GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2003

 

 

SESSION LAW 2003-284

HOUSE BILL 397

 

 

AN ACT to appropriate funds for current operations and capital improvements for state departments, institutions, and agencies, and for other purposes, and to Implement A State Budget That enables the State to Provide a sustainable recovery through strong educational and economic tools.

 

The General Assembly of North Carolina enacts:

 

 

PART I. INTRODUCTION AND TITLE OF ACT

 

INTRODUCTION

SECTION 1.1.  The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and, except as allowed by the Executive Budget Act, or this act, the savings shall revert to the appropriate fund at the end of each fiscal year.

 

TITLE OF ACT

SECTION 1.2.  This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2003."

 

PART II. CURRENT OPERATIONS AND EXPANSION/GENERAL FUND

 

CURRENT OPERATIONS AND EXPANSION/GENERAL FUND

SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for the biennium ending June 30, 2005, according to the following schedule:

 

Current Operations - General Fund                                   2003-2004             2004-2005

 

EDUCATION

 

Community Colleges System Office                                    660,927,719           660,199,222

 

Department of Public Instruction                                      6,035,050,302        6,034,995,183

 

University of North Carolina - Board of Governors        1,792,141,661        1,822,426,657

 

HEALTH AND HUMAN SERVICES

 

Department of Health and Human Services

      Office of the Secretary                                                       82,168,433             80,968,433

      Division of Aging                                                                27,685,838             27,685,838

      Division of Blind Services/Deaf/HH                                   9,302,670               9,387,008

      Division of Child Development                                       259,017,167           259,210,693

      Division of Education Services                                         31,806,862             31,670,076

      Division of Facility Services                                             12,256,792             12,256,792

      Division of Medical Assistance                                   1,987,409,086        2,449,169,963

      Division of Mental Health                                               577,290,247           580,423,098

      NC Health Choice                                                               49,484,279             55,432,822

      Division of Public Health                                                124,177,475           123,448,895

      Division of Social Services                                             179,178,674           189,029,268

      Division of Vocational Rehabilitation                              40,042,124             40,834,858

Total                                                                                      3,379,819,647        3,859,517,744

 

NATURAL AND ECONOMIC RESOURCES

 

Department of Agriculture and Consumer Services              48,495,356             48,616,369

 

Department of Commerce                                                                                                           

      Commerce                                                                           33,396,542             34,336,301

      Commerce State-Aid                                                          11,272,085             11,222,085

      NC Biotechnology Center                                                    5,883,395               5,883,395

      Rural Economic Development Center                                4,658,607               4,658,607

 

Department of Environment and Natural Resources                                                                 

      Environment and Natural Resources                               147,176,308           152,798,010

      Clean Water Management Trust Fund                               62,000,000             62,000,000

 

Department of Labor                                                                13,265,454             13,274,104

 

JUSTICE AND PUBLIC SAFETY

 

Department of Correction                                                     940,246,590           959,947,282

 

Department of Crime Control and Public Safety                   28,744,326             28,139,010

 

Judicial Department                                                                304,340,731           311,499,694

Judicial Department - Indigent Defense                                 73,264,829             71,019,451

 

Department of Justice                                                              71,041,310             71,459,312

 

Department of Juvenile Justice and

      Delinquency Prevention                                                   130,313,473           130,585,498

 

GENERAL GOVERNMENT

 

Department of Administration                                                 52,055,520             52,583,907

 

Office of Administrative Hearings                                            2,409,683               2,411,797

 

Department of State Auditor                                                    10,293,801             10,293,801

 

Office of State Controller                                                          9,694,464               9,719,451

 

Department of Cultural Resources                                                                                              

      Cultural Resources                                                             55,227,767             54,088,598

      Roanoke Island Commission                                                1,634,905               1,636,559

 

State Board of Elections                                                             6,837,797               4,915,939

 

General Assembly                                                                     41,561,463             44,971,305

 

Office of the Governor                                                                                                                 

      Office of the Governor                                                         4,976,503               4,826,503

      Office of State Budget and Management                            4,211,805               4,216,110

      OSBM - Reserve for Special Appropriations                    3,380,000               3,130,000

      Housing Finance Agency                                                      4,750,945               4,750,945

           

Department of Insurance                                                                                                              

      Insurance                                                                              26,307,054             23,187,587

Insurance - Volunteer Safety Workers' Compensation           4,500,000               2,600,000

 

Office of Lieutenant Governor                                                     601,722                   601,722

 

Department of Revenue                                                            74,930,766             75,174,094

 

Rules Review Commission                                                            310,454                   310,454

 

Department of Secretary of State                                              8,057,198               7,756,198

 

Department of State Treasurer                                                                                                     

      State Treasurer                                                                       7,575,029               7,577,784

      State Treasurer - Retirement for Fire and

            Rescue Squad Workers                                                   7,481,179               7,481,179

 

TRANSPORTATION

 

Department of Transportation                                                  11,429,525             11,402,800

 

RESERVES, ADJUSTMENTS AND DEBT SERVICE

 

Reserve for Compensation Increases                                   132,050,000             45,550,000

 

Reserve for State Health Plan                                                113,418,000           151,225,000

 

Reserve for Retiree Health Benefits                                       36,800,000             36,800,000

 

Reserve for Teachers' and State Employees'

      Retirement Contribution                                                    26,546,000           154,200,000

 

Reserve for Transfer of Various Benefit Plans                    (55,000,000)          (13,000,000)

 

Contingency and Emergency                                                      5,000,000               5,000,000

 

Reserve for Salary Adjustments                                                 4,500,000               4,500,000

 

Mental Health, Developmental Disabilities and

      Substance Abuse Services Trust Fund                               12,500,000                               0

 

Reserve to Implement HIPPA                                                    2,000,000                               0

 

State Surplus Real Property System                                             250,000                               0

 

Blue Ribbon Commission on Medicaid Reform                         250,000                               0

 

Debt Service                                                                                                                                  

      General Debt Service                                                       387,785,920           503,682,683

      Federal Reimbursement                                                        1,155,948               1,155,948

 

TOTAL CURRENT OPERATIONS -

      GENERAL FUND                                                     14,747,521,783     15,505,328,288

 

GENERAL FUND AVAILABILITY STATEMENT

SECTION 2.2.(a)  The General Fund availability used in developing the 2003-2005 biennial budget is shown below:

                                                                                                FY 2003-2004       FY 2004-2005

 

Unappropriated Balance Remaining

      from FY 2002-2003                                                                103,885           163,383,597

 

Beginning Credit Balance                                                  409,159,298                               0

      Credit to Savings Reserve Account                               (150,000,000)                             0

      Credit to Repairs & Renovations

            Reserve Account                                                          (15,000,000)                             0

 

Beginning Unreserved Credit Balance                           244,159,298                               0

 

Revenues Based on Existing Tax Structure               13,028,600,000     13,766,160,000

 

Nontax Revenues

      Investment Income                                                            113,900,000           119,690,000

      Judicial Fees                                                                      137,520,000           144,430,000

      Disproportionate Share                                                    100,000,000           100,000,000

      Insurance                                                                              51,900,000             53,900,000

      Other Nontax Revenues                                                    116,050,000           120,100,000

      Highway Trust Fund/Use Tax

            Reimbursement Transfer                                            252,422,125           242,586,830

      Highway Fund Transfer                                                       16,379,000             16,166,400

            Subtotal Nontax Revenues                                      788,171,125           796,873,230

 

Total General Fund Availability                                 14,061,034,308     14,726,416,827

 

Adjustments to Availability:  2003 Session

      Maintain Sales Tax Rate at 4.5%                                     341,750,000           388,200,000

      Maintain Top Income Tax Bracket at 8.25%                    37,500,000             92,700,000

      Conform to Federal Definition of Child for

            State Child Tax Credit                                                   16,800,000             17,000,000

      Equalize Insurance Tax Rate on

            Article 65 Corporations                                               18,600,000             13,900,000

      Conform to Streamline Sales Tax Provision (Soft          44,050,000             47,600,000

            Drinks, Prepared Food & Modified Software)

      Tax Soft Drinks in Vending Machines at

            50% of General Rate                                                     (4,050,000)            (8,600,000)

      Restore Use Tax Line on Individual Returns                      3,100,000               3,100,000

      Revenue:  Project Tax Collect                                           50,000,000             50,000,000

      Revenue:  Project Compliance                                          40,204,537             76,116,865

      Divert MSA Settlement Proceeds from

            Tobacco Trust Fund                                                       40,000,000             40,000,000

      Divert MSA Settlement Proceeds from

            Health & Wellness Trust Fund                                     25,000,000             25,000,000

      Divert Additional Proceeds from MSA                               1,800,000                               0

      Discontinue Tobacco Discounts                                          1,741,667               1,900,000

      Discontinue Alcohol Discounts                                           3,666,667               4,000,000

      Fee Increases                                                                         5,710,281               5,778,569

      Attorney General Settlement Funds                                  10,000,000                               0

      Reserve for Special Funds Transfer                                  20,000,000             20,000,000

      Divert Proceeds from 911 Fund                                        33,000,000             25,000,000

      Sale of Surplus Real Property                                            10,000,000             30,000,000

      Federal Relief Package (Grants to States)                     136,859,298                               0

      Hurricane Floyd Disaster Relief Funds                          108,796,845                               0

      Adjust Transfer from Insurance Regulatory Fund              2,942,777                 (207,827)

      Tax Reductions for Federal Conformity                         (70,000,000)                             0

 

Subtotal Adjustments to Availability:  2003 Session          877,472,072           831,487,607

 

Revised General Fund Availability                            14,938,506,380     15,557,904,434

 

Less: Total General Fund Appropriations              (14,775,122,783)  (15,505,328,288)

 

Unappropriated Balance Remaining                               163,383,597             52,576,146

 

SECTION 2.2.(b)  Notwithstanding G.S. 143-16.4(a2), of the funds credited to the Tobacco Trust Account from the Master Settlement Agreement pursuant to Section 6(2) of S.L. 1999-2 during the 2003-2004 and 2004-2005 fiscal years, the sum of forty million dollars ($40,000,000) shall be transferred from the Department of Agriculture and Consumer Services, Budget Code 23703 (Tobacco Trust Fund), to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2003-2004 and 2004-2005 fiscal years.

SECTION 2.2.(c)  Notwithstanding G.S. 143-16.4(a1), of the funds credited to the Health Trust Account from the Master Settlement Agreement pursuant to Section 6(2) of S.L. 1999-2 during the 2003-2004 and 2004-2005 fiscal years, the sum of twenty million dollars ($20,000,000) that would otherwise be deposited in the Fund Reserve established by G.S. 147-86.30(c) and five million ($5,000,000) of the funds that are not reserved pursuant to G.S. 147-86.30(c) shall be transferred from the Department of State Treasurer, Budget Code 23460 (Health and Wellness Trust Fund), to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2003-2004 and 2004-2005 fiscal years.

SECTION 2.2.(d)  On July 1, 2003, the State Controller shall transfer one hundred eight million seven hundred ninety-six thousand eight hundred forty-five dollars ($108,796,845) from the Disaster Reserve Fund, Budget Code 13017, to Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2003-2004 fiscal year.

SECTION 2.2.(e)  Notwithstanding G.S. 143-15.2 and G.S. 143-15.3, the State Controller shall transfer only one hundred fifty million dollars ($150,000,000) from the unreserved credit balance to the Savings Reserve Account on June 30, 2003.  This is not an "appropriation made by law", as that phrase is used in Article V, Section 7(1) of the North Carolina Constitution.  This subsection becomes effective June 30, 2003.

SECTION 2.2.(f)  Notwithstanding G.S. 143-15.2 and G.S. 143-15.3A, the State Controller shall transfer fifteen million dollars ($15,000,000) from the unreserved credit balance to the Repairs and Renovations Reserve Account on June 30, 2003. This subsection becomes effective June 30, 2003.

SECTION 2.2.(g)  Notwithstanding G.S. 147-86.30(c), the Health and Wellness Trust Fund Commission may expend the balance of funds remaining from funds transferred from the Fund Reserve to Health and Wellness Trust Fund nonreserved funds pursuant to Section 2.2(h) of S.L. 2002-126.  These funds shall be expended in accordance with G.S. 147-86.30(d) during the 2003-2005 fiscal biennium.

SECTION 2.2.(h)  Notwithstanding the provisions of G.S. 62A-22(c), 62A-24(d), 62A-25, and 62A-26, the following shall be transferred from Wireless Fund created in G.S. 62A-22(c) to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2003-2005 fiscal biennium: (i) all service charges remitted to the Wireless Fund during the 2003-2004 fiscal year; and (ii) the sum of twenty-five million dollars ($25,000,000) from the services charges remitted to the Wireless Fund during the 2004-2005 fiscal year.

SECTION 2.2.(i)  Notwithstanding any other provision of law, the sum of ten million dollars ($10,000,000) received by the State of North Carolina as the State's share of the Conflicts of Interest Global Settlement shall be deposited in the General Fund. The revenue shall be used for educational purposes.

SECTION 2.2.(j)  When the Highway Trust Fund was created in 1989, the revenue from the sales tax on motor vehicles was transferred from the General Fund to the Highway Trust Fund. To offset this loss of revenue from the General Fund, the Highway Trust Fund was required to transfer one hundred seventy million dollars ($170,000,000) to the General Fund each year, an amount equal to the revenue in 1989 from the sales tax on motor vehicles. This transfer did not, however, make the General Fund whole after the transfer of the sales tax revenue because no provision has been made to adjust the amount for the increased volume of transactions and increased vehicle prices. The additional funds transferred from the Highway Trust Fund to the General Fund by this act is an effort to recover a portion of the sales tax revenues that would have gone to the General Fund over the last 14 years.

In addition to the transfer authorized under G.S. 105-187.9(b)(2), and notwithstanding Section 26.14 of S.L. 2002-126 and G.S. 105-187.9(b)(1), the sum to be transferred to the General Fund for fiscal year 2003-2004 is two hundred fifty million dollars ($250,000,000) and for fiscal year 2004-2005 is two hundred forty million dollars ($240,000,000).

SECTION 2.2.(k)  Effective June 30, 2003, notwithstanding G.S. 143-16.4(a1) and G.S. 143-16.4(a2), of the funds credited to the Tobacco Trust Account and Health Trust Account from the Master Settlement Agreement pursuant to Section 6(2) of S.L. 1999-2, the sum of one million eight hundred thousand dollars ($1,800,000) which the State will receive from a settlement involving cigarettes that Brown & Williamson contract manufactured for Star Tobacco, Inc. and Star Scientific, Inc. during the years 1999 through 2002 shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2003-2004 fiscal year.

 

PART III. CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

 

CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 2005, according to the following schedule:

 

Current Operations - Highway Fund                               2003-2004              2004-2005

 

(1)       Transportation Admin. (84210)                                 $72,776,692           $72,898,916

(2)       Transportation Operations (84220)                            28,190,393            28,150,605

(3)       Transportation Programs (84230)                                                                                   

            State Construction                                                                                                            

                  Secondary                                                                89,600,000             90,590,000

                  Urban                                                                        28,000,000             14,000,000

                  Public Access                                                            2,000,000               2,000,000

                  Spot Safety                                                                 9,100,000               9,100,000

                  Contingency                                                             15,000,000             10,000,000

                  Federal Aid Match                                                     4,160,000               4,280,000

                  Maintenance                                                          582,507,482           573,436,154

                  Asphalt Plant/OSHA                                                     425,000                   425,000

            Capital                                                                                               -                                -

            Ferry Operations                                                           19,677,283             19,677,283

            Aid to Municipalities                                                    89,600,000             90,590,000

            Rail                                                                                 15,090,919             15,531,153

            Public Transit                                                                79,705,266             80,302,926

(4)       Governor's Highway Safety (84240)                                292,449                   293,118

(5)       Transportation Regulation (84260)                          102,032,933          102,896,913

(6)       Reserves, Transfers, Other Agencies (84270)         214,626,257          217,352,347

TOTAL                                                                               $1,352,784,674     $1,331,524,415

 

HIGHWAY FUND AVAILABILITY STATEMENT

SECTION 3.2.  The Highway Fund availability used in developing the 2003-2005 biennial budget is shown below:

 

Highway Fund Budget Reform Statement                        2003-2004              2004-2005

 

Beginning Credit Balance                                                                           -                                -

Estimated Revenue                                                           $ 1,352,784,674    $ 1,375,848,337

Estimated Reversions                                                                                  -                                -

 

Total Highway Fund Availability                               $ 1,352,784,674    $ 1,375,848,337

 

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

 

HIGHWAY TRUST FUND APPROPRIATIONS

SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 2005, according to the following schedule:

 

Current Operations - Highway Trust Fund                    2003-2004              2004-2005

 

Intrastate System                                                                  $422,754,783         $452,665,225

Urban Loops                                                                            170,944,428           183,038,965

Aid to Municipalities                                                                44,356,838             47,495,141

Total for Secondary Roads                                                       79,559,266             83,648,141

Program Administration                                                           40,001,560             39,636,698

Transfer to General Fund                                                       252,422,125           242,586,830

GRAND TOTAL CURRENT OPERATIONS

      AND EXPANSION                                                 $  1,010,039,000  $  1,049,071,000

 

PART V. BLOCK GRANTS

 

DHHS BLOCK GRANTS

SECTION 5.1.(a)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2004, according to the following schedule:

 

COMMUNITY SERVICES BLOCK GRANT

 

01.       Community Action Agencies                                                      $ 15,266,973

 

02.       Limited Purpose Agencies                                                                  848,165

 

03.       Department of Health and Human Services

to administer and monitor

the activities of the

Community Services Block Grant                                                      848,165

 

TOTAL COMMUNITY SERVICES BLOCK GRANT                                $ 16,963,303

 

SOCIAL SERVICES BLOCK GRANT

 

01.       County departments of social services                                      $ 28,868,189

(Transfer from TANF - $4,500,000)

 

02.       Allocation for in-home services provided

by county departments of

social services                                                                                   2,101,113

 

03.       Division of Mental Health, Developmental

Disabilities, and Substance Abuse Services                                    3,234,601

 

04.       Division of Services for the Blind                                                   3,105,711

 

05.       Division of Facility Services                                                               426,836

 

06.       Division of Aging - Home and Community

Care Block Grant                                                                               1,840,234

 

07.       Child Care Subsidies                                                                         3,000,000

 

08.       Division of Vocational Rehabilitation -

United Cerebral Palsy                                                                            71,484

 

09.       State administration                                                                          1,693,368

 

10.       Child Medical Evaluation Program                                                     238,321

 

11.       Adult day care services                                                                     2,155,301

 

12.       Comprehensive Treatment Services

Program                                                                                                 422,003

 

13.       Department of Administration

for the N.C. State Commission of Indian Affairs

In-Home Services Program for the Elderly                                       203,198

 

14.       Division of Vocational Rehabilitation  Services -

Easter Seals Society                                                                             116,779

 

15.       UNC-CH CARES Program for training and

consultation services                                                                            247,920

 

16.       Office of the Secretary - Office of Economic

Opportunity for N.C. Senior Citizens'

Federation for outreach services to

low-income elderly persons                                                                  41,302

 

17.       Division of Social Services - Child

Caring Agencies                                                                                1,500,000

 

18.       Division of Mental Health,

Developmental Disabilities, and

Substance Abuse Services - Developmentally

Disabled Waiting List for services                                                  5,000,000

 

19.       Transfer to Preventive Health Services Block

Grant for HIV/AIDS education, counseling, and

testing                                                                                                    145,819

 

20.       Division of Facility Services -

Mental Health Licensure                                                                     213,128

 

21.       Transfer to the Office of the Secretary -

            N.C. Inter-Agency Council for Coordinating

Homeless Programs                                                                             150,000

 

TOTAL SOCIAL SERVICES BLOCK GRANT                                           $ 54,775,307

 

LOW-INCOME ENERGY BLOCK GRANT

 

01.       Energy Assistance Programs                                                      $ 12,775,323

 

02.       Crisis Intervention                                                                             9,192,927

 

03.       Administration                                                                                   2,957,339

 

04.       Weatherization Program                                                                   4,212,740

 

05.       Department of Administration -

N.C. State Commission of Indian Affairs                                             54,840

 

06.       Heating Air Repair and Replacement Program                               1,966,153

 

TOTAL LOW-INCOME ENERGY BLOCK GRANT                                 $ 31,159,322

 

MENTAL HEALTH SERVICES BLOCK GRANT

 

01.       Provision of community-based

services for severe and persistently

mentally ill adults                                                                           $ 5,657,798

 

02.       Provision of community-based

services to children                                                                           2,513,141

 

03.       Comprehensive Treatment Services

Program for Children                                                                        1,500,000

 

04.       Administration                                                                                      568,911

 

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT                        $ 10,239,850

 

SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT

 

01.       Provision of community-based

alcohol and drug abuse services,

tuberculosis services, and services

provided by the Alcohol and Drug Abuse

Treatment Centers                                                                       $ 18,901,711

 

02.       Continuation of services for

pregnant women and women

with dependent children                                                                    8,069,524

 

03.       Continuation of services to

IV drug abusers and others at risk

for HIV diseases                                                                                4,616,378

 

04.       Provision of services to children

and adolescents                                                                                  7,740,611

 

05.       Juvenile Services - Family Focus                                                       851,156

 

06.       Allocation to the Division of Public Health

for HIV/STD Risk Reduction Projects                                               383,980

 

07.       Allocation to the Division of Public Health

for HIV/STD Prevention by County Health

Departments                                                                                          209,576

 

08.       Allocation to the Division of Public Health

for the Maternal and Child Health Hotline                                           37,779

 

09.       Administration                                                                                   2,596,307

 

TOTAL SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT                                                         $ 43,407,022

 

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

 

01.       Child care subsidies                                                                   $154,713,475

 

02.       Quality and availability initiatives                                                  16,449,256

 

03.       Administrative expenses                                                                   6,969,533

 

04.       Transfer from TANF Block Grant for

child care subsidies                                                                         79,562,189

 

TOTAL CHILD CARE AND DEVELOPMENT FUND

BLOCK GRANT                                                                                           $257,694,453

 

TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT

 

01.       Work First Cash Assistance                                                      $129,396,275

 

02.       Work First County Block Grants                                                   94,653,315

 

03.       Transfer to the Child Care and

Development Fund Block Grant

for child care subsidies                                                                  79,562,189

 

04.       Child Care Subsidies for TANF Recipients                                  26,621,241

 

05.       Child Welfare Workers for local DSS                                          11,452,391

 

06.       Transfer to Social Services Block Grant for

County Departments of Social Services for

Children's Services                                                                            4,500,000

 

07.       Support Our Students - Department of

Juvenile Justice and Delinquency

Prevention                                                                                          2,249,642

 

08.       Residential Substance Abuse Services

for Women With Children                                                               2,000,000

 

09.       Domestic Violence Services

for Work First Families                                                                    1,200,000

 

10.       After-School Services for

At-Risk Children                                                                               2,249,642

            YWCA Central Carolinas

            Youth Development Programs  $176,000

 

11.       Division of Social Services -

Administration                                                                                      400,000

 

12.       Child Welfare Training                                                                     2,550,000

 

13.       TANF Automation Projects                                                                 592,500

 

14.       Work First/Boys and Girls Clubs                                                    1,000,000

 

15.       Work Central Career Advancement Center                                        550,000

 

16.       WCH-Teen Pregnancy Prevention                                                   1,500,000

 

17.       Transfer to Social Services Block Grant for Child Caring

            Institutions                                                                                         1,500,000

 

18.       Special Children's Adoption Fund                                                    2,000,000

 

19.       NC Fast Implementation                                                                      630,000

 

20.       Maternity Homes                                                                                  838,000

 

21.       Pregnancy Prevention Coalition of North Carolina                          127,500

 

22.       Individual Development Accounts                                                      180,000

 

23.       Reduction of Out-of-Wedlock Births                                             1,000,000

 

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT                                                                             $366,752,695

 

MATERNAL AND CHILD HEALTH BLOCK GRANT

 

01.       Healthy Mothers/Healthy Children

Block Grants to Local Health

Departments                                                                                       9,838,074

 

02.       High-Risk Maternity Clinic Services,

Perinatal Education and Training,

Childhood Injury Prevention,

Public Information and Education, and

Technical Assistance to Local Health

Departments                                                                                       2,307,918

 

03.       Services to Children With Special Health

Care Needs                                                                                         5,078,647

 

TOTAL MATERNAL AND CHILD

HEALTH BLOCK GRANT                                                                           $ 17,224,639

 

PREVENTIVE HEALTH SERVICES BLOCK GRANT

 

01.       Statewide Health Promotion Programs                                        $3,132,810

 

02.       Rape Crisis/Victims' Services

Program - Council for Women                                                          197,112

 

03.       Transfer from Social Services

Block Grant - HIV/AIDS education,

counseling, and testing                                                                         145,819

 

04.       Office of Minority Health                                                                   159,459

 

05.       Administrative Costs                                                                            108,546

 

06.       Osteoporosis Task Force Activities                                                   150,000

 

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT                   $3,893,746

 

SECTION 5.1.(b)  Decreases in Federal Fund Availability. - If the United States Congress reduces federal fund availability in the Social Services Block Grant below the amounts appropriated in this section, then the Department of Health and Human Services shall allocate these decreases giving priority first to those direct services mandated by State or federal law, then to those programs providing direct services that have demonstrated effectiveness in meeting the federally and State-mandated services goals established for the Social Services Block Grant.  The Department shall not include transfers from TANF for specified purposes in any calculations of reductions to the Social Services Block Grant.

If the United States Congress reduces the amount of TANF funds below the amounts appropriated in this section after the effective date of this act, then the Department shall allocate the decrease in funds after considering any underutilization of the budget and the effectiveness of the current level of services. Any TANF Block Grant fund changes shall be reported to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Decreases in federal fund availability shall be allocated for the Maternal and Child Health and Preventive Health Services federal block grants by the Department of Health and Human Services after considering the effectiveness of the current level of services.

SECTION 5.1.(c)  Increases in Federal Fund Availability. - Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Health and Human Services, with the approval of the Office of State Budget and Management, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.

SECTION 5.1.(d)  Changes to the budgeted allocations to the block grants appropriated in this act and new allocations from the block grants not specified in this act shall be submitted to the Joint Legislative Commission on Governmental Operations  for review prior to the change and shall be reported immediately to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(e)  The Department of Health and Human Services may allow no-cost contract extensions for up to six months for nongovernmental grant recipients under the TANF Block Grant.

SECTION 5.1.(f)  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104-193 (42 U.S.C. § 710), for the 2003-2004 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an Abstinence Until Marriage Education Program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C-81(e1)(4). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.

The Department of Health and Human Services shall contract for the follow-up testing involved with the Newborn Screening Program. The Department may contract for these services with an entity within or outside of the State; however, the Department may only contract with an out-of-state entity if it can be demonstrated that there is a cost savings associated with contracting with the out-of-state entity. The contract amount shall not exceed twenty-five thousand dollars ($25,000). The amount of the contract shall be covered by funds in the Maternal and Child Health Block Grant.

SECTION 5.1.(g)  The sum of four hundred thousand dollars ($400,000) appropriated in this section to the Department of Health and Human Services in the Child Care and Development Fund Block Grant shall be used to develop and implement a Medical Child Care Pilot open to children throughout the State.

SECTION 5.1.(h)  Payment for subsidized child care services provided with federal TANF funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.

SECTION 5.1.(i)  The sum of four hundred thousand dollars ($400,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2003-2004 fiscal year shall be used to support administration of TANF-funded programs.

SECTION 5.1.(j)  The sum of two million dollars ($2,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2003-2004 fiscal year shall be used to provide regional residential substance abuse treatment and services for women with children. The Department of Health and Human Services, Division of Social Services and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, in consultation with local departments of social services, area mental health programs, and other State and local agencies or organizations, shall coordinate this effort in order to facilitate the expansion of regionally based substance abuse services for women with children. These services shall be culturally appropriate and designed for the unique needs of TANF women with children.

In order to expedite the expansion of these services, the Secretary of the Department of Health and Human Services may enter into contracts with service providers.

The Department of Health and Human Services, Division of Social Services and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall report on its progress in complying with this subsection no later than October 1, 2003, and March 1, 2004, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. These reports shall include all of the following:

(1)       The number and location of additional beds created.

(2)       The types of facilities established.

(3)       The delineation of roles and responsibilities at the State and local levels.

(4)       Demographics of the women served, the number of women served, and the cost per client.

(5)       Demographics of the children served, the number of children served, and the services provided.

(6)       Job placement services provided to women.

(7)       A plan for follow-up and evaluation of services provided with an emphasis on outcomes.

(8)       Barriers identified to the successful implementation of the expansion.

(9)       Identification of other resources needed to appropriately and efficiently provide services to Work First recipients.

(10)     Other information as requested.

SECTION 5.1.(k)  The sum of two million two hundred forty-nine thousand six hundred forty-two dollars ($2,249,642) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services and transferred to the Department of Juvenile Justice and Delinquency Prevention for the 2003-2004 fiscal year shall be used to support the existing Support Our Students Program and to expand the Program statewide, focusing on low-income communities in unserved areas. These funds shall not be used for administration of the Program.

SECTION 5.1.(l)  The sum of one million two hundred thousand dollars ($1,200,000) appropriated under this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2003-2004 fiscal year shall be used to provide domestic violence services to Work First recipients.  These funds shall be used to provide domestic violence counseling, support, and other direct services to clients.  These funds shall not be used to establish new domestic violence shelters or to facilitate lobbying efforts.  The Division of Social Services may use up to seventy-five thousand dollars ($75,000) in TANF funds to establish one administrative position within the Division of Social Services to implement this subsection.

Each county department of social services and the local domestic violence shelter program serving the county shall jointly develop a plan for utilizing these funds. The plan shall include the services to be provided and the manner in which the services shall be delivered. The county plan shall be signed by the county social services director or the director's designee and the domestic violence program director or the director's designee and submitted to the Division of Social Services by December 1, 2003. The Division of Social Services, in consultation with the Council for Women, shall review the county plans and shall provide consultation and technical assistance to the departments of social services and local domestic violence shelter programs, if needed.

The Division of Social Services shall allocate these funds to county departments of social services according to the following formula:  (i) each county shall receive a base allocation of five thousand dollars ($5,000) and (ii) each county shall receive an allocation of the remaining funds based on the county's proportion of the statewide total of the Work First caseload as of July 1, 2003, and the county's proportion of the statewide total of the individuals receiving domestic violence services from programs funded by the Council for Women as of July 1, 2003. The Division of Social Services may reallocate unspent funds to counties that submit a written request for additional funds.

The Department of Health and Human Services shall report on the uses of these funds no later than March 1, 2004, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(m)  The sum of two million two hundred forty-nine thousand six hundred forty-two dollars ($2,249,642) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used to expand after-school programs and services for at-risk children. The Department shall develop and implement a grant program to award grants to community-based programs that demonstrate the ability to reach children at risk of teen pregnancy and school dropout. The Department shall award grants to community-based organizations that demonstrate the ability to develop and implement linkages with local departments of social services, area mental health programs, schools, and other human services programs in order to provide support services and assistance to the child and family. These funds may be used to establish one position within the Division of Social Services to coordinate at-risk after-school programs and shall not be used for other State administration. The Department shall report no later than March 1, 2004, on its progress in complying with this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Subcommittee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(n)  The sum of eleven million four hundred fifty-two thousand three hundred ninety-one dollars ($11,452,391) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2003-2004 fiscal year for Child Welfare Improvements shall be allocated to the county departments of social services for hiring or contracting staff to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post-adoption services for eligible families.

SECTION 5.1.(o)  The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this section in the Mental Health Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2003-2004 fiscal year and the sum of four hundred twenty-two thousand three dollars ($422,003) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2003-2004 fiscal year shall be used to continue a Comprehensive Treatment Services Program for Children in accordance with Section 21.60 of S.L. 2001-424, as amended.

SECTION 5.1.(p)  The sum of one million six hundred thousand dollars ($1,600,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for fiscal year 2003-2004 shall be used to support various child welfare training projects as follows:

(1)       Provide a regional training center in southeastern North Carolina.

(2)       Support the Masters Degree in Social Work/Baccalaureate Degree in Social Work Collaborative.

(3)       Provide training for residential child care facilities.

(4)       Provide for various other child welfare training initiatives.

SECTION 5.1.(q)  If funds appropriated through the Child Care and Development Fund Block Grant for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order to use the federal funds fully.

SECTION 5.1.(r)  The sum of eight hundred thirty-eight thousand dollars ($838,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services shall be used to purchase services at maternity homes throughout the State.

SECTION 5.1.(s)  The sum of two million dollars ($2,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 2003-2004 fiscal year shall be used to implement this subsection. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A-50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.

SECTION 5.1.(t)  The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this act in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for child caring agencies for the 2003-2004 fiscal year shall be allocated to the State Private Child Caring Agencies Fund. These funds shall be combined with all other funds allocated to the State Private Child Caring Agencies Fund for the reimbursement of the State's portion of the cost of care for the placement of certain children by the county departments of social services who are not eligible for federal IV-E funds.  These funds shall not be used to match other federal funds.

SECTION 5.1.(u)  The sum of one million dollars ($1,000,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant for Boys and Girls Clubs shall be used to make grants for approved programs. The Department of Health and Human Services, in accordance with federal regulations for the use of TANF Block Grant funds, shall administer a grant program to award funds to the Boys and Girls Clubs across the State in order to implement programs that improve the motivation, performance, and self-esteem of youths and to implement other initiatives that would be expected to reduce school dropout and teen pregnancy rates. The Department shall encourage and facilitate collaboration between the Boys and Girls Clubs and Support Our Students, Communities in Schools, and similar programs to submit joint applications for the funds if appropriate.

SECTION 5.1.(v)  The Department of Health and Human Services shall report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on the activities and expenditures of the North Carolina Inter-Agency Council for Coordinating Homeless Programs no later than April 1, 2004.

 

NER Block Grant Funds

SECTION 5.2.(a)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2004, according to the following schedule:

 

COMMUNITY DEVELOPMENT BLOCK GRANT

 

01.     State Administration                                                                    $1,000,000

 

02.     Urgent Needs and Contingency                                                          50,000

 

03.     Scattered Site Housing                                                                13,200,000

 

04.     Economic Development                                                              10,960,000

 

05.     Community Revitalization                                                           12,200,000

 

06.     State Technical Assistance                                                               450,000

 

07.     Housing Development                                                                   2,000,000

 

08.     Infrastructure                                                                                  5,140,000

 

TOTAL COMMUNITY DEVELOPMENT

      BLOCK GRANT -  2004 Program Year                                                        $45,000,000

 

SECTION 5.2.(b)  Decreases in Federal Fund Availability. - If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.

SECTION 5.2.(c)  Increases in Federal Fund Availability for Community Development Block Grant. - Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows:  Each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.

SECTION 5.2.(d)  Limitations on Community Development Block Grant Funds. - Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year:  up to one million dollars ($1,000,000) may be used for State administration; not less than fifty thousand dollars ($50,000) may be used for Urgent Needs and Contingency; up to thirteen million two hundred thousand dollars ($13,200,000) may be used for Scattered Site Housing; up to ten million nine hundred sixty thousand dollars ($10,960,000) may be used for Economic Development, including Urban Redevelopment grants; not less than twelve million two hundred thousand dollars ($12,200,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to two million dollars ($2,000,000) may be used for Housing Development; up to five million one hundred forty thousand dollars ($5,140,000) may be used for Infrastructure.  If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.

SECTION 5.2.(e)  Increase Capacity for Nonprofit Organizations. - Assistance to nonprofit organizations to increase their capacity to carry out CDBG-eligible activities in partnership with units of local government is an eligible activity under any program category in accordance with federal regulations.  Capacity building grants may be made from funds available within program categories, program income, or unobligated funds.

SECTION 5.2.(f)  Up to four million dollars ($4,000,000) of funds for Economic Development may be used for Urgent Needs and Contingency for drought recovery.

SECTION 5.2.(g)  Department of Commerce Demonstration Grants in Partnership with Rural Economic Development Center, Inc. - The Department of Commerce, in partnership with the Rural Economic Development Center, Inc., shall award up to two million two hundred fifty thousand dollars ($2,250,000) in demonstration grants to local governments in very distressed rural areas of the State.  These grants shall be used to address critical infrastructure and entrepreneurial needs and to provide small business assistance.

SECTION 5.2.(h)  The Department of Commerce shall, in consultation with local government officials and the University of North Carolina School of Government, design a regional distribution system for making grants in the Community Revitalization category in program year 2005.  The system shall take into account the relative lower income, poverty, and housing conditions in every region, target the most critical needs, and ensure that local governments in every region have equal and fair access to these funds.

 

PART VI. GENERAL PROVISIONS

 

SPECIAL FUNDS, FEDERAL FUNDS, AND DEPARTMENTAL RECEIPTS, AND AUTHORIZATION FOR EXPENDITURES

SECTION 6.1.  There is appropriated out of the cash balances, federal receipts, and departmental receipts available to each department, sufficient amounts to carry on authorized activities included under each department's operations.  All these cash balances, federal receipts, and departmental receipts shall be expended and reported in accordance with provisions of the Executive Budget Act, except as otherwise provided by statute, and shall be expended at the level of service authorized by the General Assembly.  If the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes or Highway Fund Codes, then the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget finds that the appropriations from the Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund.

Funds that become available from overrealized receipts in General Fund Codes and Highway Fund Codes may be used for new permanent employee positions or to raise the salary of existing employees only as follows:

(1)       As provided in G.S. 116-30.1, 116-30.2, 116-30.3, 116-30.4; or

(2)       If the Director of the Budget finds that the new permanent employee positions are necessary to maintain the function that generated the receipts at the level anticipated in the certified budget codes for that Fund. The Director of the Budget shall notify the President Pro Tempore of the Senate, the Speakers of the House of Representatives, the Chairs of the Appropriations Committees of the Senate and the House of Representatives, and the Fiscal Research Division of the Legislative Services Office that he intends to make such a finding at least 10 days before he makes the finding. The notification shall set out the reason the positions are necessary to maintain the function.

The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter the General Fund Codes or Highway Fund Codes that did not result in a corresponding reduced allotment from appropriations from that Fund.

This section shall expire June 30, 2004.

 

NO EXPENDITURE OF UNBUDGETED RECEIPTS

SECTION 6.2.  Effective July 1, 2004, G.S. 143-27 reads as rewritten:

"§ 143-27.  Appropriations to educational, charitable and correctional institutions are in addition to receipts by them.

All appropriations now or hereafter made to the educational institutions, and to the charitable and correctional institutions, and to such other departments and agencies of the State as receive moneys available for expenditure by them are declared to be in addition to such receipts of said institutions, departments or agencies, and are to be available as and to the extent that such receipts are insufficient to meet the costs anticipated in the budget authorized by the General Assembly, of maintenance of such institutions, departments, and agencies; Provided, however, that if the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes, Highway Fund Codes, or Wildlife Fund Codes, the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget has consulted with the Joint Legislative Commission on Governmental Operations and unless the Director of the Budget finds that (i) the appropriations from that Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund and (ii) the funds may be expended in accordance with G.S. 143-23.excess. Notwithstanding the foregoing provisions of this section, receipts within The University of North Carolina realized in excess of budgeted levels shall be available, up to a maximum of ten percent (10%) above budgeted levels, for each Budget Code, in addition to appropriations, to support the operations generating such receipts, as approved by the Director of the Budget.

The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on expenditures of receipts in excess of the amounts certified in General Fund Codes, Highway Fund Codes, or Wildlife Fund Codes, that did not result in a corresponding reduced allotment from appropriations from that Fund."

 

BUDGET DIRECTOR TO REVIEW PRACTICES

SECTION 6.2A.(a)  The Office of State Budget and Management, in consultation with the State Controller, shall conduct a review and evaluation of current practices relative to the following issues:

(1)       The proliferation of nonreverting funds and accounts.

(2)       The designation of selected funds as "off-budget".

(3)       The sources of authority, consistent with Article V, Section 7(1) of the Constitution, under which expenditures are being made from each special fund, trust fund, internal service fund, or enterprise fund.

(4)       The proper classification and management of funds as special funds, trust funds, internal service funds, or enterprise funds consistent with criteria adopted by the Governmental Accounting Standards Board.

(5)       Appropriate budget planning within special funds, trust funds, internal service funds, and enterprise funds, including, in particular, the accurate projection of receipts, expenditures, and fund balances and the presentation of that information for legislative review and appropriation action.

(6)       The administration of G.S. 143-27, which requires in part that the over collection of departmental receipts be accompanied by a corresponding reduction in the allotments to institutions, departments, and agencies.

SECTION 6.2A.(b)  Where the review and evaluation reveals problems or other failures, the Office of State Budget and Management shall report its findings and recommendations to the Chairs of the Appropriations Committees of the Senate and House of Representatives as soon as practicable. In particular, the Office of State Budget and Management shall transmit to the General Assembly a list of special funds properly classified together with their estimated beginning balances, estimated receipts and expenditures, and estimated ending balances, and a list of funds currently classified as special funds for which the receipts are more appropriately reflected as offsets to total requirements in General Fund budget codes. The list of special funds properly classified should include funds currently classified as trust funds that are more appropriately classified as special funds.

 

BUDGET CODE ADJUSTMENTS

SECTION 6.3.(a) The Office of State Budget and Management shall determine and prepare for each General Fund budget code such adjustments as may be necessary to re-budget line items to reflect historical spending patterns and anticipated revenues based on actual collections and to provide for more accurate budgeting of salaries.

SECTION 6.3.(b) The Office of State Budget and Management shall report the necessary adjustments to the General Assembly no later than 10 days after the convening of the 2004 Regular Session of the 2003 General Assembly.  The Director of the Budget shall include the adjustments prepared in accordance with subsection (a) of this section in the recommended adjustments to the authorized budget for the 2004-2005 fiscal year.

 

CONTINGENCY AND EMERGENCY FUND ALLOCATIONS

SECTION 6.4.(a)  Funds in the amount of five million dollars ($5,000,000) for the 2003-2004 fiscal year and five million dollars ($5,000,000) for the 2004-2005 fiscal year are appropriated in this act to the Contingency and Emergency Fund. Of these funds:

(1)       Up to two million dollars ($2,000,000) for the 2003-2004 fiscal year may be used for purposes related to the Base Realignment and Closure Act (BRAC); and

(2)       Up to two hundred fifty thousand dollars ($250,000) for the 2003-2004 fiscal year may be expended for statutory purposes other than those set out in G.S. 143-23(a1)(2) or in subdivision (1) of this section.

The remainder of these funds shall be expended only for the purposes outlined in G.S. 143-23(a1)(2).

 

CHANGE EFFECTIVE DATE - PRIVATE PLATES ON PUBLIC VEHICLES

SECTION 6.5.(a)  The introductory language to Section 6.14(b) of S.L. 2001-424 reads as rewritten:

"SECTION 6.14.(b)  Effective October 1, 2003, 2004, G.S. 20-39.1(b), as enacted in subsection (a) of this section, reads as rewritten:".

SECTION 6.5.(b)  Section 6.14(h) of S.L. 2001-424 reads as rewritten:

"SECTION 6.14.(h)  Subsection (b) of this section becomes effective October 1, 2003. 2004. Except as provided in subsection (c) of this section, the remainder of this section is effective when it becomes law."

 

HIPAA RESERVE

SECTION 6.6.  Funds in the amount of two million dollars ($2,000,000) are appropriated in this act to the Reserve to Implement HIPAA. This reserve shall be located in the Office of State Budget and Management.

 

HIPAA IMPLEMENTATION

SECTION 6.7.(a)  The Governor or the Governor's designee shall coordinate the State's implementation of the federal Health Insurance Portability and Accountability Act ("HIPAA"), Title II Subtitle F (Administrative Simplification). Specifically, the scope of coordination shall include the following:

(1)       Coordinating correspondence between the State and the United States government on all matters relating to HIPAA Administrative Simplification requirements under Subtitle F of Title II of HIPAA.

(2)       Coordinating official State comments on proposed federal regulations and the federal rule-making process pertaining to HIPAA Administrative Simplification.

(3)       Obtaining from the North Carolina Attorney General legal interpretations of federal rules pertaining to HIPAA Administrative Simplification compliance, implementation, and enforcement.

(4)       Establishing deadlines and benchmarks for State agencies to provide the necessary data required to monitor compliance with HIPAA Administrative Simplification requirements.

The Information Resource Management Commission ("IRMC") shall cooperate with the Governor to ensure that IRMC policies and activities and State HIPAA implementation are complementary to ensure effective and efficient monitoring of HIPAA Administrative Simplification requirements.

SECTION 6.7.(b)  The University of North Carolina System and the Teachers' and State Employees' Comprehensive Major Medical Plan may develop and implement HIPAA Administrative Simplification compliance and shall report bimonthly to the Governor on the status of implementation.

SECTION 6.7.(c)  Funds appropriated to the Reserve to Implement HIPAA that are unexpended and unencumbered at the end of the fiscal year shall not revert to the General Fund but shall remain in the Reserve for use in accordance with the purposes of the Reserve.

 

STATE-OWNED SURPLUS REAL PROPERTY SYSTEM

SECTION 6.8.(a)  Definition. - For purposes of this section, the term "State-owned surplus real property" means State-owned land and buildings that are unused or underused.

SECTION 6.8.(b)  Establish State-Owned Surplus Real Property Disposal System; Purpose; Use of Proceeds. - The Department of Administration, in consultation with the Office of State Budget and Management, the Department of Transportation, The University of North Carolina, and all other affected State departments, agencies, and institutions, shall develop and implement a State-owned surplus real property disposal system.  The purpose of the system is to establish a uniform real property disposal system that will continuously identify State-owned surplus real property, evaluate that property, and dispose of that property as appropriate.  Unless otherwise provided by law, the clear proceeds of the sale of State-owned surplus real property shall be credited to the General Fund.  It is the intent of the General Assembly that these proceeds shall partially offset debt service costs occasioned by the use of Certificates of Participation to finance the repair and renovation of State buildings.

SECTION 6.8.(c)  Duties; Criteria. - In compliance with this section, the Department of Administration, in consultation with all other affected State departments, agencies, and institutions, shall do all of the following:

(1)       Review the current inventory of State-owned land and buildings for accuracy and completeness.

(2)       Determine how and when State-owned land and buildings should be declared surplus.

(3)       Develop criteria to be considered prior to the disposal of any property under the system. The criteria shall include all of the following factors:

a.         The condition of the property;

b.         The extent to which it meets the purpose for which it was intended;

c.         The future needs of the Agency to perform the service intended at the location;

d.         The best and most cost-effective manner in which these future needs can be serviced;

e.         The practicability of moving the function of the services performed at a location to another area that might reduce acquisition, construction, and labor cost without diminishing the quality of service;

f.          A recommendation as to whether a respective property should be (i) sold or retained, (ii) renovated, (iii) expanded for future use, or (iv) sold with a leaseback for a period of not more than 10 years in order to allow transition; and

g.         Other recommendations regarding use of the property.

(3)       Determine whether the highest and best use is being made of the State-owned property.

(4)       Determine whether State agencies have the authority to retain funds from the disposal of State-owned surplus real property and whether this is consistent among agencies and conducive to the disposal of unneeded property.

(5)       Consider the use of private real estate brokers, auction, and any other method determined to be suitable in order to efficiently and effectively dispose of State-owned surplus real property.

(6)       Review the real property held by a selected number of State agencies to determine whether the agency has any property that meets the criteria as set forth in this section.

(7)       Assess the need for additional staff to effectively administer the system.

(8)       Examine current State law to assess the need for changes in order to support a uniform system to identify, evaluate, and dispose of all unused or underused State-owned land and buildings.

SECTION 6.8.(d)  Establish Real Property Management Advisory Council. - There is established the Real Property Management Advisory Council in the Department of Administration.  The Advisory Council shall examine the use of State-owned real property and shall advise the Secretary of Administration as to the identification of those properties that are unneeded or underutilized. Members of the Advisory Council must be knowledgeable in one of the following areas:  real estate/appraisal, engineering, investment properties, or finance.  The Advisory Council shall consist of 12 members appointed as follows:

(1)       Four members appointed by the Speaker of the House of Representatives, including one member who shall be designated as House cochair. Of the members appointed, one shall be knowledgeable in the field of real estate/appraisal, one shall be knowledgeable in the field of engineering, one shall be knowledgeable in the field of investment properties, and one shall be knowledgeable in the field of finance.

(2)       Four members appointed by the President Pro Tempore of the Senate, including one member who shall be designated as Senate cochair. Of the members appointed, one shall be knowledgeable in the field of real estate/appraisal, one shall be knowledgeable in the field of engineering, one shall be knowledgeable in the field of investment properties, and one shall be knowledgeable in the field of finance.

(3)       Four members appointed by the Governor. Of the members appointed, one shall be knowledgeable in the field of real estate/appraisal, one shall be knowledgeable in the field of engineering, one shall be knowledgeable in the field of investment properties, and one shall be knowledgeable in the field of finance.

The Advisory Council shall meet upon the call of the cochairs.

Members of the Advisory Council shall serve for a term of two years beginning July 1, 2003, and shall receive subsistence and travel expenses as provided in G.S. 138-5. Staff support to the Advisory Council shall be provided by the Department of Administration.

SECTION 6.8.(e)  Consultants May Be Retained. - The Department may retain consultants to assist the accomplishment of the objectives set forth in subsection (a) of this section.

SECTION 6.8.(f)  Study Sale and Lease-Back Potential of State-Owned Property. - As part of developing the State-owned surplus real property disposal system mandated by this section, the Department of Administration shall also review the highest and best use of state-owned property and determine if less expensive alternative sites should be acquired for State use and the former sites sold or marketed by sale and leaseback until the alternative site is ready for use.  The Department shall include its findings and recommendations in the reports to the Joint Legislative Commission on Governmental Operations required by this section.

SECTION 6.8.(g)  Reporting Requirement. - The Department of Administration shall make an interim report to the Joint Legislative Commission on Governmental Operations no later than December 1, 2003, regarding the extraordinary measures being taken to comply with this section and shall make a final report no later than March 1, 2004, regarding its findings and recommendations and the progress in implementing this section.

 

GOVERNMENT AGENCIES TO USE PRODUCTS OF RECYCLED STEEL

SECTION 6.10.(a)  G.S. 130A-309.14 is amended by adding a new subsection to read:

"(l)       Any State agency or agency of a political subdivision of the State that is using State funds, or any person contracting with any agency with respect to work performed under contract, shall procure products of recycled steel if all of the following conditions are satisfied:

(1)       The product must be acquired competitively within a reasonable time frame.

(2)       The product must meet appropriate performance standards.

(3)       The product must be acquired at a reasonable price."

SECTION 6.10.(b)  The Department of Administration shall report to the Joint Legislative Commission on Governmental Operations on agencies' compliance with this section.

 

JOINT COMMITTEE ON EXECUTIVE BUDGET ACT REVISIONS

SECTION 6.12.(a)  There is created a Joint Committee on Executive Budget Act Revisions.  The Committee shall be composed of 8 members, four of whom shall be Representatives who are members of the Appropriations Committee appointed by the Speaker of the House of Representatives and four of whom shall be Senators who are members of the Appropriations Committee appointed by the President Pro Tempore of the Senate.  The Speaker of the House of Representatives shall designate one member as cochair and the President Pro Tempore of the Senate shall designate one member as cochair.  The Committee shall meet upon call of the cochairs.

SECTION 6.12.(b)  The Committee shall consider contemporary financial management practices in reviewing the current budget process.  The Committee shall recommend any changes to the Executive Budget Act that are needed to modernize and improve the processes of budget preparation, budget adoption, budget execution, and program evaluation.  The Committee shall report its recommendations to the 2003 General Assembly on or before April 1, 2004.

SECTION 6.12.(c)  The Legislative Services Office shall assign professional and clerical staff to assist the Committee in its work.  Members of the Committee shall receive per diem, subsistence, and travel allowances in accordance with G.S. 120-3.1, 138-5, or 138-6, as appropriate.

 

ISSUE REQUEST FOR INFORMATION/ENERGY MANAGEMENT

SECTION 6.13.  The Department of Administration (Department) shall issue a Request for Information (RFI) to identify companies interested in providing, and qualified to provide, comprehensive energy management services to State departments, agencies, and institutions. The Department shall evaluate information collected through the RFI to determine the:

(1)       Number of qualified companies interested in doing energy management business with State government.

(2)       Types of energy management services available and applicable to State-owned facilities.

(3)       Long-term cost savings potentially available to the State from the implementation of various energy management services.

(4)       Modifications to State law or regulations that may be necessary to acquire and utilize successfully energy management services.

By May 1, 2004, the Department shall report its findings, conclusions, and recommendations to the Chairs of the Senate and House of Representatives Appropriations Committees.

 

BLUE RIBBON COMMISSION ON MEDICAID REFORM

SECTION 6.14A.(a)  There is established the North Carolina Blue Ribbon Commission on Medicaid Reform (Commission). The Commission shall examine the State's Medicaid program and make comprehensive recommendations for fundamental reform. The Commission shall consider:

(1)       Methods to responsibly restrain the growth in Medicaid spending.

(2)       Best practices in both the public and private sectors in managing and administering health care.

(3)       Options for maximizing existing resources while controlling Medicaid program costs.

(4)       Current array of services available within the State Medicaid program to determine the appropriateness of the type, frequency, and duration of those services.

(5)       Opportunities for long-term, systemic change in the Medicaid program through the use of federal waivers and other management tools.

(6)       How to minimize the State and county share of Medicaid costs and maximize federal participation in Medicaid programs.

(7)       The role of Medicaid in the State's economy.

(8)       Any other matter relating to reform of the State Medicaid program.

SECTION 6.14A.(b)  The Commission shall consist of 12 members appointed as follows:

(1)       Six members appointed by the Speaker of the House of Representatives, including one member who shall be designated as House Cochair. No more than three may be legislators.

(2)       Six members appointed by the President Pro Tempore of the Senate, including one member who shall be designated as Senate Cochair. No more than three may be legislators.

The appointing officer shall fill vacancies. The Commission shall meet at the call of the Cochairs. Members of the Commission shall receive per diem, subsistence, and travel expenses as provided in G.S. 120-3.1, 138-5, or 138-6, as appropriate. The Commission may contract for consultant services as provided in G.S. 120-32.02. Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional staff to assist the Commission in its work. Clerical staff shall be furnished to the Commission through the offices of the House of Representatives and Senate Directors of Legislative Assistants. The Commission may meet in the Legislative Building or the Legislative Office Building. The Commission may exercise all of the powers provided under G.S. 120-19 through G.S. 120-19.4 while in the discharge of its official duties. The funds appropriated by this act to the Reserve for the Blue Ribbon Commission on Medicaid Reform shall be transferred to the Department of Health and Human Services in order to draw down federal match funds to be used to cover the cost of the Commission's work.

SECTION 6.14A.(c)  By April 1, 2004, the Commission shall make an interim report to the 2003 General Assembly. The Commission shall make its final report to the 2005 General Assembly by February 1, 2005, and shall expire upon submitting that report.

 

COMPETITIVELY BID BEVERAGES CONTRACTS

SECTION 6.15.(a)  Article 3 of Chapter 143 of the General Statutes is amended by adding the following new section to read:

"§ 143-64.  Beverages contracts.

Notwithstanding any other provision of law, local school administrative units, community colleges, and constituent institutions of The University of North Carolina shall competitively bid contracts that involve the sale of juice or bottled water. The local school administrative units, community colleges, and constituent institutions may set quality standards for these beverages, and these standards may be used to accept or reject a bid."

SECTION 6.15.(b)  This section is effective when it becomes law and applies to contracts bid on or after that date.

 

EXPENDITURES OF FUNDS IN RESERVES LIMITED

SECTION 6.19.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

 

TRANSFER OF LAND FOR THE MILLENNIUM CAMPUSES OF UNC-GREENSBORO AND NC A&T STATE UNIVERSITY

SECTION 6.20.  Notwithstanding G.S. 143-341(4)g. or any other provision of law, the property currently allocated to the Department of Administration and previously allocated to the Department of Health and Human Services for the Central School for the Deaf at Greensboro is hereby reallocated to the Board of Governors of The University of North Carolina.  This property shall be used for the establishment of Millennium Campuses of the University of North Carolina at Greensboro and North Carolina Agricultural and Technical State University.

 

REVISE LAW ON NON-STATE ENTITY REPORTS ON USE OF STATE FUNDS

SECTION 6.21.  G.S. 143-6.1 reads as rewritten:

"§ 143-6.1.  Report on use of State funds by non-State entities.

(a)       Disbursement and Use of State Funds. - Every corporation, organization, and institution that receives, uses, or expends any State funds shall use or expend the funds only for the purposes for which they were appropriated by the General Assembly or collected by the State. State funds include federal funds that flow through the State. For the purposes of this section, the term "grantee" means a corporation, organization, or institution that receives, uses, or expends any State funds. The receives a grant of State funds from a State agency, department, or institution.

The State may shall not disburse State funds appropriated by the General Assembly to any grantee or collected by the State for use by any grantee if unless that grantee has failed to provide any reports or financial information previously required by this section. In addition, before disbursing the funds, the Office of State Budget and Management may require the grantee to supply information demonstrating that the grantee is capable of managing the funds in accordance with law and has established adequate financial procedures and controls. grantee:

(1)       Provides all reports and financial information required under this section to the appropriate State agencies and officials; and

(2)       Provides any additional information that the Office of State Budget and Management deems necessary demonstrating that such grantee is capable of managing the funds in accordance with law and has established adequate financial procedures and controls.

All financial statements furnished to the State Auditor pursuant to this section, and any audits or other reports prepared by the State Auditor, are public records.

(b)       State Agency Reports. Responsibilities. - A State agency that receives State funds and then disburses the State funds to a grantee must identify the grantee to the State Auditor, unless the funds were for the purchase of goods and services. The State agency must submit shall:

(1)       Submit documents to the State Auditor in a prescribed format describing standards of compliance and suggested audit procedures sufficient to give adequate direction to independent auditors performing audits.

(2)       Annually, at the time the grant is made, notify each grantee, in writing, of the reporting requirements set forth in this section and that the State agency is not authorized to disburse funds to grantees that fail to comply with the reporting requirements for funds received during the prior fiscal year.

(3)       Provide each grantee with the accounting form and other requirements prescribed by the State Auditor.

(4)       Submit a list to the State Auditor by October 31 each year of every grantee to which the agency disbursed State funds in the prior fiscal year, the amount disbursed to each grantee, and other such information as required by the State Auditor to comply with the requirements set forth in this section.

(5)       Submit a list to the Office of State Budget and Management by January 31 each year of every grantee to which the agency disbursed State funds in the prior fiscal year and, for each grantee, whether that grantee has filed the sworn accounting required by subsection (c) of this section and whether the sworn accounting is in compliance with subsection (c) of this section.

(c)       Grantee Receipt and Expenditure Reports. - A grantee that receives, uses, or expends between fifteen thousand dollars ($15,000) and three hundred thousand dollars ($300,000) in State funds annually, except when the funds are for the purchase of goods or services, annually must file annually with the State agency that disbursed the funds a sworn accounting of receipts and expenditures of the State funds and a description of activities and accomplishments undertaken by the grantee with State funds. This accounting must be attested to by the treasurer of the grantee and one other authorizing officer of the grantee. The accounting must be filed within six months after the end of the grantee's fiscal year in which the State funds were received. The accounting shall be in the form required by the State Auditor and provided to the grantee by the disbursing agency. Each State agency shall develop a format for these accountings and shall obtain the State Auditor's approval of the format.

(d)       Grantee Audit Reports. - A grantee that receives, uses, or expends State funds in the amount of three hundred thousand dollars ($300,000) or more annually, except when the funds are for the purchase of goods or services, annually must file annually with the State Auditor a financial statement in the form and on the schedule prescribed by the State Auditor. These audit reports shall be filed no later than nine months after the close of the grantee's fiscal year. The financial statement must be audited in accordance with standards prescribed by the State Auditor to assure that State funds are used for the purposes provided by law.

A grantee that receives, uses, or expends State funds in the amount of three hundred thousand dollars ($300,000) or more annually must file annually with the State agency that disbursed the funds a description of activities and accomplishments undertaken by the grantee with State funds. This description must be filed within 90 days after the end of the grantee's fiscal year in which the State funds were received.

(d1)     State Auditor's Responsibilities. - The State Auditor shall:

(1)       Review each audit submitted pursuant to subsection (d) of this section and determine that it has been conducted in accordance with generally accepted audit standards and that the grantee has received a clean audit opinion.

(2)       Notify disbursing agencies by January 31 each year of all grantees that are not in compliance with the reporting requirements set forth in this section.

(3)       Notify disbursing agencies of any material audit findings in the audits of their grantees.

(4)       Submit a list to the Office of State Budget and Management by January 31 each year of every grantee that received State funds in the prior fiscal year and, for each grantee, whether that grantee has complied with this subsection.

(d2)     Before a State agency disburses any funds for the fourth quarter of a fiscal year, the agency shall, in consultation with the Office of State Budget and Management, verify that the grantee has complied with the reporting requirements of this section. A State agency shall not disburse funds during the fourth quarter of the fiscal year to any grantee that has not complied with this section by March 31 of each year.

(d3)     The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by May 1 of each year on all grantees that failed to comply with this section for the prior fiscal year, the amount of State funds that were disbursed to each of those grantees during that fiscal year, and the amount of State funds that were withheld.

(e)       Federal Reporting Requirements. - Federal law may require a grantee to make additional reports with respect to funds for which reports are required under this section. Notwithstanding the provisions of this section, a grantee may satisfy the reporting requirements of subsection (c) of this section by submitting a copy of the report required under federal law with respect to the same funds or by submitting a copy of the report described in subsection (d) of this section.

(f)        Audit Oversight. - The State Auditor has audit oversight, pursuant to Article 5A of Chapter 147 of the General Statutes, of every grantee that receives, uses, or expends State funds. Such a grantee must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State funds. The grantee must furnish any additional financial or budgetary information requested by the State Auditor."

 

Transfers between line items

SECTION 6.22.  For fiscal year 2003-2004 only, State departments and agencies may transfer General Fund appropriations between personal service and nonpersonal service line items provided that it has been approved by the department or agency head and has received prior approval from the Office of State Budget and Management. Personal service funds may be transferred and used for nonpersonal service items in certain instances.  Specifically, personal service funds may only be used to pay for costs related to continuing operations and shall not be used to expand existing programs or to establish new programs.

State departments and agencies shall report to the Joint Legislative Commission on Governmental Operations within 30 days on all transfers from personal service line items to nonpersonal service line items.

General Fund salary and related benefit appropriations for State departments and agencies that are reduced or eliminated in this act shall not be replaced by other budgeted line items supported by General Fund appropriations. Nonpersonal service funds or lapsed salary funds shall not be used to establish new permanent employee positions or to raise the salary of existing employees.

 

reserve for special funds transfer

SECTION 6.23.(a)  The Office of State Budget and Management may transfer up to twenty percent (20%) of the balance of any special fund other than the Clean Water Management Trust Fund, the Natural Heritage Trust Fund, or the Parks and Recreation Trust Fund, to the Reserve for Special Funds Transfer. 

If the above transfers are insufficient to meet the obligations set forth in the Reserve for Special Funds Transfer, then in such event the Office of State Budget and Management may transfer funds from the Clean Water Management Trust Fund, the Natural Heritage Trust Fund, or the Parks and Recreation Trust Fund, provided such transfers shall not exceed twenty percent (20%) of the balance of said fund and provided the Office of State Budget and Management consults with the Joint Legislative Commission on Governmental Operations prior to making the transfer. Further the Office of State Budget and Management may seek to transfer in excess of twenty percent (20%) of other special funds only after consulting with the Joint Legislative Commission on Governmental Operations prior to making the transfer.

SECTION 6.23.(b)  Nothing in this section shall be construed to modify the authority of the Governor to act under Article III, Section 5(3) of the North Carolina Constitution to effect necessary economies in State expenditures required for balancing the budget due to a revenue shortfall.

 

PART VII. PUBLIC SCHOOLS

 

TEACHER SALARY SCHEDULES

SECTION 7.1.(a)  Effective for the 2003-2004 school year, the Director of the Budget shall transfer from the Reserve for Experience Step Salary Increase for Teachers and Principals in Public Schools for the 2003-2004 fiscal year funds necessary to implement the teacher salary schedule set out in subsection (b) of this section, including funds for the employer's retirement and social security contributions and funds for annual longevity payments at one and one-half percent (1.5%) of base salary for 10 to 14 years of State service, two and twenty-five hundredths percent (2.25%) of base salary for 15 to 19 years of State service, three and twenty-five hundredths percent (3.25%) of base salary for 20 to 24 years of State service, and four and one-half percent (4.5%) of base salary for 25 or more years of State service, commencing July 1, 2003, for all teachers whose salaries are supported from the State's General Fund.  These funds shall be allocated to individuals according to rules adopted by the State Board of Education.  The longevity payment shall be paid in a lump sum once a year.

SECTION 7.1.(b)  For the 2003-2004 school year, the following monthly salary schedules shall apply to certified personnel of the public schools who are classified as teachers.  The schedule contains 30 steps with each step corresponding to one year of teaching experience.

              2003-2004 MONTHLY SALARY SCHEDULE

                                         "A" TEACHERS

Years of                            "A"                            NBPTS

Experience                       Teachers                  Certification

0                                 $2,525                           N/A

1                                 $2,567                           N/A

2                                 $2,611                           N/A

3                                 $2,764                     $3,096

4                                 $2,904                     $3,252

5                                 $3,036                     $3,400

6                                 $3,164                     $3,544

7                                 $3,266                     $3,658

8                                 $3,314                     $3,712

9                                 $3,362                     $3,765

10                               $3,412                     $3,821

11                               $3,461                     $3,876

12                               $3,511                     $3,932

13                               $3,561                     $3,988

14                               $3,614                     $4,048

15                               $3,667                     $4,107

16                               $3,722                     $4,169

17                               $3,777                     $4,230

18                               $3,834                     $4,294

19                               $3,892                     $4,359

20                               $3,950                     $4,424

21                               $4,011                     $4,492

22                               $4,072                     $4,561

23                               $4,136                     $4,632

24                               $4,200                     $4,704

25                               $4,264                     $4,776

26                               $4,330                     $4,850

27                               $4,398                     $4,926

28                               $4,467                     $5,003

29                               $4,538                     $5,083

30+                            $4,538                     $5,083

 

              2003-2004 MONTHLY SALARY SCHEDULE

                                        "M" TEACHERS

Years of                            "M"                           NBPTS

Experience                       Teachers                  Certification

0                                 $2,778                           N/A

1                                 $2,824                           N/A

2                                 $2,872                           N/A

3                                 $3,040                     $3,405

4                                 $3,194                     $3,577

5                                 $3,340                     $3,741

6                                 $3,480                     $3,898

7                                 $3,593                     $4,024

8                                 $3,645                     $4,082

9                                 $3,698                     $4,142

10                               $3,753                     $4,203

11                               $3,807                     $4,264

12                               $3,862                     $4,325

13                               $3,917                     $4,387

14                               $3,975                     $4,452

15                               $4,034                     $4,518

16                               $4,094                     $4,585

17                               $4,155                     $4,654

18                               $4,217                     $4,723

19                               $4,281                     $4,795

20                               $4,345                     $4,866

21                               $4,412                     $4,941

22                               $4,479                     $5,016

23                               $4,550                     $5,096

24                               $4,620                     $5,174

25                               $4,690                     $5,253

26                               $4,763                     $5,335

27                               $4,838                     $5,419

28                               $4,914                     $5,504

29                               $4,992                     $5,591

30+                            $4,992                     $5,591

SECTION 7.1.(c)  Certified public school teachers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "M" teachers.  Certified public school teachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "M" teachers.

SECTION 7.1.(d)  Effective for the 2003-2004 school year, the first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "M" teachers.  Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience.  Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.

Certified psychologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified psychologists. Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.

SECTION 7.1.(e)  Effective for the 2003-2004 school year, speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.

Speech pathologists and audiologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for speech pathologists and audiologists. Speech pathologists and audiologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for speech pathologists and audiologists.

SECTION 7.1.(f)  Certified school nurses who are employed in the public schools as nurses shall be paid on the "M" salary schedule.

SECTION 7.1.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.

 

SCHOOL-BASED ADMINISTRATOR SALARY SCHEDULE

SECTION 7.2.(a)  Effective for the 2003-2004 school year, the Director of the Budget shall transfer from the Reserve for Experience Step Salary Increase for Teachers and Principals in Public Schools for the 2003-2004 fiscal year funds necessary to implement the salary schedule for school-based administrators as provided in this section.  These funds shall be used for State-paid employees only.

SECTION 7.2.(b)  The base salary schedule for school-based administrators shall apply only to principals and assistant principals.  The base salary schedule for the 2003-2004 fiscal year, commencing July 1, 2003, is as follows:

2003-2004

PRINCIPAL AND ASSISTANT PRINCIPAL SALARY SCHEDULES

CLASSIFICATION

Yrs of       Assistant         Prin I               Prin II             Prin III            Prin IV

Exp            Principal         (0-10)             (11-21)           (22-32)           (33-43)

0-4            $3,226                    -                       -                       -                       -

5                $3,373                    -                       -                       -                       -

6                $3,515                    -                       -                       -                       -

7                $3,629                    -                       -                       -                       -

8                $3,681         $3,681                       -                       -                       -

9                $3,735         $3,735                       -                       -                       -

10             $3,791         $3,791            $3,845                       -                       -

11             $3,845         $3,845            $3,901                       -                       -

12             $3,901         $3,901            $3,956            $4,015                       -

13             $3,956         $3,956            $4,015            $4,074            $4,135

14             $4,015         $4,015            $4,074            $4,135            $4,197

15             $4,074         $4,074            $4,135            $4,197            $4,259

16             $4,135         $4,135            $4,197            $4,259            $4,324

17             $4,197         $4,197            $4,259            $4,324            $4,388

18             $4,259         $4,259            $4,324            $4,388            $4,456

19             $4,324         $4,324            $4,388            $4,456            $4,524

20             $4,388         $4,388            $4,456            $4,524            $4,596

21             $4,456         $4,456            $4,524            $4,596            $4,666

22             $4,524         $4,524            $4,596            $4,666            $4,737

23             $4,596         $4,596            $4,666            $4,737            $4,811

24             $4,666         $4,666            $4,737            $4,811            $4,886

25             $4,737         $4,737            $4,811            $4,886            $4,963

26             $4,811         $4,811            $4,886            $4,963            $5,042

27             $4,886         $4,886            $4,963            $5,042            $5,143

28             $4,963         $4,963            $5,042            $5,143            $5,246

29             $5,042         $5,042            $5,143            $5,246            $5,351

30             $5,143         $5,143            $5,246            $5,351            $5,458

31             $5,246         $5,246            $5,351            $5,458            $5,567

32                        -         $5,351            $5,458            $5,567            $5,678

33                        -                    -            $5,567            $5,678            $5,792

34                        -                    -            $5,678            $5,792            $5,908

35                        -                    -                       -            $5,908            $6,026

36                        -                    -                       -            $6,026            $6,147

37                        -                    -                       -                       -            $6,270

 

2003-2004

PRINCIPAL AND ASSISTANT PRINCIPAL SALARY SCHEDULES

CLASSIFICATION

Yrs of       Prin V          Prin VI            Prin VII           Prin VIII

Exp            (44-54)        (55-65)           (66-100)        (101+)

14             $4,259                    -                       -                       -

15             $4,324                    -                       -                       -

16             $4,388         $4,456                       -                       -

17             $4,456         $4,524            $4,666                       -

18             $4,524         $4,596            $4,737            $4,811

19             $4,596         $4,666            $4,811            $4,886

20             $4,666         $4,737            $4,886            $4,963

21             $4,737         $4,811            $4,963            $5,042

22             $4,811         $4,886            $5,042            $5,143

23             $4,886         $4,963            $5,143            $5,246

24             $4,963         $5,042            $5,246            $5,351

25             $5,042         $5,143            $5,351            $5,458

26             $5,143         $5,246            $5,458            $5,567

27             $5,246         $5,351            $5,567            $5,678

28             $5,351         $5,458            $5,678            $5,792

29             $5,458         $5,567            $5,792            $5,908

30             $5,567         $5,678            $5,908            $6,026

31             $5,678         $5,792            $6,026            $6,147

32             $5,792         $5,908            $6,147            $6,270

33             $5,908         $6,026            $6,270            $6,395

34             $6,026         $6,147            $6,395            $6,523

35             $6,147         $6,270            $6,523            $6,653

36             $6,270         $6,395            $6,653            $6,786

37             $6,395         $6,523            $6,786            $6,922

38             $6,523         $6,653            $6,922            $7,060

39                        -         $6,786            $7,060            $7,201

40                        -         $6,922            $7,201            $7,345

41                        -                    -            $7,345            $7,492

SECTION 7.2.(c)  The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools, shall be determined in accordance with the following schedule:

                                                                        Number of Teachers

Classification                                                            Supervised

Assistant Principal

Principal I                                                      Fewer than 11 Teachers

Principal II                                                     11-21 Teachers

Principal III                                                    22-32 Teachers

Principal IV                                                    33-43 Teachers

Principal V                                                     44-54 Teachers

Principal VI                                                    55-65 Teachers

Principal VII                                                  66-100 Teachers

Principal VIII                                                 More than 100 Teachers

The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non-State funds or the principal or teacher assistants.

The beginning classification for principals in alternative schools shall be the Principal III level. Principals in alternative schools who supervise 33 or more teachers shall be classified according to the number of teachers supervised.

SECTION 7.2.(d)  A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal. A principal or assistant principal shall also continue to receive any additional State-funded percentage increases earned for the 1997-1998, 1998-1999, and 1999-2000 school years for improvement in student performance or maintaining a safe and orderly school.

SECTION 7.2.(e)  Principals and assistant principals with certification based on academic preparation at the six-year degree level shall be paid a salary supplement of one hundred twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty-three dollars ($253.00) per month.

SECTION 7.2.(f)  There shall be no State requirement that superintendents in each local school unit shall receive in State-paid salary at least one percent (1%) more than the highest paid principal receives in State salary in that school unit; provided, however, the additional State-paid salary a superintendent who was employed by a local school administrative unit for the 1992-1993 fiscal year received because of that requirement shall not be reduced because of this subsection for subsequent fiscal years that the superintendent is employed by that local school administrative unit so long as the superintendent is entitled to at least that amount of additional State-paid salary under the rules in effect for the 1992-1993 fiscal year.

SECTION 7.2.(g)  Longevity pay for principals and assistant principals shall be as provided for State employees under the State Personnel Act.

SECTION 7.2.(h)

(1)       If a principal is reassigned to a higher job classification because the principal is transferred to a school within a local school administrative unit with a larger number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the higher job classification.

(2)       If a principal is reassigned to a lower job classification because the principal is transferred to a school within a local school administrative unit with a smaller number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the lower job classification.

This subsection applies to all transfers on or after the effective date of this section, except transfers in school systems that have been created, or will be created, by merging two or more school systems. Transfers in these merged systems are exempt from the provisions of this subsection for one calendar year following the date of the merger.

SECTION 7.2.(i)  Participants in an approved full-time masters in school administration program shall receive up to a 10-month stipend at the beginning salary of an assistant principal during the internship period of the masters program. For the 2004-2005 fiscal year and subsequent fiscal years, the stipend shall not exceed the difference between the beginning salary of an assistant principal and any fellowship funds received by the intern as a full-time student, including awards of the Principal Fellows Program. The Principal Fellows Program or the school of education where the intern participates in a full-time masters in school administration program shall supply the Department of Public Instruction with certification of eligible full-time interns.

SECTION 7.2.(j)  During the 2003-2004 fiscal year, the placement on the salary schedule of an administrator with a one-year provisional assistant principal's certificate shall be at the entry-level salary for an assistant principal or the appropriate step on the teacher salary schedule, whichever is higher.

 

CENTRAL OFFICE SALARIES

SECTION 7.3.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2003-2004 fiscal year, beginning July 1, 2003.  All employees so classified who are employed on October 1, 2003 shall receive a one-time, lump sum compensation bonus, payable at the end of the employee’s first pay period after October 1, 2003, of five hundred and fifty dollars ($550.00).

School Administrator I                     $2,932            $5,266

School Administrator II                    $3,112            $5,586

School Administrator III                  $3,303            $5,925

School Administrator IV                  $3,436            $6,162

School Administrator V                   $3,574            $6,410

School Administrator VI                  $3,792            $6,799

School Administrator VII                 $3,945            $7,072

The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents. The category in which an employee is placed shall be included in the contract of any employee hired on or after July 1, 2003.

SECTION 7.3.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2003-2004 fiscal year, beginning July 1, 2003. All employees so classified who are employed on October 1, 2003, shall receive a one-time, lump sum compensation bonus, payable at the end of the employee’s first pay period after October 1, 2003, of five hundred and fifty dollars ($550.00).

Superintendent I                                $4,187            $7,503

Superintendent II                               $4,445            $7,956

Superintendent III                              $4,716            $8,441

Superintendent IV                             $5,005            $8,953

Superintendent V                               $5,312            $9,499

The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.

Notwithstanding the provisions of this subsection, a local board of education may pay an amount in excess of the applicable range to a superintendent who is entitled to receive the higher amount under Section 7.2.(f) of this act.

SECTION 7.3.(c)  Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the State Personnel Act.

SECTION 7.3.(d)  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided pursuant to this section.  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for under this section.

SECTION 7.3.(e)  The State Board of Education shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.

SECTION 7.3.(f)  The Director of the Budget shall transfer from the Reserve for Compensation Increases created in this act for fiscal year 2003-2004, beginning July 1, 2003, funds necessary to provide a one-time, lump sum compensation bonus, payable at the end of the employee’s first pay period after October 1, 2003, of five hundred fifty dollars ($550.00) for all permanent full-time personnel paid from the Central Office Allotment. The State Board of Education shall allocate these funds to local school administrative units.  The local boards of education shall establish guidelines for providing their salary increases to these personnel.

 

NONCERTIFIED PERSONNEL

SECTION 7.4.(a)  The Director of the Budget shall transfer from the Reserve for Compensation Increases created in this act for fiscal year 2003-2004, commencing July 1, 2003, funds necessary to provide a one-time, lump sum compensation bonus, payable at the end of the employee’s first pay period after October 1, 2003, of five hundred fifty dollars ($550.00), for all noncertified public school employees whose salaries are supported from the State's General Fund and who are employed by the public schools on October 1, 2003.

SECTION 7.4.(b)  Local boards of education shall provide a one-time, lump sum compensation bonus, payable at the end of the employee’s first pay period after October 1, 2003, of five hundred fifty dollars ($550.00) for all such employees who were employed on October 1, 2003.  For part-time employees, the pay increase shall be pro rata based on the number of hours worked.

SECTION 7.4.(c)  These funds shall not be used for any purpose other than for the one-time, lump sum compensation bonuses and necessary employer contributions provided by this section.

 

RESERVE FOR EXPERIENCE STEP INCREASE FOR TEACHERS AND PRINCIPALS IN PUBLIC SCHOOLS

SECTION 7.5.(a)  Funds in the Reserve for Experience Step Increase for Teachers and Principals in Public Schools shall be used for experience step increases for employees of schools operated by a local board of education, the Department of Health and Human Services, the Department of Correction, or the Department of Juvenile Justice and Delinquency Prevention who are paid on the teacher salary schedule or the principal and assistant principal salary schedule.

SECTION 7.5.(b)  Effective July 1, 2003, any permanent certified personnel employed on July 1, 2003, and paid on the teacher salary schedule with 29+ years of experience shall receive a one-time bonus equivalent to the average increase of the 26 to 29 year steps.  Effective July 1, 2003, any permanent personnel employed on July 1, 2003, and paid at the top of the principal and assistant principal salary schedule shall receive a one-time bonus equivalent to two percent (2%).  For permanent part-time personnel, the one-time bonus shall be adjusted pro rata.  Personnel defined under G.S. 115C-325(a)(5a) are not eligible to receive the bonus.

 

SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES

SECTION 7.6.(a)  Funds for Supplemental Funding. - The General Assembly finds that it is appropriate to provide supplemental funds in low-wealth counties to allow those counties to enhance the instructional program and student achievement.  Therefore, funds are appropriated to State Aid to Local School Administrative Units for the 2003-2004 fiscal year and the 2004-2005 fiscal year to be used for supplemental funds for the schools.

SECTION 7.6.(b)  Use of Funds for Supplemental Funding. - All funds received pursuant to this section shall be used only:  (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, school computer technicians, instructional supplies and equipment, staff development, and textbooks; (ii) for salary supplements for instructional personnel and instructional support personnel; and (iii) to pay an amount not to exceed ten thousand dollars ($10,000) of the plant operation contract cost charged by the Department of Public Instruction for services.

Local boards of education are encouraged to use at least twenty-five percent (25%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose, and the State Board shall report this information to the Joint Legislative Education Oversight Committee. These reports shall specify how these funds were targeted and used to implement specific improvement strategies of each local school administrative unit and its schools, such as teacher recruitment, closing the achievement gap, improving student accountability, addressing the needs of at-risk students, and establishing and maintaining safe schools.

SECTION 7.6.(c)  Definitions. - As used in this section:

(1)       "Anticipated county property tax revenue availability" means the county-adjusted property tax base multiplied by the effective State average tax rate.

(2)       "Anticipated total county revenue availability" means the sum of the:

a.         Anticipated county property tax revenue availability,

b.         Local sales and use taxes received by the county that are levied under Chapter 1096 of the 1967 Session Laws or under Subchapter VIII of Chapter 105 of the General Statutes,

c.         Sales tax hold harmless reimbursement received by the county under G.S. 105-521, and

d.         Fines and forfeitures deposited in the county school fund for the most recent year for which data are available.

(3)       "Anticipated total county revenue availability per student" means the anticipated total county revenue availability for the county divided by the average daily membership of the county.

(4)       "Anticipated State average revenue availability per student" means the sum of all anticipated total county revenue availability divided by the average daily membership for the State.

(5)       "Average daily membership" means average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education. If a county contains only part of a local school administrative unit, the average daily membership of that county includes all students who reside within the county and attend that local school administrative unit.

(6)       "County-adjusted property tax base" shall be computed as follows:

a.         Subtract the present-use value of agricultural land, horticultural land, and forestland in the county, as defined in G.S. 105-277.2, from the total assessed real property valuation of the county,

b.         Adjust the resulting amount by multiplying by a weighted average of the three most recent annual sales assessment ratio studies,

c.         Add to the resulting amount the:

1.         Present-use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105-277.2,

2.         Value of property of public service companies, determined in accordance with Article 23 of Chapter 105 of the General Statutes, and

3.         Personal property value for the county.

(7)       "County-adjusted property tax base per square mile" means the county-adjusted property tax base divided by the number of square miles of land area in the county.

(8)       "County wealth as a percentage of State average wealth" shall be computed as follows:

a.         Compute the percentage that the county per capita income is of the State per capita income and weight the resulting percentage by a factor of five-tenths,

b.         Compute the percentage that the anticipated total county revenue availability per student is of the anticipated State average revenue availability per student and weight the resulting percentage by a factor of four-tenths,

c.         Compute the percentage that the county-adjusted property tax base per square mile is of the State-adjusted property tax base per square mile and weight the resulting percentage by a factor of one-tenth,

d.         Add the three weighted percentages to derive the county wealth as a percentage of the State average wealth.

(9)       "Effective county tax rate" means the actual county tax rate multiplied by a weighted average of the three most recent annual sales assessment ratio studies.

(10)     "Effective State average tax rate" means the average of effective county tax rates for all counties.

(10a)   "Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.

(11)     "Per capita income" means the average for the most recent three years for which data are available of the per capita income according to the most recent report of the United States Department of Commerce, Bureau of Economic Analysis, including any reported modifications for prior years as outlined in the most recent report.

(12)     "Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).

(13)     "State average current expense appropriations per student" means the most recent State total of county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.

(14)     "State average adjusted property tax base per square mile" means the sum of the county-adjusted property tax bases for all counties divided by the number of square miles of land area in the State.

(14a)   "Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.

(15)     "Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.

SECTION 7.6.(d)  Eligibility for Funds. - Except as provided in subsection (h) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%).

SECTION 7.6.(e)  Allocation of Funds. - Except as provided in subsection (g) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools.  (To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county wealth as a percentage of State average wealth by the State average current expense appropriations per student.)

The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit located in whole or in part in the county based on the average daily membership of the county's students in the school units.

If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.

SECTION 7.6.(f)  Formula for Distribution of Supplemental Funding Pursuant to This Section Only. - The formula in this section is solely a basis for distribution of supplemental funding for low-wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools.  The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low-wealth counties.

SECTION 7.6.(g)  Minimum Effort Required. - Counties that had effective tax rates in the 1996-1997 fiscal year that were above the State average effective tax rate but that had effective rates below the State average in the 1997-1998 fiscal year or thereafter shall receive reduced funding under this section.  This reduction in funding shall be determined by subtracting the amount that the county would have received pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws from the amount that the county would have received if qualified for full funding and multiplying the difference by ten percent (10%).  This method of calculating reduced funding shall apply one time only.

This method of calculating reduced funding shall not apply in cases in which the effective tax rate fell below the statewide average effective tax rate as a result of a reduction in the actual property tax rate. In these cases, the minimum effort required shall be calculated in accordance with Section 17.1(g) of Chapter 507 of the 1995 Session Laws.

If the county documents that it has increased the per student appropriation to the school current expense fund in the current fiscal year, the State Board of Education shall include this additional per pupil appropriation when calculating minimum effort pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws.

SECTION 7.6.(h)  Nonsupplant Requirement. - A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2003-2005 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding 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:

(1)       The current expense appropriation per student of the county for the current year is less than ninety-five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and

(2)       The county cannot show:  (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.

The State Board of Education shall adopt rules to implement this section.

SECTION 7.6.(i)  Reports. - The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2004, if it determines that counties have supplanted funds.

SECTION 7.6.(j)  Department of Revenue Reports. - The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year.  The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present-use value of agricultural land, horticultural land, and forestland as defined in G.S. 105-277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.

 

SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING

SECTION 7.7.(a)  Funds for Small School Systems. - Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of fewer than 3,175 students and (ii) to 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 administrative unit is located has a county-adjusted property tax base per student that is below the State-adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,175 to 4,000 students. The allocation formula shall:

(1)       Round all fractions of positions to the next whole position.

(2)       Provide five and one-half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or fewer.

(3)       Provide additional program enhancement teachers adequate to offer the standard course of study.

(4)       Change the duty-free period allocation to one teacher assistant per 400 average daily membership.

(5)       Provide a base for the consolidated funds allotment of at least six hundred fourteen thousand one hundred forty-eight dollars ($614,148), excluding textbooks for the 2003-2004 fiscal year and a base of six hundred forty-seven thousand four hundred eighty-one dollars ($647,481) for the 2004-2005 fiscal year.

(6)       Allot vocational education funds for grade 6 as well as for grades 7-12.

If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fully fund the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis. This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units.

SECTION 7.7.(b)  Nonsupplant Requirement. - A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2003-2005 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding 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:

(1)       The current expense appropriation per student of the county for the current year is less than ninety-five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and

(2)       The county cannot show:  (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.

The State Board of Education shall adopt rules to implement this section.

SECTION 7.7.(c)  Phase-Out Provisions. - If a local school administrative unit becomes ineligible for funding under this formula solely because of an increase in the county-adjusted property tax base per student of the county in which the local school administrative unit is located, funding for that unit shall be phased out over a two-year period.  For the first year of ineligibility, the unit shall receive the same amount it received for the prior fiscal year. For the second year of ineligibility, it shall receive one-half of that amount.

If a local school administrative unit becomes ineligible for funding under this formula solely because of an increase in the population of the county in which the local school administrative unit is located, funding for that unit shall be continued for five years after the unit becomes ineligible.

SECTION 7.7.(d)  Definitions. - As used in this section:

(1)       "Average daily membership" means within two percent (2%) of the average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education.

(2)       "County-adjusted property tax base per student" means the total assessed property valuation for each county, adjusted using a weighted average of the three most recent annual sales assessment ratio studies, divided by the total number of students in average daily membership who reside within the county.

(2a)     "Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.

(3)       "Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).

(4)       "State-adjusted property tax base per student" means the sum of all county adjusted property tax bases divided by the total number of students in average daily membership who reside within the State.

(4a)     "Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.

(5)       "Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued during the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.

SECTION 7.7.(e)  Reports. - The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2004, if it determines that counties have supplanted funds.

SECTION 7.7.(f)  Use of Funds. - Local boards of education are encouraged to use at least twenty percent (20%) of the funds they receive pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and children who are performing at Level I or II on the writing tests in grades 4 and 7.  Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose, and the State Board shall report this information to the Joint Legislative Education Oversight Committee.  These reports shall specify how these funds were targeted and used to implement specific improvement strategies of each local school administrative unit and its schools such as teacher recruitment, closing the achievement gap, improving student accountability, addressing the needs of at-risk students, and establishing and maintaining safe schools.

 

APPROPRIATIONS FOR CONTINUALLY LOW-PERFORMING  SCHOOLS

SECTION 7.8.  Of funds appropriated from the General Fund to State Aid to Local School Administrative Units, the sum of one million nine hundred fifty-six thousand one hundred fifteen dollars ($1,956,115) for the 2003-2004 and 2004-2005 fiscal years shall be used to provide the State's chronically low-performing schools with tools needed to dramatically improve student achievement. These funds shall be used to implement any of the following strategies at the schools that have not previously been implemented with State or other funds:

(1)       The sum of one million six hundred fifty-seven thousand three hundred forty-five dollars ($1,657,345) for the 2003-2004 and 2004-2005 fiscal years shall be used to reduce class size at a continually low-performing school to ensure that the number of teachers allotted for students in grades four and five is one for every 17 students, and that the number of teachers allotted in grades six through eight is one for every 17 students, and that the number of teachers allotted in grades nine through twelve is one for every 20 students; and

(2)       The sum of two hundred ninety-eight thousand seven hundred seventy dollars ($298,770) for the 2003-2004 and 2004-2005 fiscal years shall be used to extend teachers' contracts for a total of 10 days, including five days of additional instruction with related costs for other than teachers' salaries for the 2003-2004 and 2004-2005 school years.

Notwithstanding any other provision of law, the State Board of Education may implement intervention strategies for the 2003-2004 and 2004-2005 school years that it deems appropriate.

 

IMMEDIATE ASSISTANCE TO THE HIGHEST PRIORITY ELEMENTARY SCHOOLS

SECTION 7.9.  Of funds appropriated from the General Fund to State Aid to Local School Administrative Units, the sum of ten million one hundred thirty-four thousand six hundred seven dollars ($10,134,607) for the 2003-2004 and 2004-2005 fiscal years shall be budgeted to provide the State's lowest performing elementary schools with the tools needed to dramatically improve student achievement.  These funds shall be used for the 37 elementary schools at which, for the 1999-2000 school year, over eighty percent (80%) of the students qualified for free or reduced-price lunches and no more than fifty-five percent (55%) of the students performed at or above grade level.  Of these funds:

(1)       The sum of six million ninety-three thousand one hundred eighty-one dollars ($6,093,181) for the 2003-2004 and 2004-2005 fiscal years shall be used to reduce class size at each of these schools to ensure that no class kindergarten through third grade has more than 15 students;

(2)       The sum of two million two hundred sixty-six thousand twenty-six dollars ($2,266,026) for the 2003-2004 and 2004-2005 fiscal years shall be used to extend all teachers' contracts at these schools for a total of 10 days, with five days for staff development, including staff development on methods to individualize instruction in smaller classes, and preparation for the 2003-2004 and 2004-2005 school years, and five additional days of instruction with related costs for other than teachers' salaries;  and

(3)       The sum of one million seven hundred seventy-five thousand four hundred dollars ($1,775,400) for the 2003-2004 and 2004-2005 fiscal years shall be used to provide one additional instructional support position at each priority school.

No funds from the teacher assistant allotment category may be allotted to the local school administrative units for students assigned to these schools. Any teacher assistants displaced from jobs in these high-priority elementary schools shall be given preferential consideration for vacant teacher assistant positions at other schools, provided their job performance has been satisfactory. Nothing in this section prevents the local school administrative unit from placing teacher assistants in these schools.

 

EVALUATION OF INITIATIVES TO ASSIST HIGH-PRIORITY SCHOOLS

SECTION 7.10.(a)  In order for the high-priority schools identified in Section 7.9 of this act to remain eligible for the additional resources provided in this section, the schools must meet the expected growth for each year and must achieve high growth for at least two out of three years based on the State Board of Education's annual performance standards set for each school.  No adjustment in the allotment of resources based on performance shall be made until the 2004-2005 school year.

SECTION 7.10.(b)  All teaching positions allotted for students in high-priority schools and continually low-performing schools in those grades targeted for smaller class sizes shall be assigned to and teach in those grades and in those schools.  The maximum class size in grades K-3 in high-priority schools and in grades K-5 in continually low-performing schools shall be no more than one student above the allotment ratio in that grade.  The Department of Public Instruction shall monitor class sizes at these schools at the end of the first month of school and report to the State Board of Education on the actual class sizes at these schools.  If the local school administrative unit notifies the State Board of Education that they do not have sufficient resources to adhere to the class size maximum requirements and requests additional teaching positions, the State Board shall verify the need for additional positions.  If the additional resources are determined necessary, the State Board of Education may allocate additional teaching positions to the unit from the Reserve for Average Daily Membership adjustments.

SECTION 7.10.(c)  Of funds appropriated from the General Fund to State Aid to Local School Administrative Units, the sum of five hundred thousand dollars ($500,000) for fiscal year 2003-2004 and the sum of five hundred thousand dollars ($500,000) for fiscal year 2004-2005 shall be used by the State Board of Education to contract with an outside organization to evaluate the initiatives set forth in this section.  The evaluation shall include:

(1)       An assessment of the overall impact these initiatives have had on student achievement;

(2)       An assessment of the effectiveness of each individual initiative set for this section in improving student achievement;

(3)       An identification of changes in staffing patterns, instructional methods, staff development, and parental involvement as a result of these initiatives;

(4)       An accounting of how funds and personnel resources made available for these schools were utilized and the impact of varying patterns of utilization on changes in student achievement;

(5)       An assessment of the impact of bonuses for mathematics, science, and special education teachers on (i) the retention of these teachers in the targeted schools, (ii) the recruitment of teachers in these specialties into targeted schools, (iii) the recruitment of teachers certified in these disciplines, and (iv) student achievement in schools at which these teachers receive these bonuses; and

(6)       Recommendations for the continuance and improvement of these initiatives.

The State Board of Education shall make a report to the Joint Legislative Education Oversight Committee regarding the results of this evaluation by December 1 of each year. The State Board of Education shall submit its recommendations for changes to these initiatives to the Committee at anytime.

 

AT-RISK STUDENT SERVICES/ALTERNATIVE SCHOOLS

SECTION 7.11.  The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Student allotment each year for the 2003-2004 fiscal year and for the 2004-2005 fiscal year to implement G.S. 115C-12(24).

 

ADDITIONAL TEACHER POSITIONS FOR SECOND GRADE

SECTION 7.12.(a)  The maximum class size limits for second grade established by the State Board of Education for the 2003-2004 school year shall be reduced by two from the 2002-2003 limits, based on an allotment ratio of one teacher for every 18 students.

SECTION 7.12.(b)  For the 2003-2004 school year, local school administrative units shall use these additional teacher positions to reduce class size in second grade.

 

CHILDREN WITH DISABILITIES

SECTION 7.13.  The State Board of Education shall allocate funds for children with disabilities on the basis of two thousand six hundred seventy dollars and twenty-eight cents ($2,670.28) per child for a maximum of 164,167 children for the 2003-2004 school year.  Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) twelve and five-tenths percent (12.5%) of the 2003-2004 allocated average daily membership in the local school administrative unit.

The dollar amounts allocated under this section for children with disabilities shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve children with disabilities.

 

FUNDS FOR ACADEMICALLY GIFTED CHILDREN

SECTION 7.14.  The State Board of Education shall allocate funds for academically or intellectually gifted children on the basis of eight hundred eighty-four dollars and fifty-five cents ($884.55) per child.  A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2003-2004 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The State Board shall allocate funds for no more than 53,712 children for the 2003-2004 school year.

The dollar amounts allocated under this section for academically or intellectually gifted children shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.

 

STUDENTS WITH LIMITED ENGLISH PROFICIENCY

SECTION 7.15.(a)  The State Board of Education shall develop guidelines for identifying and providing services to students with limited proficiency in the English language.

The State Board shall allocate these funds to local school administrative units and to charter schools under a formula that takes into account the average percentage of students in the units or the charters over the past three years who have limited English proficiency. The State Board shall allocate funds to a unit or a charter school only if (i) average daily membership of the unit or the charter school includes at least 20 students with limited English proficiency or (ii) students with limited English proficiency comprise at least two and one-half percent (2.5%) of the average daily membership of the unit or charter school. For the portion of the funds that is allocated on the basis of the number of identified students, the maximum number of identified students for whom a unit or charter school receives funds shall not exceed ten and six-tenths percent (10.6%) of its average daily membership.

Local school administrative units shall use funds allocated to them to pay for classroom teachers, teacher assistants, tutors, textbooks, classroom materials/instructional supplies/equipment, transportation costs, and staff development of teachers for students with limited English proficiency.

A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds.

SECTION 7.15.(b)  The Department of Public Instruction shall prepare a current head count of the number of students classified with limited English proficiency by December 1 of each year.

Students in the head count shall be assessed at least once every three years to determine their level of English proficiency. A student who scores "superior" on the standard English language proficiency assessment instrument used in this State shall not be included in the head count of students with limited English proficiency.

SECTION 7.15.(c)  The State Board of Education shall review the allotment formula for funding for students with limited English proficiency.  In its review, the Board shall consider whether the proportion of funds allotted on the basis of concentration of students with limited English proficiency in a local school administrative unit is at the proper level or should be revised.  The Board shall report the results of its review and its recommendations to the Joint Legislative Education Oversight Committee by November 15, 2003.

 

FUNDS TO IMPLEMENT THE ABCS OF PUBLIC EDUCATION

SECTION 7.16.(a)  The State Board of Education shall use funds appropriated for State Aid to Local School Administrative Units for the 2003-2004 fiscal year to provide incentive funding for schools that met or exceeded the projected levels of improvement in student performance during the 2002-2003 school year, in accordance with the ABCs of Public Education Program.  In accordance with State Board of Education policy:

(1)       Incentive awards in schools that achieve higher than expected improvements may be up to:

a.         One thousand five hundred dollars ($1,500) for each teacher and for certified personnel; and

b.         Five hundred dollars ($500.00) for each teacher assistant.

(2)       Incentive awards in schools that meet the expected improvements may be up to:

a.         Seven hundred fifty dollars ($750.00) for each teacher and for certified personnel; and

b.         Three hundred seventy-five dollars ($375.00) for each teacher assistant.

SECTION 7.16.(b)  The State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for assistance teams to low-performing schools.

SECTION 7.16.(c)  The pilot program established by the State Board of Education under Section 8.36 of S.L. 1999-237 is terminated as of June 30, 2002. The State Board of Education shall report its findings and recommendations based on results of the pilot program as of June 30, 2002, to the Joint Legislative Education Oversight Committee by October 15, 2003.

SECTION 7.16.(d)  It is the intent of the General Assembly, in future fiscal years, to address efforts in schools to close the achievement gap by providing an incentive for schools that make adequate yearly progress as required by the No Child Left Behind Act of 2001.

SECTION 7.16.(e)  Subsection (c) of this section becomes effective June 30, 2003.

 

LEA ASSISTANCE PROGRAM

SECTION 7.17.  Of funds appropriated from the General Fund to State Aid to Local School Administrative Units, the sum of five hundred thousand dollars ($500,000) for fiscal year 2003-2004 shall be used to provide assistance to the State's low-performing Local School Administrative Units (LEAs) and to assist schools in meeting adequate yearly progress in each subgroup identified in the No Child Left Behind Act of 2001. The State Board of Education shall report to the Office of State Budget and Management, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the expenditure of these funds by May 15, 2004, and by December 15, 2005.  The report shall contain: (i) the criteria for selecting LEAs and schools to receive assistance, (ii) measurable goals and objectives for the assistance program, (iii) an explanation of the assistance provided, (iv) findings from the assistance program, (v) actual expenditures by category, (vi) recommendations for the continuance of this program, and (vii) any other information the State Board deems necessary.

 

EXPENDITURE OF FUNDS TO IMPROVE STUDENT ACCOUNTABILITY

SECTION 7.18.(a)  Funds appropriated for the 2003-2004 and 2004-2005 fiscal years for Student Accountability Standards shall be used to assist students to perform at or above grade level in reading and mathematics in grades 3-8 as measured by the State's end-of-grade tests. The State Board of Education shall allocate these funds to LEAs based on the number of students who score at Level I or Level II on either reading or mathematics end-of-grade tests in grades 3-8. Funds in the allocation category shall be used to improve the academic performance of (i) students who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 or (ii) students who are performing at Level I or II on the writing tests in grades 4 and 7. These funds may also be used to improve the academic performance of students who are performing at Level I or II on the high school end-of-course tests. These funds shall not be transferred to other allocation categories or otherwise used for other purposes.  Except as otherwise provided by law, local boards of education may transfer other funds available to them into this allocation category.

The principal of a school receiving these funds, in consultation with the faculty and the site-based management team, shall implement plans for expending these funds to improve the performance of students.

Local boards of education are encouraged to use federal funds such as Title I Comprehensive School Reform Development Funds and to examine the use of State funds to ensure that every student is performing at or above grade level in reading and mathematics.

These funds shall be allocated to local school administrative units for the 2003-2004 fiscal year within 30 days of the date this act becomes law.

SECTION 7.18.(b)  Funds appropriated for Student Accountability Standards shall not revert at the end of each fiscal year but shall remain available for expenditure until August 31 of the subsequent fiscal year.

 

FUNDS FOR TEACHER RECRUITMENT INITIATIVES

SECTION 7.19.  The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds appropriated for State Aid to Local School Administrative Units each year for the 2003-2004 fiscal year and for the 2004-2005 fiscal year to enable teachers who have received NBPTS certification or who have otherwise received special recognition to advise the State Board of Education on teacher recruitment and other strategic priorities of the State Board.

 

RECRUITMENT AND RETENTION INITIATIVES TO ADDRESS TEACHER SHORTAGES

SECTION 7.20.(a)  Of the funds appropriated from the General Fund to State Aid to Local School Administrative Units, the sum of two million eight hundred ninety thousand dollars ($2,890,000) for the 2003-2004 and 2004-2005 fiscal years shall be used to provide annual bonuses of one thousand eight hundred dollars ($1,800) to teachers certified in and teaching in the fields of mathematics, science, or special education in grades 6 through 12 at middle and high schools with eighty percent (80%) or more of the students eligible for free or reduced lunch or with fifty percent (50%) or more of students performing below grade level in Algebra I and Biology. The bonus shall be paid monthly with matching benefits. Teachers shall remain eligible for the bonuses so long as they continue to teach in one of these disciplines at a school that was eligible for the bonus program when the teacher first received this bonus.

SECTION 7.20.(b)  In accordance with G.S. 115C-325 and by way of clarification, it shall not constitute a demotion as that term is defined in G.S. 115C-325(a)(4) if:

(1)       A teacher who receives a bonus pursuant to subsection (a) of this section is reassigned to a school at which there is no such bonus;

(2)       A teacher who receives a bonus pursuant to subsection (a) of this section is reassigned to teach in a field for which there is no such bonus; or

(3)       A teacher receives a bonus pursuant to subsection (a) of this section and the bonus is subsequently discontinued or reduced.

SECTION 7.20.(c)  Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C-296.3.  Certification of highly qualified teachers from other states.

Notwithstanding any other provision of law, a teacher from another state shall be granted North Carolina certification under the following conditions:

(1)       New hires to the profession from other states. - A teacher from another state who (i) has less than three years of experience as a full-time classroom teacher, (ii) is fully certified and highly qualified, as provided in the No Child Left Behind Act of 2001, in that other state; and (iii) is employed as a teacher by a local school administrative unit in North Carolina, is deemed to have satisfied the academic and professional preparation required to receive initial certification in North Carolina. The initial certification shall be granted for one year or for the period of time necessary for the teacher to acquire three years of full-time teaching experience in North Carolina and the other state combined, whichever is longer.

Once the teacher has three years of experience as a full-time teacher with at least one full year in a local school administrative unit in North Carolina, the teacher shall receive continuing certification unless the employing local school administrative unit recommends that the teacher not be granted continuing certification. The teacher shall be subject to the same requirements for continuing certification and certificate renewal as other teachers in North Carolina.

The teacher shall not be required to take and pass a standard examination to demonstrate adequate academic and professional preparation for certification, except as otherwise provided by the No Child Left Behind Act of 2001.

(2)       New hires with at least three years of experience from other states. - A teacher from another state who (i) has three or more years of experience as a full-time teacher, (ii) is fully certified and highly qualified as provided in the No Child Left Behind Act of 2001 in that other state, and (iii) is employed as a teacher by a local school administrative unit in North Carolina is deemed to have satisfied the academic and professional preparation required to receive continuing certification for one year in North Carolina.

If at the end of one year of employment, the employing local board of education recommends to the State Board of Education that the teacher's certification be renewed, the teacher shall retain continuing certification. The teacher shall be subject to the same requirements for continuing certification and certificate renewal as other teachers in North Carolina.

The teacher shall not be required to take and pass a standard examination to demonstrate adequate academic and professional preparation for certification, except as otherwise provided by the No Child Left Behind Act of 2001."

SECTION 7.20.(d)  The State Board of Education shall review the requirements for initial certification as a teacher to determine whether the prescribed minimum score on the PRAXIS examination is appropriate to demonstrate an applicant's academic and professional preparation for teaching.  The State Board shall report the results of this study to the Joint Legislative Education Oversight Committee by April 15, 2004.

SECTION 7.20.(e)  G.S. 115C-296(c) reads as rewritten:

"(c)      It is the policy of the State of North Carolina to encourage lateral entry into the profession of teaching by skilled individuals from the private sector.qualified individuals who hold a postsecondary degree that is at least a bachelors degree. To this end, before the 1985-862004-2005 school year begins, the State Board of Education shall develop criteria and procedures to accomplish the employment of such individuals as classroom teachers.review and revise the curriculum requirements for lateral entry candidates to receive certification. Regardless of credentials or competence, no one shall begin teaching above the middle level of differentiation. Skilled individuals who choose to enter the profession of teaching laterally

Qualified first-year lateral entry candidates who are required by federal law to obtain certification before contracting to teach for a fourth year may be granted a provisional teaching certificate for no more than three years. Other qualified lateral entry candidates may be granted a provisional teaching certificate for no more than five years and shall be required to obtain certification before contracting for a sixth year of service with any local administrative unit in this State. The State Board of Education shall ensure that the institutions of higher learning in the State, including community colleges, that are providing training to lateral entry candidates shall provide that training in a uniform and consistent manner that enables lateral entry candidates to obtain certification in accordance with the requirements of the No Child Left Behind Act of 2001 while working as full-time teachers.

It is further the policy of the State of North Carolina to ensure that local boards of education can provide the strongest possible leadership for schools based upon the identified and changing needs of individual schools. To this end, before the 1994-95 school year begins, the State Board of Education shall carefully consider a lateral entry program for school administrators to ensure that local boards of education will have sufficient flexibility to attract able candidates."

SECTION 7.20.(f)  The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to July 1, 2004, on revisions the Board made to the curriculum requirements for lateral entry candidates pursuant to G.S. 115C-296(c), as rewritten by subsection (e) of this section.

SECTION 7.20.(g)  Subsection (c) of this section is effective when this act becomes law and applies to all persons initially employed as teachers by a local school administrative unit in North Carolina for the 2003-2004 school year or a subsequent school year.

SECTION 7.20.(h)  This section expires June 30, 2004.

 

FUNDS FOR THE TESTING AND IMPLEMENTATION OF THE NEW STUDENT INFORMATION SYSTEM

SECTION 7.21.(a)  The State Board of Education may transfer up to one million dollars ($1,000,000) in funds appropriated for the Uniform Education Reporting System for the 2003-2004 fiscal year and up to one million dollars ($1,000,000) in funds appropriated for the Uniform Education Reporting System for the 2004-2005 fiscal year to the Department of Public Instruction to lease or purchase equipment necessary for the testing and implementation of NC WISE, the new student information system in the public schools.

Testing shall include an emphasis on the security of the system.

SECTION 7.21.(b)  Funds appropriated for the Uniform Education Reporting System shall not revert at the end of the 2003-2004 and 2004-2005 fiscal years but shall remain available until expended.

SECTION 7.21.(c)  This section becomes effective June 30, 2003.

 

LITIGATION RESERVE FUNDS

SECTION 7.22.  The State Board of Education may expend up to five hundred thousand dollars ($500,000) each year for the 2003-2004 and 2004-2005 fiscal years from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.

 

LOCAL EDUCATION AGENCY FLEXIBILITY

SECTION 7.23.  Within 14 days of the date this act becomes law, the State Board of Education shall notify each local school administrative unit of the amount the unit must reduce from State General Fund appropriations.  The State Board shall determine the amount of the reduction for each unit on the basis of average daily membership.

Each unit shall report to the Department of Public Instruction on the discretionary budget reductions it has identified for the unit within 30 days of the date this act becomes law and by September 1, 2004, for reductions for the 2004-2005 fiscal year. No later than December 31, 2003, the State Board of Education shall make a summary report to the Office of State Budget and Management and the Fiscal Research Division on all reductions made by the LEAs to achieve this reduction.

For fiscal years 2003-2004 and 2004-2005, the General Assembly urges local school administrators to make every effort to reduce spending whenever and wherever such budget reductions are appropriate as long as the targeted reductions do not directly impact classroom services or any services for students at risk or children with special needs, including those services or supports that are called for in students' Personal Education Plans (PEP) and/or Individual Education Plans (IEP). If reductions to the allotment categories listed in this paragraph are necessary in order to meet the reduction target, the local board of education shall submit an explanation of the anticipated impact of the reductions to student services along with the budget reductions to the Department of Public Instruction. By August 15, 2004, for fiscal year 2005-2006 and subsequent fiscal years, the State Board of Education shall determine the changes to the allotment categories to make such reductions permanent. Notwithstanding other provisions of law, the State Board of Education has the authority to reduce the proposed funding level of any allotment category in the State Public School Fund or the Department of Public Instruction in order to carry out the requirements of this section to make changes to the proposed continuation budget for the 2005-2007 fiscal biennium. The changes proposed by the State Board of Education shall be subject to the approval of the General Assembly.

 

BASE BUDGET REDUCTION TO DEPARTMENT OF PUBLIC INSTRUCTION

SECTION 7.24.  Notwithstanding any other provision of law, the Department of Public Instruction may use salary reserve funds and other funds and may transfer funds within the Department's continuation budget to implement budget reductions for the 2003-2004 fiscal year.

 

 

REPLACEMENT SCHOOL BUSES FUNDS/safety rules for school activity buses

SECTION 7.25.(a)  Of the funds appropriated to the State Board of Education, the Board may use up to fifteen million dollars ($15,000,000) for the 2003-2004 fiscal year and up to forty-seven million seven hundred fifty-two thousand eight hundred thirteen dollars ($47,752,813) for the 2004-2005 fiscal year for allotments to local boards of education for replacement school buses under G.S. 115C-249(c) and (d). In making these allotments, the State Board of Education may impose any of the following conditions:

(1)       The local board of education must use the funds only to make the first,  second, or third year's payment on a financing contract entered into pursuant to G.S. 115C-528.

(2)       The term of a financing contract entered into under this section shall not exceed three years.

(3)       The local board of education must purchase the buses only from vendors selected by the State Board of Education and on terms approved by the State Board of Education.

(4)       The State Board of Education shall solicit bids for the direct purchase of buses and for the purchasing of buses through financing. The State Board of Education may solicit separate bids for financing if the Board determines that multiple financing options are more cost-efficient.

(5)       A bus financed pursuant to this section must meet all federal motor vehicle safety regulations for school buses.

(6)       Any other condition the State Board of Education considers appropriate.

SECTION 7.25.(b)  Any term contract for the purchase or lease-purchase of school buses or school activity buses shall not require vendor payment of the electronic procurement transaction fee of the North Carolina E-Procurement Service.

SECTION 7.25.(c)   The State Board of Education shall study the adequacy of the safety rules and policies adopted by local boards of education regarding the use of activity buses.  The State Board shall report the results of this study to the Joint Legislative Education Oversight Committee by March 15, 2004.

 

EXPENDITURES FOR DRIVING ELIGIBILITY CERTIFICATES

SECTION 7.26.  The State Board of Education may use funds appropriated for drivers education for the 2003-2004 fiscal year and for the 2004-2005 fiscal year for driving eligibility certificates.

 

DISCREPANCIES BETWEEN ANTICIPATED AND ACTUAL ADM

SECTION 7.27.(a)  If the State Board of Education does not have sufficient resources in the ADM Contingency Reserve line item to make allotment adjustments in accordance with the Allotment Adjustments for ADM Growth provisions of the North Carolina Public Schools Allotment Policy Manual, the State Board of Education may use funds appropriated to State Aid for Public Schools for this purpose.

SECTION 7.27.(b)  If the higher of the first or second month average daily membership in a local school administrative unit is at least two percent (2%) or 100 students lower than the anticipated average daily membership used for allotments for the unit, the State Board of Education shall reduce allotments for the unit.  The reduced allotments shall be based on the higher of the first or second month average daily membership plus one-half of the number of students overestimated in the anticipated average daily membership.

The allotments reduced pursuant to this subsection shall include only those allotments that may be increased pursuant to the Allotment Adjustments for ADM Growth provisions of the North Carolina Public Schools Allotment Policy Manual.

 

CHARTER SCHOOL ADVISORY COMMITTEE/CHARTER SCHOOL EVALUATION

SECTION 7.28.  The State Board of Education may spend up to fifty thousand dollars ($50,000) a year from State Aid to Local School Administrative Units for the 2003-2004 and 2004-2005 fiscal years to continue support of a charter school advisory committee and to continue to evaluate charter schools.

 

STUDY OF ISSUES RELATED TO RAPID GROWTH IN STUDENT POPULATION

SECTION 7.29.  The Joint Legislative Education Oversight Committee shall study the effects of rapid growth in student population on local school administrative units.  In the course of the study, the Committee shall consider issues related to rapid growth and strategies for addressing these issues. The Committee shall report to the 2004 Regular Session of the 2003 General Assembly on its findings and recommendations.

 

 

MENTOR TEACHER FUNDS MAY BE USED FOR FULL-TIME MENTORS

SECTION 7.30.(a)  The State Board of Education shall grant flexibility to a local board of education regarding the use of mentor funds to provide mentoring support, provided the local board submits a detailed plan on the use of the funds to the State Board and the State Board approves that plan. The plan shall include information on how all mentors in the local school administrative unit have been or will be adequately trained to provide mentoring support.

Local boards of education shall use funds allocated for mentor teachers to provide mentoring support to all State-paid newly certified teachers, second-year teachers who were assigned mentors during the prior school year, and entry-level instructional support personnel who have not previously been teachers.

SECTION 7.30.(b)  The State Board, after consultation with the Professional Teaching Standards Commission, shall adopt standards for mentor training.

SECTION 7.30.(c)  The Winston-Salem/Forsyth, Charlotte/Mecklenburg, and Wake County Public School systems may continue with their existing pilot mentor programs, but shall submit plans as required in subsection (a) of this section. These three local boards of education shall report as required in subsection (d) of this section.

SECTION 7.30.(d)  Each local board of education with a plan approved pursuant to subsection (a) of this section shall report to the State Board on the impact of its mentor program on teacher retention.  The State Board shall analyze these reports to determine the characteristics of mentor programs that are most effective in retaining teachers and shall report its findings to the Joint Legislative Education Oversight Committee by October 15, 2004.

SECTION 7.30.(e)  In addition to the report required in subsection (d) of this section, the State shall also evaluate the effectiveness of a representative sample of local mentor programs and report on its findings to the Joint Legislative Education Oversight Committee and the Fiscal Research Division by December 15, 2004.   The evaluation shall focus on quantitative evidence, quality of service delivery, and satisfaction of those involved.  The report shall include the results of the evaluation and recommendations both for improving mentor programs generally and for an appropriate level of State support for mentor programs.

 

 

EXPLORNET AUDIT

SECTION 7.31.  No State funds appropriated for distribution to ExplorNet, Incorporated, shall be disbursed until the State Auditor and the Office of State Budget and Management certify that ExplorNet, Incorporated, has received an audit report for the 2001-2002 fiscal year that is free of audit exceptions. A copy of the certification by the State Auditor and the Office of State Budget and Management shall be sent to the Joint Legislative Education Oversight Committee and to the Joint Legislative Commission on Governmental Operations.

 

SCHOOL NURSE SERVICES

SECTION 7.32.  The State Board of Education shall review the standards for the number of school nurses recommended in the Basic Education Program to determine whether these standards are being met by the local school administrative units. The State Board shall compare the current standards with standards recommended by national health organizations to determine whether the current standards are adequate to meet the changing needs and demands for health services of the current and projected school populations. In its review, the Board shall consider the need to change legal requirements for the provision of health-related services to public school students in its review.

The State Board of Education shall make recommendations on the ratio of school nurses to student populations that it considers necessary, as well as recommendations for the provision of school nurse services, to the Joint Legislative Education Oversight Committee by February 15, 2004.

 

TRANSFER OF PUBLIC SCHOOL CAPITAL FUND

SECTION 7.33.(a)  The Public School Building Capital Fund is transferred from the Office of State Budget and Management to the Department of Public Instruction, as if by a Type I transfer as defined in G.S. 143A-6, with all the elements of such a transfer.

SECTION 7.33.(b)  G.S. 115C-546.1(c) reads as rewritten:

"(c)      The Fund shall be administered by the Office of State Budget and Management. Department of Public Instruction."

 

FUNDS FOR REGIONAL EDUCATIONAL SERVICES ALLIANCES

SECTION 7.34.  Local boards of education may use up to ten percent (10%) of State funds allocated for staff development to contract with Regional Education Services Alliances without such funds being subject to the provisions of G.S. 115C-105.30.

Additional funds distributed pursuant to G.S. 115C-105.30 may also be used to contract with Regional Education Services Alliances.

 

PILOT PROGRAMS ON FINANCIAL LITERACY

SECTION 7.35.  The State Board of Education shall establish a pilot program authorizing and assisting up to five local school administrative units in the implementation of programs on teaching personal financial literacy.  The purpose of the pilot program is to determine the best methods of equipping students with the knowledge and skills they need, before they become self-supporting, to make critical decisions regarding their personal finances.  The components of personal financial literacy covered in the pilot program shall include, at a minimum, consumer financial education, personal finance, and personal credit.

Prior to selecting the pilot units, the State Board of Education shall develop a curriculum, materials, and guidelines for local boards of education to use in implementing a program of instruction on personal financial literacy. The State Board shall also provide information to local boards of education on securing public and private grant funds and on using other public and private assets to implement the instructional program.

The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to January 1, 2004, on the implementation of the program in the pilot units.

 

credit for high school students taking community college courses

SECTION 7.36.   The State Board of Education shall study the issue of weighted grades for high school students who take university and community college courses. The State Board of Education shall report the results of the study and its recommendations on the issue to the Joint Legislative Education Oversight Committee by December 15, 2003.

 

Vocational Education Funding

SECTION 7.37.  It is the intent of the General Assembly to eliminate funding for vocational education in the seventh grade. Local school administrative units shall make every effort to focus the vocational education budget reductions on the seventh grade for 2003-2004 school year. For the 2004-2005 school year, after making the base allotment for each local school administrative unit, the State Board of Education shall use the average daily membership for grades eight through twelve only to calculate vocational education budget allotments to local school administrative units. For the 2004-2005 school year, local school administrative units shall take all of the vocational education budget reductions for the 2003-2005 biennium in the seventh grade before making reductions to other grades.

 

review of teacher certification process

SECTION 7.39.  Section 7.18 of S.L. 2002-126 reads as rewritten:

"SECTION 7.18.(a)  The State Board of Education, in consultation with the Board of Governors of The University of North Carolina and the Education Cabinet, shall review teacher preparation programs and the continuing certification process to determine how these programs can be modified to enhance the continuing teacher certification process and to reduce the burden the continuing certification process places on newly certified teachers. This evaluation shall consider strategies for streamlining the current continuing certification process and reducing the amount of documentation required in the applicant's portfolio. process.

The State Board of Education shall suspend the portfolio requirement for all teachers who are required, under the current law, to submit portfolios from August 1, 2002, through June 30, 2004. Teachers who are not required to submit portfolios during the period the portfolio requirement is suspended shall be subject to interim requirements adopted by the State Board and shall complete the interim requirements. The State Board of Education shall make every effort to insure that any interim requirements do not require significant and unnecessary paperwork, effort, and administrative burden. Prior to implementation of the interim requirements, the State Board of Education shall report to the Joint Legislative Education Oversight Committee on the proposed requirements.

SECTION 7.18.(b)  The State Board of Education shall contract with an outside consultant to study and propose modifications to the current North Carolina initial certification, continuing certification, and recertification programs that ensure high standards, support for teachers, and high retention rates. Specifically, the contractor State Board of Education shall:

(1)       Review the administration and implementation of the certification programs and identify significant strengths and weaknesses of the programs;

(2)       Identify issues related to administration, staffing, and paperwork at the school, local, and State levels;

(3)       Investigate and identify communication concerns about the certification programs between the school, local, and State levels;

(4)       Randomly survey and interview participating teachers and administrators regarding key aspects of the certification programs and ways to improve them;

(5)       Examine the possibility of making the programs more focused on and supportive of early teacher development and integrating them more appropriately into a teacher's daily work;

(6)       Examine the portfolios previously submitted and identify the elements that are most troublesome to teachers, schools, and school systems;

(7)       Identify alternatives to the portfolio approach and ways to keep paperwork requirements to a minimum;

(8)       Review the State's mentor program and the mentor's role in support of certification efforts to determine whether the two programs are complementary;

(9)       Examine the effect of the certification programs on teacher retention, using valid evidence; and

(10)     Examine the impact the certification programs have on improving teaching practices, using valid evidence.

SECTION 7.18.(c)  The State Board of Education shall use the results of the study to make recommendations to:

(1)       Improve the administration and implementation of the certification programs, including improving the process for teachers;

(2)       Resolve the issues surrounding the portfolio process and the collection of professional evidence during initial certification;

(3)       Reduce paperwork and bureaucracy in initial certification, continuing certification, and recertification for teachers, schools, and school systems;

(4)       Provide schools and districts incentives and flexibility to participate in more rigorous certification processes;

(5)       Effectively use information regarding teacher supply and demand, standards and retention to inform policy decisions;

(6)       Improve the relationship and coordination between the certification programs and mentoring programs;

(7)       Provide appropriate sample work to teachers, including lesson plans, unit plans, and other professional work required during initial certification; and

(8)       Provide ongoing program evaluation to monitor the quality of the programs and to inform policymakers.

SECTION 7.18.(d)  The State Board of Education shall enlist the assistance of the Southern Regional Education Board in evaluating the responses to the request for proposals. Prior to awarding the contract for the consultant study, the State Board shall consult with the Joint Legislative Education Oversight Committee.conducting the study.

The State Board shall use federal No Child Left Behind State Grants for Improving Teacher Quality, to the extent possible, to cover the cost of the consultant and study.

The State Board shall report the findings of the consultant study and the recommendations required by this section to the Joint Legislative Education Oversight Committee by January 1, 2004.March 15, 2004.

SECTION 7.18.(e)  The Joint Legislative Education Oversight Committee shall make recommendations to the General Assembly on any changes to law or policy affecting certification of teachers on or after August 1, 2004, after reviewing the findings and recommendations of the consultant and State Board of Education."

 

enhancement of character and civic education program

SECTION 7.40.(a)   G.S. 115C-81 is amended by adding two new subsections to read:

"§ 115C-81.  Basic Education Program.

(g2)     Student Councils. - All high schools and middle schools shall be encouraged to have elected student councils through which students have input into policies and decisions that affect them. All other schools are encouraged to have student councils.

The purpose of these student councils is to build civic skills and attitudes such as participation in elections, discussion and debate of issues, and collaborative decision making. Schools shall encourage active, broad-based participation in these student councils.

(g3)     Current Events. - Schools should encourage discussions of current events in a wide range of classes, especially social studies and language arts classes. All high schools and middle schools are encouraged to have at least two classes per grade level to offer interactive current events discussions at least every four weeks."

SECTION 7.40.(b)  G.S. 115C-81(h1) reads as rewritten:

"(h1)    In addition to the instruction under subsection (h) of this section, local boards of education are encouraged to include instruction on the following responsibilities:

(1)       Respect for school personnel. - In the school environment, respect includes holding teachers, school administrators, and all school personnel in high esteem and demonstrating in words and deeds that all school personnel deserve to be treated with courtesy and proper deference.

(2)       Responsibility for school safety. - Helping to create a harmonious school atmosphere that is free from threats, weapons, and violent or disruptive behavior; cultivate an orderly learning environment in which students and school personnel feel safe and secure; and encourage the resolution of conflicts and disagreements through peaceful means including peer mediation. Instruction in this responsibility should include a consistent and age-appropriate antiviolence message and a conflict resolution component for students in kindergarten through twelfth grade. These messages should include media-awareness education to help children recognize stereotypes and messages portraying violence.

(3)       Service to others. - Engaging in meaningful service to their schools and their communities. Schools may teach service-learning by (i) incorporating it into their standard curriculum, or (ii) involving a classroom of students or some other group of students in one or more hands-on community-service projects. All schools are encouraged to provide opportunities for student involvement in community service or service-learning projects.

(4)       Good citizenship. - Obeying the laws of the nation and this State; abiding by school rules; and understanding the rights and responsibilities of a member of a republic."

SECTION 7.40.(c)  G.S. 115C-105.35 reads as rewritten:

"§ 115C-105.35.  Annual performance goals.

The School-Based Management and Accountability Program shall (i) focus on student performance in the basics of reading, mathematics, and communications skills in elementary and middle schools, (ii) focus on student performance in courses required for graduation and on other measures required by the State Board in the high schools, and (iii) hold schools accountable for the educational growth of their students. To those ends, the State Board shall design and implement an accountability system that sets annual performance standards for each school in the State in order to measure the growth in performance of the students in each individual school. For purposes of this Article, beginning school year 2002-2003, the State Board shall include a "closing the achievement gap" component in its measurement of educational growth in student performance for each school. The "closing the achievement gap" component shall measure and compare the performance of each subgroup in a school's population to ensure that all subgroups as identified by the State Board are meeting State standards.

The State Board shall consider incorporating into the School-Based Management and Accountability Program a character and civic education component which may include a requirement for student councils."

SECTION 7.40.(d)  This section is effective when it becomes law.  The rewrite of G.S. 115C-81(h1)(2) set out in subsection (b) of this section applies beginning with the 2004-2005 school year.

 

VISITING INTERNATIONAL FACULTY

SECTION 7.41.  The State Board of Education shall convert teacher positions to dollars for Visiting International Faculty Program teachers for the 2003-2004 fiscal year on the basis of the allotted average teacher salary and benefits.

 

PART VIII. COMMUNITY COLLEGES

 

COMMUNITY COLLEGE FUNDING FLEXIBILITY

SECTION 8.1.  A local community college may use all State funds allocated to it, except for Literacy Funds and Funds for New and Expanding Industries, for any authorized purpose that is consistent with the college's Institutional Effectiveness Plan.  Each local community college shall include in its Institutional Effectiveness Plan a section on how funding flexibility allows the college to meet the demands of the local community and to maintain a presence in all previously funded categorical programs.

No more than two percent (2%) systemwide shall be transferred from faculty salaries without the approval of the State Board of Community Colleges. The State Board shall report on any such transfers above two percent (2%) systemwide to the Office of State Budget and Management and the Joint Legislative Commission on Governmental Operations at its next meeting.

 

FLEXIBILITY TO IMPLEMENT BUDGET REDUCTIONS

SECTION 8.2.  Notwithstanding G.S. 143-23 or any other provision of law, the State Board of Community Colleges may use salary reserve funds and other funds, and may transfer funds within the Community College System Office continuation budget to the extent necessary to implement budget reductions for the 2003-2004 fiscal year.

 

STATE BOARD OF COMMUNITY COLLEGE MANAGEMENT FLEXIBILITY

SECTION 8.3.  Within 30 days of the date this act becomes law, the State Board of Community Colleges shall notify each college of the amount the college must reduce from State General Fund appropriations.  The State Board shall determine the amount of the reduction for each unit on the basis of FTE or another method that accounts for the unique needs of specific colleges.

Each college shall report to the State Board of Community Colleges on the discretionary budget reductions it has identified for the college within 60 days of the date this act becomes law. No later than December 31, 2003, the State Board of Community Colleges shall make a summary report to the Office of State Budget and Management and the Fiscal Research Division on all reductions made by the colleges to achieve this reduction.

For fiscal year 2003-2004, the General Assembly urges local college administrators to make every effort to reduce spending whenever and wherever such budget reductions are appropriate and as long as the targeted reductions do not directly impact classroom services or those services that are identified in this act as a high-need area for the State. If reductions to the allotment categories listed in this paragraph are necessary in order to meet the reduction target, the local college administration shall submit an explanation of the anticipated impact of the reductions to student services along with the budget reductions to the State Board of Community Colleges.

By February 15, 2004, for fiscal year 2004-2005, the State Board of Community Colleges will determine the changes to the allotment categories to make such reductions permanent.

 

REGISTRATION FEES FOR OCCUPATIONAL CONTINUING EDUCATION OR FOCUSED INDUSTRIAL TRAINING

SECTION 8.4.  Of the funds appropriated to the North Carolina Community College System for the 2003-2005 fiscal biennium, the State Board of Community Colleges may use up to one hundred thousand dollars ($100,000) each year to pay registration fees and material costs for Occupational Continuing Education or Focused Industrial Training safety courses provided to companies that (i) are eligible to participate in the Focused Industrial Training Program, (ii) have less than 150 employees, and (iii) are found by community college representatives and regional customized training directors to face challenges in paying these fees and costs.  These funds shall not be expended without the prior approval of the North Carolina Community College System Office, Division of Economic and Workforce Development.

 

SUMMER SCHOOL FUNDING

SECTION 8.5.  The General Assembly encourages the North Carolina Community Colleges System to use funds appropriated to support summer term curriculum FTE to address issues associated with worker shortages in high-needs industries such as (i) Business Technology, (ii) Health Sciences, (iii) Child Care Training, and (iv) Public Service Technologies including law enforcement, fire protection, and education.

 

CARRYFORWARD FOR EQUIPMENT

SECTION 8.6.(a)  Subject to cash availability, the North Carolina Community Colleges System may carry forward an amount not to exceed five million dollars ($5,000,000) of the operating funds held in reserve that were not reverted in fiscal year 2002-2003 to be reallocated to the State Board of Community Colleges' Equipment Reserve Fund.  These funds should be distributed to colleges consistent with G.S. 115D-31.

SECTION 8.6.(b)  This section becomes effective June 30, 2003.

 

HOSIERY CENTER FUNDS

SECTION 8.7.  Notwithstanding any other provision of law, all fees collected by the Hosiery Technology Center of Catawba Valley Community College for the testing of hosiery products shall be retained by the Center and used for the operations of the Center.  Purchases made by the Center using these funds are not subject to the provisions of Article 3 of Chapter 143 of the General Statutes.

 

SCHOLARSHIPS FOR PROSPECTIVE TEACHERS

SECTION 8.8.  Of the funds appropriated in this act to the State Board of Community Colleges, the State Board may use up to one million dollars ($1,000,000) for a nonrecurring grant to the North Carolina Community College Foundation.  These funds shall be used to match the Glaxo Smith Kline Foundation challenge grant establishing a two million dollar ($2,000,000) endowment for the creation of a new scholarship program for prospective teachers enrolled in baccalaureate completion programs at State community college campuses and for the development of teacher preparation courses.

This provision is contingent upon receipt of one million dollars ($1,000,000) for this purpose from the Glaxo Smith Kline Foundation and applies only to the 2003-2004 fiscal year.

 

MANAGEMENT INFORMATION SYSTEM FUNDS

SECTION 8.9.(a)  Funds appropriated for the Community Colleges System Office Management Information System shall not revert at the end of the 2002-2003 and 2003-2004 fiscal years but shall remain available until expended.

SECTION 8.9.(b)  This section becomes effective June 30, 2003.

 

USE OF LITERACY FUNDS FOR LITERACY LABS

SECTION 8.10.  Notwithstanding any other provision of law, a local community college may use up to five percent (5%) of the Literacy Funds allocated to it by the State Board of Community Colleges to procure computers for literacy labs.

 

FACULTY AND PROFESSIONAL STAFF SALARIES

SECTION 8.11.  Three million two hundred fifty thousand dollars ($3,250,000) in the Reserve for Compensation Increases in Section 2.1 of this act shall be used to increase faculty and professional staff salaries by an average of one-half percent (0.5%). These increases are in addition to the one-time, lump sum compensation bonus provided by Section 30.11 of this act, and shall be calculated on the average salaries prior to the issuance of the compensation bonus. Colleges may provide additional increases from funds available.

The State Board of Community Colleges shall adopt rules to ensure that these funds are used only to move faculty and professional staff to the respective national averages. The funds shall not be transferred by the State Board or used for any other budget purpose by the community colleges.

 

EVALUATION OF THE COMPREHENSIVE ARTICULATION AGREEMENT

SECTION 8.12.(a)  The General Assembly finds that (i) there is a general sentiment expressed by students that the Comprehensive Articulation Agreement adopted by the Board of Governors of The University of North Carolina and the State Board of Community Colleges should be improved and (ii) over the past five years, there have been many suggestions for improving the Comprehensive Articulation Agreement as well as recommendations for new directions in which the Comprehensive Articulation Agreement should be developed.

SECTION 8.12.(b)  The Joint Legislative Education Oversight Committee shall contract with a credible independent source, individual, or organization to study the Comprehensive Articulation Agreement.  The contractor shall not be (i) a current employee of The University of North Carolina, Office of the President, the North Carolina Community College System, or any of the North Carolina independent schools/colleges participating in the Comprehensive Articulation Agreement or (ii) a current or past member of the Transfer Advisory Committee.

SECTION 8.12.(c)  The study by the contractor shall:

(1)       Be consistent with the standards of the Southern Association of Colleges and Schools, Commission on Colleges, on educational quality and institutional effectiveness;

(2)       Be designed to provide an accurate and credible assessment of the effectiveness of the Comprehensive Articulation Agreement during its initial five years of existence relative to the intent of its authorizing legislation;

(3)       Be based on qualitative as well as quantitative information and data;

(4)       Take no more than four months from initiation to completion; and

(5)       Include input from college transfer students, counselors, faculty, and administration from both systems.

SECTION 8.12.(d)  The contractor's report shall:

(1)       Adequately reflect the study's methodology, sources of information, purpose and scope, analyses, evaluative assessments, recommendations, and conclusions;

(2)       State any known deficiencies or limitations of the study;

(3)       Be presented in both a printed form and an electronic version; and

(4)       Provide recommendations for improving the Comprehensive Articulation Agreement.

SECTION 8.12.(e)  The contractor shall submit a written progress report every four weeks to the Joint Legislative Education Oversight Committee, the vice-president of academic affairs of The University of North Carolina, Office of the President, the vice-president of academic affairs of the North Carolina Community College System Office, and the cochairs of the Transfer Advisory Committee. The contractor shall complete the report within four months. At the completion of the study, the contractor shall submit a draft of the report document to the Joint Legislative Education Oversight Committee, the vice-president of academic affairs of The University of North Carolina, Office of the President, the vice-president of academic affairs of the North Carolina Community College System Office, and the cochairs of the Transfer Advisory Committee for review.

SECTION 8.12.(f)  Within 30 days of completing the study, the contractor shall submit a final report to the Joint Legislative Education Oversight Committee, the vice-president of academic affairs of The University of North Carolina, Office of the President, the vice-president of academic affairs of the North Carolina Community College System Office, and the cochairs of the Transfer Advisory Committee. The Joint Legislative Education Oversight Committee, vice-president of academic affairs of The University of North Carolina, Office of the President, and the vice-president of academic affairs of the North Carolina Community College System Office may, in their discretion, schedule a formal presentation of the report when it is submitted.

SECTION 8.12.(g)  The University of North Carolina, Office of the President, and the North Carolina Community College System shall provide the contractor with access to and use of information databases to the extent that such access and use is necessary for the study and does not violate legal and ethical codes or create disruptions of normal operations.

SECTION 8.12.(h)  The University of North Carolina, Office of the President, and the North Carolina Community College System shall each transfer thirty-five thousand dollars ($35,000) to the Joint Legislative Education Oversight Committee to carry out this study.

 

AUTOMOTIVE TRAINING INCENTIVE

SECTION 8.13.  Of the funds appropriated in this act for the State Board of Community Colleges for the 2003-2004 fiscal year, the sum of one hundred twenty-five thousand dollars ($125,000) shall be used for a nonrecurring grant to the North Carolina Community College Foundation provided that a like amount is provided by the North Carolina Automotive Dealers Association to match these funds on a dollar-for-dollar basis.  The North Carolina Community College Foundation shall use these funds to provide incentive programming at the colleges that offer Automotive Systems Technology.  The incentive programming shall consist of one or more of the following:

(1)       Increasing awareness of careers available in the franchised automobile and truck industry in North Carolina;

(2)       Increasing awareness within North Carolina's middle school and high school guidance counselors and workforce development coordinators;

(3)       Increasing public awareness of teaching opportunities in North Carolina's high schools and community colleges in the area of automotive technology;

(4)       Increasing opportunities in continuing education for automotive technology high school and community college instructors;

(5)       Providing a program coordinator to work with the franchised car and truck dealers and with community college and high school automotive professionals to ensure that the automotive curriculum is uniform and appropriate; and

(6)       Increasing resources to assist high schools and community colleges in gaining and maintaining certification for their respective automotive technology programs.

 

COMMUNITY COLLEGES TRUST FUND

SECTION 8.14.(a)  Article 3 of Chapter 115D of the General Statutes is amended by adding a new section to read:

"§ 115D-42.  North Carolina Community Colleges Instructional Trust Fund.

(a)       There is established the North Carolina Community Colleges Instructional Trust Fund. The purpose of this Trust Fund is to supplement the funds raised by community college foundations to enhance the academic missions of community colleges.

(b)       The State Board of Community Colleges is authorized to allocate funds from the Instructional Trust Fund to the community colleges and to adopt rules to implement the provisions of this section.

(c)       State funds from the Trust Fund and matching funds raised by foundations shall be used by the board of trustees of a community college only to enhance the academic mission of the college. State funds shall be used only for scholarships or financial aid for needy students.

Expenditures of the matching funds raised by foundations shall directly relate to education and shall be used only for:

(1)       Resource center materials;

(2)       Professional development of instructional faculty and staff in cases in which (i) professional development will improve the quality of performance provided by the employee and (ii) the employee makes a commitment to remain at the college for a prescribed period of time;

(3)       Professional development of instructional faculty and staff in cases in which professional development is necessary to enhance the employee's ability to meet newly mandated instructional or performance requirements; and

(4)       Other purposes authorized by the State Board of Community Colleges that are consistent with the college's mission.

(d)       Every two dollars ($2.00) raised by the community college foundations for the Trust Fund during the 2003-2004 fiscal year shall be matched with one dollar ($1.00) of State funds. The maximum matching contribution from the State shall not exceed twenty-five thousand dollars ($25,000) for each of the 58 community colleges. These funds shall be reserved for each community college and held in escrow in the Trust Fund. A community college foundation may apply for matching funds after it raises twenty-five thousand dollars ($25,000). The chairperson of each community college foundation shall certify to the North Carolina Community College System Office that (i) new funds have been raised by the community college foundation to match the amount of funds held in escrow in the Trust Fund, (ii) the amount raised by the community college foundation has not been used previously for matching purposes, (iii) the amount raised by the college shall be used only as provided in subsection (c) of this section, and (iv) matching State funds shall be used only for scholarships or financial aid for needy students.

(e)       The State Board of Community Colleges may request an audit of the State funds expended under this section from any community college foundation."

SECTION 8.14.(b)  There is appropriated from the Escheat Fund to the State Board of Community Colleges the sum of one million four hundred fifty thousand dollars ($1,450,000) for the 2003-2004 fiscal year to provide matching State funds for the Community Colleges Instructional Trust Fund established in subsection (a) of this section.

 

FOCUSED INDUSTRIAL TRAINING FUNDS

SECTION 8.15.  Notwithstanding any other provision of law, for the 2003-2004 fiscal year only, the State Board of Community Colleges may transfer up to one million four hundred fifty thousand dollars ($1,450,000) from New and Expanding Industry Training to Focused Industrial Training.

 

TUITION MODIFICATIONS

SECTION 8.16.(a)  G.S. 116-143.3 reads as rewritten:

"§ 116-143.3.  Tuition of active duty personnel in the armed services.

(a)       Definitions. - For purposes of this section the The following definitions apply in this section:

(1)       The term "armed services" shall mean the United States Air Force, Army, Coast Guard, Marine Corps, and Navy; the North Carolina National Guard; and any Reserve Component of the foregoing.

(2)       The term "abode" shall mean the place where a person actually lives, whether temporarily or permanently; the term "abide" shall mean to live in a given place.

(3)       The term "tuition assistance" shall be used as defined in the United States Department of Defense Directive 1322.8, implementing 10 U.S.C. § 2007.

(b)       Any active duty member of the armed services qualifying for admission to an institution of higher education a community college under the jurisdiction of the State Board of Community Colleges as defined in G.S. 116-143.1(a)(3) but not qualifying as a resident for tuition purposes under G.S. 116-143.1 shall be charged the out-of-State tuition rate; provided, that the out-of-State tuition shall be forgiven to the extent that the out-of-State tuition rate exceeds any amounts payable to the institution or the service member by the service member's employer by reason of enrollment pursuant to such admission while the member is abiding in this State incident to active military duty, plus the amount that represents the percentage of the out-of-State tuition rate paid to the institution or the service member by the service member's employer multiplied by the in-State tuition rate and then subtracted from the in-State tuition rate.

(b1)     Any active duty member of the armed services qualifying for admission to a constituent institution of The University of North Carolina but not qualifying as a resident for tuition purposes under G.S. 116-143.1 shall be charged the maximum available tuition assistance as the required payment for tuition and mandatory fees not to exceed the established out-of-state tuition and mandatory fee rates. The Board of Governors of The University of North Carolina shall determine which mandatory fees apply to active duty members of the armed services attending The University of North Carolina.

(b2)     Any active duty member of the armed services who does not qualify for any payment by the member's employer pursuant to subsections (b) or (b1) of this section shall be eligible to be charged the in-State tuition rate and shall pay the full amount of the in-State tuition rate.rate and applicable mandatory fees.

(c)       Any dependent relative of a member of the armed services who is abiding in this State incident to active military duty, as defined by the Board of Governors of The University of North Carolina and by the State Board of Community Colleges while sharing the abode of that member shall be eligible to be charged the in-State tuition rate, if the dependent relative qualifies for admission to an institution of higher education as defined in G.S. 116-143.1(a)(3). The dependent relatives shall comply with the requirements of the Selective Service System, if applicable, in order to be accorded this benefit. In the event the member of the armed services removes his abode from North Carolina during an academic year, the dependent relative shall continue to be eligible for the in-State tuition rate during the remainder of that academic year.

(d)       The burden of proving entitlement to the benefit of this section shall lie with the applicant therefor.

(e)       A person charged less than the out-of-State out-of-state tuition rate solely by reason of this section shall not, during the period of receiving that benefit, qualify for or be the basis of conferring the benefits benefit of G.S. 116-143.1(g), (h), (i), (j), (k), or (1)."

SECTION 8.16.(b)  G.S. 115D-39 reads as rewritten:

"§ 115D-39.  Student tuition and fees.

(a)       The State Board of Community Colleges shall fix and regulate all tuition and fees charged to students for applying to or attending any institution pursuant to this Chapter.

The receipts from all student tuition and fees, other than student activity fees, shall be State funds and shall be deposited as provided by regulations of the State Board of Community Colleges.

The legal resident limitation with respect to tuition, set forth in G.S. 116-143.1 and G.S. 116-143.3, shall apply to students attending institutions operating pursuant to this Chapter; provided, however, that when an employer other than the armed services, as that term is defined in G.S. 116-143.3, pays tuition for an employee to attend an institution operating pursuant to this Chapter and when the employee works at a North Carolina business location, the employer shall be charged the in-State tuition rate; provided further, however, a community college may charge in-State tuition to up to one percent (1%) of its out-of-state students, rounded up to the next whole number, to accommodate the families transferred by business, the families transferred by industry, or the civilian families transferred by the military, consistent with the provisions of G.S. 116-143.3, into the State. Notwithstanding these requirements, a refugee who lawfully entered the United States and who is living in this State shall be deemed to qualify as a domiciliary of this State under G.S. 116-143.1(a)(1) and as a State resident for community college tuition purposes as defined in G.S. 116-143.1(a)(2). Also, a nonresident of the United States who has resided in North Carolina for a 12-month qualifying period and has filed an immigrant petition with the United States Immigration and Naturalization Service shall be considered a State resident for community college tuition purposes.

(b)       In addition, any person lawfully admitted to the United States who satisfied the qualifications for assignment to a public school set out under G.S. 115C-366 and graduated from the public school to which the student was assigned shall also be eligible for the State resident community college tuition rate. This subsection does not make a person a resident of North Carolina for any other purpose."

 

TUITION MODIFICATIONS/nonprofit sponsorship of community college student

SECTION 8.16A.(a)  G.S. 115D-39 is amended by adding a new subsection to read:

"(c)      In addition, a person sponsored under this subsection who is lawfully admitted to the United States is eligible for the State resident community college tuition rate. For purposes of this subsection, a North Carolina nonprofit entity is a charitable or religious corporation as defined in G.S. 55A-1-40 that is incorporated in North Carolina and that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code, or a civic league incorporated in North Carolina under Chapter 55A of the General Statutes that is exempt from taxation under section 501(c)(4) of the Internal Revenue Code. A nonresident of the United States is sponsored by a North Carolina nonprofit entity if the student resides in North Carolina while attending the community college and the North Carolina nonprofit entity provides a signed affidavit to the community college verifying that the entity accepts financial responsibility for the student's tuition and any other required educational fees. Any North Carolina nonprofit entity that sponsors a nonresident of the United States under this subsection may sponsor no more than five nonresident students annually under this subsection. This subsection does not make a person a resident of North Carolina for any other purpose."

SECTION 8.16A.(b)  The State Board of Community Colleges shall report to the Senate Committee on Appropriations and the House of Representatives Committee on Appropriations in April of 2004 on the implementation of this section during the 2003-2004 academic year.

 

PART IX. UNIVERSITIES

 

UNC FLEXIBILITY GUIDELINES

SECTION 9.1.  The Chancellor of each constituent institution shall report to the Board of Governors of The University of North Carolina on the reductions made to the General Fund budget codes in order to meet the reduction reserve amounts for that institution. The President of The University of North Carolina shall report to the Board of Governors of The University of North Carolina on the reductions made to the General Fund budget codes controlled by the Board in order to meet the reduction reserve amounts for those entities.  The Board of Governors shall make a summary report to the Office of State Budget and Management and the Fiscal Research Division by December 31, 2003, on all reductions made by these entities and constituent institutions in order to reduce the budgets by the targeted amounts.

 

ESCHEAT FUNDS

SECTION 9.2.(a)  There is appropriated from the Escheat Fund to the Board of Governors of The University of North Carolina the sum of twenty-three million seven hundred fifty thousand dollars ($23,750,000) for each year of the 2003-2005 fiscal biennium and to the State Board of Community Colleges the sum of ten million two hundred sixty-two thousand eight hundred six dollars ($10,262,806) for each year of the 2003-2005 fiscal biennium. These funds shall be allocated by the State Educational Assistance Authority for need-based student financial aid in accordance with G.S. 116B-7 and this act.

SECTION 9.2.(b)  The Director of the Budget shall include General Fund appropriations in the amounts provided in subsection (a) of this section in the proposed 2005-2007 fiscal biennium continuation budget for the purposes provided in G.S. 116B-7.

SECTION 9.2.(c)  The State Education Assistance Authority (SEAA) shall perform all of the administrative functions necessary to implement the program of financial aid. The SEAA shall conduct periodic evaluations of expenditures of the scholarship programs to determine if allocations are utilized to ensure access to institutions of higher learning and to meet the goals of the respective programs.  The SEAA may make recommendations for redistribution of funds to The University of North Carolina and the President of the Community College System regarding their respective scholarship programs, who then may authorize redistribution of unutilized funds for a particular fiscal year.

SECTION 9.2.(d)  All obligations to students for uses of the funds set out in subsection (a) of this section that were made prior to the effective date of this section shall be fulfilled as to students who remain eligible under the provisions of the respective programs.

 

UNC Bond Project Modifications

SECTION 9.3.(a)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at Elizabeth City State University by substituting a project entitled "Campus Infrastructure Improvements" for "Doles Residence Hall - Comprehensive Renovation" as contained in Section 2(a) of S.L. 2000-3, as a residence hall that has been provided for from housing receipts and campus infrastructure improvements will allow energy conservation and savings. Section 2(a) of S.L. 2000-3 is therefore amended in the portion under Elizabeth City State University by deleting "Doles Residence Hall - Comprehensive Renovation…$1,722,500" and by substituting "Campus Infrastructure Improvements…$1,722,500".

SECTION 9.3.(a1)  With the approval of the Board of Governors of The University of North Carolina, Elizabeth City State University may transfer funds from bond projects for planning facilities needed for the Joint Pharmacy Program.

SECTION 9.3.(b)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at North Carolina Central University, due to increasing enrollment growth, by substituting a project entitled "Pearson Cafeteria - Expansion" for "Pearson Cafeteria - Comprehensive Renovation" as contained in Section 2(a) of S.L. 2000-3, by deleting a project entitled "Old Senior Dorm - Conversion to Academic Use" as contained in Section 2(a) of S.L. 2000-3 and by transferring the funds of two million one hundred thirty thousand seven hundred dollars ($2,130,700) from the project entitled "Old Senior Dorm - Conversion to Academic Use", as contained in Section 2(a) of S.L. 2000-3, and by transferring a portion of the funds from a project entitled "Farrison-Newton Building - Comprehensive Renovation of Classroom Building", as contained in Section 2(a) of S.L. 2000-3, to this substitute project.  Section 2(a) of S.L. 2000-3 is therefore amended as follows:

(1)       In the portion entitled "Pearson Cafeteria - Comprehensive Renovation" under North Carolina Central University, by deleting "Comprehensive Renovation" and by substituting "Expansion" and by adding $7,730,700 for the project so that it reads "Pearson Cafeteria - Expansion…$8,994,300".

(2)       In the portion under North Carolina Central University, by deleting "Old Senior Dorm - Conversion to Academic Use…$2,130,700".

(3)       In the portion entitled "Farrison-Newton Building - Comprehensive Renovation of Classroom Building" under North Carolina Central University, by decreasing by $5,600,000 the $7,048,700 for the project so that it reads "Farrison-Newton Building - Comprehensive Renovation of Classroom Building…$1,448,700".

SECTION 9.3.(b1)  With the approval of The Board of Governors of The University of North Carolina, North Carolina Central University may transfer funds from one bond project to another to make infrastructure improvements and repairs within buildings for the remediation of mold on campus.

SECTION 9.3.(c)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at the University of North Carolina at Asheville by substituting a project entitled "Carmichael Hall Classroom Building - Demolition and New Construction" for "Carmichael Hall Classroom Building - Comprehensive Renovation" as contained in Section 2(a) of S.L. 2000-3, as it has been determined that it is more cost-effective to replace this facility than to renovate it. Section 2(a) of S.L. 2000-3 is therefore amended in the portion under the University of North Carolina at Asheville by deleting "Carmichael Hall Classroom Building - Comprehensive Renovation" and by adding "Carmichael Hall Classroom Building - Demolition and New Construction".

SECTION 9.3.(d)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at the University of North Carolina at Pembroke, due to enrollment growth higher than projected, by adding a project entitled "General Purpose Classroom Building" to Section 2(a) of S.L. 2000-3 and by transferring a portion of the funds from the project entitled "Residence/Dining Hall - Replacement of Jacobs & Wellons Halls", as contained in Section 2(a) of S.L. 2000-3, to this substitute project. Section 2(a) of S.L. 2000-3 is therefore amended in the portion under the University of North Carolina at Pembroke by substituting "Residence/Dining Hall - Replacement of Jacobs & Wellons Halls…$325,300" and by adding "General Purpose Classroom Building…$7,375,000".

SECTION 9.3.(e)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at Winston-Salem State University by substituting a project entitled "Anderson Center - Comprehensive Renovation" for "Anderson Center - Comprehensive Renovation & Change of Use for Early Childhood/Gerontology Programs", as contained in Section 2(a) of S.L. 2000-3, by adding a project entitled "Coltrane Hall - Renovation to House Gerontology", by transferring a portion of the funds from the project entitled "Anderson Center - Comprehensive Renovation & Change of Use for Early Childhood/Gerontology Programs", as contained in Section 2(a) of S.L. 2000-3, to the new project entitled "Coltrane Hall - Renovation to House Gerontology", by adding a project entitled "New Facility for the Early Childhood Program", and by transferring a portion of the funds from the project entitled "Anderson Center - Comprehensive Renovation & Change of Use for Early Childhood/Gerontology Programs", as contained in Section 2(a) of S.L. 2000-3, to the new project entitled "New Facility for the Early Childhood Program".  Section 2(a) of S.L. 2000-3 is therefore amended as follows:

(1)       In the portion entitled "Anderson Center - Comprehensive Renovation & Change of Use for Early Childhood/Gerontology Programs" under Winston-Salem State University, by deleting "& Change of Use for Early Childhood/Gerontology Programs" and by decreasing by $1.9 million the $6,917,900 for the project so that it reads "Anderson Center - Comprehensive Renovation…$5,017,900".

(2)       In the portion under Winston-Salem State University, by adding a new project "Coltrane Hall - Renovation to House Gerontology…$400,000".

(3)       In the portion under Winston-Salem State University, by adding a new project "New Facility for the Early Childhood Program…$1,500,000".

SECTION 9.3.(f)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at Winston-Salem State University by substituting a project entitled "New Student Health Center" for "Health Center Bldg. & Old Nursing Bldg. - Comprehensive Renovation for Student Health", as contained in Section 2(a) of S.L. 2000-3, and by using the existing project budget for a new health facility, as it has been determined that the two existing buildings are in poor condition and have been recommended for future demolition.  Section 2(a) of S.L. 2000-3 is therefore amended in the portion under Winston-Salem State University by deleting "Health Center Bldg. and Old Nursing Bldg. - Comprehensive Renovation for Student Health" and by substituting "New Student Health Center".

SECTION 9.3.(g)  Nothing in this section is intended to supersede any other requirement of law or policy for approval of the substituted capital improvement projects.

 

SCHOOL OF SCIENCE MATH/COLLEGE SCHOLARSHIPS

SECTION 9.4.(a)  Article 29 of Chapter 116 of the General Statutes is amended by adding a new section to read:

"§ 116-238.1.  Full tuition grant for graduates who attend a State university.

(a)       There is granted to each State resident who graduates from the North Carolina School of Science and Mathematics and who enrolls as a full-time student in a constituent institution of The University of North Carolina a sum to be determined by the General Assembly as a tuition grant. The tuition grant shall be for four consecutive academic years and shall cover the tuition cost at the constituent institution in which the student is enrolled. The tuition grant shall be distributed to the student as provided by this section.

(b)       The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section. The State Education Assistance Authority shall not approve any grant until it receives proper certification from the appropriate constituent institution that the student applying for the grant is an eligible student. Upon receipt of the certification, the State Education Assistance Authority shall remit at the times it prescribes the grant to the constituent institution on behalf, and to the credit, of the student.

(c)       In the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority.

(d)       In the event there are not sufficient funds to provide each eligible student with a full grant:

(1)       The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a) and (b) of this section; and

(2)       Each eligible student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.

(e)       Any remaining funds shall revert to the General Fund."

SECTION 9.4.(b)  This section applies to students graduating in the 2003-2004 academic year and each subsequent academic year.

 

FILM INDUSTRY FEASIBILITY STUDY

SECTION 9.5.  The Board of Governors of The University of North Carolina shall conduct a feasibility study to assess the strategic opportunities in the arts and entertainment industry in Forsyth County and its environs in the creation of programs, facilities, job opportunities, and tourism demand related to the film industry. The study shall include, but not be limited to: (i) the development of a program in digital media, and (ii) the development of a tourist destination film industry studio backlot.

The Board of Governors shall consult with the faculty and staff of the North Carolina School of the Arts and other experts in the arts and entertainment fields in conducting the feasibility study. The Board of Governors shall report the results of the study and any recommendations the Board makes related to the study to the 2003 Regular Session of the General Assembly by April 1, 2004.

 

AREA HEALTH EDUCATION CENTER (AHEC) Funds

SECTION 9.7.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2003-2004 fiscal year, the Board of Governors shall allocate the sum of twenty-four thousand dollars ($24,000) to the Wilmington AHEC program for the 2003-2004 fiscal year and the sum of twenty-four thousand dollars ($24,000) to the Region L. AHEC program for the 2003-2004 fiscal year to pay for information highway line charges.

 

FUNDS FOR TEACCH PROGRAM

SECTION 9.8.  Of the funds appropriated in this act to the Board of Governors of The University of North Carolina, the sum of one hundred eighty-seven thousand dollars ($187,000) for the 2003-2004 fiscal year and the sum of one hundred eighty-seven thousand dollars ($187,000) for the 2004-2005 fiscal year shall be used for the Division TEACCH program at the University of North Carolina at Chapel Hill.

 

North Carolina Agricultural and Technical state UNIVERSITY/allocate state Matching Funds for 2004-2005 Fiscal Year

SECTION 9.9.  Of the funds appropriated to The Board of Governors of The University of North Carolina for the 2004-2005 fiscal year the sum of one million ninety-two thousand nine hundred forty-four dollars ($1,092,944) shall be allocated to North Carolina Agricultural and Technical State University for the 2004-2005 fiscal year to continue to match federal funds for conducting agricultural research and cooperative extension service work.

 

PART X. DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

SUBPART 1. ADMINISTRATION

 

PETROLEUM OVERCHARGE FUNDS ALLOCATION

SECTION 10.1.(a)  There is appropriated from funds and interest thereon received from the case of United States v. Exxon that remain in the Special Reserve for Oil Overcharge Funds to the Department of Health and Human Services the sum of one million dollars ($1,000,000) for the 2003-2004 fiscal year to be allocated for the Weatherization Assistance Program.

SECTION 10.1.(b)  Any funds remaining in the Special Reserve for Oil Overcharge Funds after the allocation made pursuant to subsection (a) of this section may be expended only as authorized by the General Assembly.  All interest or income accruing from all deposits or investments of cash balances shall be credited to the Special Reserve for Oil Overcharge Funds.

 

OFFICE OF POLICY AND PLANNING

SECTION 10.2.(a)  To promote coordinated policy development and strategic planning for the State's health and human services systems, the Secretary of Health and Human Services shall establish an Office of Policy and Planning from existing resources across the Department.  The Director of the Office of Policy and Planning shall report directly to the Secretary and shall have the following responsibilities:

(1)       Coordinate the development of departmental policies, plans, and rules, in consultation with the Divisions of the Department.

(2)       Development of a departmental process for the development and implementation of new policies, plans, and rules.

(3)       Development of a departmental process for the review of existing policies, plans, and rules to ensure that departmental policies, plans, and rules are relevant.

(4)       Coordination and review of all departmental policies before dissemination to ensure that all policies are well-coordinated within and across all programs.

(5)       Implementation of ongoing strategic planning that integrates budget, personnel, and resources with the mission and operational goals of the Department.

(6)       Review, disseminate, monitor, and evaluate best practice models.

SECTION 10.2.(b)  Under the direction of the Secretary of Health and Human Services, the Director of the Office of Policy and Planning shall have the authority to direct Divisions, offices, and programs within the Department to conduct periodic reviews of policies, plans, and rules and shall advise the Secretary when it is determined to be appropriate or necessary to modify, amend, and repeal departmental policies, plans, and rules.  All policy and management positions within the Office of Policy and Planning are exempt positions as that term is defined in G.S. 126-5.

 

WEATHERIZATION ASSISTANCE PROGRAM

SECTION 10.3.  Article 2 of Chapter 108A of the General Statutes is amended by adding the following new Part to read:

"Part 9. Weatherization Assistance Program and Heating/Air Repair and Replacement Program.

"§ 108A-70.30.  Weatherization Assistance Program and Heating/Air Repair and Replacement Program.

The Department may administer the Weatherization Assistance Program for Low-Income Families and the Heating/Air Repair and Replacement Program functions. Nothing in this Part shall be construed as obligating the General Assembly to appropriate funds for the Program or as entitling any person to services under the Program."

 

NONMEDICAID REIMBURSEMENT CHANGES

SECTION 10.4.  Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program.

The Department of Health and Human Services may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days. When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non-Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.

Notwithstanding the provisions of paragraph one, the Department of Health and Human Services may negotiate with providers of medical services under the various Department of Health and Human Services programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes:  contracts or agreements for medical services and purchases of medical equipment and other medical supplies. These negotiated rates are allowable only to meet the medical needs of its non-Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.

Maximum net family annual income eligibility standards for services in these programs shall be as follows:

                                           Medical Eye                      Rehabilitation Except

Family Size                        Care Adults                         DSB Over 55 Grant                        Other

        1                                     $4,860                                    $8,364                                  $4,200

        2                                        5,940                                    10,944                                     5,300

        3                                        6,204                                    13,500                                     6,400

        4                                        7,284                                    16,092                                     7,500

        5                                        7,821                                    18,648                                     7,900

        6                                        8,220                                    21,228                                     8,300

        7                                        8,772                                    21,708                                     8,800

        8                                        9,312                                    22,220                                     9,300

The eligibility level for children in the Medical Eye Care Program in the Division of Services for the Blind shall be one hundred percent (100%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. The eligibility level for adults 55 years of age or older who qualify for services through the Division of Services for the Blind, Independent Living Rehabilitation Program, shall be two hundred percent (200%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. The eligibility level for adults in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall be one hundred fifty percent (150%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. Additionally, those adults enrolled in the Atypical Antipsychotic Medication Program who become gainfully employed may continue to be eligible to receive State support, in decreasing amounts, for the purchase of atypical antipsychotic medication and related services up to three hundred percent (300%) of the poverty level.

State financial participation in the Atypical Antipsychotic Medication Program for those enrollees who become gainfully employed is as follows:

                  Income              State Participation                Client Participation

            (% of poverty)

            0-150%                       100%                                            0%

            151-200%                     75%                                          25%

            201-250%                     50%                                          50%

            251-300%                     25%                                          75%

            300% and over                0%                                       100%

The Department of Health and Human Services shall contract at, or as close as possible to, Medicaid rates for medical services provided to residents of State facilities of the Department.

 

SENIOR CARES PROGRAM ADMINISTRATION

SECTION 10.5.  The Department of Health and Human Services may administer the "Senior Cares" prescription drug access program approved by the Health and Wellness Trust Fund Commission and funded from the Health and Wellness Trust Fund.

 

PHYSICIAN SERVICES

SECTION 10.6.  With the approval of the Office of State Budget and Management, the Department of Health and Human Services may use funds appropriated in this act for across-the-board salary increases and performance pay to offset similar increases in the costs of contracting with private and independent universities for the provision of physician services to clients in facilities operated by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.  This offsetting shall be done in the same manner as is currently done with the constituent institutions of The University of North Carolina.

 

LIABILITY INSURANCE

SECTION 10.7.(a)  The Secretary of the Department of Health and Human Services, the Secretary of the Department of Environment and Natural Resources, and the Secretary of the Department of Correction may provide medical liability coverage not to exceed one million dollars ($1,000,000) per incident on behalf of employees of the Departments licensed to practice medicine or dentistry, on behalf of all licensed physicians who are faculty members of The University of North Carolina who work on contract for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for incidents that occur in Division programs, and on behalf of physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Health and Human Services.  This coverage may include commercial insurance or self-insurance and shall cover these individuals for their acts or omissions only while they are engaged in providing medical and dental services pursuant to their State employment or training.

SECTION 10.7.(b)  The coverage provided under this section shall not cover any individual for any act or omission that the individual knows or reasonably should know constitutes a violation of the applicable criminal laws of any state or the United States or that arises out of any sexual, fraudulent, criminal, or malicious act or out of any act amounting to willful or wanton negligence.

SECTION 10.7.(c)  The coverage provided pursuant to this section shall not require any additional appropriations and shall not apply to any individual providing contractual service to the Department of Health and Human Services, the Department of Environment and Natural Resources, or the Department of Correction, with the exception that coverage may include physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Health and  Human  Services  and  licensed physicians who are faculty members of The University of North Carolina who work for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

 

BUTNER COMMUNITY LAND RESERVATION

SECTION 10.8.  The Department of Health and Human Services shall reserve and dedicate the following described land for the construction of a community building and related facilities to serve the Butner Reservation:

"Approximately 2 acres, on the east side it borders Central Avenue with a line running along the Wallace Bradshur property on the north back to the tree line next to the ADATC. From there it follows the tree line south and west to and including the softball field. From the softball field it turns east to the State Employees Credit Union and follows the Credit Union property on the south side back to Central Avenue."

This land shall be reserved and dedicated for the project which shall be funded with contributions from Granville County, contributions from the residents of the Butner Reservation, the use of cablevision franchise rebate funds received by the Department of Health and Human Services on behalf of the Butner Reservation, and other public and private sources.

 

DHHS CENTRALIZE INFORMATION TECHNOLOGY OPERATIONS

SECTION 10.8A.(a)  The Department of Health and Human Services shall conduct a thorough, department-wide examination and analysis of its Information Technology (IT) infrastructure, including IT expenditures and management functions. The purpose of the examination is to enable the General Assembly and the Office of State Budget and Management to readily determine the amount of State funds being expended annually on each and all IT functions.  As part of this examination, the Department shall review IT contracts with outside vendors, including the adequacy of contract management, and shall consider the implementation of performance measures in the development of future IT contracts. Upon completion of its examination and analysis, the Department shall develop a plan for the establishment of a Central IT Operations Unit encompassing all IT operations and functions that are common to all divisions, offices, and programs of the Department.  The Central IT Operations Unit shall be organized such that all IT expenditures and personnel are readily identifiable.  The Department may exclude from the Central IT Operations Unit those IT functions that are unique to one or more individual divisions, offices, or programs, provided that such separate IT functions are readily identifiable in terms of expenditures and personnel and that the separation allows for combining the expenditures and personnel data with expenditures and personnel data of the Central IT Operations Unit.  The Department shall identify all excluded IT functions and provide reasons why it is more beneficial to the State to exclude those functions from the Central IT Operations Unit.

SECTION 10.8A.(b)  The Office of State Budget and Management and the Department of Health and Human Services shall identify the amount of State appropriations necessary to fully fund from the General Fund the current budget for the Division of Information Resources.  Having determined the amount of General Fund dollars needed, the Office of State Budget and Management shall develop and recommend a plan for providing the necessary funds.

SECTION 10.8A.(c)  The Department of Health and Human Services shall report on the development of the Central IT Operations Unit to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by January 1, 2004.  The Office of State Budget and Management shall report on the identification of funds required under subsection (b) of this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by January 1, 2004.

 

EDUCATION AND AWARENESS OF INFANT HOMICIDE PREVENTION ACT

SECTION 10.8B.(a)  The Department of Health and Human Services, Division of Public Health and the Division of Social Services, shall incorporate education and awareness of the Infant Homicide Prevention Act pursuant to S.L. 2001-291, into other State-funded programs at the local level.

SECTION 10.8B.(b)  The Department shall report on its activities to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division not later than April 1, 2004.

 

MEDICAL CARE COMMISSION TEMPORARY RULE-MAKING AUTHORITY  EXTENDED

SECTION 10.8C.  Section 6(d) of S.L. 2002-160 reads as rewritten:

"SECTION 6.(d)  Notwithstanding 26 NCAC 2C .0102(11), the Commission for Health Services and the Medical Care Commission may adopt temporary rules as provided in this section until 1 July 2003.2004."

 

unlawful practice of pharmacy

SECTION 10.8D.  Article 4A of Chapter 90 of the General Statutes is amended by adding a new section to read:

"§ 90-85.21B.  Unlawful practice of pharmacy.

It shall be unlawful for any person, firm, or corporation not licensed or registered under the provisions of this Article to:

(1)       Use in a trade name, sign, letter, or advertisement any term, including 'drug', 'pharmacy', 'prescription drugs', 'prescription', 'Rx', or 'apothecary', that would imply that the person, firm, or corporation is licensed or registered to practice pharmacy in this State.

(2)       Hold himself or herself out to others as a person, firm, or corporation licensed or registered to practice pharmacy in this State."

 

EFFECTIVE DATE OF LONG-TERM CARE CRIMINAL RECORD checks for employment positions

SECTION 10.8E.  Notwithstanding any other provision of law to the contrary, the requirements of G.S. 131E-265 for nursing homes to conduct national criminal history record checks for employment positions other than those involving direct patient care shall become effective no earlier than January 1, 2005. Notwithstanding any other provision of law to the contrary, the requirements of G.S. 131D-2 for adult care homes to conduct national criminal records checks for all staff positions shall become effective no earlier than January 1, 2005.

 

IMPLEMENT A PILOT PROJECT FOR LONG-TERM CARE COMMUNITY SERVICE COORDINATION

SECTION 10.8F.(a)  In accordance with the recommendations in the final report from the Institute of Medicine Task Force on Long-Term Care and the study report recommendations resulting from S.L. 2001-491, Part XXII, the Department of Health and Human Services shall implement a communications and coordination initiative to support local coordination of long-term care and shall pilot the establishment of local lead agencies to facilitate the long-term care coordination process at the county or regional level.  For those counties that voluntarily participate, the local long-term care coordination initiative shall aid in the development of core services, coordinate local services, and streamline access to services. The initiative shall eliminate fragmentation and barriers to information and services; provide a seamless connection among State agencies and local entities, regardless of funding sources; and allow consumers to efficiently and effectively navigate among long-term care services.

SECTION 10.8.F.(b)  The Department shall submit an interim report on the pilot project for local long-term care coordination to the North Carolina Study Commission on Aging by October 1, 2004, and a final report by October 1, 2005.

 

SUBPART 2. DIVISION OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES

 

MENTAL HEALTH, DEVELOPMENTAL DISABILITY, AND SUBSTANCE ABUSE SERVICES TRUST FUND FOR SYSTEM REFORM BRIDGE AND CAPITAL FUNDING NEEDS AND OLMSTEAD

SECTION 10.9.  Moneys in the Trust Fund established pursuant to G.S. 143-15.3D shall be used to establish or expand community-based services only if sufficient recurring funds can be identified within the Department of Health and Human Services from funds currently budgeted for mental health, developmental disabilities, and substance abuse services, area mental health programs or county programs, or local government.

 

EXTEND MENTAL HEALTH CONSUMER ADVOCACY PROGRAM CONTINGENT UPON FUNDS APPROPRIATED BY THE 2005 GENERAL ASSEMBLY

SECTION 10.10.  Section 4 of S.L. 2001-437, as amended by Section 10.30 of S.L. 2002-126, reads as rewritten:

"SECTION 4. Sections 1.1 through 1.21(b) of this act become effective July 1, 2002. Section 2 of this act becomes effective only if funds are appropriated by the 2003 2005 General Assembly for that purpose. Section 2 of this act becomes effective July 1 of the fiscal year for which funds are appropriated by the 2003 2005 General Assembly for that purpose. The remainder of this act is effective when it becomes law."

 

SUBSTANCE ABUSE PREVENTION SERVICES REPORTING

SECTION 10.11.  The Department of Health and Human Services shall report on its activities under Section 10.24 of S.L. 2002-126 to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division not later than December 1, 2003.

 

TRANSITION PLANNING FOR STATE PSYCHIATRIC HOSPITALS

SECTION 10.12.(a)  In keeping with the United States Supreme Court decision in Olmstead vs. L.C. & E.W. and State policy to provide appropriate services to clients in the least restrictive and most appropriate environment, the Department of Health and Human Services shall develop and implement a plan for the construction of a replacement facility for Dorothea Dix Hospital and for the transition of patients to the community or to other long-term care facilities, as appropriate. The goal is to develop mechanisms and identify resources needed to enable patients and their families to receive the necessary services and supports based on the following guiding principles:

(1)       Individuals shall be provided acute psychiatric care in non-State facilities when appropriate.

(2)       Individuals shall be provided acute psychiatric care in State facilities only when non-State facilities are unavailable.

(3)       Individuals shall receive evidenced-based psychiatric services and care that are cost-efficient.

(4)       The State shall minimize cost shifting to other State and local facilities or institutions.

SECTION 10.12.(b)  The Department of Health and Human Services shall conduct an analysis of the individual patient service needs and shall develop and implement an individual transition plan, as appropriate, for patients in each hospital.  The State shall ensure that each individual transition plan, as appropriate, shall take into consideration the availability of appropriate alternative placements based on the needs of the patient and within resources available for the mental health, developmental disabilities, and substance abuse services system. In developing each plan, the Department shall consult with the patient and the patient's family or other legal representative.

SECTION 10.12.(c)  In accordance with the plan established in subsections (a) and (b) of this section, any nonrecurring savings in State appropriations that result from reductions in beds or services shall be placed in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs.  These funds shall be used to facilitate the transition of clients into appropriate community-based services and supports in accordance with G.S. 143-15.3D. Recurring savings realized through implementation of this section shall be retained by the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, (i) for implementation of subsections (a) and (b) of this section and (ii) to support the recurring costs of additional community-based placements from Division facilities in accordance with Olmstead vs. L.C. & E.W.

SECTION 10.12.(d)  The Department of Health and Human Services shall submit reports on the status of implementation of this section to the Joint Legislative Commission on Governmental Operations, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.  These reports shall be submitted on December 1, 2003, and May 1, 2004.

 

COMPREHENSIVE TREATMENT SERVICES PROGRAM

SECTION 10.13.  The Department of Health and Human Services shall report on its continuing implementation of the Comprehensive Treatment Services Program established pursuant to Section 21.60 of S.L. 2001-424.  The Department shall submit an interim report on December 1, 2003, and a final report not later than April 1, 2004, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

 

MENTAL RETARDATION CENTER DOWNSIZING

SECTION 10.14.(a)  In accordance with the Department of Health and Human Services' plan for downsizing the State's regional mental retardation facilities by four percent (4%) each year, the Department shall implement cost-containment and reduction strategies to ensure the corresponding financial and staff downsizing of each facility. The Department shall manage the client population of the mental retardation centers in order to ensure that placements for ICF/MR level of care shall be made in non-State facilities. Admissions to State ICF/MR facilities are permitted only as a last resort and only upon approval of the Department. The corresponding budgets for each of the State mental retardation centers shall be reduced and positions shall be eliminated as the census of each facility decreases. At no time shall mental retardation center positions be transferred to other units within a facility or assigned nondirect care activities such as outreach.

SECTION 10.14.(b)  Any savings in State appropriations in each year of the 2003-2005 fiscal biennium that result from reductions in beds or services shall be applied as follows:

(1)       Nonrecurring savings shall be placed in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs and shall be used to facilitate the transition of clients into appropriate community-based services and support in accordance with G.S. 143-15.3D; and

(2)       Recurring savings realized through implementation of this section shall be retained by the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, to support the recurring costs of additional community-based placements from Division facilities in accordance with Olmstead vs. L.C. & E.W. In determining the savings in this section, savings shall include all savings realized from the downsizing of the State mental retardation centers including both the savings in direct State appropriations in the budgets of the State mental retardation centers as well as the savings in the State matching portion of reduced Medicaid payments associated with downsizing.

SECTION 10.14.(c)  The Department of Health and Human Services shall report on its progress in complying with this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The progress report shall be submitted not later than January 15, 2004, and a final report submitted not later than May 1, 2004.

SECTION 10.14.(d)  Downsizing of mental retardation centers which occurs in the 2003-2004 fiscal year shall be maintained for the 2004-2005 fiscal year. Effective July 1, 2003, downsizing shall be accomplished in accordance with this section and the State Plan for Mental Health, Developmental Disabilities, and Substance Abuse Services. All savings resulting from downsizing occurring on and after July 1, 2003, shall be utilized as set forth in subsection (b) of this section.

 

MENTAL RETARDATION CENTER TRANSITION PLAN

SECTION 10.15.(a)  The Department of Health and Human Services shall develop and implement a plan for the reorganization of outreach services performed by the State mental retardation centers.  The plan shall provide for the elimination of self-referrals by the mental retardation centers and shall include the following:

(1)       The area and county mental health programs shall have exclusive authority for referring to the mental retardation centers persons in the community who are in need of specialized services.

(2)       The mental retardation centers shall coordinate the transition of residents from the mental retardation centers to area and county mental health programs, and shall provide technical assistance to community service providers and families who care for transitioned residents, and to others in the community, as appropriate, for the purpose of furthering community services and placement.

(3)       The method for allocating savings in State appropriations from the mental retardation centers across the area and county mental health programs.

SECTION 10.15.(b)  In accordance with the plan established in subsection (a) of this section, any recurring and nonrecurring savings in State appropriations that result from the transfer of referral activities in the mental retardation centers to area and county mental health programs shall be transferred from the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to area and county mental health programs for referral activities.

SECTION 10.15.(c)  The Department of Health and Human Services shall report on the implementation of this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. This report shall be submitted on February 1, 2004.

 

SERVICES TO MULTIPLY DIAGNOSED ADULTS

SECTION 10.16.(a)  In order to ensure that multiply-diagnosed adults are appropriately served by the mental health, developmental disabilities, and substance abuse services system, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall do the following with respect to services provided to these adults:

(1)       Implement the following guiding principles for the provision of services:

a.         Service delivery system must be outcome oriented and evaluation based.

b.         Services should be delivered as close as possible to the consumer's home.

c.         Services selected should be those that are most efficient in terms of cost and effectiveness.

d.         Services should not be provided solely for the convenience of the provider or the client.

e.         Families and consumers should be involved in decision making throughout treatment planning and delivery.

(2)       Provide those treatment services that are medically necessary.

(3)       Implement utilization review of services provided.

SECTION 10.16.(b)  The Department of Health and Human Services shall implement all of the following cost-reduction strategies:

(1)       Preauthorization for all services except emergency services.

(2)       Criteria for determining medical necessity.

(3)       Clinically appropriate services.

(4)       Not later than May 1, 2004, conduct a State review of (i) individualized service plans for former Thomas S. class members and for adults whose service plan exceeds one hundred thousand dollars ($100,000) to ensure that service plans focus on delivery of appropriate services rather than optimal treatment and habilitation plans and (ii) staffing patterns of residential services.

SECTION 10.16.(c)  No State funds shall be used for the purchase of single-family or other residential dwellings to house multiply diagnosed adults.

SECTION 10.16.(d)  The Department shall submit a progress report on implementation of this section not later than February 1, 2004, and a final report not later than May 1, 2004, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

AREA MENTAL HEALTH ADMINISTRATIVE COSTS

SECTION 10.17.(a)  Area mental health, developmental disabilities, and substance abuse authorities or counties administering mental health, developmental disabilities, and substance abuse services shall develop and implement plans to reduce local administrative costs. The plans shall be developed in accordance with guidelines adopted by the Secretary, in consultation with the Local Government Commission and the North Carolina Association of County Commissioners, and in accordance with the following:

(1)       Administrative costs for area mental health, developmental disabilities, and substance abuse services programs shall not exceed thirteen percent (13%).

(2)       Administrative costs for counties administering mental health, developmental disabilities, and substance abuse services through a county program shall not exceed thirteen percent (13%).

SECTION 10.17.(b)  The Department of Health and Human Services shall report its progress in complying with this section not later than January 1, 2004, and April 15, 2004. The reports shall be submitted to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division and shall include:

(1)       A description of the process used and the participants involved in complying with subsection (a) of this section.

(2)       The guidelines developed under subsection (a) of this section.

(3)       A description of local compliance initiatives and efforts including program or function consolidation.

(4)       A list of area programs at or below the targeted thirteen percent (13%) for the 2003-2004 fiscal year.

(5)       Projected savings in administrative costs as a result of implementation of the targeted limits required under this section.

SECTION 10.17.(c)  The Department may implement alternative approaches to establish reasonable administrative cost limitations for Local Management Entities (LMEs), including both county programs and area authority models, and service providers in accordance with system reform and changes in system funding structures.

 

PRIVATE AGENCY UNIFORM COST FINDING REQUIREMENT

SECTION 10.18.(a)  To ensure uniformity in rates charged to area programs and funded with State-allocated resources, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services of the Department of Health and Human Services may require a private agency that provides services under contract with an area program or county program, except for hospital services that have an established Medicaid rate, to complete an agency-wide uniform cost finding in accordance with G.S. 122C-147.2.  The resulting cost shall be the maximum included for the private agency in the contracting area program's unit cost finding.

SECTION 10.18.(b)  If a private agency fails to timely and accurately complete the required agency-wide uniform cost finding in a manner acceptable to the Department's controller's office, the Department may suspend all Department funding and payment to the private agency until such time as an acceptable cost finding has been completed by the private agency and approved by the Department's controller's office.

 

group home tracking system

SECTION 10.18A.  The Department of Health and Human Services shall use funds within its budget for the 2003-2004 fiscal year to develop a group home tracking system.

 

SUBPART 3. DIVISION OF MEDICAL ASSISTANCE

 

MEDICAID

SECTION 10.19.(a)  Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy. Funds appropriated for these services shall be expended in accordance with the following schedule of services and payment bases. All services and payments are subject to the language at the end of this subsection.

Services and payment bases:

(1)       Hospital-Inpatient. - Payment for hospital inpatient services will be prescribed in the State Plan as established by the Department of Health and Human Services.

(2)       Hospital-Outpatient. - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Health and Human Services.

(3)       Nursing Facilities. - Payment for nursing facility services will be prescribed in the State Plan as established by the Department of Health and Human Services. Nursing facilities providing services to Medicaid recipients who also qualify for Medicare must be enrolled in the Medicare program as a condition of participation in the Medicaid Program. State facilities are not subject to the requirement to enroll in the Medicare program. Residents of nursing facilities who are eligible for Medicare coverage of nursing facility services must be placed in a Medicare certified bed. Medicaid shall cover facility services only after the appropriate services have been billed to Medicare. The Division of Medical Assistance shall allow nursing facility providers sufficient time from the effective date of this act to certify additional Medicare beds if necessary. In determining the date that the requirements of this subdivision become effective, the Division of Medical Assistance shall consider the regulations governing certification of Medicare beds and the length of time required for this process to be completed.

(4)       Intermediate Care Facilities for the Mentally Retarded. - As prescribed in the State Plan as established by the Department of Health and Human Services.

(5)       Drugs. - Drug costs as allowed by federal regulations plus a professional services fee per month excluding refills for the same drug or generic equivalent during the same month. Reimbursement shall be available for up to six prescriptions per recipient, per month, including refills. Payments for drugs are subject to the provisions of subsection (h) of this section and to the provisions at the end of subsection (a) of this section or in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal reimbursement regulations. Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. The professional services fee shall be five dollars and sixty cents ($5.60) per prescription for generic drugs and four dollars ($4.00) per prescription for brand name drugs. Adjustments to the professional services fee shall be established by the General Assembly.

(6)       Physicians, Chiropractors, Podiatrists, Optometrists, Dentists, Certified Nurse Midwife Services, Nurse Practitioners. - Fee schedules as developed by the Department of Health and Human Services. Payments for dental services are subject to the provisions of subsection (g) of this section.

(7)       Community Alternative Program, EPSDT Screens. - Payment to be made in accordance with the rate schedule developed by the Department of Health and Human Services.

(8)       Home Health and Related Services, Private Duty Nursing, Clinic Services, Prepaid Health Plans, Durable Medical Equipment. - Payment to be made according to reimbursement plans developed by the Department of Health and Human Services.

(9)       Medicare Buy-In. - Social Security Administration premium.

(10)     Ambulance Services. - Uniform fee schedules as developed by the Department of Health and Human Services. Public ambulance providers will be reimbursed at cost.

(11)     Hearing Aids. - Actual cost plus a dispensing fee.

(12)     Rural Health Clinic Services. - Provider-based, reasonable cost; nonprovider-based, single-cost reimbursement rate per clinic visit.

(13)     Family Planning. - Negotiated rate for local health departments. For other providers, see specific services, for instance, hospitals, physicians.

(14)     Independent Laboratory and X-Ray Services. - Uniform fee schedules as developed by the Department of Health and Human Services.

(15)     Optical Supplies. - One hundred percent (100%) of reasonable wholesale cost of materials.

(16)     Ambulatory Surgical Centers. - Payment as prescribed in the reimbursement plan established by the Department of Health and Human Services.

(17)     Medicare Crossover Claims. - By not later than October 1, 2005, the Department shall apply Medicaid medical policy to Medicare claims for dually eligible recipients. The Department shall pay an amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Health and Human Services.

(18)     Physical Therapy and Speech Therapy. - Services limited to EPSDT- eligible children. Payments are to be made only to qualified providers at rates negotiated by the Department of Health and Human Services. Physical therapy (including occupational therapy) and speech therapy services are subject to prior approval and utilization review.

(19)     Personal Care Services. - Payment in accordance with the State Plan approved by the Department of Health and Human Services.

(20)     Case Management Services. - Reimbursement in accordance with the availability of funds to be transferred within the Department of Health and Human Services.

(21)     Hospice. - Services may be provided in accordance with the State Plan developed by the Department of Health and Human Services.

(22)     Other Mental Health Services. - Unless otherwise covered by this section, coverage is limited to:

a.         Services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) when provided in agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services and reimbursement is made in accordance with a State Plan developed by the Department of Health and Human Services not to exceed the upper limits established in federal regulations, and

b.         For children eligible for EPSDT services:

1.         Licensed or certified psychologists, licensed clinical social workers, certified clinical nurse specialists in psychiatric mental health advanced practice, and nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, when Medicaid-eligible children are referred by the Carolina ACCESS primary care physician or the area mental health program, and

2.         Institutional providers of residential services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) for children and Psychiatric Residential Treatment Facility services that meet federal and State requirements as defined by the Department.

Notwithstanding G.S. 150B-21.1(a), the Department of Health and Human Services may adopt temporary rules in accordance with Chapter 150B of the General Statutes further defining the qualifications of providers and referral procedures in order to implement this subdivision. Coverage policy for services defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services under sub-subdivisions a. and b.2 of this subdivision shall be established by the Division of Medical Assistance.

(23)     Medically Necessary Prosthetics or Orthotics for EPSDT-Eligible Children. - Reimbursement in accordance with the State Plan approved by the Department of Health and Human Services.

(24)     Health Insurance Premiums. - Payments to be made in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal regulations.

(25)     Medical Care/Other Remedial Care. - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates. Services addressed by this subdivision are limited to those prescribed in the State Plan as established by the Department of Health and Human Services.

(26)     Pregnancy-Related Services. - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.

Services and payment bases may be changed with the approval of the Director of the Budget.

Payment is limited to Medicaid-enrolled providers that purchase a performance bond in an amount not to exceed one hundred thousand dollars ($100,000) naming as beneficiary the Department of Health and Human Services, Division of Medical Assistance, or provide to the Department a validly executed letter of credit or other financial instrument issued by a financial institution or agency honoring a demand for payment in an equivalent amount. The Department may waive or limit the requirements of this paragraph for one or more classes of Medicaid-enrolled providers based on the provider's dollar amount of monthly billings to Medicaid or the length of time the provider has been licensed in this State to provide services. In waiving or limiting requirements of this paragraph, the Department shall take into consideration the potential fiscal impact of the waiver or limitation on the State Medicaid Program. The Department may adopt temporary rules in accordance with G.S. 150B-21.1 as necessary to implement this provision.

Reimbursement is available for up to 24 visits per recipient per year to any one or combination of the following: physicians, clinics, hospital outpatient, optometrists, chiropractors, and podiatrists. Prenatal services, all EPSDT children, emergency rooms, and mental health services subject to independent utilization review are exempt from the visit limitations contained in this paragraph. Exceptions may be authorized by the Department of Health and Human Services where the life of the patient would be threatened without such additional care. Any person who is determined by the Department to be exempt from the 24-visit limitation may also be exempt from the six-prescription limitation.

SECTION 10.19.(b)  Allocation of Nonfederal Cost of Medicaid. - The State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section.

SECTION 10.19.(c)  Copayment for Medicaid Services. - The Department of Health and Human Services may establish co-payment up to the maximum permitted by federal law and regulation.

SECTION 10.19.(d)  Medicaid and Work First Family Assistance, Income Eligibility Standards. - The maximum net family annual income eligibility standards for Medicaid and Work First Family Assistance and the Standard of Need for Work First Family Assistance shall be as follows:

 

                   Categorically Needy                                        Medically Needy

                             WFFA*

      Family                  Standard                             Families and

         Size                     of Need                         Children Income

                                                                                     Level            AA, AB, AD*

          1                           $4,344                                 $2,172                $2,900

          2                             5,664                                   2,832                   3,800

          3                             6,528                                   3,264                   4,400

          4                             7,128                                   3,564                   4,800

          5                             7,776                                   3,888                   5,200

          6                             8,376                                   4,188                   5,600

          7                             8,952                                   4,476                   6,000

          8                             9,256                                   4,680                   6,300

*Work First Family Assistance (WFFA); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).

 

The payment level for Work First Family Assistance shall be fifty percent (50%) of the standard of need.

These standards may be changed with the approval of the Director of the Budget with the advice of the Advisory Budget Commission.

SECTION 10.19.(e)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to all elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines, as revised each April 1.

SECTION 10.19.(f)  ICF and ICF/MR Work Incentive Allowances. - The Department of Health and Human Services may provide an incentive allowance to Medicaid-eligible recipients of ICF and ICF/MR facilities who are regularly engaged in work activities as part of their developmental plan and for whom retention of additional income contributes to their achievement of independence. The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department. The incentive allowances may be as follows:

 

Monthly Net Wages                 Monthly Incentive Allowance

              $1.00 to $100.99                               Up to $50.00

         $101.00 to $200.99                                         $80.00

         $201.00 to $300.99                                       $130.00

         $301.00 and greater                                       $212.00.

SECTION 10.19.(g)  Dental Coverage Limits. - Dental services shall be provided on a restricted basis in accordance with rules adopted by the Department to implement this subsection.

SECTION 10.19.(h)  Dispensing of Generic Drugs. - Notwithstanding G.S. 90-85.27 through G.S. 90-85.31, or any other law to the contrary, under the Medical Assistance Program (Title XIX of the Social Security Act), and except as otherwise provided in this subsection for atypical antipsychotic drugs and drugs listed in the narrow therapeutic index, a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber has determined, at the time the drug is prescribed, that the brand name drug is medically necessary and has written on the prescription order the phrase "medically necessary". An initial prescription order for an atypical antipsychotic drug or a drug listed in the narrow therapeutic drug index that does not contain the phrase "medically necessary" shall be considered an order for the drug by its established or generic name, except that a pharmacy shall not substitute a generic or established name prescription drug for subsequent brand or trade name prescription orders of the same prescription drug without explicit oral or written approval of the prescriber given at the time the order is filled. Generic drugs shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand name drugs. As used in this subsection, "brand name" means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and "established name" has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act as amended, 21 U.S.C. § 352(e)(3).

SECTION 10.19.(i)  The Department of Health and Human Services shall not impose prior authorization requirements or other restrictions under the State Medical Assistance Program on medications prescribed for Medicaid recipients for the treatment of: (i) mental illness, including, but not limited to, medications for schizophrenia, bipolar disorder, and major depressive disorder, or (ii) HIV/AIDS.

SECTION 10.19.(j)  Exceptions to Service Limitations, Eligibility Requirements, and Payments. - Service limitations, eligibility requirements, and payments bases in this section may be waived by the Department of Health and Human Services, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, contracting for services, managed care plans, or community-based services programs in accordance with plans approved by the United States Department of Health and Human Services or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient. The Department of Health and Human Services may proceed with planning and development work on the Program of All-Inclusive Care for the Elderly.

SECTION 10.19.(k)  Volume Purchase Plans and Single Source Procurement. - The Department of Health and Human Services, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other contracting processes in order to improve cost containment.

SECTION 10.19.(l)  Cost-Containment Programs. - The Department of Health and Human Services, Division of Medical Assistance, may undertake cost-containment programs in accordance with Section 3 of S.L. 2001-395, including contracting for services, preadmissions to hospitals, and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.

SECTION 10.19.(m)  For all Medicaid eligibility classifications for which the federal poverty level is used as an income limit for eligibility determination, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines.

SECTION 10.19.(n)  The Department of Health and Human Services shall provide Medicaid to 19-, 20-, and 21-year-olds in accordance with federal rules and regulations.

SECTION 10.19.(o)  The Department of Health and Human Services shall provide coverage to pregnant women and to children according to the following schedule:

(1)       Pregnant women with incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits. In determining income eligibility under this subdivision, the income of a minor's parents shall be counted if the minor is residing in the home.

(2)       Infants under the age of one with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(3)       Children aged one through five with family incomes equal to or less than one hundred thirty-three percent (133%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(4)       Children aged six through 18 with family incomes equal to or less than the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(5)       The Department of Health and Human Services shall provide Medicaid coverage for adoptive children with special or rehabilitative needs regardless of the adoptive family's income.

Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy. In order to reduce county administrative costs and to expedite the provision of medical services to pregnant women, to infants, and to children described in subdivisions (3) and (4) of this subsection, no resources test shall be applied.

SECTION 10.19.(p)  Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.

SECTION 10.19.(q)  The Division of Medical Assistance, Department of Health and Human Services, may provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.

SECTION 10.19.(r)  If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Health and Human Services, may use funds that are identified to support the cost of development and acquisition of equipment and software through contractual means to improve and enhance information systems that provide management information and claims processing. The Department of Health and Human Services shall identify adequate funds to support the implementation and first year's operational costs that exceed the currently allocated funds for the new contract for the fiscal agent for the Medicaid Management Information System.

SECTION 10.19.(s)  The Department of Health and Human Services may adopt temporary or emergency rules according to the procedures established in G.S. 150B-21.1 and G.S. 150B-21.1A when it finds that these rules are necessary to maximize receipt of federal funds within existing State appropriations, to reduce Medicaid expenditures, and to reduce fraud and abuse. Prior to the filing of these temporary or emergency rules with the Rules Review Commission and the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary or emergency rule and its effect on State appropriations and local governments.

SECTION 10.19.(t)  The Department shall report to the Fiscal Research Division of the Legislative Services Office and to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Health and Human Services or the Joint Legislative Health Care Oversight Committee on any change it anticipates making in the Medicaid Program that impacts the type or level of service, reimbursement methods, or waivers, any of which require a change in the State Plan or other approval by the Centers for Medicare and Medicaid Services (CMS). The reports shall be provided at the same time they are submitted to CMS for approval.

SECTION 10.19.(u)  Upon approval of a demonstration waiver by the Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services may provide Medicaid coverage for family planning services to men and women of child-bearing age with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty level. Coverage shall be contingent upon federal approval of the waiver and shall begin no earlier than January 1, 2001.

SECTION 10.19.(v)  The Department of Health and Human Services, Division of Medical Assistance, shall use the latest audited cost reporting data available when establishing Medicaid provider rates or when making changes to the reimbursement methodology. For hospital services, the Division shall use the latest audited cost reporting data available, supplemented by additional financial information available to the Division if and to the extent that the Division concludes that the information is reliable and relevant, when establishing rates or when making changes to the reimbursement methodology.

SECTION 10.19.(w)  The Department of Health and Human Services, Division of Medical Assistance, shall implement a new coding system for therapeutic mental health services as required by the Health Insurance Portability and Accountability Act of 1996. In implementing the new coding system, the Division shall ensure that the new coding system does not discriminate between providers of therapeutic mental health services with similar qualifications and training. In meeting the requirements of this subsection, the Division shall consult with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and the professional licensing boards responsible for licensing the affected professionals.

SECTION 10.19.(x)  The Department of Health and Human Services may apply federal transfer of assets policies, as described in Title XIX, section 1917(c) of the Social Security Act, including the attachment of liens, to real property excluded as  "income producing", tenancy-in-common, or as nonhomesite property made "income producing" under Title XIX, section 1902(r)(2) of the Social Security Act. The transfer of assets policy shall apply only to an institutionalized individual or the individual's spouse as defined in Title XIX, section 1917(c) of the Social Security Act. This subsection becomes effective no earlier than October 1, 2001. Federal transfer of asset policies and attachment of liens to properties excluded as tenancy-in-common or as nonhomesite property made "income producing" in accordance with this subsection shall become effective not earlier than November 1, 2002.

SECTION 10.19.(y)  When implementing the Supplemental Security Income (SSI) method for considering equity value of income producing property, the Department shall, to the maximum extent possible, employ procedures to mitigate the hardship to Medicaid enrollees occurring from application of the Supplemental Security Income (SSI) method.

SECTION 10.19.(z)  Unless required for compliance with federal law, the Department shall not change medical policy affecting the amount, sufficiency, duration, and scope of health care services and who may provide services until the Division of Medical Assistance has prepared a five-year fiscal analysis documenting the increased cost of the proposed change in medical policy and submitted it for Departmental review.  If the fiscal impact indicated by the fiscal analysis for any proposed medical policy change exceeds three million dollars ($3,000,000) in total requirements for a given fiscal year, then the Department shall submit the proposed policy change with the fiscal analysis to the Office of State Budget and Management and the Fiscal Research Division.  The Department shall not implement any proposed medical policy change exceeding three million dollars ($3,000,000) in total requirements for a given fiscal year unless the source of State funding is identified and approved by the Office of State Budget and Management.  The Department shall provide the Office of State Budget and Management and the Fiscal Research Division a quarterly report itemizing all medical policy changes with total requirements of less than three million dollars ($3,000,000).

SECTION 10.19.(aa)  The Department of Health and Human Services, Division of Medical Assistance, shall convene a work group to review the current Medicaid standards for vision screening for Medicaid-eligible children to determine whether the standards are meeting the vision needs of these children. The Secretary shall appoint to the work group pediatricians, ophthalmologists, optometrists, and other individuals with expertise or interest in children's vision care. The Department shall report the findings of the work group to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division by March 1, 2004. The report shall include recommendations on whether current Medicaid standards need to be modified to meet the vision care needs of Medicaid-eligible children and, if modification is necessary, the cost of providing vision services based on the modified standards.

SECTION 10.19.(bb)  The Department shall develop, amend, and adopt medical coverage policy in accordance with the following:

(1)       During the development of new medical coverage policy or amendment to existing medical coverage policy, consult with and seek the advice of the Physician Advisory Group of the North Carolina Medical Society and other organizations the Secretary deems appropriate. The Secretary shall also consult with and seek the advice of officials of the professional societies or associations representing providers groups listed in subdivision (a)(6) of this section who are affected by the new medical coverage policy or amendments to existing medical coverage policy due to their involvement with or use of new technologies or therapies.

(2)       At least 45 days prior to the adoption of new or amended medical coverage policy, the Department shall:

a.         Publish the proposed new or amended medical coverage policy on the Department's web site;

b.         Notify all Medicaid providers of the proposed, new, or amended policy; and

c.         Upon request, provide persons copies of the proposed medical coverage policy.

(3)       During the 45-day period immediately following publication of the proposed new or amended medical coverage policy, accept oral and written comments on the proposed new or amended policy.

(4)       If, following the comment period, the proposed new or amended medical coverage policy is modified, then the Department shall, at least 15 days prior to its adoption:

a.         Notify all Medicaid providers of the proposed policy;

b.         Upon request, provide persons notice of amendments to the proposed policy; and

c.         Accept additional oral or written comments during this 15-day period.

 

MEDICAID RESERVE FUND TRANSFER

SECTION 10.20.  Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143-23.2, the sum of sixty-two million five hundred thousand dollars ($62,500,000) for the 2003-2004 fiscal year and the sum of sixty-two million five hundred thousand dollars ($62,500,000) for the 2004-2005 fiscal year shall be allocated as prescribed by G.S. 143-23.2(b) for Medicaid programs. Notwithstanding the prescription in G.S. 143-23.2(b) that these funds not reduce State general revenue funding, these funds shall replace the reduction in general revenue funding effected in this act.

 

DISPOSITION OF DISPROPORTIONATE SHARE RECEIPTS

SECTION 10.21.(a)  Disproportionate share receipts reserved at the end of the 2003-2004 and 2004-2005 fiscal years shall be deposited with the Department of State Treasurer as nontax revenue for each of those fiscal years.

SECTION 10.21.(b)  For each year of the 2003-2005 fiscal biennium, as it receives funds associated with Disproportionate Share Payments from State hospitals, the Department of Health and Human Services, Division of Medical Assistance, shall deposit up to one hundred million dollars ($100,000,000) of these Disproportionate Share Payments to the Department of State Treasurer for deposit as nontax revenue.  Any Disproportionate Share Payments collected in excess of one hundred million dollars ($100,000,000) shall be reserved by the State Treasurer for future appropriations.

 

COUNTY MEDICAID COST SHARE

SECTION 10.22.(a)  Effective July 1, 2000, the county share of the cost of Medicaid services currently and previously provided by area mental health authorities shall be increased incrementally each fiscal year until the county share reaches fifteen percent (15%) of the nonfederal share by State fiscal year 2009-2010.

SECTION 10.22.(b)  Effective July 1, 2000, the county share of the cost of Medicaid Personal Care Services paid to adult care homes shall be decreased incrementally each fiscal year until the county share reaches fifteen percent (15%) of the nonfederal share by State fiscal year 2009-2010.

 

MEDICAID COST CONTAINMENT ACTIVITIES

SECTION 10.23.  The Department of Health and Human Services may use not more than five million dollars ($5,000,000) in the 2003-2004 fiscal year and not more than three million dollars ($3,000,000) in the 2004-2005 fiscal year in Medicaid funds budgeted for program services to support the cost of administrative activities when cost-effectiveness and savings are demonstrated.  The funds shall be used to support activities that will contain the cost of the Medicaid Program, including contracting for services or hiring additional staff.  Medicaid cost-containment activities may include prospective reimbursement methods, incentive-based reimbursement methods, service limits, prior authorization of services, periodic medical necessity reviews, revised medical necessity criteria, service provision in the least costly settings, plastic magnetic stripped Medicaid identification cards for issuance to Medicaid enrollees, fraud detection software or other fraud detection activities, credit balance recovery and data mining services, and other cost-containment activities.  Funds may be expended under this section only after the Office of State Budget and Management has approved a proposal for the expenditure submitted by the Department. Proposals for expenditure of funds under this section shall include the cost of implementing the cost-containment activity and documentation of the amount of savings expected to be realized from the cost-containment activity.  The Department shall provide a copy of proposals for expenditures under this section to the Fiscal Research Division.

 

INCREASES IN FEDERAL MEDICAID FUNDS

SECTION 10.24.(a)  Notwithstanding any other provision of law to the contrary, the total amount of State funds that become available to the Department of Health and Human Services for the 2003-2004 fiscal year due to an increase in federal Medicaid funds resulting from increases in the Federal Financial Participation rate shall be used to increase funds appropriated to the Department for the 2003-2004 fiscal year for the Medicaid Program without any reduction in what is otherwise allocated to the Department from appropriated funds.

SECTION 10.24.(b)  The Department of Health and Human Services, Division of Medical Assistance, may reinstate eligibility policies changed by this act when all of the following conditions are met:

(1)       Congress approves enhanced Federal Financial Participation for State Medicaid programs.

(2)       Receipt of the enhanced Federal Financial Participation is dependent on a State's maintenance of effort in Medicaid eligibility.

(3)       The Department has concluded that the enacted policy changes render the State ineligible for the enhanced Federal Financial Participation.

(4)       Enhanced Federal Financial Participation receipts exceed the anticipated savings in State funds from the enacted policy changes.

 

TRANSFER OF PROPERTY TO QUALIFY FOR MEDICAID

SECTION 10.26.  G.S. 108A-58 reads as rewritten:

"§ 108A-58.  Transfer of property for purposes of qualifying for medical assistance; periods of ineligibility.

(a)       Any person, otherwise eligible, who, either while receiving medical assistance benefits or within one year prior to the date of applying for medical assistance benefits, unless some other within the time period is mandated by controlling federal law, sells, gives, assigns or transfers countable real or personal property or an interest in real or personal property for the purpose of retaining or establishing eligibility for medical assistance benefits, shall be ineligible to receive medical assistance benefits as set forth in subsection (c) of this section.section 1917(c) of the Social Security Act. Countable real and personal property includes real property, excluding a homesite, unless other applicable federal or State law requires the homesite to be counted for transfer of property purposes, intangible personal property, nonessential motor and recreational vehicles, nonincome producing business equipment, boats and motors. The provisions of this act shall not apply to the sale, gift, assignment or transfer of real or personal property if and to the extent that the person applying for medical assistance would have been eligible for such assistance notwithstanding ownership of such property or an interest therein.

(b)       Any sale, gift, assignment or transfer of real or personal property or an interest in real or personal property, as provided in subsection (a) of this section, shall be presumed to have been made for the purpose of retaining or establishing eligibility for medical assistance benefits unless the person, or the person's legal representative, who sells, gives, assigns or transfers the property or interest, receives valuable consideration at least equal to the fair market value, less encumbrances, of the property or interest.

(c)       Any person who sells, gives, assigns or transfers real or personal property or an interest in real or personal property for the purpose of retaining or establishing eligibility for medical assistance benefits, as provided in subsection (a) of this section, shall, after the time of transfer, be ineligible to receive these benefits until an amount equal to the uncompensated value of the property or interest has been expended by or on behalf of the person for the person's maintenance and support, including medical expenses, paid or incurred, or shall be ineligible based on the period of time required under section 1917(c) of the Social Security Act. in accordance with the following schedule, whichever is sooner;

(1)       For uncompensated value of at least one thousand dollars ($1,000) but not more than six thousand dollars ($6,000), a one-year period of ineligibility from date of sale, gift, assignment or transfer;

(2)       For uncompensated value of more than six thousand dollars ($6,000) but not more than twelve thousand dollars ($12,000), a two-year period of ineligibility from date of sale, gift, assignment or transfer;

(3)       For uncompensated value of more than twelve thousand dollars ($12,000), a two-year period of ineligibility from date of sale, gift, assignment or transfer, plus one additional month of ineligibility for each five hundred dollar ($500.00) increment or portion thereof by which the uncompensated value exceeds twelve thousand dollars ($12,000), but in no event to exceed three years.

(d)       The sale, gift, assignment or transfer for a consideration less than fair market value, less encumbrances, of any tangible personal property which was acquired with the proceeds of sale, assignment or transfer of real or intangible personal property described in subsection (a) of this section or in exchange for such real or intangible personal property shall be presumed to have been for the purpose of evading the provisions of this section if the acquisition and sale, gift, assignment or transfer of the tangible personal property is by or on behalf of a person receiving medical assistance or within the time period mandated by controlling federal law one year of making application for such assistance and the consequences of the sale, gift, assignment of transfer of such tangible personal property shall be determined under the provisions of subsections (c), (f) and (g) (c) and (f) of this section.

(e)       The presumptions created by subsections (b) and (d) may be overcome if the person receiving or applying for medical assistance, or the person's legal representative, establishes by the greater weight of the evidence that the sale, gift, assignment or transfer was exclusively for some purpose other than retaining or establishing eligibility for medical assistance benefits.

(f)        For the purpose of establishing uncompensated value under subsection (c), the value of property or an interest therein shall be the fair market value of the property or interest at the time of the sale, gift, assignment or transfer, less the amount of compensation, if any, received for the property or interest. There shall be a rebuttable presumption that the fair market value of real property is the most recent property tax value of the property, as ascertained according to Subchapter II of Chapter 105 of the General Statutes. Fair market value for purpose of this subsection shall be such value, determined as above set out, less any legally enforceable encumbrances to which the property is subject.

(g)       In the event that there is more than one sale, gift, assignment or transfer of property or an interest therein by a person receiving medical assistance or within one year of the date of an application for medical assistance, unless some other time period is mandated by controlling federal law, the uncompensated value, for the purposes of subsection (c), shall be the aggregate uncompensated value of all sales, gifts, assignments and transfers. The date which is the midpoint between the date of the first and last sale, gift, assignment or transfer shall be the date from which the period of ineligibility shall be determined under subsection (c).

(h)       This section shall not apply to applicants for or recipients of Work First Family Assistance or to persons entitled to medical assistance by virtue of their eligibility for Work First Family Assistance.

(i)        This section shall apply only to transfers made before July 1, 1988."

 

MEDICARE ENROLLMENT REQUIRED

SECTION 10.27.  Part 6 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new section to read:

"§ 108A-55.1.  Medicare enrollment required.

The Department shall require State Medical Assistance Program recipients who qualify for Medicare to enroll in Medicare, in accordance with Title XIX of the Social Security Act, in order to pay medical expenditures that qualify for payment under Medicare Part B. Failure to enroll in Medicare shall result in nonpayment of these expenditures under the State Medical Assistance Program. A provider may seek payment for services from Medicaid enrollees who are eligible for but not enrolled in Medicare Part B."

 

MEDICAID ASSESSMENT PROGRAM FOR SKILLED NURSING FACILITIES

SECTION 10.28.(a)  The Secretary of Health and Human Services shall implement a Medicaid assessment program for skilled nursing facilities licensed under Chapter 131E of the General Statutes.  The assessment shall be imposed in a manner consistent with federal regulations under 42 C.F.R. Part 433, Subpart B.  The Department shall impose the assessment effective October 1, 2003.  Funds realized from assessments imposed shall be used only to draw down federal Medicaid matching funds for implementing the new reimbursement plan for nursing homes and for increasing nursing facility rates in accordance with the plan.

SECTION 10.28.(b)  Funds realized from the Medicaid assessment program established pursuant to subsection (a) of this section shall not be used to supplant State funds appropriated for nursing facility services.

SECTION 10.28.(c)  Funds realized from the assessment shall be used to pay one hundred percent (100%) of the nonfederal share for the new reimbursement plan for nursing homes.

 

HEALTH CHOICE

SECTION 10.29.(a)  G.S. 108A-70.21 reads as rewritten:

"§ 108A-70.21.  Program eligibility; benefits; enrollment fee and other cost-sharing; coverage from private plans; purchase of extended coverage.

(a)       Eligibility. - The Department may enroll eligible children based on availability of funds. Following are eligibility and other requirements for participation in the Program:

(1)       Children must:

a.         Be under the age of 19;

b.         Be ineligible for Medicaid, Medicare, or other federal government-sponsored health insurance;

c.         Be uninsured;

d.         Be in a family that meets the following family income requirements:

1.         Infants under the age of one year whose family income is from one hundred eighty-five percent (185%) through two hundred percent (200%) of the federal poverty level;

2.         Children age one year through five years whose family income is above one hundred thirty-three percent (133%) through two hundred percent (200%) of the federal poverty level; and

3.         Children age six years through eighteen years whose family income is above one hundred percent (100%) through two hundred percent (200%) of the federal poverty level;

e.         Be a resident of this State and eligible under federal law; and

f.          Have paid the Program enrollment fee required under this Part.

(2)       Proof of family income and residency and declaration of uninsured status shall be provided by the applicant at the time of application for Program coverage. The family member who is legally responsible for the children enrolled in the Program has a duty to report any change in the enrollee's status within 60 days of the change of status.

(3)       If a responsible parent is under a court order to provide or maintain health insurance for a child and has failed to comply with the court order, then the child is deemed uninsured for purposes of determining eligibility for Program benefits if at the time of application the custodial parent shows proof of agreement to notify and cooperate with the child support enforcement agency in enforcing the order.

                  If health insurance other than under the Program is provided to the child after enrollment and prior to the expiration of the eligibility period for which the child is enrolled in the Program, then the child is deemed to be insured and ineligible for continued coverage under the Program. The custodial parent has a duty to notify the Department within 10 days of receipt of the other health insurance, and the Department, upon receipt of notice, shall disenroll the child from the Program. As used in this paragraph, the term "responsible parent" means a person who is under a court order to pay child support.

(4)       Except as otherwise provided in this section, enrollment shall be continuous for one year. At the end of each year, applicants may reapply for Program benefits.

(b)       Benefits. - Except as otherwise provided for eligibility, fees, deductibles, copayments, and other cost-sharing charges, health benefits coverage provided to children eligible under the Program shall be equivalent to coverage provided for dependents under the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan, including optional prepaid plans. Prescription drug providers shall accept as payment in full, for outpatient prescriptions filled, ninety percent (90%) of the average wholesale price for the prescription drug or the amounts published by the Centers for Medicare and Medicaid Services plus a dispensing fee of five dollars and sixty cents ($5.60) per prescription for generic drugs and four dollars ($4.00) per prescription for brand name drugs. All other health care providers providing services to Program enrollees shall accept as payment in full for services rendered the maximum allowable charges under the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan for services less any copayments assessed to enrollees under this Part. No child enrolled in the Plan's self-insured indemnity program shall be required by the Plan to change health care providers as a result of being enrolled in the Program.

In addition to the benefits provided under the Plan, the following services and supplies are covered under the Health Insurance Program for Children established under this Part:

(1)       Dental: Oral examinations, teeth cleaning, and scaling twice during a 12-month period, full mouth X-rays once every 60 months, supplemental bitewing X-rays showing the back of the teeth once during a 12-month period, fluoride applications twice during a 12-month period, fluoride varnish, sealants, simple extractions, therapeutic pulpotomies, prefabricated stainless steel crowns, and routine fillings of amalgam or other tooth-colored filling material to restore diseased teeth. No benefits are to be provided for services under this subsection that are not performed by or upon the direction of a dentist, doctor, or other professional provider approved by the Plan nor for services and materials that do not meet the standards accepted by the American Dental Association.

(2)       Vision: Scheduled routine eye examinations once every 12 months, eyeglass lenses or contact lenses once every 12 months, routine replacement of eyeglass frames once every 24 months, and optical supplies and solutions when needed. Optical services, supplies, and solutions must be obtained from licensed or certified opthamologists, ophthalmologists, optometrists, or optical dispensing laboratories. Eyeglass lenses are limited to single vision, bifocal, trifocal, or other complex lenses necessary for a Plan enrollee's visual welfare. Coverage for oversized lenses and frames, designer frames, photosensitive lenses, tinted contact lenses, blended lenses, progressive multifocal lenses, coated lenses, and laminated lenses is limited to the coverage for single vision, bifocal, trifocal, or other complex lenses provided by this subsection. Eyeglass frames are limited to those made of zylonite, metal, or a combination of zylonite and metal. All visual aids covered by this subsection require prior approval of the Plan. Upon prior approval by the Plan, refractions may be covered more often than once every 12 months.

(3)       Hearing: Auditory diagnostic testing services and hearing aids and accessories when provided by a licensed or certified audiologist, otolaryngologist, or other hearing aid specialist approved by the Plan. Prior approval of the Plan is required for hearing aids, accessories, earmolds, repairs, loaners, and rental aids.

The Department may provide services to children aged birth through five years enrolled in the Program through the State Medical Assistance managed care program. Services provided through the managed care program shall be paid from Program funds.

(c)       Annual Enrollment Fee. - There shall be no enrollment fee for Program coverage for enrollees whose family income is at or below one hundred fifty percent (150%) of the federal poverty level. The enrollment fee for Program coverage for enrollees whose family income is above one hundred fifty percent (150%) of the federal poverty level shall be fifty dollars ($50.00) per year per child with a maximum annual enrollment fee of one hundred dollars ($100.00) for two or more children. The enrollment fee shall be collected by the county department of social services and retained to cover the cost of determining eligibility for services under the Program. County departments of social services shall establish procedures for the collection of enrollment fees.

(d)       Cost-Sharing. - There shall be no deductibles, copayments, or other cost-sharing charges for families covered under the Program whose family income is at or below one hundred fifty percent (150%) of the federal poverty level. level, except that fees for outpatient prescription drugs are applicable and shall be one dollar ($1.00) for each outpatient generic prescription drug and for each outpatient brand-name prescription drug for which there is no generic substitution available. The fee for each outpatient brand-name prescription drug for which there is a generic substitution available is three dollars ($3.00). Families covered under the Program whose family income is above one hundred fifty percent (150%) of the federal poverty level shall be responsible for copayments to providers as follows:

(1)       Five dollars ($5.00) per child for each visit to a provider, except that there shall be no copayment required for well-baby, well-child, or age-appropriate immunization services;

(2)       Five dollars ($5.00) per child for each outpatient hospital visit;

(3)       A six-dollar ($6.00) fee for each outpatient prescription drug purchased; one dollar ($1.00) fee for each outpatient generic prescription drug and for each outpatient brand-name prescription drug for which there is no generic substitution available. The fee for each outpatient brand-name prescription drug for which there is a generic substitution available is ten dollars ($10.00).

(4)       Twenty dollars ($20.00) for each emergency room visit unless:

a.         The child is admitted to the hospital, or

b.         No other reasonable care was available as determined by the Claims Processing Contractor of the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan.

Copayments required under this subsection for prescription drugs apply only to prescription drugs prescribed on an outpatient basis.

(e)       Cost-Sharing Limitations. - The total annual aggregate cost-sharing, including fees, with respect to all children in a family receiving Program benefits under this Part shall not exceed five percent (5%) of the family's income for the year involved. To assist the Department in monitoring and ensuring that the limitations of this subsection are not exceeded, the Executive Administrator and Board of Trustees of the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan shall provide data to the Department showing cost-sharing paid by Program enrollees.

(f)        Coverage From Private Plans. - The Department shall, from funds available for the Program, pay the cost for dependent coverage provided under a private insurance plan for persons eligible for coverage under the Program if all of the following conditions are met:

(1)       The person eligible for Program coverage requests to obtain dependent coverage from a private insurer in lieu of coverage under the Program and shows proof that coverage under the private plan selected meets the requirements of this subsection;

(2)       The dependent coverage under the private plan is actuarially equivalent to the coverage provided under the Program and the private plan does not engage in the exclusive enrollment of children with favorable health care risks;

(3)       The cost of dependent coverage under the private plan is the same as or less than the cost of coverage under the Program; and

(4)       The total annual aggregate cost-sharing, including fees, paid by the enrollee under the private plan for all dependents covered by the plan, do not exceed five percent (5%) of the enrollee's family income for the year involved.

The Department may reimburse an enrollee for private coverage under this subsection upon a showing of proof that the dependent coverage is in effect for the period for which the enrollee is eligible for the Program.

(g)       Purchase of Extended Coverage. - An enrollee in the Program who loses eligibility due to an increase in family income above two hundred percent (200%) of the federal poverty level and up to and including two hundred twenty-five percent (225%) of the federal poverty level may purchase at full premium cost continued coverage under the Program for a period not to exceed one year beginning on the date the enrollee becomes ineligible under the income requirements for the Program. The same benefits, copayments, and other conditions of enrollment under the Program shall apply to extended coverage purchased under this subsection.

(h)       No State Funds for Voluntary Participation. - No State or federal funds shall be used to cover, subsidize, or otherwise offset the cost of coverage obtained under subsection (g) of this section."

SECTION 10.29.(b)  G.S. 108A-70.23(c) reads as rewritten:

"(c)      Services Provided. - The services authorized to be provided to children eligible under this section are as follows:

(1)       The same level of services as provided for special needs children under the Medical Assistance Program as authorized in the Current Operations Appropriations Act except that that:

a.         no No services for long-term care shall be provided under this section, and section;

b.         except that services Services for respite care shall be provided only under emergency circumstances; and

c.         The Department may limit services for special needs children after consultation with the Commission on Children with Special Health Care Needs.

(2)       Only those services eligible under this section that are not covered or otherwise provided under Part 5 of Article 3 of Chapter 135 of the General Statutes."

 

COLLABORATION AMONG DHHS, DPI, AND LEAS TO ENSURE MEDICAID-RELATED SERVICES FOR ELIGIBLE PUBLIC SCHOOL STUDENTS WITH DISABILITIES

SECTION 10.29A.  Part 6 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new section to read:

"§ 108A-55.1.  Collaboration among agencies to ensure Medicaid-related services payments to eligible students with disabilities in public schools.

The Department shall work with the Department of Public Instruction and local education agencies to develop efficient, effective, and appropriate administrative procedures and guidelines to provide maximum funding for Medicaid-related services for Medicaid-eligible students with disabilities. The procedures and guidelines shall be streamlined to ensure that local education agencies receive Medicaid reimbursement in a timely manner for Medicaid-related services and administrative outreach to Medicaid-eligible students with disabilities."

 

AUDIT OF CAP/DA PROGRAMS BY STATE AUDITOR

SECTION 10.29B.(a)  If State funds are appropriated to the Office of State Auditor for this purpose, then the State Auditor shall perform an audit of the Community Alternatives Program for Disabled Adults (CAP/DA).  The audit shall build upon the results of the study conducted in accordance with Section 10.16(c) of S.L. 2002-126, by the North Carolina Institute of Medicine and shall provide information necessary to determine whether CAP/DA is operating within waiver guidelines and program goals. The State Auditor shall report the results of the audit to the North Carolina Study Commission on Aging by January 1, 2004.

SECTION 10.29B.(b)  The Department of Health and Human Services shall continue to examine CAP/DA and shall make a report of its findings to the North Carolina Study Commission on Aging by January 1, 2004.  The report shall include the following information:

(1)       A review of the current assessment process for CAP/DA clients, including an explanation of how assessments are conducted and a comparison of the assessment process for CAP/DA clients with the assessment process for nursing home and adult care home clients.

(2)       A description of total program costs to the State and counties for clients receiving CAP/DA payments and an analysis of per-client costs in CAP/DA to per-client costs in nursing homes and adult care homes. This analysis shall include the costs of all forms of assistance received by CAP/DA clients, such as food stamps and housing assistance.

(3)       A description of total program costs and an analysis of per-participant costs for individuals in the State-County In-Home Program. The analysis shall include a comparison of per-client costs for participants in the In-Home Program to per-client costs in adult care homes.

(4)       A description of total program costs and an analysis of per-person costs for persons receiving personal care services through the Medicaid program. The analysis shall include a comparison of per-person costs in nursing homes and adult care homes.

(5)       A description of the monitoring of quality of care for CAP/DA clients.

(6)       An evaluation of the current waiting list procedures.

SECTION 10.29B.(c)  The Department of Health and Human Services shall review, on a pilot basis, a selected number of CAP/DA programs to determine compliance with eligibility requirements for the program.  The Department shall include the results of the review in its report to the Study Commission on Aging required under subsection (b) of this section.

 

MEDICAID HOSPITAL PAYMENTS

SECTION 10.29C.  The Department of Health and Human Services shall evaluate all medical payment programs and policies administered by the Department that may affect the future viability and sustainability of financially vulnerable hospitals. Based on the evaluation of the medical payment programs and policies affecting hospitals, the Department shall implement those programs and policies such that they have the least impact on the future viability and sustainability of financially vulnerable hospitals. The Department shall also review the status of financially vulnerable hospitals to determine whether additional State actions are appropriate to ensure that communities served by these hospitals continue to receive essential medical services. The Department shall consult with the North Carolina Hospital Association while conducting the evaluation of medical payment programs and policies and determining how to implement them. The Department shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on its activities under this section not later than November 1, 2003.

 

SUBPART 4. DIVISION OF PUBLIC HEALTH

 

IMMUNIZATION PROGRAM FUNDING

SECTION 10.30.(a)  Of the funds appropriated in this act to the Department of Health and Human Services for childhood immunization programs for positions, operating support, equipment, and pharmaceuticals, the sum of one million dollars ($1,000,000) for the 2003-2004 fiscal year and the sum of one million dollars ($1,000,000) for the 2004-2005 fiscal year may be used for projects and activities that are also designed to increase childhood immunization rates in North Carolina. These projects and activities shall include the following:

(1)       Outreach efforts at the State and local levels to improve service delivery of vaccines. Outreach efforts may include educational seminars, media advertising, support services to parents to enable children to be transported to clinics, longer operating hours for clinics, and mobile vaccine units.

(2)       Continued development of an automated immunization registry.

SECTION 10.30.(b)  Funds authorized to be used for immunization efforts under subsection (a) of this section shall not be used to fund additional State positions in the Department of Health and Human Services or contracts, except for contracts to develop an automated immunization registry or contracts with local health departments for outreach.

 

AIDS DRUG ASSISTANCE PROGRAM (ADAP)

SECTION 10.31.(a)  For the 2003-2004 fiscal year and for the 2004-2005 fiscal year, HIV-positive individuals with incomes at or below one hundred twenty-five percent (125%) of the federal poverty level are eligible for participation in ADAP. Eligibility for participation in ADAP during the 2003-2005 fiscal biennium shall not be extended to individuals with incomes above one hundred twenty-five percent (125%) of the federal poverty level.

SECTION 10.31.(b)  The Department of Health and Human Services shall make an interim report on ADAP program utilization by January 1, 2004, and a final report on ADAP program utilization by May 1, 2004, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on ADAP. The reports shall include the following:

(1)       ADAP program utilization:

a.         Monthly data on total cumulative AIDS/HIV cases reported in North Carolina.

b.         Monthly data on the number of individuals who have applied to participate in ADAP that have been determined to be ineligible.

c.         Monthly data on the income level of participants in ADAP and of individuals who have applied to participate in ADAP who have been determined to be ineligible.

d.         Monthly data on fiscal year-to-date expenditures of ADAP. The interim report shall contain monthly data on the calendar year-to-date expenditures of ADAP.

e.         An update on the status of the information management system.

f.          Monthly data on ADAP usage patterns and demographics of participants in ADAP.

g.         Fiscal year-to-date budget information.

 

ADAP INCOME ELIGIBILITY

SECTION 10.31A.(a)  It is the intent of the General Assembly to assist citizens of North Carolina who are diagnosed with HIV/AIDS to live healthy and productive lives.  In keeping with this goal, the Department of Health and Human Services shall pursue alternatives to the current financing of the AIDS Drug Assistance Program (ADAP).  Notwithstanding Section 10.31 of this act, the Department shall explore various options or arrangements in order to expand income eligibility for ADAP.  The Department may develop and administer an expanded ADAP that maximizes existing State funds.  The expanded ADAP may include an increase in current income eligibility levels.

SECTION 10.31A.(b)  Nothing in this section shall be construed as obligating the General Assembly to appropriate funds for the expanded AIDS Drug Assistance Program or as entitling any person to receive services under the Program.

SECTION 10.31A.(c )  The Department of Health and Human Services shall report its progress in complying with this section and any corresponding findings and recommendations to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on or before April 1, 2004.

 

NEWBORN HEARING SCREENING PROGRAM REPORT

SECTION 10.32.  The Department of Health and Human Services shall report the following information on the newborn hearing screening program:

(1)       Unduplicated number of infants screened.

(2)       Number of infants who failed the second hearing screening.

(3)       Number of infants receiving the diagnostic evaluation.

(4)       Number and types of services provided.

(5)       Number and types of follow-up services provided to children.

The Department shall submit the report not later than May 1, 2004, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

EMPLOYEES EXAMINED FOR ASBESTOSIS OR SILICOSIS UNDER WORKERS' COMPENSATION STATUTE

SECTION 10.33.(a)  G.S. 97-60 is repealed.

SECTION 10.33.(b)  G.S. 97-61.1 reads as rewritten:

"§ 97-61.1.  First examination of and report on employee having asbestosis or silicosis.

When an employee and the Industrial Commission are is advised by the Department of Health and Human Servicesan employer or employee that an employee has or allegedly has asbestosis or silicosis, the employer shall be notified by the Industrial Commission, and the employee, when ordered by the Industrial Commission, shall go to a place designated by the Industrial Commission and submit to X rays and a physical examination by the advisory medical committee or other designated qualified physician who is not a member of the advisory medical committee.committee, at least one of whom shall conduct the examination, and the member or members of the advisory medical committee conducting the examination shall forward the X rays and findings to the member or members of the committee not present for the physical examination. The employer shall pay the expenses connected with the examination by the advisory medical committee or other designated qualified physician who is not a member of the advisory medical committee in such amounts as shall be directed by the Industrial Commission. Within 30 days after the completion of the examination, the advisory medical committee or other designated qualified physician shall make a written report signed by all of its members shall submit a written report to the Industrial Commission setting forth:

(1)       The X rays and clinical procedures used by the committee in arriving at its findings.used.

(2)       Whether or not the claimant has contracted asbestosis or silicosis.

(3)       The committee's The advisory medical committee's or designated qualified physician's opinion expressed in percentages of the impairment of the employee's ability to perform normal labor in the same or any other employment.

(4)       Any other matter deemed pertinent by the committee.pertinent.

When a competent physician certifies to the Industrial Commission that the employee's physical condition is such that his movement to the place of examination ordered by the Industrial Commission as herein provided in G.S. 97-61.1, 97-61.3 and 97-61.4 would be harmful or injurious to the health of the employee, the Industrial Commission shall cause the examination of the employee to be made by the advisory medical committee or other designated qualified physician as herein provided at some place in the vicinity of the residence of the employee suitable for the purposes of making such examination."

SECTION 10.33.(c)  G.S. 97-72(b) is repealed.

SECTION 10.33.(d)  G.S. 97-73(b) and (c) are repealed.

SECTION 10.33.(e)  The Department of Health and Human Services shall develop a plan for the future storage or disposal of X ray files. In doing so, the Division of Public Health shall consider disposal of the files, archiving the files by digitizing them, or returning the files to the medical facility that conducted the X ray. The Department shall report on its activities under this subsection no later than March 1, 2004, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

SECTION 10.33.(f)  G.S. 97-75 and G.S. 97-76 are repealed.

 

RENAME NORTH CAROLINA HEART DISEASE AND STROKE PREVENTION TASK FORCE

SECTION 10.33B.  G.S. 143B-216.60 reads as rewritten:

"§ 143B-216.60.  North CarolinaThe Justus-Warren Heart Disease and Stroke Prevention Task Force.

(a)       The North CarolinaJustus-Warren Heart Disease and Stroke Prevention Task Force is created in the Department of Health and Human Services.

(b)       The Task Force shall have 27 members. The Governor shall appoint the Chair, and the Vice-Chair shall be elected by the Task Force. The Director of the Department of Health and Human Services, the Director of the Division of Medical Assistance in the Department of Health and Human Services, and the Director of the Division of Aging in the Department of Health and Human Services, or their designees, shall be members of the Task Force. Appointments to the Task Force shall be made as follows:

(1)       By the General Assembly upon the recommendation of the President Pro Tempore of the Senate, as follows:

a.         Three members of the Senate;

b.         A heart attack survivor;

c.         A local health director;

d.         A certified health educator;

e.         A hospital administrator; and

f.          A representative of the North Carolina Association of Area Agencies on Aging.

(2)       By the General Assembly upon the recommendation of the Speaker of the House of Representatives, as follows:

a.         Three members of the House of Representatives;

b.         A stroke survivor;

c.         A county commissioner;

d.         A licensed dietitian/nutritionist;

e.         A pharmacist; and

f.          A registered nurse.

(3)       By the Governor, as follows:

a.         A practicing family physician, pediatrician, or internist;

b.         A president or chief executive officer of a business upon recommendation of a North Carolina wellness council which is a member of the Wellness Councils of America;

c.         A news director of a newspaper or television or radio station;

d.         A volunteer of the North Carolina Affiliate of the American Heart Association;

e.         A representative from the North Carolina Cooperative Extension Service;

f.          A representative of the Governor's Council on Physical Fitness and Health; and

g.         Two members at large.

(c)       Each appointing authority shall assure insofar as possible that its appointees to the Task Force reflect the composition of the North Carolina population with regard to ethnic, racial, age, gender, and religious composition.

(d)       The General Assembly and the Governor shall make their appointments to the Task Force not later than 30 days after the adjournment of the 1995 General Assembly, Regular Session 1995. A vacancy on the Task Force shall be filled by the original appointing authority, using the criteria set out in this section for the original appointment.

(e)       The Task Force shall meet at least quarterly or more frequently at the call of the Chair.

(f)        The Task Force Chair may establish committees for the purpose of making special studies pursuant to its duties, and may appoint non-Task Force members to serve on each committee as resource persons. Resource persons shall be voting members of the committees and shall receive subsistence and travel expenses in accordance with G.S. 138-5 and G.S. 138-6. Committees may meet with the frequency needed to accomplish the purposes of this section.

(g)       Members of the Task Force shall receive per diem and necessary travel and subsistence expenses in accordance with G.S. 120-3.1, 138-5 and 138-6, as applicable.

(h)       A majority of the Task Force shall constitute a quorum for the transaction of its business.

(i)        The Task Force may use funds allocated to it to establish two positions and for other expenditures needed to assist the Task Force in carrying out its duties.

(j)        The Heart Disease and Stroke Prevention Task Force has the following duties:

(1)       To undertake a statistical and qualitative examination of the incidence of and causes of heart disease and stroke deaths and risks, including identification of subpopulations at highest risk for developing heart disease and stroke, and establish a profile of the heart disease and stroke burden in North Carolina.

(2)       To publicize the profile of the heart disease and stroke burden and its preventability in North Carolina.

(3)       To identify priority strategies which are effective in preventing and controlling risks for heart disease and stroke.

(4)       To identify, examine limitations of, and recommend to the Governor and the General Assembly changes to existing laws, regulations, programs, services, and policies to enhance heart disease and stroke prevention by and for the people of North Carolina.

(5)       To determine and recommend to the Governor and the General Assembly the funding and strategies needed to enact new or to modify existing laws, regulations, programs, services, and policies to enhance heart disease and stroke prevention by and for the people of North Carolina.

(6)       To adopt and promote a statewide comprehensive Heart Disease and Stroke Prevention Plan to the general public, State and local elected officials, various public and private organizations and associations, businesses and industries, agencies, potential funders, and other community resources.

(7)       To identify and facilitate specific commitments to help implement the Plan from the entities listed in subdivision (6) above.

(8)       To facilitate coordination of and communication among State and local agencies and organizations regarding current or future involvement in achieving the aims of the Heart Disease and Stroke Prevention Plan.

(9)       To receive and consider reports and testimony from individuals, local health departments, community-based organizations, voluntary health organizations, and other public and private organizations statewide, to learn more about their contributions to heart disease and stroke prevention, and their ideas for improving heart disease and stroke prevention in North Carolina.

(k)       Notwithstanding Section 11.57 of S.L. 1999-237, the Task Force shall submit a final report to the Governor and the General Assembly by June 30, 2003, and a report to each subsequent regular legislative session within one week of its convening."

 

LOCAL HEALTH DIRECTOR PILOT

SECTION 10.33C.  Article 2 of Chapter 130A of the General Statutes is amended by adding a new section to read:

"§ 130A-40.1.  Pilot program for nurse as health director.

(a)       Notwithstanding G.S. 130A-40, a local board of health, after consulting with the appropriate county board of commissioners, and with the approval of the Secretary of Health and Human Services, may appoint a local health director who meets the following education and experience requirements for that position:

(1)       Graduation from a four-year college or university with a Bachelor of Science in Nursing degree that includes a public health nursing rotation; or

(2)       A candidate with an RN but not a bachelors degree if the candidate has at least 10 years' experience, at least seven years of which must be in an administrative or supervisory role, and of this seven years, at least five years must be at the agency at which the candidate is an applicant for employment as local health director.

(b)       The Secretary of Health and Human Services may approve only one request under subsection (a) of this section, this section being designed as a pilot program concerning alternative qualifications for a local health director. The Secretary of Health and Human Services shall report any approval under this section to the Public Health Study Commission.

(c)       All bachelors level candidates appointed under this section shall have a total of 10 years' public health experience, at least five years of which must be in a supervisory capacity at the agency at which the candidate is an applicant for employment as a local health director. Bachelor of Science in Nursing candidates with a public health rotation may use this BSN degree as credit for one year's public health experience.

(d)       In addition to possessing the qualifications required in this section, all Bachelor of Science, Bachelor of Arts, or Registered Nurse candidates must complete at least six contact hours of continuing education annually on the subject of local and State government finance, organization, or budgeting. The training must be in a formal setting offered through the State or local government or through an accredited educational institution. This training is in addition to any other required training for local health director or other continuing education required to maintain other professional credentials. If during the course of employment as local health director the employee meets the requirements of this subsection, the additional training requirements of this section are waived.

 

SUBPART 5. DIVISION OF CHILD DEVELOPMENT

 

CHILD CARE FUNDS MATCHING REQUIREMENT

SECTION 10.34.  No local matching funds may be required by the Department of Health and Human Services as a condition of any locality's receiving any State child care funds appropriated by this act unless federal law requires a match. This shall not prohibit any locality from spending local funds for child care services.

 

CHILD CARE SUBSIDY RATES

SECTION 10.35.(a)  The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be seventy-five percent (75%) of the State median income, adjusted for family size.

SECTION 10.35.(b)  Fees for families who are required to share in the cost of care shall be established based on a percent of gross family income and adjusted for family size. Fees shall be determined as follows:

FAMILY SIZE                        PERCENT OF GROSS FAMILY INCOME

1-3                                                                       10%

4-5                                                                         9%

6 or more                                                              8%.

SECTION 10.35.(c)  Payments for the purchase of child care services for low-income children shall be in accordance with the following requirements:

(1)       Religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the one-star county market rate or the rate they charge privately paying parents, whichever is lower.

(2)       Licensed child care centers and homes with two or more stars shall receive the market rate for that rated license level for that age group or the rate they charge privately paying parents, whichever is lower.

(3)       Nonlicensed homes shall receive fifty percent (50%) of the county market rate or the rate they charge privately paying parents, whichever is lower.

(4)       Maximum payment rates shall also be calculated periodically by the Division of Child Development for transportation to and from child care provided by the child care provider, individual transporter, or transportation agency, and for fees charged by providers to parents. These payment rates shall be based upon information collected by market rate surveys.

SECTION 10.35.(d)  Provision of payment rates for child care providers in counties that do not have at least 50 children in each age group for center-based and home-based care are as follows:

(1)       Except as applicable in subdivision (2) of this subsection, payment rates shall be set at the statewide or regional market rate for licensed child care centers and homes.

(2)       If it can be demonstrated that the application of the statewide or regional market rate to a county with fewer than 50 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low-income children, then the county market rate may be applied.

SECTION 10.35.(e)  A market rate shall be calculated for child care centers and homes at each rated license level for each county and for each age group or age category of enrollees and shall be representative of fees charged to unsubsidized privately paying parents for each age group of enrollees within the county. The Division of Child Development shall also calculate a statewide rate and regional market rates for each rated license level for each age category.

SECTION 10.35.(f)  Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes and facilities operated pursuant to G.S. 110-106 may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families. No separate licensing requirements shall be used to select facilities to participate. In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations. Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.

County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.

SECTION 10.35.(g)  Payment for subsidized child care services provided with Work First Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.

SECTION 10.35.(h)  Noncitizen families who reside in this State legally shall be eligible for child care subsidies if all other conditions of eligibility are met. If all other conditions of eligibility are met, noncitizen families who reside in this State illegally shall be eligible for child care subsidies only if at least one of the following conditions is met:

(1)       The child for whom a child care subsidy is sought is receiving child protective services or foster care services.

(2)       The child for whom a child care subsidy is sought is developmentally delayed or at risk of being developmentally delayed.

(3)       The child for whom a child care subsidy is sought is a citizen of the United States.

 

CHILD CARE ALLOCATION FORMULA

SECTION 10.36.(a)  The Department of Health and Human Services shall allocate child care subsidy voucher funds to pay the costs of necessary child care for minor children of needy families. The mandatory thirty percent (30%) Smart Start subsidy allocation under G.S. 143B-168.15(g) shall constitute the base amount for each county's child care subsidy allocation. The Department of Health and Human Services shall use the following method when allocating federal and State child care funds, not including the aggregate mandatory thirty percent (30%) Smart Start subsidy allocation:

(1)       Funds shall be allocated based upon the projected cost of serving children in a county under age 11 in families with all parents working who earn less than seventy-five percent (75%) of the State median income.

(2)       No county's allocation shall be less than ninety percent (90%) of its State Fiscal Year 2001-2002 initial child care subsidy allocation.

SECTION 10.36.(b)  The Department of Health and Human Services may reallocate unused child care subsidy voucher funds in order to meet the child care needs of low-income families. Any reallocation of funds shall be based upon the expenditures of all child care subsidy voucher funding, including Smart Start funds, within a county.

 

CHILD CARE REVOLVING LOAN

SECTION 10.37.  Notwithstanding any law to the contrary, funds budgeted for the Child Care Revolving Loan Fund may be transferred to and invested by the financial institution contracted to operate the Fund. The principal and any income to the Fund may be used to make loans, reduce loan interest to borrowers, serve as collateral for borrowers, pay the contractor's cost of operating the Fund, or pay the Department's cost of administering the program.

 

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES ENHANCEMENTS

SECTION 10.38.(a)  Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships. For purposes of this subsection, administrative costs shall include costs associated with partnership oversight, business and financial management, general accounting, human resources, budgeting, purchasing, contracting, and information systems management.

SECTION 10.38.(b)  The North Carolina Partnership for Children, Inc., and all local partnerships shall use competitive bidding practices in contracting for goods and services on contract amounts as follows:

(1)       For amounts of five thousand dollars ($5,000) or less, the procedures specified by a written policy to be developed by the Board of Directors of the North Carolina Partnership for Children, Inc.

(2)       For amounts greater than five thousand dollars ($5,000), but less than fifteen thousand dollars ($15,000), three written quotes.

(3)       For amounts of fifteen thousand dollars ($15,000) or more, but less than forty thousand dollars ($40,000), a request for proposal process.

(4)       For amounts of forty thousand dollars ($40,000) or more, a request for proposal process and advertising in a major newspaper.

SECTION 10.38.(c)  The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than fifty percent (50%) of the total amount budgeted for the program in each fiscal year of the biennium as follows:  contributions of cash equal to at least fifteen percent (15%) and in-kind donated resources equal to no more than five percent (5%) for a total match requirement of twenty percent (20%) for each fiscal year. The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of the required match for a fiscal year in order to meet the match requirement of the succeeding fiscal year. Only in-kind contributions that are quantifiable shall be applied to the in-kind match requirement. Volunteer services may be treated as an in-kind contribution for the purpose of the match requirement of this subsection. Volunteer services that qualify as professional services shall be valued at the fair market value of those services. All other volunteer service hours shall be valued at the statewide average wage rate as calculated from data compiled by the Employment Security Commission in the Employment and Wages in North Carolina Annual Report for the most recent period for which data are available. Expenses, including both those paid by cash and in-kind contributions, incurred by other participating non-State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships, also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:

(1)       Be verifiable from the contractor's records.

(2)       If in-kind, other than volunteer services, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations.

(3)       Not include expenses funded by State funds.

(4)       Be supplemental to and not supplant preexisting resources for related program activities.

(5)       Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives.

(6)       Be otherwise allowable under federal or State law.

(7)       Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership.

(8)       Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.

Failure to obtain a twenty percent (20%) match by June 30 of each fiscal year shall result in a dollar-for-dollar reduction in the appropriation for the Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in-kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly.

SECTION 10.38.(d)  The Department of Health and Human Services shall continue to implement the performance-based evaluation system.

SECTION 10.38.(e)  The Department of Health and Human Services and the North Carolina Partnership for Children, Inc., shall ensure that the allocation of funds for Early Childhood Education and Development Initiatives for State fiscal years 2003-2004 and 2004-2005 shall be administered and distributed in the following manner:

(1)       The North Carolina Partnership for Children, Inc., shall develop a policy to allocate the reduction of funds for Early Childhood Education and Development Initiatives for the 2003-2004 and 2004-2005 fiscal years.

(2)       Capital expenditures and playground equipment expenditures are prohibited for fiscal years 2003-2004 and 2004-2005. For the purposes of this section, "capital expenditures" means expenditures for capital improvements as defined in G.S. 143-34.40.

(3)       Expenditures of State funds for advertising and promotional activities are prohibited for fiscal years 2003-2004 and 2004-2005.

SECTION 10.38.(f)  For the 2003-2004 and 2004-2005 fiscal years, the North Carolina Partnership for Children, Inc., shall not approve local partnership plans that allocate State funds to child care providers for one-time quality improvement initiatives in the following circumstances:

(1)       Child care facilities with licensure of four or five stars, unless the expenditure of funds is to expand capacity for low-income children.

(2)       Child care facilities that do not accept child care subsidy funds.

SECTION 10.38.(g)  For the 2003-2004 fiscal year, the local partnerships shall spend an amount for child care subsidies that provides at least fifty-two million dollars ($52,000,000) for the TANF maintenance of effort requirement and the Child Care Development Fund and Block Grant match requirement.

SECTION 10.38.(h)  A county may use the county's allocation of State and federal child care funds to subsidize child care according to the county's Early Childhood Education and Development Initiatives Plan as approved by the North Carolina Partnership for Children, Inc. The use of federal funds shall be consistent with the appropriate federal regulations. Child care providers shall, at a minimum, comply with the applicable requirements for State licensure pursuant to Article 7 of Chapter 110 of the General Statutes.

SECTION 10.38.(i)  The North Carolina Partnership for Children, Inc., shall develop a plan to focus on quality child care initiatives and child care subsidies and shall study any duplication of health services, family support, and program support activities and report same to the House of Representatives and Senate Appropriations Chairs.

SECTION 10.38.(j)  The North Carolina Partnership for Children, Inc., shall develop a plan to incorporate a penalty into a local partnership's allocation when the local partnership's audit is classified as a "needs improvement performance assessment".

SECTION 10.38.(k)  The North Carolina Partnership for Children, Inc., shall report on activities and directives of this act by March 1, 2004, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

SECTION 10.38.(l)  G.S. 143B-168.12(a)(1) reads as rewritten:

"(1)      The North Carolina Partnership shall have a Board of Directors consisting of the following 25 members:

a.         The Secretary of Health and Human Services, ex officio, or the Secretary's designee;

b.         Repealed by Session Laws 1997, c. 443, s. 11A.105.

c.         The Superintendent of Public Instruction, ex officio, or the Superintendent's designee;

d.         The President of the Community Colleges System, ex officio, or the President's designee;

e.         Three members of the public, including one child care provider, one other who is a parent, and one other who is a board chair of a local partnership serving on the North Carolina Partnership local partnership advisory committee, appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate;

f.          Three members of the public, including one who is a parent, one other who is a representative of the faith community, and one other who is a board chair of a local partnership serving on the North Carolina Partnership local partnership advisory committee, appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives;

g.         Twelve members, appointed by the Governor. Three of these 12 members shall be members of the party other than the Governor's party, appointed by the Governor. Seven of these 12 members shall be appointed as follows: one who is a child care provider, one other who is a pediatrician, one other who is a health care provider, one other who is a parent, one other who is a member of the business community, one other who is a member representing a philanthropic agency, and one other who is an early childhood educator;

h.         Repealed by Session Laws 1998-212, s. 12.37B(a), effective October 30, 1998.

h1.       The Chair of the North Carolina Partnership Board shall be appointed by the Governor;

i.          Repealed by Session Laws 1998-212, s. 12.37B(a), effective October 30, 1998.

j.          One member of the public appointed by the General Assembly upon recommendation of the Majority Leader of the Senate;

k.         One member of the public appointed by the General Assembly upon recommendation of the Majority Leader of the House of Representatives;

l.          One member of the public appointed by the General Assembly upon recommendation of the Minority Leader of the Senate; and

m.        One member of the public appointed by the General Assembly upon recommendation of the Minority Leader of the House of Representatives.

            All members appointed to succeed the initial members and members appointed thereafter shall be appointed for three-year terms. Members may succeed themselves.

            All appointed board members shall avoid conflicts of interests and the appearance of impropriety. Should instances arise when a conflict may be perceived, any individual who may benefit directly or indirectly from the North Carolina Partnership's disbursement of funds shall abstain from participating in any decision or deliberations by the North Carolina Partnership regarding the disbursement of funds.

            All ex officio members are voting members. Each ex officio member may be represented by a designee. These designees shall be voting members. No members of the General Assembly shall serve as members.

            The North Carolina Partnership may establish a nominating committee and, in making their recommendations of members to be appointed by the General Assembly or by the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Majority Leader of the Senate, the Majority Leader of the House of Representatives, the Minority Leader of the Senate, the Minority Leader of the House of Representatives, and the Governor shall consult with and consider the recommendations of this nominating committee.

            The North Carolina Partnership may establish a policy on members' attendance, which policy shall include provisions for reporting absences of at least three meetings immediately to the appropriate appointing authority.

            Members who miss more than three consecutive meetings without excuse or members who vacate their membership shall be replaced by the appropriate appointing authority, and the replacing member shall serve either until the General Assembly and the Governor can appoint a successor or until the replaced member's term expires, whichever is earlier.

            The North Carolina Partnership shall establish a policy on membership of the local board, which policy shall include the requirement that all local board members, other than any member appointed because of a position held by that individual, be residents of the county or the partnership region they are representing.boards. No member of the General Assembly shall serve as a member of a local board. Within these requirements for local board membership, the North Carolina Partnership shall allow local partnerships that are regional to have flexibility in the composition of their boards so that all counties in the region have adequate representation.

            All appointed local board members shall avoid conflicts of interests and the appearance of impropriety. Should instances arise when a conflict may be perceived, any individual who may benefit directly or indirectly from the partnership's disbursement of funds shall abstain from participating in any decision or deliberations by the partnership regarding the disbursement of funds."

SECTION 10.38.(m)  G.S. 143B-168.12(a)(8) reads as rewritten:

"…

(8)       The North Carolina Partnership shall establish a local partnership advisory committee comprised of 15 members. Eight of the members shall be chairs ofchosen from past board chairs or duly elected officers currently serving on local partnerships' board of directors, and seven directors at the time of appointment and shall serve three-year terms. Seven of the members shall be staff of local partnerships. Members shall be chosen by the Chair of the North Carolina Partnership from a pool of candidates nominated by their respective boards of directors. The local partnership advisory committee shall serve in an advisory capacity to the North Carolina Partnership and shall establish a schedule of regular meetings. Members shall be chosen from local partnerships on a rotating basis. The advisory committee shall annually elect a chair from among its members.

…."

SECTION 10.38.(n)  G.S. 143B-168.12 is amended by adding a new subsection to read:

"(f)      The North Carolina Partnership for Children, Inc., shall establish uniform guidelines and a reporting format for local partnerships to document the qualifying expenses occurring at the contractor level. Local partnerships shall monitor qualifying expenses to ensure they have occurred and meet the requirements prescribed in this subsection."

 

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES EVALUATION

SECTION 10.39.  The Department of Health and Human Services, Division of Child Development, may evaluate the Early Childhood Education and Development Initiatives.  The evaluation may include:

(1)       Evaluation of the Early Childhood Education and Development Initiatives, including the ongoing review of quality child care efforts and child care providers' progress in preparing children to be ready to enter school and succeed.

(2)       Continuation of technical assistance to local partnerships in data collection and evaluation.

 

DEPARTMENT  PLAN FOR FAMILY CHILD CARE HOME FEES

SECTION 10.39A.  The Department of Health and Human Services, Division of Child Development, shall develop a plan proposing fees for the licensing of family child care homes. The Department shall report on the plan to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than April 1, 2004.

 

MORE AT FOUR PROGRAM

SECTION 10.40.(a)  Of the funds appropriated to the Department of Health and Human Services, the sum of forty-three million one hundred twenty-one thousand eight hundred dollars ($43,121,800) in the 2003-2004 fiscal year and the sum of forty-one million nine hundred twenty-one thousand eight hundred dollars ($41,921,800) in the 2004-2005 fiscal year shall be used to implement "More At Four", a voluntary prekindergarten program for at-risk four-year-olds.

SECTION 10.40.(b)  The Department of Health and Human Services and the Department of Public Instruction shall establish the "More At Four" Pre-K Task Force to oversee development and implementation of the pilot program. The membership shall include:

(1)       Parents of at-risk children.

(2)       Representatives with expertise in early childhood development.

(3)       Classroom teachers who are certified in early childhood education.

(4)       Representatives of the private not-for-profit and for-profit child care providers in North Carolina.

(5)       Employees of the Department of Health and Human Services who are knowledgeable in the areas of early childhood development, current State and federally funded efforts in child development, and providing child care.

(6)       Representatives of local Smart Start partnerships.

(7)       Representatives of local school administrative units.

(8)       Representatives of Head Start prekindergarten programs in North Carolina.

(9)       Employees of the Department of Public Instruction.

SECTION 10.40.(c)  The Department of Health and Human Services and the Department of Public Instruction, with guidance from the Task Force, shall continue the implementation of the "More At Four" prekindergarten program for at-risk four-year-olds who are at risk of failure in kindergarten. The program is available statewide to all counties that choose to participate, including underserved areas. The goal of the program is to provide quality prekindergarten services to a greater number of at-risk children in order to enhance kindergarten readiness for these children. The program shall be consistent with standards and assessments established jointly by the Department of Health and Human Services, the Department of Public Instruction, and the Task Force and may consider the "More At Four" Pre-K Task Force recommendations. The program shall include:

(1)       A process and system for identifying children at risk of academic failure.

(2)       A process and system for identifying children who are not being served first priority in formal early education programs, such as child care, public or private preschools, Head Start, Early Head Start, early intervention programs, or other such programs, who demonstrate educational needs, and who are eligible to enter kindergarten the next school year, as well as children who are underserved.

(3)       A curriculum or several curricula that are recommended by the Task Force. The Task Force will identify and approve appropriate research-based curricula. These curricula shall: (i) focus primarily on oral language and emergent literacy; (ii) engage children through key experiences and provide background knowledge requisite for formal learning and successful reading in the early elementary years; (iii) involve active learning; (iv) promote measurable kindergarten language-readiness skills that focus on emergent literacy and mathematical skills; and (v) develop skills that will prepare children emotionally and socially for kindergarten.

(4)       An emphasis on ongoing family involvement with the prekindergarten program.

(5)       Evaluation of child progress through pre- and post-assessment of children in the statewide evaluation, as well as ongoing assessment of the children by teachers.

(6)       Guidelines for a system to reimburse local school boards and systems, private child care providers, and other entities willing to establish and provide prekindergarten programs to serve at-risk children.

(7)       A system built upon existing local school boards and systems, private child care providers, and other entities that demonstrate the ability to establish or expand prekindergarten capacity.

(8)       A quality-control system. Participating providers shall comply with standards and guidelines as established by the Department of Health and Human Services, the Department of Public Instruction, and the Task Force. The Department may use the child care rating system to assist in determining program participation.

(9)       Standards for minimum teacher qualifications. A portion of the classroom sites initially funded shall have at least one teacher who is certified or provisionally certified in birth to kindergarten education.

(10)     A local contribution. Programs must demonstrate that they are accessing resources other than "More At Four".

(11)     A system of accountability.

(12)     Collaboration with State agencies and other organizations. The Department of Health and Human Services, the Department of Public Instruction, and the Task Force shall collaborate with State agencies and other organizations such as the North Carolina Partnership for Children, Inc., in the design and implementation of the program.

(13)     Consideration of the reallocation of existing funds. In order to maximize current funding and resources, the Department of Health and Human Services, the Department of Public Instruction, and the Task Force shall consider the reallocation of existing funds from State and local programs that provide prekindergarten related care and services.

(14)     Recommendations for long-term organizational placement and administration of the program.

SECTION 10.40.(d)  During the 2003-2004 fiscal year, the Department of Health and Human Services shall plan for expansion of the "More At Four" program within existing resources to include four and five star rated centers and schools serving four-year-olds and develop guidelines for these programs. The Department shall analyze guidelines for use of the "More At Four" funds, State subsidy funds, and Smart Start subsidy funds and devise a complementary plan for administration of funds for all four-year-old classrooms. The four and five star centers that choose to become a "More at Four" program shall, at a minimum, receive curricula and access to training and workshops for "More at Four" programs and be considered along with other "More at Four" programs for T.E.A.C.H. funding. The Department shall ensure that no individual receives funding from more than one source for the same purpose or activity during the same funding period. For purposes of this subsection, sources shall include T.E.A.C.H., W.A.G.E.$., and T.E.A.C.H. Health Insurance programs for individual recipients.

The Department may use nonobligated "More At Four" funds for the 2003-2004 fiscal year to reduce the waiting list for subsidy, with priority given to four-year-olds attending three star or better centers. If there are funds remaining after the waiting list for four-year-olds has been satisfied, then the waiting list for other children may be addressed with the remaining funds.

SECTION 10.40.(e)  The Department of Health and Human Services, the Department of Public Instruction, and the Task Force shall submit a progress report by January 1, 2004, and May 1, 2004, to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Education Oversight Committee, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. This final report shall include the following:

(1)       The number of children participating in the program.

(2)       The number of children participating in the program who have never been served in other early education programs, such as child care, public or private preschool, Head Start, Early Head Start, or early intervention programs.

(3)       The expected expenditures for the programs and the source of the local match for each grantee.

(4)       The location of program sites and the corresponding number of children participating in the program at each site.

(5)       Activities involving Child Find in counties.

(6)       A comprehensive cost analysis of the program, including the cost per child served by the program.

(7)       The plan for expansion of "More At Four" through existing resources as outlined in this section.

 

SUBPART 6. OFFICE OF EDUCATIONAL SERVICES

 

RESIDENTIAL SCHOOLS REPORTING

SECTION 10.41.  The Office of Education Services shall report not later than December 1, 2003, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on the activities of the Eastern North Carolina School for the Deaf at Wilson, the North Carolina School for the Deaf at Morganton, and the Governor Morehead School for the Blind. The report shall include enrollment numbers at the schools, the budgets, and the academic status of the schools as defined under the ABCs program.

 

SUBPART 7. dIVISION OF aGing

 

SENIOR CENTER OUTREACH

SECTION 10.42.(a)  Funds appropriated to the Department of Health and Human Services, Division of Aging, for the 2003-2005 fiscal biennium, shall be used by the Division of Aging to enhance senior center programs as follows:

(1)       To expand the outreach capacity of senior centers to reach unserved or underserved areas; or

(2)       To provide start-up funds for new senior centers.

All of these funds shall be allocated by October 1 of each fiscal year.

SECTION 10.42.(b)  Prior to funds being allocated pursuant to this section for start-up funds for a new senior center, the county commissioners of the county in which the new center will be located shall:

(1)       Formally endorse the need for such a center;

(2)       Formally agree on the sponsoring agency for the center; and

(3)       Make a formal commitment to use local funds to support the ongoing operation of the center.

SECTION 10.42.(c)  State funding shall not exceed seventy-five percent (75%) of reimbursable costs.

 

SUBPART 8. DIVISION OF SOCIAL SERVICES

 

ADULT CARE HOME MODEL FOR COMMUNITY-BASED SERVICES

SECTION 10.43.(a)  In keeping with the United States Supreme Court Decision in Olmstead vs. L.C. & E.W. and with State policy to provide appropriate services to clients in the least restrictive and most appropriate environment, the Department of Health and Human Services shall develop a model project for delivering community-based mental health, developmental disabilities, and substance abuse housing and services through adult care homes that have excess capacity.  The model shall be designed for implementation on a pilot basis and shall address the following:

(1)       Services that will be provided by the facility or under contract with the facility, including assistance with daily medication.

(2)       Access of clients to mental health, developmental disabilities, and substance abuse services provided in the community, including transportation to services outside of the client's residence in the adult care home facility.

(3)       Physical plant additions or changes necessary to provide for independent living of residents.

(4)       Methods for assuring quality of services, resident safety, and cost-effectiveness.

(5)       Consistency with the Department's Olmstead plan, other policies on community-integration, and disability plans adopted by the State.

SECTION 10.43.(b)  The Department shall submit a final report on the development of the model to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on or before March 1, 2004. The report shall address the following:

(1)       Proposed time and location for implementation of the pilot.

(2)       Proposed number of residents to be placed and services to be provided directly by the facility or under contract with the facility.

(3)       Method for evaluating the pilot, including services provided, on a regular basis.

(4)       A description of the living environment for each resident and a comparison of how the living environment compares to that of other residents in the adult care home.

(5)       Changes to State law necessary to implement the pilot.

(6)       Projected cost to the State for pilot and statewide implementation.

 

CHILD SUPPORT PROGRAM/ENHANCED STANDARDS

SECTION 10.44.(a)  It is the intent of the General Assembly to increase the productivity and enhance the performance of child support enforcement offices statewide.

SECTION 10.44.(b)  The Department of Health and Human Services shall develop and implement performance standards for each of the State and county child support enforcement offices across the State. To develop these performance standards, the Department of Health and Human Services shall evaluate other private and public child support models and national standards as well as other successful collections models. These performance standards shall include the following:

(1)       Cost per collections.

(2)       Consumer satisfaction.

(3)       Paternity establishments.

(4)       Administrative costs.

(5)       Orders established.

(6)       Collections on arrearages.

(7)       Location of absent parents.

(8)       Other related performance measures.

The Department of Health and Human Services shall monitor the performance of each office and shall implement a system of reporting that allows each local office to review its performance as well as the performance of other local offices. The Department of Health and Human Services shall publish an annual performance report that shall include the statewide and local office performance of each child support office.

SECTION 10.44.(c)  The Department of Health and Human Services shall report on its progress, in compliance with this section, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by May 1, 2005.

 

SPECIAL NEEDS ADOPTIONS INCENTIVE FUND

SECTION 10.45.  Part 4 of Article 2 of Chapter 108A of the General Statutes is amended by adding a new section to read:

"§ 108A-50A.  Special Needs Adoptions Incentive Fund.

(a)       There is created a Special Needs Adoptions Incentive Fund to provide financial assistance to facilitate the adoption of certain children residing in licensed foster care homes. These funds shall be used to remove financial barriers to the adoption of these children and shall be available to foster care families who adopt children with special needs, as defined by the Social Services Commission. These funds shall be matched by county funds.

(b)       This program shall not constitute an entitlement and is subject to the availability of funds.

(c)       The Social Services Commission shall adopt rules to implement the provisions of this section."

 

FOSTER CARE AND ADOPTION ASSISTANCE PAYMENTS

SECTION 10.46.(a)  The maximum rates for State participation in the foster care assistance program are established on a graduated scale as follows:

(1)       $365.00 per child per month for children aged birth through 5;

(2)       $415.00 per child per month for children aged 6 through 12; and

(3)       $465.00 per child per month for children aged 13 through 18.

Of these amounts, fifteen dollars ($15.00) is a special needs allowance for the child.

SECTION 10.46.(b)  The maximum rates for State participation in the adoption assistance program are established on a graduated scale as follows:

(1)       $365.00 per child per month for children aged birth through 5;

(2)       $415.00 per child per month for children aged 6 through 12; and

(3)       $465.00 per child per month for children aged 13 through 18.

SECTION 10.46.(c)  In addition to providing board payments to foster and adoptive families of HIV-infected children, as prescribed in Section 23.28 of Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated for this purpose shall be used to provide medical training in avoiding HIV transmission in the home.

SECTION 10.46.(d)  The maximum rates for the State participation in HIV foster care and adoption assistance are established on a graduated scale as follows:

(1)       $800.00 per child per month with indeterminate HIV status;

(2)       $1,000 per child per month confirmed HIV-infected, asymptomatic;

(3)       $1,200 per child per month confirmed HIV-infected, symptomatic; and

(4)       $1,600 per child per month terminally ill with complex care needs.

 

SPECIAL CHILDREN ADOPTION FUND

SECTION 10.47.(a)  Of the funds appropriated to the Department of Health and Human Services in this act, the sum of one million one hundred thousand dollars ($1,100,000) shall be used to support the Special Children Adoption Fund for each year of the 2003-2005 fiscal biennium. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A-50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services. No local match shall be required as a condition for receipt of these funds. In accordance with State rules for allowable costs, the Special Children Adoption Fund may be used for post-adoption services for families whose income exceed two hundred percent (200%) of the federal poverty level.

SECTION 10.47.(b)  Of the total funds appropriated for the Special Children Adoption Fund each year, twenty percent (20%) of the total funds available shall be reserved for payment to participating private adoption agencies. If the funds reserved in this subsection for payments to private agencies have not been spent on or before March 31, 2004, the Division of Social Services may reallocate those funds, in accordance with this section, to other participating adoption agencies.

 

INTENSIVE FAMILY PRESERVATION SERVICES FUNDING AND PERFORMANCE ENHANCEMENTS

SECTION 10.48.(a)  The Department of Health and Human Services shall review the Intensive Family Preservation Services Program (IFPS) to enhance and implement initiatives that focus on increasing the sustainability and effectiveness of the Program.

SECTION 10.48.(b)  Notwithstanding the provisions of G.S. 143B-150.6, the Program shall provide intensive services to children and families in cases of abuse, neglect, and dependency where a child is at imminent risk of removal from the home and to children and families in cases of abuse where a child is not at imminent risk of removal. The Program shall be developed and implemented statewide on a regional basis. The revised IFPS shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out-of-home placement.

SECTION 10.48.(c)  The Department of Health and Human Services shall require that any program or entity that receives State, federal, or other funding for the purpose of Intensive Family Preservation Services shall provide information and data that allows for:

(1)       An established follow-up system with a minimum of six months of follow-up services.

(2)       Detailed information on the specific interventions applied including utilization indicators and performance measurement.

(3)       Cost-benefit data.

(4)       Data on long-term benefits associated with Intensive Family Preservation Services. This data shall be obtained by tracking families through the intervention process.

(5)       The number of families remaining intact and the associated interventions while in IFPS and 12 months thereafter.

(6)       The number and percentage by race of children who received Intensive Family Preservation Services compared to the ratio of their distribution in the general population involved with Child Protective Services.

SECTION 10.48.(d)  The Department shall establish performance-based funding protocol and shall only provide funding to those programs and entities providing the required information specified in subsection (c) of this section. The amount of funding shall be based on the individual performance of each program.

SECTION 10.48.(e)  The Department of Health and Human Services shall report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than April 1, 2004. The report shall include information and data collected pursuant to subsection (c) of this section.

 

TANF STATE PLAN

SECTION 10.49.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2003-2005", prepared by the Department of Health and Human Services and presented to the General Assembly on April 28, 2003, as revised in accordance with subsection (b) of this section. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2003, through September 30, 2005. The Department shall submit the State Plan, as revised in accordance with subsection (b) of this section, to the United States Department of Health and Human Services as amended by this act or any other act of the 2003 General Assembly.

SECTION 10.49.(b)  The Department of Health and Human Services shall revise the North Carolina Temporary Assistance for Needy Families State Plan FY 2003-2005, submitted to the General Assembly for approval on April 28, 2003. The revisions shall be made to the following Plan components:

(1)       Enhanced Employee Assistance Program to reflect changes in funding.

(2)       Services for Families to remove reference to start-up activities.

(3)       Work Responsibility to remove reference to start-up activities.

(4)       Cabarrus County Waiver to reflect changes in the law made by the 2003 General Assembly.

(5)       Goal number eight to provide that caseload reduction goals are subject to economic conditions in the county.

SECTION 10.49.(c)  The counties approved as Electing Counties in North Carolina's Temporary Assistance for Needy Families State Plan FY 2003-2005 as approved by this section are:  Beaufort, Caldwell, Iredell, Lenoir, Lincoln, Macon, McDowell, Sampson, and Wilkes.

SECTION 10.49.(d)  Counties designated as Electing Counties pursuant to G.S. 108A-27(d) and who submitted the letter of intent to be redesignated as a standard county and the accompanying county plan for fiscal years 2003 through 2005, pursuant to G.S. 108A-27(e), shall operate under the standard county budget requirements effective July 1, 2003. Counties that submitted the letter of intent to remain as an Electing County or to be redesignated as an Electing County and the accompanying county plan for fiscal years 2003 through 2005, pursuant to G.S. 108A-27(e), shall operate under the Electing County budget requirements effective July 1, 2003. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2003.

 

ELECTING COUNTY TANF FUNDS REVERT

SECTION 10.50.  G.S. 108A-27.11(c) reads as rewritten:

"(c)      Each Electing County's allocation for Work First Family Assistance shall be computed based on the percentage of each Electing County's total expenditures for cash assistance to statewide actual expenditures for cash assistance in 1995-96. The resulting percentage shall be applied to the federal TANF block grant funds appropriated for cash assistance by the General Assembly each fiscal year. The Department shall transmit the federal funds contained in the county block grants to Electing Counties as soon as practicable after they become available to the State and in accordance with federal cash management laws and regulations. The Department shall transmit one-fourth of the State funds contained in county block grants to Electing Counties at the beginning of each quarter."

 

SPECIAL ASSISTANCE IN-HOME PROGRAM

SECTION 10.51.(a)  The Department of Health and Human Services may use funds from the existing State-County Special Assistance for Adults budget to provide Special Assistance payments to eligible individuals in in-home living arrangements. These payments may be made for up to 800 individuals during the 2003-2004 fiscal year and the 2004-2005 fiscal year. The standard monthly payment to individuals enrolled in the Special Assistance in-home program shall be fifty percent (50%) of the monthly payment the individual would receive if the individual resided in an adult care home and qualified for Special Assistance, except if a lesser payment amount is appropriate for the individual as determined by the local case manager. For State fiscal year 2003-2004, qualified individuals shall not receive payments at rates less than they would have been eligible to receive in State fiscal year 2002-2003. The Department shall implement Special Assistance in-home eligibility policies and procedures to assure that in-home program participants are those individuals who need and, but for the in-home program, would seek placement in an adult care home facility. The Department's policies and procedures shall include the use of a functional assessment.  The Department shall make this in-home option available to all counties on a voluntary basis.  To the maximum extent possible, the Department shall consider geographic balance in the dispersion of payments to individuals across the State.

SECTION 10.51.(b)  The Department shall report on or before January 1, 2004, and on or before January 1, 2005, to the cochairs of the House of Representatives Appropriations Committee, the House of Representatives Appropriations Subcommittee on Health and Human Services, the cochairs of the Senate Appropriations Committee, and the cochairs of the Senate Appropriations Committee on Health and Human Services. This report shall include the following information:

(1)       A description of cost savings that result from allowing individuals eligible for State-County Special Assistance the option of remaining in the home.

(2)       A complete fiscal analysis of the in-home option to include all federal, State, and local funds expended.

(3)       How much case management is needed and which types of individuals are most in need of case management.

(4)       The geographic location of individuals receiving payments under this section.

(5)       A description of the services purchased with these payments.

(6)       A description of the income levels of individuals who receive payments under this section and the impact on the Medicaid program.

(7)       Findings and recommendations as to the feasibility of continuing or expanding the in-home program.

(8)       The level and quantity of services (including personal care services) provided to the demonstration project participants compared to the level and quantity of services for residents in adult care homes.

SECTION 10.51.(c)  The Department shall incorporate data collection tools designed to compare quality of life among institutionalized versus noninstitutionalized populations (i.e., an individual's perception of his or her own health and well-being, years of healthy life, and activity limitations). To the extent national standards are available, the Department shall utilize those standards.

 

STATE/COUNTY SPECIAL ASSISTANCE

SECTION 10.52.(a)  The eligibility of Special Assistance recipients residing in adult care homes on August 1, 1995, shall not be affected by an income reduction in the Special Assistance eligibility criteria resulting from adoption of the Rate Setting Methodology Report and Related Services, providing these recipients are otherwise eligible.  The maximum monthly rate for these residents in adult care home facilities shall be one thousand two hundred thirty-one dollars ($1,231) per month per resident.

SECTION 10.52.(b)  The maximum monthly rate for residents in adult care home facilities shall be one thousand ninety-one dollars ($1,091) per month per resident through September 30, 2003.

SECTION 10.52.(c)   Effective October 1, 2003, the maximum monthly rate for residents in adult care home facilities shall be one thousand sixty-six dollars ($1,066) per month per resident unless adjusted by the Department in accordance with subsection (f) of this section.

SECTION 10.52.(d)  It is the intent of the General Assembly to protect individuals who meet current eligibility standards for State/County Special Assistance from becoming disenfranchised from the program as a result of any changes proposed in this section.  Therefore, subject to any necessary approvals by the Center for Medicare & Medicaid Services (CMS):

(1)       The eligibility of Special Assistance recipients who reside in adult care homes on September 30, 2003, and remain continuously eligible shall not be affected by an income reduction in the Special Assistance eligibility criteria, providing these recipients are otherwise eligible. The maximum monthly rate for these residents in adult care home facilities shall be one thousand ninety-one dollars ($1,091) per month per resident; and

(2)       The standard of need level for coverage eligibility under State/County Special Assistance, for individuals not enrolled or recipients of the program on September 30, 2003, shall be not less than one thousand ninety-one dollars ($1,091) per month per individual, but the monthly reimbursement rate for such individuals shall be the amount established under subsections (c) and (f) of this section. However, the Department of Health and Human Services, in its determination of reimbursement rates, may establish a minimum monthly reimbursement rate of not more than five dollars ($5.00) per month for any resident of an adult care home facility meeting the established standard of need level for coverage.

SECTION 10.52.(e)  The sum of three million one hundred eighty-nine thousand six hundred seventy-five dollars ($3,189,675) for the 2003-2004 fiscal year and the sum of four million four hundred thirty-one thousand eight hundred forty-six dollars ($4,431,846) for the 2004-2005 fiscal year appropriated to the Department of Health and Human Services shall be transferred from the Division of Social Services to the Division of Medical Assistance and used as State match to draw down federal matching funds to help pay for Medicaid's personal care services for adult care homes (ACH-PCS) rather than the State/County Special Assistance Program.

SECTION 10.52.(f)  Notwithstanding any other provision of this section, the Department of Health and Human Services shall review activities and costs related to the provision of care in adult care homes and shall determine what costs may be considered to properly maximize allowable reimbursement available through Medicaid personal care services for adult care homes (ACH-PCS) under federal law.  As determined, and with any necessary approval from the Centers for Medicare and Medicaid Services (CMS), and the approval of the Office of State Budget and Management, the Department may transfer necessary funds from the State/County Special Assistance program within the Division of Social Services to the Division of Medical Assistance and may use those funds as State match to draw down federal matching funds to pay for such activities and costs under Medicaid's personal care services for adult care homes (ACH-PCS), thus maximizing available federal funds.  The established rate for State/County Special Assistance set forth in subsection (c) of this section shall be adjusted by the Department to reflect any transfer of funds from the Division of Social Services to the Division of Medical Assistance, and related transfer costs and responsibilities from State/County Special Assistance to the Medicaid personal care services for adult care homes (ACH-PCS).  Such rate adjustments to the Special Assistance rate shall be effective with the effective date of increased reimbursement under ACH-PCS.  In no event shall the reimbursement for services through the ACH-PCS exceed the average cost of such services as determined by the Department from review of cost reports as required and submitted by adult care homes.  The Department shall report any transfers of funds and modifications of rates to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

 

STATE/COUNTY SPECIAL ASSISTANCE TRANSFER OF ASSETS

SECTION 10.53.(a)  G.S. 108A-46 is repealed.

SECTION 10.53.(b)  Part 3 of Article 2 of Chapter 108A is amended by adding the following new section to read:

"§ 108A-46A. Transfer of assets for purposes of qualifying for State-county Special Assistance for adults.

Notwithstanding any other provision of law to the contrary, Supplemental Security Income (SSI) policy applicable to transfer of assets and estate recovery, as prescribed by federal  law, shall apply to applicants for State-county Special Assistance."

SECTION 10.53.(c)  The Department of Health and Human Services shall continue to review whether policy for State-county Special Assistance should be changed to permit an assisted living facility to accept from a family member of a resident who qualifies for State-county Special Assistance payment for the difference in the monthly rate for room, board, and services available. In reviewing current policy, the Department shall consider the following conditions on family contributions to the resident's cost of care:

(1)       Ensuring that the resident meets all income and resource eligibility requirements for State-county Special Assistance.

(2)       Not counting payments made by family members to the facility as income to the resident or as an in-kind contribution when calculating the monthly rate applicable to the resident.

(3)       Ensuring that supplemental payments are made on a voluntary basis as specified in the resident agreement.

Not later than March 1, 2004, the Department shall report on its activities under this subsection to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

LIMITATION ON STATE ABORTION FUND

SECTION 10.54.  The limitations on funding of the performance of abortion established in Section 23.27 of Chapter 324 of the 1995 Session Laws, as amended by Section 23.8A of Chapter 507 of the 1995 Session Laws, apply to the 2003-2004 and 2004-2005 fiscal years.

 

FUNDS FOR FOOD BANKS

SECTION 10.55.(a)  Of the funds appropriated to the Department of Health and Human Services in this act, the sum of one million dollars ($1,000,000) for the 2003-2004 fiscal year shall be allocated equally among the six Second Harvest North Carolina food banks.

SECTION 10.55.(b)  Each organization shall report to the Department of Health and Human Services and the Fiscal Research Division on the activities performed and the impact on local communities directly associated with the funds allocated in subsection (a) of this section by April 1, 2004. Each organization shall provide to the Department of Health and Human Services and the Fiscal Research Division a copy of its annual audited financial statement within 30 days of issuance of the statement.

 

CHILD WELFARE SYSTEM PILOTS SYSTEM

SECTION 10.56.(a)  The Department of Health and Human Services, Division of Social Services, shall continue working with local departments of social services to implement an alternative response system of child protection in no fewer than 10 and no more than 33 demonstration areas in this State. The Division of Social Services may exceed the maximum number of demonstration areas if a county specifically requests inclusion and the Division determines that resources are available. The demonstration projects in place in the 2003-2004 fiscal year shall continue. The alternative response system shall provide for a family-centered approach to child protective services which local departments of social services utilize family assessment tools and family support principles when responding to selected reports of suspected child neglect and dependency.

SECTION 10.56.(b)  The Department of Health and Human Services shall evaluate the original pilot demonstration areas to determine the impact the alternative response system to child protective services has had in the following areas:

(1)       Child safety.

(2)       Timeliness of response.

(3)       Timeliness of service.

(4)       Coordination of local human services.

SECTION 10.56.(c)  The Department of Health and Human Services shall proceed to expand this demonstration project if non-State funds are identified for this purpose.

SECTION 10.56.(d)  The Department of Health and Human Services shall report on the outcome of the evaluation of the original pilot demonstration areas pursuant to subsection (b) of this section and the expansion of the demonstration areas. The Department shall make recommendations for statewide implementation of an alternative response system to child protective services. The report shall include any statutory changes required for full implementation. Any recommendations for statutory changes contained in the report shall be eligible for consideration by the 2003 General Assembly in the 2004 Regular Session. The report shall be submitted to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than April 1, 2004.

 

ELIMINATE REPORTING REQUIREMENTS FOR WORK FIRST PROGRAM

SECTION 10.57.  G.S. 108A-27.2 reads as rewritten:

"§ 108A-27.2.  General duties of the Department.

The Department shall have the following general duties with respect to the Work First Program:

(1)       Ensure that the specifications of the general provisions of the State Plan regarding the procedures required when recipients are sanctioned, prescribed in G.S. 108A-27.9(c), are uniformly developed and implemented across the State;

(1a)     Provide technical assistance to counties developing and implementing their County Plans, including providing information concerning applicable federal law and regulations and changes to federal law and regulations that affect the permissible use of federal funds and scope of the Work First Program in a county;

(1b)     Reserved for future codification purposes.

(1c)     Ensure that two-parent families receive cash assistance for three months after qualifying for assistance without being subject to pay for performance requirements, in order to encourage families to stay together and to overcome barriers to self-sufficiency and gainful employment. Cash assistance or diversion assistance received prior to being subject to pay for performance requirements is limited to one time within a 12-month period.

(2)       Describe authorized federal and State work activities. For up to twenty percent (20%) of Work First recipients, authorized State work activities shall include at least part-time enrollment in a postsecondary education program. In Standard Counties, recipients enrolled on at least a part-time basis in a postsecondary education program and maintaining a 2.5 grade point average or its equivalent shall have their two-year time limit suspended for up to three years.

(3)       Define requirements for assignment of child support income and compliance with child support activities;

(4)       Establish a schedule for counties to submit their County Plans to ensure that all Standard County Plans are adopted by the Standard Program Counties by January 15 of each odd-numbered year and all Electing County Plans are adopted by Electing Counties by February 1 of each odd-numbered year and review and then recommend a State Plan to the General Assembly;

(5)       Ensure that the County Plans comply with federal and State laws, rules, and regulations, are consistent with the overall purposes and goals of the Work First Program, and maximize federal receipts for the Work First Program;

(6)       Prepare the State Plan in accordance with G.S. 108A-27.9 and federal laws and regulations and submit it to the Budget Director for approval;

(7)       Submit the State Plan, as approved by the Budget Director, to the General Assembly for approval;

(8)       Report monthly to the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services on the monthly progress reports submitted by the counties to the Department;

(9)       Develop and implement a system to monitor and evaluate the impact of the Work First Program on children and families, including the impact of the Work First Program on job retention and advancement, child abuse and neglect, caseloads for child protective services and foster care, school attendance, academic and behavioral performance, and other measures of the economic security and health of children and families. The system should be developed to allow monitoring and evaluation of impact based on both aggregated and disaggregated data. State and county agencies shall cooperate in providing information needed to conduct these evaluations, sharing data and information except where prohibited specifically by federal law or regulation;

(10)     Monitor the performance of counties relative to their County Plans and the overall goals of the Work First Program and report every six months to the Director of the Budget and the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services and annually to the General Assembly on the counties' attainment of the outcomes and goals;Program;

(11)     Provide quarterly progress reports to the county departments of social services, the county boards of commissioners, and the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services on the performance of counties in achieving Work First Program expectations;

(12)     Report to the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services the counties which have requested Electing status; provide copies of the proposed Electing County Plans to [C]ommission and the members of the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services Services, if requested; and make recommendations to the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services on which of the proposed Electing County Plans ensure compliance with federal and State laws, rules, and regulations and are consistent with the overall purposes and goals for the Work First Program; and

(13)     Make recommendations to the General Assembly for approval of counties to become Electing Counties which represent, in aggregate, no more than fifteen and one-half percent (15.5%) of the total Work First caseload at September 1 of each year and, for each county submitting a plan, the reasons individual counties were or were not recommended.

(14)     Review the county Work First Program of each electing county and recommend whether the county should continue to be designated an electing county or whether it should be redesignated as a standard county. In conducting its review and making its recommendation, the Department shall:

a.         Examine and consider the results of the Department's monitoring and evaluation of the impact of the electing county's Work First Program as required under subdivision (9) of this section;

b.         Determine whether the electing county's Work First Program's unique design requires implementation by an electing county or whether the Work First Program could be implemented by a county designated as a standard county;

c.         Determine whether the electing county's Work First Program and policies are unique and innovative in meeting the purpose of the Work First Program as stated under G.S. 108A-27, and State and federal laws, rules, and regulations, as compared to other standard and electing county Work First programs.

The Department shall make its recommendation and the reasons therefor to the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services not later than three months prior to submitting the State Plan to the Commission for review as required under G.S. 108A-27.9(a)."

 

SOCIAL SERVICES COMMISSION RULES ON RATE-SETTING FOR ADULT DAY CENTERS AND ADULT DAY HEALTH CENTERS

SECTION 10.58.  The Social Services Commission shall consider adopting rules increasing the rates for adult day centers and adult day health centers.  Any rate increase adopted by the Social Services Commission for adult day centers and adult day health centers shall be implemented within existing funds.

 

PART X-A. DEPARTMENT OF Agriculture and consumer Services

 

Study Commercial Production of Turtles

SECTION 10A.1.  The Department of Agriculture and Consumer Services, with the cooperation and assistance of the Agricultural Research Service at North Carolina State University, shall investigate the potential for the production of turtles for food purposes and other commercial purposes that could support turtle production as an alternative agricultural product in North Carolina.  No later than April 1, 2004, the Department of Agriculture and Consumer Services shall report its findings and recommendations, including any legislative proposals, to the Appropriations Subcommittees on Natural and Economic Resources in both the Senate and the House of Representatives and to the Chairs of the Senate Committee on Agriculture, Environment, and Natural Resources and the House of Representatives Agriculture Committee.

 

PART XI. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

 

GRASSROOTS SCIENCE PROGRAM

SECTION 11.1.(a)  Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Grassroots Science Program, the sum of two million five hundred fifty-one thousand seven hundred sixty dollars ($2,551,760) for fiscal year 2003-2004 and the sum of two million five hundred fifty-one thousand seven hundred sixty dollars ($2,551,760) for fiscal year 2004-2005 are allocated as grants-in-aid for each fiscal year as follows:

 

                                                                                        2003-2004                       2004-2005

 

Aurora Fossil Museum                                           $56,690                             $56,690

Cape Fear Museum                                               $185,470                           $185,470

Catawba Science Center                                      $134,913                           $134,913

Colburn Gem and Mineral Museum, Inc.             $66,858                             $66,858

Discovery Place                                                   $624,407                           $624,407

Granville County Museum Commission,

Inc. - Harris Gallery                                            $55,885                             $55,885

The Health Adventure Museum of Pack

Place Education, Arts and

Science Center, Inc.                                          $121,115                           $121,115

Imagination Station                                                 $85,308                             $85,308

Iredell County Children's Museum                         $6,616                               $6,616

Museum of Coastal Carolina                                 $69,311                             $69,311

Natural Science Center of Greensboro              $183,416                           $183,416

North Carolina Museum of Life

and Science                                                        $388,283                           $388,283

Rocky Mount Children's Museum                        $72,810                             $72,810

Schiele Museum of Natural History                   $234,524                           $234,524

Sci Works Science Center and

Environmental Park of Forsyth County           $147,578                           $147,578

Western North Carolina Nature Center             $118,578                           $118,578

 

Total                                                                   $2,551,760                       $2,551,760

SECTION 11.1.(b) Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Grassroots Science Program, the sum of two hundred fifty thousand dollars ($250,000) for the 2003-2004 fiscal year is allocated as initial grants-in-aid of fifty thousand dollars ($50,000) to each of the following unfunded members of the Grassroots collaborative:

(1)       Wilmington Children's Museum, Inc.

(2)       Carolina Raptor Center, Inc.

(3)       Highlands Nature Center

(4)       Fascinate-U Children's Museum

(5)       KidSenses, Inc.

SECTION 11.1.(c)  It is the intent of the General Assembly that the museums receiving initial allocations under subsection (b) of this section shall receive recurring allocations in subsequent fiscal years based on the formula used to calculate the allocations under subsection (a) of this section.

 

STATEWIDE BEAVER DAMAGE CONTROL PROGRAM FUND

SECTION 11.2.  Of the funds appropriated to the Wildlife Resources Fund in this act, the sum of four hundred forty-nine thousand dollars ($449,000) for the 2003-2004 fiscal year and the sum of four hundred forty-nine thousand dollars ($449,000) for the 2004-2005 fiscal year shall be used to provide the State share necessary to support the beaver damage control program established in G.S. 113-291.10, provided the sum of at least twenty-five thousand dollars ($25,000) in federal funds is available each fiscal year of the biennium to provide the federal share.

 

FUNDS FOR CLEANUP OF WARREN COUNTY PCB LANDFILL

SECTION 11.3.(a)  Notwithstanding the provisions of G.S. 143-215.3A, the Department of Environment and Natural Resources may use up to five hundred thousand dollars ($500,000) for the 2003-2004 fiscal year from the fees collected for water quality permits under G.S. 143-215.3D and credited to the Water Permits Fund if both of the following conditions are satisfied:

(1)       The detoxification and remediation of the landfill located in Warren County cannot be completed without these additional funds.

(2)       All other funds, including all contingency funds, available to the Department for the detoxification and remediation of the landfill located in Warren County that contains polychlorinated biphenyl (PCBs) and dioxin/furan contaminated materials have been spent or encumbered.

SECTION 11.3.(b)  It is the intent of the General Assembly that the funds authorized under subsection (a) of this section will be sufficient to complete the detoxification and remediation of this landfill, based on representations made to the General Assembly.

 

COMMERCIAL AND NONCOMMERCIAL UNDERGROUND STORAGE TANK FUNDS

SECTION 11.4.(a)  Section 19 of S.L. 1989-652, Section 67 of S.L. 1991-1044, Section 15(a) and Section 15(b) of S.L. 1995-377, and Section 1 of S.L. 2001-454 are repealed, which has the effect of repealing two million six hundred twenty-five thousand dollars ($2,625,000) in appropriations from the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund to the Department of Environment and Natural Resources and one million two hundred ninety-five thousand dollars ($1,295,000) in appropriations from the Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund to the Department of Environment and Natural Resources.

SECTION 11.4.(b)  There is appropriated from the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund to the Department of Environment and Natural Resources the sum of two million six hundred twenty-five thousand dollars ($2,625,000) for the 2003-2004 fiscal year and the sum of two million six hundred twenty-five thousand dollars ($2,625,000) for the 2004-2005 fiscal year to administer the underground storage tank program under Parts 2A and 2B of Article 21A of Chapter 143 of the General Statutes.

SECTION 11.4.(c)  It is the intent of the General Assembly that the funds under subsection (b) of this section are recurring funds.

SECTION 11.4.(d)  There is appropriated from the Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund to the Department of Environment and Natural Resources the sum of one million two hundred ninety-five thousand dollars ($1,295,000) for the 2003-2004 fiscal year and the sum of one million two hundred ninety-five thousand dollars ($1,295,000) for the 2004-2005 fiscal year to administer the underground storage tank program under Parts 2A and 2B of Article 21A of Chapter 143 of the General Statutes.

SECTION 11.4.(e)  It is the intent of the General Assembly that the funds under subsection (c) of this section are recurring funds.

SECTION 11.4.(f)  The Office of State Budget and Management shall certify the appropriations under subsections (b) and subsection (d) of this section in the budget codes for the Commercial and Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Funds and in the General Fund budget code for the Department of Environment and Natural Resources.

 

EXPRESS REVIEW PILOT PROGRAM

SECTION 11.4A.(a)  The Department of Environment and Natural Resources may develop the Express Review Pilot Program, a pilot program to provide express permit and certification reviews. Participation in the Express Review Pilot Program is voluntary, and the program is to become supported by the fees determined pursuant to subsection (b) of this section. The Department of Environment and Natural Resources shall determine the project applications to review under the Express Review Pilot Program from those who request to participate in the Pilot Program. The Express Review Pilot Program may be applied to any one or all of the permits, approvals, or certifications in the following programs: the erosion and sedimentation control program, the coastal management program, and the water quality programs, including water quality certifications and stormwater management. The Express Review Pilot Program shall focus on the following permits or certifications:

(1)       Stormwater permits under Part 1 of Article 21 of Chapter 143 of the General Statutes.   

(2)       Stream origination certifications under Article 21 of Chapter 143 of the General Statutes.

(3)       Water quality certification under Article 21 of Chapter 143 of the General Statutes.

(4)       Erosion and sedimentation control permits under Article 4 of Chapter 113A of the General Statutes.

(5)       Permits under the Coastal Area Management Act (CAMA), Part 4 of Article 7 of Chapter 113A of the General Statutes.

SECTION 11.4A.(b)  The Department of Environment and Natural Resources may establish up to eight positions to administer the Express Review Pilot Program and may determine the fees for express application review under the Pilot Program. Notwithstanding G.S. 143-215.3D, the maximum permit application fee to be charged under subsection (a) of this section for the express review of a project application requiring all of the permits under subdivisions (1) through (5) of subsection (a) of this section shall not exceed five thousand five hundred dollars ($5,500). Notwithstanding G.S. 143-215.3D, the maximum permit application fee to be charged for the express review of a project application requiring all of the permits under subdivisions (1) through (4) of subsection (a) of this section shall not exceed four thousand five hundred dollars ($4,500). Notwithstanding G.S. 143-215.3D, the maximum permit application fee charged for the express review of a project application for any other combination of permits under subdivisions (1) through (5) of subsection (a) of this section shall not exceed four thousand dollars ($4,000). Express review of a project application involving additional permits or certifications issued by the Department of Environment and Natural Resources other than those under subdivisions (1) through (5) of subsection (a) of this section may be allowed by the Department, and, notwithstanding G.S. 143-215.3D or any other statute or rule that sets a permit fee, the maximum permit application fee charged for the express review of a project application shall not exceed four thousand dollars ($4,000), plus one hundred fifty percent (150%) of the fee that would otherwise apply by statute or rule for that particular permit or certification. Additional fees, not to exceed fifty percent (50%) of the original permit application fee under this section, may be charged for subsequent reviews due to the insufficiency of the permit applications. The Department of Environment and Natural Resources may establish the procedure by which the amount of the fees under this subsection is determined, and the fees and procedures are not rules under G.S. 150B-2(8a) for the Express Review Pilot Program under this section.

SECTION 11.4A.(c)  The funds appropriated to the Department of Environment and Natural Resources in this act for the 2003-2004 fiscal year shall be used for the costs of implementing the Express Review Pilot Program under this section during the 2003-2004 fiscal year.

SECTION 11.4A.(d)  The Express Review Fund is created as a special nonreverting fund.  The Express Review Fund shall be used for the costs of implementing the Express Review Pilot Program under this section. All fees collected under this section shall be credited to the Express Review Fund. If the Express Review Pilot Program is abolished, the funds in the Express Review Fund shall be credited to the General Fund.

SECTION 11.4A.(e)  No later than May 1, 2004, the Department of Environment and Natural Resources shall report to the General Assembly its findings on the success of the Express Review Pilot Program and whether it recommends that the Pilot Program be continued or expanded.

 

COST SHARE FUNDS FOR LIMITED RESOURCE/NEW FARMERS

SECTION 11.6.  G.S. 143-215.74(b) reads as rewritten:

"(b)      The program shall be subject to the following requirements and limitations:

(1)       The purpose of the program shall be to reduce the input of agricultural nonpoint source pollution into the water courses of the State.

(2)       The program shall initially include the present 16 nutrient sensitive watershed counties and 17 additional counties.

(3)       Subject to subdivision (7) of this subsection, priority designations for inclusions in the program shall be under the authority of the Soil and Water Conservation Commission. The Soil and Water Conservation Commission shall retain the authority to allocate the cost share funds.

(4)       Areas shall be included in the program as the funds are appropriated and the technical assistance becomes available from the local Soil and Water Conservation District.

(5)       Funding may be provided to assist practices including conservation tillage, diversions, filter strips, field borders, critical area plantings, sedimentation control structures, sod-based rotations, grassed waterways, strip-cropping, terraces, cropland conversion to permanent vegetation, grade control structures, water control structures, closure of lagoons, emergency spillways, riparian buffers or equivalent controls, odor control best management practices, insect control best management practices, and animal waste management systems and application. Funding for animal waste management shall be allocated for practices in river basins such that the funds will have the greatest impact in improving water quality.

(6)       Except as provided in subdivision (8) and subdivision (9) of this subsection, State funding shall be limited to seventy-five percent (75%) of the average cost for each practice with the assisted farmer providing twenty-five percent (25%) of the cost, which may include in-kind support of the practice, with a maximum of seventy-five thousand dollars ($75,000) per year to each applicant.

(7)       Priority designation for inclusion in the program for State funding shall be given to projects that improve water quality. To be eligible for cost share funds under this subdivision, a project shall be evaluated before funding is awarded and after the project is completed to determine the impact on water quality.

(8)       For practices that are eligible for funding from the federal Conservation Reserve Enhancement Program, State funding from the program shall be limited to seventy-five percent (75%) of the average cost of each practice, with the remainder paid from funding from the Conservation Reserve Enhancement Program, other available federal funds, other State funds, or the assisted farmer, whose contribution may include in-kind support of the practice. This subdivision is subject to subdivision (9) of this subsection.

(9)       When the applicant is either a limited-resource farmer or a beginning farmer, State funding shall be limited to ninety percent (90%) of the average cost for each practice with the assisted farmer providing ten percent (10%) of the cost, which may include in-kind support of the practice, with a maximum of one hundred thousand dollars ($100,000) per year to each applicant. The following definitions apply in this subdivision:

a.         Beginning farmer. - A farmer who has not operated a farm or who has operated a farm for not more than 10 years and who will materially and substantially participate in the operation of the farm.

b.         Limited-resource farmer. - A farmer with direct and indirect gross farm sales that do not exceed one hundred thousand dollars ($100,000).

c.         Materially and substantially participate. -

1.         In the case of an individual, for the individual, including members of the immediate family of the individual, to provide substantial day-to-day labor and management of the farm, consistent with the practices in the county in which the farm is located.

2.         In the case of an entity, for all members of the entity, to participate in the operation of the farm, with some members providing management and some members providing labor and management necessary for day-to-day activities such that if the members did not provide the management and labor, the operation of the farm would be seriously impaired."

 

study/impact of acquisition of land for conservation purposes on local government ad valorem tax revenues

SECTION 11.7.(a)  The Property Tax Subcommittee of the Revenue Laws Study Committee shall study the positive and negative impacts of the acquisition of land by the State and non-profit organizations using money from the Clean Water Management Trust Fund and other State funds for conservation purposes on local government ad valorem tax revenues.  In conducting this study, the Subcommittee may consider efforts by other states and the federal government to mitigate the negative impacts of acquisition of land by government or non-profit organizations for conservation purposes on local government ad valorem tax revenues.

SECTION 11.7.(b)  The Subcommittee shall, by January 15, 2004, and more frequently as requested report its findings to the Joint Legislative Commission on Governmental Operations, the Revenue Laws Study Committee, and the Fiscal Research Division.

 

CLEAN WATER MANAGEMENT TRUST FUND APPROPRIATION/FARMLAND PRESERVATION PROJECTS

SECTION 11.8.(a)  Notwithstanding  G.S. 143-15.3B(a), for the 2003-2005 fiscal biennium only, the appropriation to the Clean Water Management Trust Fund for the 2003-2004 fiscal year is only sixty-two million dollars ($62,000,000) as provided by this act and is only sixty-two million dollars ($62,000,000) for the 2004-2005 fiscal year as provided by this act. The funds appropriated by this act to the Clean Water Management Trust Fund shall be used as provided by G.S. 143-15.3B(b).

SECTION 11.8.(b)  Notwithstanding G.S. 113-145.3, for the 2003-2004 fiscal year only, the Clean Water Management Trust Fund Board of Trustees may allocate up to four million one hundred thousand dollars ($4,100,000) to match federal, State, local, and private farmland preservation and forestland preservation funds and to acquire permanent conservation easements on working farms and forests.

 

State Match for Federal safe drinking water Act Funds

SECTION 11.10.  Notwithstanding the provisions of Chapter 159G of the General Statutes, the Department of Environment and Natural Resources may transfer and use up to one million seven hundred thousand dollars ($1,700,000) of the funds available in the General Water Supply Revolving Loan Account for the 2003-2004 fiscal year to match the federal grant moneys authorized by section 1452 of the federal Safe Drinking Water Act Amendments of 1996 for the 2003-2004 fiscal year.  The General Water Supply Revolving Loan Account is an account under the Clean Water Revolving Loan and Grant Fund and is established under G.S. 159G-4.  The Clean Water Revolving Loan and Grant Fund is established by G.S. 159G-5.

 

PART XII. DEPARTMENT OF COMMERCE

 

WANCHESE SEAFOOD INDUSTRIAL PARK/OREGON INLET FUNDS

SECTION 12.1.(a)  Of the funds appropriated in this act to the Department of Commerce for the Wanchese Seafood Industrial Park, the sum of one hundred twenty-seven thousand eight hundred seventy dollars ($127,870) for the 2003-2004 fiscal year and the sum of one hundred twenty-seven thousand eight hundred seventy dollars ($127,870) for the 2004-2005 fiscal year may be expended by the North Carolina Seafood Industrial Park Authority for operations, maintenance, repair, and capital improvements in accordance with Article 23C of Chapter 113 of the General Statutes, in addition to funds available to the Authority for these purposes.

SECTION 12.1.(b)  Funds appropriated to the Department of Commerce for the 2002-2003 fiscal year for the Oregon Inlet Project that are unexpended and unencumbered as of June 30, 2003, shall not revert to the General Fund on June 30, 2003, but shall remain available to the Department for legal costs associated with the Project. This section becomes effective June 30, 2003.

 

COUNCIL OF GOVERNMENT FUNDS

SECTION 12.2.(a)  Of the funds appropriated in this act to the Department of Commerce, eight hundred thirty-two thousand one hundred fifty dollars ($832,150) for the 2003-2004 fiscal year and eight hundred thirty-two thousand one hundred fifty dollars ($832,150) for the 2004-2005 fiscal year shall only be used as provided by this section.  Each regional council of government or lead regional organization is allocated up to forty-eight thousand nine hundred fifty dollars ($48,950) for the 2003-2004 and the 2004-2005 fiscal years.

SECTION 12.2.(b)  A regional council of government may use funds appropriated by this section only to assist local governments in grant applications, economic development, community development, support of local industrial development activities, and other activities as deemed appropriate by the member governments.

SECTION 12.2.(c)  Funds appropriated by this section shall be paid by electronic transfer in two equal installments, the first no later than September 1, 2003, and the second subsequent to acceptable submission of the annual report due to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by January 15, 2005, as specified in subdivision (e)(2) of this section.

SECTION 12.2.(d)  Funds appropriated by this section shall not be used for payment of dues or assessments by the member governments and shall not supplant funds appropriated by the member governments.

SECTION 12.2.(e)  Each council of government or lead regional organization shall do the following:

(1)       By January 15, 2004, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2002-2003 program activities, objectives, and accomplishments;

b.         State fiscal year 2002-2003 itemized expenditures and fund sources;

c.         State fiscal year 2003-2004 planned activities, objectives, and accomplishments, including actual results through December 31, 2003; and

d.         State fiscal year 2003-2004 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2003;

(2)       By January 15, 2005, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2003-2004 program activities, objectives, and accomplishments;

b.         State fiscal year 2003-2004 itemized expenditures and fund sources;

c.         State fiscal year 2004-2005 planned activities, objectives, and accomplishments, including actual results through December 31, 2004; and

d.         State fiscal year 2004-2005 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2004; and

(3)       Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

 

TOURISM PROMOTION FUNDS

SECTION 12.3.  Funds appropriated in this act to the Department of Commerce for tourism promotion grants shall be allocated to counties in an effort to direct funds to counties most in need.  Determinations of which counties are most in need shall focus on those with the lowest per capita income, highest unemployment, and slowest population growth in the following manner:

(1)       Counties 1 through 20 are each eligible to receive a maximum grant of seven thousand five hundred dollars ($7,500) for each fiscal year, provided these funds are matched on the basis of one non-State dollar for every four State dollars.

(2)       Counties 21 through 50 are each eligible to receive a maximum grant of three thousand five hundred dollars ($3,500) for two of the next three fiscal years, provided these funds are matched on the basis of one non-State dollar for every three State dollars.

(3)       Counties 51 through 100 are each eligible to receive a maximum grant of three thousand five hundred dollars ($3,500) for alternating fiscal years, beginning with the 1991-1992 fiscal year, provided these funds are matched on the basis of four non-State dollars for every State dollar.

 

ONE NORTH CAROLINA - INDUSTRIAL RECRUITMENT COMPETITIVE FUND

SECTION 12.4.(a)  Funds appropriated to the Department of Commerce for the One North Carolina - Industrial Recruitment Competitive Fund, unless specifically allocated in this act for another purpose, shall be used to continue the Fund. The purpose of the Fund is to provide financial assistance to those businesses or industries deemed by the Governor to be vital to a healthy and growing State economy and that are making significant efforts to establish or expand in North Carolina.

SECTION 12.4.(b)  Moneys allocated from the One North Carolina - Industrial Recruitment Competitive Fund shall be used for the following purposes:

(1)       Installation or purchase of equipment.

(2)       Structural repairs, improvements, or renovations of existing buildings to be used for expansion.

(3)       Construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines or equipment for existing buildings.

(4)       Any other purposes specifically provided by an act of the General Assembly.

Moneys may also be used for construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines or equipment to serve new or proposed industrial buildings used for manufacturing and industrial operations. The Governor shall adopt guidelines and procedures for the commitment of moneys from the Fund.

SECTION 12.4.(c) The Department of Commerce shall report on or before September 30, 2003, and quarterly thereafter to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division on the commitment, allocation, and use of funds allocated from the One North Carolina - Industrial Recruitment Competitive Fund.

SECTION 12.4.(d) Funds appropriated to the Department of Commerce for the 2002-2003 fiscal year for the One North Carolina - Industrial Recruitment Competitive Fund that are unexpended and unencumbered as of June 30, 2003, shall not revert to the General Fund on June 30, 2003, but shall remain available to the Department for providing financial assistance to those businesses and industries deemed by the Governor to be vital to a healthy and growing State economy and that are making significant efforts to establish or expand in North Carolina.

SECTION 12.4.(e) This section becomes effective June 30, 2003.

 

NORTH CAROLINA EDUCATIONAL DEVELOPMENT

SECTION 12.4A.(a)  The General Assembly finds that institutions of higher education play an essential role in maintaining and strengthening the economic health of the State. As our economy evolves from its traditional manufacturing and agricultural base to a diverse structure, including many technology, information, and service-based businesses, innovative educational institutions are essential to providing appropriate workforce preparation and training to maintain the State's viability as an attractive location for new and expanding businesses. Recruiting new educational institutions to the State to fulfill this role also benefits the State and local governments by providing new jobs, a stronger tax base, support for satellite businesses, and investment that will permanently enhance the infrastructure necessary to support long-term growth and prosperity. The General Assembly recognizes that the significant efforts by Johnson and Wales University to establish and expand in North Carolina are vital to a healthy and growing State economy. Providing incentives to support these activities is a critical opportunity for our State to address the possibly irreversible damage from the current economic recession and restructuring.

SECTION 12.4A.(b)  To carry out the purposes provided in this section, the Department of Commerce shall allocate from funds appropriated in the 2001-2003 fiscal biennium to the One North Carolina - Industrial Recruitment Competitive Fund one million dollars ($1,000,000) for the 2003-2004 fiscal year to provide financial assistance to Johnson and Wales University.  In addition, funds are appropriated in this act to the One North Carolina - Industrial Recruitment Competitive Fund for the 2004-2005 fiscal year. From these funds, the Department of Commerce shall allocate one million dollars ($1,000,000) for the 2004-2005 fiscal year to provide financial assistance to Johnson and Wales University.  Funds allocated under this subsection shall be used only for one or more of the following capital expenditures:

(1)       Installation or purchase of equipment for educational facilities in this State.

(2)       Structural repairs, improvements, or renovations of existing academic buildings in this State to be used for expansion.

(3)       Construction of or improvements to new or existing water, sewer, gas, or electric utility distribution lines or equipment for new or existing academic facilities in this State.

(4)       Construction of new academic facilities in this State.

 

INDUSTRIAL DEVELOPMENT FUND

SECTION 12.5.(a)  The Department of Commerce shall reduce the cash balance of the Industrial Development Fund by one million one hundred sixty-nine thousand four hundred thirty-eight dollars ($1,169,438).

SECTION 12.5.(b)  This section becomes effective June 30, 2003.

 

WORKER TRAINING TRUST FUND

SECTION 12.6.(a)  There is appropriated from the Worker Training Trust Fund to the Employment Security Commission of North Carolina the sum of five million dollars ($5,000,000) for the 2003-2004 fiscal year for the operation of local offices.

SECTION 12.6.(b)  Notwithstanding the provisions of G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the following agencies the following sums for the 2003-2004 fiscal year for the following purposes:

(1)       One hundred ninety-three thousand eight hundred seventy-nine dollars ($193,879) for the 2003-2004 fiscal year to the Employment Security Commission for the State Occupational Information Coordinating Committee to develop and operate an interagency system to track former participants in State education and training programs;

(2)       Fifty-three thousand eight hundred fifty-six dollars ($53,856) for the 2003-2004 fiscal year to the Employment Security Commission to maintain compliance with Chapter 96 of the General Statutes, which directs the Commission to employ the Common Follow-Up Management Information System to evaluate the effectiveness of the State's job training, education, and placement programs;

(3)       Eight hundred sixty-one thousand six hundred eighty-four dollars ($861,684) for the 2003-2004 fiscal year to the Department of Labor to continue the Apprenticeship Program; and

(4)       One hundred twenty thousand dollars ($120,000) for the 2003-2004 fiscal year to the Community Colleges System Office for a training program in entrepreneurial skills to be operated by North Carolina REAL Enterprises.

(5)       One hundred twenty thousand dollars ($120,000) for the 2003-2004 fiscal year to the Community Colleges System Office for the operation of the Hosiery Technology Center.

SECTION 12.6.(c)  The agencies listed in subsections (a) and (b) of this section shall, by January 15, 2004, and more frequently as requested, for the programs for which funds are appropriated in this section, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

(1)       State fiscal year 2003-2004 program activities, objectives, and accomplishments;

(2)       State fiscal year 2003-2004 itemized expenditures and fund sources;

(3)       State fiscal year 2004-2005 planned activities, objectives, and accomplishments including actual results through December 31, 2003; and

(4)       State fiscal year 2004-2005 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2003.

SECTION 12.6.(d)  Notwithstanding the provisions of G.S. 96-5(f), funds appropriated for 2002-2003 from the Worker Training Trust Fund to the Community Colleges System Office for both the Focused Industrial Training Program and the Training Initiatives shall not revert but shall remain available to the System Office for personnel and non-personnel support of each program in fiscal year 2003-2004.

 

Film Industry Development Account

SECTION 12.6A.(a)  G.S. 143B-434.3 is repealed.

SECTION 12.6A.(b)  Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding the following new section to read:

"§ 143B-434.4.  Film Industry Development Account.

(a)       Legislative Findings and Purpose. - The General Assembly finds that:

(1)       It is the policy of the State of North Carolina to stimulate economic activity and to create new jobs for the citizens of the State by encouraging and promoting the growth and expansion of businesses and industries within the State.

(2)       The North Carolina film production industry barely existed in the late 1970s.

(3)       Since that time, the North Carolina film production industry has grown to employ thousands of North Carolinians and to support seven studio complexes, hundreds of production service and support companies, and a substantial permanent resident crew base of film professionals, all of which contribute to the economy of the State and are a source of tax revenue for the State and local governments.

(4)       North Carolina, through its film industry, has hosted over 600 productions over the past 20 years, is regarded as the country's third largest film-making state behind California and New York, and has hosted productions in at least 75 out of North Carolina's 100 counties.

(5)       Because of the nature of the national film production industry, the success and economic viability of North Carolina's film production industry depend in many respects on the State's ability to attract productions originating from other states such as California and New York to undertake production activity in North Carolina utilizing the State's existing film industry infrastructure.

(6)       The national film production industry is a highly creative industry in which decisions to film productions in North Carolina are typically made outside of the State and are frequently based upon factors such as cost of production.

(7)       However, current trends in the industry, including trends in foreign countries such as Canada, to develop new and creative means to attract, and to cut production costs for, the type of productions that, in the past, have sustained North Carolina's film industry, threaten the viability of the State's investments in its film industry and film production infrastructure.

(8)       Recent changes in the State's economic condition have created a level of economic distress that requires a reevaluation of certain existing State programs, and the enactment and funding of programs such as the Film Industry Development Account are designed to stimulate new economic activity and to create new jobs and opportunities for employment within the State.

(9)       The enactment, funding, and administration of this program are necessary to stimulate the economy, facilitate economic recovery, create new jobs in North Carolina, and help sustain and preserve the State's investments in the film production industry and will promote the general welfare and confer, as its primary purpose and effect, benefits on citizens throughout the State through the creation of new jobs and opportunities for employment, an enlargement of the overall tax base, an expansion and diversification of the State's industrial base, and an increase in revenue to the State and its political subdivisions, in accord with the policies declared in G.S. 143B-428.

(10)     The purpose of the Film Industry Development Account is to stimulate economic activity and to create jobs and employment opportunities within the State.

(b)       Creation of Account. - There is created in the Department of Commerce, Division of Tourism, Film, and Sports Development, the Film Industry Development Account to provide annual grants as incentives to production companies that engage in production activities in this State. The Division of Tourism, Film, and Sports Development shall administer this program in accordance with the following provisions:

(1)       To be eligible for a grant, a production company must engage in production activities in this State with expenditures in this State of at least one million dollars ($1,000,000). A grant may not be used for political or issue advertising.

(2)       A grant may not exceed fifteen percent (15%) of the amount the production company spends for goods and services in this State during the calendar year.

(3)       A grant may not exceed two hundred thousand dollars ($200,000) per production.

(4)       Grants shall be awarded to productions that substantially utilize North Carolina's film industry infrastructure and workforce, that stimulate economic activity within the State, and that create employment opportunities within the State.

(c)       Production Company Defined. - As used in this section, the term "production company" has the meaning provided in G.S. 105-164.3.

(d)       Limitation on Eligibility. - No production company shall be eligible for a grant under this section if an original motion picture, television, or radio image for theatrical, commercial, advertising, or educational purposes made by that company contains material that is considered obscene, as defined by G.S. 14-190.1(b).

(e)       Reports. - The Department of Commerce shall report annually to the General Assembly concerning the applications made to the account, the payments made from the account, and the effect of the payments on job creation in the State. The Department of Commerce shall also report quarterly to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the use of the moneys in the account, including information regarding to whom payments were made and in what amounts."

SECTION 12.6A.(c)  G.S. 143B-430 is amended by adding a new subsection to read:

"(c)      The Secretary of Commerce may adopt rules to administer a program or fulfill a duty assigned to the Department of Commerce or the Secretary of Commerce."

SECTION 12.6A.(d)  This section becomes effective on and after August 2, 2000.

 

INDUSTRIAL COMMISSION FEES/COMPUTER SYSTEM REPLACEMENT

SECTION 12.6C.(a)  The North Carolina Industrial Commission may retain the additional revenue generated by raising the fee charged to parties for the filing of compromised settlements from two hundred dollars ($200.00) to an amount that does not exceed two hundred fifty dollars ($250.00) for the purpose of replacing existing computer hardware and software used for the operations of the Commission.  These funds may also be used to prepare any assessment of hardware and software needs prior to purchase. The Commission may not retain any fees under this section unless they are in excess of the current two-hundred-dollar ($200.00) fee charged by the Commission for filing a compromise settlement.

SECTION 12.6C.(b)  Nothing in this section shall be deemed to limit or restrict the Commission's authority to increase fees for purposes other than those indicated in subsection (a) of this section.

SECTION 12.6C.(c)  Unexpended and unencumbered fees retained by the Industrial Commission under subsection (a) of this section shall not revert to the General Fund on June 30 of each fiscal year, but shall remain available to the Commission for the purposes stated in subsection (a) of this section.

SECTION 12.6C.(d)  All plans and purchases by the Commission utilizing fees retained under subsection (a) of this section are subject to project certification by the Information Resources Management Commission, and the Commission in making purchases under subsection (a) of this section must follow the procurement process outlined in accordance with the provisions of 09 NCAC 06B. 0300.  The Commission shall report its plans to replace existing computer hardware and software to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division prior to issuing any requests for proposals.

SECTION 12.6C.(e)  The Commission may retain additional fees as authorized by subsection (a) of this section only in the 2003-2005 fiscal biennium and shall not retain any additional fees after the 2003-2005 fiscal biennium.

 

Film Industry development Funds

SECTION 12.6D.(a)  Of the funds in the Film Industry Development Account created in Part 2 of Article 10 of Chapter 143B of the General Statutes, the sum of five hundred thousand dollars ($500,000) is reallocated to the Wilmington Regional Film Commission, Inc., a nonprofit corporation, for economic development services to develop and provide financial assistance and support necessary to attract to North Carolina a major television production that meets all of the following conditions:

(1)       The production will include at least 12 episodes.

(2)       The production will provide a gross payroll of over seven million dollars ($7,000,000) and involve over four million dollars ($4,000,000) in goods and services a year.

(3)       The production will provide well-paying employment, including over 100 full-time jobs and several thousand part-time jobs, resulting in estimated State payroll taxes of more than five hundred thousand dollars ($500,000) a year.

(4)       The estimated sales taxes, accommodations taxes, and rental car taxes from the production will be more than thirty-five thousand dollars ($35,000) a year.

(5)       The production will utilize existing film production facilities and benefit the State through the tourism, marketing, and recognition effects it will have.

SECTION 12.6D.(b)  The Wilmington Regional Film Commission, Inc., shall administer the funds in accordance with a contract that conditions expenditure of the funds on completion of 12 full episodes of the production.

SECTION 12.6D.(c)  The General Assembly finds that this allocation is for the purposes provided in Section 12.6A of this act.

 

Film Development Account Funds Do Not Revert

SECTION 12.6E.  Funds appropriated to the Department of Commerce for the 2002-2003 fiscal year for the Film Industry Development Account that are unexpended and unencumbered as of June 30, 2003, shall not revert to the General Fund on June 30, 2003, but shall remain available to the Department of Commerce to fund the Film Industry Development Account.

 

REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS

SECTION 12.7.(a)  Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following Commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc.

SECTION 12.7.(b)  Funds appropriated pursuant to subsection (a) of this section shall be allocated to each Regional Economic Development Commission as follows:

(1)       First, the Department shall establish each Commission's allocation by determining the sum of allocations to each county that is a member of that Commission. Each county's allocation shall be determined by dividing the county's enterprise factor by the sum of the enterprise factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation. As used in this subdivision, the term "enterprise factor" means a county's enterprise factor as calculated under G.S. 105-129.3; and

(2)       Next, the Department shall subtract from funds allocated to the Global TransPark Development Commission the sum of one hundred seventy-one thousand nine hundred seventy-nine dollars ($171,979) in each fiscal year, which sum represents the interest earnings in each fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and

(3)       Next, the Department shall redistribute the sum of one hundred seventy-one thousand nine hundred seventy-nine dollars ($171,979) in each fiscal year to the seven Regional Economic Development Commissions named in subsection (a) of this section. Each Commission's share of this redistribution shall be determined according to the enterprise factor formula set out in subdivision (1) of this subsection. This redistribution shall be in addition to each Commission's allocation determined under subdivision (1) of this subsection.

 

REGIONAL ECONOMIC DEVELOPMENT COMMISSION REPORTS

SECTION 12.8.(a)  By February 15 of each fiscal year, beginning in 2004, the seven regional economic development commissions shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

(1)       The preceding fiscal year's program activities, objectives, and accomplishments.

(2)       The preceding fiscal year's itemized expenditures and fund sources.

(3)       Demonstration of how the commission's regional economic development and marketing strategy aligns with the State's overall economic development and marketing strategies.

(4)       To the extent they are involved in promotion activities such as trade shows, visits to prospects and consultants, advertising and media placement, the commissions shall demonstrate how they have generated qualified leads.

SECTION 12.8.(b)  Each of the commissions shall provide to the Fiscal Research Division a copy of their annual audited financial statement within 30 days of issuance of the statement.

SECTION 12.8.(c)  The reporting requirements for regional economic development commissions, as provided in subsection (a) of this section, shall be reviewed annually by the North Carolina Partnership for Economic Development and recommendations for changes to the reporting requirements shall be made to the Fiscal Research Division, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives.

SECTION 12.8.(d)  Regional economic development commissions shall receive quarterly allocations of the funds appropriated in this act to the Department of Commerce for regional economic development commissions.

SECTION 12.8.(e)  Regional economic development commissions shall remain in the Department of Commerce's Budget Code 14601 with other State-aided nonprofit entities.

SECTION 12.8.(f)  The Board Structure of the Global TransPark Development Commission shall be studied in accordance with the recommendations found in the UNC Kenan-Flagler study, to determine if the board structure should be reconstituted and made similar to the boards of the Northeastern or Southeastern North Carolina Regional Economic Development Commissions.  In conducting the study, the following conditions shall be met:

(1)       The Global TransPark Development Commission shall contribute to the cost of the study by retaining a consultant familiar with the partnership.

(2)       The Study shall be conducted by a designee of the North Carolina Partnership for Economic Development determined by the Partnership Presidents, a designee of the UNC Kenan-Flager School of Business, and the consultant retained by the Global TransPark Development Commission.

(3)       None of the eastern regional commissions shall be consolidated.

(4)       The results of the study shall be submitted to the Fiscal Research Division and members of the North Carolina Partnership for Economic Development prior to the beginning of the 2004 Regular Session of the 2003 General Assembly.

 

NONPROFIT REPORTING REQUIREMENTS

SECTION 12.9.(a)  The N.C. Institute for Minority Economic Development, Inc., Land Loss Prevention Project, North Carolina Minority Support Center, North Carolina Community Development Initiative, Inc., North Carolina Association of Community Development Corporations, Inc., Coalition of Farm and Rural Families, and Partnership for the Sounds, Inc., shall do the following:

(1)       By January 15, 2004, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2002-2003 program activities, objectives, and accomplishments;

b.         State fiscal year 2002-2003 itemized expenditures and fund sources;

c.         State fiscal year 2003-2004 planned activities, objectives, and accomplishments including actual results through December 31, 2003; and

d.         State fiscal year 2003-2004 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2003;

(2)       By January 15, 2005, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2003-2004 program activities, objectives, and accomplishments;

b.         State fiscal year 2003-2004 itemized expenditures and fund sources;

c.         State fiscal year 2004-2005 planned activities, objectives, and accomplishments including actual results through December 31, 2004; and

d.         State fiscal year 2004-2005 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2004; and

(3)       Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

SECTION 12.9.(b)  No funds appropriated under this act shall be released to a nonprofit organization listed in subsection (a) of this section until the organization has satisfied the reporting requirement for January 15, 2003.  Fourth quarter allotments shall not be released to any nonprofit organization that does not satisfy the reporting requirements by January 15, 2004, or January 15, 2005.

 

BIOTECHNOLOGY CENTER

SECTION 12.10.(a)  The North Carolina Biotechnology Center shall recapture funds spent in support of successful research and development efforts in the for-profit private sector.

SECTION 12.10.(b)  The North Carolina Biotechnology Center shall provide funding for biotechnology, biomedical, and related bioscience applications under its Business and Science Technology Programs.

SECTION 12.10.(c)  The North Carolina Biotechnology Center shall:

(1)       By January 15, 2004, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2002-2003 program activities, objectives, and accomplishments;

b.         State fiscal year 2002-2003 itemized expenditures and fund sources;

c.         State fiscal year 2003-2004 planned activities, objectives, and accomplishments including actual results through December 31, 2003; and

d.         State fiscal year 2003-2004 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2003;

(2)       By January 15, 2005, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2003-2004 program activities, objectives, and accomplishments;

b.         State fiscal year 2003-2004 itemized expenditures and fund sources;

c.         State fiscal year 2004-2005 planned activities, objectives, and accomplishments including actual results through December 31, 2004; and

d.         State fiscal year 2004-2005 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2004; and

(3)       Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

SECTION 12.10.(d)  The North Carolina Biotechnology Center shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management and to the Fiscal Research Division in the same manner as State departments and agencies in preparation for biennium budget requests.

 

Rural Economic Development Center

SECTION 12.11.(a)  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of one million eight hundred forty-one thousand six hundred ninety-seven dollars ($1,881,697) for the 2003-2004 fiscal year and the sum of one million eight hundred eighty-one thousand six hundred ninety-seven dollars ($1,881,697) for the 2004-2005 fiscal year shall be allocated as follows:

                                                                                   2003-2004 FY           2004-2005 FY

Research and Demonstration Grants                     $370,000                   $370,000

Technical Assistance and Center

Administration of Research

and Demonstration Grants                                     444,399                      444,399

Center Administration, Oversight,

and Other Programs                                                604,298                      604,298

Administration of Clean Water/

Natural Gas Critical Needs

Bond Act of 1998                                                   199,722                      199,722

Additional Administration of Supplemental

Funding Program                                                    138,278                      138,278

Administration of Capacity Building

Assistance Program (1998 Bond Act)                  125,000                      125,000.

SECTION 12.11.(b)  The Rural Economic Development Center, Inc., shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management in the same manner as State departments and agencies in preparation for biennium budget requests.

SECTION 12.11.(c)  For purposes of this section, the term "community development corporation" means a nonprofit corporation:

(1)       Chartered pursuant to Chapter 55A of the General Statutes;

(2)       Tax-exempt pursuant to section 501(c)(3) of the Internal Revenue Code of 1986;

(3)       Whose primary mission is to develop and improve low-income communities and neighborhoods through economic and related development;

(4)       Whose activities and decisions are initiated, managed, and controlled by the constituents of those local communities; and

(5)       Whose primary function is to act as deal-maker and packager of projects and activities that will increase their constituencies' opportunities to become owners, managers, and producers of small businesses, affordable housing, and jobs designed to produce positive cash flow and curb blight in the targeted community.

SECTION 12.11.(d)  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of two million four hundred fifteen thousand nine hundred ten dollars ($2,415,910) for the 2003-2004 fiscal year and the sum of two million four hundred fifteen thousand nine hundred ten dollars ($2,415,910) for the 2004-2005 fiscal year shall be allocated as follows:

(1)       $1,047,410 in each fiscal year for community development grants to support development projects and activities within the State's minority communities. Any community development corporation as defined in this section is eligible to apply for funds. The Rural Economic Development Center, Inc., shall establish performance-based criteria for determining which community development corporation will receive a grant and the grant amount. The Rural Economic Development Center, Inc., shall allocate these funds as follows:

a.         $800,000 in each fiscal year for direct grants to the local community development corporations that have previously received State funds for this purpose to support operations and project activities;

b.         $197,410 in each fiscal year for direct grants to local community development corporations that have not previously received State funds; and

c.         $50,000 in each fiscal year to the Rural Economic Development Center, Inc., to be used to cover expenses in administering this section.

(2)       $195,000 in each fiscal year to the Microenterprise Loan Program to support the loan fund and operations of the Program; and

(3)       $983,000 in each fiscal year shall be used for a program to provide supplemental funding for matching requirements for projects and activities authorized under this subsection. The Center shall allocate these funds as follows:

a.         $675,000 in each fiscal year to make grants to local governments and nonprofit corporations to provide funds necessary to match federal grants or other grants for:

1.         Necessary economic development projects and activities in economically distressed areas;

2.         Necessary water and sewer projects and activities in economically distressed communities to address health or environmental quality problems except that funds shall not be expended for the repair or replacement of low-pressure pipe wastewater systems. If a grant is awarded under this sub-subdivision, then the grant shall be matched on a dollar-for-dollar basis in the amount of the grant awarded; or

3.         Projects that demonstrate alternative water and waste management processes for local governments. Special consideration should be given to cost-effectiveness, efficacy, management efficiency, and the ability of the demonstration project to be replicated.

b.         $208,000 in each fiscal year to make grants to local governments and nonprofit corporations to provide funds necessary to match federal grants or other grants related to water, sewer, or business development projects.

c.         $100,000 in each fiscal year to support the update of the statewide water and sewer database and to support the development of a statewide water management plan.

(4)       $190,500 in each fiscal year for the Agricultural Advancement Consortium. These funds shall be placed in a reserve and allocated as follows:

a.         $75,000 in each fiscal year for operating expenses associated with the Consortium; and

b.         $115,500 in each fiscal year for research initiatives funded by the Consortium.

The Consortium shall facilitate discussions among interested parties and shall develop recommendations to improve the State's economic development through farming and agricultural interests.

The grant recipients in this subsection shall be selected on the basis of need.

SECTION 12.11.(e)  The Rural Economic Development Center, Inc., shall:

(1)       By January 15, 2004, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2002-2003 program activities, objectives, and accomplishments;

b.         State fiscal year 2002-2003 itemized expenditures and fund sources;

c.         State fiscal year 2003-2004 planned activities, objectives, and accomplishments including actual results through December 31, 2003; and

d.         State fiscal year 2003-2004 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2003.

(2)       By January 15, 2005, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2003-2004 program activities, objectives, and accomplishments;

b.         State fiscal year 2003-2004 itemized expenditures and fund sources;

c.         State fiscal year 2004-2005 planned activities, objectives, and accomplishments including actual results through December 31, 2004; and

d.         State fiscal year 2004-2005 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2004.

(3)       Provide to the Fiscal Research Division a copy of each grant recipient's annual audited financial statement within 30 days of issuance of the statement.

SECTION 12.11.(f)  No funds appropriated under this act shall be released to a community development corporation, as defined in this act, unless the corporation can demonstrate that there are no outstanding or proposed assessments or other collection actions against the corporation for any State or federal taxes, including related penalties, interest, and fees.

 

OPPORTUNITIES INDUSTRIALIZATION CENTER FUNDS

SECTION 12.12.(a)  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of three hundred sixty-one thousand dollars ($361,000) for the 2003-2004 fiscal year and the sum of three hundred sixty-one thousand dollars ($361,000) for the 2004-2005 fiscal year shall be allocated as follows:

(1)       $90,250 in each fiscal year to the Opportunities Industrialization Center of Wilson, Inc., for its ongoing job training programs;

(2)       $90,250 in each fiscal year to the Opportunities Industrialization Center, Inc., in Rocky Mount, for its ongoing job training programs;

(3)       $90,250 in each fiscal year to the Opportunities Industrialization Centers Kinston and Lenoir County, North Carolina, Inc.; and

(4)       $90,250 in each fiscal year to the Opportunities Industrialization Center of Elizabeth City, Inc.

SECTION 12.12.(b)  For each of the Opportunities Industrialization Centers receiving funds pursuant to subsection (a) of this section, the Rural Economic Development Center, Inc., shall:

(1)       By January 15, 2004, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2002-2003 program activities, objectives, and accomplishments;

b.         State fiscal year 2002-2003 itemized expenditures and fund sources;

c.         State fiscal year 2003-2004 planned activities, objectives, and accomplishments, including actual results through December 31, 2003; and

d.         State fiscal year 2003-2004 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2003.

(2)       By January 15, 2005, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a.         State fiscal year 2003-2004 program activities, objectives, and accomplishments;

b.         State fiscal year 2003-2004 itemized expenditures and fund sources;

c.         State fiscal year 2004-2005 planned activities, objectives, and accomplishments, including actual results through December 31, 2004; and

d.         State fiscal year 2004-2005 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2004.

(3)       Notwithstanding G.S. 143-6.1(d), file annually with the State Auditor a financial statement in the form and on the schedule prescribed by the State Auditor. The financial statements must be audited in accordance with standards prescribed by the State Auditor to assure that State funds are used for the purposes provided by law.

(4)       Provide to the Fiscal Research Division a copy of the annual audited financial statement required in subdivision (3) of this subsection within 30 days of issuance of the statement.

SECTION 12.12.(c)  No funds appropriated under this act shall be released to an Opportunities Industrialization Center (hereinafter Center) listed in subsection (a) of this section unless the Center can demonstrate that there are no outstanding or proposed assessments or other collection actions against the Center for any State or federal taxes, including related penalties, interest, and fees.

 

PART XIII. JUDICIAL DEPARTMENT

 

OPERATIONAL SAVINGS/FUNDING RESERVES

SECTION 13.1.(a)  The Judicial Department shall report by September 1, 2003, to the Chairs of the Senate and House of Representatives Appropriations Committees and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety on the positions identified in the Administrative Office of the Courts in order to implement operational savings.

SECTION 13.1.(b)  The Judicial Department, the Department of Correction, the Department of Crime Control and Public Safety, the Department of Juvenile Justice and Delinquency Prevention, and the Department of Justice shall report quarterly to the Chairs of the Senate and House of Representatives Appropriations Committees and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety on the implementation of management flexibility reserves authorized for each agency in this budget. The departments shall report to the Joint Legislative Commission on Governmental Operations before implementing management flexibility reserves by eliminating positions or abolishing programs.

 

COLLECTION OF WORTHLESS CHECK FUNDS

SECTION 13.2.  Notwithstanding the provisions of G.S. 7A-308(c), the Judicial Department may use any balance remaining in the Collection of Worthless Checks Fund on June 30, 2003, for the purchase or repair of office or information technology equipment during the 2003-2004 fiscal year. Prior to using any funds under this section, the Judicial Department shall report to the Joint Legislative Commission on Governmental Operations and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety on the equipment to be purchased or repaired and the reasons for the purchases.

 

OFFICE OF INDIGENT DEFENSE SERVICES REPORT

SECTION 13.3.  The Office of Indigent Defense Services shall report to the Chairs of the Senate and House of Representatives Appropriations Committees and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety by March 1 of each year on:

(1)       The volume and cost of cases handled in each district by assigned counsel or public defenders;

(2)       Actions taken by the Office to improve the cost-effectiveness and quality of indigent defense, including the capital case program;

(3)       Plans for changes in rules, standards, or regulations in the upcoming year; and

(4)       Any recommended changes in law or funding procedures that would assist the Office in improving the management of funds expended for indigent defense services.

 

DRUG TREATMENT COURT PROGRAM

SECTION 13.4.(a)  It is the intent of the General Assembly that, allowing for established local differences in implementation, State Drug Treatment Court funds not be used to fund case manager positions when the services provided by those positions can be reasonably provided by the Treatment Alternatives to Street Crime (TASC) program in the Department of Health and Human Services or by other existing resources. The Drug Treatment Court Program shall identify areas of potential cost savings in the local programs that would result from reducing the number of case manager positions. The Program shall also identify areas in which federal funding might absorb administrative costs.

The Drug Treatment Court Program shall report by February 1, 2004, to the Chairs of the Senate and House of Representatives Appropriations Committees and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety on the savings identified. The report shall include a transition plan for sustaining any local program that is currently receiving federal grant funding.

SECTION 13.4.(b)  Prior to the establishment of any new local drug treatment court programs, the local drug treatment court management committee shall consult with the TASC program as to the availability of case management services in that community.

 

FEDERAL GRANT FUNDS

SECTION 13.5.  The Judicial Department shall use up to the sum of one million two hundred fifty thousand dollars ($1,250,000) from funds available to the Department to provide the State match needed in order to receive federal grant funds. Prior to using funds for this purpose, the Department shall report to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Commission on Governmental Operations on the grants to be matched using these funds. The Judicial Department may also use proceeds from the Court Information Technology Fund to fulfill prior obligations to criminal justice information projects receiving federal funds.

 

PUBLIC DEFENDER STUDY

SECTION 13.6.  The Office of Indigent Defense Services shall study the establishment of additional public defender districts in the State, identifying the areas of the State in which savings could be realized by the establishment of such districts and the projected savings in each area. The Office of Indigent Defense Services shall report to the Chairs of the Senate and House of Representatives Appropriations Committees and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety by March 1, 2004, on the results of its study.

 

TRANSFER OF EQUIPMENT AND SUPPLY FUNDS

SECTION 13.7.  Funds appropriated to the Judicial Department in the 2003-2005 biennium for equipment and supplies shall be certified in a reserve account.  The Administrative Office of the Courts may transfer these funds to the appropriate programs and between programs as the equipment priorities and supply consumptions occur during the operating year. These funds shall not be expended for any other purpose.

 

ADJUST MAGISTRATE AUTHORIZATIONS

SECTION 13.8.  G.S. 7A-133(c) reads as rewritten:

"(c)      Each county shall have the numbers of magistrates and additional seats of district court, as set forth in the following table:

                                                                                                Additional

                                                Magistrates                            Seats of

County                                    Min. - Max.                           Court

Camden                                     1           3

Chowan                                      2           3

Currituck                                   1           4

Dare                                           3           8

Gates                                         2           3

Pasquotank                                3           5

Perquimans                               2           4

Martin                                     54           8

Beaufort                                    4           8

Tyrrell                                       1           3

Hyde                                          2           4

Washington                               3           4

Pitt                                           10         12                             Farmville

                                                                                                Ayden

Craven                                       7         10                             Havelock

Pamlico                                     2           4

Carteret                                     5           8

Sampson                                    6           8

Duplin                                     98         11

Jones                                         2           3

Onslow                                      8         14

New Hanover                            6         11

Pender                                       4           6

Halifax                                       9         14                             Roanoke

                                                                                                Rapids,

                                                                                                Scotland Neck

Northampton                             5           7

Bertie                                        4           6

Hertford                                    5           7

Nash                                           7         10                             Rocky Mount

Edgecombe                               4           7                             Rocky Mount

Wilson                                       4           7

Wayne                                       5         12                             Mount Olive

Greene                                       2           4

Lenoir                                        4         10                             La Grange

Granville                                   3           7

Vance                                         3           6

Warren                                      3           5

Franklin                                     3           7

Person                                       3           4

Caswell                                      2           5

Wake                                       12         21                             Apex,

                                                                                                Wendell,

                                                                                                Fuquay-

                                                                                                Varina,

                                                                                                Wake Forest

Harnett                                      7         11                             Dunn

Johnston                                  10         12                             Benson,

                                                                                                Clayton,

                                                                                                Selma

Lee                                             4           6

Cumberland                            10         19

Bladen                                       4           6

Brunswick                                 4           9

Columbus                                  6         10                             Tabor City

Durham                                      8         13

Alamance                                  7         11                             Burlington

Orange                                       4         11                             Chapel Hill

Chatham                                    3           9                             Siler City

Scotland                                    3           5

Hoke                                          4           5

Robeson                                    8         16                             Fairmont,

                                                                                                Maxton,

                                                                                                Pembroke,

                                                                                                Red Springs,

                                                                                                Rowland,

                                                                                                St. Pauls

Rockingham                              4           9                             Reidsville,

                                                                                                Eden,

                                                                                                Madison

Stokes                                        2           5

Surry                                          5           9                             Mt. Airy

Guilford                                  20         27                             High Point

Cabarrus                                    5           9                             Kannapolis

Montgomery                             2           4

Randolph                                   5         10                             Liberty

Rowan                                        5         10

Stanly                                         5           6

Union                                         4           7

Anson                                        4           6

Richmond                                  5           6                             Hamlet

Moore                                       5           8                             Southern

                                                                                                Pines

Forsyth                                      3         15                             Kernersville

Alexander                                  2           4

Davidson                                   7         10                             Thomasville

Davie                                         2           3

Iredell                                        4           9                             Mooresville

Alleghany                                  1           2

Ashe                                           3           4

Wilkes                                       4           6

Yadkin                                       3           5

Avery                                         3           5

Madison                                    4           5

Mitchell                                    3           4

Watauga                                     4           6

Yancey                                       2           4

Burke                                         4           7

Caldwell                                    4           7

Catawba                                     6         10                             Hickory

Mecklenburg                          15         28

Gaston                                     11         22

Cleveland                                  5           8

Lincoln                                      4           7

Buncombe                                 6         15

Henderson                                 4           7

McDowell                                 3           6

Polk                                           3           4

Rutherford                                6           8

Transylvania                              2           4

Cherokee                                   3           4

Clay                                           1           2

Graham                                      2           3

Haywood                                   5           7                             Canton

Jackson                                      3           5

Macon                                       3           4

Swain                                         2           34"

 

NORTH CAROLINA STATE BAR FUNDS

SECTION 13.10.  Of the funds appropriated in the continuation budget as a grant-in-aid to the North Carolina State Bar for the 2003-2005 biennium, the North Carolina State Bar may in its discretion use up to the sum of five hundred ninety thousand dollars ($590,000) for the 2003-2004 fiscal year and up to the sum of five hundred ninety thousand dollars ($590,000) for the 2004-2005 fiscal year to contract with the Center for Death Penalty Litigation to provide training, consultation, brief banking, and other assistance to attorneys representing indigent capital defendants. The Office of Indigent Defense Services shall report by February 1, 2004, to the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the activities funded by the grant-in-aid authorized by this section.

 

CLARIFY PARTIAL PAYMENT OF APPOINTMENT FEE FOR CRIMINAL DEFENDANTS

SECTION 13.11.  G.S. 7A-455.1 reads as rewritten:

"§ 7A-455.1.  Appointment fee in criminal cases.

(a)       Each person who requests the appointment of counsel in a criminal case shall pay to the clerk of court a nonrefundable appointment fee of fifty dollars ($50.00) at the time of appointment. Partial payments shall be credited against the amount of the fifty-dollar ($50.00) fee due. No fee shall be due if the court finds that the person is not entitled to the appointment of counsel.

(b)       The appointment fee in this section is due regardless of the outcome of the proceedings. If paid before the final determination of the action at the trial level, the amount of the fee paid in full at the time of appointment, the fifty dollars ($50.00) paid shall be credited against any amounts the court determines to be owed for the value of legal services rendered to the defendant. If not paid before the final determination of the action at the trial level, the unpaid amount of the in full at the time of appointment, the fifty-dollar ($50.00) fee shall be added to any amounts the court determines to be owed for the value of legal services rendered to the defendant and shall be collected in the same manner as attorneys' fees are collected for such representation. If the fee is not paid in full at the time of appointment, and no attorneys' fees are found due when the action is finally determined at the trial level, a judgment shall be entered, docketed, and indexed pursuant to G.S. 1-233 in the amount of the unpaid fee fifty dollars ($50.00) and shall constitute a lien as prescribed by the general law of the State applicable to judgments.

(c)       The attorney representing the defendant when the action is finally determined at the trial level shall advise the court whether the appointment fee required by this section has been paid.

(d)       Inability, failure, or refusal to pay the appointment fee shall not be grounds for denying appointment of counsel, for withdrawal of counsel, or for contempt.

(e)       The appointment fee required by this section shall be assessed only once for each affidavit of indigency submitted by a defendant or other determination of indigency by the court, regardless of the number of cases for which an attorney is appointed. An additional appointment fee shall not be assessed for any additional cases thereafter assigned to an attorney if any cases for which a defendant was previously assessed an appointment fee are still pending. Nor shall an additional appointment fee be assessed if the charges for which an attorney was appointed are dismissed and subsequently refiled or if the defendant is appointed an attorney on appeal on a matter for which the defendant was assessed an appointment fee at the trial level.

(f)        Of each appointment fee collected under this section, the sum of forty-five dollars ($45.00) shall be credited to the Indigent Persons' Attorney Fee Fund and the sum of five dollars ($5.00) shall be credited to the Court Information Technology Fund under G.S. 7A-343.2. These fees shall not revert.

(g)       The Office of Indigent Defense Services shall adopt rules and develop forms to govern implementation of this section."

 

PILOT PROJECT ON ASSIGNMENT OF CIVIL CASES

SECTION 13.12.(a)  The Administrative Office of the Courts may conduct a pilot project in up to four judicial districts to assess a system for the assignment and processing of general civil cases filed in the General Court of Justice. No district may be selected without the concurrence of the senior resident superior court judge and the chief district court judge, and no more than one pilot project site may be established within a judicial division.

The project shall evaluate methods of assigning cases to individual judges or sessions of court in the district court division or the superior court division, considering the nature of the case, the amount in controversy, the complexity of the issues, the likelihood of settlement, the availability and suitability of alternative dispute resolution programs, and any other appropriate factors relevant to just resolution of the cases and efficient use of court resources. In pilot districts designated by the Administrative Office of the Courts under this section, general civil cases may be assigned or transferred to alternative dispute resolution programs used within the district court or superior court, notwithstanding the provisions of G.S. 7A-37.1, G.S. 7A-38.1, or Articles 20 and 21 of Chapter 7A of the General Statutes.

SECTION 13.12.(b)  This section expires June 30, 2005.

 

DISPUTE RESOLUTION FEE CLARIFICATION

SECTION 13.13.  G.S. 7A-38.7 reads as rewritten:

"§ 7A-38.7.  Dispute resolution fee for cases resolved in mediation.

(a)       In each criminal case filed in the General Court of Justice that is resolved through referral to a community mediation center, a dispute resolution fee shall be assessed in the sum of sixty dollars ($60.00) per mediation for the support of the General Court of Justice. Fees assessed under this section shall be paid to the clerk of superior court in the county where the case was filed and remitted by the clerk to the State Treasurer.

(b)       Before providing the district attorney with a dismissal form, the community mediation center shall require proof that the defendant has paid the dispute resolution fee as required by subsection (a) of this section. section and shall attach the receipt to the dismissal form."

 

DIVIDE SUPERIOR COURT DISTRICT 19B

SECTION 13.14.(a)  G.S. 7A-41(a) reads as rewritten:

"(a)      The counties of the State are organized into judicial divisions and superior court districts, and each superior court district has the counties, and the number of regular resident superior court judges set forth in the following table, and for districts of less than a whole county, as set out in subsection (b) of this section:

                               Superior              

Judicial                  Court                                                                                         No. of Resident

Division                District                                            Counties                                  Judges      

First                         1                         Camden, Chowan, Currituck, Dare,

                                                            Gates, Pasquotank, Perquimans                              2

First                         2                         Beaufort, Hyde, Martin, Tyrrell,

                                                            Washington                                                               1

First                         3A                      Pitt                                                                             2

Second                     3B                      Carteret, Craven, Pamlico                                       2

Second                     4A                      Duplin, Jones, Sampson                                          1

Second                     4B                      Onslow                                                                      1

Second                     5A                      (part of New Hanover, part of Pender

                                                            see subsection (b))                                                  1

                                 5B                      (part of New Hanover, part of Pender

                                                            see subsection (b))                                                  1

                                 5C                      (part of New Hanover, see subsection (b))            1

First                         6A                      Halifax                                                                      1

First                         6B                      Bertie, Hertford, Northampton                               1

First                         7A                      Nash                                                                          1

First                         7B                      (part of Wilson, part of Edgecombe,

                                                            see subsection (b))                                                  1

First                         7C                      (part of Wilson, part of Edgecombe,

                                                            see subsection (b))                                                  1

Second                     8A                      Lenoir and Greene                                                   1

Second                     8B                      Wayne                                                                       1

Third                        9                         Franklin, Granville, Vance, Warren                        2

Third                        9A                      Person, Caswell                                                       1

Third                      10A                      (part of Wake, see subsection (b))                         2

Third                      10B                      (part of Wake, see subsection (b))                         2

Third                      10C                      (part of Wake, see subsection (b))                         1

Third                      10D                      (part of Wake, see subsection (b))                         1

Fourth                    11A                      Harnett, Lee                                                              1

Fourth                    11B                      Johnston                                                                    1

Fourth                    12A                      (part of Cumberland, see subsection (b))              1

Fourth                    12B                      (part of Cumberland, see subsection (b))              1

Fourth                    12C                      (part of Cumberland, see subsection (b))              2

Fourth                    13                         Bladen, Brunswick, Columbus                                2

Third                      14A                      (part of Durham, see subsection (b))                     1

Third                      14B                      (part of Durham, see subsection (b))                     3

Third                      15A                      Alamance                                                                  2

Third                      15B                      Orange, Chatham                                                      1

Fourth                    16A                      Scotland, Hoke                                                         1

Fourth                    16B                      Robeson                                                                    2

Fifth                       17A                      Rockingham                                                              2

Fifth                       17B                      Stokes, Surry                                                            2

Fifth                       18A                      (part of Guilford, see subsection (b))                    1

Fifth                       18B                      (part of Guilford, see subsection (b))                    1

Fifth                       18C                      (part of Guilford, see subsection (b))                    1

Fifth                       18D                      (part of Guilford, see subsection (b))                    1

Fifth                       18E                      (part of Guilford, see subsection (b))                    1

Sixth                      19A                      Cabarrus                                                                    1

Fifth                       19B1                    (part of Montgomery, part of Moore,

                                                            part of Randolph see subsection (b))                     1

                               19B2                    (part of Montgomery, part of Moore,

                                                            part of Randolph see subsection (b))                     1

                               19B                      Montgomery, Randolph                                           1

Sixth                      19C                      Rowan                                                                       1

Fifth                       19D                      Moore                                                                       1

Sixth                      20A                      Anson, Richmond                                                     1

Sixth                      20B                      Stanly, Union                                                            2

Fifth                       21A                      (part of Forsyth, see subsection (b))                      1

Fifth                       21B                      (part of Forsyth, see subsection (b))                      1

Fifth                       21C                      (part of Forsyth, see subsection (b))                      1

Fifth                       21D                      (part of Forsyth, see subsection (b))                      1

Sixth                      22                         Alexander, Davidson, Davie, Iredell                       3

Fifth                       23                         Alleghany, Ashe, Wilkes, Yadkin                           1

Eighth                    24                         Avery, Madison, Mitchell, Watauga,

                                                            Yancey                                                                      2

Seventh                  25A                      Burke, Caldwell                                                        2

Seventh                  25B                      Catawba                                                                     2

Seventh                  26A                      (part of Mecklenburg, see subsection (b))            2

Seventh                  26B                      (part of Mecklenburg, see subsection (b))            3

Seventh                  26C                      (part of Mecklenburg, see subsection (b))            2

Seventh                  27A                      Gaston                                                                       2

Seventh                  27B                      Cleveland, Lincoln                                                   2

Eighth                    28                         Buncombe                                                                 2

Eighth                    29                         Henderson, McDowell, Polk,

                                                            Rutherford, Transylvania                                         2

Eighth                    30A                      Cherokee, Clay, Graham, Macon,

                                                            Swain                                                                         1

Eighth                    30B                      Haywood, Jackson                                                   1."

SECTION 13.14.(b)  G.S.7A-41(b)(24) and G.S. 7A-41(b)(25) are repealed.

SECTION 13.14.(c)  The superior court judgeship established for District 19B by subsection (a) of this section shall be filled by the superior court judge from current District 19B who resides in Randolph County. That judge's term expires on December 31, 2008. The successor to that judge shall be elected in the 2008 general election to serve an eight-year term.

SECTION 13.14.(d)  The superior court judgeship established for District 19D by subsection (a) of this section shall be filled by the superior court judge from current District 19B who resides in Moore County. That judge's term expires on December 31, 2008. The successor to that judge shall be elected in the 2008 general election to serve an eight-year term.

SECTION 13.14.(e)  The Judicial Department may use funds appropriated up to the sum of thirty-five thousand five hundred forty-nine dollars ($35,549) for the 2003-2004 fiscal year and up to the sum of fifty-three thousand six hundred ninety-eight dollars ($53,698) for the 2004-2005 fiscal year to upgrade an existing superior court judgeship to a senior resident superior court judgeship for District 19D and to add an official court reporter for District 19D.

SECTION 13.14.(f)  This section becomes effective December 1, 2003.

 

DISPUTE SETTLEMENT CENTERS STUDY/reporting of cases mediated

SECTION 13.15.(a)  The Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee shall:

(1)       Review the funding provided by the General Assembly to community mediation centers, also known as dispute settlement centers or dispute resolution centers.

(2)       Study the use of that funding by the recipient centers.

(3)       Determine whether the language of G.S. 7A-38.5 adequately and accurately states the General Assembly's priorities for dispute settlement centers and for the spending of the State funds received by those centers.

(4)       Recommend whether the match requirements set forth in G.S. 7A-38.6 should be varied according to each dispute settlement center's ability to obtain funding from non-State sources.

(5)       Study any other factors it deems relevant related to State funding of dispute settlement centers.

SECTION 13.15.(b)  The Committee shall report its findings and recommendations by May 1, 2004, to the Chairs of the Senate and House of Representatives Appropriations Committees and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety.

SECTION 13.15.(c)  G.S. 7A-38.6(a) reads as rewritten:

"(a)      All community mediation centers currently receiving State funds shall report annually to the Mediation Network of North Carolina on the program's funding and activities, including:

(1)       Types of dispute settlement services provided;

(2)       Clients receiving each type of dispute settlement service;

(3)       Number and type of referrals received, cases actually mediated, mediated (identified by docket number), cases resolved in mediation, and total clients served in the cases mediated;

(4)       Total program funding and funding sources;

(5)       Itemization of the use of funds, including operating expenses and personnel;

(6)       Itemization of the use of State funds appropriated to the center;

(7)       Level of volunteer activity; and

(8)       Identification of future service demands and budget requirements.

The Mediation Network of North Carolina shall compile and summarize the information provided pursuant to this subsection and shall provide the information to the Chairs of the House of Representatives and Senate Appropriations Committees and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by February 1 of each year."

 

PART XIV. DEPARTMENT OF JUSTICE

 

USE OF SEIZED AND FORFEITED PROPERTY TRANSFERRED TO STATE LAW ENFORCEMENT AGENCIES BY THE FEDERAL GOVERNMENT

SECTION 14.1.(a)  Assets transferred to the Departments of Justice, Correction, and Crime Control and Public Safety during the 2003-2005 biennium pursuant to applicable federal law shall be credited to the budgets of the respective departments and shall result in an increase of law enforcement resources for those departments.  The Departments of Justice, Correction, and Crime Control and Public Safety shall report to the Joint Legislative Commission on Governmental Operations upon receipt of the assets and, before using the assets, shall report on the intended use of the assets and the departmental priorities on which the assets may be expended.

SECTION 14.1.(b)  The General Assembly finds that the use of assets transferred pursuant to federal law for new personnel positions, new projects, acquisition of real property, repair of buildings where the repair includes structural change, and construction of or additions to buildings may result in additional expenses for the State in future fiscal periods.  Therefore, the Department of Justice, the Department of Correction, and the Department of Crime Control and Public Safety are prohibited from using these assets for such purposes without the prior approval of the General Assembly.

SECTION 14.1.(c)  Nothing in this section prohibits North Carolina law enforcement agencies from receiving funds from the United States Department of Justice, the United States Department of the Treasury, and the United States Department of Health and Human Services.

 

PRIVATE PROTECTIVE SERVICES AND ALARM SYSTEMS LICENSING BOARDS PAY FOR USE OF STATE FACILITIES AND SERVICES

SECTION 14.2.  The Private Protective Services and Alarm Systems Licensing Boards shall pay the appropriate State agency for the use of physical facilities and services provided to those Boards by the State.

 

CERTAIN LITIGATION EXPENSES TO BE PAID BY CLIENTS

SECTION 14.3.   Client departments, agencies, and boards shall reimburse the Department of Justice for reasonable court fees, attorney travel and subsistence costs, and other costs directly related to litigation in which the Department of Justice is representing the department, agency, or board.

 

REIMBURSEMENT FOR UNC BOARD OF GOVERNORS LEGAL REPRESENTATION

SECTION 14.4.  The Department of Justice shall be reimbursed by the Board of Governors of The University of North Carolina for two Attorney III positions to provide legal representation to The University of North Carolina System.

 

REPORT ON CRIMINAL RECORDS CHECKS CONDUCTED FOR CONCEALED HANDGUN PERMITS/STUDY FEE ADJUSTMENT FOR CRIMINAL RECORDS CHECKS

SECTION 14.5.(a)  The Department of Justice shall report by January 15 each year to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House of Representatives Appropriations Committees, and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety on the receipts, costs for, and number of criminal records checks performed in connection with applications for concealed weapons permits. The report by the Department of Justice shall also include information on the number of applications received and approved for firearms safety courses.

SECTION 14.5.(b)  The Office of State Budget and Management, in consultation with the Department of Justice, shall study the feasibility of adjusting the fees charged for criminal records checks conducted by the Division of Criminal Information of the Department of Justice as a result of the increase in receipts from criminal records checks.  The study shall include an assessment of the Division's operational, personnel, and overhead costs related to providing criminal records checks and how those costs have changed since the prior fiscal year. The Office of State Budget and Management shall report its findings and recommendations to the Chairs of the Senate and House of Representatives Appropriations Committees, the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety, and the Fiscal Research Division on or before March 1, 2004.

 

NC LEGAL EDUCATION ASSISTANCE FOUNDATION REPORT ON FUNDS DISBURSED

SECTION 14.6.  The North Carolina Legal Education Assistance Foundation shall report by March 1, 2004, to the Chairs of the House of Representatives and Senate Appropriations Committees and the Chairs of the House of Representatives and Senate Justice and Public Safety Subcommittees on its internal controls and procedures for ensuring that all funds designated for payoff of education loans are used for that purpose. The Foundation shall report by March 1 of each year to the Joint Legislative Commission on Governmental Operations on the expenditure of State funds, the number of attorneys receiving funds, the average award amount, the average student loan amount, the number of attorneys on the waiting list, and the average number of years for which attorneys receive loan assistance.

 

RAPE KITS A PRIORITY

SECTION 14.7.  The Department shall develop and implement a plan to process rape kits as expeditiously as possible, with a special emphasis on processing kits from cases that have been outstanding for the longest period of time.  In developing the plan, the Department shall work with local law enforcement to determine how many untested or unanalyzed rape kits exist and how many rape kits are collected as evidence each year.

 

COMPUTER CRIMES GRANT FUNDS

SECTION 14.8.  On or after July 1, 2004, the Department of Justice may transfer the seven State Bureau of Investigation agents funded in the 2003-2004 fiscal year with federal funds from Computer Crimes grants to agent positions in the State Bureau of Investigation that are (i) vacant, (ii) funded through the General Fund, and (iii) in existence on July 1, 2003.

 

RAPE KIT ANALYSES BY PRIVATE VENDORS

SECTION 14.9.  The Department of Justice shall issue a Request for Information to determine (i) the interest of private vendors in providing analyses of forensic samples of DNA from rape kits in which there is no suspect, (ii) the qualifications of any private vendors who demonstrate such an interest, and (iii) the estimated costs of contracting with private vendors to provide analyses of forensic DNA samples.

 

PART XV. DEPARTMENT OF JUVENILE JUSTICE AND DELINQUENCY PREVENTION

 

S.O.S. ADMINISTRATIVE COST LIMITS

SECTION 15.1.  Of the funds appropriated to the Department of Juvenile Justice and Delinquency Prevention in this act, not more than four hundred fifty thousand dollars ($450,000) for the 2003-2004 fiscal year and not more than four hundred fifty thousand dollars ($450,000) for the 2004-2005 fiscal year may be used to administer the S.O.S. Program, to provide technical assistance to applicants and to local S.O.S. programs, and to evaluate the local S.O.S. programs.  The Department may contract with appropriate public or nonprofit agencies to provide the technical assistance, including training and related services.

 

JUVENILE CRIME PREVENTION COUNCIL GRANT REPORTING AND CERTIFICATION

SECTION 15.2.(a)  On or before May 1 each year, the Department of Juvenile Justice and Delinquency Prevention shall submit to the Joint Legislative Commission on Governmental Operations and the Appropriations Committees of the Senate and House of Representatives a list of the recipients of the grants awarded, or preapproved for award, from funds appropriated to the Department for local Juvenile Crime Prevention Council grants. The list shall include for each recipient the amount of the grant awarded, the membership of the local committee or council administering the award funds on the local level, and a short description of the local services, programs, or projects that will receive funds.  The list shall also identify any programs that received grant funds at one time but for which funding has been eliminated by the Department of Juvenile Justice and Delinquency Prevention.  A written copy of the list and other information regarding the projects shall also be sent to the Fiscal Research Division of the General Assembly.

SECTION 15.2.(b)  Each county in which local programs receive Juvenile Crime Prevention Council grant funds from the Department of Juvenile Justice and Delinquency Prevention shall certify annually through its local council to the Department that funds received are not used to duplicate or supplant other programs within the county.

 

REPORTS ON CERTAIN PROGRAMS

SECTION 15.3.(a)  Project Challenge North Carolina, Inc., shall report to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety by April 1 each year on the operation and the effectiveness of its program in providing alternative dispositions and services to juveniles who have been adjudicated delinquent or undisciplined.  The report shall include information on the source of referrals for juveniles, the types of offenses committed by juveniles participating in the program, the amount of time those juveniles spend in the program, the number of juveniles who successfully complete the program, and the number of juveniles who commit additional offenses after completing the program.

SECTION 15.3.(b)  The Department of Juvenile Justice and Delinquency Prevention shall report to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety on the effectiveness of the Juvenile Assessment Center by April 1 each year.  The report on the Juvenile Assessment Center shall include information on the number of juveniles served and an evaluation of the effectiveness of juvenile assessment plans and services provided as a result of these plans.