GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2015

H                                                                                                                                                   6

HOUSE BILL 97

Committee Substitute Favorable 5/18/15

Committee Substitute #2 Favorable 5/20/15

Committee Substitute #3 Favorable 5/20/15

Committee Substitute #4 Favorable 5/21/15

Fifth Edition Engrossed 5/22/15

Senate Appropriations Committee Substitute with Amendments Adopted 6/16/15

Senate Pensions & Retirement and Aging Committee Substitute Adopted 6/16/15

 

Short Title:        2015 Appropriations Act.

(Public)

Sponsors:

 

Referred to:

 

February 24, 2015

 

A BILL TO BE ENTITLED

AN ACT to make base budget appropriations for current operations of state departments, institutions, and agencies, and for other purposes.

The General Assembly of North Carolina enacts:

 

PART I. INTRODUCTION AND TITLE OF ACT

 

TITLE OF ACT

SECTION 1.1.  This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2015."

 

INTRODUCTION

SECTION 1.2.  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 State Budget Act or this act, the savings shall revert to the appropriate fund at the end of each fiscal year.

 

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's departments, institutions, and agencies, and for other purposes as enumerated, are made for the fiscal biennium ending June 30, 2017, according to the following schedule:

 

Current Operations – General Fund                                       FY 2015‑2016          FY 2016‑2017

 

EDUCATION

 

Community Colleges System Office                                            1,051,528,672          1,050,528,672

 

Department of Public Instruction                                                8,282,418,560          8,382,532,357

 

University of North Carolina – Board of Governors

      Appalachian State University                                                   127,701,024             127,694,714

      East Carolina University

            Academic Affairs                                                              210,407,112             210,739,558

            Health Affairs                                                                     73,527,686               73,527,686

      Elizabeth City State University                                                   33,759,228               30,759,228

      Fayetteville State University                                                      48,741,530               48,741,530

      North Carolina A&T State University                                        90,898,021               90,898,021

      North Carolina Central University                                             82,132,848               82,132,848

      North Carolina State University

            Academic Affairs                                                              392,256,502             392,249,291

            Agricultural Extension                                                         38,595,927               38,595,927

            Agricultural Research                                                          53,099,332               53,099,332

      University of North Carolina at Asheville                                   37,592,283               37,592,283

      University of North Carolina at Chapel Hill

            Academic Affairs                                                              251,265,861             251,265,861

            Health Affairs                                                                   186,779,905             186,779,905

            AHEC                                                                                47,182,678               47,182,678

      University of North Carolina at Charlotte                                 198,971,605             198,971,605

      University of North Carolina at Greensboro                             143,459,427             143,459,427

      University of North Carolina at Pembroke                                 53,184,870               53,192,105

      University of North Carolina at School of the Arts                     28,669,298               28,669,298

      University of North Carolina at Wilmington                              101,627,684             101,473,413

      Western Carolina University                                                      85,805,817               85,805,817

      Winston‑Salem State University                                                64,619,124               64,619,124

      General Administration                                                              37,256,706               37,256,706

      University Institutional Programs                                                82,284,833             111,221,371

      Related Educational Programs                                                 108,168,501             108,168,501

      North Carolina School of Science & Math                                19,833,370               19,834,570

      Aid to Private Institutions                                                        117,219,754             115,219,754

 

Total University of North Carolina –

      Board of Governors                                                          2,715,040,926          2,739,150,553

 

HEALTH AND HUMAN SERVICES

 

Department of Health and Human Services

      Central Management and Support                                           116,500,781             130,139,186

      Division of Aging and Adult Services                                         42,845,788               42,845,788

      Division of Services for the Blind, Deaf,

            and Hard of Hearing                                                             8,098,207                 8,098,207

      Division of  Child Development and Early Education                233,900,693             237,476,515

      Health Service Regulation                                                         15,462,135               14,902,628

      Division of Medical Assistance                                             3,761,598,331          3,910,621,818

      Division of Mental Health, Developmental Disabilities,

            and Substance Abuse Services                                          519,096,709             502,439,890

      NC Health Choice                                                                    13,373,219                 1,590,592

      Division of Public Health                                                         137,337,977             139,261,609

      Division of Social Services                                                      181,783,263             184,883,263

      Division of Vocational Rehabilitation                                          37,752,132               37,752,132

Total Health and Human Services                                         5,067,749,235          5,210,011,628

 

NATURAL AND ECONOMIC RESOURCES

 

Department of Agriculture and Consumer Services                        112,339,862             114,625,261

 

Department of Commerce

      Commerce                                                                               58,030,891               57,512,842

      Commerce State‑Aid                                                                  3,405,472                 1,155,472

 

Department of Cultural Resources

      Cultural Resources                                                                  134,129,484             140,169,029

      Roanoke Island Commission                                                          517,384                    517,384

 

Wildlife Resources Commission                                                      10,501,493               10,426,493

 

Department of Environment and Natural Resources                       111,377,775             100,246,626

 

Department of Labor                                                                      15,472,917               15,472,917

 

JUSTICE AND PUBLIC SAFETY

 

Department of Public Safety                                                       1,828,196,520          1,840,640,544

 

Judicial Department                                                                      480,029,282             479,474,050

 

Judicial Department – Indigent Defense                                         115,738,069             115,748,013

 

Department of Justice                                                                     52,295,684               51,405,759

 

 

GENERAL GOVERNMENT

 

Department of Administration                                                          60,353,742               58,381,592

 

Office of Administrative Hearings                                                      5,117,214                 5,117,214

 

Department of State Auditor                                                           11,739,374               11,891,894

 

Office of State Controller                                                                22,700,620               22,700,620

 

State Board of Elections                                                                   6,603,243                 6,503,243

 

General Assembly                                                                           53,019,670               53,019,670

 

Office of the Governor                                                                      5,580,229                 5,580,229

 

Office of the Governor – Special Projects                                         2,000,000                 2,000,000

 

Office of State Budget and Management

      Office of State Budget and Management                                     7,242,104                 7,242,104

      OSBM – Reserve for Special Appropriations                              1,550,000                 1,500,000

 

Housing Finance Agency                                                                   9,118,739                 9,818,739

 

Department of Insurance                                                                 38,381,581               38,381,581

 

Office of Lieutenant Governor                                                              676,874                    676,874

 

Military and Veterans Affairs                                                             9,525,132                 7,815,123

 

Department of Revenue                                                                  79,810,071               79,952,920

 

Department of Secretary of State                                                    11,713,470               11,713,470

 

Department of State Treasurer

      State Treasurer                                                                         11,045,175               10,699,175

      State Treasurer – Retirement for Fire and Rescue

            Squad Workers                                                                  20,664,274               20,664,274

 

RESERVES, ADJUSTMENTS, AND DEBT SERVICE

 

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

 

Salary Adjustment Fund                                                                  34,000,000               34,000,000

 

OSHR Minimum of Market Adjustment                                                          0               12,000,000

 

Job Development Investment Grants (JDIG)                                    57,816,215               71,728,126

 

One North Carolina Fund                                                                 6,995,976                 9,000,000

 

Information Technology Reserve                                                     20,585,787               19,230,683

 

Information Technology Fund                                                          22,381,854               22,381,854

 

Film and Entertainment Grant Fund                                                 10,000,000               10,000,000

 

Workers' Compensation Reserve                                                      5,000,000              (10,000,000)

 

State Emergency Response and Disaster Relief Fund                       10,000,000                               0

 

Site Infrastructure Development Fund                                              13,000,000                               0

 

Debt Service

      General Debt Service                                                              713,159,643             676,849,215

      Federal Reimbursement                                                              1,616,380                 1,616,380

 

TOTAL CURRENT OPERATIONS –

      GENERAL FUND                                                          21,295,169,593        21,515,082,580

 

GENERAL FUND AVAILABILITY STATEMENT

SECTION 2.2.(a)  The General Fund availability used in developing the 2015‑2017 fiscal biennial budget is shown below.

                                                                                                  FY 2015‑2016          FY 2016‑2017

Unappropriated Balance Remaining from Previous Year                    2,033,330               43,297,632

Anticipated Over Collections FY 2014‑15                                    400,000,000                               0

Anticipated Reversions from FY 2014‑15

(OSBM Estimate, May 12, 2015)                                                 226,734,550                               0

Other Reversions                                                                            27,343,020                               0

Revenue Adjustment as per S.L. 2015‑2                                         (1,000,000)                              0

Less Earmarkings of Year End Fund Balance

      Savings Reserve                                                                    (500,000,000)                              0

      Repairs and Renovations                                                       (155,110,900)                              0

 

Beginning Unreserved Fund Balance                                                         0               43,297,632

 

Revenues Based on Existing Tax Structure                       20,981,400,000        21,592,400,000

 

Non‑tax Revenues

Investment Income                                                                          17,100,000               17,400,000

Judicial Fees                                                                                 227,800,000             225,500,000

Disproportionate Share                                                                 139,000,000             139,000,000

Insurance                                                                                        78,400,000               79,600,000

Master Settlement Agreement (MSA)                                           137,500,000             137,500,000

Other Non‑Tax Revenues                                                             168,000,000             168,800,000

Highway Fund Transfer                                                                 215,900,000             215,900,000

      Subtotal Non‑tax Revenues                                                983,700,000             983,700,000

 

Total General Fund Availability                                           21,965,100,000        22,619,397,632

 

Adjustments to Availability:  2015 Session

      Tax Reductions                                                                       (72,700,000)           (421,100,000)

      Renewable Energy Safe Harbor (S.L. 2015‑11)                                        0              (36,700,000)

      Realign Judicial Fees                                                                 25,000,000               25,000,000

      MSA Funds to Golden L.E.A.F.                                              (20,075,000)             (20,075,000)

      End Highway Fund Transfer to General Fund                         (215,900,000)           (215,900,000)

      Department of Justice Tobacco Settlement                                  2,194,000                               0

      Transfer to Medicaid Transformation Reserve                        (185,604,653)           (185,604,653)

      Transfer from DPS Enterprise Resource Planning

            System IT Fund                                                                    9,000,000                               0

      Transfer from Federal Insurance Contributions Act

            (FICA) Fund                                                                        4,296,802                    641,628

      Transfer from Statewide Automated Fingerprint

            Identification System Fund                                                       333,557                               0

      Transfer from E‑Commerce Fund                                               1,257,140                               0

      Adjustment of Transfer from Department of State

            Treasurer                                                                                 375,262                    369,262

      Adjustment of Transfer from Insurance Regulatory

            Fund                                                                                         85,217                      85,217

      Subtotal Adjustments to Availability:  2015 Session        (451,737,675)           (853,283,546)

 

Revised General Fund Availability                                      21,513,362,325        21,766,114,086

 

Less General Fund Appropriations                                          (21,470,064,693)      (21,520,170,080)

 

Unappropriated Balance Remaining                                           43,297,632             245,944,006

 

SECTION 2.2.(b)  G.S. 105‑164.44D is repealed.

SECTION 2.2.(c)  Notwithstanding the provisions of G.S. 143C‑4‑3(a), the State Controller shall transfer a total of one hundred fifty‑five million one hundred ten thousand nine hundred dollars ($155,110,900) from the unreserved fund balance to the Repairs and Renovations Reserve on June 30, 2015. Funds transferred under this section to the Repairs and Renovations Reserve are appropriated for the 2015‑2016 fiscal year and shall be used in accordance with G.S. 143C‑4‑3. This subsection becomes effective June 30, 2015.

SECTION 2.2.(d)  Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer a total of five hundred million dollars ($500,000,000) from the unreserved fund balance to the Savings Reserve Account on June 30, 2015. This transfer is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2015.

SECTION 2.2.(e)  Funds reserved in the Medicaid Transformation Reserve established in Section 12H.24(w) of this act do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

SECTION 2.2.(e1)  Funds reserved by section 2.2 of S.L. 2014‑100 in the Medicaid Contingency Reserve established in Section 12H.38 of that act do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

SECTION 2.2.(f)  Notwithstanding any other provision of law to the contrary, effective June 30, 2015, the following amounts shall be transferred to the State Controller to be deposited in the appropriate budget code as determined by the State Controller. These funds shall be used to support the General Fund appropriations as specified in this act for the 2015‑2016 fiscal year.

 

Budget      Fund                                                                                                   FY 2015‑2016

Code         Code               Description                                                                     Amount

24100        2514                E‑Commerce Fund                                                       $ 1,257,140

24160        2000                NC FICA Account                                                          4,296,802

23002        2910                Statewide Automated Fingerprint

                                               Identification System Fund                                              333,557

24554        2004                DPS – Enterprise Resource Planning

                                                     System IT Fund                                                           9,000,000

 

SECTION 2.2.(g)  Notwithstanding any other provision of law to the contrary, effective June 30, 2016, the following amounts shall be transferred to the State Controller to be deposited in the appropriate budget code as determined by the State Controller. These Funds shall be used to support the General Fund appropriations as specified in this act for the 2016‑2017 fiscal year.

 

Budget      Fund                                                                                                   FY 2016‑2017

Code         Code               Description                                                                     Amount

24160        2000                NC FICA Account                                                             641,628

 

SECTION 2.2.(h)  Notwithstanding any other provision of law to the contrary, effective June 30, 2015, the following amounts shall revert to the General Fund. These funds shall be used to support the General Fund appropriations as specified in this act for the 2015‑2016 fiscal year:

 

                  Description                                                                                             Amount

Department of Commerce – Job Catalyst Fund                                                         20,000,000

Community Colleges – Yellow Ribbon                                                                        1,000,000

UNC System – Yellow Ribbon                                                                                  4,863,276

Department of Public Safety – Broaden Access to Community Treatment                    1,479,744

 

SECTION 2.2.(i)  Subsections (c), (d), (f), (h), and (i) of this section become effective June 30, 2015.

 

PART III. CURRENT OPERATIONS/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 fiscal biennium ending June 30, 2017, according to the following schedule:

 

Current Operations – Highway Fund                                     FY 2015‑2016          FY 2016‑2017

 

Department of Transportation

      Administration                                                                     $ 112,492,808            $ 90,112,808

 

Division of Highways

      Administration                                                                          33,467,959               33,467,959

      Construction                                                                             45,054,878               45,054,878

      Maintenance                                                                        1,207,773,807          1,237,538,168

      Planning and Research                                                                              0                               0

      OSHA Program                                                                            358,030                    358,030

 

State Aid to Municipalities                                                            147,500,000             150,000,000

 

Intermodal Divisions

      Ferry                                                                                        39,750,395               39,750,395

      Public Transportation                                                                88,173,419               88,173,419

      Aviation                                                                                    25,760,952               25,760,952

      Rail                                                                                          23,651,674               23,651,674

      Bicycle and Pedestrian                                                                   726,895                    726,895

 

Governor's Highway Safety                                                                  251,241                    251,241

Division of Motor Vehicles                                                            120,334,217             120,334,217

 

Other State Agencies, Reserves, Transfers                                      54,283,569               54,134,470

 

Capital Improvements                                                                       7,817,900               15,444,300

 

Total Highway Fund Appropriations                                   $ 1,907,397,744       $ 1,924,759,406

 

HIGHWAY FUND/AVAILABILITY STATEMENT

SECTION 3.2.  The Highway Fund availability used in developing the 2015‑2017 fiscal biennial budget is shown below:

 

Highway Fund Availability Statement                                    FY 2015‑2016          FY 2016‑2017

Unreserved Fund Balance                                                      $                       0      $                       0

Estimated Revenue                                                                    1,969,300,000          1,934,200,000

Adjustment to Revenue Availability:

      Motor Fuel Tax (Shallow Draft Navigation

            Channel Dredging and Lake Maintenance Fund)                       157,517                    152,333

      Motor Fuel Tax (Wildlife Resources Fund)                                     157,517                    152,333

      Motor Fuel Tax (Noncommercial Leaking

            Petroleum Underground Storage Tank

            Cleanup Fund)                                                                                    0                 1,540,000

      Motor Fuel Tax Distribution                                                     (94,510,000)             (91,400,000)

      Division of Motor Vehicles Fee Adjustments                             30,822,710               78,644,740

      Special Registration Plate Account                                              1,470,000                 1,470,000

 

Revised Total Highway Fund Availability                          $ 1,907,397,744       $ 1,924,759,406

 

Unappropriated Balance                                                        $                       0      $                       0

 

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 fiscal biennium ending June 30, 2017, according to the following schedule:

 

Current Operations – Highway Trust Fund                           FY 2015‑2016          FY 2016‑2017

 

Program Administration                                                               $ 35,064,813            $ 35,064,813

Turnpike Authority                                                                          49,000,000               49,000,000

Transfer to Highway Fund                                                                    400,000                    400,000

Debt Service                                                                                  48,619,701               61,012,229

Strategic Prioritization Funding Plan for

      Transportation Investments                                                  1,185,145,486          1,189,802,958

 

Total Highway Trust Fund Appropriations                         $ 1,318,230,000       $ 1,335,280,000

 

HIGHWAY TRUST FUND AVAILABILITY STATEMENT

SECTION 4.2.  The Highway Trust Fund availability used in developing the 2015‑2017 fiscal biennial budget is shown below:

 

Highway Trust Fund Availability                                            FY 2015‑2016          FY 2016‑2017

Unreserved Fund Balance                                                      $                       0      $                       0

Estimated Revenue                                                                    1,215,900,000          1,221,200,000

Adjustment to Revenue Availability:

Motor Fuel Tax Distribution                                                            94,510,000               91,400,000

Motor Fuel Tax (Noncommercial Leaking Petroleum

      Underground Storage Tank Cleanup Fund)                                               0                    660,000

Division of Motor Vehicles Fee Adjustments                                     3,650,000               12,020,000

Highway Use Tax Adjustments                                                         4,170,000               10,000,000

 

Total Highway Trust Fund Availability                               $ 1,318,230,000       $ 1,335,280,000

 

Unappropriated Balance                                                        $                       0      $                       0

 

PART V. OTHER APPROPRIATIONS

 

CASH BALANCES AND OTHER APPROPRIATIONS

SECTION 5.1.(a)  Cash balances, federal funds, departmental receipts, grants, and gifts from the General Fund, revenue funds, enterprise funds, and internal service funds are appropriated for the 2015‑2017 fiscal biennium as follows:

(1)        For all budget codes listed in "The Governor's Recommended Budget, the State of North Carolina 2015‑2017" and in the Budget Support Document, fund balances and receipts are appropriated up to the amounts specified, as adjusted by the General Assembly, for the 2015‑2016 fiscal year and the 2016‑2017 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items or as otherwise authorized by the General Assembly. Expansion budget funds listed in those documents are appropriated only as otherwise provided in this act.

(2)        Notwithstanding the provisions of subdivision (1) of this subsection:

a.         Any receipts that are required to be used to pay debt service requirements for various outstanding bond issues and certificates of participation are appropriated up to the actual amounts received for the 2015‑2016 fiscal year and the 2016‑2017 fiscal year and shall be used only to pay debt service requirements.

b.         Other funds, cash balances, and receipts of funds that meet the definition issued by the Governmental Accounting Standards Board of a trust or agency fund are appropriated for and in the amounts required to meet the legal requirements of the trust agreement for the 2015‑2016 fiscal year and the 2016‑2017 fiscal year.

SECTION 5.1.(b)  Receipts collected in a fiscal year in excess of the amounts appropriated by this section shall remain unexpended and unencumbered until appropriated by the General Assembly, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by the State Budget Act. Overrealized receipts are appropriated in the amounts necessary to implement this subsection.

SECTION 5.1.(c)  Notwithstanding subsections (a) and (b) of this section, there is appropriated from the Reserve for Reimbursements to Local Governments and Shared Tax Revenues for each fiscal year an amount equal to the amount of the distributions required by law to be made from that reserve for that fiscal year.

 

OTHER RECEIPTS FROM PENDING GRANT AWARDS

SECTION 5.1A.(a)  Notwithstanding G.S. 143C‑6‑4, State agencies may, with approval of the Director of the Budget, spend funds received from grants awarded subsequent to the enactment of this act for grant awards that are for less than two million five hundred thousand dollars ($2,500,000), do not require State matching funds, and will not be used for a capital project. State agencies shall report to the Joint Legislative Commission on Governmental Operations within 30 days of receipt of such funds.

State agencies may spend all other funds from grants awarded after the enactment of this act only with approval of the Director of the Budget and after consultation with the Joint Legislative Commission on Governmental Operations.

SECTION 5.1A.(b)  The Office of State Budget and Management shall work with the recipient State agencies to budget grant awards according to the annual program needs and within the parameters of the respective granting entities. Depending on the nature of the award, additional State personnel may be employed on a time‑limited basis. Funds received from such grants are hereby appropriated and shall be incorporated into the authorized budget of the recipient State agency.

 

EDUCATION LOTTERY FUNDS/EXPENSES OF THE LOTTERY/LIMIT ON REGIONAL OFFICES

SECTION 5.2.(a)  The appropriations made from the Education Lottery Fund for the 2015‑2017 fiscal biennium are as follows:

                                                                                                  FY 2015‑2016          FY 2016‑2017

Noninstructional Support Personnel                                      $ 345,571,558          $ 361,666,883

Prekindergarten Program                                                          75,535,709               75,535,709

Public School Building Capital Fund                                        100,100,000             100,000,000

Scholarships for Needy Students                                               30,450,000               30,450,000

UNC Need‑Based Financial Aid                                              10,744,733               10,744,733

TOTAL                                                                              $ 562,402,000          $ 578,397,325

 

SECTION 5.2.(b)  The Education Lottery Fund availability used in developing the 2015‑2017 biennial budget is shown below:

 

AVAILABILITY                                                                FY 2015‑2016          FY 2016‑2017

Revenue Based on Existing Policies                                      $ 528,902,000          $ 533,397,325

Revenue from E‑Instant Games                                                   2,000,000               13,500,000

Revenue from Additional Advertising                                         31,500,000               31,500,000

TOTAL                                                                              $ 562,402,000          $ 578,397,325

 

SECTION 5.2.(c)  Notwithstanding G.S. 18C‑164, the Office of State Budget and Management shall not transfer funds to the Education Lottery Reserve Fund for either year of the 2015‑2017 fiscal biennium.

SECTION 5.2.(d)  G.S. 18C‑162(a) reads as rewritten:

"§ 18C‑162.  Allocation of revenues.

(a)        The Commission shall allocate revenues to the North Carolina State Lottery Fund in order to increase and maximize the available revenues for education purposes, and to the extent practicable, shall adhere to the following guidelines:

(1)        At least fifty percent (50%) of the total annual revenues, as described in this Chapter, shall be returned to the public in the form of prizes.

(2)        At least thirty‑five percent (35%) of the total annual revenues, as described in this Chapter, shall be transferred as provided in G.S. 18C‑164.

(3)        No more than eight percent (8%) of the total annual revenues, as described in this Chapter, shall be allocated for payment of expenses of the Lottery. Advertising expenses shall not exceed one percent (1%) one and one‑half percent (1.5%) of the total annual revenues.

(4)        No more than seven percent (7%) of the face value of tickets or shares, as described in this Chapter, shall be allocated for compensation paid to lottery game retailers."

SECTION 5.2.(e)  Of the funds appropriated in this section to the Public School Building Capital Fund for the 2015‑2016 fiscal year, the Office of State Budget and Management shall use up to one hundred thousand dollars ($100,000) to contract with an outside entity (i) to perform an independent assessment of school construction needs in local school administrative units in the 50 counties determined under the low‑wealth school funding formula to have the lowest ability to pay for school facilities and (ii) to determine which of those units have the highest facility needs in relation to their capacity to raise revenue to meet those needs.

The Office of State Budget and Management shall report the results of this study to the Joint Legislative Commission on Governmental Operations prior to January 1, 2016.

SECTION 5.2.(f)  The Lottery Commission shall maintain eight regional offices or claims centers, one of which shall be located in each of the regional Prosperity Zones established in G.S. 143B‑28.1. As soon as it is practicable to do so, the Lottery Commission shall co‑locate its regional offices or claims centers with the regional offices of the Prosperity Zones.

 

CIVIL PENALTY AND FORFEITURE FUND

SECTION 5.3.(a)  Appropriations are made from the Civil Penalty and Forfeiture Fund for the fiscal biennium ending June 30, 2017, as follows:

 

                                                                                                  FY 2015‑2016           FY 2016‑2017

School Technology Fund                                                              $18,000,000             $18,000,000

State Public School Fund                                                              124,362,790             124,362,790

 

Total Appropriation                                                                 $142,362,790           $142,362,790

 

SECTION 5.3.(b)  Excess receipts realized in the Civil Penalty and Forfeiture Fund in each year of the 2015‑2017 fiscal biennium are appropriated to the School Technology Fund.

 

INDIAN GAMING EDUCATION REVENUE FUND

SECTION 5.4.  Notwithstanding G.S. 143C‑9‑7, there is appropriated from the Indian Gaming Education Revenue Fund to the Department of Public Instruction, Textbooks and Digital Resources Allotment, the sum of six million dollars ($6,000,000) for the 2015‑2016 fiscal year and the sum of six million dollars ($6,000,000) for the 2016‑2017 fiscal year.

 

MODIFY ELEMENTS OF CASH MANAGEMENT PLAN

SECTION 5.5.  G.S. 147‑86.11(e) reads as rewritten:

"(e)       Elements of Plan. – For moneys received or to be received, the statewide cash management plan shall provide at a minimum that:

(4)        Unpaid billings due to a State agency other than amounts owed by patients to the University of North Carolina Health Care System, East Carolina University's Division of Health Sciences, or by customers of the North Carolina Turnpike Authority Authority, or the North Carolina Department of Transportation shall be turned over to the Attorney General for collection no more than 90 days after the due date of the billing, except that a State agency need not turn over to the Attorney General unpaid billings of less than five hundred dollars ($500.00), or (for institutions where applicable) amounts owed by all patients which are less than the federally established deductible applicable to Part A of the Medicare program, and instead may handle these unpaid bills pursuant to agency debt collection procedures.

(4b)      The North Carolina Turnpike Authority and the North Carolina Department of Transportation may turn over to the Attorney General for collection amounts owed to the North Carolina Turnpike Authority.Authority or the North Carolina Department of Transportation.

…."

 

PART VI. GENERAL PROVISIONS

 

CONTINGENCY AND EMERGENCY FUND LIMITATION

SECTION 6.1.  For the 2015‑2017 fiscal biennium and notwithstanding the provisions of G.S. 143C‑4‑4(b), funds appropriated to the Contingency and Emergency Fund may be used only for expenditures required (i) by a court or Industrial Commission order or (ii) to respond to events as authorized under G.S. 166A‑19.40(a) of the North Carolina Emergency Management Act. These funds shall not be used for other statutorily authorized purposes or for any other contingencies and emergencies.

 

ESTABLISHING OR INCREASING FEES

SECTION 6.2.(a)  Notwithstanding G.S. 12‑3.1, an agency is not required to consult with the Joint Legislative Commission on Governmental Operations prior to establishing or increasing a fee to the level authorized or anticipated in this act.

SECTION 6.2.(b)  Notwithstanding G.S. 150B‑21.1A(a), an agency may adopt an emergency rule in accordance with G.S. 150B‑21.1A to establish or increase a fee as authorized by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter 150B of the General Statutes.

 

STATE AGENCIES/REPORTS ON LEGISLATIVE LIAISONS AND SALARY INFORMATION

SECTION 6.4.  By September 1, 2015, the Office of State Budget and Management shall report the following information to the chairs of the House of Representatives Appropriations Committee, the chairs of the Senate Appropriations/Base Budget Committee, and to the Fiscal Research Division:

(1)        Legislative liaisons. ‑

a.         The number of legislative liaisons designated by each Department or Commission.

b.         For each individual, the position name, position number, salary, the amount of time spent lobbying legislators or legislative employees for legislative action, and whether lobbying is the individual's principal duty such that the individual is required to file a registration statement with the Secretary of State.

c.         An explanation of why each legislative liaison is needed.

d.         A description of any other responsibilities or duties performed by each legislative liaison.

(2)        Public Information Officer (PIO) and staff reporting to PIO. ‑

a.         The number of individuals designated by the Department or Commission to serve as a Public Information Officer, and the number of staff reporting to each PIO.

b.         For each individual, the position name, position number, and salary.

c.         The duties and responsibilities of each individual in his or her role as a Public Information Officer or staff to a PIO.

d.         An explanation of why each Public Information Officer and staff to each PIO is needed.

(3)        Salary reserve and lapsed salaries. ‑

a.         The amount of salary reserve, by source, remaining in each fund code on June 30 of fiscal year 2013‑2014 and fiscal year 2014‑2015.

b.         The amount of lapsed salaries generated in fiscal year 2013‑2014 and fiscal year 2014‑2015.

c.         The Department's or Commission's policy on the use of salary reserve and lapsed salaries.

 

COMPENSATION FOR RESEARCH AND DEVELOPMENT

SECTION 6.11.(a)  Any contract entered into by a State agency for the development, design, creation, or testing of a new curriculum, technology system or platform, or other product shall contain a provision specifying how the State of North Carolina will be appropriately compensated from the proceeds of the contractor's future revenue, use, and sales related to the curriculum, information technology system or platform, or other product in recognition of the State's investment of time, resources, expertise, knowledge, and data.

SECTION 6.11.(b)  The Office of the Attorney General shall develop the necessary contract language to effectuate the requirement in subsection (a) of this section and shall ensure that the language is incorporated into the State's template for contracts, as appropriate.

 

EXPENDITURES OF FUNDS IN RESERVES LIMITED

SECTION 6.17.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

 

CLARIFY THE CONSULTATION REQUIREMENT BEFORE THE JOINT LEGISLATIVE COMMISSION ON GOVERNMENTAL OPERATIONS WHEN A STATE AGENCY ESTABLISHES OR INCREASES A FEE OR CHARGE

SECTION 6.18.  G.S. 12‑3.1(a) reads as rewritten:

"(a)       Authority. – Only the General Assembly has the power to authorize an agency to establish or increase a fee or charge for the rendering of any service or fulfilling of any duty to the public. In the construction of a statute, unless that construction would be inconsistent with the manifest intent of the General Assembly or repugnant to the context of the statute, the legislative grant of authority to an agency to adopt rules shall not be construed as a grant of authority to the agency to establish by rule a fee or a charge for the rendering of any service or fulfilling of any duty to the public, unless the statute expressly provides for the grant of authority to establish a fee or charge for that specific service. Notwithstanding any other law, a rule adopted by an agency to establish or increase a fee or charge shall not go into effect until the agency has consulted with the Joint Legislative Commission on Governmental Operations on the amount and purpose of the fee or charge to be established or increased. Where a rule provides for a periodic automatic adjustment to a fee, the agency that adopts the rule is not required to consult with the Commission every time the fee automatically adjusts. The agency shall submit a request for consultation to all members of the Commission, the Commission Assistant, and the Fiscal Research Division of the General Assembly on the same date the notice of text of the rule is published. The request for consultation shall consist of a written report stating (i) the amount of the current fee or charge, if applicable, (ii) the amount of the proposed new or increased fee or charge, (iii) the statutory authority for the fee or charge, and (iv) a detailed explanation of the need for the establishment or increase of the fee or charge."

 

Emergency and Disaster Response Funding Changes

SECTION 6.19.(a)  G.S. 166A‑19.40 reads as rewritten:

"§ 166A‑19.40.  Use of contingency and emergency funds.

(a)        Use of Funds for Relief and Assistance. –Contingency and Emergency Funds. – The Governor may use contingency and emergency funds as necessary and appropriate to provide relief and assistance from the effects of an emergency and may reallocate such other funds as may reasonably be available within the appropriations of the various departments when the severity and magnitude of the emergency so requires and the contingency and emergency funds are insufficient or inappropriate.funds:

(1)        As necessary and appropriate to provide relief and assistance from the effects of an emergency.

(2)        As necessary and appropriate for National Guard training in preparation for emergencies, with the concurrence of the Council of State.

(b)        Use of Funds for National Guard Training. – In preparation for a state of emergency, with the concurrence of the Council of State, the Governor may use contingency and emergency funds as necessary and appropriate for National Guard training in preparation for emergencies.

(c)        Use of Other Funds. – The Governor may reallocate such other funds as may reasonably be available within the appropriations of the various departments when all of the following conditions are satisfied:

(1)        The severity and magnitude of the emergency so requires.

(2)        Contingency and emergency funds are insufficient or inappropriate.

(3)        A state of emergency has been declared pursuant to G.S. 166A‑19.20(a).

(4)        Funds in the State Emergency Response and Disaster Relief Account are insufficient."

SECTION 6.19.(b)  G.S. 166A‑19.42 reads as rewritten:

"§ 166A‑19.42.  State Emergency Response and Disaster Relief Account.

(a)        Account Established. – There is established a State Emergency Response and Disaster Relief Account as a reserve in the General Fund. Any funds appropriated to the Account shall remain available for expenditure as provided by this section, unless directed otherwise by the General Assembly.

(b)        Use of Funds. – The Governor may spend funds from the Account for the following purposes:

(1)        To cover the start‑up costs of State Emergency Response Team operations for an emergency that poses an imminent threat of a Type I, Type II, or Type III disaster.

(2)        To cover the cost of first responders to a Type I, Type II, or Type III disaster and any related supplies and equipment needed by first responders that are not provided for under subdivision (1) of this subsection.

(3)        To provide relief and assistance in accordance with G.S. 166A‑19.41 from the effects of an emergency.

All other types of emergency assistance authorized by this Part shall continue to be financed by the funds made available under G.S. 166A‑19.41.

…."

SECTION 6.19.(c)  G.S. 166A‑19.3 reads as rewritten:

"§ 166A‑19.3.  Definitions.

The following definitions apply in this Article:

(1)        Account. – The State Emergency Response and Disaster Relief Account established in G.S. 166A‑19.42.

…."

 

CONTINUATION REVIEW OF CERTAIN FUNDS/PROGRAMS/DIVISIONS

SECTION 6.20.(a)  It is the intent of the General Assembly to review the funds, agencies, divisions, and programs financed by transfers from the Highway Fund. This process is known as the Continuation Review Program. The Continuation Review Program is intended to assist the General Assembly in determining whether to continue, reduce, or eliminate transfers from the Highway Fund for the funds, agencies, divisions, and programs subject to continuation review.

SECTION 6.20.(b)  The Appropriations/Base Budget Committee of the Senate and the Appropriations Committee of the House of Representatives may review the transfers from the Highway Fund for the funds, programs, and divisions listed in this section and shall determine whether to continue, reduce, or eliminate transfers from the Highway Fund for the funds, programs, and divisions, subject to the Continuation Review Program. The Fiscal Research Division may issue instructions to the State departments and agencies subject to continuation review regarding the expected content and format of the reports required by this section. The following funds, agencies, divisions, and programs are subject to continuation review as provided in this section:

(1)        Department of Agriculture and Consumer Services – Gasoline and Oil Inspection.

(2)        Department of Environment and Natural Resources –

a.         Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund.

b.         Division of Air Quality Inspection and Maintenance Fees.

c.         Division of Air Quality Water and Air Quality Account.

d.         Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund.

e.         Mercury Pollution Prevention Account.

(3)        Department of Health and Human Services – Forensic Test for Alcohol Branch.

(4)        Department of Insurance –

a.         Rescue Squad Workers' Relief Fund.

b.         Volunteer Rescue/EMS Grant Program.

c.         State Fire Protection.

(5)        Department of Public Safety –

a.         Highway Patrol Motor Carrier Safety Assistance Program.

b.         Inmate Road Squads and Litter Crews.

(6)        Office of State Controller – Funding transferred for BEACON support.

(7)        Wildlife Resources Commission – Boating Account.

SECTION 6.20.(c)  The continuation review reports required in this section shall include the following information:

(1)        A description of the fund, agency, division, or program mission, goals, and objectives, including statutorily required functions and functions performed without specific statutory authority.

(2)        The performance measures for the fund, agency, division, or program and the problem or need addressed.

(3)        The extent to which the fund, agency, division, or program objectives and performance measures have been achieved.

(4)        A detailed accounting of all sources of funds for the fund, agency, division, or program.

(5)        Recommendations for statutory, budgetary, or administrative changes needed to improve efficiency and effectiveness of services delivered to the public, including recommendations regarding whether to transfer the program to the Division of Motor Vehicles or to elsewhere in the Department of Transportation.

(6)        The consequences of discontinuing funding or of continuing funding with a source other than a transfer from the Highway Fund.

(7)        Recommendations for improving services or reducing costs or duplication.

(8)        The identification of policy issues that should be brought to the attention of the General Assembly.

(9)        Other information necessary to fully support the General Assembly's Continuation Review Program along with any information included in instructions from the Fiscal Research Division.

SECTION 6.20.(d)  State departments and agencies identified in subsection (b) of this section shall submit a report of  the preliminary findings of the continuation review to the Fiscal Research Division no later than December 1, 2015, and shall submit a final report to the Fiscal Research Division no later than April 1, 2016.

 

LRC STUDY ON METHODS FOR INCREASING TRANSFERS TO THE SAVINGS RESERVE ACCOUNT

SECTION 6.21.(a)  The Legislative Research Commission (LRC) shall study methods for increasing the amount of funds transferred to the Savings Reserve Account. As part of its study, the LRC shall do all of the following:

(1)        Examine potential costs and benefits of requiring one or more of the following to be transferred periodically to the Savings Reserve Account:

a.         Growth in General Fund revenue in excess of a benchmark growth rate.

b.         A particular percentage or dollar amount of General Fund revenue each fiscal year.

c.         Some portion of growth in the sources of revenue identified pursuant to subdivision (2) of this subsection each fiscal year.

d.         Interest earned on special funds.

(2)        Identify specific sources of State revenue that are especially volatile.

(3)        Consider how the timing of transfers to the Savings Reserve Account affects the amount transferred and the stability of the General Fund.

(4)        Determine the appropriate target balance of the Savings Reserve Account, if different from the goal set forth in G.S. 143C‑4‑2.

(5)        Any other matters the Commission deems relevant to its efforts to increase the amount of funds in the Savings Reserve Account.

SECTION 6.21.(b)  The LRC shall report its findings, together with any proposed legislation, to the 2016 Regular Session of the 2015 General Assembly upon its convening.

 

Require Settlement Funds in Excess of ten million dollars to Be Deposited in the Savings Reserve Account

SECTION 6.22.(a)  G.S. 114‑2.4A reads as rewritten:

"§ 114‑2.4A.  Disposition of funds received by the State or a State agency from a settlement or other final order or judgment of the court.

(c)        Exception. – Subsections (b) and (e) (b), (e), and (h) of this section shall not apply to funds received by the Department of Health and Human Services to the extent those funds represent the recovery of previously expended Medicaid funds.

(h)        Recoveries in Excess of Ten Million Dollars. – Whenever the State or a State agency receives funds from a particular settlement or other final order or judgment of the court in excess of ten million dollars ($10,000,000) in any fiscal year, the State Controller shall transfer the excess to the Savings Reserve Account. For purposes of determining whether funds received from a settlement or other final order or judgment of the court are subject to this section:

(1)        The amount of funds to be considered shall be net of any funds distributed to the parties set forth in sub‑subdivisions (b)(1)a. through c. of this section.

(2)        Payments to more than one State agency shall be aggregated for purposes of determining the amount of the funds.

(i)         Subsection (h) Does Not Apply to Master Settlement Agreement. – Subsection (h) of this section does not apply to funds received from or in connection with the Master Settlement Agreement as described in S.L. 1999‑2."

SECTION 6.22.(b)  G.S. 114‑2.4A(h), as enacted by subsection (a) of this section, does not apply to funds received from or in connection with the following settlements:

(1)        Settlement funds received by the State pursuant to the Consent Judgment in U.S. v. Bank of America, Civil Action No. 12‑CV‑0361, dated April 4, 2012.

(2)        Settlement funds received by the State pursuant to the settlement agreement in North Carolina ex rel. Cooper v. The McGraw‑Hill Companies, Inc., and Standard & Poor's Financial Services LLC, No. 13CVS 001703.

 

Require Transfer of Savings from the Refinancing of Certain State Debt to Be Transferred to the Savings Reserve

SECTION 6.23.(a)  Article 1 of Chapter 142 of the General Statutes is amended by adding a new section to read:

"§ 142‑15.4.  Savings from refinancing of general obligation bonds to be placed in the Savings Reserve Account.

Whenever general obligation bonds issued or incurred by the State are refinanced:

(1)        The General Assembly shall not reduce the funds appropriated for servicing the refinanced debt during the fiscal biennium in which the refinancing occurs.

(2)        The State Controller shall, in conjunction with the State Treasurer, periodically transfer the savings resulting from the refinancing of the debt to the Savings Reserve Account established pursuant to G.S. 143C‑4‑2 during the fiscal biennium in which the refinancing occurs.

(3)        The Director of the Budget shall, in the fiscal biennium immediately following the refinancing, adjust the amount of debt service funded in the base budget so that it aligns with actual debt service needs."

SECTION 6.23.(b)  Article 9 of Chapter 142 of the General Statutes is amended by adding a new section to read:

"§ 142‑96.  Savings from refinancing of special indebtedness to be placed in the Savings Reserve Account.

Whenever special indebtedness issued or incurred pursuant to this Article is refinanced:

(1)        The General Assembly shall not reduce the funds appropriated for servicing the refinanced debt during the fiscal biennium in which the refinancing occurs.

(2)        The State Controller shall, in conjunction with the State Treasurer, periodically transfer the savings resulting from the refinancing of the debt to the Savings Reserve Account established pursuant to G.S. 143C‑4‑2 during the fiscal biennium in which the refinancing occurs.

(3)        The Director of the Budget shall, in the fiscal biennium immediately following the refinancing, adjust the amount of debt service funded in the base budget so that it aligns with actual debt service needs."

SECTION 6.23.(c)  This section becomes effective July 1, 2015, and applies to indebtedness issued, incurred, or refinanced on or after that date.

 

MSA Changes

SECTION 6.24.(a)  Section 6 of S.L. 1999‑2, as amended by Section 6.11(d) of Session Law 2011‑145, Section 7(b) of Session Law 2011‑391, and Section 6.4(b) of S.L. 2013‑360, reads as rewritten:

"SECTION 6.(a)  The It is the intent of the General Assembly that the funds under the Master Settlement Agreement, which is incorporated into the Consent Decree, shall be credited to the Settlement Reserve Fund.be allocated as follows:

(1a)      Fourteen and six‑tenths percent (14.6%) to The Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation.

(1b)      Eighty‑five and four‑tenths percent (85.4%) shall be credited to the Settlement Reserve Fund.

(b)        Any monies paid into the North Carolina State Specific Account from the Disputed Payments Account on account of the Non‑Participating Manufacturers that would have been transferred to The Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., shall be deposited in the Settlement Reserve Fund."

SECTION 6.24.(b)  The Attorney General shall take all necessary actions to notify the court in the action entitled State of North Carolina v. Philip Morris Incorporated, et al., 98 CVS 14377, in the General Court of Justice, Superior Court Division, Wake County, North Carolina, and the administrators of the State Specific Account established under the Master Settlement Agreement of this action by the General Assembly regarding redirection of payments set forth in subsection (a) of this section.

SECTION 6.24.(c)  G.S. 66‑290 reads as rewritten:

"§ 66‑290.  Definitions.

As used in this Article:

(10)      "Units sold" means the number of individual cigarettes sold in the State by the applicable tobacco product manufacturer (whether directly or through a distributor, retailer, or similar intermediary or intermediaries) during the year in question, as measured by excise taxes collected by the State on packs (or "roll‑your‑own" tobacco containers). on which the State has authority under federal law to impose excise or similar taxes or to collect escrow. The term does not include cigarettes sold (i) on a federal installation in a transaction that is exempt from state taxation under federal law or (ii) on a Native American tribe's reservation to a consumer who is an adult enrolled member of that tribe in a transaction that is exempt from state taxation under federal law. The Secretary of Revenue shall promulgate such rules as are necessary to ascertain the amount of State excise tax paid on the cigarettes of such tobacco product manufacturer for each year. In lieu of adopting rules, the Secretary of Revenue may issue bulletins or directives requiring taxpayers to submit to the Department of Revenue the information necessary to make the required determination under this subdivision."

SECTION 6.24.(d)  G.S. 66‑291 reads as rewritten:

"§ 66‑291.  Requirements.

(c)        Each tobacco product manufacturer that elects to place funds into escrow pursuant to this section shall annually certify to the Attorney General that it is in compliance with this section. The Attorney General may bring a civil action on behalf of the State against any tobacco product manufacturer or joint and severally liable importer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall:

…."

SECTION 6.24.(e)  G.S. 66‑293 reads as rewritten:

"§ 66‑293.  Sale of certain cigarettes prohibited.

(a)        Civil Penalty. – It is unlawful for a person required to pay taxes pursuant to Part 2 or 3 of Article 2A of Chapter 105 of the General Statutes to sell or deliver cigarettes belonging to a brand family of a nonparticipating manufacturer if the sale of the cigarettes is subject to such taxes unless the cigarettes are included on the compliant nonparticipating manufacturer's list prepared and made public by the Office of the Attorney General under G.S. 66‑294.1 as of the date the person sells or delivers the cigarettes. It is not a violation of this subsection if the brand family was on the compliant nonparticipating manufacturer's list when the person purchased the cigarettes and the person sold or delivered the cigarettes within 60 30 days of the purchase. The Attorney General may impose a civil penalty on a person that it finds violates this subsection. The amount of the penalty may not exceed the greater of five hundred percent (500%) of the retail value of the cigarettes sold or five thousand dollars ($5,000).

(b)        Contraband. – Cigarettes described in subsection (a) of this section are contraband and may be seized by a law enforcement officer. The procedure for seizure and disposition of this contraband is the same as the procedure under G.S. 105‑113.31 and G.S. 105‑113.32 for non‑tax‑paid cigarettes."

SECTION 6.24.(f)  G.S. 66‑294(b) is amended by adding a new subdivision to read:

"§ 66‑294.  Duties of manufacturers.

(b)        Nonparticipating Manufacturers. – A nonparticipating manufacturer must:

(7)        Notwithstanding any other provision of law, if a newly qualified nonparticipating manufacturer is to be listed in the North Carolina Tobacco Directory (the Directory), or if the Attorney General reasonably determines that any nonparticipating manufacturer who has filed a certification pursuant to G.S. 66‑291, et seq., poses an elevated risk for noncompliance with this Article, neither such nonparticipating manufacturer nor any of its brand families shall be included in the Directory unless and until such nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with G.S. 66‑291, et seq., has posted a bond in accordance with this section.

      The bond shall be posted by a corporate surety located within the United States in a form and manner acceptable to the Attorney General, or a cash equivalent posted by the nonparticipating manufacturer, in an amount equal to the greater of fifty thousand dollars ($50,000) or the greatest amount of escrow the manufacturer in either its current or predecessor form was required to deposit as a result of its highest calendar year's sales in North Carolina or greatest quarterly escrow deposit depending on the manufacturer's required escrow deposit frequency. The bond or its cash equivalent shall be posted at least 10 days in advance of each calendar year or quarter depending on the manufacturer's required escrow deposit frequency. The bond shall be written in favor of North Carolina and such bond or cash equivalent shall be conditioned on the performance by the nonparticipating manufacturer or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with G.S. 66‑294.2, of all of its duties and obligations under this Article during the year in which the certification is filed and the next succeeding calendar year. The bond may be drawn upon by the Attorney General to cover unsatisfied escrow obligations, penalties, and any other liability under the tobacco laws of the State.

      Some factors, though not exclusive, which the Attorney General may consider in determining whether any nonparticipating manufacturer or importer poses an elevated risk of noncompliance are (i) the nonparticipating manufacturer or any affiliate thereof or importer has illegally failed to satisfy an escrow obligation with respect to any state in the past; (ii) any state has removed the nonparticipating manufacturer or its brand families or an affiliate or any of the affiliate's brand families from the state's tobacco directory for noncompliance with the state's laws; (iii) any state has pending litigation against, or an unsatisfied judgment against the nonparticipating manufacturer or any affiliate thereof or importer for escrow or penalties related to noncompliance with state escrow laws; (iv) the nonparticipating manufacturer sells its cigarettes or tobacco products directly to consumers via remote or other non‑face‑to‑face means; (v) a state or federal court has determined that the nonparticipating manufacturer or importer has violated any tobacco tax or tobacco control law or engaged in unfair business practice or unfair competition; or (vi) the nonparticipating manufacturer or importer fails to submit or complete any required forms, documents, certifications or notices, in a timely manner or, to the satisfaction of the Attorney General."

SECTION 6.24.(g)  G.S. 66‑294.1 reads as rewritten:

"§ 66‑294.1.  Duties of Attorney General.

(b)        Supplemental Lists. – The Office of the Attorney General must supplement the annual lists as necessary to reflect additions to or deletions of manufacturers and brand families. The Attorney General shall delete a nonparticipating manufacturer and its brand families from the list if it determines that the manufacturer fails to comply with the duties listed in G.S. 66‑294. The Attorney General must add a nonparticipating manufacturer and its brand families to the list if it determines all of the following:

(1)        The nonparticipating manufacturer manufacturer, as well as any joint and severally liable importer, has submitted an application under G.S. 66‑294, and it is found to be complete and accurate.

(2)        The Office of the Attorney General has approved the manufacturer's escrow agreement.

(3)        The manufacturer has made any past due payments owed to its escrow account for any of its listed brand families.

(4)        The manufacturer has resolved any outstanding penalty demands or adjudicated penalties for its listed brand families.

…."

SECTION 6.24.(h)  Part 2 of Article 37 of Chapter 66 of the General Statutes is amended by adding a new section to read:

"§ 66‑294.2  Joint and several liability of importers of cigarettes manufactured by nonparticipating manufacturers located outside the United States.

For each nonparticipating manufacturer located outside the United States, each importer into the United States of any such nonparticipating manufacturer's brand families that are or are intended to be sold in North Carolina shall bear joint and several liability with such nonparticipating manufacturer for deposit of all escrow due under this Article and payment of all penalties imposed and shall so designate in a form prepared and provided by the Attorney General and shall appoint and continually maintain a process service agent with the Secretary of State and the Office of the Attorney General."

SECTION 6.24.(i)  G.S. 105‑259(b) reads as rewritten:

"§ 105‑259.  Secrecy required of officials; penalty for violation.

(b)        Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person except as provided in this subsection. Standards used or to be used for the selection of returns for examination and data used or to be used for determining the standards may not be disclosed for any purpose. All other tax information may be disclosed only if the disclosure is made for one of the following purposes:

(40a)    To furnish a data clearinghouse the information required to be released in accordance with the State's agreement under the December 2012 Term Sheet Settlement, as finalized by the State in the NPM Adjustment Settlement Agreement, concerning annual tobacco product sales by a nonparticipating manufacturer. Such information released to a data clearinghouse may be released to parties to the NPM Adjustment Settlement Agreement provided confidentiality protections are agreed to by the parties and overseen and enforced by this State's applicable court for enforcement of the Master Settlement Agreement for (i) any state information constituting confidential tax information or otherwise confidential under state law and (ii) manufacturer information designated confidential. The following definitions apply in this subdivision:

a.         Data clearinghouse. – Defined in the Term Sheet Settlement and in the NPM Adjustment Settlement Agreement.

b.         Master Settlement Agreement. – Defined in G.S. 66‑290.

c.         Nonparticipating manufacturer. – Defined in G.S. 66‑292.

d.         NPM Adjustment Settlement Agreement. – The final executed settlement document resulting from the 2012 Term Sheet Settlement.

e.         Participating manufacturer. – Defined in G.S. 66‑292.

f.          Term Sheet Settlement. – The settlement agreement entered into in December 2012 by the State and certain participating manufacturers under the Master Settlement Agreement.

…."

 

Align Agency Budgets to Actual Expenditures

SECTION 6.25.(a)  Elimination of Certain Vacant Positions. – Notwithstanding G.S. 143C‑6‑4, and except as otherwise provided in subsection (d) of this section, each State agency, in conjunction with the Office of State Budget and Management, shall do all of the following:

(1)        Abolish all positions that have been vacant for more than 12 months as of April 17, 2015, other than those positions required to exist as part of the State's maintenance of effort requirements related to a federal grant that cannot be addressed with other State funds, or for which the Director of the Budget provides an exception, in the Director's sole discretion. This requirement shall apply regardless of the source of funding for affected positions.

(2)        Fund objects or line items in the certified budget for recurring obligations that have been funded from nonrecurring sources in two or more of the previous three fiscal years. The amount funded shall not exceed the average amount expended for each object or line item during the previous three fiscal years.

(3)        Fund objects or line items in the following priority order if funds generated pursuant to subdivision (1) of this subsection are insufficient to adequately fund all of the objects and line items described in subdivision (2) of this subsection:

a.         Fund legal obligations of the agency that have been funded with lapsed salaries in prior years.

b.         Fund operational requirements directly related to the health, safety, or well‑being of individuals in the care or custody of the State that have been funded with lapsed salaries in prior years.

c.         Fund legal obligations of the agency or operational requirements directly related to the health, safety, or well‑being of individuals in the care or custody of the State that have been funded with other nonrecurring sources in prior years.

d.         Fund operational deficiencies where the obligation cannot be reduced and where no other source of funding exists and failure to fund will result in operational disruptions or unfunded liabilities at fiscal year‑end.

(4)        Adjust the appropriate objects or line items in the next recommended base budget submitted pursuant to G.S. 143C‑3‑5 to reflect the actions taken pursuant to this subsection.

SECTION 6.25.(b)  Use of Savings. – Any General Fund savings generated pursuant to subdivision (1) of subsection (a) of this section that are not used to fund objects or line items pursuant to subdivision (2) of subsection (a) of this section shall be transferred on a nonrecurring basis by June 30, 2016, to the Savings Reserve Account established in G.S. 143C‑4‑2. Savings generated by eliminating positions funded in whole or in part from federal funds or other dedicated receipts that are not used to fund objects or line items pursuant to subdivision (2) of subsection (a) of this section shall be reflected as savings to the respective funding source.

SECTION 6.25.(c)  Reporting. – No later than December 1, 2015, the Office of State Budget and Management shall report to the Fiscal Research Division on the implementation of this section. The report shall include all of the following, by budget code and fund code:

(1)        A list of positions abolished pursuant to subdivision (1) of subsection (a) of this section.

(2)        A list of positions that were exempted from being abolished pursuant to subdivision (1) of subsection (a) of this section.

(3)        A list of objects or line items funded pursuant to subdivision (2) of subsection (a) of this section and the associated amount for each object or line item.

(4)        The amount of lapsed salaries transferred to the Savings Reserve Account and used for other purposes pursuant to subsection (b) of this section.

(5)        The amount and disposition of savings from the Highway Fund, federal funds, and other non‑State agency dedicated receipt sources.

(6)        A list of objects or line items that were not funded because the funds generated pursuant to subdivision (1) of this subsection were insufficient.

SECTION 6.25.(d)  Section Inapplicable to Certain Vacant Positions. – This section shall not apply to vacant positions (i) within the Department of Transportation or (ii) reclassified pursuant to Section 30.18(e) of this act.

 

Cap State Funded Portion of Nonprofit Salaries

SECTION 6.26.  No more than one hundred twenty thousand dollars ($120,000) in State funds may be used for the annual salary of any individual employee of a nonprofit organization receiving State funds. For the purposes of this section, the term "State funds" means funds as defined in G.S. 143C‑1‑1(d)(25) and any interest earnings that accrue from those funds.

 

PART VII. INFORMATION TECHNOLOGY

 

INFORMATION TECHNOLOGY FUND

SECTION 7.1.  The availability used to support appropriations made in this act from the Information Technology Fund established in G.S. 147‑33.72H is as follows:

 

                                                                                                  FY 2015‑2016          FY 2016‑2017

 

      General Fund Appropriation for IT Fund                                 $22,381,854             $22,381,854

 

Appropriations are made from the Information Technology Fund for the 2015‑2017 fiscal biennium as follows:

 

      Criminal Justice Information Network                                           $193,085                  $193,085

      Center for Geographic Information and Analysis                           $503,810                  $503,810

      Enterprise Security Risk Management                                          $871,497                  $871,497

      Staffing and Strategic Projects                                                   $7,573,903               $7,573,903

      First Net (State Match)                                                                $140,000                  $140,000

      Enterprise Project Management Office                                      $1,501,234               $1,501,234

      IT Strategy and Standards                                                           $865,326                  $865,326

      State Portal                                                                                 $233,510                  $233,510

      Process Management                                                                   $398,234                  $398,234

      IT Consolidation                                                                       $1,000,000               $1,000,000

      Government Data Analytics Center                                           $9,101,255               $9,101,255

 

Unless a change is approved by the State Chief Information Officer after consultation with the Office of State Budget and Management, funds appropriated to the Information Technology Fund shall be spent only as specified in this section. Changes shall not result in any degradation to the information technology operations or projects listed in this section for which the funds were originally appropriated.

Any changes to the specified uses shall be reported in writing to the chairs of the Joint Legislative Oversight Committee on Information Technology, the chair and cochair of the House Appropriations Committee on Information Technology, and the Fiscal Research Division.

 

INFORMATION TECHNOLOGY INTERNAL SERVICE FUND

SECTION 7.2.(a)  IT Internal Service Fund. – For the 2015‑2016 fiscal year, receipts for the IT Internal Service Fund shall not exceed one hundred eighty‑one million eight hundred thirty‑five thousand nine hundred thirteen dollars ($181,835,913). For fiscal year 2016‑2017, receipts for the Internal Service Fund shall not exceed one hundred eighty‑eight million two hundred seventy‑four thousand five hundred five dollars ($188,274,505). For each year of the 2015‑2017 fiscal biennium, receipts may be increased for specific purposes to a maximum of one hundred ninety‑five million dollars ($195,000,000), following consultation with the Joint Legislative Commission on Governmental Operations each time a requirement for an increase is identified. Rates approved by the Office of State Budget and Management (OSBM) to support the IT Internal Service Fund shall be based on this fund limit. In the event the Fund exceeds the required limit, rates shall be adjusted within 30 days. The Internal Service Fund may also collect in each year of the 2015‑2017 fiscal biennium two hundred nineteen thousand seven hundred ninety‑one dollars ($219,791) to fund Workers' Compensation and up to one million five hundred forty‑nine thousand seven hundred twenty‑nine dollars ($1,549,729) over the biennium to fund FirstNet.

SECTION 7.2.(b)  For the 2016‑2017 fiscal year, budget requirements and associated rates shall be developed based on actual service costs for fiscal year 2014‑2015. These budget requirements and associated rates shall be developed and reported to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by October 1, 2015.

SECTION 7.2.(c)  Receipts collected for IT Internal Service Fund services shall only be used for the specific purposes for which they were collected and are hereby appropriated for those purposes. Funds collected for information technology equipment and fixtures shall be separately maintained and accounted for by the Office of Information Technology Services, and such funds shall be used only for the replacement of the fixtures and equipment for which the funds were collected. By October 1, 2015, the Office of Information Technology Services shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the means and methods by which it is in compliance with the requirements of this subsection.

SECTION 7.2.(d)  Agency Billing and Payments. – The State Chief Information Officer shall ensure that bills from the Office of Information Technology Services are easily understandable and fully transparent. If a State agency fails to pay its IT Internal Service Fund bill within 30 days of receipt, the Office of State Budget and Management may transfer funds from the agency to fully or partially cover the cost of the bill from that agency to the IT Internal Service Fund following notification of the affected agency.

SECTION 7.2.(e)  Of the funds carried forward from fiscal year 2014‑2015 to fiscal year 2015‑2016, the sum of five million dollars ($5,000,000) shall be used during the 2015‑2017 fiscal biennium to offset any shortfalls in agency budgets resulting from rate increases that cause an agency to be unable to pay an IT Internal Service fund bill. The State Chief Information Officer shall ensure that the offsetting funding does not come from federal receipts that the Department of Information Technology has collected or from federal funding intended for any State program or project.

SECTION 7.2.(f)  The State Chief Information Officer shall identify IT Restructuring savings of at least nine million one hundred four thousand ten dollars ($9,104,010) in fiscal year 2015‑2016 and savings of at least twenty million one hundred four thousand ten dollars ($20,104,010) in fiscal year 2016‑2017. As savings are accrued, the OSBM shall reduce the IT Internal Service Fund and agency budgets to reflect the savings, adjusting for actual indirect costs and overhead related to the savings. These accrued savings shall be used for the development of an Enterprise Resource Planning (ERP) system for the State. In order to ensure an effective implementation of the ERP system, all State agencies shall fully cooperate and coordinate with the ERP Provisional Oversight Committee, which is comprised of the Secretary of Information Technology (Chair), State Controller, and State Budget Director. All State agencies shall also fully cooperate and coordinate with any future ERP governance bodies, the Department, and the OSBM and provide data for all statewide ERP‑related activities.

SECTION 7.2.(g)  Statewide information technology procurement shall be funded through a combination of administrative fees as part of the IT Supplemental Staffing contract, as well as fees charged to agencies using the services of the Statewide Information Technology Procurement Office. The Department shall provide to the OSBM a fee schedule to allow cost recovery. If an agency fails to pay for services within 30 days of billing, OSBM shall transfer the unpaid amount to the State Information Technology Procurement Office, following notification of the affected agency.

 

INFORMATION TECHNOLOGY RESERVE

SECTION 7.3.(a)  The appropriations from the Information Technology Reserve Fund for the 2015‑2017 fiscal biennium are as follows:

                                                                                                  FY 2015‑2016          FY 2016‑2017

      Government Data Analytics Center                                           $8,200,000               $8,200,000

      Improve Efficiency and Customer

            Service through IT Modernization                                       $8,255,891               $8,183,212

      NC Connect/Digital Infrastructure                                                $429,438                  $688,061   IT Restructuring      $3,238,804                                                                              $2,029,509

      Maintenance Management System Replacement                           $173,180                  $129,901

      Law Enforcement Information Exchange                                       $288,474                        –

 

SECTION 7.3.(b)  Of the funds appropriated for Information Technology Modernization, the sum of five hundred fifty‑two thousand eight hundred seventy‑four dollars ($552,874) for fiscal year 2015‑2016 and five hundred twenty‑eight thousand seventy‑four dollars ($528,074) for fiscal year 2016‑2017 shall be transferred to the Department of Revenue to fund four security positions. The security positions shall include a Security Design Engineer, a Security Impact Analyst, and two Security Specialists.

SECTION 7.3.(c)  The funds appropriated for Maintenance Management System Replacement shall be transferred to the Department of Administration to support the acquisition of a cloud‑based facilities management system. The system shall include core system functionality consisting of maintenance, inventory, and utility management systems. The system shall also include three additional modules for system failure alerts, automation of utility bills, and the extension of maintenance management to mobile devices.

SECTION 7.3.(d)  Funds appropriated to the Information Technology Reserve Fund shall be spent only as specified in this section unless a change is approved by the State Chief Information Officer after consultation with the Office of State Budget and Management. An authorized change may not result in any degradation to the information technology operations or projects listed in this section for which the funds were originally appropriated. Any changes to the specified uses for the funds shall be reported immediately, in writing, to the chairs of the Joint Legislative Oversight Committee on Information Technology, the chairs of the House Appropriations Committee on Information Technology, and the Fiscal Research Division.

SECTION 7.3.(e)  The Office of State Budget and Management shall establish a fund code for the Information Technology Reserve Fund and shall create budget codes within the fund code for each specific appropriation to the Fund. The Office of State Budget and Management shall manage the fund code separately from other funding for the Department of Information Technology as created by this act.

 

INFORMATION TECHNOLOGY ENTERPRISE ARCHITECTURE

SECTION 7.4.(a)  By April 15, 2016, the Department of Information Technology, as enacted by this act, shall develop an information technology enterprise architecture for State government.

SECTION 7.4.(b)  The completed State information technology enterprise architecture developed pursuant to this section shall be provided to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. This architecture, along with State and agency business plans, shall be incorporated into a biennial State Information Technology Plan (State IT Plan).

 

department of information technology PERFORMANCE MEASURES

SECTION 7.11.(a)  On or before September 1, 2015, the State Chief Information Officer shall establish specific, quantifiable performance measures for each function performed by the Department of Information Technology (Department) created by this act. These performance measures shall be based on industry standards and best practices in other states for performance of each function and shall include measurable objectives for improved performance. The objectives shall include specific time lines for achieving the performance measures and metrics for gauging intended performance. Service level agreements (SLAs) shall also be established. The Department shall post the performance measures and SLAs on the Department's Internet Web site. The Department shall provide monthly updates to its Web site to report on their progress toward achieving performance measures and report whether or not SLAs have been met for each agency during the previous month. Any plans developed by the Department shall include mitigation strategies to resolve any failure to meet established performance measures.

SECTION 7.11.(b)  On or before September 1, 2015, the State Chief Information Officer shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the establishment of performance measures and SLAs. The report shall identify (i) the methodology used to determine the performance measures and SLAs, (ii) assumptions made in determining the performance measures and SLAs, (iii) potential factors that could impact the achievement of performance measures and SLAs, and (iv) the sources of statistical and cost data and processes utilized to assure accuracy.

For any month that the Department does not meet a performance measure or SLA, the Department shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the reason the performance measure or SLA was not achieved, what corrective action is being taken, and when the Department expects to achieve the performance measure or SLA.

 

ELECTRONIC forms and digital SIGNATURES

SECTION 7.13.(a)  The State Chief Information Officer (State CIO) shall implement a digital forms program for State agencies that provides for the acquisition and use of information technologies that enable electronic review, submission, maintenance, or disclosure of information as a replacement substitute for paper documents and hardcopy forms. In developing this capability, the State shall implement a citizen‑friendly electronic forms processing solution that does all of the following:

(1)        Allows form data to be saved locally and submitted electronically.

(2)        Supports interactive forms on desktop and mobile devices.

(3)        Enables forms to be electronically routed through a workflow.

(4)        Provides for the encryption of confidential and sensitive documents.

(5)        Provides for digital signatures through the use of x.509 digital certificates, where applicable, to enable and ensure submitter identity, submitted form information, and acceptance of forms terms and requirements.

If practicable, this program shall be made available to all State agencies, departments, and institutions; local political subdivisions of the State; The University of North Carolina and its constituent institutions; community colleges; and local school administrative units.

SECTION 7.13.(b)  By October 1, 2015, the State CIO shall provide a completed plan for the program to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. This plan shall include a priority list for implementing digital identities and associated certificates, specific electronic forms, a time line for each implementation, and costs associated with the program.

 

state Information Technology Budgeting

SECTION 7.16.(a)  The Administration and Finance Division of the Department of Information Technology (DIT), as created by this act, shall work with the Office of State Budget and Management (OSBM), the Office of the State Controller, and participating agencies to institute a process to oversee and manage State agency information technology funding. This joint effort shall include implementing a process for the following:

(1)        Developing State agency information technology budgets.

(2)        Determining what participating and separate agency information technology funding will transition to DIT and what will remain with the agencies.

(3)        Developing a plan to transfer appropriate funding to DIT in coordination with other State budget requirements.

(4)        Developing rates and chargebacks for support provided to agencies.

(5)        Identifying anticipated information technology cost savings.

(6)        Identifying any rule or statutory changes required to facilitate information technology budgeting oversight and management.

By October 1, 2015, the OSBM and DIT shall report jointly to the Joint Legislative Oversight Committee on Information Technology and Fiscal Research Division on the development of the information technology budgeting process and any anticipated cost savings.

SECTION 7.16.(b)  The OSBM and DIT shall identify anticipated information technology cost savings projected for the 2017‑2019 fiscal biennium, with documentation as to the specific sources and amounts of those savings, and shall report that information to the Joint Legislative Oversight Committee on Information Technology and Fiscal Research Division by December 1, 2015.

 

state agency Budgetary Transparency/expenditures Online

SECTION 7.17.(a)  In coordination with the State Controller and the Office of State Budget and Management (OSBM), the State Chief Information Officer (State CIO) shall prioritize Digital Commons Information Technology Modernization funding to establish a State budget transparency Internet Web site to provide information on budget expenditures for each State agency for each fiscal year beginning 2015-2016. The Internet Web site shall be fully functional by April 1, 2016. The Internet Web site shall be user‑friendly with easy‑to‑use search features and data provided in formats that can be readily downloaded and analyzed by the public. The Internet Web site shall include budgeted amounts and actual expenditures for each agency budget code. The information provided shall include receipts and expenditures from and to all sources, including vendor payments, updated on a monthly basis.

SECTION 7.17.(b)  Each State agency shall work with the State CIO, the State Controller, and the OSBM to ensure that complete and accurate budget and spending information is provided in a timely manner as directed by the State CIO. Each State agency Internet Web site shall include a hyperlink to the State's budget transparency Internet Web site.

 

MultiYear IT Contracts

SECTION 7.18.  Notwithstanding the cash management provisions of G.S. 147‑86.11, the Department of Information Technology, as created by this act, may procure information technology goods and services for periods up to a total of three years where the terms of the procurement contracts require payment of all or a portion of the contract price at the beginning of the contract agreement. All of the following conditions shall be met before payment for these agreements may be disbursed:

(1)        Any advance payment can be accomplished within the IT Internal Service Fund budget.

(2)        The State Controller receives conclusive evidence that the proposed agreement would be more cost‑effective than a multiyear agreement that complies with G.S. 147‑86.11.

(3)        The procurement complies in all other aspects with applicable statutes and rules.

(4)        The proposed agreement contains contract terms that protect the financial interest of the State against contractor nonperformance or insolvency through the creation of escrow accounts for funds, source codes, or both, or by any other reasonable means that have legally binding effect.

The Office of State Budget and Management shall ensure the savings from any authorized agreement shall be included in the IT Internal Service Fund rate calculations before approving annual proposed rates. Any savings resulting from the agreements shall be returned to agencies included in the contract in the form of reduced rates.

 

information technology security/Two‑factor Authentication

SECTION 7.19.(a)  The State CIO shall develop and implement a plan to provide a standardized, statewide two‑factor authentication system. Development of the plan shall be accomplished in coordination with the Criminal Justice Information Network Board of Directors. On or before January 15, 2016, the State CIO shall provide the completed two‑factor authentication plan to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

SECTION 7.19.(b)  Funding appropriated to the Information Technology Reserve for two‑factor authentication, along with any remaining funding from prior appropriations for authentication, shall be used to support implementation of the plan.

 

Data Security Study

SECTION 7.20.  The Joint Legislative Oversight Committee on Information Technology shall study liability issues associated with data security in both the public and private sectors. The Committee shall report its findings and any legislative proposals pertaining to liability issues associated with data security to the General Assembly on or before April 1, 2016.

 

Law Enforcement Information exchange

SECTION 7.21.  Funds appropriated in this act for the Law Enforcement Information Exchange shall be allocated to the Criminal Justice Information Network Board of Directors to be used to map the records management systems of law enforcement agencies in the State to allow these agencies to interface with the Law Enforcement Information Exchange.

 

Enterprise Resource Planning

SECTION 7.22.(a)  In coordination with the Office of the State Controller (OSC) and the Office of State Budget and Management (OSBM), the Department of Information Technology (DIT) shall establish a program to plan, develop, and implement an enterprise resource planning (ERP) system for the State using funds identified from information technology restructuring savings. The funds shall be maintained at OSBM and shall be used to support the development, implementation, and operation of the ERP system.

SECTION 7.22.(b)  Beginning October 1, 2015, and quarterly thereafter, the DIT, in conjunction with OSC and OSBM, shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the status of the program. The report shall include all of the following:

(1)        A detailed listing of current, completed, and potential future projects.

(2)        The amount of funding identified from restructuring savings since the inception of the program.

(3)        The uses of the identified funding.

(4)        The costs of current, completed, and potential future projects.

(5)        The status of planning and implementation of each project.

(6)        Identification of any issues associated with the program.

 

state BROADBAND plan

SECTION 7.23.(a)  The State CIO shall develop a State broadband plan that includes:

(1)        Information regarding the availability and functionality of broadband throughout the State and an evaluation of the current deployment of broadband service.

(2)        A strategy to support the affordability of broadband service as well as maximum utilization of broadband infrastructure, including potential partnerships and sources of funding to support the effort.

(3)        Analysis of means, methods, and best practices to establish universal broadband access across the State.

In developing the State broadband plan, the State CIO shall coordinate with other State agencies in order to maximize the effectiveness and efficiency of available resources.

SECTION 7.23.(b)  For the 2015‑2017 fiscal biennium, by October 1, 2015, and then quarterly thereafter, the State CIO shall provide a report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the development and implementation of the State broadband plan.

 

state portal/economic development/Business Web site Plan

SECTION 7.24.(a)  In coordination with appropriate State agencies, departments, and institutions as part of the State portal planning and development, the State Chief Information Officer (State CIO) shall develop and implement a plan to establish an Internet Web site for businesses operating, or considering operating, within North Carolina, which shall include all of the following:

(1)        The capabilities necessary to complete required business transactions electronically, to include the availability of electronic forms and digital signatures.

(2)        How the State CIO will ensure secure access to any and all information and services required to facilitate the operation of businesses within the State.

(3)        Potential sources of funding to support the development and implementation of the Web site.

SECTION 7.24.(b)  On or before December 1, 2015, the State CIO shall provide the completed plan to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. On or before December 1, 2015, and then at least semiannually for the duration of the 2015‑2017 fiscal biennium, the State CIO shall provide progress reports regarding the establishment and use of the business Internet Web site to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

 

Agency Use of Enterprise Active Directory

SECTION 7.25.  On or before July 1, 2016, all State agencies identified as principal departments under G.S. 143B‑6 shall become direct members of and shall use the Enterprise Active Directory. A principal department may submit to the State Chief Information Officer a written request to deviate from certain requirements of the Enterprise Active Directory, provided that any deviation shall be consistent with available funding and shall be subject to any terms and conditions specified by the State Chief Information Officer.

 

study state agency use of utility‑based computing

SECTION 7.26.(a)  The Department of Information Technology (Department) shall study the use of and cost savings associated with the adoption of utility‑based cloud computing services by State agencies. For the purposes of this section, "utility‑based computing" means the process of providing computing service through an on‑demand, pay‑per‑use billing method, metering the offered services. At a minimum, the review conducted by the Department shall:

(1)        Evaluate the actual and potential usefulness of commercial cloud computing services by State agencies and whether expedited transition to cloud computing would offer significant savings to State agencies.

(2)        Evaluate how giving State agencies the ability to purchase information technology (IT) services in a utility‑based model would result in savings from paying for only the IT services consumed.

(3)        Identify the capabilities required to implement utility‑based computing, storage, and applications, including a rate structure.

SECTION 7.26.(b)  By October 1, 2015, the State Chief Information Officer shall make a written report to the Joint Legislative Oversight Committee on Information Technology on the results of the DIT review of utility‑based computing.

 

State Funded IT Contracts

SECTION 7.27.  For all information technology contracts that receive any State funds, State agencies and vendors shall immediately provide copies of contract documents and any subsequent amendments, modifications, or other changes upon request of the Joint Legislative Oversight Committee on Information Technology or the Fiscal Research Division.

 

PART VII‑A. ESTABLISH DEPARTMENT OF INFORMATION TECHNOLOGY

 

establish Department of Information Technology

SECTION 7A.1.(a)  The Department of Information Technology is established in this Part as a single, unified cabinet‑level department that consolidates information technology functions, powers, duties, obligations, and services existing within the principal departments. Notwithstanding G.S. 143B‑9 and G.S. 143B‑10, and except as otherwise provided in this act, all information technology functions, powers, duties, obligations, and services vested in the State entities listed in G.S. 143B‑6 are transferred to, vested in, and consolidated within the Department of Information Technology. The head of the Department of Information Technology is the State Chief Information Officer, who shall be known as the State CIO. The powers and duties of the deputy chief information officers, directors, and divisions of the Department shall be subject to the direction and control of the State CIO. Upon the establishment of the Department of Information Technology, the Governor shall appoint a State CIO in accordance with G.S. 143B‑9.

SECTION 7A.1.(b)  The following transfers from the Office of Information Technology Services are made to the Department of Information Technology created by this act:

(1)        A Type I transfer, as defined in G.S. 143A‑6, of the:

a.         Office of the State Chief Information Officer.

b.         Office of Information Technology Services.

(2)        A Type II transfer, as defined in G.S. 143A‑6, of the:

a.         911 Board.

b.         Criminal Justice Information Network.

c.         Government Data Analytics Center.

d.         North Carolina Geographic Information Coordinating Council and the Center for Geographic Information and Analysis.

SECTION 7A.1.(c)  G.S. 143B‑2 reads as rewritten:

"§ 143B‑2.  Interim applicability of the Executive Organization Act of 1973.

The Executive Organization Act of 1973 shall be applicable only to the following named departments:

...

(11)      Department of Information Technology."

SECTION 7A.1.(d)  G.S. 143B‑6 reads as rewritten:

"§ 143B‑6.  Principal departments.

In addition to the principal departments enumerated in the Executive Organization Act of 1971, all executive and administrative powers, duties, and functions not including those of the General Assembly and its agencies, the General Court of Justice and the administrative agencies created pursuant to Article IV of the Constitution of North Carolina, and higher education previously vested by law in the several State agencies, are vested in the following principal departments:

...

(12)      Department of Information Technology."

 

statutory changes creating the department of information technology

SECTION 7A.2.(a)  Article 3D of Chapter 147 of the General Statutes is repealed.

SECTION 7A.2.(b)  Chapter 143B of the General Statutes is amended by adding a new Article to read:

"Article 14.

"Department of Information Technology.

"Part 1. General Provisions.

"§ 143B‑1300.  Definitions; scope; exemptions.

(a)        Definitions. – The following definitions apply in this Article:

(1)        CGIA. – Center for Geographic Information and Analysis.

(2)        CJIN. – Criminal Justice Information Network.

(3)        Cooperative purchasing agreement. – An agreement between a vendor and one or more states or state agencies providing that the parties may collaboratively or collectively purchase information technology goods and services in order to increase economies of scale and reduce costs.

(4)        Department. – The Department of Information Technology.

(5)        Distributed information technology assets. – Hardware, software, and communications equipment not classified as traditional mainframe‑based items, including personal computers, local area networks, servers, mobile computers, peripheral equipment, and other related hardware and software items.

(6)        Exempt agencies. – An entity designated as exempt in Part 1 of this Article.

(7)        GDAC. – Government Data Analytics Center.

(8)        GICC. – North Carolina Geographic Information Coordinating Council.

(9)        Information technology or IT. – Set of tools, processes, and methodologies, including, but not limited to, coding and programming, data communications, data conversion, data analysis, architecture, planning, storage and retrieval, systems analysis and design, systems control, mobile applications, and associated equipment employed to collect, process, and present information to support the operation of an organization. The term also includes office automation, multimedia, telecommunications, and any personnel and support personnel required for planning and operations.

(10)      Information technology security incident. – A computer‑, network‑, or paper‑based activity that results directly or indirectly in misuse, damage, denial of service, compromise of integrity, or loss of confidentiality of a network, computer, application, or data.

(11)      Local government entity. – A local political subdivision of the State, including a city, a county, a local school administrative unit as defined in G.S. 115C‑5, or a community college.

(12)      Participating agency. – Any agency that has transferred its information technology personnel, operations, projects, assets, and funding to the Department of Information Technology. The State CIO shall be responsible for providing all required information technology support to participating agencies.

(13)      Separate agency. – Any agency that has maintained responsibility for its information technology personnel, operations, projects, assets, and funding. The agency head shall work with the State CIO to ensure that the agency has all required information technology support.

(14)      State agency or agency. – Any agency, department, institution, commission, committee, board, division, bureau, office, unit, officer, or official of the State. The term does not include the legislative or judicial branches of government or The University of North Carolina.

(15)      State Chief Information Officer or State CIO. – The head of the Department, who is a Governor's cabinet level officer.

(b)        Exemptions. – Except as otherwise specifically provided by law, the provisions of this Chapter do not apply to the General Assembly, the Judicial Department, or The University of North Carolina and its constituent institutions. The General Assembly, the Judicial Department, or The University of North Carolina and its constituent institutions may elect to participate in the information technology programs, services, or contracts offered by the Department, including information technology procurement, in accordance with the statutes, policies, and rules of the Department. Such an election must be made in writing, as follows:

(1)        For the General Assembly, by the Legislative Services Commission.

(2)        For the Judicial Department, by the Chief Justice.

(3)        For The University of North Carolina, by the Board of Governors.

(4)        For the constituent institutions of The University of North Carolina, by the respective boards of trustees.

(c)        Deviations. – Any State agency may apply in writing to the State Chief Information Officer for approval to deviate from the provisions of this Chapter. If granted by the State Chief Information Officer, any deviation shall be consistent with available appropriations and shall be subject to such terms and conditions as may be specified by the State CIO.

(d)        Review. – Notwithstanding subsection (b) of this section, any State agency shall review and evaluate any deviation authorized and shall, in consultation with the Department of Information Technology, adopt a plan to phase out any deviations that the State CIO determines to be unnecessary in carrying out functions and responsibilities unique to the agency having a deviation. The plan adopted by the agency shall include a strategy to coordinate its general information processing functions with the Department of Information Technology in the manner prescribed by this act, and provide for its compliance with policies, procedures, and guidelines adopted by the Department of Information Technology. Any agency receiving a deviation shall submit its plan to the Office of State Budget and Management as directed by the State Chief Information Officer.

"§ 143B‑1301.  Powers and duties of the Department; cost‑sharing with exempt entities.

(a)        The Department shall have the following powers and duties:

(1)        Provide information technology support to executive branch agencies.

(2)        Provide such information technology support to local government entities and others, as may be required.

(3)        Plan and coordinate information technology efforts with State agencies, nonprofits, and private organizations, as required.

(4)        Establish a consistent process for planning, maintaining, and acquiring the State's information technology resources. This includes responsibility for developing and administering a comprehensive long‑range plan to ensure the proper management of the State's information technology resources.

(5)        Develop standards and accountability measures for information technology projects, including criteria for effective project management.

(6)        Set technical standards for information technology, review and approve information technology projects and budgets, establish information technology security standards, provide for the procurement of information technology resources, and develop a schedule for the replacement or modification of information technology systems.

(7)        Implement enterprise procurement processes and develop metrics to support this process.

(8)        Manage the information technology funding for State agencies, to include the Information Technology Fund for statewide information technology efforts and the Information Technology Internal Service Fund for agency support functions.

(9)        Support, maintain, and develop metrics for the State's technology infrastructure and facilitate State agencies' delivery of services to citizens.

(10)      Operate as the State enterprise organization for information technology governance.

(11)      Advance the State's technology and data management capabilities.

(12)      Prepare and present the Department's budget in accordance with Chapter 143C of the General Statutes, the State Budget Act.

(13)      Obtain, review, and maintain, on an ongoing basis, records of the appropriations, allotments, expenditures, revenues, grants, and federal funds for each State agency for information technology.

(14)      Adopt rules for the administration of the Department and implementing this Article, pursuant to the Administrative Procedures Act, Chapter 150B of the General Statutes.

(15)      Require reports by State agencies, departments, and institutions about information technology assets, systems, personnel, and projects and prescribing the form of such reports.

(16)      Prescribe the manner in which information technology assets, systems, and personnel shall be provided and distributed among agencies, to include changing the distribution when the State CIO determines that is necessary.

(17)      Prescribe the manner of inspecting or testing information technology assets, systems, or personnel to determine compliance with information technology plans, specifications, and requirements.

(18)      Submit all rates and fees for common, shared, and State government‑wide technology services provided by the Department to the Office of State Budget and Management for approval.

(19)      Establish and operate centers of expertise for specific information technologies and services to serve two or more agencies on a cost‑sharing basis, if the State CIO, after consultation with the Office of State Budget and Management, decides it is advisable from the standpoint of efficiency and economy to establish these centers and services.

(20)      Charge each State agency for which services are performed its proportionate part of the cost of maintaining and operating the shared centers and services, subject to approval by the Office of State Budget and Management.

(21)      Require any State agency served to transfer to the Department ownership, custody, or control of information‑processing equipment, supplies, and positions required by the shared centers and services.

(22)      Identify and develop projects to facilitate the consolidation of information technology equipment, support, and projects.

(23)      Identify agency to serve as the lead for an enterprise effort, when appropriate.

(24)      Develop performance standards for shared services in coordination with supported State agencies, and publish performance reports on the Department Web site.

(25)      Adopt plans, policies, and procedures for the acquisition, management, and use of information technology resources in State agencies to facilitate more efficient and economic use of information technology in the agencies.

(26)      Develop and manage career progressions and training programs to efficiently implement, use, and manage information technology resources throughout State government.

(27)      Provide local government entities with access to the Department's services as authorized in this section for State agencies. Access shall be provided on the same cost basis that applies to State agencies.

(28)      Support the operation of the CGIA, GICC, GDAC, CJIN, and 911 Board.

(29)      Provide geographic information systems services through the Center for Geographic Information and Analysis on a cost recovery basis. The Department and the Center for Geographic Information and Analysis may contract for funding from federal or other sources to conduct or provide geographic information systems services for public purposes.

(30)      Support the development, implementation, and operation of an Education Community of Practice.

(b)        Cost‑Sharing with Other Branches. – Notwithstanding any other provision of law to the contrary, the Department shall provide information technology services on a cost‑sharing basis to exempt agencies, upon request.

"§ 143B‑1302.  State CIO duties and Departmental administration.

(a)        State CIO. – The State CIO is the head of the Department and a member of the Governor's cabinet. The State CIO shall be qualified by education and experience for the office. The State CIO shall be appointed by and serve at the pleasure of the Governor. The salary of the State CIO shall be set by the Governor. The State CIO shall receive longevity pay on the same basis as is provided to employees of the State who are subject to the North Carolina Human Resources Act.

(b)        Administration. – The Department shall be managed under the administration of the State CIO. The State CIO shall have the power and duty to do all of the following:

(1)        Ensure that executive branch agencies receive all required information technology support in an efficient and timely manner.

(2)        Ensure that such information technology support is provided to local government entities and others, as appropriate.

(3)        As required, plan and coordinate information technology efforts with State agencies, nonprofits, and private organizations.

(4)        Ensure the security of State information technology systems and networks, as well as associated data, developing standardized systems and processes.

(5)        Prepare and present the Department's budget in accordance with Chapter 143C of the General Statutes, the State Budget Act.

(6)        Establish rates for all goods and services provided by the Department within required schedules.

(7)        Identify and work to consolidate duplicate information technology capabilities.

(8)        Identify and develop plans to increase State data center efficiencies, consolidating assets in State‑managed data centers.

(9)        Plan for and manage State network development and operations.

(10)      Centrally classify, categorize, manage, and protect the State's data.

(11)      Obtain, review, and maintain, on an ongoing basis, records of the appropriations, allotments, expenditures, and revenues of each State agency for information technology.

(12)      Be responsible for developing and administering a comprehensive long‑range plan to ensure the proper management of the State's information technology resources.

(13)      Set technical standards for information technology, review and approve information technology projects and budgets, establish information technology security standards, provide for the procurement of information technology resources, and develop a schedule for the replacement or modification of information technology systems.

(14)      Require reports by State departments, institutions, or agencies of information technology assets, systems, personnel, and projects; prescribe the form of such reports; and verify the information when the State CIO determines verification is necessary.

(15)      Prescribe the manner in which information technology assets, systems, and personnel shall be provided and distributed among agencies.

(16)      Establish and maintain a program to provide career management for information technology professionals.

(17)      Prescribe the manner of inspecting or testing information technology assets, systems, or personnel to determine compliance with information technology plans, specifications, and requirements.

(18)      Supervise and support the operations of the CGIA, GICC, GDAC, CJIN, and 911 Board.

(19)      Oversee and coordinate an Education Community of Practice.

(c)        Budgetary Matters. – The Department's budget shall incorporate information technology costs and anticipated expenditures of State agencies identified as principal departments in G.S. 143B‑6, together with all divisions, boards, commissions, or other State entities for which the principal departments have budgetary authority.

(d)        Cost‑Sharing with Other Branches. – Notwithstanding any other provision of law, the Department shall provide information technology services on a cost‑sharing basis to the judicial branch as requested by the Chief Justice and to the General Assembly and its agencies as requested by the Legislative Services Commission.

"§ 143B‑1303.  Divisions and units of the Department.

(a)        The Department shall be organized into at least the following divisions and units:

(1)        Statewide Information Technology Division.

(2)        Shared Services Division.

(3)        Administrative and Finance Division.

(b)        Statewide Information Technology Division. – There is hereby created within the Department the Statewide Information Technology Division. The functions of the Statewide Information Technology Division shall include, but are not limited to, the following:

(1)        Statewide strategic planning.

(2)        Statewide information technology procurement.

(3)        Information technology project management.

(4)        Statewide information technology strategies and standards (enterprise architecture).

(5)        Data analytics.

(6)        Digital support to include Web support, mobile support, and social media support (State portal).

(7)        Solution architecture.

(8)        Requirements analysis.

(c)        Shared Services Division. – There is hereby created within the Department the Shared Services Division. The Shared Services Division shall provide services to State agencies as well as local government entities on a cost recovery basis. These services include the following:

(1)        Network Infrastructure.

(2)        Hosting Infrastructure.

(3)        Telephony and call center services.

(4)        Client computing.

(5)        Electronic mail.

(6)        Identity Management.

(7)        Quality assurance testing.

(8)        Document management.

(9)        Project management staffing.

(10)      Primary and secondary data centers operation.

(d)        Administration and Finance Division. – There is hereby created within the Department the Administration and Finance Division. The Administration and Finance Division shall provide:

(1)        Financial management services, including handling the Department's budgeting, accounting, purchasing, rate‑setting, and billing functions.

(2)        Agency information management, including asset management, agency IT security, billing systems, and Department‑specific tools and applications.

(3)        Administrative support.

(4)        Facilities management.

(5)        Internal auditing.

(6)        Boards administration.

(e)        Education Community of Practice. – There is established an Education Community of Practice to promote collaboration and create efficiencies between and among The University of North Carolina system, the North Carolina Community Colleges System Office, the constituent institutions of the Community College System  the Department of Public Instruction, and local school administrative units.

(f)         Other Units. – Other units of the Department include the following:

(1)        Center for Geographic Information and Analysis.

(2)        Criminal Justice Information Network.

(3)        Government Data Analytics Center.

(4)        North Carolina 911 Board.

(5)        North Carolina Geographic Information Coordinating Council.

"§ 143B‑1304.  State agency information technology management; deviations for State agencies.

Each State agency shall have tools and applications specific to their respective functions in order to effectively and efficiently carry out the business of the State with respect to all of the following:

(1)        Administrative support.

(2)        Facilities management.

(3)        Internal auditing.

(4)        Boards administration.

(5)        Departmental policies and procedures.

"§ 143B‑1305.  Transition to Department of Information Technology.

(a)        Transition Period. – During the 2015‑2016 fiscal year, the State CIO shall work with appropriate State agencies to develop a State business plan. The State CIO shall develop documentation to support the consolidation of enterprise information technology functions within the executive branch to include the following:

(1)        Information technology architecture.

(2)        Updated State information technology strategic plan that reflects State and agency business plans and the State information technology architecture.

(3)        Information technology funding process to include standardized, transparent rates that reflect market costs for information technology requirements.

(4)        Information technology personnel management.

(5)        Information technology project management.

(6)        Information technology procurement.

(7)        Hardware configuration and management.

(8)        Software acquisition and management.

(9)        Data center operations.

(10)      Network operations.

(11)      System and data security, including disaster recovery.

(12)      Establishment, implementation, and monitoring of verifiable, industry standard Department performance measures for support to both participating agencies and nonparticipating agencies available on the agency Web site.

Each plan shall include specific, quantifiable performance measures. These performance measures shall be posted on the Department's Web site. The Department's plans shall include mitigation strategies to resolve any failure to meet established performance measures. These plans shall be provided to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by March 1, 2016.

(b)        Phased Transitions. – The State CIO shall develop detailed plans for the phased transition of Principal Departments to the Department, as well as a plan that defines in detail how information technology support shall be provided to agencies that are not Principal Departments. These plans shall be coordinated, in writing, with each agency and shall address any issues unique to a specific agency.

(c)        Pilot Participating Agencies. – During the 2015‑2016 fiscal year, after completion of detailed plans for each agency, the following pilot participating agencies shall transfer information technology personnel, operations, projects, assets, and appropriate funding to the Department of Information Technology:

(1)        Department of Public Safety.

(2)        Governor's Office.

(3)        Department of Environment and Natural Resources.

(4)        Office of State Budget and Management.

(5)        Office of State Human Resources.

(6)        Department of Cultural Resources.

(7)        Department of Commerce.

After integration of the pilot participating agencies, the State CIO shall identify lessons learned during the pilot, update plans to reflect needed changes, and provide both the lessons learned documents and the updated plans to Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. Upon successful transition of the pilot participating agencies, the State CIO may add additional agencies during the 2016‑2017 fiscal year.

(d)        Final State Agencies to Transition. – During the 2016‑2017 fiscal year, all remaining principal departments shall transfer to the Department all information technology personnel, operations, projects, assets, and funding.

The State CIO shall ensure that agencies' operations are not impacted during the transition. Within 48 hours of occurrence, the State CIO and the affected agency shall report any impact on agency operations resulting from the transition to the new Department to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

The State CIO shall develop a plan to transition all remaining State agencies to the Department during the 2017‑2019 biennium, provided that no constitutional provision is violated by the transition.

"Part 2. Information Technology Planning, Funding, and Reporting.

"§ 143B‑1306.  Planning and financing State information technology resources.

(a)        The State CIO shall develop policies for agency information technology planning and financing. Agencies shall prepare and submit such plans as required in this section.

(1)        The Department shall analyze the State's legacy information technology systems and develop a plan to document the needs and costs for replacement systems, as well as determining and documenting the time frame during which State agencies can continue to efficiently use legacy information technology systems, resources, security, and data management to support their operations. The plan shall include an inventory of legacy applications and infrastructure, required capabilities not available with the legacy system, the process, time line, and cost to migrate from legacy environments, and any other information necessary for fiscal or technology planning. The State CIO shall have the authority to prioritize the upgrade and replacement of legacy systems. Agencies shall provide all requested documentation to validate reporting on legacy systems and shall make the systems available for inspection by the Department.

(2)        The State CIO shall develop a biennial State Information Technology Plan (Plan).

(3)        The State CIO shall develop and periodically update a long‑range State Information Technology Plan that forecasts, at a minimum, the needs of State agencies for the next 10 years.

(4)        The State CIO shall develop one or more strategic plans for information technology. The State CIO shall determine whether strategic plans are needed for any agency and shall consider an agency's operational needs, functions, and capabilities when making such determinations.

(b)        The biennial State Information Technology Plan shall be transmitted to the General Assembly in conjunction with the Governor's budget of each regular session. The Plan shall include the following elements:

(1)        Anticipated requirements for information technology support over the next five years.

(2)        An inventory of current information technology assets and major projects. As used in this subdivision, the term "major project" includes projects costing more than five hundred thousand dollars ($500,000) to implement.

(3)        Significant unmet needs for information technology resources over a five‑year time period. The Plan shall rank the unmet needs in priority order according to their urgency.

(4)        A statement of the financial requirements, together with a recommended funding schedule for major projects in progress or anticipated for approval during the upcoming fiscal biennium.

(5)        An analysis of opportunities for statewide initiatives that would yield significant efficiencies or improve effectiveness in State programs.

(c)        Each participating agency shall actively participate in preparing, testing, and implementing an information technology plan required under subsection (b) of this section. Separate agencies shall prepare biennial information technology plans including the requirements listed in subsection (b) and transmit these plans to the State CIO by October 1 of each even‑numbered year. Agencies shall provide all financial information to the State CIO necessary to determine full costs and expenditures for information technology assets and resources provided by the agencies or through contracts or grants. The Department shall consult with and assist State agencies in the preparation of these plans; shall provide appropriate personnel or other resources to the principal departments identified in G.S. 143B‑6; and to Council of State agencies upon request pursuant to Part 3, Shared Information Technology Services, of this Article. Plans shall be submitted to the State CIO of Information Technology by October 1 of each even‑numbered year.

"§ 143B‑1307.  Business continuity planning.

The State CIO shall oversee the manner and means by which information technology business and disaster recovery plans for the State agencies are created, reviewed, and updated. Each State agency shall establish a disaster recovery planning team to work with the Department, or other resources designated by the State CIO, to develop the disaster recovery plan and to administer implementation of the plan. In developing the plan, all of the following shall be completed:

(1)        Consider the organizational, managerial, and technical environments in which the disaster recovery plan must be implemented.

(2)        Assess the types and likely parameters of disasters most likely to occur and the resultant impacts on the agency's ability to perform its mission.

(3)        List protective measures to be implemented in anticipation of a natural or man‑made disaster.

(4)        Determine whether the plan is adequate to address information technology security incidents.

Each State agency shall submit its disaster recovery plan to the State CIO on an annual basis and as otherwise requested by the State CIO.

"§ 143B‑1308.  Information Technology Fund.

There is established a special revenue fund to be known as the Information Technology Fund, which may receive transfers or other credits as authorized by the General Assembly. Money may be appropriated from the Information Technology Fund to support the operation and administration that meet statewide requirements, including planning, project management, security, electronic mail, State portal operations, early adoption of enterprise efforts, and the administration of systemwide procurement procedures. Funding for principal agency information technology projects shall be appropriated to the Information Technology Fund and may be reallocated by the State CIO, if appropriate, following coordination with the impacted agencies and written approval by the Office of State Budget and Management. Any redirection of agency funds shall immediately be reported to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division with a detailed explanation of the reasons for the redirection. Expenditures involving funds appropriated to the Department from the Information Technology Fund shall be made by the State CIO. Interest earnings on the Information Technology Fund balance shall be credited to the Information Technology Fund.

"§ 143B‑1309.  Internal Service Fund.

(a)        The Internal Service Fund is established within the Department as a fund to provide goods and services to State agencies on a cost‑recovery basis. The Department shall establish fees for subscriptions and chargebacks for consumption‑based services. The State CIO shall establish and annually update consistent, fully transparent, easily understandable fees and rates that reflect industry standards for any good or service for which an agency is charged. These fees and rates shall be prepared by October 1 and shall be approved by the Office of State Budget and Management. The Office of State Budget and Management shall ensure that State agencies have the opportunity to adjust their budgets based on any rate or fee changes prior to submission of those budget recommendations to the General Assembly. The approved Information Technology Internal Service Fund budget and associated rates shall be included in the Governor's budget recommendations to the General Assembly.

(b)        Receipts shall be used solely for the purpose for which they were collected. Any uses of the Information Technology Internal Service Fund not specifically related to providing receipt‑supported services to State agencies shall immediately be reported to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

(c)        In coordination with the Office of the State Controller and the Office of State Budget Management, the State CIO shall ensure processes are established to manage federal receipts, maximize those receipts, and ensure that federal receipts are correctly utilized. By September 1 of each year, the State CIO shall certify that federal receipts for participating agency information technology programs have been properly used during the previous State fiscal year.

"§ 143B‑1310.  Information technology reporting.

The State CIO shall report to the Joint Legislative Oversight Committee on Information Technology and to the Fiscal Research Division regarding the Information Technology Fund, the Internal Service Fund, and any Information Technology Reserve Fund on a quarterly basis, no later than the first day of the second month following the end of the quarter. The report shall include current cash balances, line‑item detail on expenditures from the previous quarter, and anticipated expenditures and revenues over the next year, by quarter. The State CIO shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on expenditures for the upcoming quarter, projected year‑end balance, and the status report on personnel position changes, including new positions created and existing positions eliminated. Spending reports shall comply with the State Accounting System object codes.

"§ 143B‑1311.  Financial reporting and accountability for information technology investments and expenditures.

The Department, along with the Office of State Budget and Management and the Office of the State Controller, shall develop processes for budgeting and accounting of expenditures for information technology operations, services, projects, infrastructure, and assets for State agencies, notwithstanding any deviations permitted pursuant to G.S. 143B‑1303(b) or G.S. 143B‑1303(c). The budgeting and accounting processes may include hardware, software, personnel, training, contractual services, and other items relevant to information technology, and the sources of funding for each. Annual reports regarding information technology shall be coordinated by the Department with the Office of State Budget and Management and the Office of the State Controller and submitted to the Governor and the General Assembly on or before October 1 of each year.

The State CIO shall not enter into any information technology contracts requiring agency financial participation without obtaining written agreement from participating agencies regarding apportionment of the contract costs.

The State CIO shall review the information technology budgets for principal departments and shall recommend appropriate adjustments to support requirements identified by the State CIO.

"§ 143B‑1312.  Information technology human resources.

(a)        The State CIO may appoint all employees of the Department of Information Technology necessary to carry out the powers and duties of the Department. All employees of the Department are under the supervision, direction, and control of the State CIO, who may assign any function vested in his or her office to any subordinate employee of the Department.

(b)        The State CIO may appoint a deputy State CIO for each of the three divisions within the Department, each of whom shall be under the control and direction of the State CIO. The salaries of the deputy secretaries shall be set by the State CIO. The State CIO and the deputy secretaries are exempt from the North Carolina Human Resources Act.

(c)        Subject to approval of the Governor and limitations of G.S. 126‑5, the State CIO may appoint or designate additional managerial and policymaking positions, including, but not limited to, the chief financial officer, and general counsel, who shall be exempt from the North Carolina Human Resources Act.

(d)        The State CIO shall establish a detailed, standardized, systemic plan for the transition of participating agency personnel to the new organization. This shall include the following:

(1)        Documentation of current information technology personnel requirements.

(2)        An inventory of current agency information technology personnel and their skills.

(3)        Analysis and documentation of the gaps between current personnel and identified requirements.

(4)        An explanation of how the Department plans to fill identified gaps.

(5)        The Department's plan to eliminate positions no longer required.

(6)        The Department's plan for employees whose skills are no longer required.

For each person to be transferred, the State CIO shall identify a designated position with a job description, determine the cost for the position, identify funding sources, and establish a standardized rate.

(e)        Participating agency information technology personnel performing information technology functions shall be moved to the Department. The State CIO shall consolidate participating agency information technology personnel following the time line established in this Article once a detailed plan has been developed for transitioning the personnel to the new agency.

(f)         The State CIO shall establish standard information technology career paths for both management and technical tracks, including defined qualifications, career progression, training requirements, and appropriate compensation. For information technology procurement professionals, the State CIO shall establish a career path that includes defined qualifications, career progression, training requirements, and appropriate compensation. These career paths shall be documented by December 1, 2015, and shall be provided to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by December 1, 2015. The career paths shall be updated on an annual basis.

(g)        The State CIO may, subject to the provisions of G.S. 147‑64.7(b)(2), obtain the services of independent public accountants, qualified management consultants, and other professional persons or experts to carry out the powers and duties of this Article, if the Department does not have any personnel qualified to perform the function for which the professionals would be engaged and if the requirement has been included in the Department's budget for the year in which the services are required.

(h)        Criminal Records Checks. – The State CIO shall require background investigations of any employee or prospective employee, including a criminal history record check, which may include a search of the State and National Repositories of Criminal Histories based on the person's fingerprints. A criminal history record check shall be conducted by the State Bureau of Investigation upon receiving fingerprints and other information provided by the employee or prospective employee. If the employee or prospective employee has been a resident of the State for less than five years, the background report shall include a review of criminal information from both the State and National Repositories of Criminal Histories. The criminal background report shall be provided to the State CIO and is not a public record under Chapter 132 of the General Statutes.

"Part 3. Information Technology Projects and Management.

"§ 143B‑1318.  Project Management.

(a)        Overall Management. – All information technology projects shall be managed through a standardized, fully documented process established and overseen by the State CIO. The State CIO shall be responsible for ensuring that participating agency information technology projects are completed on time, within budget, and meet all defined business requirements upon completion. For separate agency projects, the State CIO shall ensure that projects follow the Department's established process and shall monitor schedule, budget, and adherence to business requirements. For all projects, the State CIO shall establish procedures to limit the need for change requests and shall report on this process to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by October 1, 2015. The State CIO shall also ensure that agency information technology project requirements are documented in biennial information technology plans. If an agency updates a biennial information technology plan to add a new project, the State CIO shall immediately report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the reasons for the new requirement, the costs, and the sources of funding.

(b)        Project Review and Approval. – The State CIO shall review, approve, and monitor all information technology projects for State agencies and shall be responsible for the efficient and timely management of all information technology projects for participating agencies. Project approval may be granted upon the State CIO's determination that the project conforms to project management procedures and policies, does not duplicate a capability already existing in the State, conforms to procurement rules and policies, and that sufficient funds are available.

(c)        Project Implementation. – No State agency, unless expressly exempt within this Article, shall proceed with an information technology project until the State CIO approves the project. If a project is not approved, the State CIO shall specify in writing to the agency the grounds for denying the approval. The State CIO shall provide this information to the agency and the Office of State Budget and Management within five business days of the denial.

(d)        Suspension of Approval/Cancellation of Projects. – The State CIO of Information Technology may suspend the approval of, or cancel, any information technology project that does not continue to meet the applicable quality assurance standards. The State CIO shall immediately suspend approval of, or cancel, any information technology project that is initiated without State CIO approval. Any project suspended or cancelled because of lack of State CIO approval cannot proceed until it completes all required project management documentation and meets criteria established by the State CIO for project approval, to include a statement from the State CIO that the project does not duplicate capabilities that already exist within the executive branch. If the State CIO suspends or cancels a project, the State CIO shall specify in writing to the agency the grounds for suspending or cancelling the approval. The State CIO shall provide this information to the agency within five business days of the suspension.

The Department shall report any suspension or cancellation immediately to the Office of the State Controller, the Office of State Budget and Management, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division. The Office of State Budget and Management shall not allow any additional expenditure of funds for a project that is no longer approved by the State CIO of Information Technology.

(e)        General Quality Assurance. – Information technology projects authorized in accordance with this Article shall meet all project standards and requirements established under this Part.

(f)         Performance Contracting. – All contracts between the State and a private party for information technology projects shall include provisions for vendor performance review and accountability, contract suspension or termination, and termination of funding. The State CIO may require that these contract provisions include a performance bond, monetary penalties, or require other performance assurance measures for projects that are not completed within the specified time period or that involve costs in excess of those specified in the contract. The State CIO may utilize cost‑savings realized on government vendor partnerships as performance incentives for an information technology vendor.

(g)        Notwithstanding the provisions of G.S. 114‑2.3, any State agency developing and implementing an information technology project with a total cost of ownership in excess of five million dollars ($5,000,000) may be required by the State CIO to engage the services of private counsel or subject matter experts with the appropriate information technology expertise. The private counsel or subject matter expert may review requests for proposals; review and provide advice and assistance during the evaluation of proposals and selection of any vendors; and review and negotiate contracts associated with the development, implementation, operation, and maintenance of the project. This requirement may also apply to information technology programs that are separated into individual projects, if the total cost of ownership for the overall program exceeds five million dollars ($5,000,000).

"§ 143B‑1319.  Project management standards.

(a)        The State CIO shall establish standardized documentation requirements for agency projects to include requests for proposal and contracts. The State CIO shall establish standards for project managers and project management assistants. The State CIO shall develop performance measures for project reporting and shall make this reporting available through a publicly accessible Web site.

(b)        Participating Agency Responsibilities. – The State CIO shall designate a Project Manager who shall select qualified personnel from the Department staff to participate in IT project management, implementation, testing, and other activities for any information technology project. The Project Manager shall provide periodic reports to the project management assistant assigned to the project by the State CIO under subsection (b) of this section. The reports shall include information regarding the agency's business requirements, applicable laws and regulations, project costs, issues related to hardware, software, or training, projected and actual completion dates, and any other information related to the implementation of the information technology project.

(c)        Separate Agency Responsibilities. – Each agency shall provide for one or more project managers who meet the applicable quality assurance standards for each information technology project that is subject to approval by the State CIO. Each project manager shall be subject to the review and approval of the State CIO. Each agency project manager shall provide periodic reports to the project management assistant assigned to the project by the State CIO under this subsection. The reports shall include information regarding project costs, issues related to hardware, software, or training, projected and actual completion dates, and any other information related to the implementation of the information technology project.

(d)        State CIO Responsibilities. – The State CIO of Information Technology shall provide a project management assistant from the Department for any approved separate agency project, whether the project is undertaken in single or multiple phases or components. The State CIO may designate a project management assistant for any other information technology project.

The project management assistant shall advise the agency with the initial planning of a project, the content and design of any request for proposals, contract development, procurement, and architectural and other technical reviews. The project management assistant shall also monitor progress in the development and implementation of the project and shall provide status reports to the agency and the State CIO of Information Technology, including recommendations regarding continued approval of the project.

The State CIO shall establish a clearly defined, standardized process for project management that includes timelines for completion of process requirements for both the Department and agencies. The State CIO shall also establish reporting requirements for information technology projects, both during the planning, development, and implementation process, and following completion of the project. The State CIO shall continue to monitor system performance and financial aspects of each project after implementation and shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division when there is more than a five percent (5%) variance in a completed project's operations and maintenance costs or if a project does not provide the forecasted return on investment. The State CIO shall also monitor any certification process required for State information technology projects and shall immediately report any issues associated with certification processes to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

"§ 143B‑1320.  Dispute resolution.

(a)        Agency Request for Review. – In any instance where the State CIO has denied or suspended the approval of an information technology project, has cancelled the project, or has denied an agency's request for deviation, the affected State agency may request that the Governor review the State CIO's decision. The agency shall submit a written request for review to the Governor within 15 working days following the agency's receipt of the State CIO's written grounds for denial, suspension, or cancellation. The agency's request for review shall specify the grounds for its disagreement with the State CIO's determination. The agency shall include with its request for review a copy of the State CIO's written grounds for denial or suspension.

(b)        Review Process. – The Governor shall review the information provided and may request additional information from either the agency or the State CIO. The Governor may affirm, reverse, or modify the decision of the State CIO, or may remand the matter back to the State CIO for additional findings. Within 30 days after initial receipt of the agency's request for review, the Governor shall notify the agency and the State CIO of the decision in the matter. The notification shall be in writing and shall specify the grounds for the Governor's decision.

The Governor may reverse or modify a decision of the State CIO when the Governor finds the decision of the State CIO is unsupported by substantial evidence that the agency project fails to meet one or more standards of efficiency and quality of State government information technology as required under this Article.

"§ 143B‑1321.  Standardization.

The State CIO shall establish consistent standards for the purchase of agency hardware and software that reflect identified, documented agency needs.

"§ 143B‑1322.  Legacy applications.

Legacy applications shall be moved to the Department once a detailed plan, coordinated with the impacted agencies, is in place for the successful transition of a specific application to the Department. The State CIO must provide a written statement that the Department is prepared to assume responsibility for the application and that there will be no issues with service during the transition. A copy of this statement shall be forwarded to the Review Committee, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division prior to the transition of an application.

The Department shall identify situations where multiple agencies are using legacy systems with similar capabilities and shall prepare plans to consolidate these systems. Initial identification of similar capabilities shall be reported to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by March 1, 2016. The initial report shall include a schedule for the consolidation. The report shall also include the costs for operating and maintaining the current systems, the estimated costs for an enterprise replacement system, and the operations and maintenance costs associated with an enterprise system.

"Part 4. Information Technology Procurement.

"§ 143B‑1323.  Procurement of information technology.

(a)        The State CIO is responsible for establishing policies and procedures for information technology procurement for State agencies.

Notwithstanding any other provision of law, the Department shall procure all information technology goods and services for participating agencies and shall approve information technology procurements for separate agencies. The State CIO may cancel or suspend any agency information technology procurement that occurs without State CIO approval. If an agency procures information technology goods or services without State CIO approval, the agency shall be responsible for identifying a funding source that is not associated with information technology fund codes.

(b)        The Department shall integrate technological review, current availability of the capability, cost analysis, and procurement for all information technology needs of State agencies in order to make procurement and implementation of technology more responsive, efficient, and cost‑effective. G.S. 143‑135.9 shall apply to information technology procurements.

(c)        The Department shall, subject to the provisions of this Part, do all of the following with respect to State information procurement:

(1)        Purchase or contract for all information technology for participating State agencies.

(2)        Approve all technology purchases for separate agencies.

(3)        Establish standardized, consistent processes, specifications, and standards that shall apply to all information technology to be purchased, licensed, or leased by State agencies and relating to information technology personal services contract requirements for State agencies, including, but not limited to, requiring convenience contracts to be rebid prior to termination without extensions.

(4)        Establish procedures to permit State agencies and local government entities to use the General Services Administration (GSA) Cooperative Purchasing Program to purchase information technology (i) awarded under General Services Administration Supply Schedule 70 Information Technology and (ii) from contracts under the GSA's Consolidated Schedule containing information technology special item numbers.

(5)        Establish procedures to permit State agencies and local government entities to use other cooperative purchasing agreements.

(6)        Comply with the State government‑wide technical architecture, as required by the State CIO.

(7)        Utilize the purchasing benchmarks established by the State CIO of Administration pursuant to G.S. 143‑53.1.

(8)        Provide strategic sourcing resources and detailed, documented planning to compile and consolidate all estimates of information technology goods and services needed and required by State agencies.

(9)        Develop a process to provide a question and answer period for vendors prior to procurements.

(d)        Each State agency, separate agency, and participating agency shall furnish to the State CIO when requested, and on forms as prescribed, estimates of all information technology goods and services needed and required by such department, institution, or agency for such periods in advance as may be designated by the State CIO. In addition to the report required, all departments, institutions, or agencies of the State government shall furnish to the State CIO when requested, and on forms as prescribed, actual expenditures for all goods and services needed and required by the department, institution, or agency for such periods after the expenditures have been made as may be designated by the State CIO.

(e)        Confidentiality. – Contract information compiled by the Department shall be made a matter of public record after the award of contract. Trade secrets, test data, similar proprietary information, and security information protected under G.S. 132‑6.1(c) or other law shall remain confidential.

(f)         Electronic Procurement. – The State CIO may authorize the use of the electronic procurement system established by G.S. 143‑48.3, or other systems, to conduct reverse auctions and electronic bidding. For purposes of this Part, "reverse auction" means a real‑time purchasing process in which vendors compete to provide goods or services at the lowest selling price in an open and interactive electronic environment. The vendor's price may be revealed during the reverse auction. The Department may contract with a third‑party vendor to conduct the reverse auction. "Electronic bidding" means the electronic solicitation and receipt of offers to contract. Offers may be accepted and contracts may be entered by use of electronic bidding. All requirements relating to formal and competitive bids, including advertisement, seal, and signature, are satisfied when a procurement is conducted or a contract is entered in compliance with the reverse auction or electronic bidding requirements established by the Department.

(g)        Bulk Purchasing. – The State CIO shall establish efficient, responsive procedures for the procurement of information technology. The procedures may include aggregation of hardware purchases, the use of formal bid procedures, restrictions on supplemental staffing, enterprise software licensing, hosting, and multi‑year maintenance agreements. The State CIO may require agencies to submit information technology procurement requests on a regularly occurring schedule each fiscal year in order to allow for bulk purchasing.

(h)        All offers to contract, whether through competitive bidding or other procurement method, shall be subject to evaluation and selection by acceptance of the most advantageous offer to the State. Evaluation shall include best value, as the term is defined in G.S. 143‑135.9(a)(1); compliance with information technology project management policies, compliance with information technology security standards and policies, substantial conformity with the specifications and other conditions set forth in the solicitation.

(i)         Exceptions. – In addition to permitted waivers of competition, the requirements of competitive bidding shall not apply to information technology contracts and procurements:

(1)        In cases of pressing need or emergency arising from a security incident.

(2)        In the use of master licensing or purchasing agreements governing the Department's acquisition of proprietary intellectual property.

Any exceptions shall immediately be reported to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

(j)         Information Technology Innovation Center. – The Department may operate a State Information Technology Innovation Center (iCenter) to develop and demonstrate technology solutions with potential benefit to the State and its citizens. The iCenter may facilitate the piloting of potential solutions to State technology requirements. In operating the iCenter, the State CIO shall ensure that all State laws, rules, and policies are followed.

Vendor participation in the iCenter shall not be construed to (i) create any type of preferred status for vendors or (ii) abrogate the requirement that agency and statewide requirements for information technology support, including those of the Department, are awarded based on a competitive process that follows information technology procurement guidelines.

"§ 143B‑1324.  Restriction on State agency contractual authority with regard to information technology.

(a)        All State agencies covered by this Article shall use contracts for information technology to include enterprise licensing agreements and convenience contracts established by the Department. The State CIO shall consult the agency heads and Agency Information Technology Leaders prior to the initiation of any enterprise project or contract. Notwithstanding any other statute, the authority of State agencies to procure or obtain information technology shall be subject to compliance with the provisions of this Part.

(b)        Notwithstanding any other provision of law, local governmental entities may use the information technology programs, services, or contracts offered by the Department, including information technology procurement, in accordance with the statutes, policies, and rules of the Department.

Local governmental entities are not required to comply with otherwise applicable competitive bidding requirements when using contracts established by the Department.

Any other State entities exempt from Part 3 or Part 5 of this Article may also use the information technology programs, services, or contracts offered by the Department, including information technology procurement, in accordance with the statutes, policies, and rules of the Department.

"§ 143B‑1325.  Unauthorized use of public purchase or contract procedures for private benefit prohibited.

(a)        It is unlawful for any person, by the use of the powers, policies, or procedures described in this Part or established hereunder, to purchase, attempt to purchase, procure, or attempt to procure any property or services for private use or benefit.

(b)        This prohibition shall not apply if:

(1)        The State agency through which the property or services are procured had theretofore established policies and procedures permitting such purchases or procurement by a class or classes of persons in order to provide for the mutual benefit of such persons and the department, institution, or agency involved, or the public benefit or convenience; and

(2)        Such policies and procedures, including any reimbursement policies, are complied with by the person permitted thereunder to use the purchasing or procurement procedures described in this Part or established thereunder.

(c)        Any violation of this section is a Class 1 misdemeanor.

(d)        Any employee or official of the State who violates this Part shall be liable to the State to repay any amount expended in violation of this Part, together with any court costs.

"§ 143B‑1326.  Financial interest of officers in sources of supply; acceptance of bribes.

Neither the State CIO, any deputy State CIO, or any other policy‑making or managerially exempt personnel shall be financially interested, or have any personal beneficial interest, either directly or indirectly, in the purchase of, or contract for, any information technology, nor in any firm, corporation, partnership, or association furnishing any information technology to the State government, or any of its departments, institutions, or agencies, nor shall any of these persons or any other Department employee accept or receive, directly or indirectly, from any person, firm, or corporation to whom any contract may be awarded, by rebate, gifts, or otherwise, any money or anything of value whatsoever, or any promise, obligation, or contract for future reward or compensation. Violation of this section is a Class F felony, and any person found guilty of a violation of this section shall, upon conviction, be removed from State office or employment.

"§ 143B‑1327.  Certification that information technology bid submitted without collusion.

The State CIO shall require bidders to certify that each bid on information technology contracts overseen by the Department is submitted competitively and without collusion. False certification is a Class I felony.

"§ 143B‑1328.  Award review.

(a)        When the dollar value of a contract for the procurement of information technology equipment, materials, and supplies exceeds the benchmark established by G.S. 143B‑1317, an award recommendation shall be submitted to the State CIO of Information Technology for approval or other action. The State CIO shall promptly notify the agency or institution making the recommendation, or for which the purchase is to be made, of the action taken.

(b)        Prior to submission for review pursuant to this section for any contract for information technology being acquired for the benefit of an agency authorized to deviate from this Article pursuant to G.S. 143B‑1302(b), the State CIO shall review and approve the procurement to ensure compliance with the established processes, specifications, and standards applicable to all information technology purchased, licensed, or leased in State government, including established procurement processes, and compliance with the State government‑wide technical architecture and standards established by the State CIO.

(c)        The State CIO shall provide a report of all contract awards approved through the Statewide Procurement Office as indicated below. The report shall include the amount of the award, the contract term, the award recipient, the using agency, and a short description of the nature of the award, as follows:

(1)        For contract awards greater than twenty‑five thousand dollars ($25,000), to the cochairs of the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on a monthly basis.

(2)        For all contract awards outside the established purchasing system, to the Department of Administration, Joint Legislative Oversight Committee on Information Technology, and Fiscal Research Division on a quarterly basis.

"§ 143B‑1329.  Attorney General contract assistance.

At the request of the State CIO, the Attorney General shall provide legal advice and services necessary to implement this Part.

"§ 143B‑1330.  Purchase of certain computer equipment and televisions by State agencies and governmental entities prohibited.

(a)        No State agency, local political subdivision of the State, or other public body shall purchase computer equipment or televisions, as defined in G.S. 130A‑309.131, or enter into a contract with any manufacturer that the State CIO determines is not in compliance with the requirements of G.S. 130A‑309.134 or G.S. 130A‑309.135 as determined from the list provided by the Department of Environment and Natural Resources pursuant to G.S. 130A‑309.138. The State CIO shall issue written findings upon a determination of noncompliance. A determination of noncompliance by the State CIO is reviewable under Article 3 of Chapter 150B of the General Statutes.

(b)        The Department shall make the list available to local political subdivisions of the State and other public bodies. A manufacturer that is not in compliance with the requirements of G.S. 130A‑309.134 or G.S. 130A‑309.135 shall not sell or offer for sale computer equipment or televisions to the State, a local political subdivision of the State, or other public body.

"§ 143B‑1331.  Refurbished computer equipment purchasing program.

(a)        The Department of Information Technology and the Department of Administration, with the administrative support of the Information Technology Strategic Sourcing Office, shall offer State and local governmental entities the option of purchasing refurbished computer equipment from registered computer equipment refurbishers whenever most appropriate to meet the needs of State and local governmental entities.

(b)        State and local governmental entities shall document savings resulting from the purchase of the refurbished computer equipment, including, but not limited to, the initial acquisition cost as well as operations and maintenance costs. These savings shall be reported quarterly to the Department of Information Technology.

(c)        The Information Technology Strategic Sourcing Office shall administer the refurbished computer equipment program by establishing a competitive purchasing process to support this initiative that meets all State information technology procurement laws and procedures and ensures that agencies receive the best value.

(d)        Participating computer equipment refurbishers must meet all procurement requirements established by the Department of Information Technology and the Department of Administration.

"§ 143B‑1332.  Configuration and specification requirements same as for new computers.

Refurbished computer equipment purchased under this act must conform to the same standards as the State may establish as to the configuration and specification requirements for the purchase of new computers.

"§ 143B‑1333.  Data on reliability and other issues; report.

The Department of Information Technology shall maintain data on equipment reliability, potential cost‑savings, and any issues associated with the refurbished computer equipment initiative and shall report the results of the initiative to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by March 1, 2016, and then quarterly thereafter.

"§ 143B‑1334.  Information technology procurement policy; reporting requirements.

(a)        Policy. – In order to further the policy of the State to encourage and promote the use of small, minority, physically handicapped, and women contractors in State purchasing of goods and services, all State agencies shall cooperate with the Department in efforts to encourage the use of small, minority, physically handicapped, and women contractors in achieving the purposes of this Article, which is to provide for the effective and economical acquisition, management, and disposition of information technology.

(b)        Bids. – A vendor submitting a bid shall disclose in a statement, provided contemporaneously with the bid, where services will be performed under the contract sought, including any subcontracts and whether any services under that contract, including any subcontracts, are anticipated to be performed outside the United States. Nothing in this section is intended to contravene any existing treaty, law, agreement, or regulation of the United States. The State CIO shall retain the statements required by this subsection regardless of the State entity that awards the contract and shall report annually to the Secretary of Administration on the number of contracts which are anticipated to be performed outside the United States.

(c)        Reporting. – Every State agency that makes a direct purchase of information technology using the services of the Department shall report directly to the Department of Administration all information required by G.S. 143‑48(b).

(d)        Data from Department of Administration. – The Department of Administration shall collect and compile the data described in this section and report it annually to the Department of Information Technology, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division.

"Part 5. Data Centers.

"§ 143B‑1335.  Data centers.

(a)        The State CIO shall create an inventory of data center operations in the executive branch and shall develop and implement a detailed, written plan for consolidation of agency data centers in the most efficient manner possible. By May 1, 2016, the State CIO shall present a report on the data center consolidation plan to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

(b)        State agencies shall use the State infrastructure to host their projects, services, data, and applications. The State Chief Information Officer may grant an exception if the State agency can demonstrate any of the following:

(1)        Using an outside contractor would be more cost‑effective for the State.

(2)        The Department does not have the technical capabilities required to host the application.

(3)        Valid security requirements preclude the use of State infrastructure, and a vendor can provide a more secure environment.

"Part 6. Communications and Portal Services.

"§ 143B‑1336.  Communications services.

(a)        The State CIO shall exercise authority for telecommunications and other communications included in information technology relating to the internal management and operations of State agencies. In discharging that responsibility, the State CIO shall do the following:

(1)        Develop standards for a State network.

(2)        Develop a detailed plan for the standardization and operation of State communications networks and services.

(3)        Establish an inventory of communications systems in use within the State and ensure that the State is using the most efficient and cost‑effective means possible.

(4)        Identify shortfalls in current network operations and develop a strategy to mitigate the identified shortfalls.

(5)        Provide for the establishment, management, and operation, through either State ownership, by contract, or through commercial leasing, of the following systems and services as they affect the internal management and operation of State agencies:

a.         Central telephone systems and telephone networks, including Voice over Internet Protocol and Commercial Mobile Radio Systems.

b.         Satellite services.

c.         Closed‑circuit TV systems.

d.         Two‑way radio systems.

e.         Microwave systems.

f.          Related systems based on telecommunication technologies.

g.         The "State Network," managed by the Department, which means any connectivity designed for the purpose of providing Internet Protocol transport of information to any building.

h.         Broadband.

(6)        Coordinate the development of cost‑sharing systems for respective user agencies for their proportionate parts of the cost of maintenance and operation of the systems and services listed in subdivision (1) of this subsection.

(7)        Assist in the development of coordinated telecommunications services or systems within and among all State agencies and recommend, where appropriate, cooperative utilization of telecommunication facilities by aggregating users.

(8)        Perform traffic analysis and engineering for all telecommunications services and systems listed in subdivision (1) of this subsection.

(9)        Establish telecommunications specifications and designs so as to promote and support compatibility of the systems within State agencies.

(10)      Provide a periodic inventory of telecommunications costs, facilities, systems, and personnel within State agencies.

(11)      Promote, coordinate, and assist in the design and engineering of emergency telecommunications systems, including, but not limited to, the 911 emergency telephone number program, Emergency Medical Services, and other emergency telecommunications services.

(12)      Perform frequency coordination and management for State agencies and local governments, including all public safety radio service frequencies, in accordance with the rules and regulations of the Federal Communications Commission or any successor federal agency.

(13)      Advise all State agencies on telecommunications management planning and related matters and provide through the State Personnel Training Center or the Department training to users within State agencies in telecommunications technology and systems.

(14)      Assist and coordinate the development of policies and long‑range plans, consistent with the protection of citizens' rights to privacy and access to information, for the acquisition and use of telecommunications systems, and base such policies and plans on current information about State telecommunications activities in relation to the full range of emerging technologies.

(b)        The provisions of this section shall not apply to the Judicial Information System in the Judicial Department.

"§ 143B‑1337.  Communications services for local governmental entities and other entities.

(a)        The State CIO shall provide cities, counties, and other local governmental entities with access to communications systems or services established by the Department under this Part for State agencies. Access shall be provided on the same cost basis that applies to State agencies.

(b)        The State CIO shall establish broadband communications services and permit, in addition to State agencies, cities, counties, and other local government entities, the following organizations and entities to share on a not‑for‑profit basis:

(1)        Nonprofit educational institutions as defined in G.S. 116‑280.

(2)        MCNC and research affiliates of MCNC for use only in connection with research activities sponsored or funded, in whole or in part, by MCNC, if such research activities relate to health care or education in North Carolina.

(3)        Agencies of the United States government operating in North Carolina for use only in connection with activities that relate to health care, education, or FirstNet in North Carolina.

(4)        Hospitals, clinics, and other health care facilities for use only in connection with activities that relate to health care, education, or FirstNet in North Carolina.

(c)        Provided, however, that communications or broadband telecommunications services provided pursuant to this section shall not cause the State or the Department to be classified as a public utility as that term is defined in G.S. 62‑3(23)a.6., nor as a retailer as that term is defined in G.S. 105‑164.3. Nor shall the State or the Department engage in any activities that may cause those entities to be classified as a common carrier as that term is defined in the Communications Act of 1934, 47 U.S.C. § 153(10). Provided further, authority to share communications services with the non‑State agencies set forth in subdivisions (1) through (4) of subsection (b) of this section shall terminate not later than one year from the effective date of a tariff for such service or federal law that preempts this section.

"§ 143B‑1338.  Statewide electronic portal; annual report.

(a)        The Department shall plan, develop, implement, and operate a statewide electronic portal (i) to increase the convenience of members of the public in conducting online transactions with, and obtaining information from, State government and (ii) to facilitate their interactions and communications with government agencies. The State CIO shall have approval authority over all agency Web site funding and content, to include any agency contract decisions. Participating agency Web site and content development staff shall be transferred to the Department in accordance with the schedule for their agency.

(b)        Beginning June 30, 2015, and then annually thereafter, the State CIO shall report to the General Assembly and to the Fiscal Research Division on the following information:

(1)        Services currently provided and associated transaction volumes or other relevant indicators of utilization by user type.

(2)        New services added during the previous year.

(3)        Services added that are currently available in other states.

(4)        The total amount collected for each service.

(5)        The total amount remitted to the State for each service.

(6)        The total amount remitted to the vendor for each service.

(7)        Any other use of State data by the vendor and the total amount of revenue collected per each use and in total.

(8)        Customer satisfaction with each service.

(9)        Any other issues associated with the provision of each service.

"Part 7. Security of Information Technology.

"§ 143B‑1339.  Security.

Confidentiality. – No data of a confidential nature, as defined in the General Statutes or federal law, may be entered into or processed through any information technology system or network established under this Article until safeguards for the data's security satisfactory to the State CIO have been designed and installed and are fully operational. This section does not affect the provisions of G.S. 147‑64.6 or G.S. 147‑64.7.

"§ 143B‑1340.  Statewide security standards.

The State CIO shall be responsible for the security of all State information technology systems and associated data. The State CIO shall manage all executive branch information technology security and shall establish a statewide standard for information technology security to maximize the functionality, security, and interoperability of the State's distributed information technology assets, including, but not limited to, data classification and management, communications, and encryption technologies. The State CIO shall review and revise the security standards annually. As part of this function, the State CIO shall review periodically existing security standards and practices in place among the various State agencies to determine whether those standards and practices meet statewide security and encryption requirements. The State CIO may assume the direct responsibility of providing for the information technology security of any State agency that fails to adhere to security standards adopted under this Article.

The State CIO shall establish standards for the management and safeguarding of all State data held by State agencies and private entities and shall develop and implement a process to monitor and ensure adherence to the established standards. The State CIO shall establish and enforce standards for the protection of State data. The State CIO shall develop and maintain an inventory of where State data is stored. For data maintained by non‑State entities, the State CIO shall document the reasons for the use of the non‑State entity and certify, in writing, that the use of the non‑State entity is the best course of action. The State CIO shall ensure that State data held by non‑State entities is properly protected and is held in facilities that meet State security standards. By October 1 each year, the State CIO shall certify in writing that data held in non‑State facilities is being maintained in accordance with State information technology security standards and shall provide a copy of this certification to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division.

Before a State agency can contract for the storage, maintenance, or use of State data by a private vendor, the agency shall obtain the approval of the State CIO.

"§ 143B‑1341.  State CIO approval of security standards and risk assessments.

(a)        Notwithstanding G.S. 143‑48.3, 143B‑1302(b), or (c), or any other provision of law, and except as otherwise provided by this Article, all information technology security goods, software or services purchased using State funds, or for use by a State agency or in a State facility, shall be subject to approval by the State CIO in accordance with security standards adopted under this Part.

(b)        The State CIO shall conduct risk assessments to identify compliance, operational, and strategic risks to the enterprise network. These assessments may include methods such as penetration testing or similar assessment methodologies. The State CIO may contract with another party or parties to perform the assessments. Detailed reports of the risk and security issues identified shall be kept confidential as provided in G.S. 132‑6.1(c).

(c)        If the legislative branch or the judicial branch develop their own security standards, taking into consideration the mission and functions of that entity, that are comparable to or exceed those set by the State CIO under this section, then those entities may elect to be governed by their own respective security standards. In these instances, approval of the State CIO shall not be required before the purchase of information technology security devices and services. If requested, the State CIO shall consult with the legislative branch and the judicial branch in reviewing the security standards adopted by those entities.

(d)        Before a State agency may enter into any contract with another party for an assessment of network vulnerability, the State agency shall notify the State CIO and obtain approval of the request. If the State agency enters into a contract with another party for assessment and testing, after approval of the State CIO, the State agency shall issue public reports on the general results of the reviews. The contractor shall provide the State agency with detailed reports of the security issues identified that shall not be disclosed as provided in G.S. 132‑6.1(c). The State agency shall provide the State CIO with copies of the detailed reports that shall not be disclosed as provided in G.S. 132‑6.1(c).

(e)        Nothing in this section shall be construed to preclude the Office of the State Auditor from assessing the security practices of State information technology systems as part of its statutory duties and responsibilities.

"§ 143B‑1342.  Assessment of agency compliance with security standards.

At a minimum, the State CIO shall annually assess the ability of each State agency, and each agency's contracted vendors, to comply with the current security enterprise‑wide set of standards established pursuant to this section. The assessment shall include, at a minimum, the rate of compliance with the enterprise‑wide security standards and an assessment of security organization, security practices, security information standards, network security architecture, and current expenditures of State funds for information technology security. The assessment of a State agency shall also estimate the cost to implement the security measures needed for agencies to fully comply with the standards. Each State agency shall submit information required by the State CIO for purposes of this assessment. The State CIO shall include the information obtained from the assessment in the State Information Technology Plan.

"§ 143B‑1343.  State agency cooperation; liaisons.

(a)        The head of each principal department and Council of State agency shall cooperate with the State CIO in the discharge of the State CIO's duties by providing the following information to the Department:

(1)        The full details of the State agency's information technology and operational requirements and of all the agency's information technology security incidents within 24 hours of confirmation.

(2)        Comprehensive information concerning the information technology security employed to protect the agency's information technology.

(3)        A forecast of the parameters of the agency's projected future information technology security needs and capabilities.

(4)        Designating an agency liaison in the information technology area to coordinate with the State Chief Information Officer. The liaison shall be subject to a criminal background report from the State Repository of Criminal Histories, which shall be provided by the State Bureau of Investigation upon its receiving fingerprints from the liaison. If the liaison has been a resident of this State for less than five years, the background report shall include a review of criminal information from both the State and National Repositories of Criminal Histories. The criminal background report shall be provided to the State Chief Information Officer and the head of the agency. In addition, all personnel in the Office of the State Auditor who are responsible for information technology security reviews pursuant to G.S. 147‑64.6(c)(18) shall be subject to a criminal background report from the State Repository of Criminal Histories, which shall be provided by the State Bureau of Investigation upon receiving fingerprints from the personnel designated by the State Auditor. For designated personnel who have been residents of this State for less than five years, the background report shall include a review of criminal information from both the State and National Repositories of Criminal Histories. The criminal background reports shall be provided to the State Auditor. Criminal histories provided pursuant to this subdivision are not public records under Chapter 132 of the General Statutes.

(b)        The information provided by State agencies to the State CIO under this section is protected from public disclosure pursuant to G.S. 132‑6.1(c).

"Part 8. Government Data Analytics Center.

"§ 143B‑1344.  Definitions.

As used in this Part, the following definitions apply:

(1)        Business intelligence. – The process of collecting, organizing, sharing, and analyzing data through integrated data management, reporting, visualization, and advanced analytics to discover patterns and other useful information that will allow policymakers and State officials to make more informed decisions. Business intelligence also includes both of the following:

a.         Broad master data management capabilities such as data integration, data quality and enrichment, data governance, and master data management to collect, reference, and categorize information from multiple sources.

b.         Self‑service query and reporting capabilities to provide timely, relevant, and actionable information to business users delivered through a variety of interfaces, devices, or applications based on their specific roles and responsibilities.

(2)        Data analytics. – Data analysis, including the ability to use the data for assessment and extraction of policy relevant information.

(3)        Enterprise‑level data analytics. – Standard analytics capabilities and services leveraging data throughout all State agencies, departments, and institutions.

"§ 143B‑1345.  Government Data Analytics Center.

(a)        Purpose. – The purpose of the Department's GDAC is to utilize public‑private partnerships as part of a statewide data integration and data‑sharing initiative and to identify data integration and business intelligence opportunities that will generate greater efficiencies in, and improved service delivery by, State agencies, departments, and institutions. The intent is not to replace transactional systems but to leverage the data from those systems for enterprise level State business intelligence. The GDAC shall continue the work, purpose, and resources of previous data integration efforts and shall otherwise advise and assist the State CIO in the management of the initiative. The State CIO shall make any organizational changes necessary to maximize the effectiveness and efficiency of the GDAC.

(b)        Public‑private partnerships. – The State CIO shall continue to utilize public‑private partnerships and existing data integration and analytics contracts and licenses as appropriate to continue the implementation of the initiative. Private entities that partner with the State shall make appropriate contributions of funds or resources, including, but not limited to, knowledge transfer and education activities, software licensing, hardware and technical infrastructure resources, personnel resources, and such other appropriate resources as agreed upon by the parties.

(c)        Powers and Duties. – The Department shall, through the GDAC, do all of the following:

(1)        Continue and coordinate ongoing enterprise data integration efforts, including:

a.         The deployment, support, technology improvements, and expansion of the Criminal Justice Law Enforcement Automated Data System (CJLEADS) and related case management systems.

b.         The pilot and subsequent phase initiative for the North Carolina Financial Accountability and Compliance Technology System (NCFACTS).

c.         Individual‑level student data and workforce data from all levels of education and the State workforce.

d.         Other capabilities as developed by the GDAC.

(2)        Identify technologies currently used in North Carolina that have the capability to support the initiative.

(3)        Identify other technologies, especially those with unique capabilities that are complementary to existing technology standards, and that could support the State's business intelligence effort.

(4)        Compare capabilities and costs across State agencies.

(5)        Ensure implementation is properly supported across State agencies.

(6)        Ensure that data integration and sharing is performed in a manner that preserves data privacy and security in transferring, storing, and accessing data, as appropriate.

(7)        Immediately seek any waivers and enter into any written agreements that may be required by State or federal law to effectuate data sharing and to carry out the purposes of this section.

(8)        Coordinate data requirements and usage for State business intelligence applications in a manner that (i) limits impacts on participating State agencies as those agencies provide data and business knowledge expertise and (ii) assists in defining business rules so the data can be properly used.

(9)        Recommend the most cost‑effective and reliable long‑term hosting solution for enterprise‑level State business intelligence as well as data integration, notwithstanding any other provision of State law or regulation.

(10)      Utilize a common approach that establishes standards for business intelligence initiatives for all State agencies and prevents the development of projects that do not meet the established standards.

(11)      The creation of efficiencies in State government by ensuring that State agencies use the GDAC for agency business intelligence requirements.

(d)        Application to State Government. – The initiative shall include all State agencies, departments, and institutions, including The University of North Carolina, as follows:

(1)        All State agency business intelligence requirements, including any planning or development efforts associated with creating business intelligence capability, as well as any master data management efforts, shall be implemented through the GDAC.

(2)        The Chief Justice of the North Carolina Supreme Court and the Legislative Services Commission each shall designate an officer or agency to advise and assist the State CIO with respect to implementation of the initiative in their respective branches of government. The judicial and legislative branches shall fully cooperate in the initiative mandated by this section in the same manner as is required of State agencies.

(e)        Project Management. – The Department, with the assistance of the Office of State Budget and Management, shall identify potential funding sources for expansion of existing projects or development of new projects. No GDAC project shall be initiated, extended, or expanded (i) without the specific approval of the General Assembly unless the project can be implemented within funds appropriated for GDAC projects or (ii) without prior consultation to the Joint Legislative Commission on Governmental Operations and a report to the Joint Legislative Oversight Committee on Information Technology if the project can be implemented within funds appropriated for GDAC projects.

"§ 143B‑1346.  Data sharing.

(a)        General Duties of All State Agencies. – Unless otherwise provided by this article and except as limited or prohibited by federal law, the head of each State agency, department, and institution shall do all of the following:

(1)        Grant the GDAC access to all information required to develop and support State business intelligence applications pursuant to this section. The State CIO and the GDAC shall take all necessary actions and precautions, including training, certifications, background checks, and governance policy and procedure, to ensure the security, integrity, and privacy of the data in accordance with State and federal law and as may be required by contract.

(2)        Provide complete information on the State agency's information technology, operational, and security requirements.

(3)        Provide information on all of the State agency's information technology activities relevant to the State business intelligence effort.

(4)        Forecast the State agency's projected future business intelligence information technology needs and capabilities.

(5)        Ensure that the State agency's future information technology initiatives coordinate efforts with the GDAC to include planning and development of data interfaces to incorporate data into the initiative and to ensure the ability to leverage analytics capabilities.

(6)        Provide technical and business resources to participate in the initiative by providing, upon request and in a timely and responsive manner, complete and accurate data, business rules and policies, and support.

(7)        Identify potential resources for deploying business intelligence in their respective State agencies and as part of the enterprise‑level effort.

(8)        Immediately seek any waivers and enter into any written agreements that may be required by State or federal law to effectuate data sharing and to carry out the purposes of this section, as appropriate.

(b)        Specific Requirements. – The GDAC shall enhance the State's business intelligence through the collection and analysis of data relating to workers' compensation claims for the purpose of preventing and detecting fraud, as follows:

(1)        The North Carolina Industrial Commission shall release to the GDAC, or otherwise provide electronic access to, all data requested by the GDAC relating to workers' compensation insurance coverage, claims, appeals, compliance, and enforcement under Chapter 97 of the General Statutes.

(2)        The North Carolina Rate Bureau (Bureau) shall release to GDAC, or otherwise provide electronic access to, all data requested by GDAC relating to workers' compensation insurance coverage, claims, business ratings, and premiums under Chapter 58 of the General Statutes. The Bureau shall be immune from civil liability for releasing information pursuant to this subsection, even if the information is erroneous, provided the Bureau acted in good faith and without malicious or willful intent to harm in releasing the information.

(3)        The Department of Commerce, Division of Employment Security (DES), shall release to GDAC, or otherwise provide access to, all data requested by GDAC relating to unemployment insurance coverage, claims, and business reporting under Chapter 96 of the General Statutes.

(4)        The Department of Labor shall release to GDAC, or otherwise provide access to, all data requested by GDAC relating to safety inspections, wage and hour complaints, and enforcement activities under Chapter 95 of the General Statutes.

(5)        The Department of Revenue shall release to GDAC, or otherwise provide access to, all data requested by GDAC relating to the registration and address information of active businesses, business tax reporting, and aggregate federal tax Form 1099 data for comparison with information from DES, the Rate Bureau, and the Department of the State CIO for the evaluation of business reporting. Additionally, the Department of Revenue shall furnish to the GDAC, upon request, other tax information, provided that the information furnished does not impair or violate any information sharing agreements between the Department and the United States Internal Revenue Service. Notwithstanding any other provision of law, a determination of whether furnishing the information requested by GDAC would impair or violate any information sharing agreements between the Department of Revenue and the United States Internal Revenue Service shall be within the sole discretion of the State Chief Information Officer. The Department of Revenue and the Office of the State CIO shall work jointly to assure that the evaluation of tax information pursuant to this subdivision is performed in accordance with applicable federal law.

(c)        All information shared with GDAC and the State CIO under this subsection is protected from release and disclosure in the same manner as any other information is protected under this section.

(d)        Privacy and Confidentiality of Information. – The State CIO and the GDAC shall be deemed to be all of the following for the purposes of this Part:

(1)        With respect to criminal information, and to the extent allowed by federal law, a criminal justice agency (CJA), as defined under Criminal Justice Information Services (CJIS) Security Policy. The State CJIS Systems Agency (CSA) shall ensure that CJLEADS receives access to federal criminal information deemed to be essential in managing CJLEADS to support criminal justice professionals.

(2)        With respect to health information covered under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended, and to the extent allowed by federal law:

a.         A business associate with access to protected health information acting on behalf of the State's covered entities in support of data integration, analysis, and business intelligence.

b.         Authorized to access and view individually identifiable health information, provided that the access is essential to the enterprise fraud, waste, and improper payment detection program or required for future initiatives having specific definable need for the information.

c.         Authorized to access all State and federal data, including revenue and labor information, deemed to be essential to the enterprise fraud, waste, and improper payment detection program or future initiatives having specific definable need for the data.

d.         Authorized to develop agreements with the federal government to access data deemed to be essential to the enterprise fraud, waste, and improper payment detection program or future initiatives having specific definable need for such data.

(e)        Release of Information. – The following limitations apply to (i) the release of information compiled as part of the initiative, (ii) data from State agencies that is incorporated into the initiative, and (iii) data released as part of the implementation of the initiative:

(1)        Information compiled as part of the initiative. – Notwithstanding the provisions of Chapter 132 of the General Statutes, information compiled by the State CIO and the GDAC related to the initiative may be released as a public record only if the State CIO, in that officer's sole discretion, finds that the release of information is in the best interest of the general public and is not in violation of law or contract.

(2)        Data from State agencies. – Any data that is not classified as a public record under G.S. 132‑1 shall not be deemed a public record when incorporated into the data resources comprising the initiative. To maintain confidentiality requirements attached to the information provided to the State CIO and GDAC, each source agency providing data shall be the sole custodian of the data for the purpose of any request for inspection or copies of the data under Chapter 132 of the General Statutes.

(3)        Data released as part of implementation. – Information released to persons engaged in implementing the State's business intelligence strategy under this section that is used for purposes other than official State business is not a public record pursuant to Chapter 132 of the General Statutes.

(4)        Data from North Carolina Rate Bureau. – Notwithstanding any other provision of this section, any data released by or obtained from the North Carolina Rate Bureau under this initiative relating to workers' compensation insurance claims, business ratings, or premiums are not public records and public disclosure of such data, in whole or in part, by the GDAC or State CIO, or by any State agency, is prohibited.

"§ 143B‑1347.  GDAC funding.

The Department shall identify and make all efforts to secure any matching funds or other resources to assist in funding the GDAC. Savings resulting from the cancellation of projects, software, and licensing, as well as any other savings from the utilization of the GDAC, shall be returned to the General Fund and shall remain unexpended and unencumbered until appropriated by the General Assembly in a subsequent fiscal year. It is the intent of the General Assembly that expansion of the GDAC in subsequent fiscal years be funded with these savings and that the General Assembly appropriate funds for projects in accordance with the priorities identified by the State CIO.

"§ 143B‑1348.  GDAC reporting.

(f)         The State CIO shall do the following regarding the work of the GDAC:

(1)        Submit and present quarterly reports on the activities described in this section to the chairs of the House of Representatives Appropriations and Senate Base Budget/Appropriations Committees, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division of the General Assembly.

(2)        Report the following information upon its occurrence or as requested:

a.         Any failure of a State agency to provide information requested pursuant to this section. The failure shall be reported to the Joint Legislative Oversight Committee on Information Technology and to the chairs of the House of Representatives Appropriations and Senate Base Budget/Appropriations Committees.

b.         Any additional information to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Oversight Committee on Information Technology that is requested by those entities.

c.         The State CIO shall report to the Joint Legislative Oversight Committee on Information Technology on projects that are not achieving projected savings. The report shall include a proposed corrective action plan for the project.

"Part 9. Criminal Justice Information.

"§ 143B‑1349.  Definitions.

As used in this Part:

(1)        "Board" means the Criminal Justice Information Network Governing Board.

(2)        "Local government user" means a unit of local government of this State having authorized access to the Network.

(3)        "Network" means the Criminal Justice Information Network established by the Board pursuant to this Article.

(4)        "Network user" or "user" means any person having authorized access to the Network.

(5)        "State agency" means any State department, agency, institution, board, commission, or other unit of State government.

"§ 143B‑1350.  Criminal Justice Information Network.

(a)        The Criminal Justice Information Network Governing Board is established within the Office of the State Chief Information Officer to operate the State's Criminal Justice Information Network, the purpose of which shall be to provide the governmental and technical information systems infrastructure necessary for accomplishing State and local governmental public safety and justice functions in the most effective manner by appropriately and efficiently sharing criminal justice and juvenile justice information among law enforcement, judicial, and corrections agencies. The Board is established within the Department, for organizational and budgetary purposes only, and the Board shall exercise all of its statutory powers in this Article independent of control by State CIO.

(b)        The Board shall consist of 21 members, appointed as follows:

(1)        Five members appointed by the Governor, including one member who is a director or employee of a State correction agency for a term to begin September 1, 1996, and to expire on June 30, 1997, one member who is an employee of the North Carolina Department of Public Safety for a term beginning September 1, 1996, and to expire on June 30, 1997, one member selected from the North Carolina Association of Chiefs of Police for a term to begin September 1, 1996, and to expire on June 30, 1999, one member who is an employee of the Division of Juvenile Justice of the Department of Public Safety, and one member who represents the Division of Motor Vehicles.

(2)        Six members appointed by the General Assembly in accordance with G.S. 120‑121, as follows:

a.         Three members recommended by the President Pro Tempore of the Senate, including two members of the general public for terms to begin on September 1, 1996, and to expire on June 30, 1997, and one member selected from the North Carolina League of Municipalities who is a member of, or an employee working directly for, the governing board of a North Carolina municipality for a term to begin on September 1, 1996, and to expire on June 30, 1999; and

b.         Three members recommended by the Speaker of the House of Representatives, including two members of the general public for terms to begin on September 1, 1996, and to expire on June 30, 1999, and one member selected from the North Carolina Association of County Commissioners who is a member of, or an employee working directly for, the governing board of a North Carolina county for a term to begin on September 1, 1996, and to expire on June 30, 1997.

(3)        Two members appointed by the Attorney General, including one member who is an employee of the Attorney General for a term to begin on September 1, 1996, and to expire on June 30, 1997, and one member from the North Carolina Sheriffs' Association for a term to begin on September 1, 1996, and to expire on June 30, 1999.

(4)        Six members appointed by the Chief Justice of the North Carolina Supreme Court, as follows:

a.         The Director of the Administrative Office of the Courts, or an employee of the Administrative Office of the Courts, for a term beginning July 1, 1997, and expiring June 30, 2001.

b.         One member who is a district attorney or an assistant district attorney upon the recommendation of the Conference of District Attorneys of North Carolina, for a term beginning July 1, 1998, and expiring June 30, 1999.

c.         Two members who are superior court or district court judges for terms beginning July 1, 1998, and expiring June 30, 2001.

d.         One member who is a magistrate upon the recommendation of the North Carolina Magistrates' Association, for a term beginning July 1, 1998, and expiring June 30, 1999.

e.         One member who is a clerk of superior court upon the recommendation of the North Carolina Association of Clerks of Superior Court, for a term beginning July 1, 1998, and expiring June 30, 1999.

(5)        One member appointed by the State CIO.

(6)        One member appointed by the President of the North Carolina Chapter of the Association of Public Communications Officials International, who is an active member of the Association, for a term to begin on September 1, 1996, and to expire on June 30, 1999.

The respective appointing authorities are encouraged to appoint persons having a background in and familiarity with criminal information systems and networks generally and with the criminal information needs and capacities of the constituency from which the member is appointed.

As the initial terms expire, subsequent members of the Board shall be appointed to serve four‑year terms. At the end of a term, a member shall continue to serve on the Board until a successor is appointed. A member who is appointed after a term is begun serves only for the remainder of the term and until a successor is appointed. Any vacancy in the membership of the Board shall be filled by the same appointing authority that made the appointment, except that vacancies among members appointed by the General Assembly shall be filled in accordance with G.S. 120‑122.

(c)        Members of the Board shall not be employed by or serve on the board of directors or other corporate governing body of any information systems, computer hardware, computer software, or telecommunications vendor of goods and services to the State or to any unit of local government in the State. No member of the Board shall vote on an action affecting solely the member's own State agency or local governmental unit or specific judicial office.

"§ 143B‑1351.  Compensation and expenses of Board members.

Members of the Board shall serve without compensation but may receive travel and subsistence as follows:

(1)        Board members who are officials or employees of a State agency or unit of local government, in accordance with G.S. 138‑6.

(2)        All other Board members, at the rate established in G.S. 138‑5.

"§ 143B‑1352.  Powers and duties.

(a)        The Board shall have the following powers and duties:

(1)        To establish and operate the Network as an integrated system of State and local government components for effectively and efficiently storing, communicating, and using criminal justice information at the State and local levels throughout North Carolina's law enforcement, judicial, juvenile justice, and corrections agencies, with the components of the Network to include electronic devices, programs, data, and governance and to set the Network's policies and procedures.

(2)        To develop and adopt uniform standards and cost‑effective information technology, after thorough evaluation of the capacity of information technology to meet the present and future needs of the State and, in consultation with the Department of Information Technology, to develop and adopt standards for entering, storing, and transmitting information in criminal justice databases and for achieving maximum compatibility among user technologies.

(3)        To identify the funds needed to establish and maintain the Network, identify public and private sources of funding, and secure funding to:

a.         Create the Network and facilitate the sharing of information among users of the Network; and

b.         Make grants to local government users to enable them to acquire or improve elements of the Network that lie within the responsibility of their agencies or State agencies; provided that the elements developed with the funds must be available for use by the State or by local governments without cost and the applicable State agencies join in the request for funding.

(4)        To provide assistance to local governments for the financial and systems planning for Network‑related automation and to coordinate and assist the Network users of this State in soliciting bids for information technology hardware, software, and services in order to assure compliance with the Board's technical standards, to gain the most advantageous contracts for the Network users of this State, and to assure financial accountability where State funds are used.

(5)        To provide a liaison among local government users and to advocate on behalf of the Network and its users in connection with legislation affecting the Network.

(6)        To facilitate the sharing of knowledge about information technologies among users of the Network.

(7)        To take any other appropriate actions to foster the development of the Network.

(b)        All grants or other uses of funds appropriated or granted to the Board shall be conditioned on compliance with the Board's technical and other standards.

"§ 143B‑1353.  Election of officers; meetings; staff, etc.

(a)        The Governor shall call the first meeting of the Board. At the first meeting, the Board shall elect a chair and a vice‑chair, each to serve a one‑year term, with subsequent officers to be elected for one‑year terms. The Board shall hold at least two regular meetings each year, as provided by policies and procedures adopted by the Board. The Board may hold additional meetings upon the call of the chair or any three Board members. A majority of the Board membership constitutes a quorum.

(b)        The staff of the Criminal Justice Information Network shall provide the Board with professional and clerical support and any additional support the Board needs to fulfill its mandate. The Board's staff shall use space provided by the Department.

"Part 10. Emergency Telephone Service.

"§ 143B‑1354 through § 143B‑1364.

"Part 11. North Carolina Geographic Information Coordinating Council.

"§ 143B‑1365 through § 143B‑1368."

 

instructions to the revisor of statutes

SECTION 7A.3.  The Revisor of Statutes shall make following recodifications in connection with creating the Department of Information Technology:

(1)        Article 3 of Chapter 62A of the General Statutes (Emergency Telephone Service) is recodified as Part 10 of Article 14 of Chapter 143B of the General Statutes with the sections to be numbered as G.S. 143B‑1354 through G.S. 143B‑1364, respectively.

(2)        Article 76 of Chapter 143 of the General Statutes (North Carolina Geographic Information Coordinating Council) is recodified as Part 11 of Article 14 of Chapter 143B of the General Statutes with the sections to be recodified as G.S. 143B‑1365 through 143B‑1368, respectively.

The Revisor of Statutes may conform names and titles changed by this section, and may correct statutory references as required by this section, throughout the General Statutes. In making the changes authorized by this section, the Revisor may also adjust subject and verb agreement and the placement of conjunctions.

 

conforming and technical changes relating to department of information technology

SECTION 7A.4.(a)  G.S. 66‑58.20(b) reads as rewritten:

"(b)      Each State department, agency, and institution under the review of the State Chief Information Officer agency as defined in G.S. 143B‑1300(a)(9) shall functionally link its Internet or electronic services to a centralized Web portal system established pursuant to subsection (a) of this section."

SECTION 7A.4.(b)  G.S. 136‑89.194(g)(2) reads as rewritten:

"(g)       Contract Exemptions. – The following provisions concerning the purchase of goods and services by a State agency do not apply to the Turnpike Authority:

(2)        Article 3D of Chapter 147 of the General Statutes. The Authority may use the services of the Office of Information Technology Services Department of Information Technology in procuring goods and services that are not specific to establishing and operating a toll revenue system. All However, all contract information for contracts for information technology are subject to disclosure in accordance with G.S. 147‑33.95.Article 14 of Chapter 143B of the General Statutes."

SECTION 7A.4.(c)  G.S. 138A‑3 reads as rewritten:

"§ 138A‑3.  Definitions.

The following definitions apply in this Chapter:

(30)      Public servants. – All of the following:

p.         The chief information officer, State Chief Information Officer, deputy chief information officers, chief financial officers, and general counsel of the Office of Department of Information Technology.

…."

SECTION 7A.4.(d)  G.S. 143‑129(e)(7) reads as rewritten:

"(e)       Exceptions. – The requirements of this Article do not apply to:

(7)        Purchases of information technology through contracts established by the State Office of Department of Information Technology as provided in G.S. 147‑33.82(b) and G.S. 147‑33.92(b).Article 14 of Chapter 143B of the General Statutes."

SECTION 7A.4.(e)  G.S. 143C‑3‑3(e) reads as rewritten:

"(e)       Information Technology Request. – In addition to any other information requested by the Director, State Chief Information Officer (State CIO), any State agency requesting significant State resources, as defined by the Director, State CIO, for the purpose of acquiring acquiring, operating, or maintaining information technology shall accompany that request with all of the following:

(1)        A statement of its needs for information technology and related resources, including expected improvements to programmatic or business operations, together with a review and evaluation of that statement prepared by the State Chief Information Officer.

(2)        A statement setting forth the requirements for State resources, together with an evaluation of those requirements by the State Chief Information Officer that takes into consideration the State's current technology, the opportunities for technology sharing, the requirements of Article 3D of Chapter 147 Article 14 of Chapter 143B of the General Statutes, and any other factors relevant to the analysis. And, in cases of an acquisition, an explanation of the method by which the acquisition is to be financed.

(3)        A statement by the State Chief Information Officer that sets forth viable alternatives, if any, for meeting the agency needs in an economical and efficient manner. A statement setting forth the requirements for State resources, together with an evaluation of those requirements, including expected improvements to programmatic or business operations by the Secretary that takes into consideration the State's current technology, the opportunities for technology sharing, the requirements of the General Statutes, and any other factors relevant to the analysis.

(4)        In the case of an acquisition, an explanation of the method by which the acquisition is to be financed.

This subsection shall not apply to requests submitted by the General Assembly or the Administrative Office of the Courts."

SECTION 7A.4.(f)  G.S. 150B‑21.1(a)(10) reads as rewritten:

"(a)       Adoption. – An agency may adopt a temporary rule when it finds that adherence to the notice and hearing requirements of G.S. 150B‑21.2 would be contrary to the public interest and that the immediate adoption of the rule is required by one or more of the following:

(10)      The need for the State Chief Information Officer to implement the information technology procurement provisions of Article 3D of Chapter 147 of Article 14 of Chapter 143B of the General Statutes."

SECTION 7A.4.(g)  G.S. 150B‑38 is amended by adding a new subsection to read:

"(i)        Standards adopted by the State Chief Information Officer and applied to information technology as defined by G.S. 143B‑1300."

SECTION 7A.4.(h)  G.S. 143‑59.1(a) reads as rewritten:

"(a)       Ineligible Vendors. – The Secretary of Administration Administration, State Chief Information Officer, and other entities to which this Article applies shall not contract for goods or services with either of the following:

…."

 

administrative matters/DIT

SECTION 7A.5.  No action or proceeding pending on July 1, 2015, brought by or against the Office of Information Technology Services or the Office of the State Chief Information Officer shall be affected by any provision of this act, but the same may be prosecuted or defended in the name of the Department of Information Technology. In these actions and proceedings, the Department shall be substituted as a party upon proper application to the courts or other public bodies. Any business or other matter undertaken or commanded by the Office of Information Technology Services or the Office of the State Chief Information Officer regarding any State program, office, or contract or pertaining to or connected with its respective functions, powers, obligations, and duties that are pending on the date this act becomes effective may be conducted and completed by the Department of Information Technology in the same manner and under the same terms and conditions and with the same effect as if conducted and completed by the former commission, director, or office. Unless otherwise specifically provided by this act, any previous assignment of duties within the purview of this act by the Governor or General Assembly shall have continued validity.

 

PART VIII. PUBLIC SCHOOLS

 

FUNDS FOR CHILDREN WITH DISABILITIES

SECTION 8.1.  The State Board of Education shall allocate additional funds for children with disabilities on the basis of three thousand nine hundred twenty‑six dollars and ninety‑seven cents ($3,926.97) per child. 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 one‑half percent (12.5%) of its 2015‑2016 allocated average daily membership in the local school administrative unit. The dollar amounts allocated under this section for children with disabilities shall also be adjusted 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 8.2.  The State Board of Education shall allocate additional funds for academically or intellectually gifted children on the basis of one thousand two hundred eighty dollars and seventy cents ($1,280.70) per child for fiscal years 2015‑2016 and 2016‑2017. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2015‑2016 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The dollar amounts allocated under this section for academically or intellectually gifted children shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.

 

USE OF SUPPLEMENTAL FUNDING IN LOW‑WEALTH COUNTIES

SECTION 8.3.(a)  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 and digital resources and (ii) for salary supplements for instructional personnel and instructional support personnel. 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 three through eight.

SECTION 8.3.(b)  Definitions. – As used in this section, the following definitions apply:

(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 following:

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.         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 following:

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.

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.

(11)      "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.

(12)      "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.

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

(14)      "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.

(15)      "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.

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

(17)      "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 8.3.(c)  Eligibility for Funds. – Except as provided in subsection (g) 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 8.3.(d)  Allocation of Funds. – Except as provided in subsection (f) 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's 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 8.3.(e)  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 8.3.(f)  Minimum Effort Required. – A county that (i) maintains an effective county tax rate that is at least one hundred percent (100%) of the effective State average tax rate in the most recent year for which data are available or (ii) maintains a county appropriation per student to the school local current expense fund of at least one hundred percent (100%) of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools shall receive full funding under this section. A county that maintains a county appropriation per student to the school local current expense fund of less than one hundred percent (100%) of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools shall receive funding under this section at the same percentage that the county's appropriation per student to the school local current expense fund is of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools.

SECTION 8.3.(g)  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 2015‑2017 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 all of the following criteria apply:

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

(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 the requirements of this subsection.

SECTION 8.3.(h)  Counties Containing a Base of the Armed Forces. – Notwithstanding any other provision of this section, for the 2015‑2017 fiscal biennium, counties containing a base of the Armed Forces of the United States that have an average daily membership of more than 23,000 students shall receive the same amount of supplemental funding for low‑wealth counties as received in the 2012‑2013 fiscal year.

SECTION 8.3.(i)  Funds for EVAAS Data. – Notwithstanding the requirements of subsection (a) of this section, local school administrative units may utilize funds allocated under this section to purchase services that allow for extraction of data from the Education Value‑Added Assessment System (EVAAS).

SECTION 8.3.(j)  Reports. – For the 2015‑2017 fiscal biennium, the State Board of Education shall report to the Fiscal Research Division prior to May 15 of each year if it determines that counties have supplanted funds.

SECTION 8.3.(k)  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 8.4.(a)  Allotment Schedule for the 2015‑2017 Fiscal Biennium. – Except as otherwise provided in subsection (d) of this section, each eligible county school administrative unit shall receive a dollar allotment according to the following schedule:

Allotted ADM                                Small County Allotment

                                 0‑600                                       $1,710,000

                          601‑1,300                                       $1,820,000

                       1,301‑1,700                                       $1,548,700

                       1,701‑2,000                                       $1,600,000

                       2,001‑2,300                                       $1,560,000

                       2,301‑2,600                                       $1,470,000

                       2,601‑2,800                                       $1,498,000

                       2,801‑3,200                                       $1,548,000

SECTION 8.4.(b)  Phase‑Out Provision for the 2015‑2016 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section in the 2015‑2016 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local administrative units shall be reduced in equal increments in each of the five years after the local administrative unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2014‑2015 in any fiscal year.

SECTION 8.4.(c)  Phase‑Out Provision for the 2016‑2017 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section in the 2016‑2017 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local administrative units shall be reduced in equal increments in each of the five years after the local administrative unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2015‑2016 in any fiscal year.

SECTION 8.4.(d)  Nonsupplant Requirement for the 2015‑2017 Fiscal Biennium. – 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 2015‑2017 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 all of the following criteria apply:

(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 local current expense appropriation per student for the three prior fiscal years.

(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 the requirements of this subsection.

SECTION 8.4.(e)  Reports. – For the 2015‑2017 fiscal biennium, the State Board of Education shall report to the Fiscal Research Division prior to May 15 of each fiscal year if it determines that counties have supplanted funds.

SECTION 8.4.(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 three through eight.

Local school administrative units may also utilize funds allocated under this section to purchase services that allow for extraction of data from the Education Value‑Added Assessment System (EVAAS).

 

DISADVANTAGED STUDENT SUPPLEMENTAL FUNDING (DSSF)

SECTION 8.5.(a)  Funds appropriated for disadvantaged student supplemental funding shall be used, consistent with the policies and procedures adopted by the State Board of Education, only to do the following:

(1)        Provide instructional positions or instructional support positions and/or professional development.

(2)        Provide intensive in‑school and/or after‑school remediation.

(3)        Purchase diagnostic software and progress‑monitoring tools.

(4)        Provide funds for teacher bonuses and supplements. The State Board of Education shall set a maximum percentage of the funds that may be used for this purpose.

The State Board of Education may require local school administrative units receiving funding under the Disadvantaged Student Supplemental Fund to purchase the Education Value‑Added Assessment System (EVAAS) in order to provide in‑depth analysis of student performance and help identify strategies for improving student achievement. This data shall be used exclusively for instructional and curriculum decisions made in the best interest of children and for professional development for their teachers and administrators.

SECTION 8.5.(b)  Disadvantaged student supplemental funding (DSSF) shall be allotted to a local school administrative unit based on (i) the unit's eligible DSSF population and (ii) the difference between a teacher‑to‑student ratio of 1:21 and the following teacher‑to‑student ratios:

(1)        For counties with wealth greater than ninety percent (90%) of the statewide average, a ratio of 1:19.9.

(2)        For counties with wealth not less than eighty percent (80%) and not greater than ninety percent (90%) of the statewide average, a ratio of 1:19.4.

(3)        For counties with wealth less than eighty percent (80%) of the statewide average, a ratio of 1:19.1.

(4)        For local school administrative units receiving DSSF funds in fiscal year 2005‑2006, a ratio of 1:16. These local school administrative units shall receive no less than the DSSF amount allotted in fiscal year 2006‑2007.

For the purpose of this subsection, wealth shall be calculated under the low‑wealth supplemental formula as provided for in this act.

SECTION 8.5.(c)  If a local school administrative unit's wealth increases to a level that adversely affects the unit's disadvantaged student supplemental funding (DSSF) allotment ratio, the DSSF allotment for that unit shall be maintained at the prior year level for one additional fiscal year.

 

UNIFORM EDUCATION REPORTING SYSTEM (UERS) FUNDS

SECTION 8.7.  Funds appropriated for the Uniform Education Reporting System (UERS) for the 2015‑2017 fiscal biennium shall not revert at the end of each fiscal year but shall remain available until expended.

 

COOPERATIVE INNOVATIVE HIGH SCHOOLS

SECTION 8.8.  G.S. 115C‑238.54 is amended by adding a new subsection to read:

"(j)       Any State funds appropriated for cooperative innovative high schools shall not be adjusted to reflect legislative salary increments, retirement rate adjustments, and health benefit adjustments for school personnel, unless specifically provided for by the General Assembly."

 

STudy NCVPS ALTERNATIVE FUNDING FORMULA

SECTION 8.11.(a)  The State Board of Education shall study implementation of an alternative funding formula for the North Carolina Virtual Public School (NCVPS) in lieu of the funding formula adopted by the State Board pursuant to Section 7.22(d) of S.L. 2011‑145, as amended by Section 8.9 of S.L. 2013‑360. The study shall include consideration of the potential costs and benefits of (i) offering an alternative funding formula option for local boards of education to select and (ii) replacing the current NCVPS formula with a new formula applicable to all local boards of education participating in NCVPS.

SECTION 8.11.(b)  The State Board of Education shall report the results of the study under subsection (a) of this section and any legislative recommendations to the Joint Legislative Education Oversight Committee by January 15, 2016.

 

REVISE THE DESIGNATION OF THE TEXTBOOK FUNDING ALLOTMENT

SECTION 8.18.(a)  Effective July 1, 2015, the existing Textbooks funding allotment in the State Public School Fund shall be designated as the Textbooks and Digital Resources funding allotment in the State Public School Fund.

SECTION 8.18.(b)  The State Board of Education shall establish the purposes for which the funds within the new Textbooks and Digital Resources funding allotment may be used for as follows: (i) to acquire textbooks as defined in G.S. 115C‑85, which includes technology‑based programs, and (ii) only for allowable expenditures as were permitted under the Textbooks funding allotment as of June 30, 2015.

 

REPEAL UNNECESSARY STATE BOARD OF EDUCATION REPORTS

SECTION 8.25.(a)  Report on Paperwork Reduction. – G.S. 115C‑12(19) reads as rewritten:

"(19)    Duty to Identify Required Reports and to Eliminate Unnecessary Reports and Paperwork. – Prior to the beginning of each school year, the State Board of Education shall identify all reports that are required at the State level for the school year.

The State Board of Education shall adopt policies to ensure that local school administrative units are not required by the State Board of Education, the State Superintendent, or the Department of Public Instruction staff to (i) provide information that is already available on the student information management system or housed within the Department of Public Instruction; (ii) provide the same written information more than once during a school year unless the information has changed during the ensuing period; (iii) complete forms, for children with disabilities, that are not necessary to ensure compliance with the federal Individuals with Disabilities Education Act (IDEA); or (iv) provide information that is unnecessary to comply with State or federal law and not relevant to student outcomes and the efficient operation of the public schools. Notwithstanding the foregoing, the State Board may require information available on its student information management system or require the same information twice if the State Board can demonstrate a compelling need and can demonstrate there is not a more expeditious manner of getting the information.

The State Board shall permit schools and local school administrative units to submit all reports to the Department of Public Instruction electronically.

The State Board of Education, in collaboration with the education roundtables within the Department of Public Instruction, shall consolidate all plans that affect the school community, including school improvement plans. The consolidated plan shall be posted on each school's Web site for easy access by the public and by school personnel.

The State Board shall report to the Joint Legislative Education Oversight Committee by November 15 of each year on the reports identified that are required at the State level, the evaluation and determination for continuing individual reports, including the consideration of whether those reports exceed what is required by State and federal law, and any reports that it has consolidated or eliminated for the upcoming school year."

SECTION 8.25.(b)  Report on the ABCs. – G.S. 115C‑12(25) reads as rewritten:

"(25)    Duty to Report to Joint Legislative Education Oversight Committee. – Upon the request of the Joint Legislative Education Oversight Committee, the State Board shall examine and evaluate issues, programs, policies, and fiscal information, and shall make reports to that Committee. Furthermore, beginning October 15, 1997, October 15, 2015, and annually thereafter, the State Board shall submit reports to that Committee regarding the continued implementation of Chapter 716 of the 1995 Session Laws, 1996 Regular Session. Each report shall include information regarding the composition and activity of assistance teams, schools that received incentive awards, schools identified as low‑performing, school improvement plans found to significantly improve student performance, personnel actions taken in low‑performing schools, and recommendations for additional legislation to improve student performance and increase local flexibility."

SECTION 8.25.(c)  Report on State School Technology Plan. – G.S. 115C‑102.6B(b) reads as rewritten:

"(b)      The Board shall submit the plan to the State Chief Information Officer for approval of the technical components of the plan set out in G.S. 115C‑102.6A(1) through (4). At least one‑fourth of the members of any technical committee that reviews the plan for the State Chief Information Officer shall be people actively involved in primary or secondary education.

The Board shall report annually by February 15 of each year to the Joint Legislative Education Oversight Committee on the status of the State School Technology Plan."

SECTION 8.25.(d)  Reports by Local School Administrative Units and Charter Schools on Students With Diabetes. – G.S. 115C‑375.3 reads as rewritten:

"§ 115C‑375.3.  Guidelines to support and assist students with diabetes.

Local boards of education and boards of directors of charter schools shall ensure that the guidelines adopted by the State Board of Education under G.S. 115C‑12(31) are implemented in schools in which students with diabetes are enrolled. In particular, the boards shall require the implementation of the procedures set forth in those guidelines for the development and implementation of individual diabetes care plans. The boards also shall make available necessary information and staff development to teachers and school personnel in order to appropriately support and assist students with diabetes in accordance with their individual diabetes care plans. Local boards of education and boards of directors of charter schools shall report to the State Board of Education annually, on or before August 15, whether they have students with diabetes enrolled and provide information showing compliance with the guidelines adopted by the State Board of Education under G.S. 115C‑12(31). These reports shall be in compliance with the federal Family Educational Rights and Privacy Act, 20 U.S.C. § 1232g."

 

INVESTING IN INNOVATION GRANT

SECTION 8.27.(a)  Section 8.25 of S.L. 2013‑360, as amended by Section 8.27 of S.L. 2014‑100, is repealed.

SECTION 8.27.(b)  The federal Investing in Innovation Fund Grant: Validating Early College Strategies for Traditional Comprehensive High Schools awarded to the North Carolina New Schools Project for 2012‑2020 requires students to enroll in a community college course in the tenth grade. Notwithstanding any other provision of law, specified local school administrative units may offer one community college course to participating sophomore (tenth grade) students. Participating local school administrative units are Alleghany, Beaufort, Bladen, Duplin, Hertford, Harnett, Jones, Madison, Martin, Richmond, Rutherford, Scotland, Surry, Warren, and Yancey County Schools.

SECTION 8.27.(c)  Grant funds shall be used to pay for all costs incurred by the local school administrative units and the community college partners to implement the grant, including community college FTE. Community colleges shall not earn budget FTE for student course enrollments supported with this grant.

SECTION 8.27.(d)  Research conducted as part of the federal grant program under subsection (a) of this section shall address the effects of early college strategies in preparing students for college completion. The North Carolina New Schools Project shall report on the implementation of the grant to the State Board of Education, State Board of Community Colleges, Office of the Governor, and the Joint Legislative Education Oversight Committee no later than March 15, 2016, and annually thereafter until the end of the grant period.

 

STUDY ON CHARTER SCHOOL CLOSURE FUNDS

SECTION 8.28.(a)  The State Board of Education shall study and develop a proposed policy regarding circumstances in which a charter school, approved by the State Board pursuant to G.S. 115C‑218.5, shall not be subject to the minimum value requirement of fifty thousand dollars ($50,000) as required by G.S. 115C‑218.100 for the purposes of ensuring payment of expenses related to closure proceedings. The State Board shall consider providing certain charter schools with a total or partial waiver of the requirement. In doing so, the State Board shall examine criteria for potentially eligible charter schools, such as the years of operation of the charter school, proven compliance with finance, governance, academic requirements of its charter, State law, and State Board policy requirements, as well as appropriate documentation to show the charter school's financial health and sustainability.

SECTION 8.28.(b)  By February 15, 2016, the State Board of Education shall report to the Joint Legislative Education Oversight Committee on the results of the study and a proposed policy as required by subsection (a) of this section, including any legislative recommendations.

 

TEXTBOOKS AND DIGITAL RESOURCES ALLOTMENT/USE OF FUNDS

SECTION 8.33.  G.S. 115C‑105.25(c) reads as rewritten:

"(c)       To ensure that parents, educators, and the general public are informed on how State funds have been used to address local educational priorities, each local school administrative unit shall publish the following information on its Web site by October 15 of each year:

(1)        A description of each program report code, written in plain English, and a summary of the prior fiscal year's expenditure of State funds within each program report code.

(2)        A description of each object code within a program report code, written in plain English, and a summary of the prior fiscal year's expenditure of State funds for each object code.

(3)        A description of each allotment transfer that increased or decreased the initial allotment amount by more than five percent (5%) and the educational priorities that necessitated the transfer.

(4)        A description of any transfer of funds from the textbooks and digital resources allotment into another allotment category with an explanation of why the transfer from the textbooks and digital resources allotment was made to a different allotment category.

(5)        A chart that clearly reflects how the local school administrative unit spent State funds."

 

STUDY ON JUVENILE LITERACY PROGRAM

SECTION 8.34.(a)  The Joint Legislative Education Oversight Committee shall study the results of the Juvenile Literacy Center program established in Wake County. In conducting the study, the Committee shall do at least the following:

(1)        Examine the impact of the program on (i) improving basic literacy skills, (ii) reintegrating juveniles into schools, (iii) preventing criminal behavior and recidivism, (iv) developing overall academic skills, and (v) addressing problem behaviors in school.

(2)        Evaluate the existing program for potential expansion into other counties, including projected costs, feasibility of implementation, and recommendations for locations for additional programs.

SECTION 8.34.(b)  The Committee shall report the results of its study and any recommendations on the expansion of the program, including proposed legislation, to the 2015 General Assembly upon the convening of the 2016 Regular Session.

 

Budget Reductions/Department of Public Instruction

SECTION 8.37.(a)  Notwithstanding G.S. 143C‑6‑4, the State Board of Education may, after consultation with the Office of State Budget and Management and the Fiscal Research Division, reorganize the Department of Public Instruction, if necessary, to implement the budget reductions for the 2015‑2017 fiscal biennium. Consultation shall occur prior to requesting budgetary and personnel changes through the budget revision process. The State Board shall provide a current organization chart for the Department of Public Instruction in the consultation process and shall report to the Joint Legislative Commission on Governmental Operations on any reorganization.

SECTION 8.37.(b)  In implementing budget reductions for the 2015‑2017 fiscal biennium, the State Board of Education shall make no reduction to funding or positions for (i) the North Carolina Center for Advancement of Teaching and (ii) the Eastern North Carolina School for the Deaf, the North Carolina School for the Deaf, and the Governor Morehead School, except that the State Board may, in its discretion, reduce positions at these institutions that have been vacant for more than 16 months. The State Board shall also make no reduction in funding to any of the following entities:

(1)        Communities in Schools of North Carolina, Inc.

(2)        Teach For America, Inc.

(3)        Beginnings for Parents of Children who are Deaf or Hard of Hearing, Inc.

 

Local Boards of Education/Performance‑Based RIFS

SECTION 8.38.(a)  G.S. 115C‑325.4 is amended by adding a new subsection to read:

"(c)       Local boards of education shall adopt a policy for implementing a reduction in force pursuant to subdivision (a)(15) of this section that includes the following criteria:

(1)        In determining which positions shall be subject to a reduction, a local school administrative unit shall consider the following:

a.         Structural considerations, such as identifying positions, departments, courses, programs, operations, and other areas where there are (i) less essential, duplicative, or excess personnel; (ii) job responsibility and position inefficiencies; (iii) opportunities for combined work functions; and (iv) decreased student or other demands for curriculum, programs, operations, or other services.

b.         Organizational considerations, such as anticipated organizational needs of the school system and program or school enrollment.

(2)        In identifying which teachers in similar positions shall be subject to a dismissal, demotion, or reduction to employment on a part‑time basis under the policy, a local school administrative unit shall consider work performance and teacher evaluations."

SECTION 8.38.(b)  G.S. 115C‑325(e)(2) reads as rewritten:

"(2)      Reduction in Force. –

a.         A local board of education shall adopt a policy for implementing a reduction in force pursuant to sub‑subdivision (e)(1)l. of this section that includes the following criteria:

1.         In determining which positions shall be subject to a reduction, a local school administrative unit shall consider the following:

I.          Structural considerations, such as identifying positions, departments, courses, programs, operations, and other areas where there are (i) less essential, duplicative, or excess personnel; (ii) job responsibility and position inefficiencies; (iii) opportunities for combined work functions; and (iv) decreased student or other demands for curriculum, programs, operations, or other services.

II.         Organizational considerations, such as anticipated organizational needs of the school system and program or school enrollment.

2.         In identifying which teachers in similar positions shall be subject to a dismissal, demotion, or reduction to employment on a part‑time basis under the policy, a local school administrative unit shall consider work performance and teacher evaluations.

b.         Before recommending to a board the dismissal or demotion of the career employee pursuant to G.S. 115C‑325(e)(1)l., the superintendent shall give written notice to the career employee by certified mail or personal delivery of his intention to make such recommendation and shall set forth as part of his or her recommendation the grounds upon which he or she believes such dismissal or demotion is justified. The notice shall include a statement to the effect that if the career employee within 15 days after receipt of the notice requests a review, he or she shall be entitled to have the proposed recommendations of the superintendent reviewed by the board. Within the 15‑day period after receipt of the notice, the career employee may file with the superintendent a written request for a hearing before the board within 10 days. If the career employee requests a hearing before the board, the hearing procedures provided in G.S. 115C‑325(j3) shall be followed. If no request is made within the 15‑day period, the superintendent may file his or her recommendation with the board. If, after considering the recommendation of the superintendent and the evidence adduced at the hearing if there is one, the board concludes that the grounds for the recommendation are true and substantiated by a preponderance of the evidence, the board, if it sees fit, may by resolution order such dismissal. Provisions of this section which permit a hearing by a hearing officer shall not apply to a dismissal or demotion recommended pursuant to G.S. 115C‑325(e)(1)l.

When a career employee is dismissed pursuant to G.S. 115C‑325(e)(1)l., above, his or her name shall be placed on a list of available career employees to be maintained by the board."

SECTION 8.38.(c)  Effective June 30, 2018, G.S. 115C‑325(e)(2), as amended by this section, is repealed.

 

Driver Education Training

SECTION 8.39.(a)  G.S. 115C‑216 reads as rewritten:

"§ 115C‑216.  Boards of education required to provide courses in operation of motor vehicles.

(a)        Course of Training and Instruction Required in Public High Schools. – Local boards of education shall offer noncredit driver education courses in high schools using the standardized curriculum provided by the Department of Public Instruction.

(b)        Inclusion of Expense in Budget. – The local boards of education shall include as an item of instructional service and as a part of the current expense fund of the budget of the high schools under their supervision, the expense necessary to offer the driver education course.

(c)        through (f) Repealed by Session Laws 1991, c. 689, s. 32(c).

(g)        Fee for Instruction. – The local boards of education shall fund driver education courses from funds available to them and may charge each student participating in a driver education course a fee of up to sixty‑five dollars ($65.00) to offset in an amount not to exceed the actual costs of providing the training and instruction.course."

SECTION 8.39.(b)  Article 14 of Chapter 115C of the General Statutes is repealed.

SECTION 8.39.(c)  G.S. 20‑7(m)(1) reads as rewritten:

"(1)      An applicant who is less than 18 years old and is enrolled in a drivers education program that is approved by the State Superintendent of Public Instruction meets the requirements set forth in G.S. 115D‑76.5 and is offered at a public high school,by a community college or at a nonpublic secondary school,school or a licensed driverscommercial driver training school."

SECTION 8.39.(e)  G.S. 20‑81.12(b86) reads as rewritten:

"(b86)  Concerned Bikers Association/ABATE of North Carolina. – The Division must receive 300 or more applications for the "Concerned Bikers Association/ABATE of North Carolina" plate before the plate may be developed. The Division shall transfer quarterly the money in the Collegiate and Cultural Attraction Plate Account derived from the sale of the "Concerned Bikers Association/ABATE of North Carolina" plates to the Department of Public Instruction Community Colleges System Office to support the driver training and safety education program established pursuant to G.S. 115C‑215G.S. 115D‑76.5 and to support motorcycle safety and awareness training as part of the driver training program."

SECTION 8.39.(f)  G.S. 20‑88.1(d) reads as rewritten:

"(d)      The Division shall prepare a driver license handbook that explains the traffic laws of the State and shall periodically revise the handbook to reflect changes in these laws. At the request of the Department of Public Instruction,Community Colleges System Office, the Division shall provide free copies of the handbook to that Department the System Office for use in the program of driver education offered at public high schools.by community colleges."

SECTION 8.39.(g)  G.S. 20‑129(a)(4) reads as rewritten:

"(4)      At any other time when windshield wipers are in use as a result of smoke, fog, rain, sleet, or snow, or when inclement weather or environmental factors severely reduce the ability to clearly discern persons and vehicles on the street and highway at a distance of 500 feet ahead, provided, however, the provisions of this subdivision shall not apply to instances when windshield wipers are used intermittently in misting rain, sleet, or snow. Any person violating this subdivision during the period from October 1, 1990, through December 31, 1991, shall be given a warning of the violation only. Thereafter, any person violating this subdivision shall have committed an infraction and shall pay a fine of five dollars ($5.00) and shall not be assessed court costs. No drivers license points, insurance points or premium surcharge shall be assessed on account of violation of this subdivision and no negligence or liability shall be assessed on or imputed to any party on account of a violation of this subdivision. The Commissioner of Motor Vehicles and the Superintendent of Public Instruction State Board of Community Colleges shall incorporate into driver education programs and driver licensing programs instruction designed to encourage compliance with this subdivision as an important means of reducing accidents by making vehicles more discernible during periods of limited visibility."

SECTION 8.39.(h)  G.S. 20‑135.2A(g) reads as rewritten:

"(g)       The Commissioner of Motor Vehicles and the Department of Public Instruction State Board of Community Colleges shall incorporate in driver education programs and driver licensing programs instructions designed to encourage compliance with this section as an important means of reducing the severity of injury to the users of restraint devices and on the requirements and penalties specified in this law."

SECTION 8.39.(i)  G.S. 20‑322(b) reads as rewritten:

"(b)      Regulations adopted by the Commissioner shall state the requirements for a school license, including requirements concerning location, equipment, courses of instruction, instructors, financial statements, schedule of fees and charges, character and reputation of the operators, insurance, bond or other security in such sum and with such provisions as the Commissioner deems necessary to protect adequately the interests of the public, and such other matters as the Commissioner may prescribe. A driver education course offered to prepare an individual for a limited learner's permit or another provisional license must meet the requirements set in G.S. 115C‑215 G.S. 115D‑76.5 for the program of driver education offered in the public schools.by community colleges."

SECTION 8.39.(j)  G.S. 105‑187.6(a)(8) reads as rewritten:

"(8)      To a local board of education board of trustees of a community college for use in the driver education program of a public school of the community college when the motor vehicle is transferred:

a.         By a retailer and is to be transferred back to the retailer within 300 days after the transfer to the local board.board of trustees of the community college.

b.         By a local board of education.board of trustees of the community college."

SECTION 8.39.(k)  G.S. 115C‑12(28) reads as rewritten:

"(28)    Duty to Develop Rules for Issuance of Driving Eligibility Certificates. – The State Board of Education shall adopt the following rules to assist schools in their administration of procedures necessary to implement G.S. 20‑11 and G.S. 20‑13.2:

a.         To define what is equivalent to a high school diploma for the purposes of G.S. 20‑11 and G.S. 20‑13.2. These rules shall apply to all educational programs offered in the State by public schools, charter schools, nonpublic schools, or community colleges.

b.         To establish the procedures a person who is or was enrolled in a public school or in a charter school must follow and the requirements that person shall meet to obtain a driving eligibility certificate.

c.         To require the person who is required under G.S. 20‑11(n) to sign the driving eligibility certificate to provide the certificate if he or she determines that one of the following requirements is met:

1.         The person seeking the certificate is eligible for the certificate under G.S. 20‑11(n)(1) and is not subject to G.S. 20‑11(n1).

2.         The person seeking the certificate is eligible for the certificate under G.S. 20‑11(n)(1) and G.S. 20‑11(n1).

These rules shall apply to public schools and charter schools.

d.         To provide for an appeal to an appropriate education authority by a person who is denied a driving eligibility certificate. These rules shall apply to public schools and charter schools.

e.         To define exemplary student behavior and to define what constitutes the successful completion of a drug or alcohol treatment counseling program. These rules shall apply to public schools and charter schools.

The State Board also shall develop policies as to when it is appropriate to notify the Division of Motor Vehicles that a person who is or was enrolled in a public school or in a charter school no longer meets the requirements for a driving eligibility certificate.

The State Board shall develop a form for parents, guardians, or emancipated juveniles, as appropriate, to provide their written, irrevocable consent for a school to disclose to the Division of Motor Vehicles that the student no longer meets the conditions for a driving eligibility certificate under G.S. 20‑11(n)(1) or G.S. 20‑11(n1), if applicable, in the event that this disclosure is necessary to comply with G.S. 20‑11 or G.S. 20‑13.2. Other than identifying under which statutory subsection the student is no longer eligible, no other details or information concerning the student's school record shall be released pursuant to this consent. This form shall be used for students enrolled in public schools or charter schools.

The State Board of Education may use funds appropriated for drivers education to cover the costs of driving eligibility certificates."

SECTION 8.39.(l)  Subsection (a) of this section applies for the 2015‑2016 school year only. Subsections (b) through (k) of this section become effective July 1, 2016.

 

Office of Educator Licensure/Transfer from Licensure section

SECTION 8.40.(a)  Article 20 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑295.5.  Office of Educator Licensure.

(a)        There is created the Office of Educator Licensure (OEL), which shall be under the control of the State Board of Education. The OEL shall consist of an executive director appointed by the State Board of Education and such other professional, administrative, technical, and clerical personnel as may be necessary to assist the OEL in carrying out its powers and duties within the funds available for this purpose. The State Board may direct the Department of Public Instruction to provide technical and administrative support to the OEL.

(b)        The OEL shall execute the rules and regulations established by the State Board of Education for renewal and extension of all licenses.

(c)        The OEL shall ensure that initial licenses and license renewals are processed and issued in a timely and accurate manner as follows:

(1)        The OEL shall work cooperatively with local school administrative units, charter schools, regional schools, schools of education, individuals seeking licensure, the Department of Public Instruction, and educator licensing entities in other states.

(2)        The OEL shall use electronic means of processing applications, to the extent practicable, to process all applications and concerns and shall ensure that applicants can ascertain progress and communicate with the OEL on processing of applications electronically.

(d)        The OEL shall maintain information on a publicly accessible Web site about the following:

(1)        The process for licensure for educators in the State, including initial licensure, renewal of licensure, licensure reciprocity with other states, and lateral entry licensure.

(2)        Licensure fee schedules.

(3)        Licensure policies related to experience and degree credit for salary purposes.

(4)        Licensure suspension and revocation.

(5)        The current status of licensed educators in the State in a searchable format.

(e)        The OEL shall maintain and make available statistical information about licensure in the State on a publicly accessible Web site, including the following:

(1)        Updated at least weekly:

a.         Number of applications received and transactions completed.

b.         Number of newly licensed educators.

c.         Number of licensure renewals.

(2)        Updated at least annually:

a.         Demographic information regarding currently licensed educators.

b.         Number of licenses issued by area of licensure and type of license.

c.         Number of initial licenses for the following:

1.         Graduates of educator preparation programs.

2.         Lateral entry.

3.         International educators.

4.         Out‑of‑State educators seeking reciprocity.

(f)         The OEL shall be supported by fees as provided in G.S. 115C‑296(a2)."

SECTION 8.40.(b)  Within 60 days of the date this act becomes law, the State Board of Education shall appoint an executive director of the Office of Educator Licensure (OEL) in accordance with G.S. 115C‑295.5, as enacted by subsection (a) of this section. Notwithstanding G.S. 115C‑295.5, the OEL shall not be subject to carrying out the duties and responsibilities required by G.S. 115C‑295.5 until January 1, 2016. The position of the executive director of the OEL shall be supported by fees as provided in G.S. 115C‑296(a2).

SECTION 8.40.(c)  Effective January 1, 2016, the Licensure Section within the Department of Public Instruction is dissolved and the duties and functions of that section are transferred to the OEL, established under G.S. 115C‑295.5, as enacted by subsection (a) of this section. This transfer shall have all of the elements of a Type I transfer, as defined in G.S. 143A‑6. Prior to the transfer on January 1, 2016, the executive director of the OEL shall, in consultation with the Licensure Section within the Department of Public Instruction, develop and implement a transition plan that addresses the transfer of duties and functions of the Licensure Section to the OEL to minimize disruption in the provision of services for educator licensure and renewals.

 

modify Educator Preparation Program approval process

SECTION 8.41.(a)  Article 20 of Chapter 115C of the General Statutes is amended by adding new sections to read:

"§ 115C‑296.8.  Educator preparation program approval process.

(a)        The State Board of Education, as lead agency, in coordination and cooperation with the Board of Governors of The University of North Carolina, the State Board of Community Colleges, the North Carolina Independent Colleges and Universities, Inc., and such other public and private agencies as are necessary, shall establish standards for approval of educator preparation programs. Graduates of educator preparation programs operating in this State that have either (i) not been approved by the State Board or (ii) are not nationally accredited shall be ineligible for an initial license as a new, in‑State approved program graduate.

(b)        The standards for approval of educator preparation programs shall require that educator preparation program providers be either State‑approved or nationally accredited. North Carolina program approval site visitors shall coordinate with educator preparation programs seeking national accreditation. State educator preparation program approval shall include the following components:

(1)        Adoption of rules for granting State approval to educator preparation programs and units. These rules shall mirror national accreditation in efforts to maintain the same level of quality preparation across programs. The rules shall include all content, pedagogy, and clinical requirements required by State law.

(2)        A State peer review process that includes highly qualified and trained members to adequately review programs within the State.

(3)        Technical assistance to educator preparation programs in efforts to do the following:

a.         Improve education quality and educator preparation program performance.

b.         Inform programs about the program approval process as part of educator preparation program performance based on outcome data.

c.         Assist with State and federal reporting process.

d.         Help build and maintain partnerships between elementary and secondary schools and educator preparation programs.

(c)        The State Board of Education may place an approved educator preparation program provider on probationary status and require a plan for improvement on any of the unmet standards for the program, or revoke educator preparation program approval, for any of the following reasons:

(1)        Failing to report required information to the State Board of Education as part of the reporting requirement.

(2)        Offering misleading or false information about approved programs.

(3)        Accepting students into any part of an educator preparation program that is not approved by the State Board of Education.

(4)        Failing to comply with the educator preparation program review process.

(5)        Failing to meet standards for approval set forth by the State Board of Education.

"§ 115C‑296.9.  Minimum admissions requirements for educator preparation programs.

(a)        Testing. – An undergraduate student seeking a degree in education shall attain passing scores on a preprofessional skills test prior to admission to an approved program in the State. The State Board of Education shall permit students to fulfill this requirement by achieving the prescribed minimum scores set by the State Board of Education for the Praxis Core tests or by achieving the appropriate required scores, as determined by the State Board of Education, on the verbal and mathematics portions of the SAT or ACT. The minimum combined verbal and mathematics score set by the State Board for the SAT shall be 1,100 or greater. The minimum composite score set by the State Board for the ACT shall be 24 or greater.

(b)        Grade Point Average. – An approved educator preparation program in the State shall not admit an undergraduate student into an educator preparation program unless that student has earned a minimum cumulative grade point average of at least a 2.7. An approved educator preparation program shall ensure that the minimum cohort grade point average for each entering cohort to an educator preparation program is at least a 3.0.

"§ 115C‑296.10.  Content and pedagogy requirements.

(a)        Content and Pedagogy Requirements for Educator Preparation Programs. – To ensure that educator preparation programs remain current and reflect a rigorous course of study that is aligned to State and national standards, the State Board of Education, in consultation with the Board of Governors of The University of North Carolina and the North Carolina Independent Colleges and Universities, Inc., shall require that the rules for approval of educator preparation programs include the following requirements with demonstrated competencies:

(1)        All educator preparation programs shall include the following:

a.         The identification and education of children with disabilities.

b.         Positive management of student behavior and effective communication techniques for defusing and deescalating disruptive or dangerous behavior.

c.         Demonstration of competencies in using digital and other instructional technologies to provide high‑quality, integrated digital teaching and learning to all students.

(2)        Elementary education teacher education preparation programs shall include the following:

a.         Adequate coursework in the teaching of reading, writing, and mathematics.

b.         Assessment prior to licensure to determine if a student possesses the requisite knowledge in scientifically based reading, writing, and mathematics instruction that is aligned with the State Board's expectations.

c.         Instruction in application of formative and summative assessments within the school and classroom setting through technology‑based assessment systems available in North Carolina schools that measure and predict expected student improvement.

d.         Instruction in integration of arts education across the curriculum.

(3)        Elementary and special education general curriculum teacher education preparation programs shall ensure that students receive instruction in early literacy intervention strategies and practices that are aligned with State and national reading standards and shall include the following:

a.         Instruction in the teaching of reading, including a substantive understanding of reading as a process involving oral language, phonological and phonemic awareness, phonics, fluency, vocabulary, and comprehension. Instruction shall include appropriate application of instructional supports and services and reading interventions to ensure reading proficiency for all students.

b.         Instruction in evidence‑based assessment and diagnosis of specific areas of difficulty with reading development and of reading deficiencies.

c.         Instruction in appropriate application of instructional supports and services and reading interventions to ensure reading proficiency for all students.

(4)        Middle and high school science teacher education preparation programs shall include adequate preparation in issues related to science laboratory safety.

(b)        School Administrator Preparation Programs. – Rules for approval of school administrator preparation programs shall incorporate the criteria developed in accordance with G.S. 116‑74.21 for assessing proposals under the School Administrator Training Program.

"§ 115C‑296.11.  Clinical partnerships and practice in educator preparation programs.

(a)        As used in this section, the following definitions shall apply:

(1)        Clinical educator. – An individual employed by an elementary or secondary school, including a classroom teacher, who assesses, supports, and develops a student's knowledge, skills, and professional disposition during the clinical experience.

(2)        Internship. – Part of a formal program to provide practical experience and training for beginners in the education profession.

(3)        Residency. – A specified period of time in which a person is employed by a local school administrative unit to gain practical experience and training in educator preparation.

(b)        The State Board of Education, in consultation with the Board of Governors of The University of North Carolina and the North Carolina Independent Colleges and Universities, Inc., shall adopt and establish rules for educator preparation that require at least the following:

(1)        Educator preparation programs shall establish and maintain collaborative, formalized partnerships with elementary and secondary schools that are focused on student achievement, continuous school improvement, and the professional development of elementary and secondary educators, as well as those preparing educators.

(2)        Educator preparation programs shall work collaboratively with elementary and secondary schools and enter into a memorandum of understanding with local school administrative units where students are placed. In the memorandum, the educator preparation program and the local school administrative unit shall:

a.         Define the collaborative relationship between the educator preparation program and the local school administrative unit and how this partnership will be focused on continuous school improvement and student achievement.

b.         Adopt a plan for collaborative teacher selection, orientation, and student placement.

c.         Determine how information will be shared and verified between the educator preparation program and local school administrative unit.

(3)        Educator preparation programs shall ensure clinical educators who supervise students in residencies or internships meet the following requirements:

a.         Be professionally licensed in the field of licensure sought by the student.

b.         Have a minimum of three years of experience in a teaching role.

c.         Have been rated, through formal evaluations, at least at the "accomplished" level as part of the North Carolina Teacher Evaluation System and have met expectations as part of student growth in the field of licensure sought by the student.

(4)        Educator preparation programs shall require, in all programs leading to initial licensure, field experiences that include organized and sequenced engagement of students in settings that provide them with opportunities to observe, practice, and demonstrate knowledge and skills. The experiences shall be systematically designed and sequenced to increase the complexity and levels of engagement with which students apply, reflect upon, and expand their knowledge and skills.

(5)        Educator preparation programs shall require clinical practice in the form of residencies or internships in those fields for which they are approved by the State Board of Education. Residencies or internships shall be a minimum of 16 weeks. Residencies and internships may be over the course of two semesters and shall, to the extent practicable, provide student experiences at both the beginning and ending of the school year.

(6)        Educator preparation programs with a clinical practice component shall require, in addition to a content assessment, a nationally normed and valid pedagogy assessment to determine clinical practice performance. Passing scores and mastery criteria will be determined by the State Board of Education.

"§ 115C‑296.12.  Lateral entry teacher education preparation programs.

(a)        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. Skilled individuals who choose to enter the profession of teaching laterally may be granted an initial teaching license for no more than three years and shall be required to obtain licensure required for those who have taught more than three years before contracting for a fourth year of service with any local school administrative unit in this State. The criteria and procedures for lateral entry shall include preservice training in all of the following areas:

(1)        The identification and education of children with disabilities.

(2)        Positive management of student behavior.

(3)        Effective communication for defusing and deescalating disruptive or dangerous behavior.

(4)        Safe and appropriate use of seclusion and restraint.

(b)        The State Board of Education, in consultation with the State Board of Community Colleges and North Carolina Independent Colleges and Universities, Inc., may provide a competency‑based program of study for lateral entry teachers to complete the coursework necessary to earn a teaching license. To this end, the State Board of Education, in consultation with the State Board of Community Colleges and North Carolina Independent Colleges and Universities, Inc., shall establish a competency‑based program of study for lateral entry teachers to be implemented within the Community College System and at approved educator preparation programs at private, nonprofit two‑year colleges. These programs shall meet standards set by the State Board of Education. To ensure that programs of study for lateral entry remain current and reflect a rigorous course of study that is aligned to State and national standards, the State Board of Education shall do all of the following to ensure that lateral entry personnel are prepared to teach:

(1)        Provide adequate coursework in the teaching of reading and mathematics for lateral entry teachers seeking certification in elementary education.

(2)        Assess lateral entry teachers prior to licensure to determine that they possess the requisite knowledge in scientifically based reading and mathematics instruction that is aligned with the State Board's expectations.

(3)        Prepare all lateral entry teachers to apply formative and summative assessments within the school and classroom setting through technology‑based assessment systems available in North Carolina schools that measure and predict expected student improvement.

(4)        Require that lateral entry teachers demonstrate competencies in using digital and other instructional technologies to provide high‑quality, integrated digital teaching and learning to all students.

(c)        The State Board of Community Colleges and the State Board of Education shall jointly identify the community college courses and the educator preparation program courses that are necessary and appropriate for inclusion in the community college program of study for lateral entry teachers. To the extent possible, any courses that must be completed through an approved educator preparation program shall be taught on a community college campus or shall be available through distance learning. The State Board of Education shall identify the appropriate courses for a private, nonprofit two‑year college to include in the program of study for lateral entry teachers.

(d)        In order to participate in the community college or private, nonprofit two‑year college program of study for lateral entry teachers, an individual must hold at least a bachelor's degree from a regionally accredited institution of higher education.

(e)        An individual who successfully completes the lateral entry program of study and meets all other requirements of licensure set by the State Board of Education shall be recommended for a North Carolina teaching license.

(f)         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. 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.

"§ 115C‑296.13.  Educator preparation program reporting.

(a)        Annual Performance Reports. – The State Board of Education shall require all approved educator preparation programs, including master's degree programs in teacher preparation and master's degree programs in school administration, to submit annual performance reports. The performance reports shall provide the State Board of Education with a focused review of the programs and the current process of accrediting these programs in order to ensure that the programs produce graduates that are well prepared to teach.

(b)        Required Elements. – The performance report for each educator preparation program in North Carolina shall follow a common format and include at least the following elements:

(1)        Quality of students entering the educator preparation program, including the average grade point average and average score on preprofessional skills tests that assess reading, writing, mathematics, and other competencies.

(2)        Graduation rates.

(3)        Time‑to‑graduation rates.

(4)        Average scores of graduates on professional and content area examination for the purpose of licensure.

(5)        Percentage of graduates receiving initial licenses.

(6)        Percentage of graduates hired as teachers.

(7)        Percentage of graduates remaining in teaching for four years.

(8)        Graduate satisfaction based on a common survey.

(9)        Employer satisfaction based on a common survey.

(10)      Effectiveness of teacher preparation program graduates.

(c)        Submission of Annual Performance Reports. – Performance reports shall be provided annually to the Board of Governors of The University of North Carolina, the State Board of Education, and the boards of trustees of nonpublic postsecondary colleges. The State Board of Education shall review the educator preparation program performance reports each year the performance reports are submitted.

(d)        Educator Preparation Program Report Card. – The State Board shall create a higher education educator preparation program report card reflecting the information collected in the annual performance reports for each North Carolina institution offering educator preparation programs. The report cards shall, at a minimum, summarize information reported on all of the performance indicators for the performance reports required by subsection (b) of this section.

(e)        Annual State Board of Education Report. – The educator preparation program report cards shall be submitted to the Joint Legislative Education Oversight Committee on an annual basis by November 15.

(f)         State Board of Education Action Based on Performance. – Based upon the performance reports and other criteria established by the State Board, the State Board may reward an educator preparation program, impose probationary status and plans of improvement on an educator preparation program, or revoke approval of an educator preparation program."

SECTION 8.41.(b)  G.S. 115C‑296(b) reads as rewritten:

"(b)      It is the policy of the State of North Carolina to maintain the highest quality teacher education programs and school administrator programs in order to enhance the competence of professional personnel licensed in North Carolina. To the end that teacher preparation programs are upgraded to reflect a more rigorous course of study, the The State Board of Education, as lead agency in coordination and cooperation with the University Board of Governors, the State Board of Community Colleges and such other public and private agencies as are necessary, shall continue to refine the several licensure requirements, standards for approval of institutions of teacher education, standards for institution based innovative and experimental programs, standards for implementing consortium based teacher education, and standards for improved efficiencies in the administration of the approved programs [, as follows]:as follows:

…."

SECTION 8.41.(c)  G.S. 115C‑296(b)(2) is repealed.

SECTION 8.41.(d)  G.S. 115C‑296(b1) is repealed.

SECTION 8.41.(e)  G.S. 115C‑296(b2) is repealed.

SECTION 8.41.(f)  G.S. 115C‑296(c) is repealed.

SECTION 8.41.(g)  G.S. 115C‑296(c1) is repealed.

SECTION 8.41.(h)  G.S. 115C‑296(c2) is repealed.

SECTION 8.41.(i)  G.S. 115C‑296.7(g) reads as rewritten:

"(g)       NC Teaching Corps members shall be granted lateral entry teaching licenses pursuant to G.S. 115C‑296(c).G.S. 115C‑296.12(a)."

SECTION 8.41.(j)  G.S. 115D‑5(p) reads as rewritten:

"(p)      The North Carolina Community College System may offer courses, in accordance with the lateral entry program of study established under G.S. 115C 296(c1), G.S. 115C‑296.12, to individuals who choose to enter the teaching profession by lateral entry."

SECTION 8.41.(k)  Educator preparation programs approved by the State Board of Education as of July 1, 2015, shall meet the requirements of subsection (a) of this section no later than July 1, 2017. Educator preparation programs seeking approval by the State Board of Education on or after July 1, 2015, shall meet the requirements of subsection (a) of this section at the time approval is sought from the State Board of Education. The State Board of Education shall not require students enrolled in educator preparation programs that require a nationally normed and valid pedagogy assessment to determine clinical practice performance to provide scores for a pedagogy assessment based on multiple choice or constructed responses.

 

Access for Teachers to EVAAS Data

SECTION 8.42.(a)  Article 22 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑333.2.  Teacher evaluation reports.

Each local school administrative unit shall ensure that individual teachers are provided access to school‑level value‑added data, the teacher's own value‑added data, when applicable, and the teacher's evaluation dashboard through the Education Value‑Added Assessment System (EVAAS). The principal of each school shall notify teachers at least annually when EVAAS data has been updated to reflect teacher performance from the previous school year."

SECTION 8.42.(b)  This section applies beginning with the 2015‑2016 school year.

 

Certain CIHS Operating WIthout Additional Funds

SECTION 8.43.  Notwithstanding G.S. 115C‑238.51A(c) and G.S. 115C‑238.54, the Academy at High Point Central, the Academy at Ben L. Smith High School, STEM Early College at NC A&T State University, Middle College at the University of North Carolina at Greensboro, Vernon Malone College and Career Academy, and the Northeast Regional School of Biotechnology and Agriscience shall be permitted to operate in accordance with G.S. 115C‑238.53 and G.S. 115C‑238.54 as cooperative innovative high schools approved under G.S. 115C‑238.51A(c) and shall be subject to the evaluation requirements of G.S. 115C‑238.55.

 

part viii‑a. LEGISLATIVE FINDINGS, DIRECTION, AUTHORITY, AND RESOURCES TO ENSURE THAT ALL STUDENTS HAVE THE OPPORTUNITY TO receive A SOUND BASIC EDUCATION

 

Legislative findings

SECTION 8A.1.(a)  The General Assembly finds that some local boards of education are not in compliance with the requirements of the judiciary's decisions in Leandro to provide all public school students the opportunity to receive a sound basic education. Notwithstanding a history of adequate State and local funding and legislatively‑granted flexibility in administration, management, and employment at the local level to provide tools to facilitate compliance with Leandro, some local boards of education have failed to take actions sufficient to:

(1)        Prevent education bureaucracies from interfering with and overriding accountability measures and education reforms required by State law.

(2)        Properly administer the public schools.

(3)        Provide high‑quality principals in every school and high‑quality teachers in every classroom.

SECTION 8A.1.(b)  It is the intent of the General Assembly in this act to provide the following additional direction, authority, and resources to local boards of education and to the State Board of Education to enable them to correct these deficiencies:

(1)        Clarify the role of local boards of education to ensure that their main focus is to provide each public school student with the opportunity to receive a sound basic education, and that all policy decisions should be made with that objective in mind, including employment decisions, budget development, and other administrative actions.

(2)        Direct the State Board of Education not to allow waivers of State laws and rules that permit local boards to avoid accountability measures and education reforms required by the State.

(3)        Provide additional teacher positions to transition to lower class size in kindergarten through third grade and require local boards of education to use those positions to maintain class sizes that, according to research, are optimal for learning at this critical time.

(4)        Facilitate the identification of low‑performing schools and low‑performing local school administrative units.

(5)        Provide the State Board of Education with authority to consolidate local school administrative units in contiguous counties as necessary to ensure that all school systems have the size, expertise, and other resources necessary to provide their students with the opportunity to receive a sound basic education.

(6)        Provide one hundred fifty‑seven million ninety‑six thousand four hundred thirty‑seven dollars ($157,096,437) in additional funds to increase the base teacher salary paid by the State and provide additional funds for the salaries of principals and assistant principals.

 

duty of Local Boards of Education to provide students with the opportunity to RECEIVE a sound basic education

SECTION 8A.2.  G.S. 115C‑47(1) reads as rewritten:

"(1)      To Provide an Adequate School System. the Opportunity to Receive a Sound Basic Education. It shall be the duty of local boards of education to provide adequate school systems students with the opportunity to receive a sound basic education and to make all policy decisions with that objective in mind, including employment decisions, budget development, and other administrative actions, within their respective local school administrative units, as directed by law."

 

class size in kindergarten through third grade

SECTION 8A.3.(a)  G.S. 115C‑301 reads as rewritten:

"§ 115C‑301.  Allocation of teachers; class size.

(a)        Request for Funds. – The State Board of Education, based upon the reports of local boards of education and such other information as the State Board may require from local boards, shall determine for each local school administrative unit the number of teachers and other instructional personnel to be included in the State budget request.

(b)        Allocation of Positions. – The State Board of Education is authorized to adopt rules to allot instructional personnel and teachers, within funds appropriated.

(c)        Maximum Class Size for Kindergarten Through Third Grade. – The average class size for kindergarten through third grade in a local school administrative unit shall at no time exceed the funded allotment ratio of teachers to students in kindergarten through third grade. At the end of the second school month and for the remainder of the school year, the size of an individual class in kindergarten through third grade shall not exceed the allotment ratio by more than three students. In grades four through 12, local school administrative units shall have the maximum flexibility to use allotted teacher positions to maximize student achievement.

(d),       (e) Repealed by Session Laws 2013‑363, s. 3.3(a), effective July 1, 2013.

(f)         Second Month Reports. – At the end of the second month of each school year, each local board of education, through the superintendent, shall file a report for each school within the school unit with the State Board of Education. The report shall be filed in a format prescribed by the State Board of Education and shall include the organization for each school, the duties of each teacher, the size of each class, and such other information as the State Board may require. As of February 1 each year, local boards of education, through the superintendent, shall report all exceptions to individual class size maximums in kindergarten through third grade that occur at that time.

(g)        Waivers and Allotment Adjustments. – Local boards of education shall report exceptions to the class size requirements set out for kindergarten through third grade and significant increases in class size at other grade levels to the State Board and shall request allotment adjustments at any grade level, waivers from the requirements for kindergarten through third grade, or both. Within 45 days of receipt of reports, the State Board of Education, within funds available, may allot additional positions at any grade level. The State Board shall not grant waivers for the excess class size in kindergarten through third grade.grade, except under the following circumstances: (i) emergencies or acts of God that impact the availability of classroom space or facilities; (ii) an unanticipated increase in student population of an individual school in excess of two percent (2%) of the average daily membership of that school; (iii) organizational problems in geographically isolated local school administrative units in which the average daily membership is less than one and one‑half per square mile; (iv) classes organized for a solitary curricular area; or (v) a charter school closure.

(h)        State Board Rules. – The State Board of Education shall adopt rules necessary for the implementation of this section.

(i)         Repealed by Session Laws 2013‑363, s. 3.3(a), effective July 1, 2013.

(j)         Penalty for Noncompliance. – If the State Board of Education determines that a local superintendent has willfully failed to comply with the requirements of this section, no State funds shall be allocated to pay the superintendent's salary for the period of time the superintendent is in noncompliance. The local board of education shall continue to be responsible for complying with the terms of the superintendent's employment contract."

SECTION 8A.3.(b)  Notwithstanding G.S. 115C‑301, as amended by this section, for the 2015‑2016 school year only, the funded class size allotment ratio, the maximum average class size for all classes within a local school administrative unit, and the maximum individual class size for kindergarten through third grade are as follows:

Grade Level         Funded            Maximum Average    Maximum Individual

Class Size                  Class Size                   Class Size

 

Kindergarten               18                               21                                24

1‑3                             16                               19                                22.

SECTION 8A.3.(c)  For the 2016‑2017 school year, the funded class size allotment ratio, the maximum average class size for all classes within a local school administrative unit, and the maximum individual class size for kindergarten through third grade are as follows:

Grade Level         Funded            Maximum Average    Maximum Individual

Class Size                  Class Size                   Class Size

 

Kindergarten               17                               17                                20

1‑3                             15                               15                                18.

 

Identification of low‑performing schools and Units

SECTION 8A.4.(a)  G.S. 115C‑105.35(c) is repealed.

SECTION 8A.4.(b)  G.S. 115C‑105.36 is repealed.

SECTION 8A.4.(c)  G.S. 115C‑105.37 reads as rewritten:

"§ 115C‑105.37.  Identification of low‑performing schools.

(a)        Identification of Low‑Performing Schools. – The State Board of Education shall design and implement a procedure to identify low‑performing schools on an annual basis. Low‑performing schools are those that receive a school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" as defined by G.S. 115C‑83.15.Low‑performing schools are those in which there is a failure to meet the minimum growth standards, as defined by the State Board, and a majority of students are performing below grade level.

(a1)      By July 10 of each year, each local school administrative unit shall do a preliminary analysis of test results to determine which of its schools the State Board may identify as low‑performing under this section.Plan for Improvement of Low‑Performing Schools. – If a school has been identified as low‑performing as provided in this section and the school is not located in a local school administrative unit identified as low‑performing under G.S. 115C‑105.39A, the following actions shall be taken:

(1)        The superintendent then shall proceed under G.S. 115C‑105.39.

(2)        In addition, within Within 30 days of the initial identification of a school as low‑performing by the local school administrative unit or the State Board, whichever occurs first, the State Board, the superintendent shall submit to the local board of education a preliminary plan for addressing the needs of that school, improving both the school performance grade and school growth score, including how the superintendent and other central office administrators will work with the school and monitor the school's progress.

(3)        Within 30 days of its receipt of this the preliminary plan, the local board shall vote to approve, modify, or reject this plan. Before the local board makes this vote, votes on the preliminary plan, it shall make the plan available to the public, including the personnel assigned to that school and the parents and guardians of the students who are assigned to the school, and shall allow for written comments.

(4)        The local board shall submit the a final plan to the State Board within five days of the local board's vote. approval of the plan. The State Board shall review the plan expeditiously and, if appropriate, may offer recommendations to modify the plan. The local board shall consider any recommendations made by the State Board.Board and, if necessary, amend the plan and vote on approval of any changes to the final plan.

(5)        The local board of education shall provide access to the final plan on the local school administrative unit's Web site. The State Board of Education shall also provide access to each low‑performing school plan on the Department of Public Instruction's Web site.

(b)        Parental Notice of Low‑Performing School Status. – Each school that the State Board identifies as low‑performing shall provide written notification to the parents and guardians of students attending that school.school within 30 days of the identification that includes the following information:

(1)        The written notification shall include a A statement that the State Board of Education has found that the school has "failed to meet the minimum growth standards, as defined by the State Board, and a majority of students in the school are performing below grade level.""received a school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and has been identified as a low‑performing school as defined by G.S. 115C‑105.37." The statement shall include an explanation of the school performance grades and growth scores.

(2)        This notification also shall include information The school performance grade and growth score received.

(3)        Information about the preliminary plan developed under subsection (a1) of this section and a section and the availability of the final plan on the local school administrative unit's Web site.

(4)        The meeting date for when the preliminary plan will be considered by the local board of education.

(5)        A description of any additional steps the school is taking to improve student performance."

SECTION 8A.4.(d)  Article 8B of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑105.39A.  Identification of low‑performing local school administrative units.

(a)        Identification of Low‑Performing Local School Administrative Units. – The State Board of Education shall identify low‑performing local school administrative units on an annual basis. A low‑performing local school administrative unit is a unit in which the majority of the schools in that unit that received a school performance grade and growth score as provided in G.S. 115C‑83.15 have been identified as a low‑performing school, as provided in G.S. 115C‑105.37.

(b)        Plan for Improvement of Low‑Performing Local School Administrative Units. – Once a local school administrative unit has been identified as low‑performing under this section, the following actions shall be taken:

(1)        The superintendent shall proceed under G.S. 115C‑105.39.

(2)        Within 30 days of the identification of a local school administrative unit as low‑performing by the State Board, the superintendent shall submit to the local board of education a preliminary plan for improving both the school performance grade and school growth score of each low‑performing school in the unit, including how the superintendent and other central office administrators will work with each low‑performing school and monitor the low‑performing school's progress, and how current local school administrative unit policy should be changed to improve student achievement throughout the local school administrative unit.

(3)        Within 30 days of its receipt of the preliminary plan, the local board shall vote to approve, modify, or reject this plan. Before the local board votes on the plan, it shall make the plan available to the public, including the personnel assigned to each low‑performing school and the parents and guardians of the students who are assigned to each low‑performing school, and shall allow for written comments.

(4)        The local board shall submit a final plan to the State Board within five days of the local board's approval of the plan. The State Board shall review the plan expeditiously and, if appropriate, may offer recommendations to modify the plan. The local board shall consider any recommendations made by the State Board and, if necessary, amend the plan and vote on approval of any changes to the final plan.

(5)        The local board of education shall provide access to the final plan on the local school administrative unit's Web site. The State Board of Education shall also provide access to each low‑performing local school administrative unit plan on the Department of Public Instruction's Web site.

(c)        Parental Notice of Low‑Performing Local School Administrative Unit Status. – Each local school administrative unit that the State Board identifies as low‑performing shall provide written notification to the parents and guardians of all students attending any school in the local school administrative unit within 30 days of the identification that includes the following information:

(1)        A statement that the State Board of Education has found that a majority of the schools in the local school administrative unit have "received a school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and have been identified as low‑performing schools as defined by G.S. 115C‑105.37." The statement shall also include an explanation of the school performance grades and growth scores.

(2)        The percentage of schools identified as low‑performing.

(3)        Information about the preliminary plan developed under subsection (b) of this section and the availability of the final plan on the local school administrative unit's Web site.

(4)        The meeting date for when the preliminary plan will be considered by the local board of education.

(5)        A description of any additional steps the local school administrative unit and schools are taking to improve student performance.

(6)        For notifications sent to parents and guardians of students attending a school that is identified as low‑performing under G.S. 115C‑105.37, a statement that the State Board of Education has found that the school has "received a school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and has been identified as a low‑performing school as defined by G.S. 115C‑105.37." This notification also shall include the school performance grade and school growth score the school received and an explanation of the school performance grades and growth scores."

 

state board authority to consolidate CONTIGUOUS county school administrative units

SECTION 8A.5.  Article 7 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑66.5.  Merger of county school administrative units by the State Board of Education.

The State Board of Education shall have the authority to consolidate and merge contiguous county school administrative units or a group of county school administrative units in which each county unit is contiguous with at least one other county unit in the group. The State Board shall adopt a written plan setting forth the conditions of the merger. A merger of county units and reorganization of those units under this section shall not have the effect of abolishing any special taxes that may have been voted in any such units."

 

Limit local board of education waivers

SECTION 8A.6.(a)  G.S. 115C‑105.26 reads as rewritten:

"§ 115C‑105.26.  Waivers of State laws, rules, or policies.laws or rules.

(a)        When included as part of a school improvement plan accepted under G.S. 115C‑105.27, local boards of education shall submit requests for waivers of State laws, rules, or policies to the State Board of Education. A Except as otherwise provided for in this section, the State Board of Education shall not grant waivers of State laws or rules to local boards of education. If permitted under this section, a request for a waiver by a local board of education shall (i) identify the school or schools making the request, (ii) identify the State laws, rules, or policies that inhibit the school's ability to improve student performance, law or rule requesting to be waived, (iii) set out with specificity the circumstances under which the waiver may be used, and (iv) explain how the requested waiver will permit the school to improve student performance.

Except as provided in subsection (c) of this section, the State Board shall grant waivers only for the specific schools for which they are requested and shall be used only under the specific circumstances for which they are requested.

(b)        When requested as part of a school improvement plan, the The State Board of Education may grant waivers of:to local boards of education of State laws and rules pertaining to the following:

(1)        State laws pertaining to class Class size and teacher certification; andrequirements only as provided in G.S. 115C‑301(g).

(2)        State rules and policies, except those pertaining to public school State salary schedules and employee benefits for school employees, the instructional program that must be offered under the Basic Education Program, the system of employment for public school teachers and administrators set out in G.S. 115C‑287.1 and in Part 3 of Article 22 of this Chapter, health and safety codes, compulsory attendance, the minimum lengths of the school day and year, and the Uniform Education Reporting System.

(3)        School calendar requirements in order to provide sufficient days to accommodate anticipated makeup days due to school closings only as provided in G.S. 115C‑84.2(d).

(c)        The State Board also may grant requests received from local boards for waivers of State laws, rules, or policies that affect the organization, duties, and assignment of central office staff only. However, none of the duties to be performed under G.S. 115C‑436 may be waived.

(c1)      The State Board also may grant requests received from local boards for waivers of State laws, rules, or policies that require that each local school administrative unit provide at least one alternative school or at least one alternative learning program.

(d)        Notwithstanding subsections (b) and (c) of this section, the State Board shall not grant waivers of G.S. 115C‑12(16)b. regarding the placement of State‑allotted office support personnel, teacher assistants, and custodial personnel on the salary schedule adopted by the State Board.

(e)        Notwithstanding subsection (b) of this section, the State Board may grant requests received from local boards for waivers of State laws, rules, or policies pertaining to the placement of principals on the State salary schedule for public school administrators in order to provide financial incentives to encourage principals to accept employment in a school that has been identified as low‑performing under G.S. 115C‑105.37. The State Board shall act on requests under this subsection at the first Board meeting following receipt of each request.

(f)         Except as provided in subsection (e) of this section, the The State Board shall act within 60 days of receipt of all requests for waivers under this section.

(g)        The State Board shall, on a regular basis, review all waivers it has granted to determine whether any rules should be repealed or modified or whether the Board should recommend to the General Assembly the repeal or modification of any laws.

(h)        By September 15 of each year, the State Board shall report to the Joint Legislative Education Oversight Committee with a list of the specific waivers granted to each local board of education under this section. The State Board may include any legislative recommendations identified under subsection (g) of this section in its report."

SECTION 8A.6.(b)  This section applies beginning with the 2015‑2016 school year.

 

PART IX. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES

 

TEACHER SALARY SCHEDULE

SECTION 9.1.(a)  The following monthly teacher salary schedule shall apply for the 2015‑2017 fiscal biennium to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.

2015‑2017 Teacher Monthly Salary Schedule

Years of Experience                                                               "A" Teachers

0‑4                                                                                    $3,500

5‑9                                                                                      3,825

10‑14                                                                                  4,125

15‑19                                                                                  4,425

20‑24                                                                                  4,700

25+                                                                                     5,000.

SECTION 9.1.(b)  Salary Supplements for Teachers Paid on This Salary Schedule. –

(1)        Licensed teachers who have NBPTS certification shall receive a salary supplement each month of twelve percent (12%) of their monthly salary on the "A" salary schedule.

(2)        Licensed teachers who are classified as "M" teachers shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.

(3)        Licensed teachers with licensure 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 supplement provided to them as "M" teachers.

(4)        Licensed teachers with licensure 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 supplement provided to them as "M" teachers.

(5)        Certified school nurses shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.

SECTION 9.1.(c)  The first step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be equivalent to Step 5 of the "A" salary schedule. These employees shall receive a salary supplement each month of ten percent (10%) of their monthly salary and are eligible to receive salary supplements equivalent to those of teachers for academic preparation at the six‑year degree level or the doctoral degree level.

SECTION 9.1.(d)  Beginning with the 2014‑2015 fiscal year, in lieu of providing annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those longevity payments are included in the monthly amounts under the teacher salary schedule.

SECTION 9.1.(e)  A teacher compensated in accordance with this salary schedule for the 2015‑2016 and 2016‑2017 school years shall receive an amount equal to the greater of the following:

(1)        The applicable amount on the salary schedule for the applicable school year.

(2)        For teachers who were eligible for longevity for the 2013‑2014 school year, the sum of       the following:

a.         The teacher's salary provided in S.L. 2013‑360, Sec. 35.11.

b.         The longevity that the teacher would have received under the longevity system in effect for the 2013‑2014 school year provided in S.L. 2013‑360, Sec. 35.11, based on the teacher's current years of service.

c.         The annual bonus provided in S.L. 2014‑100, Sec. 9.1(e).

(3)        For teachers who were not eligible for longevity for the 2013‑2014 school year, the sum of the teacher's salary and annual bonus provided in S.L. 2014‑100, Sec. 9.1.

SECTION 9.1.(f)  As used in this section, the term "teacher" shall also include instructional support personnel.

 

SCHOOL‑BASED ADMINISTRATOR SALARY SCHEDULE

SECTION 9.2.(a)  The following monthly base salary schedule for school‑based administrators shall apply only to principals and assistant principals. This base salary schedule shall apply for the 2015‑2016 fiscal year commencing July 1, 2015.

2015‑2016 Principal and Assistant Principal Salary Schedules

Classification

Years of Exp         Assistant                Prin I               Prin II           Prin III            Prin IV

                           Principal                (0‑10)             (11‑21)         (22‑32)           (33‑43)

0‑9                 $3,895                          ‑                       ‑                     ‑                     ‑

10                  $3,977                          ‑                       ‑                     ‑                     ‑

11                  $4,123                          ‑                       ‑                     ‑                     ‑

12                  $4,240                          ‑                       ‑                     ‑                     ‑

13                  $4,323                $4,323                       ‑                     ‑                     ‑

14                  $4,377                $4,377                       ‑                     ‑                     ‑

15                  $4,434                $4,434             $4,489                     ‑                     ‑

16                  $4,489                $4,489             $4,547                     ‑                     ‑

17                  $4,547                $4,547             $4,606            $4,665                     ‑

18                  $4,606                $4,606             $4,665            $4,726            $4,788

19                  $4,665                $4,665             $4,726            $4,788            $4,851

20                  $4,726                $4,726             $4,788            $4,851            $4,918

21                  $4,788                $4,788             $4,851            $4,918            $4,983

22                  $4,851                $4,851             $4,918            $4,983            $5,050

23                  $4,918                $4,918             $4,983            $5,050            $5,119

24                  $4,983                $4,983             $5,050            $5,119            $5,188

25                  $5,050                $5,050             $5,119            $5,188            $5,263

26                  $5,119                $5,119             $5,188            $5,263            $5,335

27                  $5,188                $5,188             $5,263            $5,335            $5,409

28                  $5,263                $5,263             $5,335            $5,409            $5,483

29                  $5,335                $5,335             $5,409            $5,483            $5,561

30                  $5,409                $5,409             $5,483            $5,561            $5,641

31                  $5,483                $5,483             $5,561            $5,641            $5,722

32                  $5,561                $5,561             $5,641            $5,722            $5,794

33                  $5,641                $5,641             $5,722            $5,794            $5,909

34                  $5,722                $5,722             $5,794            $5,909            $6,027

35                  $5,794                $5,794             $5,909            $6,027            $6,148

36                  $5,909                $5,909             $6,027            $6,148            $6,271

37                            ‑                $6,027             $6,148            $6,271            $6,396

38                            ‑                          ‑             $6,271            $6,396            $6,524

39                            ‑                          ‑             $6,396            $6,524            $6,654

40                            ‑                          ‑                       ‑            $6,654            $6,787

41                            ‑                          ‑                       ‑            $6,787            $6,923

42                            ‑                          ‑                       ‑                     ‑            $7,061

 

2015‑2016 Principal and Assistant Principal Salary Schedules

Classification

Years of Exp           Prin V                 Prin VI             Prin VII        Prin VIII

                           (44‑54)               (55‑65)           (66‑100)         (101+)

0‑19               $4,918                          ‑                       ‑                     ‑

20                  $4,983                          ‑                       ‑                     ‑

21                  $5,050                $5,119                       ‑                     ‑

22                  $5,119                $5,188             $5,335                     ‑

23                  $5,188                $5,263             $5,409            $5,483

24                  $5,263                $5,335             $5,483            $5,561

25                  $5,335                $5,409             $5,561            $5,641

26                  $5,409                $5,483             $5,641            $5,722

27                  $5,483                $5,561             $5,722            $5,794

28                  $5,561                $5,641             $5,794            $5,909

29                  $5,641                $5,722             $5,909            $6,027

30                  $5,722                $5,794             $6,027            $6,148

31                  $5,794                $5,909             $6,148            $6,271

32                  $5,909                $6,027             $6,271            $6,396

33                  $6,027                $6,148             $6,396            $6,524

34                  $6,148                $6,271             $6,524            $6,654

35                  $6,271                $6,396             $6,654            $6,787

36                  $6,396                $6,524             $6,787            $6,923

37                  $6,524                $6,654             $6,923            $7,061

38                  $6,654                $6,787             $7,061            $7,202

39                  $6,787                $6,923             $7,202            $7,346

40                  $6,923                $7,061             $7,346            $7,493

41                  $7,061                $7,202             $7,493            $7,643

42                  $7,202                $7,346             $7,643            $7,796

43                  $7,346                $7,493             $7,796            $7,952

44                                             $7,643             $7,952            $8,111

45                            ‑                $7,796             $8,111            $8,273

46+                         ‑                          ‑             $8,273            $8,438

SECTION 9.2.(b)  The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools and in cooperative innovative high schools, shall be determined in accordance with the following schedule:

Classification                                Number of Teachers 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 and in cooperative innovative high school programs 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 9.2.(c)  A principal shall be placed on the step on the salary schedule that reflects the total number of years of experience as a certified employee of the public schools and an additional step for every three years of experience serving as a principal on or before June 30, 2009. 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 9.2.(d)  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 9.2.(e)  Longevity pay for principals and assistant principals shall be as provided for State employees under the North Carolina Human Resources Act.

SECTION 9.2.(f)  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.

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 9.2.(g)  Participants in an approved full‑time master's 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 master's program. The stipend shall not exceed the difference between the beginning salary of an assistant principal plus the cost of tuition, fees, and books 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 master's in‑school administration program shall supply the Department of Public Instruction with certification of eligible full‑time interns.

SECTION 9.2.(h)  During the 2015‑2016 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.

SECTION 9.2.(i)  It is the intent of the General Assembly to modify the compensation system for principals and assistant principals, effective July 1, 2016.

 

CENTRAL OFFICE SALARIES

SECTION 9.3.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2015‑2017 fiscal biennium, beginning July 1, 2015.

School Administrator I                          $ 3,391                        $ 6,323

School Administrator II                         $ 3,592                        $ 6,704

School Administrator III                       $ 3,811                        $ 7,110

School Administrator IV                       $ 3,962                        $ 7,391

School Administrator V                        $ 4,120                        $ 7,689

School Administrator VI                       $ 4,368                        $ 8,151

School Administrator VII                      $ 4,542                        $ 8,478

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.

SECTION 9.3.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2015‑2017 fiscal biennium, beginning July 1, 2015.

Superintendent I                                   $ 4,819                         $  8,991

Superintendent II                                  $ 5,113                         $  9,532

Superintendent III                                 $ 5,422                        $ 10,109

Superintendent IV                                 $ 5,752                        $ 10,721

Superintendent V                                  $ 6,102                        $ 11,372

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.

SECTION 9.3.(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 9.3.(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 9.3.(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.

 

NONCERTIFIED PERSONNEL SALARIES

SECTION 9.4.  The annual salary for permanent full‑time and part‑time noncertified public school employees whose salaries are supported from the State's General Fund shall remain unchanged for the 2015‑2017 fiscal biennium.

 

no pay loss for teachers who become administrators or assistant principals who become principals

SECTION 9.5.(a)  Section 7.22(b) of S.L. 2009‑451 reads as rewritten:

"SECTION 7.22.(b)  This section becomes effective July 1, 2009, and applies to all persons initially employed as assistant principals on or after that date.July 1, 2009."

SECTION 9.5.(b)  G.S. 115C‑285(a) is amended by adding a new subdivision to read:

"(9)      An assistant principal who becomes a principal without a break in service shall be paid, on a monthly basis, at least as much as he or she would earn as an assistant principal employed by that local school administrative unit."

 

PART X. COMMUNITY COLLEGES

 

REORGANIZATION OF THE COMMUNITY COLLEGES SYSTEM OFFICE

SECTION 10.1.(a)  Notwithstanding any other provision of law, and consistent with the authority established in G.S. 115D‑3, the President of the North Carolina Community College System may reorganize the System Office in accordance with recommendations and plans submitted to and approved by the State Board of Community Colleges.

SECTION 10.1.(b)  This section expires June 30, 2017.

 

BASIC SKILLS PLUS

SECTION 10.2.(a)  G.S. 115D‑5(b) is amended by adding a new subdivision to read:

"(b)      In order to make instruction as accessible as possible to all citizens, the teaching of curricular courses and of noncurricular extension courses at convenient locations away from institution campuses as well as on campuses is authorized and shall be encouraged. A pro rata portion of the established regular tuition rate charged a full‑time student shall be charged a part‑time student taking any curriculum course. In lieu of any tuition charge, the State Board of Community Colleges shall establish a uniform registration fee, or a schedule of uniform registration fees, to be charged students enrolling in extension courses for which instruction is financed primarily from State funds. The State Board of Community Colleges may provide by general and uniform regulations for waiver of tuition and registration fees for the following:

(15)      Courses providing employability skills, job‑specific occupational or technical skills, or developmental education instruction to certain students who are concurrently enrolled in an eligible community college literacy course, in accordance with rules adopted by the State Board of Community Colleges.

The State Board of Community Colleges shall not waive tuition and registration fees for other individuals."

SECTION 10.2.(b)  G.S. 115D‑31(b1) reads as rewritten:

"(b1)    A local community college may use all State funds allocated to it, except for Literacy funds and Customized Training funds, for any authorized purpose that is consistent with the college's Institutional Effectiveness Plan. The State Board of Community Colleges may authorize a local community college to use up to twenty percent (20%) of the State Literacy funds allocated to it to provide employability skills, job‑specific occupational and technical skills, and developmental education instruction to students concurrently enrolled in an eligible community college literacy course.

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."

 

EQUIPMENT FUNDING

SECTION 10.3.  For the 2015‑2017 fiscal biennium, community colleges may expend regular equipment allocations on equipment and on repairs, renovations, and new construction, necessary to accommodate equipment. Colleges must match funds expended on new construction on an equal matching‑fund basis in accordance with G.S. 115D‑31. Notwithstanding any other provision of law, community colleges are not required to match funds expended on repairs and renovations of existing facilities.

Colleges must have capital improvement projects approved by the State Board of Community Colleges and any required matching funds identified by June 30, 2017.

 

COLLEGES EARN BUDGET FTE FOR Certain COURSES TAUGHT DURING THE SUMMER TERM

SECTION 10.5.(a)  G.S. 115D‑5(v) reads as rewritten:

"(v)       Community colleges may teach technical education, health care, developmental education, and STEM‑related courses courses, and the Universal General Education Transfer Courses contained in the Comprehensive Articulation Agreement entered into between The University of North Carolina and the North Carolina Community College System at any time during the year, including the summer term. Student membership hours from these courses shall be counted when computing full‑time equivalent students (FTE) for use in budget funding formulas at the State level."

SECTION 10.5.(b)  The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee by October 1, 2015, on FTE for the summer 2015 term.

SECTION 10.5.(c)  This section applies beginning with the summer 2015 term.

 

COMMUNITY COLLEGES PROGRAM COMPLIANCE REVIEW FUNCTION

SECTION 10.6.(a)  Section 10.15(a) of S.L. 2013‑360 is repealed.

SECTION 10.6.(b)  G.S. 115D‑5(m) reads as rewritten:

"(m)      The State Board of Community Colleges shall maintain an education program auditing accountability function that conducts an annual audit periodic reviews of each community college operating under the provisions of this Chapter. The purpose of the annual audit compliance review shall be to ensure that college programs and related fiscal operations comply with State law, State regulations, State Board policies, and System Office guidance. (i) data used to allocate State funds among community colleges is reported accurately to the System Office and (ii) community colleges are charging and waiving tuition and registration fees consistent with law. The State Board of Community Colleges shall require auditors of community college programs to the use of a statistically valid sample size in performing program audits compliance reviews of community colleges. All education program audit compliance review findings that are determined to be material shall be forwarded to the college president, local college board of trustees, the State Board of Community Colleges, and the State Auditor. The State Board of Community Colleges shall adopt rules governing the frequency, scope, and standard of materiality for compliance reviews."

SECTION 10.6.(c)  Subsection (b) of this section applies to compliance reviews beginning with the 2015‑2016 academic year.

 

Career and College Ready Graduates

SECTION 10.13.(a)  The State Board of Community Colleges, in consultation with the State Board of Education, shall develop a program for implementation in the 2016‑2017 school year that introduces the college developmental mathematics and developmental reading and English curriculums in the high school senior year and provide opportunities for college remediation for students prior to high school graduation through cooperation with community college partners. Students who are enrolled in the Occupational Course of Study to receive their high school diplomas shall not be required to participate in the program or be required to take mandatory remedial courses as provided for in this section, unless a parent specifically requests through the individualized education program (IEP) process that the student participates. The program shall require the following:

(1)        Establishment by the State Board of Community Colleges of measures for determining student readiness and preparation for college coursework by using ACT scores, student grade point averages, or other measures currently used by the State Board of Community Colleges to determine college readiness for entering students.

(2)        Changes in curriculum, policy, and rules as needed by the State Board of Community Colleges and State Board of Education to make remedial courses mandatory for students who do not meet readiness indicators by their junior year to ensure college readiness prior to high school graduation. These changes shall include the flexibility for students to fulfill senior mathematics and English graduation requirements through enrollment in mandatory remedial courses or to enroll in those courses as electives.

(3)        Revisions to current direct instruction remediation modules used by the North Carolina community colleges by the State Board of Community Colleges, in cooperation with the State Board of Education, to provide remedial education to high school students.

(4)        Determinations by the State Board of Community Colleges on the following:

a.         Appropriate measures of successful completion of the remedial courses to ensure students are prepared for coursework at a North Carolina community college without need for further remediation in mathematics or reading and English.

b.         The length of time following high school graduation in which a student who successfully completed high school remedial courses will not be required to enroll in developmental courses at a North Carolina community college.

(5)        Policies established by the State Board of Community Colleges and State Board of Education for delivery of college remediation instruction in high schools. The policies shall include the following requirements:

a.         Faculty from the partner community college will provide training and oversight for high school faculty who will serve as facilitators for high school students enrolled in the remedial courses.

b.         Faculty from the partner community college will make regular site visits to provide assistance to students and high school faculty with the remedial courses.

c.         Partner high schools shall identify and assign appropriate faculty to the remedial course. Assigned faculty shall be trained by partner community college faculty prior to the start of the school year or semester in which the faculty will facilitate the remedial course.

d.         Partner high schools shall provide appropriate technology resources for delivery of the remedial course modules.

SECTION 10.13.(b)  The State Board of Community Colleges and the State Board of Education shall report on progress of implementation of the program statewide, including the requirements in subsection (a) of this section, to the Joint Legislative Education Oversight Committee no later than January 15, 2016.

 

NC Works Career Coaches

SECTION 10.14.(a)  Article 2 of Chapter 115D of the General Statutes is amended by adding a new section to read:

"§ 115D‑21.5.  NC Works Career Coach Program.

(a)        Purpose. – There is established the NC Works Career Coach Program to place community college career coaches in high schools to assist students with determining career goals and identifying community college programs that would enable students to achieve these goals.

(b)        Memorandum of Understanding. – The board of trustees of a community college and a local board of education of a local school administrative unit within the service area of the community college shall enter into a memorandum of understanding for the placement of career coaches employed by the board of trustees of the community college in schools within the local school administrative unit. At a minimum, the memorandum of understanding shall include the following:

(1)        Requirement that the community college provides the following:

a.         Hiring, training, and supervision of career coaches. The board of trustees may include a local board of education liaison on the hiring committee and to participate in the decision making regarding hiring for the coach positions.

b.         Salary, benefits, and all other expenses related to the employment of the career coach. The coach will be an employee of the board of trustees and will not be an agent or employee of the local board of education.

c.         Development of pedagogical materials and technologies needed to enhance the advising process.

d.         Criminal background checks required by the local school administrative unit for employees working directly with students.

e.         Agreement that, while on any school campus, the career coach will obey all local board of education rules and will be subject to the authority of the school building administration.

(2)        Requirement that the local school administrative unit provides the following to career coaches:

a.         Access to student records, as needed to carry out the coach's job responsibilities.

b.         Office space on site appropriate for student advising.

c.         Information technology resources, including, but not limited to, Internet access, telephone, and copying.

d.         Initial school orientation and ongoing integration into the faculty and staff community.

e.         Promotion of school‑wide awareness of coach duties.

f.          Facilitation of coach's access to individual classes and larger assemblies for the purposes of awareness‑building.

(c)        Application for NC Works Career Coach Program Funding. – The board of trustees of a community college and a local board of education of a local school administrative unit within the service area of the community college jointly may apply for available funds for NC Works Career Coach Program funding from the State Board of Community Colleges. The State Board of Community Colleges shall establish a process for award of funds as follows:

(1)        Advisory committee. – Establishment of an advisory committee, which shall include representatives from the NC Community College System, the Department of Public Instruction, the NC Works initiative located in the Department of Commerce, and at least three representatives of the business community, to review applications and make recommendations for funding awards to the State Board.

(2)        Application submission requirements. – The State Board shall require at least the following:

a.         Evidence of a signed memorandum of understanding that meets, at a minimum, the requirements of this section.

b.         Evidence that the funding request will be matched dollar‑for‑dollar with local funds. Matching funds may come from public or private sources.

(3)        Awards criteria. – The State Board shall develop criteria for consideration in determining the award of funds that shall include the following:

a.         Consideration of the workforce needs of business and industry in the region.

b.         Targeting of resources to enhance ongoing economic activity within the community college service area and surrounding counties.

c.         Geographic diversity of awards.

(d)        Annual Report. –

(1)        The board of trustees of a community college that employs one or more career coaches shall report annually to the State Board of Community Colleges on implementation and outcomes of the program, including the following information:

a.         Number of career coaches employed.

b.         Number of local school administrative units served and names of schools in which career coaches are placed.

c.         Number of students annually counselled by career coaches.

d.         Impact of career coaches on student choices, as determined by a valid measure selected by the State Board of Community Colleges.

(2)        The State Board of Community Colleges shall report annually no later than October 1 to the Joint Legislative Education Oversight Committee on the following:

a.         A compilation of the information reported by the board of trustees of community colleges, as provided in subdivision (1) of this subsection.

b.         Number and names of partnership applicants for NC Works Career Coach Program funding.

c.         Number, names, and amounts of those awarded NC Works Career Coach Program funding."

SECTION 10.14.(b)  The State Board of Community Colleges shall begin accepting applications for available funds for NC Works Career Coach Program funding no later than December 1, 2015, and shall select the initial recipients for the award of funds no later than February 1, 2016.

SECTION 10.14.(c)  The funds appropriated under this act to the Community Colleges System Office for the 2015‑2017 fiscal biennium to match non‑State funds to implement the NC Works Career Coach Program shall only be used for salary and benefits for NC Works Career Coaches.

 

driver education and safety instruction program

SECTION 10.15.(a)  The North Carolina Community Colleges System Office shall conduct a feasibility study on the establishment of a statewide, tuition‑based drivers education program delivered through the Community Colleges System Office for all students older than 14 years and six months who (i) are enrolled in a public high school, a private high school, or a home school within the State and (ii) have not previously enrolled in a program delivered through the public schools or the Community Colleges System Office. In the course of the study, the System Office shall consider the cost of the program and options for funding it, including fees, State funds, or a combination of fees and State funds.

The System Office shall report to the Joint Legislative Education Oversight Committee prior to March 15, 2016, on the results of the study.

SECTION 10.15.(b)  G.S. 115D‑20(4)c. reads as rewritten:

"c.        High school students may be permitted to take noncredit courses in safe driving on a self‑supporting basis during the academic year or the summer.Students older than 14 years and six months who (i) are enrolled in a public high school, a private high school, or a home school within the State and (ii) have not previously enrolled in a program delivered through the public schools or the Community Colleges System Office may take driver education and safety instruction in accordance with the Driver Education Safety Instruction Program, as established under G.S. 115D‑76.5. The program may be funded with State funds, on a self‑supporting basis, or a combination of both and may be offered during the academic year or the summer."

SECTION 10.15.(c)  Chapter 115D of the General Statutes is amended by adding a new article to read:

"Article 6B.

"Driver Education and Safety Instruction.

"§ 115D‑76.5.  Driver Education and Safety Instruction Program.

(a)        There is created a Driver Education and Safety Instruction Program for the purpose of establishing statewide driver education and safety instruction to be delivered through the Community Colleges System Office for all students older than 14 years and six months who (i) are enrolled in a public high school, a private high school, or a home school within the State and (ii) have not previously enrolled in a program delivered through the public schools or the Community Colleges System Office. The Program may be administered by a driver education and safety coordinator who shall be responsible for the planning, curriculum, and completion requirements of the Program. The State Board of Community Colleges may elect a driver education and safety coordinator upon nomination by the President of the Community College System, and the compensation of the driver education and safety coordinator shall be fixed by the State Board upon recommendation of the President of the Community College System pursuant to G.S. 115D‑3. The State Board of Community Colleges may contract with an appropriate public or private agency or person to carry out the duties of the driver education and safety coordinator.

(b)        The Driver Education and Safety Instruction Program shall be implemented through the Community Colleges System Office. The driver education and safety coordinator shall select and facilitate the training and certification of instructors who will implement the Program.

(c)        The State Board of Community Colleges shall adopt a curriculum, standards, and other policies and procedures for the program."

SECTION 10.15.(d)  Effective July 1, 2016, the Community Colleges System Office shall provide driver education and safety instruction in accordance with G.S. 115D‑76.5, as enacted in subsection (b) of this section.

SECTION 10.15.(e)  Notwithstanding G.S. 20‑87(6), of the revenue collected on or after the date this act becomes law for the Motorcycle Safety Instruction Program, the Community Colleges System Office may use up to two hundred thousand dollars ($200,000) for the 2015‑2016 fiscal year to conduct the study required by subsection (a) of this section.

SECTION 10.15.(f)  Subsection (b) of this section is effective July 1, 2016.

 

PART XI. UNIVERSITIES

 

USE OF ESCHEAT FUNDS FOR Student FINANCIAL AID PROGRAMS/Technical corrections

SECTION 11.1.(a)  The funds appropriated by this act from the Escheat Fund for the 2015‑2017 fiscal biennium for student financial aid shall be allocated in accordance with G.S. 116B‑7. Notwithstanding any other provision of Chapter 116B of the General Statutes, if the interest income generated from the Escheat Fund is less than the amounts referenced in this act, the difference may be taken from the Escheat Fund principal to reach the appropriations referenced in this act; however, under no circumstances shall the Escheat Fund principal be reduced below the sum required in G.S. 116B‑6(f). If any funds appropriated from the Escheat Fund by this act for student financial aid remain uncommitted aid as of the end of a fiscal year, the funds shall be returned to the Escheat Fund, but only to the extent the funds exceed the amount of the Escheat Fund income for that fiscal year.

SECTION 11.1.(b)  The State Education Assistance Authority (SEAA) shall conduct periodic evaluations of expenditures of the student financial aid programs administered by SEAA 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 student financial aid programs, who then may authorize redistribution of unutilized funds for a particular fiscal year.

SECTION 11.1.(c)  G.S. 116B‑7(b) reads as rewritten:

"(b)      An amount specified in the Current Operations Appropriations Act shall be transferred annually from the Escheat Fund to the Department of Administration Military and Veterans Affairs to partially fund the program of Scholarships for Children of War Veterans established by Article 4 of Chapter 165 of the General Statutes. Those funds may be used only for residents of this State who (i) are worthy and needy as determined by the Department of Administration, Military and Veterans Affairs and (ii) are enrolled in public institutions of higher education of this State."

SECTION 11.1(d)  G.S. 116B‑6 reads as rewritten:

"§ 116B‑6.  Administration of Escheat Fund; Escheat Account.

(g)        Additional Funds for Refunds. – If at any time the amount of the refund reserve shall be insufficient to make refunds required to be made, the Treasurer, in addition, may use all current receipts derived from escheated or abandoned property, exclusive of earnings and profits on investments of the Escheat Fund and the Escheat Account, for the purpose of making such refunds; and if all such funds shall be inadequate for such refunds, the Treasurer may apply to the Council of State, pursuant to the Executive State Budget Act, to the limit of funds available from the Contingency and Emergency Fund, for a loan, without interest, to supply any deficiencies, in whole or in part. No receipts derived from escheated or abandoned property, other than earnings or profits on investments, shall be paid to the Authority until: (i) all valid claims for refund have been paid; (ii) the reserve for refund shall equal five million dollars ($5,000,000); and (iii) the amount loaned from the Contingency and Emergency Fund shall have been repaid by the Escheat Fund.

(h)        Expenditures. – The Treasurer may expend the funds in the Escheat Fund, other than funds in the Escheat Account, for the payment of claims for refunds to owners, holders and claimants under G.S. 116B‑4; for the payment of costs of maintenance and upkeep of abandoned or escheated property; costs of preparing lists of names of owners of abandoned property to be furnished to clerks of superior court; costs of notice and publication; costs of appraisals; fees of persons employed pursuant to G.S. 116B‑8 costs involved in determining whether a decedent died without heirs; fees of persons employed pursuant to G.S. 116B‑8 to conduct audits; costs of a title search of real property that has escheated; and costs of auction or sale under this Chapter. All other costs, including salaries of personnel, necessary to carry out the duties of the Treasurer under this Chapter, shall be appropriated from the funds of the Escheat Fund pursuant to the provisions of Article 1, Chapter 143 Chapter 143C of the General Statutes.

…."

 

AMEND REGULATION OF UNC INSTITUTIONAL TRUST FUNDS AND FUNDS OF UNC HEALTH CARE SYSTEM

SECTION 11.2.(a)  G.S. 116‑36.1(h) reads as rewritten:

"(h)       The Board may authorize, through the President, that the chancellors may deposit or invest each institution's available trust fund cash balances in interest‑bearing accounts and other investments as may be authorized by the Board in the exercise of its sound discretion, without regard to any statute or rule of law relating to the investment of funds by fiduciaries.fiduciaries; provided however, funds deposited and invested under this section are subject to G.S. 116‑36.1A."

SECTION 11.2.(b)  Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:

"§116‑36.1A.  Institutional trust fund deposits to be secured; reports of depositories.

(a)        The amount of funds deposited pursuant to G.S. 116‑36.1 in an official depository shall be adequately secured by deposit insurance, surety bonds, or investment securities of such nature in such amounts and in such manner as may be prescribed by policy of the Board of Governors. No security is required for the protection of funds remitted to and received by a bank or trust company designated by the Board of Governors under Chapter 116D or Part 4 of Article 1 of Chapter 116 of the General Statutes and acting as paying agent for the payment of the principal of or interest on bonds or notes of the State.

(b)        Each official depository having deposits required to be secured by subsection (a) of this section may be required to report to the Board of Governors on January 1 and July 1 of each year (or such other dates as the Board of Governors may prescribe) a list of all surety bonds or investment securities securing such deposits. If the Board of Governors finds at any time that any funds of the State are not properly secured, the Board of Governors shall so notify the depository. Upon such notification, the depository shall comply with the applicable law or regulations forthwith.

(c)        Violation of the provisions of this section shall be a Class 1 misdemeanor."

 

IN‑STATE TUITION FOR CERTAIN VETERANS AND OTHER INDIVIDUALS ENTITLED TO FEDERAL EDUCATIONAL BENEFITS

SECTION 11.3.(a)  Article 14 of Chapter 116 of the General Statutes is amended by adding a new section to read:

"§ 116‑143.3A.  Waiver of 12‑month residency requirement for certain veterans and other individuals entitled to federal education benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33.

(a)        Definitions. – The following definitions apply in this section:

(1)        Abode. – Has the same meaning as G.S. 116‑143.3(a)(1).

(2)        Armed Forces. – Has the same meaning as G.S. 116‑143.3(a)(2).

(3)        Veteran. – A person who served active duty for not less than 90 days in the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration and who was discharged or released from such service under conditions other than dishonorable.

(b)        Waiver of 12‑Month Residency Requirement for Veteran. – Any veteran who qualifies for admission to an institution of higher education as defined in G.S. 116‑143.1(a)(3) is eligible to be charged the in‑State tuition rate and applicable mandatory fees for enrollment without satisfying the 12‑month residency requirement under G.S. 116‑143.1, provided the veteran meets all of the following criteria:

(1)        The veteran applies for admission to the institution of higher education and enrolls within three years of the veteran's discharge or release from the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration.

(2)        The veteran qualifies for and uses educational benefits pursuant to 38 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance Program) or 38 U.S.C. Chapter 33 (Post‑9/11 Educational Assistance), as administered by the U.S. Department of Veterans Affairs.

(3)        The veteran's abode is North Carolina.

(4)        The veteran provides the institution of higher education at which the veteran intends to enroll a letter of intent to establish residence in North Carolina.

(c)        Eligibility of Other Individuals Entitled to Federal Educational Benefits Under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33. – Any person who is entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 is also eligible to be charged the in‑State tuition rate and applicable mandatory fees for enrollment without satisfying the 12‑month residency requirement under G.S. 116‑143.1 if the person meets all of the following criteria:

(1)        The person qualifies for admission to the institution of higher education as defined in G.S. 116‑143.1(a)(3) and enrolls in the institution of higher education within three years of the veteran's discharge or release from the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration.

(2)        The person is the recipient of federal educational benefits pursuant to 38 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance Program) or 38 U.S.C. Chapter 33 (Post‑9/11 Educational Assistance), as administered by the U.S. Department of Veterans Affairs.

(3)        The person's abode is North Carolina.

(4)        The person provides the institution of higher education at which the person intends to enroll a letter of intent to establish residence in North Carolina.

(d)        After the expiration of the three‑year period following discharge or death as described in 38 U.S.C. § 3679(c), any enrolled veteran entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 and any other enrolled individual entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 who is eligible for in‑State tuition under this section shall continue to be eligible for the in‑State tuition rate so long as the covered individual remains continuously enrolled (other than during regularly scheduled breaks between courses, quarters, terms, or semesters) at that institution of higher education."

SECTION 11.3.(b)  G.S. 116‑143.8 is repealed.

SECTION 11.3.(c)  This section applies to qualifying veterans and other individuals entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 who are enrolled or who enroll in institutions of higher education for any academic quarter, term, or semester that begins on or after the effective date of this act.

 

UNC MANAGEMENT FLEXIBILITY REDUCTION

SECTION 11.4.(a)  The management flexibility reduction for The University of North Carolina shall not be allocated by the Board of Governors to the constituent institutions and affiliated entities using an across‑the‑board method but shall be done in a manner that recognizes the importance of the academic missions and differences among The University of North Carolina entities.

Before taking reductions in instructional budgets, the Board of Governors and the campuses of the constituent institutions shall consider all of the following:

(1)        Reducing State funding for centers and institutes, speaker series, and other nonacademic activities.

(2)        Faculty workload adjustments.

(3)        Restructuring of research activities.

(4)        Implementing cost‑saving span of control measures.

(5)        Reducing the number of senior and middle management positions.

(6)        Eliminating low‑performing, redundant, or low‑enrollment programs.

(7)        Using alternative funding sources.

(8)        Protecting direct classroom services.

The Board of Governors and the campuses of the constituent institutions also shall review the institutional trust funds and the special funds held by or on behalf of The University of North Carolina and its constituent institutions to determine whether there are monies available in those funds that can be used to assist with operating costs. In addition, the campuses of the constituent institutions also shall require their faculty to have a teaching workload equal to the national average in their Carnegie classification.

SECTION 11.4.(b)  In allocating the management flexibility reduction, no reduction in State funds shall be allocated in either fiscal year of the 2015‑2017 biennium to any of the following:

(1)        UNC Need‑Based Financial Aid.

(2)        NC School of Science and Mathematics.

(3)        University of North Carolina at Asheville.

(4)        University of North Carolina School of the Arts.

SECTION 11.4.(c)  The University of North Carolina shall report on the implementation of the management flexibility reduction in subsection (a) of this section to the Office of State Budget and Management and the Fiscal Research Division no later than April 1, 2016. This report shall identify both of the following by campus:

(1)        The total number of positions eliminated by type (faculty/nonfaculty).

(2)        The low‑performing, redundant, and low‑enrollment programs that were eliminated.

 

UNC TO FUND NORTH CAROLINA RESEARCH CAMPUS

SECTION 11.5.  Of the funds appropriated in this act to the Board of Governors of The University of North Carolina, the Board of Governors shall use twenty‑nine million dollars ($29,000,000) for the 2015‑2016 fiscal year and twenty‑nine million dollars ($29,000,000) for the 2016‑2017 fiscal year to support UNC‑related activities at the North Carolina Research Campus at Kannapolis.

 

program evaluation division study graduation rates at constituent institutions and recommendations regarding policies to increase graduation rates

SECTION 11.7.(a)  The General Assembly finds that the six‑year graduation rate for students pursuing a baccalaureate degree from any constituent institution of The University of North Carolina is too low. The General Assembly further finds that it is important to design and implement a program for the purpose of achieving the following goals: to assist more students to obtain a baccalaureate degree within a shorter time period; to provide students with a college education at significantly lower costs for both the student and the State; to help decrease the amount of debt resulting from loans that a student may owe upon graduation; to provide a student with an interim degree that may increase a student's job opportunities if the student chooses not to continue postsecondary education; and to provide easier access to academic counseling that will assist a student in selecting coursework that reflects the student's educational and career goals and helps the student succeed academically.

SECTION 11.7.(b)  To address the issues and goals set out in subsection (a) of this section, the Program Evaluation Division shall review current six‑year graduation rates for each constituent institution in the University of North Carolina system, determine what factors are associated with academic success and failure, and make recommendations on any policy changes needed to increase graduation rates at specific institutions, including, but not limited to, increasing the minimum high school GPA required for admission to 3.00 and implementing a deferred admission program, to be known as the North Carolina Guaranteed Admission Program (NCGAP), for students identified as academically at risk. The University of North Carolina and its constituent institutions shall provide any data necessary and perform any analyses for this study as directed by the Program Evaluation Division. The Program Evaluation Division shall report on the findings of this study and make recommendations to the Joint Legislative Program Evaluation Oversight Committee by April 1, 2016.

 

SPECIAL EDUCATION SCHOLARSHIP CHANGES AND REEVALUATION FUNDS

SECTION 11.11.(a)  G.S. 115C‑112.6 reads as rewritten:

"§ 115C‑112.6.  Scholarships.

(a)        Scholarship Applications. – The Authority shall make available no later than May 1 annually applications to eligible students for the award of scholarships. Information about scholarships and the application process shall be made available on the Authority's Web site. The Authority shall give priority in awarding scholarships to eligible students who received a scholarship during the previous semester. Except as otherwise provided by the Authority for prior scholarship recipients, scholarships shall be awarded to eligible students in the order in which the applications are received.

(a1)      Web Site Availability. – Information about scholarships and the application process shall be made available on the Authority's Web site. The Authority shall also include information on the Web site notifying parents that federal regulations adopted under IDEA provide that no parentally placed private school child with a disability has an individual right to receive some or all of the special education and related services that the child would receive if enrolled in a public school.

(b)        Scholarship Awards. – Scholarships awarded to eligible students shall be for amounts of not more than three four thousand dollars ($3,000) ($4,000) per semester per eligible student. Eligible students awarded scholarships may not be enrolled in a public school to which that student has been assigned as provided in G.S. 115C‑366. Scholarships shall be awarded only for tuition and for the reimbursement of tuition, special education, related services, and educational technology, as provided in subsection (b1) of this section. The Authority shall notify parents in writing of their eligibility to receive scholarships for costs that will be incurred during the spring semester of the following year by December 1 and for costs incurred during the fall semester of that year by July 1.

(b1)      Disbursement of Scholarship Funds. – The Authority shall disburse scholarship funds for tuition and for the reimbursement of costs incurred by the parent of an eligible student as follows:

(1)        Scholarship endorsement for tuition. – The Authority shall remit, at least two times each school year, scholarship funds awarded to eligible students for endorsement by at least one of the student's parents or guardians for tuition to attend (i) a North Carolina public school other than the public school to which that student has been assigned as provided in G.S. 115C‑366 or (ii) a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter as identified by the Department of Administration, Division of Nonpublic Education. Scholarship funds shall not be provided for tuition for home schooled students. If the student is attending a nonpublic school, the school must be deemed eligible by the Division of Nonpublic Education, pursuant to G.S. 115C‑562.4, and the school shall be subject to the requirements of G.S. 115C‑562.5. The parent or guardian shall restrictively endorse the scholarship funds awarded to the eligible student to the school for deposit into the account of the school. The parent or guardian shall not designate any entity or individual associated with the school as the parent's attorney‑in‑fact to endorse the scholarship funds but shall endorse the scholarship funds in person at the site of the school. A parent's or guardian's failure to comply with this section shall result in forfeiture of the scholarship funds. A scholarship forfeited for failure to comply with this section shall be returned to the Authority to be awarded to another student.

(2)        Scholarship Reimbursements. – reimbursements for costs. – Scholarship reimbursement for costs incurred shall be provided as follows:

(1)a.     Preapproval process. – Prior to the start of each school semester, the parent of an eligible student may submit documentation of the tuition, special education, related services, or educational technology the parent anticipates incurring costs on in that semester for preapproval by the Authority.

(2)b.     Reimbursement submissions. – Following the conclusion of each school semester, the parent of an eligible student shall submit to the Authority any receipts or other documentation approved by the Authority to demonstrate the costs incurred during the semester. In addition, parents shall provide documentation of the following to seek reimbursement:

a.         Tuition reimbursement. – Parents may only receive reimbursement for tuition if the parent provides documentation that the student was enrolled in nonpublic school or public school for which payment of tuition is required for no less than 75 days of the semester for which the parent seeks reimbursement. Tuition reimbursement shall not be provided for home schooled students.

b.1.      Special education reimbursement. – Parents may only receive reimbursement for special education if the parent provides documentation that the student received special education for no less than 75 days of the semester for which the parent seeks reimbursement. Special education reimbursement shall not be provided for special education instruction provided to a home schooled student by a member of the household of a home school, as defined in G.S. 115C‑563(a).

c.2.      Related services reimbursement. – Parents may only receive reimbursement for related services if the parent provides documentation that the student also received special education for no less than 75 days of the semester for which the parent seeks reimbursement for the related services. Related services reimbursement shall not be provided for related services provided to a home schooled student by a member of the household of a home school, as defined in G.S. 115C‑563(a).

d.3.      Educational technology reimbursement. – Parents may only receive reimbursement for educational technology if the parent provides documentation that the student used the educational technology for no less than 75 days of the semester for which the parent seeks reimbursement.

(3)c.     Scholarship award. – The Authority shall award a scholarship in the amount of costs demonstrated by the parent up to the maximum amount. If the costs incurred by the parent do not meet the maximum amount, the Authority shall use the remainder of those funds for the award of scholarships to eligible students for the following semester. The Authority shall award scholarships to the parents of eligible students at least semiannually.

(c)        Student Reevaluation. – After an eligible student's initial receipt of a scholarship, the Authority shall ensure that the student is reevaluated at least every three years by the local educational agency in order to verify that the student continues to be a child with a disability.

(d)        Rule Making. – The Authority shall establish rules and regulations for the administration and awarding of scholarships. The Authority shall adopt rules providing for pro rata return of funds if a student withdraws prior to the end of the semester from a school to which scholarship funds have been remitted. The Authority shall annually develop a list of educational technology for which scholarships may be used and shall provide scholarship recipients with information about the list.

(e)        Public Records Exception. – Scholarship applications and personally identifiable information related to eligible students receiving scholarships shall not be a public record under Chapter 132 of the General Statutes. For the purposes of this section, personally identifiable information means any information directly related to a student or members of a student's household, including the name, birthdate, address, Social Security number, telephone number, e‑mail address, financial information, or any other information or identification number that would provide information about a specific student or members of a specific student's household."

SECTION 11.11.(b)  G.S. 115C‑112.9 reads as rewritten:

"§ 115C‑112.9.  Duties of State Board of Education.agencies.

(a)        The State Board, as part of its duty to monitor all local educational agencies to determine compliance with this Article and IDEA as provided in G.S. 115C‑107.4, shall ensure that local educational agencies do the following:

(1)        Conduct evaluations requested by a child's parent or guardian of suspected children with disabilities, as defined in G.S. 115C‑107.3, in a timely manner as required by IDEA.

(2)        Provide reevaluations to identified children with disabilities receiving scholarships as provided in Part 1H of this Article at the request of the parent or guardian to ensure compliance with G.S. 115C‑112.6(c).

(b)        The Authority shall analyze, in conjunction with the Department of Public Instruction, past trends in scholarship data on an annual basis to ensure that the amount of funds transferred each fiscal year by the Authority to the Department for reevaluations by local school administrative units of eligible students under G.S. 115C‑112.6(c) are sufficient and based on actual annual cost requirements."

SECTION 11.11.(c)  The Authority shall adopt rules within 60 days of the date this act becomes law providing for pro rata return of funds if a student withdraws prior to the end of the semester from a school to which scholarship funds have been remitted.

SECTION 11.11.(d)  This section applies to scholarships awarded for the 2015‑2016 school year and each subsequent school year.

 

INTERNSHIPS AND CAREER‑BASED OPPORTUNITIES FOR STUDENTS ATTENDING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES (HBCU)

SECTION 11.12.(a)  The internship program created pursuant to S.L. 2014‑100 to provide internships and career‑based opportunities for students attending Historically Black Colleges and Universities may be offered to four or more HBCUs in the discretion of the Board of Governors of The University of North Carolina. Further, there is no requirement that Elizabeth City State University be a permanent participant in the internship program. The internship program shall be administered as provided by subsection (b) of this section.

SECTION 11.12.(b)  The Board of Governors shall conduct a competitive process to select institutions of higher education that are Historically Black Colleges and Universities to participate in the internship program which links 60 students attending Historically Black Colleges and Universities with North Carolina‑based companies. The Board of Governors shall determine the number of institutions that may participate in the program; however, at least two of the institutions shall be private institutions. Funds appropriated by this act for this internship program shall be allocated only to constituent institutions of The University of North Carolina that are designated as an HBCU and private colleges and universities located in North Carolina that are designated as an HBCU.

SECTION 11.12.(c)  Of the funds appropriated by this act for the support of the internship program, The University of North Carolina may use up to five percent (5%) for costs associated with administering this program.

SECTION 11.12.(d)  This section applies to the 2015‑2016 fiscal year and each subsequent fiscal year.

 

ELIZABETH CITY STATE UNIVERSITY BUDGET STABILIZATION FUNDS REPORT

SECTION 11.13.  The President of The University of North Carolina shall report each quarter of the 2015‑2016 fiscal year to the Office of State Budget and Management and the Fiscal Research Division of the General Assembly on the status of budget stabilization funds appropriated to Elizabeth City State University by this act for the purpose of enhancing technology related to enrollment and recruitment of students, campus access and safety, and human resources management. The reports shall provide detailed descriptions of the scope of work that has been completed to date, anticipated activities for the next quarter, and a plan with time line to complete the full scope of work. The reports shall also include evidence of improved services and outcomes achieved from improvements implemented using these funds. The first quarterly report required by this section shall be made no later than October 1, 2015.

 

UNC ENROLLMENT GROWTH REPORT

SECTION 11.14.  G.S. 116‑30.7 reads as rewritten:

"§ 116‑30.7.  Biennial projection of enrollment growth for The University of North Carolina.

By October December 15 of each even‑numbered year, the General Administration of The University of North Carolina shall provide to the Joint Education Legislative Oversight Committee and to the Office of State Budget and Management a projection of the total student enrollment in The University of North Carolina that is anticipated for the next biennium. The enrollment projection shall be divided into the following categories and shall include the projected growth for each year of the biennium in each category at each of the constituent institutions: undergraduate students, graduate students (students earning master's and doctoral degrees), first professional students, and any other categories deemed appropriate by General Administration. The projection shall also distinguish between on‑campus and distance education students. The projections shall be considered by the Director of the Budget when determining the amount the Director proposes to appropriate to The University of North Carolina in the Recommended State Budget submitted pursuant to G.S. 143C‑3‑5(b)."

 

EARLY COLLEGE GRADUATES/UNC ADMISSION POLICY

SECTION 11.16.(a)  The Board of Governors of The University of North Carolina shall adopt a policy to require each constituent institution to offer to any student who graduated from a cooperative innovative high school program with an associate degree and who applies for admission to the constituent institution the option of being considered for admission as a freshman or as a transfer student. The constituent institution shall also provide written information to the student regarding the consequences that accompany each option and any other relevant information that may be helpful to the student when considering which option to select.

SECTION 11.16.(b)  Beginning November 1, 2016, the Board of Governors shall report annually to the Joint Legislative Education Oversight Committee regarding the number of students who graduated from a cooperative innovative high school program with an associate degree and which option was chosen by those students when applying for admission to a constituent institution.

SECTION 11.16.(c)  This section applies to the 2016‑2017 academic year and each subsequent academic year.

 

SEAA FUNDS FOR ADMINISTRATION OF SPECIAL EDUCATION SCHOLARSHIP GRANT PROGRAM

SECTION 11.18.  Section 5(b) of S.L. 2013‑364, as amended by Section 3.2 of S.L. 2013‑363, reads as rewritten:

"SECTION 5.(b)  Of the funds allocated to NCSEAA to be used for the award of scholarship grants to eligible students under subsection (a) of this section, for fiscal year 2013‑2014, NCSEAA may retain up to two hundred thousand dollars ($200,000) for administrative costs associated with the scholarship grant program. For fiscal year 2014‑2015 2015‑2016 and subsequent years, NCSEAA may retain up to two percent (2%) four percent (4%) annually for administrative costs associated with the scholarship grant program."

 

WESTERN GOVERNORS UNIVERSITY CHALLENGE GRANT

SECTION 11.20.  Of the funds appropriated in this act to the Board of Governors of The University of North Carolina, the sum of two million dollars ($2,000,000) in nonrecurring funds for the 2015‑2016 fiscal year shall be used as a challenge grant to Western Governors University to raise the sum of five million dollars ($5,000,000) in private funds for the 2015‑2016 fiscal year to establish a North Carolina campus. The allocation of two million dollars ($2,000,000) under this section is contingent upon receipt by Western Governors University of five million dollars ($5,000,000) in private funds for the purpose of establishing a North Carolina campus.

 

HUNT INSTITUTE/NO GENERAL FUNDS

SECTION 11.21.  Notwithstanding any other provision of law, no monies from the General Fund shall be used for the support of The Hunt Institute which is an affiliate of the University of North Carolina at Chapel Hill.

 

PART XII. DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

SUBPART XII‑A. CENTRAL MANAGEMENT AND SUPPORT

 

FUNDING FOR PROGRAMS TO IMPROVE CHILDREN'S HEALTH/ESTABLISH COMPETITIVE GRANTS PROCESS

SECTION 12A.2.(a)  Findings. – The General Assembly finds that America spends twice as much on health care as any other nation, yet Americans are not the healthiest people in the world. Research indicates that spending on health care to treat people may actually come at the expense of investing in public health programs meant to keep people from getting sick in the first place. The General Assembly further finds that infant mortality rates are an indicator of a state's overall health status. North Carolina currently ranks fortieth in the nation on infant mortality. Implementing statewide policies to invest in evidence‑based programs that are scientifically proven to lower infant mortality rates, and improve birth outcomes and the health of children ages birth to five, will assure that future rankings for North Carolina are among the best in the nation.

SECTION 12A.2.(b)  Designation of Lead Agency. – The Secretary of the North Carolina Department of Health and Human Services (Secretary) shall designate a lead agency that is responsible for doing all of the following:

(1)        Assuming responsibility for controlling all funding and contracts designed to (i) improve North Carolina's birth outcomes, (ii) improve the overall health status of children in this State from ages birth to five, and (iii) lower this State's infant mortality rates.

(2)        Working in consultation with the University of North Carolina Gillings School of Global Public Health to develop a statewide, comprehensive plan to accomplish the goals described in subdivision (1) of this subsection.

(3)        Conducting a justification review of all programs and activities funded with State appropriations described in subsection (c) of this section.

SECTION 12A.2.(c)  Nonrecurring Allocations. – For the 2015‑2016 fiscal year only, the Department of Health and Human Services shall allocate the following designated amounts for the following programs on a nonrecurring basis:

(1)        Maternal and Child Health Contracts                                        $2,472,094 NR

(2)        High‑Risk Maternity Clinic                                                            375,000 NR

(3)        Healthy Beginnings (Two Contracts)                                              396,025 NR

(4)        Pregnancy Care Case Management                                               300,901 NR

(5)        Maternal, Infant, and Early Childhood Home Visiting                     425,643 NR

(6)        Triple P‑Positive Parenting Program                                              828,233 NR

(7)        NC Perinatal and Maternal Substance Abuse Initiative                2,729,316 NR

(8)        Perinatal Substance Abuse Specialist                                               45,000 NR

SECTION 12A.2.(d)  Statewide Proposal and Justification Review. – By March 1, 2016, the Secretary shall submit the statewide proposal developed pursuant to subsection (b) of this section to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division for consideration during the 2016 Regular Session of the 2015 General Assembly. The statewide proposal shall include at least all of the following:

(1)        Details of the statewide plan and identification of the lead agency responsible for assuring the success of the plan.

(2)        Justification for continuing, reducing, or eliminating funding for the programs and activities that receive nonrecurring allocations for the 2015‑2016 fiscal year.

(3)        Recommendations for reallocation of funding from programs and activities that are not evidence‑based and that are not producing positive returns on investment consistent with the goals described in subdivision (1) of subsection (b) of this section.

(4)        Recommendations for investments in new initiatives that accomplish the goals described in subdivision (1) of subsection (b) of this section.

SECTION 12A.2.(e)  Establishment of Competitive Grants Process for Local Health Departments. – It is the intent of the General Assembly that, beginning in the 2016‑2017 fiscal year, the Department of Health and Human Services implement a competitive grants process for local health departments based on a county's current health status and the county's detailed proposal to invest in evidence‑based programs to achieve the goals described in subdivision (1) of subsection (b) of this section. To that end, the Department shall develop a plan that establishes a competitive grants process to be administered by the Division of Central Management and Support. The Department shall develop a plan that, at a minimum, includes each of the following components:

(1)        A request for application (RFA) process to allow local health departments to apply for and receive State funds on a competitive basis.

(2)        A requirement that the Secretary prioritize grant awards to those local health departments that are able to leverage non‑State funds in addition to the grant award.

(3)        A process that awards grants to local health departments dedicated to providing services on a countywide basis and that supports the goals described in subdivision (1) of subsection (b) of this section.

(4)        Ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for health and wellness programs and initiatives.

SECTION 12A.2.(f)  Funds for Competitive Grants Process. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, the sum of two million five hundred thousand dollars ($2,500,000) in recurring funds for each year of the 2015‑2017 fiscal biennium shall be used to establish the competitive grants process for local health departments described in subsection (e) of this section. The Department shall not use more than five percent (5%) of these funds for administrative purposes.

SECTION 12A.2.(g)  Evaluation Protocol for Future Program Funding. – The Department shall work with the University of North Carolina Gillings School of Global Public Health (School of Global Public Health) to establish an evaluation protocol for determining program effectiveness and future funding requirements at the local level. By April 1, 2016, the Department, in consultation with the School of Global Public Health, shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services on the request for application process to allow local health departments to apply for and receive State funds on a competitive basis. The report shall include the counties awarded, the amount of the award, the types of programs to be funded, and the evaluation process to be used in determining county performance.

 

HEALTH INFORMATION TECHNOLOGY

SECTION 12A.4.(a)  The Department of Health and Human Services (Department), in cooperation with the State Chief Information Officer (State CIO), shall coordinate health information technology (HIT) policies and programs within the State of North Carolina. The goal of the DHHS CIO in coordinating State HIT policy and programs shall be to avoid duplication of efforts and to ensure that each State agency, public entity, and private entity that undertakes health information technology activities does so within the area of its greatest expertise and technical capability and in a manner that supports coordinated State and national goals, which shall include at least all of the following:

(1)        Ensuring that patient health information is secure and protected, in accordance with applicable law.

(2)        Improving health care quality, reducing medical errors, reducing health disparities, and advancing the delivery of patient‑centered medical care.

(3)        Providing appropriate information to guide medical decisions at the time and place of care.

(4)        Ensuring meaningful public input into HIT infrastructure development.

(5)        Improving the coordination of information among hospitals, laboratories, physicians' offices, and other entities through an effective infrastructure for the secure and authorized exchange of health care information.

(6)        Improving public health services and facilitating early identification and rapid response to public health threats and emergencies, including bioterrorist events and infectious disease outbreaks.

(7)        Facilitating health and clinical research.

(8)        Promoting early detection, prevention, and management of chronic diseases.

SECTION 12A.4.(b)  The Department, in cooperation with the State CIO, shall establish and direct an HIT management structure that is efficient and transparent and that is compatible with the Office of the National Health Coordinator for Information Technology (National Coordinator) governance mechanism. The HIT management structure shall be responsible for all of the following:

(1)        Developing a State plan for implementing and ensuring compliance with national HIT standards and for the most efficient, effective, and widespread adoption of HIT.

(2)        Ensuring that (i) specific populations are effectively integrated into the State plan, including aging populations, populations requiring mental health services, and populations utilizing the public health system, and (ii) unserved and underserved populations receive priority consideration for HIT support.

(3)        Identifying all HIT stakeholders and soliciting feedback and participation from each stakeholder in the development of the State plan.

(4)        Ensuring that existing HIT capabilities are considered and incorporated into the State plan.

(5)        Identifying and eliminating conflicting HIT efforts where necessary.

(6)        Identifying available resources for the implementation, operation, and maintenance of health information technology, including identifying resources and available opportunities for North Carolina institutions of higher education.

(7)        Ensuring that potential State plan participants are aware of HIT policies and programs and the opportunity for improved health information technology.

(8)        Monitoring HIT efforts and initiatives in other states and replicating successful efforts and initiatives in North Carolina.

(9)        Monitoring the development of the National Coordinator's strategic plan and ensuring that all stakeholders are aware of and in compliance with its requirements.

(10)      Monitoring the progress and recommendations of the HIT Policy and Standards Committee and ensuring that all stakeholders remain informed of the Committee's recommendations.

(11)      Monitoring all studies and reports provided to the United States Congress and reporting to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the impact of report recommendations on State efforts to implement coordinated HIT.

SECTION 12A.4.(c)  By no later than January 15, 2016, the Department shall provide a written report on the status of HIT efforts to the Joint Legislative Oversight Committees on Health and Human Services and Information Technology and to the Fiscal Research Division. The report shall be comprehensive and shall include all of the following:

(1)        Current status of federal HIT initiatives.

(2)        Current status of State HIT efforts and initiatives among both public and private entities.

(3)        Other State information technology initiatives with potential applicability to State HIT efforts.

(4)        Efforts to ensure coordination and avoid duplication of HIT efforts within the State.

(5)        A breakdown of current public and private funding sources and dollar amounts for State HIT initiatives.

(6)        Efforts by the DHHS CIO to coordinate HIT initiatives within the State and any obstacles or impediments to coordination.

(7)        HIT research efforts being conducted within the State and sources of funding for research efforts.

(8)        Opportunities for stakeholders to participate in HIT funding and other efforts and initiatives during the next quarter.

(9)        Issues associated with the implementation of HIT in North Carolina and recommended solutions to these issues.

 

FUNDS FOR OVERSIGHT AND ADMINISTRATION OF STATEWIDE HEALTH INFORMATION EXCHANGE NETWORK

SECTION 12A.5.(a)  It is the intent of the General Assembly to do all of the following with respect to health information exchange:

(1)        Establish a successor HIE Network to which (i) all Medicaid providers shall be connected by July 1, 2017, and (ii) all other entities that receive State funds for the provision of health services shall be connected by January 1, 2018.

(2)        Establish (i) a State‑controlled Health Information Exchange Authority to oversee and administer the successor HIE Network and (ii) a Health Information Exchange Advisory Board to provide consultation to the Authority on matters pertaining to administration and operation of the HIE Network and on statewide health information exchange, generally.

(3)        Have the successor HIE Network gradually become and remain one hundred percent (100%) receipt‑supported by establishing reasonable participation fees approved by the General Assembly and by drawing down available matching funds whenever possible.

SECTION 12A.5.(b)  In order to achieve the objectives described in subsection (a) of this section, funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2015‑2016 fiscal year and for the 2016‑2017 fiscal year to continue efforts toward the implementation of a statewide health information exchange network shall be transferred to the Department of Information Technology. By 30 days after the effective date of this section, the Secretary of the Department of Health and Human Services and the State Chief Information Officer (State CIO) shall enter into a written memorandum of understanding pursuant to which the State CIO will have sole authority to direct the expenditure of these funds until (i) the North Carolina Health Information Exchange Authority (Authority) is established and the State CIO has appointed an Authority Director and (ii) the North Carolina Health Information Exchange Advisory Board (Advisory Board) is established with members appointed pursuant to Article 29B of Chapter 90 of the General Statutes, as enacted by subsection (d) of this section. The State CIO shall use these transferred funds to accomplish the following:

(1)        Beginning immediately upon receipt of the transferred funds, facilitate the following:

a.         Establishment of the successor HIE Network described in subsection (a) of this section.

b.         Termination or assignment to the Authority by December 31, 2015, of any contracts pertaining to the HIE Network established under Article 29A of Chapter 90 of the General Statutes (i) between the State and the NC HIE and (ii) between the NC HIE and any third parties.

(2)        Fund the monthly operational expenses incurred or encumbered by the NC HIE from July 1, 2015, until December 31, 2015. Notwithstanding any other provision of law to the contrary, the total amount of monthly operating expenses paid for with these funds shall not exceed one hundred seventy‑seven thousand dollars ($177,000) per month, or a total of one million sixty‑two thousand dollars ($1,062,000) for the six‑month period commencing July 1, 2015, and ending December 31, 2015. The State CIO shall terminate payments for these monthly operational expenses upon the earlier of December 31, 2015, or upon the termination or assignment to the Authority of all contracts pertaining to the HIE Network established under Article 29A of Chapter 90 of the General Statutes (i) between the State and the NC HIE and (ii) between the NC HIE and any third parties.

The State CIO is encouraged to explore all available opportunities for the State to receive federal grant funds and federal matching funds for health information exchange.

SECTION 12A.5.(c)  Once the Authority Director has been hired and the Advisory Board has been established with members appointed pursuant to Article 29B of Chapter 90 of the General Statutes, as enacted by subsection (d) of this section, the Authority shall use these funds to do the following:

(1)        Fund the operational expenses of the Authority and the Advisory Board.

(2)        Establish, oversee, administer, and provide ongoing support of a successor HIE Network to the HIE Network established under Article 29A of Chapter 90 of the General Statutes.

(3)        Enter into any contracts necessary for the establishment, administration, and operation of the successor HIE Network.

(4)        Facilitate the termination or assignment to the Authority by December 31, 2015, of any contracts pertaining to the HIE Network established under Article 29A of Chapter 90 of the General Statutes (i) between the State and the NC HIE and (ii) between the NC HIE and any third parties.

(5)        Fund the monthly operational expenses incurred or encumbered by the NC HIE from July 1, 2015, until December 31, 2015. Notwithstanding any other provision of law to the contrary, the total amount of monthly operating expenses paid for with these funds shall not exceed one hundred seventy‑seven thousand dollars ($177,000) per month, or a total of one million sixty‑two thousand dollars ($1,062,000) for the six‑month period commencing July 1, 2015, and ending December 31, 2015. The Authority shall terminate payments for these monthly operational expenses upon the earlier of December 31, 2015, or upon the termination or assignment to the Authority of all contracts pertaining to the HIE Network established under Article 29A of Chapter 90 of the General Statutes (i) between the State and the NC HIE and (ii) between the NC HIE and any third parties.

The Authority is encouraged to explore all available opportunities for the State to receive federal grant funds and federal matching funds for health information exchange.

SECTION 12A.5.(d)  Chapter 90 of the General Statutes is amended by adding a new Article to read:

"Article 29B.

"Statewide Health Information Exchange Act.

"§ 90‑414.1.  Title.

This act shall be known and may be cited as the "Statewide Health Information Exchange Act."

"§ 90‑414.2.  Purpose.

This Article is intended to improve the quality of health care delivery within this State by facilitating and regulating the use of a voluntary, statewide health information exchange network for the secure electronic transmission of individually identifiable health information among health care providers, health plans, and health care clearinghouses in a manner that is consistent with the Health Insurance Portability and Accountability Act, Privacy Rule and Security Rule, 45 C.F.R. §§ 160, 164.

"§ 90‑414.3.  Definitions.

The following definitions apply in this Article:

(1)        Business associate. – As defined in 45 C.F.R. § 160.103.

(2)        Business associate contract. – The documentation required by 45 C.F.R. § 164.502(e)(2) that meets the applicable requirements of 45 C.F.R. § 164.504(e).

(3)        Covered entity. – Any entity described in 45 C.F.R. § 160.103 or any other facility or practitioner licensed by the State to provide health care services.

(4)        Disclose or disclosure. – The release, transfer, provision of access to, or divulging in any other manner an individual's protected health information through the HIE Network.

(5)        Emergency medical condition. – A medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in (i) placing an individual's health in serious jeopardy, (ii) serious impairment of an individual's bodily functions, or (iii) serious dysfunction of any bodily organ or part of an individual.

(6)        GDAC. – The North Carolina Government Data Analytics Center.

(7)        Health Benefits Authority. – The Authority established under Article 14 of Chapter 143B of the General Statutes to operate the Medicaid and NC Health Choice programs.

(8)        HIE Network. – The voluntary, statewide health information exchange network overseen and administered by the Authority.

(9)        HIPAA. – The Health Insurance Portability and Accountability Act of 1996, P.L. 104‑191, as amended.

(10)      Individual. – As defined in 45 C.F.R. § 160.103.

(11)      North Carolina Health Information Exchange Authority or Authority. – The entity established pursuant to G.S. 90‑414.5.

(12)      North Carolina Health Information Exchange Advisory Board or Advisory Board. – The Advisory Board established under G.S. 90‑414.6.

(13)      Opt out. – An individual's affirmative decision to disallow his or her protected health information maintained by or on behalf of one or more specific covered entities from being disclosed to other covered entities through the HIE Network.

(14)      Protected health information. – As defined in 45 C.F.R. § 160.103.

(15)      Public health purposes. – The public health activities and purposes described in 45 C.F.R. § 164.512(b).

(16)      Qualified organization. – An entity designated by the Authority to contract with covered entities on behalf of the Authority to facilitate the participation of such covered entities in the HIE Network.

(17)      Research purposes. – Research that meets the standard described in 45 C.F.R. § 164.512(i).

(18)      State CIO. – The State Chief Information Officer.

"§ 90‑414.4.  Required participation in HIE Network for some providers.

(a)        The General Assembly makes the following findings:

(1)        That controlling escalating health care costs of the Medicaid program and other State‑funded health services is of significant importance to the State, its taxpayers, its Medicaid recipients, and other recipients of State‑funded health services.

(2)        That the Health Benefits Authority needs timely access to claims and clinical information in order to assess performance, improve health care outcomes, pinpoint medical expense trends, identify beneficiary health risks, and evaluate how the State is spending money on Medicaid and other State‑funded health services.

(3)        That making this clinical information available through the HIE Network will improve care coordination within and across health systems, increase care quality, enable more effective population health management, reduce duplication of medical services, augment syndromic surveillance, allow more accurate measurement of care services and outcomes, increase strategic knowledge about the health of the population, and facilitate health care cost containment.

(b)        As a condition of receiving State funds, including Medicaid funds, the following entities shall connect to the HIE Network and submit individual patient demographic and clinical data on services paid for with State funds, including Medicaid funds, based on the findings set forth in subsection (a) of this section and notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2:

(1)        Each hospital, as defined in G.S. 131E‑76(3), that has an electronic health record system.

(2)        Each Medicaid provider.

(3)        Each provider that receives State funds for the provision of health services.

(c)        The Authority shall give the Health Benefits Authority real‑time access to data and information disclosed through the HIE Network. At the request of the Director of the Fiscal Research, Bill Drafting, Research, or Program Evaluation Divisions of the General Assembly for data and information disclosed through the HIE Network or for a consolidation or analysis of the data and information disclosed through the HIE Network, the Authority shall provide the professional staff of these Divisions with data and information responsive to the Director's request. Prior to providing the General Assembly's staff with any data or information disclosed through the HIE Network or with any compilation or analysis of data or information disclosed through the HIE Network, the Authority shall redact any personal identifying information in a manner consistent with the standards specified for de‑identification of health information under the HIPAA Privacy Rule, 45 C.F.R. § 164.15, as amended.

"§ 90‑414.4A.  State ownership of data disclosed through HIE Network.

Any data disclosed through the HIE Network pursuant to G.S. 90‑414.4 or any other provision of this Article shall be and will remain the sole property of the State. Any data or product derived from the data disclosed to the HIE Network pursuant to G.S. 90‑414.4 or any other provision of this Article, including a consolidation or analysis of the data, shall be and will remain the sole property of the State. The Authority shall not allow proprietary information it receives pursuant to G.S. 90‑414.4 or any other provision of this Article to be used by any person or entity for commercial purposes.

"§ 90‑414.5.  North Carolina Health Information Exchange Authority.

(a)        Creation. – There is hereby established the North Carolina Health Information Exchange Authority to oversee and administer the HIE Network in accordance with this Article. The Authority shall be located within the Department of Information Technology and shall be under the supervision, direction, and control of the State CIO. The State CIO shall employ an Authority Director and may delegate to the Authority Director all powers and duties associated with the daily operation of the Authority, its staff, and the performance of the powers and duties set forth in subsection (b) of this section. In making this delegation, however, the State CIO maintains the responsibility for the performance of these powers and duties.

(b)        Powers and Duties. – The Authority has the following powers and duties:

(1)        Oversee and administer the HIE Network in a manner that ensures all of the following:

a.         Compliance with this Article.

b.         Compliance with HIPAA and any rules adopted under HIPAA, including the Privacy Rule and Security Rule.

c.         Compliance with the terms of any business associate contract the Authority or qualified organization enters into with a covered entity participating in the HIE Network.

d.         Notice to the patient by the provider on the initial visit about the HIE Network, including information and education about the right of individuals on a continuing basis to opt out or rescind a decision to opt out.

e.         Opportunity for all individuals to exercise on a continuing basis the right to opt out or rescind a decision to opt out.

f.          Nondiscriminatory treatment by covered entities of individuals who exercise the right to opt out.

(2)        Employ staff necessary to carry out the provisions of this Article and determine the compensation, duties, and other terms and conditions of employment of hired staff.

(3)        Enter into contracts pertaining to the oversight and administration of the HIE Network, including contracts of a consulting or advisory nature. G.S. 143‑64.20 does not apply to this subdivision.

(4)        Establish fees approved by the General Assembly for participation in the HIE Network.

(5)        Following consultation with the Advisory Board, develop and enter into written participation agreements with covered entities that utilize the HIE Network. The participation agreements shall specify the terms and conditions governing participation in the HIE Network. The agreement shall also require compliance with policies developed by the Authority pursuant to this Article or pursuant to applicable laws of the state of residence for entities located outside of North Carolina. In lieu of entering into a participation agreement directly with covered entities, the Authority may enter into participation agreements with qualified organizations, which in turn enter into participation agreements with covered entities.

(6)        Add, remove, disclose, and access protected health information through the HIE Network in accordance with this Article.

(7)        Following consultation with the Advisory Board, enter into a business associate contract with each of the covered entities participating in the HIE Network. In lieu of entering into a business associate contract directly with covered entities, the Authority may enter into business associate contracts with qualified organizations, which in turn may enter into business associate contracts with covered entities.

(8)        Following consultation with the Advisory Board, grant user rights to the HIE Network to business associates of covered entities participating in the HIE Network (i) at the request of the covered entities and (ii) at the discretion of the Authority upon consideration of the business associates' legitimate need for utilizing the HIE Network and privacy and security concerns.

(9)        Facilitate and promote use of the HIE Network by covered entities.

(10)      Periodically monitor compliance with this Article by covered entities participating in the HIE Network.

(11)      Collect clinical health data from all Medicaid providers and other providers that receive State funds for the provision of health services in order to ensure the efficient delivery of Medicaid and other health services and to improve patient outcomes and measure performance.

(12)      Collaborate with the State CIO to ensure that resources available through the GDAC are properly leveraged, assigned, or deployed to support the work of the Authority. The duty to collaborate under this subdivision includes collaboration on data hosting and development, implementation, operation, and maintenance of the HIE Network.

(13)      Initiate or direct expansion of existing public‑private partnerships within the GDAC as necessary to meet the requirements, duties, and obligations of the Authority. Notwithstanding any other provision of law and subject to the availability of funds, the State CIO, at the request of the Authority, shall assist and facilitate expansion of existing contracts related to the HIE Network, provided that such request is made in writing by the Authority to the State CIO with reference to specific requirements set forth in this Article.

(14)      In consultation with the Advisory Board, develop a strategic plan for achieving statewide participation in the HIE Network by all hospitals and health care providers licensed in this State.

(15)      In consultation with the Advisory Board, define the following with respect to operation of the HIE Network:

a.         Business policy.

b.         Protocols for data integrity, data sharing, data security, HIPAA compliance, and business intelligence as defined in G.S. 143B‑426.38A. To the extent permitted by HIPAA, protocols for data sharing shall allow for the disclosure of data for academic research.

c.         Qualitative and quantitative performance measures.

d.         An operational budget and assumptions.

(16)      Annually report to the Joint Legislative Oversight Committees on the Health Benefits Authority and Information Technology on the following:

a.         The operation of the HIE Network.

b.         Any efforts or progress in expanding participation in the HIE Network.

c.         Health care trends based on information disclosed through the HIE Network.

"§ 90‑414.6.  North Carolina Health Information Exchange Advisory Board.

(a)        Creation and Membership. – There is hereby established the North Carolina Health Information Exchange Advisory Board within the Department of Information Technology. The Advisory Board shall consist of the following nine members:

(1)        The following three members appointed by the President Pro Tempore of the Senate:

a.         A licensed physician in good standing and actively practicing in this State.

b.         A patient representative.

c.         An individual with technical expertise in health data analytics.

(2)        The following three members appointed by the Speaker of the House of Representatives:

a.         A representative of a critical access hospital.

b.         A representative of a federally qualified health center.

c.         An individual with technical expertise in health information technology.

(3)        The following three ex officio, nonvoting members:

a.         The State Chief Information Officer or a designee.

b.         The Program Manager of GDAC or a designee.

c.         The Chief Executive Officer of the Health Benefits Authority or a designee.

(b)        Chairperson. – A chairperson shall be elected from among the members. The chairperson shall organize and direct the work of the Advisory Board.

(c)        Administrative Support. – The Department of Information Technology shall provide necessary clerical and administrative support to the Advisory Board.

(d)        Meetings. – The Advisory Board shall meet at least quarterly and at the call of the chairperson. A majority of the Advisory Board constitutes a quorum for the transaction of business.

(e)        Terms. – In order to stagger terms, in making initial appointments, the President Pro Tempore shall designate two of the members appointed under subdivision (1) of subsection (a) of this section to serve for a one‑year period from the date of appointment, and the Speaker of the House of Representatives shall designate two members appointed under subdivision (2) of subsection (a) of this section to serve for a one‑year period from the date of appointment. The remaining voting members shall serve two‑year periods. Future appointees who are voting members shall serve terms of two years, with staggered terms based on this subsection. Voting members may serve up to two consecutive terms, not including the abbreviated two‑year terms that establish staggered terms or terms of less than two years that result from the filling of a vacancy. Ex officio, nonvoting members are not subject to these term limits. A vacancy other than by expiration of a term shall be filled by the appointing authority.

(f)         Expenses. – Members of the Advisory Board who are State officers or employees shall receive no compensation for serving on the Advisory Board but may be reimbursed for their expenses in accordance with G.S. 138‑6. Members of the Advisory Board who are full‑time salaried public officers or employees other than State officers or employees shall receive no compensation for serving on the Advisory Board but may be reimbursed for their expenses in accordance with G.S. 138‑5(b). All other members of the Advisory Board may receive compensation and reimbursement for expenses in accordance with G.S. 138‑5.

(g)        Duties. – The Advisory Board shall provide consultation to the Authority with respect to the advancement, administration, and operation of the HIE Network and on matters pertaining to health information exchange, generally. In carrying out its responsibilities, the Advisory Board may form committees of the Advisory Board to examine particular issues related to the advancement, administration, or operation of the HIE Network.

"§ 90‑414.7.  Participation by covered entities.

(a)        Each covered entity that elects to participate in the HIE Network shall enter into a business associate contract and a written participation agreement with the Authority or qualified organization prior to disclosing or accessing any protected health information through the HIE Network.

(b)        Each covered entity that elects to participate in the HIE Network may authorize its business associates to disclose or access protected health information on behalf of the covered entity through the HIE Network in accordance with this Article and at the discretion of the Authority, as provided in G.S. 90‑414.5(b)(8).

(c)        Notwithstanding any State law or regulation to the contrary, each covered entity that elects to participate in the HIE Network may disclose an individual's protected health information through the HIE Network (i) to other covered entities for any purpose permitted by HIPAA, unless the individual has exercised the right to opt out, and (ii) in order to facilitate the provision of emergency medical treatment to the individual, subject to the requirements set forth in G.S. 90‑414.8(e).

(d)        Any health care provider who relies in good faith upon any information provided through the Authority or through a qualified organization in the health care provider's treatment of a patient shall not incur criminal or civil liability for damages caused by the inaccurate or incomplete nature of this information.

"§ 90‑414.8.  Continuing right to opt out; effect of opt out; exception for emergency medical treatment.

(a)        Each individual has the right on a continuing basis to opt out or rescind a decision to opt out.

(b)        The Authority or its designee shall enforce an individual's decision to opt out or rescind an opt out prospectively from the date the Authority or its designee receives notice of the individual's decision to opt out or rescind an opt out in the manner prescribed by the Authority. An individual's decision to opt out or rescind an opt out does not affect any disclosures made by the Authority or covered entities through the HIE Network prior to receipt by the Authority or its designee of the individual's notice to opt out or rescind an opt out.

(c)        A covered entity may not deny treatment or benefits to an individual because of the individual's decision to opt out. However, nothing in this Article is intended to restrict a treating physician from otherwise appropriately terminating a relationship with a patient in accordance with applicable law and professional ethical standards.

(d)        Except as otherwise permitted in subsection (e) of this section and G.S. 90‑414.9(a)(3), the protected health information of an individual who has exercised the right to opt out may not be disclosed to covered entities through the HIE Network for any purpose.

(e)        The protected health information of an individual who has exercised the right to opt out may be disclosed through the HIE Network in order to facilitate the provision of emergency medical treatment to the individual if all of the following criteria are met:

(1)        The reasonably apparent circumstances indicate to the treating health care provider that (i) the individual has an emergency medical condition, (ii) a meaningful discussion with the individual about whether to rescind a previous decision to opt out is impractical due to the nature of the individual's emergency medical condition, and (iii) information available through the HIE Network could assist in the diagnosis or treatment of the individual's emergency medical condition.

(2)        The disclosure through the HIE Network is limited to the covered entities providing diagnosis and treatment of the individual's emergency medical condition.

(3)        The circumstances and extent of the disclosure through the HIE Network is recorded electronically in a manner that permits the Authority or its designee to periodically audit compliance with this subsection.

"§ 90‑414.9.  Construction and applicability.

(a)        Nothing in this Article shall be construed to do any of the following:

(1)        Impair any rights conferred upon an individual under HIPAA, including all of the following rights related to an individual's protected health information:

a.         The right to receive a notice of privacy practices.

b.         The right to request restriction of use and disclosure.

c.         The right of access to inspect and obtain copies.

d.         The right to request amendment.

e.         The right to request confidential forms of communication.

f.          The right to receive an accounting of disclosures.

(2)        Authorize the disclosure of protected health information through the HIE Network to the extent that the disclosure is restricted by federal laws or regulations, including the federal drug and alcohol confidentiality regulations set forth in 42 C.F.R. Part 2.

(3)        Restrict the disclosure of protected health information through the HIE Network for public health purposes or research purposes, so long as disclosure is permitted by both HIPAA and State law.

(4)        Prohibit the Authority or any covered entity participating in the HIE Network from maintaining in the Authority's or qualified organization's computer system a copy of the protected health information of an individual who has exercised the right to opt out, as long as the Authority or the qualified organization does not access, use, or disclose the individual's protected health information for any purpose other than for necessary system maintenance or as required by federal or State law.

(b)        This Article applies only to disclosures of protected health information made through the HIE Network, including disclosures made within qualified organizations. It does not apply to the use or disclosure of protected health information in any context outside of the HIE Network, including the redisclosure of protected health information obtained through the HIE Network.

"§ 90‑414.10.  Penalties and remedies.

A covered entity that discloses protected health information in violation of this Article is subject to the following:

(1)        Any civil penalty or criminal penalty, or both, that may be imposed on the covered entity pursuant to the Health Information Technology for Economic and Clinical Health (HITECH) Act, P.L. 111‑5, Div. A, Title XIII, section 13001, as amended, and any regulations adopted under the HITECH Act.

(2)        Any civil remedy under the HITECH Act or any regulations adopted under the HITECH Act that is available to the Attorney General or to an individual who has been harmed by a violation of this Article, including damages, penalties, attorneys' fees, and costs.

(3)        Disciplinary action by the respective licensing board or regulatory agency with jurisdiction over the covered entity.

(4)        Any penalty authorized under Article 2A of Chapter 75 of the General Statutes if the violation of this Article is also a violation of Article 2A of Chapter 75 of the General Statutes.

(5)        Any other civil or administrative remedy available to a plaintiff by State or federal law or equity."

SECTION 12A.5.(e)  G.S. 126‑5 is amended by adding a new subdivision to read:

"§ 126‑5.  Employees subject to Chapter; exemptions.

(c1)      Except as to the provisions of Articles 6 and 7 of this Chapter, the provisions of this Chapter shall not apply to:

(31)      Employees of the North Carolina Health Information Exchange Authority."

SECTION 12A.5.(f)  Article 29A of Chapter 90 of the General Statutes is repealed.

SECTION 12A.5.(g)  Subsections (d) and (e) of this section become effective October 1, 2015. Subsection (f) of this section becomes effective on the date the State Chief Information Officer notifies the Revisor of Statutes that all contracts pertaining to the HIE Network established under Article 29A of Chapter 90 of the General Statutes (i) between the State and the NC HIE, as defined in G.S. 90‑413.3, and (ii) between the NC HIE and any third parties have been terminated or assigned to the North Carolina Health Information Exchange Authority established under Article 29B of Chapter 90 of the General Statutes, as enacted by subsection (d) of this section. The remainder of this section becomes effective July 1, 2015.

 

FUNDS FOR NCTRACKS, THE REPLACEMENT MULTIPAYER MEDICAID MANAGEMENT INFORMATION SYSTEM

SECTION 12A.6.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for NCTRACKS, the sum of four hundred thousand dollars ($400,000) for the 2015‑2016 fiscal year and the sum of four hundred thousand dollars ($400,000) for the 2016‑2017 fiscal year shall be used to operate and maintain NCTRACKS; and the sum of two million three hundred thousand dollars ($2,300,000) in nonrecurring funds for the 2015‑2016 fiscal year and the sum of nine hundred forty thousand dollars ($940,000) in nonrecurring funds for the 2016‑2017 fiscal year shall be used to develop and implement the ICD‑10 Project and the Business Process Automated System for the Division of Health Service Regulation. In addition, overrealized receipts are hereby appropriated to the Department of Health and Human Services, Division of Central Management and Support, up to the amounts necessary to implement this section. In the event it becomes necessary for the Department to utilize these overrealized receipts or any other funds appropriated to the Department to implement this section, the Department shall first (i) obtain prior approval from the Office of State Budget and Management (OSBM) and (ii) consult with the Joint Legislative Oversight Committees on Health and Human Services and Information Technology and the Fiscal Research Division. As part of the consultation required by this section, the Department shall provide the amounts of any overrealized receipts or other funds it intends to use to make up for any shortfall in funding for NCTRACKS and an explanation of the circumstances necessitating the use of overrealized receipts or other funds to make up for the shortfall.

 

FUNDS FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST)

SECTION 12A.7.(a)  Departmental receipts appropriated in this act in the amount of nine million eight hundred seventy‑one thousand fifty‑nine dollars ($9,871,059) for the 2015‑2016 fiscal year and thirteen million two hundred twenty thousand six hundred sixty‑five dollars ($13,220,665) for the 2016‑2017 fiscal year shall be used to provide ongoing maintenance and operations for the NC FAST system, including the creation of three full‑time equivalent technology support analyst positions.

SECTION 12A.7.(b)  Prior year earned revenue appropriated in this act in the amount of six million six hundred forty‑seven thousand eight hundred forty‑nine dollars ($6,647,849) for the 2015‑2016 fiscal year and five million two hundred ninety‑eight thousand one hundred seventy‑eight dollars ($5,298,178) for the 2016‑2017 fiscal year and the cash balance in Budget Code 24410 Fund 2411 for the North Carolina Families Accessing Services through Technology (NC FAST) project shall be used to match federal funds in the 2015‑2016 and 2016‑2017 fiscal years to expedite the development and implementation of Child Care, Low Income Energy Assistance, Crisis Intervention Programs, Child Services, and NC FAST Federally‑Facilitated Marketplace (FFM) Interoperability components of the NC FAST program. The Department shall report any changes in approved federal funding or federal match rates within 30 days after the change to the Joint Legislative Oversight Committees on Health and Human Services and Information Technology and the Fiscal Research Division.

 

COMPETITIVE GRANTS/NONPROFIT ORGANIZATIONS, HEALTH DISPARITY‑RELATED INITIATIVES, AND PHYSICAL HEALTH AND NUTRITION

SECTION 12A.8.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the following amounts shall be used for the specified purposes:

(1)        The sum of ten million three hundred twenty‑eight thousand nine hundred eleven dollars ($10,328,911) for each year of the 2015‑2017 fiscal biennium and the sum of three million eight hundred fifty‑two thousand five hundred dollars ($3,852,500) appropriated in Section 12I.1 of this act in Social Services Block Grant funds for each year of the 2015‑2017 fiscal biennium shall be used to allocate funds for nonprofit organizations.

(2)        The sum of three million two hundred ninety‑nine thousand five hundred seventy‑six dollars ($3,299,576), offset by receipts in the amount of one hundred fifty‑five thousand four hundred sixty‑eight dollars ($155,468) for each year of the 2015‑2017 fiscal biennium and the sum of two million seven hundred fifty‑six thousand eight hundred fifty‑five dollars ($2,756,855) appropriated in Section 12I.1 of this act in Preventive Health Services Block Grant funds for the 2015‑2016 fiscal year shall be used to continue the established competitive grants process for health disparity‑related initiatives.

(3)        The sum of four hundred twenty‑six thousand three hundred thirty‑three dollars ($426,333), offset by receipts in the amount of one hundred sixty thousand twenty‑one dollars ($160,021) for each year of the 2015‑2017 fiscal biennium and the sum of one million two hundred forty‑three thousand eight hundred ninety‑nine dollars ($1,243,899) appropriated in Section 12I.1 of this act in Preventive Health Services Block Grant funds for the 2015‑2016 fiscal year shall be used to establish a competitive grants process for physical health and nutrition‑related initiatives.

SECTION 12A.8.(b)  Nonprofit Organizations. –

(1)        The Department shall continue administering a competitive grants process for nonprofit funding. The Department shall administer a plan that, at a minimum, includes each of the following:

a.         A request for application (RFA) process to allow nonprofits to apply for and receive State funds on a competitive basis. The Department shall require nonprofits to include in the application, a plan to evaluate the effectiveness, including measurable impact or outcomes, of the activities, services, and programs for which the funds are being requested.

b.         A requirement that nonprofits match a minimum of fifteen percent (15%) of the total amount of the grant award.

c.         A requirement that the Secretary prioritize grant awards to those nonprofits that are able to leverage non‑State funds in addition to the grant award.

d.         A process that awards grants to nonprofits that have the capacity to provide services on a statewide basis and that support any of the following State health and wellness initiatives:

1.         A program targeting advocacy, support, education, or residential services for persons diagnosed with autism.

2.         A system of residential supports for those afflicted with substance abuse addiction.

3.         A program of advocacy and supports for individuals with intellectual and developmental disabilities or severe and persistent mental illness, substance abusers, or the elderly.

4.         Supports and services to children and adults with developmental disabilities or mental health diagnoses.

5.         A food distribution system for needy individuals.

6.         The provision and coordination of services for the homeless.

7.         The provision of services for individuals aging out of foster care.

8.         Programs promoting wellness, physical activity, and health education programming for North Carolinians.

9.         The provision of services and screening for blindness.

10.       Provision for the delivery of after‑school services for apprenticeships or mentoring at‑risk youth.

11.       The provision of direct services for amyotrophic lateral sclerosis (ALS) and those diagnosed with the disease.

12.       A comprehensive smoking prevention and cessation program that screens and treats tobacco use in pregnant women and postpartum mothers.

13.       A program providing short‑term or long‑term residential substance abuse services. For purposes of this sub‑subdivision, "long‑term" means a minimum of 12 months.

e.         Ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for health and wellness programs and initiatives.

f.          Allows grants to be awarded to nonprofits for up to two years.

g.         With grants awarded beginning July 1, 2016, a requirement that of the funds provided for competitive grants pursuant to this section, a minimum of five percent (5%) of the grants be awarded to new grant recipients who did not receive grant awards during the previous competitive grants process.

(2)        No later than July 1, 2015, and every two years thereafter, as applicable, the Secretary shall announce the recipients of the competitive grant awards and allocate funds to the grant recipients for the respective grant period pursuant to the amounts designated under subdivision (1) of subsection (a) of this section. After awards have been granted, the Secretary shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services on the grant awards that includes at least all of the following:

a.         The identity and a brief description of each grantee and each program or initiative offered by the grantee.

b.         The amount of funding awarded to each grantee.

c.         The number of persons served by each grantee, broken down by program or initiative.

(3)        No later than December 1 of each fiscal year, each nonprofit organization receiving funding pursuant to this subsection in the respective fiscal year shall submit to the Division of Central Management and Support a written report of all activities funded by State appropriations. The report shall include the following information about the fiscal year preceding the year in which the report is due:

a.         The entity's mission, purpose, and governance structure.

b.         A description of the types of programs, services, and activities funded by State appropriations.

c.         Statistical and demographical information on the number of persons served by these programs, services, and activities, including the counties in which services are provided.

d.         Outcome measures that demonstrate the impact and effectiveness of the programs, services, and activities.

e.         A detailed program budget and list of expenditures, including all positions funded, matching expenditures, and funding sources.

(4)        For the 2015‑2017 fiscal biennium only, from the funds identified in subdivision (1) of subsection (a) of this section, the Department shall allocate the sum of two million four hundred twenty-seven thousand nine hundred seventy-five dollars ($2,427,975) in each year of the 2015-2017 fiscal biennium to provide grants to Boys and Girls Clubs across the State to implement (i) programs that improve the motivation, performance, and self-esteem of youth and (ii) other initiatives that would be expected to reduce gang participation, school dropout, and teen pregnancy rates. Boys and Girls Clubs shall be required to seek future funding through the competitive grants process in accordance with subdivision (1) of this subsection.

SECTION 12A.8.(c)  Health Disparity‑Related Initiatives. –

(1)        Funds identified in subdivision (2) of subsection (a) of this section shall be used to continue the competitive grants process established to close the gap in the health status of African‑Americans, Hispanics/Latinos, and American Indians as compared to the health status of white persons. These grants shall continue to focus on the use of measures to eliminate or reduce health disparities among minority populations in this State with respect to heart disease, stroke, diabetes, obesity, asthma, HIV/AIDS, cancer, infant mortality, and low birth weight.

(2)        It is the intent of the General Assembly that the Department continue implementing the competitive grants process established for health disparity‑related initiatives funding to be administered by the Division of Central Management and Support. The Department shall continue implementing a process that, at a minimum, includes each of the following:

a.         A request for application (RFA) process to allow an entity to apply for and receive State funds on a competitive basis. The Department shall require entities to include in the application, a plan to evaluate the effectiveness, including measurable impact or outcomes, of activities, services, and programs for which the funds are being requested.

b.         The amount of any grant award is limited to three hundred thousand dollars ($300,000).

c.         Only community‑based organizations, faith‑based organizations, local health departments, and hospitals located in urban and rural areas of the western, eastern, and Piedmont areas of this State are eligible to apply for these grants. No more than four grants shall be awarded to applicants located in any one of the three areas specified in this sub‑subdivision.

d.         Each eligible applicant shall be required to demonstrate substantial participation and involvement with all other categories of eligible applicants in order to ensure an evidence‑based medical home model that will affect change in health and geographic disparities.

e.         Eligible applicants shall select one or more of the following chronic illnesses or conditions specific to the applicant's geographic area as the basis for applying for a grant under this subdivision to affect change in the health status of African‑Americans, Hispanics/Latinos, or American Indians:

1.         Heart disease.

2.         Stroke.

3.         Diabetes.

4.         Obesity.

5.         Asthma.

6.         HIV/AIDS.

7.         Cancer.

8.         Infant mortality.

9.         Low birth weight.

f.          The minimum duration of the grant period for any grant awarded under this subsection is two years.

g.         The maximum duration of the grant period for any grant awarded under this subsection is three years.

h.         If approved for a grant award, the grantee (i) shall not use more than eight percent (8%) of the grant funds for overhead costs and (ii) shall be required at the end of the grant period to demonstrate significant gains in addressing one or more of the health disparity focus areas identified in subdivision (1) of this subsection.

i.          An independent panel with expertise in the delivery of services to minority populations, health disparities, chronic illnesses and conditions, and HIV/AIDS shall conduct the review of applications for grants. The Department shall establish the independent panel required by this sub‑subdivision.

(3)        The grants awarded under this subsection shall be awarded in honor of the memory of the following deceased members of the General Assembly: Bernard Allen, Pete Cunningham, John Hall, Robert Holloman, Howard Hunter, Ed Jones, Jeanne Lucas, Vernon Malone, William Martin, and William Wainwright. These funds shall be used for concerted efforts to address large gaps in health status among North Carolinians who are African‑American, as well as disparities among other minority populations in North Carolina.

(4)        By October 1, 2017, the Department shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on funds appropriated for grants allocated pursuant to this subsection for the 2015‑2017 fiscal biennium. The report shall include specific activities undertaken by grantees pursuant to subdivision (1) of this subsection to address large gaps in health status among North Carolinians who are African‑American and other minority populations in this State and shall also address all of the following:

a.         Which community‑based organizations, faith‑based organizations, local health departments, and hospitals received grants.

b.         The amount of funding awarded to each grantee.

c.         Which of the minority populations were served by each grantee.

d.         Which community‑based organizations, faith‑based organizations, local health departments, and hospitals were involved in fulfilling the goals and activities of each grant‑in‑aid awarded under this section and what activities were planned and implemented by the grantee to fulfill the community focus of grants awarded pursuant to this subsection.

e.         How the activities implemented by the grantee fulfilled the goal of reducing health disparities among minority populations and the specific success in reducing particular incidences.

SECTION 12A.8.(d)  Physical Health and Nutrition‑Related Activities. –

(1)        Funds identified in subdivision (3) of subsection (a) of this section shall be used to establish and administer a competitive grants process for programs demonstrated to improve physical health and nutrition across the State.

(2)        It is the intent of the General Assembly that, beginning fiscal year 2015‑2016, the Department implements a competitive grants process for physical health and nutrition‑related initiatives funding. To that end, the Department shall develop a plan that establishes a competitive grants process to be administered by the Division of Central Management and Support. The Department shall develop a plan that, at a minimum, includes each of the following:

a.         A request for application (RFA) process to allow an entity to apply for and receive State funds on a competitive basis. The Department shall require entities to include in the application, a plan to evaluate the effectiveness, including measurable impact or outcomes, of activities, services, and programs for which the funds are being requested.

b.         A process that awards grants to entities that have the capacity to provide services on a statewide basis and support physical health and nutrition initiatives.

c.         Ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for physical health and nutrition programs and initiatives.

d.         Allows grants to be awarded for up to two years.

(3)        No later than February 1, 2016, the Secretary of Health and Human Services shall develop a plan for the implementation of the competitive grants process for physical health and nutrition‑related initiative funding and shall report to the Joint Legislative Oversight Committee on Health and Human Services on the plan.

(4)        No later than March 1, 2016, the Secretary of Health and Human Services shall implement the plan for the competitive grants process.

(5)        No later than July 1, 2016, the Secretary shall announce the recipients of the competitive grant awards and allocate funds to the grant recipients for the 2016‑2017 fiscal year pursuant to the amounts designated under subdivision (3) of subsection (a) of this section. After awards have been granted, the Secretary shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services on the grant awards that includes at least all of the following:

a.         The identity and a brief description of each grantee and each program or initiative offered by the grantee.

b.         The amount of funding awarded to each grantee.

c.         The number of persons served by each grantee, broken down by program or initiative.

(6)        No later than December 1, 2016, each program receiving funding pursuant to subdivision (3) of subsection (a) of this section shall submit to the Division of Central Management and Support a written report of all activities funded by State appropriations. The report shall include the following information about the fiscal year preceding the year in which the report is due:

a.         The entity's mission, purpose, and governance structure.

b.         A description of the type of program, service, or activity funded by State appropriations.

c.         Statistical and demographical information on the number of persons served by the program, service, or activity, including the counties in which services are provided.

d.         Outcome measures that demonstrate the impact and effectiveness of the program, service, or activity.

e.         A detailed program budget and list of expenditures, including all positions funded and funding sources.

f.          The source and amount of any matching funds received by the entity.

 

COMMUNITY HEALTH GRANT PROGRAM CHANGES

SECTION 12A.9.  The Department of Health and Human Services, Office of Rural Health and Community Care, shall repurpose two million two hundred fifty thousand dollars ($2,250,000) in Health Net appropriations to the Community Health Grant Program. The new appropriation for this program is seven million six hundred eighty‑seven thousand one hundred sixty‑nine dollars ($7,687,169) in recurring funds. To ensure continuity of care, safety‑net agencies receiving Health Net funds at the end of the 2014‑2015 fiscal year shall be eligible to apply for and receive Community Health Grant funds at their current level of funding for the 2015‑2016 and 2016‑2017 fiscal years. After the 2016‑2017 fiscal year, these agencies must submit an application for funding through the competitive Community Health Grant process. The Community Health Grant Program is available to rural health centers, free clinics, public health departments, school‑based health centers, federally qualified health centers, and other nonprofit organizations that provide primary care and preventive health services to low‑income populations, including uninsured, underinsured, Medicaid, and Medicare residents across the State.

 

RURAL HEALTH LOAN REPAYMENT PROGRAMS

SECTION 12A.10.(a)  The Department of Health and Human Services, Office of Rural Health and Community Care, shall use funds appropriated in this act for loan repayment to medical, dental, and psychiatric providers practicing in State hospitals or in rural or medically underserved communities in this State to combine the following loan repayment programs in order to achieve efficient and effective management of these programs:

(1)        The Physician Loan Repayment Program.

(2)        The Psychiatric Loan Repayment Program.

(3)        The Loan Repayment Initiative at State Facilities.

SECTION 12A.10.(b)  These funds may be used for the following additional purposes:

(1)        Continued funding of the State Loan Repayment Program for primary care providers and expansion of State incentives to general surgeons practicing in Critical Access Hospitals (CAHs) located across the State.

(2)        Expansion of the State Loan Repayment Program to include eligible providers residing in North Carolina who use telemedicine in rural and underserved areas.

 

FUNDS FOR COMMUNITY PARAMEDICINE PILOT PROgram

SECTION 12A.12.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2015‑2016 fiscal year, the sum of three hundred fifty thousand dollars ($350,000) shall be used to implement a community paramedicine pilot program. The pilot program shall focus on expanding the role of paramedics to allow for community‑based initiatives that result in providing care that avoids nonemergency use of emergency rooms and 911 services and avoids unnecessary admissions into health care facilities.

SECTION 12A.12.(b)  The North Carolina Office of Emergency Medical Services (NCOEMS) shall set the education standards and other requirements necessary to qualify as a community paramedic eligible to participate in the pilot program established in subsection (a) of this section. The Department shall consult with the NCOEMS to define the objectives, set standards, and establish the required outcomes for the pilot program.

SECTION 12A.12.(c)  The Department of Health and Human Services shall establish up to three program sites to implement the community paramedicine pilot program, one of which shall be New Hanover Regional Emergency Medical Services. For the 2015‑2016 fiscal year, the New Hanover Regional Emergency Medical Services program site shall be awarded up to two hundred ten thousand dollars ($210,000), and each of the remaining program sites may be awarded up to seventy thousand dollars ($70,000). In selecting the remaining program sites, the Department may give preference to counties that currently have an established community paramedic program.

SECTION 12A.12.(d)  The Department of Health and Human Services shall submit a report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Committee on Health and Human Services, and the Fiscal Research Division by June 1, 2016, on the progress of the pilot program and shall include an evaluation plan based on the U.S. Department of Health and Human Services, Health Resources and Services Administration Office of Rural Health Policy's Community Paramedicine Evaluation Tool published in March 2012.

SECTION 12A.12.(e)  The Department of Health and Human Services shall submit a final report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1, 2016. At a minimum, the final report shall include all of the following:

(1)        An updated version of the evaluation plan required by subsection (d) of this section.

(2)        An estimate of the cost to expand the program incrementally and statewide.

(3)        An estimate of any potential savings of State funds associated with expansion of the program.

(4)        If expansion of the program is recommended, a time line for expanding the program.

 

FUNDS FOR DESIGN AND IMPLEMENTATION OF CONTRACTING SPECIALIST AND CERTIFICATION PROGRAM

SECTION 12A.13.  Funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the design of a contracting specialist training and certification program for management level personnel within the Department of Health and Human Services (DHHS) shall be used as follows:

(1)        For the 2015‑2016 fiscal year, the sum of one hundred fifty thousand dollars ($150,000) in nonrecurring funds shall be allocated to the University of North Carolina School of Government (SOG) to design the program for permanent administration by the Office of State Human Resources (OSHR). SOG shall design a program that is similar to its Certified Local Government Purchasing Officer program and local purchasing and contracts program. OSHR, SOG, and the Office of the State Chief Information Officer shall provide assistance on program design and implementation as requested by DHHS, OSHR, or SOG. To the extent practical, DHHS, OSHR, and SOG shall design and develop the program as a prototype for a State government‑wide program. Although designed for personal and professional services contracting, the design may incorporate any applicable best practices for construction and technology contracting.

(2)        For the 2016‑2017 fiscal year:

a.         The sum of twenty‑five thousand dollars ($25,000) in nonrecurring funds shall be used to assist both DHHS and OSHR with program implementation.

b.         The sum of one hundred seventy‑five thousand dollars ($175,000) in recurring funds shall be used for program support and to fund two full‑time equivalent positions within OSHR dedicated to oversight of, and training for, this new program.

 

Child Welfare Case Management System

SECTION 12A.14.(a)  Funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, in the amount of five million eight hundred three thousand dollars ($5,803,000) in nonrecurring funds and prior year earned revenue in the amount of two million seven hundred fifty‑two thousand one hundred fifty‑one dollars ($2,752,151) for the 2015‑2016 fiscal year and in the amount of thirteen million fifty‑two thousand dollars ($13,052,000) in nonrecurring funds and prior year earned revenue in the amount of four million one hundred one thousand eight hundred twenty‑four dollars ($4,101,824) for the 2016‑2017 fiscal year shall be used to purchase a child welfare case management system that has demonstrated its ability to provide child welfare case management services in another state within the United States. The Division shall purchase a system that can be integrated with North Carolina Families Accessing Services through Technology (NC FAST) and the work product of the Child Protective Services Pilot Project being conducted in accordance with Section 12C.11 of this act. The Division shall issue a request for proposals (RFP) in selecting a system for purchase. The Department shall not move forward with implementing the child welfare case management system in NC FAST.

SECTION 12A.14.(b)  It is the intent of the General Assembly that beginning fiscal year 2016‑2017, all Department of Health and Human Services' information technology assets, resources, and personnel transfer to the Department of Information Technology, as created in this act. To that end, the planning, development, and implementation of the child welfare case management system described in this section shall be coordinated with the Department of Information Technology.

SECTION 12A.14.(c)  The Department shall report on the results of the RFP to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division no later than October 1, 2016.

 

HEALTH CARE COST REDUCTION AND TRANSPARENCY ACT REVISIONS

SECTION 12A.15.  G.S. 131E‑214.13 reads as rewritten:

"§ 131E‑214.13.  Disclosure of prices for most frequently reported DRGs, CPTs, and HCPCSs.

(a)        The following definitions apply in this Article:

(1)        Ambulatory surgical facility. – A facility licensed under Part 4 of Article 6 of this Chapter.

(2)        Commission. – The North Carolina Medical Care Commission.

(3)        Health insurer. – An entity that writes a health benefit plan and is one of the following:

a.         An insurance company under Article 3 of Chapter 58 of the General Statutes.

b.         A service corporation under Article 65 of Chapter 58 of the General Statutes.

c.         A health maintenance organization under Article 67 of Chapter 58 of the General Statutes.

d.         A third‑party administrator of one or more group health plans, as defined in section 607(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1167(1)).

(4)        Hospital. – A medical care facility licensed under Article 5 of this Chapter or under Article 2 of Chapter 122C of the General Statutes.

(5)        Public or private third party. – Includes the State, the federal government, employers, health insurers, third‑party administrators, and managed care organizations.

(b)        Beginning with the quarter ending June 30, 2014, reporting period ending September 30, 2015, and quarterly annually thereafter, each hospital shall provide to the Department of Health and Human Services, utilizing electronic health records software, the following information about the 100 most frequently reported admissions by DRG for inpatients as established by the Department:

(1)        The amount that will be charged to a patient for each DRG if all charges are paid in full without a public or private third party paying for any portion of the charges.

(2)        The average negotiated settlement on the amount that will be charged to a patient required to be provided in subdivision (1) of this subsection.

(3)        The amount of Medicaid reimbursement for each DRG, including claims and pro rata supplemental payments.

(4)        The amount of Medicare reimbursement for each DRG.

(5)        For each of the five largest health insurers providing payment to the hospital on behalf of insureds and teachers and State employees, the range and the average of the amount of payment made for each DRG. Prior to providing this information to the Department, each hospital shall redact the names of the health insurers and any other information that would otherwise identify the health insurers.

A hospital shall not be required to report the information required by this subsection for any of the 100 most frequently reported admissions where the reporting of that information reasonably could lead to the identification of the person or persons admitted to the hospital in violation of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) or other federal law.

(c)        The Commission shall adopt rules on or before January 1, 2015, March 1, 2016, to ensure that subsection (b) of this section is properly implemented and that hospitals report this information to the Department in a uniform manner. The rules shall include all of the following:

(1)        The method by which the Department shall determine the 100 most frequently reported DRGs for inpatients for which hospitals must provide the data set out in subsection (b) of this section.

(2)        Specific categories by which hospitals shall be grouped for the purpose of disclosing this information to the public on the Department's Internet Web site.

(d)        Beginning with the quarter ending September 30, 2014, reporting period ending September 30, 2015, and quarterly annually thereafter, each hospital and ambulatory surgical facility shall provide to the Department, utilizing electronic health records software, information on the total costs for the 20 most common surgical procedures and the 20 most common imaging procedures, by volume, performed in hospital outpatient settings or in ambulatory surgical facilities, along with the related CPT and HCPCS codes. Hospitals and ambulatory surgical facilities shall report this information in the same manner as required by subdivisions (b)(1) through (5) of this section, provided that hospitals and ambulatory surgical facilities shall not be required to report the information required by this subsection where the reporting of that information reasonably could lead to the identification of the person or persons admitted to the hospital in violation of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) or other federal law.

(e)        The Commission shall adopt rules on or before January 1, 2015, March 1, 2016, to ensure that subsection (d) of this section is properly implemented and that hospitals and ambulatory surgical facilities report this information to the Department in a uniform manner. The rules shall include the method by which the Department shall determine the 20 most common surgical procedures and the 20 most common imaging procedures for which the hospitals and ambulatory surgical facilities must provide the data set out in subsection (d) of this section.

(e1)      The Commission shall adopt rules to establish and define no fewer than 10 quality measures identical to those established by the Joint Commission for each of the following:for licensed hospitals and licensed ambulatory surgical facilities.

a.         Primary cesarean section rate, uncomplicated (TJC PC‑02)

b.         Early elective delivery rate (TJC PC‑01)

c.         C. difficile infection SIR (NHSN)

d.         Multidrug resistant organisms (NHSN)

e.         Surgical site infection SRI for colon surgeries (NSHN)

f.          Post op sepsis rate (PSI13)

g.         Thrombolytic therapy for acute ischemic stroke patients (STK‑4)

h.         Stroke education (STK‑8)

i.          Venous thrombolism prophylaxis (VTE‑1)

j.          Venous thrombolism discharge instructions (VTE‑5)

(f)         Upon request of a patient for a particular DRG, imaging procedure, or surgery procedure reported in this section, a hospital or ambulatory surgical facility shall provide the information required by subsection (b) or subsection (d) of this section to the patient in writing, either electronically or by mail, within three business days after receiving the request.

(g)        G.S. 150B‑21.3 does not apply to rules adopted under subsections (c) and (e) of this section. A rule adopted under subsections (c) and (e) of this section becomes effective on the last day of the month following the month in which the rule is approved by the Rules Review Commission.

(h)        A fine of five hundred dollars ($500.00) shall be imposed on the licensed hospital or licensed ambulatory surgical facility for each instance of failure to report as required."

 

SUBPART XII‑B. DIVISION OF CHILD DEVELOPMENT AND EARLY EDUCATION

 

NC PRE‑K PROGRAM/STANDARDS FOR FOUR‑ AND FIVE‑STAR RATED FACILITIES

SECTION 12B.1.(a)  Eligibility. – The Department of Health and Human Services, Division of Child Development and Early Education, shall continue implementing the prekindergarten program (NC Pre‑K). The NC Pre‑K program shall serve children who are four years of age on or before August 31 of the program year. In determining eligibility, the Division shall establish income eligibility requirements for the program not to exceed seventy‑five percent (75%) of the State median income. Up to twenty percent (20%) of children enrolled may have family incomes in excess of seventy‑five percent (75%) of median income if those children have other designated risk factors. Furthermore, any age‑eligible child who is a child of either of the following shall be eligible for the program: (i) an active duty member of the Armed Forces of the United States, including the North Carolina National Guard, State military forces, or a reserve component of the Armed Forces who was ordered to active duty by the proper authority within the last 18 months or is expected to be ordered within the next 18 months or (ii) a member of the Armed Forces of the United States, including the North Carolina National Guard, State military forces, or a reserve component of the Armed Forces who was injured or killed while serving on active duty. Eligibility determinations for prekindergarten participants may continue through local education agencies and local North Carolina Partnership for Children, Inc., partnerships.

Other than developmental disabilities or other chronic health issues, the Division shall not consider the health of a child as a factor in determining eligibility for participation in the NC Pre‑K program.

SECTION 12B.1.(b)  Multiyear Contracts. – The Division of Child Development and Early Education shall require the NC Pre‑K contractor to issue multiyear contracts for licensed private child care centers providing NC Pre‑K classrooms.

SECTION 12B.1.(c)  Programmatic Standards. – All entities operating prekindergarten classrooms shall adhere to all of the policies prescribed by the Division of Child Development and Early Education regarding programmatic standards and classroom requirements.

SECTION 12B.1.(d)  NC Pre‑K Committees. – Local NC Pre‑K committees shall use the standard decision‑making process developed by the Division of Child Development and Early Education in awarding prekindergarten classroom slots and student selection.

SECTION 12B.1.(e)  Reporting. – The Division of Child Development and Early Education shall submit an annual report no later than March 15 of each year to the Joint Legislative Oversight Committee on Health and Human Services, the Office of State Budget and Management, and the Fiscal Research Division. The report shall include the following:

(1)        The number of children participating in the NC Pre‑K program by county.

(2)        The number of children participating in the NC Pre‑K 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 NC Pre‑K expenditures for the programs and the source of the local contributions.

(4)        The results of an annual evaluation of the NC Pre‑K program.

SECTION 12B.1.(f)  Audits. – The administration of the NC Pre‑K program by local partnerships shall be subject to the financial and compliance audits authorized under G.S. 143B‑168.14(b).

 

CHILD CARE SUBSIDY RATES

SECTION 12B.2.(a)  The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be determined based on a percentage of the federal poverty level as follows:

AGE                                                              INCOME PERCENTAGE LEVEL

0 – 5                                                                                        200%

6 – 12                                                                                      133%

The eligibility for any child with special needs, including a child who is 13 years of age or older, shall be two hundred percent (200%) of the federal poverty level.

SECTION 12B.2.(b)  Effective July 1, 2015, the Department of Health and Human Services, Division of Child Development and Early Education, shall revise its child care subsidy policy to exclude from the policy's definition of "income unit" a nonparent relative caretaker, and the caretaker's spouse and child, if applicable, when the parent of the child receiving child care subsidy does not live in the home with the child.

SECTION 12B.2.(c)  Fees for families who are required to share in the cost of care are established based on ten percent (10%) of gross family income. Co‑payments shall not be prorated for part‑time care.

SECTION 12B.2.(d)  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, unless prohibited by subsection (g) of this section.

(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, unless prohibited by subsection (g) of this section.

(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)        No payments shall be made for transportation services or registration fees charged by child care facilities.

(5)        Payments for subsidized child care services for postsecondary education shall be limited to a maximum of 20 months of enrollment.

(6)        The Department of Health and Human Services shall implement necessary rule changes to restructure services, including, but not limited to, targeting benefits to employment.

SECTION 12B.2.(e)  Provisions 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 12B.2.(f)  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 parents for each age group of enrollees within the county. The Division of Child Development and Early Education shall also calculate a statewide rate and regional market rate for each rated license level for each age category.

SECTION 12B.2.(g)  The Division of Child Development and Early Education shall continue implementing policies that improve the quality of child care for subsidized children, including a policy in which child care subsidies are paid, to the extent possible, for child care in the higher‑quality centers and homes only. The Division shall define higher‑quality, and subsidy funds shall not be paid for one‑ or two‑star‑rated facilities. For those counties with an inadequate number of four‑ and five‑star‑rated facilities, the Division shall continue a transition period that allows the facilities to continue to receive subsidy funds while the facilities work on the increased star ratings. The Division may allow exemptions in counties where there is an inadequate number of four‑ and five‑star‑rated facilities for non‑star‑rated programs, such as religious programs.

SECTION 12B.2.(h)  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. Except as authorized by subsection (g) of this section, 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 12B.2.(i)  Payment for subsidized child care services provided with Temporary Assistance for Needy Families Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development and Early Education for the subsidized child care program.

SECTION 12B.2.(j)  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.

SECTION 12B.2.(k)  The Department of Health and Human Services, Division of Child Development and Early Education, shall require all county departments of social services to include on any forms used to determine eligibility for child care subsidy whether the family waiting for subsidy is receiving assistance through the NC Pre‑K Program or Head Start.

 

Child Care Subsidy Market Rate Increases/Certain Age Groups and Counties

SECTION 12B.2A.  Beginning September 1, 2015, the Department of Health and Human Services, Division of Child Development and Early Education, shall increase the child care subsidy market rates to the rates recommended by the 2013 Child Care Market Rate Study from birth through two years of age in three‑, four‑, and five‑star‑rated child care centers and homes in tier one and tier two counties. For purposes of this section, tier one and tier two counties shall have the same designations as those established by the N.C. Department of Commerce.

 

CHILD CARE ALLOCATION FORMULA

SECTION 12B.3.(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%) North Carolina Partnership for Children, Inc., 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%) North Carolina Partnership for Children, Inc., subsidy allocation:

(1)        Funds shall be allocated to a county based upon the projected cost of serving children under age 11 in families with all parents working who earn less than the applicable federal poverty level percentage set forth in Section 12B.2 of this act.

(2)        The Department of Health and Human Services shall allocate to counties all State funds appropriated for child care subsidy and shall not withhold funds during the 2015‑2016 and 2016‑2017 fiscal years.

SECTION 12B.3.(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 North Carolina Partnership for Children, Inc., funds within a county.

SECTION 12B.3.(c)  When implementing the formula under subsection (a) of this section, the Department of Health and Human Services, Division of Child Development and Early Education, shall include the market rate increase in the formula process, rather than calculating the increases outside of the formula process. Additionally, the Department shall do the following:

(1)        For fiscal year 2015‑2016, (i) continue implementing one‑third of the change in a county's allocation based on the new Census data; (ii) implement an additional one‑third of the change in a county's allocation beginning fiscal year 2016‑2017; and (iii) the final one‑third change in a county's allocation beginning fiscal year 2018‑2019. However, beginning fiscal year 2015‑2016, a county's initial allocation shall be the county's expenditure in the previous fiscal year. With the exception of market rate increases consistent with any increases approved by the General Assembly, a county whose spending coefficient is less than ninety‑five percent (95%) in the previous fiscal year shall receive its prior year's expenditure as its allocation and shall not receive an increase in its allocation in the following year. A county whose spending coefficient is at least ninety‑five percent (95%) in the previous fiscal year shall receive, at a minimum, the amount it expended in the previous fiscal year and may receive additional funding, if available. The Division may waive this requirement and allow an increase if the spending coefficient is below ninety‑five percent (95%) due to extraordinary circumstances, such as a State or federal disaster declaration in the affected county. By October 1 of each year, the Division shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the counties that received a waiver pursuant to this subdivision and the reasons for the waiver.

(2)        Effective immediately following the next new Census data release, implement (i) one‑third of the change in a county's allocation in the year following the data release; (ii) an additional one‑third of the change in a county's allocation beginning two years after the initial change under this subdivision; and (iii) the final one‑third change in a county's allocation beginning the following two years thereafter.

 

CHILD CARE FUNDS MATCHING REQUIREMENTS

SECTION 12B.4.  No local matching funds may be required by the Department of Health and Human Services as a condition of any locality's receiving its initial allocation of child care funds appropriated by this act unless federal law requires a match. If the Department reallocates additional funds above twenty‑five thousand dollars ($25,000) to local purchasing agencies beyond their initial allocation, local purchasing agencies must provide a twenty percent (20%) local match to receive the reallocated funds. Matching requirements shall not apply when funds are allocated because of an emergency as defined in G.S. 166A‑19.3(6).

 

CHILD CARE REVOLVING LOAN

SECTION 12B.5.  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.

 

ADMINISTRATIVE ALLOWANCE FOR COUNTY DEPARTMENTS OF SOCIAL SERVICES/USE OF SUBSIDY FUNDS FOR FRAUD DETECTION

SECTION 12B.6.(a)  The Department of Health and Human Services, Division of Child Development and Early Education, shall fund the allowance that county departments of social services may use for administrative costs at four percent (4%) of the county's total child care subsidy funds allocated in the Child Care and Development Fund Block Grant plan or eighty thousand dollars ($80,000), whichever is greater.

SECTION 12B.6.(b)  Each county department of social services may use up to two percent (2%) of child care subsidy funds allocated to the county for fraud detection and investigation initiatives.

SECTION 12B.6.(c)  The Division of Child Development and Early Education may adjust the allocations in the Child Care and Development Fund Block Grant under Section 12I.1 of this act according to (i) the final allocations for local departments of social services under subsection (a) of this section and (ii) the funds allocated for fraud detection and investigation initiatives under subsection (b) of this section. The Division shall submit a report on the final adjustments to the allocations of the four percent (4%) administrative costs to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than September 30 of each year.

 

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES ENHANCEMENTS

SECTION 12B.7.(a)  Policies. – The North Carolina Partnership for Children, Inc., and its Board shall ensure policies focus on the North Carolina Partnership for Children, Inc.'s mission of improving child care quality in North Carolina for children from birth to five years of age. North Carolina Partnership for Children, Inc.‑funded activities shall include assisting child care facilities with (i) improving quality, including helping one‑, two‑, and three‑star‑rated facilities increase their star ratings and (ii) implementing prekindergarten programs. State funding for local partnerships shall also be used for evidence‑based or evidence‑informed programs for children from birth to five years of age that do the following:

(1)        Increase children's literacy.

(2)        Increase the parents' ability to raise healthy, successful children.

(3)        Improve children's health.

(4)        Assist four‑ and five‑star‑rated facilities in improving and maintaining quality.

SECTION 12B.7.(b)  Administration. – Beginning fiscal year 2015‑2016, administrative costs for central administration shall be equivalent to not more than three and twenty‑five hundredths percent (3.25%). Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than seven and seventy‑five hundredths percent (7.75%) of the total statewide allocation to all local partnerships for the 2015‑2016 fiscal year and beginning fiscal year 2016‑2017, equivalent to not more than seven and five‑tenths percent (7.5%) 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. The North Carolina Partnership for Children, Inc., shall continue using a single statewide contract management system that incorporates features of the required standard fiscal accountability plan described in G.S. 143B‑168.12(a)(4). All local partnerships are required to participate in the contract management system and, directed by the North Carolina Partnership for Children, Inc., to collaborate, to the fullest extent possible, with other local partnerships to increase efficiency and effectiveness.

SECTION 12B.7.(c)  Salaries. – The salary schedule developed and implemented by the North Carolina Partnership for Children, Inc., shall set the maximum amount of State funds that may be used for the salary of the Executive Director of the North Carolina Partnership for Children, Inc., and the directors of the local partnerships. The North Carolina Partnership for Children, Inc., shall base the schedule on the following criteria:

(1)        The population of the area serviced by a local partnership.

(2)        The amount of State funds administered.

(3)        The amount of total funds administered.

(4)        The professional experience of the individual to be compensated.

(5)        Any other relevant factors pertaining to salary, as determined by the North Carolina Partnership for Children, Inc.

The salary schedule shall be used only to determine the maximum amount of State funds that may be used for compensation. Nothing in this subsection shall be construed to prohibit a local partnership from using non‑State funds to supplement an individual's salary in excess of the amount set by the salary schedule established under this subsection.

SECTION 12B.7.(d)  Match Requirements. – The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match one hundred percent (100%) of the total amount budgeted for the program in each fiscal year of the 2015‑2017 biennium. Of the funds the North Carolina Partnership for Children, Inc., and the local partnerships are required to match, contributions of cash shall be equal to at least twelve percent (12%) and in‑kind donated resources shall be equal to no more than five percent (5%) for a total match requirement of seventeen percent (17%) for the 2015‑2016 fiscal year; and contributions of cash shall be equal to at least thirteen percent (13%) and in‑kind donated resources shall be equal to no more than six percent (6%) for a total match requirement of nineteen percent (19%) for the 2016‑2017 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 Division of Employment Security of the Department of Commerce 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 seventeen‑percent (17%) match by June 30 of the 2015‑2016 fiscal year and a nineteen‑percent (19%) match by June 30 of the 2016‑2017 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 Oversight Committee on Health and Human Services 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 12B.7.(e)  Bidding. – 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 as 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 12B.7.(f)  Allocations. – The North Carolina Partnership for Children, Inc., shall not reduce the allocation for counties with less than 35,000 in population below the 2012‑2013 funding level.

SECTION 12B.7.(g)  Performance‑Based Evaluation. – The Department of Health and Human Services shall continue to implement the performance‑based evaluation system.

SECTION 12B.7.(h)  Expenditure Restrictions. – 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 the 2015‑2017 fiscal biennium shall be administered and distributed in the following manner:

(1)        Capital expenditures are prohibited for the 2015‑2017 fiscal biennium. For the purposes of this section, "capital expenditures" means expenditures for capital improvements as defined in G.S. 143C‑1‑1(d)(5).

(2)        Expenditures of State funds for advertising and promotional activities are prohibited for the 2015‑2017 fiscal biennium.

For the 2015‑2017 fiscal biennium, local partnerships shall not spend any State funds on marketing campaigns, advertising, or any associated materials. Local partnerships may spend any private funds the local partnerships receive on those activities.

 

PLAN FOR MERGER OF EARLY EDUCATION AND FAMILY SUPPORT PROGRAMS

SECTION 12B.8.  The Joint Legislative Program Evaluation Oversight Committee shall include in the 2015‑2017 Work Plan a directive for the Program Evaluation Division to plan a merger of the Child Care Subsidy, NC Prekindergarten (NC Pre‑K), and Smart Start programs. The Director of the Program Evaluation Division shall recommend a firm for approval by the Legislative Services Commission to prepare the plan under the supervision of the Program Evaluation Division. The sum of three hundred thousand dollars ($300,000) is hereby appropriated to the Legislative Services Commission from the General Fund for the 2015‑2016 fiscal year in nonrecurring funds to pay for the contract. The Program Evaluation Division shall submit the merger plan prepared by the contractor to the Joint Legislative Program Evaluation Oversight Committee, the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division no later than March 1, 2016.

 

U.S. Department of Defense‑Certified Child Care Facilities Participation in State‑Subsidized Child Care Program

SECTION 12B.9.(a)  Article 7 of Chapter 110 of the General Statutes is amended by adding a new section to read:

"§ 110‑106.2.  Department of Defense‑certified child care facilities.

(a)        As used in this section, the phrase "Department of Defense‑certified child care facility" shall include child development centers, family child care homes, and school‑aged child care facilities operated aboard a military installation under the authorization of the United States Department of Defense (Department of Defense) certified by the Department of Defense.

(b)        Procedure Regarding Department of Defense‑Certified Child Care Facilities. –

(1)        Department of Defense‑certified child care facilities shall file with the Department a notice of intent to operate a child care facility in a form determined by the Department of Defense.

(2)        As part of its notice, each Department of Defense‑certified child care facility shall file a report to the Department indicating that it meets the minimum standards for child care facilities as provided by the Department of Defense.

(3)        Department of Defense‑certified child care facilities that meet all the requirements of this section shall be exempt from all other requirements of this Article and shall not be subject to licensure.

(4)        For purposes of the North Carolina Subsidized Child Care Program, Department of Defense‑certified child care facilities shall be reimbursed as follows:

a.         Department of Defense‑certified child care facilities that are accredited by the National Association for the Education of Young Children (NAEYC) shall be reimbursed at the five‑star‑rated license rate.

b.         All other Department of Defense‑certified child care facilities shall be reimbursed at the four‑star‑rated license rate."

SECTION 12B.9.(b)  G.S. 143B‑168.15(g) reads as rewritten:

"(g)       Not less than thirty percent (30%) of the funds spent in each year of each local partnership's direct services allocation shall be used to expand child care subsidies. To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child care services as described in this section. The North Carolina Partnership may increase this percentage requirement up to a maximum of fifty percent (50%) when, based upon a significant local waiting list for subsidized child care, the North Carolina Partnership determines a higher percentage is justified. Local partnerships shall spend an amount for child care subsidies that provides at least fifty‑two million dollars ($52,000,000) for the Temporary Assistance to Needy Families (TANF) maintenance of effort requirement and the Child Care Development Fund and Block Grant match requirement. Funds allocated under this section shall supplement and not supplant any federal or State funds allocated to Department of Defense‑certified child care facilities licensed under G.S. 110‑106.2."

SECTION 12B.9.(c)  Department of Defense‑certified child care facilities licensed pursuant to G.S. 110‑106.2, as enacted in subsection (a) of this section, may participate in the State‑subsidized child care program that provides for the purchase of care in child care facilities for minor children in needy families; provided, that funds allocated from the State‑subsidized child care program to Department of Defense‑certified child care facilities shall supplement and not supplant funds allocated in accordance with G.S. 143B‑168.15(g). Payment rates and fees for military families who choose Department of Defense‑certified child care facilities and who are eligible to receive subsidized child care shall be as set forth in Section 12B.2 of this act.

SECTION 12B.9.(d)  This section becomes effective January 1, 2016.

 

SUBPART XII‑C. DIVISION OF SOCIAL SERVICES

 

TANF BENEFIT IMPLEMENTATION

SECTION 12C.1.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2013‑2016," prepared by the Department of Health and Human Services and presented to the General Assembly. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2013, through September 30, 2016. 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.

SECTION 12C.1.(b)  The counties approved as Electing Counties in the North Carolina Temporary Assistance for Needy Families State Plan FY 2013‑2016, as approved by this section, are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson.

SECTION 12C.1.(c)  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 years 2013 through 2016, pursuant to G.S. 108A‑27(e), shall operate under the Electing County budget requirements effective July 1, 2015. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2016.

SECTION 12C.1.(d)  For each year of the 2015‑2017 fiscal biennium, Electing Counties shall be held harmless to their Work First Family Assistance allocations for the 2014‑2015 fiscal year, provided that remaining funds allocated for Work First Family Assistance and Work First Diversion Assistance are sufficient for payments made by the Department on behalf of Standard Counties pursuant to G.S. 108A‑27.11(b).

SECTION 12C.1.(e)  In the event that departmental projections of Work First Family Assistance and Work First Diversion Assistance for the 2015‑2016 fiscal year or the 2016‑2017 fiscal year indicate that remaining funds are insufficient for Work First Family Assistance and Work First Diversion Assistance payments to be made on behalf of Standard Counties, the Department is authorized to deallocate funds, of those allocated to Electing Counties for Work First Family Assistance in excess of the sums set forth in G.S. 108A‑27.11, up to the requisite amount for payments in Standard Counties. Prior to deallocation, the Department shall obtain approval by the Office of State Budget and Management. If the Department adjusts the allocation set forth in subsection (d) of this section, then a report shall be made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

 

INTENSIVE FAMILY PRESERVATION SERVICES FUNDING AND PERFORMANCE ENHANCEMENTS

SECTION 12C.2.(a)  Notwithstanding the provisions of G.S. 143B‑150.6, the Intensive Family Preservation Services (IFPS) 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 IFPS shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out‑of‑home placement.

SECTION 12C.2.(b)  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 IFPS shall provide information and data that allows for the following:

(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 IFPS. 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 IFPS compared to the ratio of their distribution in the general population involved with Child Protective Services.

SECTION 12C.2.(c)  The Department shall establish a performance‑based funding protocol and shall only provide funding to those programs and entities providing the required information specified in subsection (b) of this section. The amount of funding shall be based on the individual performance of each program.

 

CHILD CARING INSTITUTIONS

SECTION 12C.3.  Until the Social Services Commission adopts rules setting standardized rates for child caring institutions as authorized under G.S. 143B‑153(8), the maximum reimbursement for child caring institutions shall not exceed the rate established for the specific child caring institution by the Department of Health and Human Services, Office of the Controller. In determining the maximum reimbursement, the State shall include county and IV‑E reimbursements.

 

USE OF FOSTER CARE BUDGET FOR GUARDIANSHIP ASSISTANCE PROGRAM

SECTION 12C.4.  Of the funds available for the provision of foster care services, the Department of Health and Human Services, Division of Social Services, may provide for the financial support of children who are deemed to be (i) in a permanent family placement setting, (ii) eligible for legal guardianship, and (iii) otherwise unlikely to receive permanency. The Division of Social Services shall design the Guardianship Assistance Program (GAP) to include provisions for extending guardianship services for individuals who have attained the age of 18 years and opt to continue to receive guardianship services until reaching 21 years of age if the individual is (i) completing secondary education or a program leading to an equivalent credential, (ii) enrolled in an institution that provides postsecondary or vocational education, (iii) participating in a program or activity designed to promote, or remove barriers to, employment, (iv) employed for at least 80 hours per month, or (v) incapable of completing the educational or employment requirements of this section due to a medical condition or disability. The Guardianship Assistance Program rates shall reimburse the legal guardian for room and board and be set at the same rate as the foster care room and board rates in accordance with rates established under G.S. 108A‑49.1. The Social Services Board shall adopt rules establishing a Guardianship Assistance Program to implement this section, including defining the phrase "legal guardian" as used in this section.

 

CHILD WELFARE POSTSECONDARY SUPPORT PROGRAM (NC REACH)

SECTION 12C.5.(a)  Funds appropriated from the General Fund to the Department of Health and Human Services for the child welfare postsecondary support program shall be used to continue providing assistance with the "cost of attendance" as that term is defined in 20 U.S.C. § 108711 for the educational needs of foster youth aging out of the foster care system and special needs children adopted from foster care after age 12. These funds shall be allocated by the State Education Assistance Authority.

SECTION 12C.5.(b)  Of the funds appropriated from the General Fund to the Department of Health and Human Services, the sum of fifty thousand dollars ($50,000) for the 2015‑2016 fiscal year and the sum of fifty thousand dollars ($50,000) for the 2016‑2017 fiscal year shall be allocated to the North Carolina State Education Assistance Authority (SEAA). The SEAA shall use these funds only to perform administrative functions necessary to manage and distribute scholarship funds under the child welfare postsecondary support program.

SECTION 12C.5.(c)  Of the funds appropriated from the General Fund to the Department of Health and Human Services, the sum of three hundred thirty‑nine thousand four hundred ninety‑three dollars ($339,493) for the 2015‑2016 fiscal year and the sum of three hundred thirty‑nine thousand four hundred ninety‑three dollars ($339,493) for the 2016‑2017 fiscal year shall be used to contract with an entity to administer the child welfare postsecondary support program described under subsection (a) of this section, which administration shall include the performance of case management services.

SECTION 12C.5.(d)  Funds appropriated to the Department of Health and Human Services for the child welfare postsecondary support program shall be used only for students attending public institutions of higher education in this State.

 

FEDERAL CHILD SUPPORT INCENTIVE PAYMENTS

SECTION 12C.7.(a)  Centralized Services. – The North Carolina Child Support Services Section (NCCSS) of the Department of Health and Human Services, Division of Social Services, shall retain up to fifteen percent (15%) of the annual federal incentive payments it receives from the federal government to enhance centralized child support services. To accomplish this requirement, NCCSS shall do the following:

(1)        In consultation with representatives from county child support services programs, identify how federal incentive funding could improve centralized services.

(2)        Use federal incentive funds to improve the effectiveness of the State's centralized child support services by supplementing and not supplanting State expenditures for those services.

(3)        Develop and implement rules that explain the State process for calculating and distributing federal incentive funding to county child support services programs.

SECTION 12C.7.(b)  County Child Support Services Programs. – NCCSS shall allocate no less than eighty‑five percent (85%) of the annual federal incentive payments it receives from the federal government to county child support services programs to improve effectiveness and efficiency using the federal performance measures. To that end, NCCSS shall do the following:

(1)        In consultation with representatives from county child support services programs, examine the current methodology for distributing federal incentive funding to the county programs and determine whether an alternative formula would be appropriate. NCCSS shall use its current formula for distributing federal incentive funding until an alternative formula is adopted.

(2)        Upon adopting an alternative formula, develop a process to phase‑in the alternative formula for distributing federal incentive funding over a four‑year period.

SECTION 12C.7.(c)  Reporting by County Child Support Services Programs. – NCCSS shall establish guidelines that identify appropriate uses for federal incentive funding. To ensure those guidelines are properly followed, NCCSS shall require county child support services programs to comply with each of the following:

(1)        Submit an annual plan describing how federal incentive funding would improve program effectiveness and efficiency as a condition of receiving federal incentive funding.

(2)        Report annually on: (i) how federal incentive funding has improved program effectiveness and efficiency and been reinvested into their programs, (ii) provide documentation that the funds were spent according to their annual plans, and (iii) explain any deviations from their plans.

SECTION 12C.7.(d)  Plan/Report by NCCSS. – The NCCSS shall develop a plan to implement the requirements of this section. Prior to implementing the plan, NCCSS shall submit a progress report on the plan to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1, 2015.

After implementing the plan, NCCSS shall submit a report on federal child support incentive funding to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1 of each year. The report shall describe how federal incentive funds enhanced centralized child support services to benefit county child support services programs and improved the effectiveness and efficiency of county child support services programs. The report shall further include any changes to the State process the NCCSS used in calculating and distributing federal incentive funding to county child support services programs and any recommendations for further changes.

 

CHILD PROTECTIVE SERVICES IMPROVEMENT INITIATIVE/REVISE STATEWIDE EVALUATION REPORT DATE

SECTION 12C.8.  The Department of Health and Human Services, Division of Social Services, shall report on the findings and recommendations from the comprehensive, statewide evaluation of the State's child protective services system required by Section 12C.1(f) of S.L. 2014‑100 to the Joint Legislative Oversight Committee on Health and Human Services on or before March 1, 2016.

 

FOSTERING SUCCESS/EXTEND FOSTER CARE TO 21 YEARS OF AGE

SECTION 12C.9.(a)  G.S. 108A‑48 reads as rewritten:

"§ 108A‑48.  State Foster Care Benefits Program.

(a)        The Department is authorized to establish a State Foster Care Benefits Program with appropriations by the General Assembly for the purpose of providing assistance to children who are placed in foster care facilities by county departments of social services in accordance with the rules and regulations of the Social Services Commission. Such appropriations, together with county contributions for this purpose, shall be expended to provide for the costs of keeping children in foster care facilities.

(b)        No benefits provided by this section shall be granted to any individual who has passed his eighteenth birthday unless he is less than 21 years of age and is a full‑time student or has been accepted for enrollment as a full‑time student for the next school term pursuing a high school diploma or its equivalent; a course of study at the college level; or a course of vocational or technical training designed to fit him for gainful employment.

(c)        The Department may continue to provide benefits pursuant to this section to an individual who has attained the age of 18 years and chosen to continue receiving foster care services until reaching 21 years of age if the individual is (i) completing secondary education or a program leading to an equivalent credential, (ii) enrolled in an institution that provides postsecondary or vocational education, (iii) participating in a program or activity designed to promote, or remove barriers to, employment, (iv) employed for at least 80 hours per month, or (v) incapable of completing the educational or employment requirements of this subsection due to a medical condition or disability.

(d)        With monthly supervision and oversight by the director of the county department of social services or a supervising agency, an individual receiving benefits pursuant to subsection (c) of this section may reside outside a foster care facility in a college or university dormitory or other semi‑supervised housing arrangement approved by the director of the county department of social services and continue to receive benefits pursuant to this section."

SECTION 12C.9.(b)  G.S. 108A‑49 is amended by adding a new subsection to read:

"(e)       If all other eligibility criteria are met, adoption assistance payments may continue until the beneficiary reaches the age of 21 if the beneficiary was adopted after reaching the age of 16 but prior to reaching the age of 18."

SECTION 12C.9.(c)  G.S. 108A‑49.1 reads as rewritten:

"§ 108A‑49.1.  Foster care and adoption assistance payment rates.

(a)        The maximum rates for State participation in the foster care assistance program are established on a graduated scale as follows:

(1)        $475.00 per child per month for children from birth through five years of age.

(2)        $581.00 per child per month for children six through 12 years of age.

(3)        $634.00 per child per month for children at least 13 through 18 but less than 21 years of age.

(b)        The maximum rates for the State adoption assistance program are established consistent with the foster care rates as follows:

(1)        $475.00 per child per month for children from birth through five years of age.

(2)        $581.00 per child per month for children six through 12 years of age.

(3)        $634.00 per child per month for children at least 13 through 18 but less than 21 years of age.

(c)        The maximum rates for the State participation in human immunodeficiency virus (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 with confirmed HIV infection, asymptomatic.

(3)        $1,200 per child per month with confirmed HIV infection, symptomatic.

(4)        $1,600 per child per month when the child is terminally ill with complex care needs.

In addition to providing board payments to foster and adoptive families of HIV‑infected children, any additional funds remaining that are appropriated for purposes described in this subsection shall be used to provide medical training in avoiding HIV transmission in the home.

(d)        The State and a county participating in foster care and adoption assistance shall each contribute fifty percent (50%) of the nonfederal share of the cost of care for a child placed by a county department of social services or child‑placing agency in a family foster home or residential child care facility. A county shall be held harmless from contributing fifty percent (50%) of the nonfederal share of the cost for a child placed in a family foster home or residential child care facility under an agreement with that provider as of October 31, 2008, until the child leaves foster care or experiences a placement change.

(e)        A county shall be held harmless from contributing fifty percent (50%) of the nonfederal share of the cost for an individual receiving benefits pursuant to G.S. 108A‑48(c)."

SECTION 12C.9.(d)  G.S. 131D‑10.2 reads as rewritten:

"§ 131D‑10.2.  Definitions.

For purposes of this Article, unless the context clearly implies otherwise:

(3)        "Child" means an individual less than 18 21 years of age, who has not been emancipated under the provisions of Article 35 of Chapter 7B of the General Statutes.

(9a)      "Foster Parent" means any individual who is 18 21 years of age or older who is licensed by the State to provide foster care.

…."

SECTION 12C.9.(e)  Part 1 of Article 1A of Chapter 131D of the General Statutes is amended by adding a new section to read:

"§ 131D‑10.2A.  Foster care until 21 years of age.

(a)        A child placed in foster care who has attained the age of 18 years may continue receiving foster care services until reaching 21 years of age as provided by law. A child who initially chooses to opt out of foster care upon attaining the age of 18 years may opt to receive foster care services at a later date until reaching 21 years of age.

(b)        A child who has attained the age of 18 years and chosen to continue receiving foster care services until reaching 21 years of age may continue to receive benefits pursuant to Part 4 of Article 2 of Chapter 108A of the General Statutes upon meeting the requirements under G.S. 108A‑48(c)."

SECTION 12C.9.(f)  G.S. 131D‑10.5 reads as rewritten:

"§ 131D‑10.5.  Powers and duties of the Commission.

In addition to other powers and duties prescribed by law, the Commission shall exercise the following powers and duties:

(1)        Adopt, amend and repeal rules consistent with the laws of this State and the laws and regulations of the federal government to implement the provisions and purposes of this Article;Article.

(2)        Issue declaratory rulings as may be needed to implement the provisions and purposes of this Article;Article.

(3)        Adopt rules governing procedures to appeal Department decisions pursuant to this Article granting, denying, suspending or revoking licenses;licenses.

(4)        Adopt criteria for waiver of licensing rules adopted pursuant to this Article;Article.

(5)        Adopt rules on documenting the use of physical restraint in residential child‑care facilities;facilities.

(6)        Adopt rules establishing personnel and training requirements related to the use of physical restraints and time‑out for staff employed in residential child‑care facilities; andfacilities.

(7)        Adopt rules establishing educational requirements, minimum age, relevant experience, and criminal record status for executive directors and staff employed by child placing agencies and residential child care facilities.

(8)        Adopt any rules necessary for the expansion of foster care for individuals who have attained the age of 18 years and chosen to continue receiving foster care services to 21 years of age in accordance with G.S. 131D‑10.2A."

SECTION 12C.9.(g)  Article 9 of Chapter 7B of the General Statutes is amended by adding a new section to read:

"§ 7B‑910.1.  Review of voluntary foster care placements with young adults.

(a)        The court shall review the placement of a young adult in foster care authorized by G.S. 108A‑48(c) when the director of social services and a young adult who was in foster care as a juvenile enter into a voluntary placement agreement. The review hearing shall be held not more than 90 days from the date the agreement was executed, and the court shall make findings from evidence presented at this review hearing with regard to all of the following:

(1)        Whether the placement is in the best interest of the young adult in foster care.

(2)        The services that have been or should be provided to the young adult in foster care to improve the placement.

(3)        The services that have been or should be provided to the young adult in foster care to further the young adult's educational or vocational ambitions, if relevant.

(b)        Upon written request of the young adult or the director of social services, the court may schedule additional hearings to monitor the placement and progress toward the young adult's educational or vocational ambitions.

(c)        No guardian ad litem under G.S. 7B‑601 will be appointed to represent the young adult in the initial or any subsequent hearing.

(d)        The clerk shall give written notice of the initial and any subsequent review hearings to the young adult and foster care and the director of social services at least 15 days prior to the date of the hearing."

SECTION 12C.9.(h)  G.S. 7B‑401.1 is amended by adding a new subsection to read:

"(i)        Young Adult in Foster Care. – In proceedings held pursuant to G.S. 7B‑910.1, the young adult in foster care and the director of the department of social services are parties."

SECTION 12C.9.(i)  The Department of Health and Human Services, Division of Social Services (Division), shall develop a plan for the expansion of foster care services for individuals who have attained the age of 18 years and opt to continue receiving foster care services until reaching 21 years of age. The Division shall report on the plan to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by October 1, 2015. The Division shall report on the plan as implemented to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1, 2016.

SECTION 12C.9.(j)  No later than 60 days after the Department implements the plan for the expansion of foster care services as required under subsection (i) of this section, the Division shall submit a State plan amendment to the U.S. Department of Health and Human Services Administration for Children and Families to make federal payments for foster care and adoption assistance, as applicable, under Title IV‑E, available to a person meeting the requirements of G.S. 108A‑48(c), as enacted in subsection (a) of this section.

SECTION 12C.9.(k)  Any agreement entered into pursuant to G.S. 108A‑48(b) prior to the effective date of subsection (a) of this section shall remain in full force and effect, and no provision of this section shall be construed to affect or alter such an agreement.

SECTION 12C.9.(l)  Subsection (a) of this section becomes effective August 1, 2016, and applies to agreements entered into on or after that date. Subsections (i), (j), and (k) of this section are effective when they become law. The remainder of this section becomes effective August 1, 2016.

 

Require Transfer of Certain Services to Eastern Band of Cherokee Indians

SECTION 12C.10.(a)  G.S. 108A‑25 reads as rewritten:

"§ 108A‑25.  Creation of programs; assumption by federally recognized tribe of programs.

(e)        When any federally recognized Native American tribe within the State assumes responsibility for any social services, Medicaid and NC Health Choice healthcare benefit programs, and ancillary services, including Medicaid administrative and service functions, that are otherwise the responsibility of a county under State law, then, notwithstanding any other provision of law, the county shall be relieved of the legal responsibility related to the tribe's assumption of those services. With respect to a tribe's assumption of any responsibilities for administration of any aspects of the NC Medicaid program, NC Health Choice, and the Supplemental Nutrition Assistance Program (SNAP), the State and the tribe shall execute an agreement to set forth the general terms, definitions, and conditions by which the parties shall operate. Upon the execution of the agreement, to allow the tribe to assume certain duties and responsibilities for the administration of the NC Medicaid program, NC Health Choice, and SNAP, the agreement between the State and the tribe shall require the tribe to accept the oversight authority of the State and the Department of Health and Human Services (Department) in the administration and supervision of these programs. In addition to the other necessary terms and conditions, the agreement shall include the following conditions:

(1)        All requirements as prescribed by federal law, as well as the tribe and State's responsibilities in complying with federal law, including, but not limited to, any specific provisions pertaining to accounting and auditing compliance, maintenance of liability insurance, confidentiality, reporting requirements, indemnity, waiver of immunity, or due process.

(2)        As the Department is the federally recognized single State agency for the NC Medicaid program, NC Health Choice, and SNAP, provisions stating the Department retains ultimate administrative discretion in the administration and supervision of the program, including, but not limited to, issuance and interpretation of all applicable policies, rules, and regulations regarding application processing, eligibility determinations and redeterminations, and other functions related to the eligibility process.

(3)        Provisions by the tribe to ensure that individuals who will be responsible for the tribe's duties and responsibilities under this agreement shall be employed under standards equivalent to current standards for a Merit System of Personnel Administration or any standards later prescribed by the Office of Personnel Management under section 208 of the Intergovernmental Personnel Act of 1970 and shall provide the Department with information for verification of this condition.

(4)        Either party may terminate the agreement without cause with at least 30 days' notice prior to the date the terminating party seeks to terminate the agreement. The Department may terminate all or part of the agreement when federal or State funding becomes unavailable for any reason.

(f)         With respect to programs federally administered by the Administration for Children and Families (ACF), the Department shall maintain oversight authority for all federal protections to individuals living on federal reservations held in trust by the United States until such time as ACF has approved the Eastern Band of Cherokee Indians to administer these programs."

SECTION 12C.10.(b)  G.S. 108A‑87(c) reads as rewritten:

"(c)       Notwithstanding subsections (a) and (b) of this section, when the Eastern Band of Cherokee Indians assumes responsibility for a program described under G.S. 108A‑25(e), the following shall occur:

(1)        Nonfederal matching funds designated to Jackson and Swain counties to serve the Eastern Band of Cherokee Indians for that program previously borne by the State shall be allocated directly to the Eastern Band of Cherokee Indians rather than to those counties.counties and shall not exceed the amount expended by the State for fiscal year 2014‑2015 for programs or services assumed by the Eastern Band of Cherokee Indians, as applicable, plus the growth rate equal to the growth in State‑funded nonfederal share for all counties.

(2)        Any portion of nonfederal matching funds borne by counties for public assistance and social services programs and related administrative costs shall be borne by the Eastern Band of Cherokee Indians."

SECTION 12C.10.(c)  Of the funds appropriated in this act from the General Fund to the Department of Health and Human Services, Division of Social Services, the sum of three hundred sixty thousand dollars ($360,000) in recurring funds for fiscal year 2015‑2016 and the sum of three million two hundred thousand dollars ($3,200,000) in nonrecurring funds for fiscal year 2015‑2016 shall be deposited in the Department's information technology budget code to be used for ongoing operation and maintenance pursuant to implementing the provisions of this section.

SECTION 12C.10.(d)  Approval for the tribe to administer the eligibility process for Medicaid and NC Health Choice is contingent upon federal approval of a state plan amendment and Medicaid waivers by the Centers for Medicare and Medicaid Services (CMS). The Department of Health and Human Services, Division of Medical Assistance, shall make any necessary amendments to its previous SPA 14‑001, including amendment of its effective date. The new effective date shall be October 1, 2016. If CMS does not approve the SPA, the counties shall continue serving individuals living on the federal lands held in trust by the United States.

SECTION 12C.10.(e)  Within 30 days of CMS approval of the amended SPA 14‑001, the Department of Health and Human Services shall submit an Advanced Planning Document Update (APDU) to CMS, the United States Department of Agriculture (USDA), and the Administration for Children and Families (ACF). If CMS, USDA, and ACF do not approve the APDU, the counties shall continue serving individuals living on the federal lands held in trust by the United States.

SECTION 12C.10.(f)  Upon CMS, USDA, and ACF approval of the APDU, the Department of Health and Human Services (Department) shall begin functional and detailed design, development, testing, and training of NC FAST, NCTracks, and legacy systems to allow the Eastern Band of Cherokee Indians to assume certain administrative duties consistent with approval given by federal funding partners and any agreements between the Eastern Band of Cherokee Indians and the Department.

SECTION 12C.10.(g)  If federal law allows the Eastern Band of Cherokee Indians to assume responsibility for the NC Medicaid program, NC Health Choice, or SNAP, the Eastern Band of Cherokee Indians shall be allowed to assume responsibility for those programs if they choose to assume such responsibility.

 

Child Protective Services Pilot Project

SECTION 12C.11.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of three hundred thousand dollars ($300,000) shall be used for the continuation of the Child Protective Services Pilot Project established by Section 12C.1(e) of S.L. 2014‑100. The Division shall continue to collaborate with the Government Data Analytics Center (GDAC) and shall utilize the funds to support and enhance the Pilot by doing the following:

(1)        Developing a dashboard linking the family to the child.

(2)        Integrating additional Department of Health and Human Services and other State department data sources to build a more comprehensive view of the child and family, including (i) matching the child to the caretaker; (ii) linking child, family, and address information; and (iii) integrating Criminal Justice Law Enforcement Automated Data Services (CJLEADS) data to determine if the caretaker or someone living in the house is a sex offender or has a criminal history.

(3)        Developing a comprehensive profile of a child that includes demographic and caretaker information and indicators or flags of other services, including, but not limited to, prior assessments of the child, eligibility for food and nutrition programs, Medicaid, and subsidized child care.

SECTION 12C.11.(b)  The Division of Social Services shall interface the work product from the Child Protective Services Pilot Program with the statewide child welfare case management system operated by the Department of Health and Human Services by utilizing resources and subject matter expertise available through existing public‑private partnerships within the GDAC for the purposes of analyzing risk and improving outcomes for children. The Division of Social Services shall submit its findings and recommendations in a final report on the Child Protective Services Pilot Program to the Joint Legislative Oversight Committee on Health and Human Services no later than March 1, 2016.

 

Foster Care Family Act

SECTION 12C.12.(a)  This section shall be known and may be cited as the "Foster Care Family Act."

SECTION 12C.12.(b)  Part 1 of Article 1A of Chapter 131D of the General Statutes is amended by adding a new section to read:

"§ 131D‑10.2A.  Reasonable and prudent parenting standard.

(a)        The reasonable and prudent parenting standard is characterized by careful and sensible parental decisions that maintain a child's health, safety, and best interests while encouraging the child's emotional and developmental growth.

(b)        Every child care institution shall designate an on‑site official who is authorized to apply the reasonable and prudent parenting standard pursuant to this section.

(c)        A caregiver, including the child's foster parent, whether the child is in a family foster home or a therapeutic foster home, the designated official at a child care institution where the child is placed, or the county department of social services, must use the reasonable and prudent parenting standard when determining whether to allow a child in foster care to participate in extracurricular, enrichment, and social activities.

(d)        A caregiver, including the child's foster parent, whether the child is in a family foster home or a therapeutic foster home, the designated official at a child care institution where the child is placed, the county department of social services, or the Department of Health and Human Services with custody of or placement authority over a child in foster care shall not be held liable for an act or omission of the child if the caregiver or county department of social services is acting in accordance with the reasonable and prudent parenting standard under this section.

(e)        Unless otherwise ordered by a court with jurisdiction pursuant to G.S. 7B‑200, a caregiver, including the child's foster parent, whether the child is in a family foster home or a therapeutic foster home, exercising the reasonable and prudent parenting standard has the authority to provide or withhold permission, without prior approval of the court or a county department of social services, allowing a child in foster care, in the custody of a county department of social services, or under the placement authority of a county department of social services through a voluntary placement agreement, to participate in normal childhood activities. Normal childhood activities shall include, but are not limited to, extracurricular, enrichment, and social activities and may include overnight activities outside the direct supervision of the caregiver for periods of over 24 hours and up to 72 hours.

(f)         The caregiver, including the child's foster parent, whether the child is in a family foster home or a therapeutic foster home, the designated official at a child care institution where the child is placed, the county department of social services, or the Department of Health and Human Services, shall not be liable for injuries to the child that occur as a result of the reasonable and prudent parenting standard. The burden of proof with respect to a breach of the reasonable and prudent parenting standard shall be by clear and convincing evidence.

(g)        The caregiver, including the child's foster parent, whether the child is in a family foster home or a therapeutic foster home, the designated official at a child care institution where the child is placed, the county department of social services, or the Department of Health and Human Services, shall be liable for any action or inaction of gross negligence, willful and wanton conduct, or intentional wrongdoing that results in the injury to the child."

SECTION 12C.12.(c)  G.S. 7B‑505(b) reads as rewritten:

"(b)      The court shall order the Department to make diligent efforts to notify relatives and any custodial parents of the juvenile's siblings that the juvenile is in nonsecure custody and of any hearings scheduled to occur pursuant to G.S. 7B‑506, unless the court finds such notification would be contrary to the best interests of the juvenile. In placing a juvenile in nonsecure custody under this section, the court shall first consider whether a relative of the juvenile is willing and able to provide proper care and supervision of the juvenile in a safe home. If the court finds that the relative is willing and able to provide proper care and supervision in a safe home, then the court shall order placement of the juvenile with the relative unless the court finds that placement with the relative would be contrary to the best interests of the juvenile."

SECTION 12C.12.(d)  G.S. 7B‑800.1(a)(4) reads as rewritten:

"(a)       Prior to the adjudicatory hearing, the court shall consider the following:

(4)        Whether relatives or parents with custody of a sibling of the juvenile have been identified and notified as potential resources for placement or support."

SECTION 12C.12.(e)  G.S. 7B‑901 reads as rewritten:

"§ 7B‑901.  Dispositional hearing.

The dispositional hearing shall take place immediately following the adjudicatory hearing and shall be concluded within 30 days of the conclusion of the adjudicatory hearing. The dispositional hearing may be informal and the court may consider written reports or other evidence concerning the needs of the juvenile. The juvenile and the juvenile's parent, guardian, or custodian shall have the right to present evidence, and they may advise the court concerning the disposition they believe to be in the best interests of the juvenile. The court may consider any evidence, including hearsay evidence as defined in G.S. 8C‑1, Rule 801, including testimony or evidence from any person who is not a party, that the court finds to be relevant, reliable, and necessary to determine the needs of the juvenile and the most appropriate disposition. The court may exclude the public from the hearing unless the juvenile moves that the hearing be open, which motion shall be granted.

At the dispositional hearing, the court shall inquire as to the identity and location of any missing parent and whether paternity is at issue. The court shall include findings of the efforts undertaken to locate the missing parent and to serve that parent and efforts undertaken to establish paternity when paternity is an issue. The order may provide for specific efforts in determining the identity and location of any missing parent and specific efforts in establishing paternity. The court shall also inquire about efforts made to identify and notify relatives relatives or parents with custody of a sibling of the juvenile, as potential resources for placement or support."

SECTION 12C.12.(f)  Article 9 of Chapter 7B of the General Statutes is amended by adding the following new sections to read:

"§ 7B‑903.1.  Juvenile placed in custody of a county department of social services.

(a)        To the extent authorized by federal law, a county department of social services with custody of a juvenile is authorized to make decisions about matters not addressed in this section that are generally made by a juvenile's custodian including, but not limited to, educational decisions and consenting to the sharing of the juvenile's information. The county department of social services may delegate any part of this authority to the juvenile's parent, foster parent, or another individual.

(b)        When a juvenile is in the custody or placement responsibility of a county department of social services, the placement provider may, in accordance with G.S. 131D‑10.2A, provide or withhold permission, without prior approval of the court or county department of social services, allowing a juvenile to participate in normal childhood activities. If such authorization is not in the juvenile's best interest, the court shall set forth alternative parameters for approving normal childhood activities.

"§ 7B‑912.  Juveniles 14 years of age and older; Another Planned Permanent Living Arrangement.

(a)        In addition to the permanency planning requirements under G.S. 7B‑906.1, at every permanency planning hearing for a juvenile in the custody of a county department of social services who has attained the age of 14 years, the court shall inquire and make written findings regarding each of the following:

(1)        The services provided to assist the juvenile in making a transition to adulthood.

(2)        The steps the county department of social services is taking to ensure that the foster family or other licensed placement provider follows the reasonable and prudent parenting standard as provided in G.S. 131D‑10.2A.

(3)        Whether the juvenile has regular opportunities to engage in age‑appropriate or developmentally appropriate activities.

(b)        At or before the last scheduled permanency planning hearing, but at least 90 days before a juvenile attains 18 years of age, the court shall (i) inquire as to whether the juvenile has a copy of the juvenile's birth certificate, Social Security card, health insurance information, drivers license or other identification card, and any educational or medical records the juvenile requests and (ii) determine the person or entity that should assist the juvenile in obtaining these documents before the juvenile attains the age of 18 years.

(c)        If the court finds each of the following conditions applies, the court shall approve Another Planned Permanent Living Arrangement (APPLA) as the juvenile's primary permanent plan:

(1)        The juvenile is 16 or 17 years old.

(2)        The county department of social services has made diligent efforts to place the juvenile permanently with a parent or relative or in a guardianship or adoptive placement.

(3)        Compelling reasons exist that it is not in the best interest of the juvenile to be placed permanently with a parent or relative or in a guardianship or adoptive placement.

(4)        APPLA is the best permanency plan for the juvenile.

(d)        If the court approves APPLA as the juvenile's permanent plan, the court shall, after questioning the juvenile, make written findings addressing the juvenile's desired permanency outcome."

SECTION 12C.12.(g)  Article 36 of Chapter 58 of the General Statutes is amended by adding a new section to read:

"§ 58‑36‑44.  Development of policy form or endorsement for personal liability insurance for foster parents.

(a)        The Rate Bureau shall develop an optional policy form or endorsement to be filed with the Commissioner for approval no later than May 1, 2016, that provides liability insurance for foster parents licensed under Article 1A of Chapter 131D of the General Statutes to provide foster care in a family foster home or therapeutic foster home. The policy form or endorsement shall provide coverage for acts or omissions of the foster parent while the parent is acting in his or her capacity as a foster parent in a licensed family foster home or therapeutic foster home licensed under Article 1A of Chapter 131D of the General Statutes.

(b)        Nothing in this section is intended to require that the liability insurance policy or endorsement required by this section cover an act or omission that results from any action or inaction of gross negligence, willful and wanton conduct, or intentional wrongdoing that results in injury to the child."

SECTION 12C.12.(h)  Article 1 of Chapter 48A of the General Statutes is amended by adding a new section to read:

"§ 48A‑4.  Certain minors competent to contract.

A minor who is 16 years of age or older and who is in the legal custody of the county department of social services shall be qualified and competent to contract for the purchase of an automobile insurance policy with the consent of the court with continuing jurisdiction over the minor's placement under G.S. 7B‑1000(b). The minor shall be responsible for paying the costs of the insurance premiums and shall be liable for damages caused by the minor's negligent operation of a motor vehicle. No State or local government agency, foster parent, or entity providing services to the minor under contract or at the direction of a State or local government agency shall be responsible for paying any insurance premiums or liable for damages of any kind as a result of the operation of a motor vehicle by the minor."

SECTION 12C.12.(i)  G.S. 20‑11(i) reads as rewritten:

"(i)        Application. — An application for a permit or license authorized by this section must be signed by both the applicant and another person. That person must be:

(1)        The applicant's parent or guardian;

(2)        A person approved by the applicant's parent or guardian; or

(3)        A person approved by the Division.

(4)        With respect to minors in the legal custody of the county department of social services, any of the following:

a.         A guardian ad litem or attorney advocate appointed to advocate for the minor.

b.         The director or his or her designee or other type of caseworker assigned to work with the minor.

c.         If no person listed in sub‑subdivision a. or b. of this subdivision is available, the court with continuing jurisdiction over the minor's placement under G.S. 7B‑1000(b)."

SECTION 12C.12.(j)  G.S. 20‑309 is amended by adding a new subsection to read:

"(a2)     Notwithstanding any other provision of this Chapter, an owner's policy of liability insurance issued to a foster parent or parents, which policy includes an endorsement excluding coverage for one or more foster children residing in the foster parent's or parents' household, may be certified as proof of financial responsibility, provided that each foster child for whom coverage is excluded is insured in an amount equal to or greater than the minimum limits required by G.S. 20‑279.21 under some other owner's policy of liability insurance or a named nonowner's policy of liability insurance. The North Carolina Rate Bureau shall establish, with the approval of the Commissioner of Insurance, a named driver exclusion endorsement or endorsements for foster children as described herein."

SECTION 12C.12.(k)  G.S. 20‑279.21(b) reads as rewritten:

"(b)      Such Except as provided in G.S. 20‑309(a2), such owner's policy of liability insurance:

…."

SECTION 12C.12.(l)  The Department of Health and Human Services, Division of Medical Assistance, shall design and draft, but not submit, a 1915(c) Medicaid waiver to serve children with Serious Emotional Disturbance (SED) in home and community‑based settings. The Department may submit drafts of the waiver to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waiver for CMS approval until authorized by the General Assembly.

SECTION 12C.12.(m)  The Department shall report, on the draft waiver required by subsection (l) of this section, other findings and any other options or recommendations to best serve children with SED to the Joint Legislative Oversight Committee on Health and Human Services by December 1, 2015. Specifically, the report shall provide an in‑depth analysis of the cost per slot, including an analysis of the estimated number of waiver recipients who would be transitioned from a facility to a home and community‑based setting and the estimated number of waiver recipients who would avoid placement in a facility.

SECTION 12C.12.(n)  Subsections (b) through (f) and (h) through (k) of this section become effective October 1, 2015. The remainder of this section is effective when this act becomes law.

 

SUBPART XII‑D. DIVISION OF AGING AND ADULT SERVICES

 

STATE‑COUNTY SPECIAL ASSISTANCE RATES

SECTION 12D.1.(a)  For each year of the 2015‑2017 fiscal biennium, the maximum monthly rate for residents in adult care home facilities shall be one thousand one hundred eighty‑two dollars ($1,182) per month per resident.

SECTION 12D.1.(b)  For each year of the 2015‑2017 fiscal biennium, the maximum monthly rate for residents in Alzheimer's/Dementia special care units shall be one thousand five hundred fifteen dollars ($1,515) per month per resident.

 

SUBPART XII‑E. DIVISION OF PUBLIC HEALTH

 

FUNDS FOR SCHOOL NURSES

SECTION 12E.1.(a)  Funds appropriated in this act for the School Nurse Funding Initiative shall be used to supplement and not supplant other State, local, or federal funds appropriated or allocated for this purpose. Communities shall maintain their current level of effort and funding for school nurses. These funds shall not be used to fund nurses for State agencies. These funds shall be distributed to local health departments according to a formula that includes all of the following:

(1)        School nurse‑to‑student ratio.

(2)        Percentage of students eligible for free or reduced‑price meals.

(3)        Percentage of children in poverty.

(4)        Per capita income.

(5)        Eligibility as a low‑wealth county.

(6)        Mortality rates for children between one and 19 years of age.

(7)        Percentage of students with chronic illnesses.

(8)        Percentage of county population consisting of minority persons.

SECTION 12E.1.(b)  The Division of Public Health shall ensure that school nurses funded with State funds (i) do not assist in any instructional or administrative duties associated with a school's curriculum and (ii) perform all of the following with respect to school health programs:

(1)        Serve as the coordinator of the health services program and provide nursing care.

(2)        Provide health education to students, staff, and parents.

(3)        Identify health and safety concerns in the school environment and promote a nurturing school environment.

(4)        Support healthy food services programs.

(5)        Promote healthy physical education, sports policies, and practices.

(6)        Provide health counseling, assess mental health needs, provide interventions, and refer students to appropriate school staff or community agencies.

(7)        Promote community involvement in assuring a healthy school and serve as school liaison to a health advisory committee.

(8)        Provide health education and counseling and promote healthy activities and a healthy environment for school staff.

(9)        Be available to assist the county health department during a public health emergency.

 

AIDS DRUG ASSISTANCE PROGRAM (ADAP)

SECTION 12E.2.  The Department of Health and Human Services shall work with the Department of Public Safety (DPS) to use DPS funds to purchase pharmaceuticals for the treatment of individuals in the custody of DPS who have been diagnosed with Human Immunodeficiency Virus or Acquired Immune Deficiency Syndrome (HIV/AIDS) in a manner that allows these funds to be accounted for as State matching funds in the Department of Health and Human Services drawdown of federal Ryan White funds earmarked for the AIDS Drug Assistance Program (ADAP).

 

APPOINTMENT, MANDATORY TRAINING, AND REVOCATION OF APPOINTMENT OF COUNTY MEDICAL EXAMINERS

SECTION 12E.4.(a)  G.S. 130A‑382 reads as rewritten:

"§ 130A‑382.  County medical examiners; appointment; term of office; vacancies.vacancies; training requirements; revocation for cause.

(a)        The Chief Medical Examiner shall appoint one two or more county medical examiners for each county for a three‑year term. In appointing medical examiners for each county, the Chief Medical Examiner shall give preference to physicians licensed to practice medicine in this State but may also appoint licensed physician assistants, nurse practitioners, nurses, coroners, or emergency medical technician paramedics. A medical examiner may serve more than one county. The Chief Medical Examiner may take jurisdiction in any case or appoint another medical examiner to do so.

(b)        County medical examiners shall complete annual continuing education training as directed by the Office of the Chief Medical Examiner and based upon established and published guidelines for conducting death investigations. The continuing education training shall include training regarding sudden unexplained death in epilepsy. The Office of the Chief Medical Examiner shall annually update and publish these guidelines on its Internet Web site. Newly appointed county medical examiners shall complete mandatory orientation training as directed by the Office of the Chief Medical Examiner within 90 days of their appointment.

(c)        The Chief Medical Examiner may revoke a county medical examiner's appointment for failure to adequately perform the duties of the office after providing the county medical examiner with written notice of the basis for the revocation and an opportunity to respond."

SECTION 12E.4.(b)  This section becomes effective January 1, 2016.

 

INCREASE IN NORTH CAROLINA MEDICAL EXAMINER AUTOPSY FEE

SECTION 12E.5.(a)  G.S. 130A‑389(a) reads as rewritten:

"(a)       If, in the opinion of the medical examiner investigating the case or of the Chief Medical Examiner, it is advisable and in the public interest that an autopsy or other study be made; or, if an autopsy or other study is requested by the district attorney of the county or by any superior court judge, an autopsy or other study shall be made by the Chief Medical Examiner or by a competent pathologist designated by the Chief Medical Examiner. A complete autopsy report of findings and interpretations, prepared on forms designated for the purpose, shall be submitted promptly to the Chief Medical Examiner. Subject to the limitations of G.S. 130A‑389.1 relating to photographs and video or audio recordings of an autopsy, a copy of the report shall be furnished to any person upon request. A fee for the autopsy or other study shall be paid by the State. However, if the deceased is a resident of the county in which the death or fatal injury occurred, that county shall pay the fee. The fee shall be one thousand two hundred fifty dollars ($1,250).two thousand eight hundred dollars ($2,800)."

SECTION 12E.5.(b)  Subsection (a) of this section applies to fees imposed for autopsies performed on or after July 1, 2015.

SECTION 12E.5.(c)  Funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, Office of the Chief Medical Examiner, shall not be used to provide a supplement to counties to offset any portion of the autopsy fee authorized in G.S. 130A‑389(a), as amended by subsection (a) of this section.

 

INCREASE IN NORTH CAROLINA MEDICAL EXAMINER FEE

SECTION 12E.6.(a)  G.S. 130A‑387 reads as rewritten:

"§ 130A‑387.  Fees.

For each investigation and prompt filing of the required report, the medical examiner shall receive a fee paid by the State. However, if the deceased is a resident of the county in which the death or fatal injury occurred, that county shall pay the fee. The fee shall be one hundred dollars ($100.00).two hundred fifty dollars ($250.00)."

SECTION 12E.6.(b)  Subsection (a) of this section becomes effective July 1, 2015, and applies to fees imposed for investigations and reports filed on or after that date.

 

INCREASE IN transportation RATE FOR DEATH INVESTIGATIONS AND AUTOPSIES

SECTION 12E.7.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, Office of the Chief Medical Examiner, the sum of four hundred thousand dollars ($400,000) for the 2015‑2016 fiscal year and the sum of four hundred thousand dollars ($400,000) for the 2016‑2017 fiscal year shall be used to increase the current base contract rate paid by the Department to transport bodies for death investigations or autopsies to one hundred ninety dollars ($190.00) for the first 40 miles and then one dollar ($1.00) per mile after the first 40 miles.

 

transfer OF functions OF office of MINORITY HEALTH

SECTION 12E.8.  The Office of Minority Health of the Department of Health and Human Services is hereby eliminated. The Department of Health and Human Services, Division of Central Management, shall assume responsibility for establishing and administering a competitive grants process in accordance with Section 12A.8(d) of this act for evidence‑based programs that are scientifically proven to eliminate or reduce health disparities among minority populations in this State.

 

transfer of FUNCTIONS OF PHYSICAL ACTIVITY AND NUTRITION PROGRAM to division of central management and support

SECTION 12E.9.  The Physical Activity and Nutrition Program within the Department of Health and Human Services, Division of Public Health, Chronic Disease and Injury Section, is hereby eliminated. The Department of Health and Human Services, Central Management and Support Division, shall assume responsibility for establishing and administering a competitive grants process in accordance with Section 12A.8(c) of this act for evidence‑based programs that are scientifically proven to improve physical health and nutrition across the State.

 

RENAMING AND TRANSFER OF OFFICE OF RURAL HEALTH AND COMMUNITY CARE TO DIVISION OF PUBLIC HEALTH

SECTION 12E.10.(a)  The Office of Rural Health and Community Care is hereby transferred from the Department of Health and Human Services, Division of Central Management and Support, to the Department of Health and Human Services, Division of Public Health, by a Type I transfer, as defined in G.S. 143A‑6, and renamed the Rural Health Section.

SECTION 12E.10.(b)  Consistent with subsection (a) of this section, the Revisor of Statutes may conform names and titles changed by this section, and may correct statutory references as required by this section, throughout the General Statutes. In making the changes authorized by this section, the Revisor may also adjust subject and verb agreement and the placement of conjunctions.

 

SUBPART XII‑F. DIVISION OF MH/DD/SAS AND STATE OPERATED HEALTHCARE FACILITIES

 

FUNDS FOR LOCAL INPATIENT PSYCHIATRIC BEDS OR BED DAYS

SECTION 12F.1.(a)  Use of Funds. – Of the funds appropriated in Section 2.1 of this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities and Substance Abuse Services, for crisis services, the sum of forty‑three million forty‑nine thousand one hundred forty‑four dollars ($43,049,144) for the 2015‑2016 fiscal year and the sum of forty‑three million forty‑nine thousand one hundred forty‑four dollars ($43,049,144) for the 2016‑2017 fiscal year shall be used to purchase additional local inpatient psychiatric beds or bed days not currently funded by or though LME/MCOs. The Department shall continue to implement a two‑tiered system of payment for purchasing these local inpatient psychiatric beds or bed days based on acuity level with an enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels, as defined by the Department. The enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels shall not exceed the lowest average cost per patient bed day among the State psychiatric hospitals. In addition, at the discretion of the Secretary of Health and Human Services, existing funds allocated to LME/MCOs for community‑based mental health, developmental disabilities, and substance abuse services may be used to purchase additional local inpatient psychiatric beds or bed days. Funds designated in this subsection for the purchase of local inpatient psychiatric beds or bed days shall not be used to supplant other funds appropriated or otherwise available to the Department for the purchase of inpatient psychiatric services through contracts with local hospitals.

SECTION 12F.1.(b)  Distribution and Management of Beds or Bed Days. – The Department shall work to ensure that any local inpatient psychiatric beds or bed days purchased in accordance with this section are utilized solely for individuals who are medically indigent, defined as uninsured persons who (i) are financially unable to obtain private insurance coverage as determined by the Department and (ii) are not eligible for government‑funded health coverage such as Medicare or Medicaid; and distributed across the State in LME/MCO catchment areas and according to need as determined by the Department. The Department shall ensure that beds or bed days for individuals with higher acuity levels are distributed across the State in LME catchment areas, including any catchment areas served by managed care organizations, and according to greatest need based on hospital bed utilization data. The Department shall enter into contracts with LME/MCOs and local hospitals for the management of these beds or bed days. The Department shall work to ensure that these contracts are awarded equitably around all regions of the State. LME/MCOs shall manage and control these local inpatient psychiatric beds or bed days, including the determination of the specific local hospital or State psychiatric hospital to which an individual should be admitted pursuant to an involuntary commitment order.

SECTION 12F.1.(c)  Funds to Be Held in Statewide Reserve. – Funds appropriated to the Department for the purchase of local inpatient psychiatric beds or bed days shall not be allocated to LME/MCOs but shall be held in a statewide reserve at the Division of Mental Health, Developmental Disabilities and Substance Abuse Services, to pay for services authorized by the LME/MCOs and billed by the hospitals through the LME/MCOs. LME/MCOs shall remit claims for payment to the Department within 15 working days after receipt of a clean claim from the hospital and shall pay the hospital within 30 working days after receipt of payment from the Department.

SECTION 12F.1.(d)  Ineffective LME/MCO Management of Beds or Bed Days. – If the Department determines that (i) an LME/MCO is not effectively managing the beds or bed days for which it has responsibility, as evidenced by beds or bed days in the local hospital not being utilized while demand for services at the State psychiatric hospitals has not reduced, or (ii) the LME/MCO has failed to comply with the prompt payment provisions of subsection (c) of this section, the Department may contract with another LME/MCO to manage the beds or bed days or, notwithstanding any other provision of law to the contrary, may pay the hospital directly.

SECTION 12F.1.(e)  Reporting by LME/MCOs. – The Department shall establish reporting requirements for LME/MCOs regarding the utilization of these beds or bed days.

SECTION 12F.1.(f)  Reporting by Department. – By no later than December 1, 2016, and by no later than December 1, 2017, the Department shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on all of the following:

(1)        A uniform system for beds or bed days purchased during the preceding fiscal year from (i) funds appropriated in this act that are designated for this purpose in subsection (a) of this section, (ii) existing State appropriations, and (iii) local funds.

(2)        Other Department initiatives funded by State appropriations to reduce State psychiatric hospital use.

 

SINGLE STREAM FUNDING FOR MH/DD/SAS COMMUNITY SERVICES

SECTION 12F.2.(a)  For the purpose of mitigating cash flow problems that many LME/MCOs experience at the beginning of each fiscal year relative to single stream funding, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (Division), shall distribute not less than one‑twelfth of each LME/MCO's continuation allocation at the beginning of the fiscal year and subtract the amount of that distribution from the LME/MCO's total reimbursements for the fiscal year.

SECTION 12F.2.(b)  The Division is directed to reduce its allocation for single stream funding by one hundred eighty‑five million six hundred four thousand six hundred fifty‑three dollars ($185,604,653) in nonrecurring funds for the 2015‑2016 fiscal year and by one hundred eighty‑five million six hundred four thousand six hundred fifty‑three dollars ($185,604,653) for the 2016‑2017 fiscal year. The Division is directed to allocate this reduction among the LME/MCOs based on the percentage of the total single stream funding allocated to each LME/MCO for the 2014‑2015 fiscal year. During each year of the 2015‑2017 fiscal biennium, each LME/MCO shall use its cash reserves to provide at least the same level of services paid for by single stream funding during the 2014‑2015 fiscal year.

 

FUNDS FOR THE NORTH CAROLINA CHILD TREATMENT PROGRAM

SECTION 12F.3.(a)  Recurring funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2015‑2017 fiscal biennium for the North Carolina Child Treatment Program (NC CTP) shall be used for the following purposes:

(1)        To continue to provide clinical training and coaching to licensed clinicians on an array of evidence‑based treatments and to provide a statewide platform to assure accountability and outcomes.

(2)        To maintain and manage a public roster of program graduates, linking high‑quality clinicians with children, families, and professionals.

(3)        To partner with State, LME/MCO, and private sector leadership to bring effective mental health treatment to children in juvenile justice and mental health facilities.

SECTION 12F.3.(b)  All data, including any entered or stored in the State‑funded secure database developed for the NC CTP to track individual‑level and aggregate‑level data with interface capability to work with existing networks within State agencies, is and remains the sole property of the State.

 

TRAUMATIC BRAIN INJURY FUNDING

SECTION 12F.6.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2015‑2016 fiscal year, the sum of two million three hundred seventy‑three thousand eighty‑six dollars ($2,373,086) shall be used exclusively to support traumatic brain injury (TBI) services as follows:

(1)        The sum of three hundred fifty‑nine thousand two hundred eighteen dollars ($359,218) shall be used to fund contracts with the Brain Injury Association of North Carolina, Carolinas Rehabilitation, or other appropriate service providers.

(2)        The sum of seven hundred ninety‑six thousand nine hundred thirty‑four dollars ($796,934) shall be used to support residential programs across the State that are specifically designed to serve individuals with TBI.

(3)        The sum of one million two hundred sixteen thousand nine hundred thirty‑four dollars ($1,216,934) shall be used to support requests submitted by individual consumers for assistance with residential support services, home modifications, transportation, and other requests deemed necessary by the consumer's local management entity and primary care physician.

 

CREATION OF SEPARATE DOROTHEA DIX HOSPITAL PROPERTY FUND WITHIN THE MENTAL HEALTH TRUST FUND

SECTION 12F.6A.(a)  G.S. 143C‑9‑2 is amended by adding a new subsection to read:

"(b1)    The Dorothea Dix Hospital Property Fund is established as a separate fund within the Trust Fund. The fund is established to receive the net proceeds from the sale of the Dorothea Dix Hospital property. Moneys in the Dorothea Dix Hospital Property Fund shall be allocated or expended only upon an act of appropriation by the General Assembly and shall not be subject to the limitations of the moneys in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs as described in subsection (b) of this section."

SECTION 12F.6A.(b)  Notwithstanding G.S. 146‑30 or any other provision of law, the net proceeds of the sale of the Dorothea Dix Hospital property shall be deposited into the Dorothea Dix Hospital Property Fund established in G.S. 143C‑9‑2(b1), as enacted by subsection (a) of this section.

 

JOINT STUDY OF JUSTICE AND PUBLIC SAFETY AND BEHAVIORAL HEALTH

SECTION 12F.10.  The Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Oversight Committee on Justice and Public Safety shall each appoint a subcommittee to study the intersection of Justice and Public Safety and behavioral health and report their findings and recommendations to their respective Committees. The subcommittees shall meet jointly to study and report on the following issues:

(1)        The impact of the Justice Reinvestment Act on the State's behavioral health system, including the following:

a.         The impact of the Justice Reinvestment Act on the demand for community‑based behavioral health services available through local management entities/managed care organizations (LME/MCOs).

b.         The change in the number of criminal offenders referred to the Treatment Accountability for Safer Communities (TASC) program since 2010 and other demands on the TASC program that have arisen since that time.

c.         The sources and amounts of funding available to serve this population, as well as any other support or resources that are provided by the Department of Public Safety to the Department of Health and Human Services or the LME/MCOs.

d.         An analysis of the supply and demand for behavioral health providers who serve this population.

(2)        The impact of mental illness and substance abuse on county law enforcement agencies, including the following:

a.         The number of people with mental illness and substance abuse issues held in county jails.

b.         The impact on local law enforcement agencies, particularly with respect to their budgets and personnel.

(3)        The impact of judicial decisions on the State's behavioral health and social services system, including the following:

a.         The role and impact of family court decisions on the demand for and delivery of county social services.

b.         The role and impact of decisions by drug treatment courts, veterans' mental health courts, and driving while impaired courts.

c.         The impact of judicial decisions on the availability of beds in State‑operated psychiatric facilities as a result of involuntary commitment orders and incapacity to proceed decisions.

(4)        Any other relevant issues the subcommittees jointly deem appropriate.

 

LME/MCO USE OF FUNDS TO PURCHASE INPATIENT ALCOHOL AND SUBSTANCE ABUSE TREATMENT SERVICES

SECTION 12F.12.(a)  It is the intent of the General Assembly to terminate all direct State appropriations for State‑operated alcohol and drug abuse treatment centers (ADATCs) beginning with the 2015‑2016 fiscal year and instead appropriate funds to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities and Substance Abuse Services, for community services in order to allow local management entities/managed care organizations (LME/MCOs) to assume responsibility for managing the full array of publicly funded substance abuse services, including inpatient services delivered through the ADATCs. To this end and notwithstanding any other provision of law, on the effective date of this section all direct State appropriations for ADATCs are terminated and the ADATCs shall be one hundred percent receipt‑supported.

SECTION 12F.12.(b)  From funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities and Substance Abuse Services, to be allocated to LME/MCOs for the purchase of inpatient alcohol and substance abuse treatment services, the LME/MCOs shall use their respective fund allocations for individuals within their respective catchment areas as follows:

(1)        During the 2015‑2016 fiscal year, a minimum of one hundred percent (100%) of the allocation shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs.

(2)        During the 2016‑2017 fiscal year, a minimum of ninety percent (90%) of the allocation shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs. The LME/MCOs shall use the remaining ten percent (10%) of their respective allocations to purchase inpatient alcohol and substance abuse treatment services from any qualified provider.

SECTION 12F.12.(c)  By March 1, 2016, the Department of Health and Human Services shall develop and report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division a plan to allow the ADATCs to remain one hundred percent (100%) receipt‑supported. The report shall include an evaluation of (i) other community‑based and residential services that could be provided by the ADATCs and (ii) potential funding sources other than payments from the LME/MCOs, including funding available from estimated receipts from Medicare, Medicaid, insurance, and self‑pay.

 

CLOSURE OF WRIGHT SCHOOL

SECTION 12F.13.(a)  The Department of Health and Human Services shall not allow any new admissions or readmissions to the Wright School after June 30, 2015. The Department shall, in consultation with local management entities/managed care organizations, develop a plan to transition all students enrolled at the Wright School to other appropriate educational and treatment settings.

SECTION 12F.13.(b)  By September 30, 2015, the Department shall permanently cease operations at the Wright School.

SECTION 12F.13.(c)  G.S. 122C‑181(a)(5)b. is repealed effective October 1, 2015.

 

REPORT ON MULTIPLICATIVE AUDITING AND MONITORING OF CERTAIN SERVICE PROVIDERS

SECTION 12F.14.  No later than December 1, 2015, the Department of Health and Human Services shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the status of multiplicative auditing and monitoring of all provider agencies under the Division of Mental Health, Developmental Disabilities and Substance Abuse Services, that have been nationally accredited through a recognized national accrediting body. The report shall include (i) all group home facilities licensed under Chapter 122C of the General Statutes, (ii) a complete list of all auditing and monitoring activities to which these service providers are subject, and (iii) recommendations on the removal of all unnecessary regulatory duplication to enhance efficiency.

 

FUNDS FOR DRUG OVERDOSE MEDICATIONS

SECTION 12F.15.  Funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities and Substance Abuse Services, for the 2015‑2016 fiscal year for the purchase of opioid antagonists as defined in G.S. 90‑106.2, shall be used as follows:

(1)        Twenty‑five thousand dollars ($25,000) shall be used to purchase opioid antagonists to be distributed at no charge to the North Carolina Harm Reduction Coalition to serve individuals at risk of experiencing an opioid‑related drug overdose or to the friends and family members of an at‑risk individual.

(2)        Twenty‑five thousand dollars ($25,000) shall be used to purchase opioid antagonists to be distributed at no charge to North Carolina law enforcement agencies.

 

STRENGTHENING OF CONTROLLED SUBSTANCES MONITORING

 

STATEWIDE OPIOID PRESCRIBING GUIDELINES

SECTION 12F.16.(a)  By July 1, 2016, the following State health officials and health care provider licensing boards shall adopt the North Carolina Medical Board's Policy for the Use of Opiates for the Treatment of Pain:

(1)        The Director of the Division of Public Health of the Department of Health and Human Services (DHHS).

(2)        The Director of the Division of Medical Assistance, DHHS.

(3)        The Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, DHHS.

(4)        The directors of medical, dental, and mental health services within the Department of Public Safety.

(5)        North Carolina State Board of Dental Examiners.

(6)        North Carolina Board of Nursing.

(7)        North Carolina Board of Podiatry Examiners.

 

CONTINUING EDUCATION REQUIREMENTS

SECTION 12F.16.(b)  The following health care provider occupational licensing boards shall require continuing education on the abuse of controlled substances as a condition of license renewal for health care providers who prescribe controlled substances:

(1)        North Carolina Board of Dental Examiners.

(2)        North Carolina Board of Nursing.

(3)        North Carolina Board of Podiatry Examiners.

(4)        North Carolina Medical Board.

SECTION 12F.16.(c)  In establishing the continuing education standards, the boards listed in subsection (b) of this section shall require that at least one hour of the total required continuing education hours consists of a course designed specifically to address prescribing practices. The course shall include, but not be limited to, instruction on controlled substance prescribing practices and controlled substance prescribing for chronic pain management.

 

IMPROVE CONTROLLED SUBSTANCES REPORTING SYSTEM ACCESS AND UTILIZATION

SECTION 12F.16.(d)  G.S. 90‑113.74 reads as rewritten:

"§ 90‑113.74.  Confidentiality.

(a)        Prescription information submitted to the Department is privileged and confidential, is not a public record pursuant to G.S. 132‑1, is not subject to subpoena or discovery or any other use in civil proceedings, and except as otherwise provided below may only be used (i) for investigative or evidentiary purposes related to violations of State or federal law and law, (ii) for regulatory activities. activities, or (iii) to inform medical records or clinical care. Except as otherwise provided by this section, prescription information shall not be disclosed or disseminated to any person or entity by any person or entity authorized to review prescription information.

(c)        The Department shall release data in the controlled substances reporting system to the following persons only:

(8)        Any county medical examiner appointed by the Chief Medical Examiner pursuant to G.S. 130A‑382 and the Chief Medical Examiner, for the purpose of investigating the death of an individual.

(9)        The federal Drug Enforcement Administration's Office of Diversion Control.

(10)      The North Carolina Health Information Exchange Authority (NC HIE Authority), established under Article 29A of this Chapter, through Web‑service calls.

…."

SECTION 12F.16.(e)  The Department of Health and Human Services shall adopt appropriate policies and procedures documenting and supporting the additional functionality and expanded access added by subsection (d) of this section for the Controlled Substances Reporting System (CSRS) for the entities added to G.S. 90‑113.74(c) by subsection (d) of this section and shall amend its contract with the vendor that operates the CSRS to support the additional functionality and expanded access to the CSRS.

 

IMPROVE CONTROLLED SUBSTANCES REPORTING SYSTEM CONTRACT

SECTION 12F.16.(f)  The Department of Health and Human Services (DHHS) shall modify the contract for the Controlled Substances Reporting System (CSRS) to improve performance, establish user access controls, establish data security protocols, and ensure availability of data for advanced analytics. Specifically, the contract shall be modified to include the following:

(1)        A connection to the North Carolina Health Information Exchange Authority (NC HIE Authority).

(2)        The establishment of interstate connectivity.

(3)        Data security protocols that meet or exceed the Federal Information Processing Standards (FIPS) established by the National Institute of Standards and Technology (NIST).

SECTION 12F.16.(g)  DHHS shall complete the contract modifications required by subsection (f) of this section by December 31, 2015. DHHS shall report by November 15, 2015, to the Joint Legislative Program Evaluation Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services regarding the progress to modify the contract.

SECTION 12F.16.(h)  DHHS shall apply for grant funding from the National Association of Boards of Pharmacy to establish the connection to PMP InterConnect. The Department shall request forty thousand thirty‑five dollars ($40,035) to establish the initial interface for PMP InterConnect and thirty thousand dollars ($30,000) for two years of ongoing service, maintenance, and support for PMP InterConnect in order to create interstate connectivity for the drug monitoring program as required by subdivision (2) of subsection (f) of this section.

SECTION 12F.16.(i)  Funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the CSRS shall be used as follows:

(1)        For the 2015‑2016 fiscal year, the sum of forty thousand thirty‑five dollars ($40,035) shall be used to connect the CSRS and the NC HIE Authority, as required by subdivision (1) of subsection (f) of this section.

(2)        For the 2015‑2016 fiscal year and for the 2016‑2017 fiscal year, the sum of fifteen thousand dollars ($15,000) shall be used to maintain a connection between the CSRS and the NC HIE Authority, as required by subdivision (1) of subsection (f) of this section.

(3)        For the 2015‑2016 fiscal year, the sum of forty thousand thirty‑five dollars ($40,035) shall be used to establish the initial interface for PMP InterConnect, as required by subdivision (2) of subsection (f) of this section. This amount shall be adjusted or eliminated if DHHS is successful in obtaining grant awards or identifying other allowable receipts for this purpose. If receipts are used for this purpose, this nonrecurring appropriation shall revert to the General Fund.

(4)        For the 2015‑2016 fiscal year, the sum of fifteen thousand dollars ($15,000) shall be used for the cost of annual service fees for the interstate connection for the drug monitoring program, as required by subdivision (2) of subsection (f) of this section. This amount shall be adjusted or eliminated if DHHS is successful in obtaining grant awards or identifying other allowable receipts for this purpose. If receipts are used for this purpose, this nonrecurring appropriation shall revert to the General Fund.

 

EXPAND MONITORING CAPACITY

SECTION 12F.16.(j)  The North Carolina Controlled Substances Reporting System shall expand its monitoring capacity by establishing data use agreements with the Prescription Behavior Surveillance System. In order to participate, the CSRS shall establish a data use agreement with the Center of Excellence at Brandeis University no later than January 1, 2016.

SECTION 12F.16.(k)  Beginning September 1, 2016, and every two years thereafter, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services of the Department of Health and Human Services shall report on its participation with the Prescription Behavior Surveillance System to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Oversight Committee on Justice and Public Safety.

 

MEDICAID LOCK‑IN PROGRAM

SECTION 12F.16.(l)  The Division of Medical Assistance of the Department of Health and Human Services (DMA) shall take the following steps to improve the effectiveness and efficiency of the Medicaid lock‑in program:

(1)        Establish written procedures for the operation of the lock‑in program, including specifying the responsibilities of DMA and the program contractor.

(2)        Establish procedures for the sharing of bulk data with the Controlled Substances Regulatory Branch.

(3)        In consultation with the Physicians Advisory Group, extend lock‑in duration to two years and revise program eligibility criteria to align the program with the statewide strategic goals for preventing prescription drug abuse. DMA shall report an estimate of the cost‑savings from the revisions to the eligibility criteria to the Joint Legislative Program Evaluation Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services within one year of the lock‑in program again becoming operational.

(4)        Develop a Web site and communication materials to inform lock‑in enrollees, prescribers, pharmacists, and emergency room health care providers about the program.

(5)        Increase program capacity to ensure that all individuals who meet program criteria are locked in.

(6)        Conduct an audit of the lock‑in program within six months after the effective date of this act in order to evaluate the effectiveness of program restrictions in preventing overutilization of controlled substances, identify any program vulnerabilities, and address whether there is evidence of any fraud or abuse within the program.

DMA shall report to the Joint Legislative Program Evaluation Oversight Committee by September 30, 2015, on its progress toward implementing all items included in this section.

 

STATEWIDE STRATEGIC PLAN

SECTION 12F.16.(m)  There is hereby created the Prescription Drug Abuse Advisory Committee, to be housed in and staffed by the Department of Health and Human Services (DHHS). The Committee shall develop and, through its members, implement a statewide strategic plan to combat the problem of prescription drug abuse. The Committee shall include representatives from the following, as well as any other persons designated by the Secretary of Health and Human Services:

(1)        The Division of Medical Assistance, DHHS.

(2)        The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, DHHS.

(3)        The Division of Public Health, DHHS.

(4)        The Rural Health Section of the Division of Public Health, DHHS.

(5)        The State Bureau of Investigation.

(6)        The Attorney General's Office.

(7)        The following health care regulatory boards with oversight of prescribers and dispensers of prescription drugs:

a.         North Carolina Board of Dental Examiners.

b.         North Carolina Board of Nursing.

c.         North Carolina Board of Podiatry Examiners.

d.         North Carolina Medical Board.

e.         North Carolina Board of Pharmacy.

(8)        The UNC Injury Prevention Research Center.

(9)        The substance abuse treatment community.

(10)      Governor's Institute on Substance Abuse, Inc.

(11)      The Department of Insurance's drug take‑back program.

After developing the strategic plan, the Committee shall be the State's steering committee to monitor achievement of strategic objectives and receive regular reports on progress made toward reducing prescription drug abuse in North Carolina.

(b)        In developing the statewide strategic plan to combat the problem of prescription drug abuse, the Prescription Drug Abuse Advisory Committee shall, at a minimum, complete the following steps:

(1)        Identify a mission and vision for North Carolina's system to reduce and prevent prescription drug abuse.

(2)        Scan the internal and external environment for the system's strengths, weaknesses, opportunities, and challenges (a SWOC analysis).

(3)        Compare threats and opportunities to the system's ability to meet challenges and seize opportunities (a GAP analysis).

(4)        Identify strategic issues based on SWOC and GAP analyses.

(5)        Formulate strategies and resources for addressing these issues.

(c)        The strategic plan for reducing prescription drug abuse shall include three to five strategic goals that are outcome‑oriented and measureable. Each goal must be connected with objectives supported by the following five mechanisms of the system:

(1)        Oversight and regulation of prescribers and dispensers by State health care regulatory boards.

(2)        Operation of the Controlled Substances Reporting System.

(3)        Operation of the Medicaid lock‑in program to review behavior of patients with high use of prescribed controlled substances.

(4)        Enforcement of State laws for the misuse and diversion of controlled substances.

(5)        Any other appropriate mechanism identified by the Committee.

(d)        DHHS, in consultation with the Prescription Drug Abuse Advisory Committee, shall develop and implement a formalized performance management system that connects the goals and objectives identified in the statewide strategic plan to operations of the Controlled Substances Reporting System and Medicaid lock‑in program, law enforcement activities, and oversight of prescribers and dispensers. The performance management system must be designed to monitor progress toward achieving goals and objectives and must recommend actions to be taken when performance falls short.

(e)        Beginning on December 1, 2016, and annually thereafter, DHHS shall submit an annual report on the performance of North Carolina's system for monitoring prescription drug abuse to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Oversight Committee on Justice and Public Safety.

 

EFFECTIVE DATE

SECTION 12F.16.(n)  Subdivision (f)(1) of this section becomes effective upon the establishment of the North Carolina Health Information Exchange Authority pursuant to Section 12A.5 of this act. The remainder of this section is effective when it becomes law.

 

Eliminate Publication/Access North Carolina Travel Guide

SECTION 12F.17.  G.S. 168‑2 is repealed.

 

BROUGHTON HOSPITAL FACILITIES STUDY

SECTION 12F.18.  Of the funds appropriated in this act for the 2015‑2016 fiscal year for technology infrastructure, furniture, and equipment for the Broughton Hospital replacement facility, the sum of two hundred thousand dollars ($200,000) shall be used to conduct the study of potential uses for vacated Broughton Hospital facilities authorized in S.L. 2014‑100.

 

SUBPART XII‑G. DIVISION OF HEALTH SERVICE REGULATION

 

MORATORIUM ON SPECIAL CARE UNIT LICENSES

SECTION 12G.2.(a)  Section 12G.1(a) of S.L. 2013‑360, as amended by Section 12G.5 of S.L. 2014‑100, reads as rewritten:

"SECTION 12G.1.(a)  For the period beginning July 31, 2013, and ending June 30, 2016,June 30, 2017, the Department of Health and Human Services, Division of Health Service Regulation (Department), shall not issue any licenses for special care units as defined in G.S. 131D‑4.6 and G.S. 131E‑114. This prohibition shall not restrict the Department from doing any of the following:

(1)        Issuing a license to a facility that is acquiring an existing special care unit.

(2)        Issuing a license for a special care unit in any area of the State upon a determination by the Secretary of the Department of Health and Human Services that increased access to this type of care is necessary in that area during the moratorium imposed by this section.

(3)        Processing all completed applications for special care unit licenses received by the Division of Health Service Regulation along with the applicable license fee prior to June 1, 2013.

(4)        Issuing a license to a facility that was in possession of a certificate of need as of July 31, 2013, that included authorization to operate special care unit beds."

SECTION 12G.2.(a1)  The Department shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services by March 1, 2016, containing at least the following information:

(1)        The number of licensed special care units in the State.

(2)        The capacity of the currently licensed special care units to serve people in need of their services.

(3)        The anticipated growth in the number of people who will need the services of a licensed special care unit.

(4)        The number of applications received from special care units seeking licensure as permitted by this section, and the number of those applications that were not approved.

SECTION 12G.2.(b)  This section is effective when this act becomes law.

 

PHASED CERTIFICATE OF NEED REPEAL

SECTION 12G.5.(a)  It is the intent of the General Assembly to repeal the certificate of need laws set forth in Article 9 of Chapter 131E of the General Statutes in three phases as set forth in subsections (b) and (c) of this section.

SECTION 12G.5.(b)  Phase 1. – Effective January 1, 2016, the certificate of need laws will not apply to the following health service facilities and activities:

(1)        The establishment of beds or a change in bed capacity at any of the following health service facilities:

a.         Acute care hospitals.

b.         Inpatient psychiatric hospitals.

c.         Inpatient rehabilitation hospitals.

d.         Kidney disease treatment centers.

e.         ICFMRs.

f.          Chemical dependency treatment facilities.

(2)        The offering of any of the following services:

a.         Bone marrow transplantation.

b.         Burn intensive care services.

c.         Open heart surgery services.

d.         Solid organ transplantation.

(3)        The acquisition of any of the following equipment:

a.         Gamma knife equipment.

b.         Heart‑lung bypass machine.

c.         Lithotripter.

(4)        The construction, development, establishment, increase in the number, or relocation of an operating room or gastrointestinal endoscopy room in a licensed health service facility.

SECTION 12G.5.(c)  Phase 2. – Effective August 1, 2017, the certificate of need laws will not apply to the establishment of beds or a change in bed capacity at any of the following health service facilities:

(1)        Diagnostic centers.

(2)        Ambulatory surgical facilities.

SECTION 12G.5.(d)  Phase 3. – Effective January 1, 2019, the certificate of need laws will not apply to the following health service facilities and activities:

(1)        Nursing homes.

(2)        Hospice programs.

(3)        Hospice inpatient facilities.

(4)        Hospice residential care facilities.

(5)        Long‑term care hospitals.

(6)        The offering of cardiac catheterization services.

(7)        The acquisition of any of the following equipment:

a.         Cardiac catheterization equipment.

b.         Linear accelerator.

c.         Magnetic resonance imaging scanner.

d.         Positron emission tomography scanner.

e.         Simulator.

 

REPEAL CERTIFICATE OF PUBLIC ADVANTAGE LAWS

SECTION 12G.6.(a)  Article 1E of Chapter 90 and Article 9A of Chapter 131E of the General Statutes are repealed.

SECTION 12G.6.(b)  All existing certificates of public advantage (COPAs) granted pursuant to Article 1E of Chapter 90 and Article 9A of Chapter 131E of the General Statutes, as defined in these Articles, are cancelled effective January 1, 2016. By delaying the effective date of the cancellation of COPAs to January 1, 2016, it is the intent of the General Assembly to provide parties to existing cooperative agreements, as defined in G.S. 90‑21.25 and G.S. 131E‑192.2, with sufficient time to review their cooperative agreements for compliance with State and federal laws and to take whatever action the parties deem necessary.

SECTION 12G.6.(c)  This section is effective when it becomes law.

 

SUBPART XII‑H. DIVISION OF MEDICAL ASSISTANCE (MEDICAID)

 

MEDICAID ELIGIBILITY

SECTION 12H.2.(a)  Families and children who are categorically and medically needy are eligible for Medicaid, subject to the following annual income levels:

                                                         Categorically                        Medically

                            Family                       Needy                                 Needy

                              Size                    Income Level                     Income Level

                                1                          $ 5,208                                $ 2,904

                                2                             6,828                                   3,804

                                3                             8,004                                   4,404

                                4                             8,928                                   4,800

                                5                             9,888                                   5,196

                                6                           10,812                                   5,604

                                7                           11,700                                   6,000

                                8                           12,432                                   6,300

The Department of Health and Human Services shall provide Medicaid coverage to 19‑ and 20‑year‑olds under this subsection in accordance with federal rules and regulations. Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.

SECTION 12H.2.(b)  For the following Medicaid eligibility classifications for which the federal poverty guidelines are used as income limits for eligibility determinations, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines. The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to the following:

(1)        All elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines.

(2)        Pregnant women with incomes equal to or less than one hundred ninety‑six percent (196%) of the federal poverty guidelines and without regard to resources. 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.

(3)        Infants under the age of one with family incomes equal to or less than two hundred ten percent (210%) of the federal poverty guidelines and without regard to resources.

(4)        Children aged one through five with family incomes equal to or less than two hundred ten percent (210%) of the federal poverty guidelines and without regard to resources.

(5)        Children aged six through 18 with family incomes equal to or less than one hundred thirty‑three percent (133%) of the federal poverty guidelines and without regard to resources.

(6)        Workers with disabilities described in G.S. 108A‑66A with unearned income equal to or less than one hundred fifty percent (150%) of the federal poverty guidelines.

The Department of Health and Human Services, Division of Medical Assistance, shall also provide family planning services to men and women of childbearing age with family incomes equal to or less than one hundred ninety‑five percent (195%) of the federal poverty guidelines and without regard to resources.

SECTION 12H.2.(c)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to adoptive children with special or rehabilitative needs, regardless of the adoptive family's income.

SECTION 12H.2.(d)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to "independent foster care adolescents," ages 18, 19, and 20, as defined in section 1905(w)(1) of the Social Security Act (42 U.S.C. § 1396d(w)(1)), without regard to the adolescent's assets, resources, or income levels.

SECTION 12H.2.(e)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to women who need treatment for breast or cervical cancer and who are defined in 42 U.S.C. § 1396a(a)(10)(A)(ii)(XVIII).

SECTION 12H.2.(f)  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 between the ages of 6 through 18;

b.         Be ineligible for Medicaid, Medicare, or other federal government‑sponsored health insurance;

c.         Be uninsured;

d.         Be in a family whose family income is above one hundred thirty‑three percent (133%) through and less than or equal to two hundred eleven percent (200%)(211%) 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.

...

(b)        Benefits. – All health benefits changes of the Program shall meet the coverage requirements set forth in this subsection. 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 North Carolina Medicaid Program except for the following:

(1)        No services for long‑term care.

(2)        No nonemergency medical transportation.

(3)        No EPSDT.

(4)        Dental services shall be provided on a restricted basis in accordance with criteria adopted by the Department to implement this subsection.

In addition to the benefits provided under the North Carolina Medicaid Program, the following services and supplies are covered under the Health Insurance Program for Children established under this Part:

(1),       (1a) Repealed by Session Laws 2011‑145, s. 10.41(b), effective July 1, 2011.

(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. NCHC recipients must obtain optical services, supplies, and solutions from NCHC enrolled, licensed or certified ophthalmologists, optometrists, or opticians. In accordance with G.S. 148‑134, NCHC providers must order complete eyeglasses, eyeglass lenses, and ophthalmic frames through Nash Optical Plant. Eyeglass lenses are limited to NCHC‑approved 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 NCHC‑approved frames made of zylonite, metal, or a combination of zylonite and metal. All visual aids covered by this subsection require prior approval. Requests for medically necessary complete eyeglasses, eyeglass lenses, and ophthalmic frames outside of the NCHC‑approved selection require prior approval. Requests for medically necessary fabrication of complete eyeglasses or eyeglass lenses outside of Nash Optical Plant require prior approval. Upon prior approval refractions may be covered more often than once every 12 months.

(3)        Under the North Carolina Health Choice Program for Children, the co‑payment for nonemergency visits to the emergency room for children whose family income is at or below less than or equal to one hundred fiftyfifty‑nine percent (150%)(159%) of the federal poverty level is ten dollars ($10.00). The co‑payment for children whose family income is between above one hundred fifty‑one fifty‑nine percent (151%)(159%) and less than or equal to two hundred eleven percent (200%)(211%) of the federal poverty level is twenty‑five dollars ($25.00).

...

(c)        Annual Enrollment Fee. – There shall be no enrollment fee for Program coverage for enrollees whose family income is at or belowless than or equal to one hundred fifty fifty‑nine percent (150%)(159%) of the federal poverty level. The enrollment fee for Program coverage for enrollees whose family income is above one hundred fifty fifty‑nine percent (150%)(159%) throughand less than or equal to two hundred eleven percent (200%)(211%) 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 belowless than or equal to one hundred fiftyfifty‑nine percent (150%)(159%) of the federal poverty level, except that fees for outpatient prescription drugs are applicable and shall be one dollar ($1.00) for each outpatient generic prescription drug, for each outpatient brand‑name prescription drug for which there is no generic substitution available, and for each covered over‑the‑counter medication. 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 fifty‑nine percent (150%)(159%) 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 one dollar ($1.00) fee for each outpatient generic prescription drug, for each outpatient brand‑name prescription drug for which there is no generic substitution available, and for each covered over‑the‑counter medication. 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 Department.

…"

 

LME/MCO OUT‑OF‑NETWORK AGREEMENTS

SECTION 12H.3.(a)  The Department of Health and Human Services (Department) shall ensure that local management entities/managed care organizations (LME/MCOs) utilize an out‑of‑network agreement that contains standardized elements developed in consultation with LME/MCOs. The out‑of‑network agreement shall be a streamlined agreement between a single provider of behavioral health or intellectual/developmental disability (IDD) services and an LME/MCO to ensure access to care in accordance with 42 C.F.R. 438.206(b)(4), reduce administrative burden on the provider, and comply with all requirements of State and federal laws and regulations. Beginning July 1, 2015, LME/MCOs shall use the out‑of‑network agreement in lieu of a comprehensive provider contract when all of the following conditions are met:

(1)        The services requested are medically necessary and cannot be provided by an in‑network provider.

(2)        The behavioral health or IDD provider's site of service delivery is located outside of the geographical catchment area of the LME/MCO, and the LME/MCO is not accepting applications or the provider does not wish to apply for membership in the LME/MCO closed network.

(3)        The behavioral health or IDD provider is not excluded from participation in the Medicaid program, the NC Health Choice program or other State or federal health care program.

(4)        The behavioral health or IDD provider is serving no more than two enrollees of the LME/MCO, unless the agreement is for inpatient hospitalization, in which case the LME/MCO may, but shall not be required to, enter into more than five such out‑of‑network agreements with a single hospital or health system in any 12‑month period.

SECTION 12H.3.(b)  Medicaid providers providing services pursuant to an out‑of‑network agreement shall be considered a network provider for purposes of Chapter 108D of the General Statutes only as it relates to enrollee grievances and appeals.

 

PROVIDER APPLICATION AND RECREDENTIALING FEE

SECTION 12H.4.  The Department of Health and Human Services, Division of Medical Assistance, shall charge an application fee of one hundred dollars ($100.00), and the amount federally required, to each provider enrolling in the Medicaid Program for the first time. The fee shall be charged to all providers at recredentialing every three years.

 

REIMBURSEMENT FOR IMMUNIZING PHARMACIST SERVICES

SECTION 12H.5.(a)  Effective January 1, 2016, the Department of Health and Human Services, Division of Medical Assistance (Department), shall provide Medicaid and NC Health Choice reimbursement for the administration of covered vaccinations or immunizations provided by immunizing pharmacists in accordance with G.S. 90‑85.15B.

SECTION 12H.5.(b)  In order to implement the requirements of subsection (a) of this section, the Department shall enroll immunizing pharmacists as providers.

SECTION 12H.5.(c)  The Department shall submit any State plan amendments necessary to accomplish the requirements of this section.

 

TRAUMATIC BRAIN INJURY MEDICAID WAIVER

SECTION 12H.6.(a)  The Department of Health and Human Services, Division of Medical Assistance and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (Department), shall submit to the Centers for Medicare and Medicaid Services a request for approval of the 1915(c) waiver for individuals with traumatic brain injury (TBI) that the Department designed pursuant to Section 12H.6 of S.L. 2014‑100, which the Joint Legislative Oversight Committee on Health and Human Services recommended as part of its December 2014 report to the General Assembly, and which is further described in the Department's February 1, 2015, report to the General Assembly.

SECTION 12H.6.(b)  The Department shall report to the Joint Legislative Oversight Committee on Health and Human Services on the status of the Medicaid TBI waiver request and the plan for implementation no later than December 1, 2015. The Department shall submit an updated report by March 1, 2016. Each report shall include the following:

(1)        The number of individuals who are being served under the waiver and the total number of individuals expected to be served.

(2)        The expenditures to date and a forecast of future expenditures.

(3)        Any recommendations regarding expansion of the waiver.

SECTION 12H.6.(c)  Of the funds appropriated to the Department of Health and Human Services, Division of Medical Assistance, two million dollars ($2,000,000) for fiscal year 2015‑2016 and two million dollars ($2,000,000) for fiscal year 2016‑2017 shall be used to fund the Medicaid TBI waiver.

 

STUDY MEDICAID COVERAGE FOR VISUAL AIDS

SECTION 12H.6A.  The Department of Health and Human Services, Division of Medical Assistance, in consultation with the Department of Public Safety, shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by October 1, 2015, containing an analysis of the fiscal impact to the State of reinstating Medicaid coverage for visual aids for adults utilizing a contract with the Department of Public Safety for fabrication of the eyeglasses at Nash Optical Plant Optical Laboratory. The report shall also analyze the cost of reinstating Medicaid coverage for routine eye examinations for adults in addition to the coverage for visual aids.

 

ASSESSMENTS

SECTION 12H.7.  G.S. 108A‑122(b) reads as rewritten:

"(b)      Allowable Cost. – An assessment paid under this Article may be included as allowable costs of a hospital for purposes of any applicable Medicaid reimbursement formula. formula; assessments paid under this Article shall be excluded from cost settlement. An assessment imposed under this Article may not be added as a surtax or assessment on a patient's bill."

 

LME/MCO Transfer of Funds to Risk Reserve

SECTION 12H.8.(a)  After the local management entities/managed care organizations (LME/MCOs) have allocated funds to cover the reduction in single stream funding required by Section 12F.2 of this act, the Department of Health and Human Services, Division of Medical Assistance, shall require LME/MCOs to transfer funds from their operating cash reserves to their contractually‑required risk reserve account in an amount sufficient so that the funds in the risk reserve account equal fifteen percent (15%) of annual premiums. The Department shall not require LME/MCOs to transfer from their operating cash reserves the amount needed to make up the difference between the current month's claims payments and the capitation payment received for the month. 

SECTION 12H.8.(b)  The Department shall discontinue paying the two percent (2%) added to the administrative payment of an LME/MCO when the amount in the LME/MCO's risk reserve account reaches fifteen percent (15%) of annual premiums.

SECTION 12H.8.(c)  The Department shall work with LME/MCOs to consolidate their multiple existing reserve accounts so that each LME/MCO has only one reserve account.

 

ADMINISTRATIVE HEARINGS FUNDING

SECTION 12H.9.  Of the funds appropriated to the Department of Health and Human Services, Division of Medical Assistance, for administrative contracts and interagency transfers, the Department of Health and Human Services (Department) shall transfer the sum of one million dollars ($1,000,000) for the 2015‑2016 fiscal year and the sum of one million dollars ($1,000,000) for the 2016‑2017 fiscal year to the Office of Administrative Hearings (OAH). These funds shall be allocated by the OAH for mediation services provided for Medicaid applicant and recipient appeals and to contract for other services necessary to conduct the appeals process. OAH shall continue the Memorandum of Agreement (MOA) with the Department for mediation services provided for Medicaid recipient appeals and contracted services necessary to conduct the appeals process. The MOA will facilitate the Department's ability to draw down federal Medicaid funds to support this administrative function. Upon receipt of invoices from OAH for covered services rendered in accordance with the MOA, the Department shall transfer the federal share of Medicaid funds drawn down for this purpose.

 

ACCOUNTING FOR MEDICAID RECEIVABLES AS NONTAX REVENUE

SECTION 12H.10.(a)  Receivables reserved at the end of the 2015‑2016 and 2016‑2017 fiscal years shall, when received, be accounted for as nontax revenue for each of those fiscal years.

SECTION 12H.10.(b)  For the 2015‑2016 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred thirty‑nine million dollars ($139,000,000) with the Department of State Treasurer to be accounted for as nontax revenue. For the 2016‑2017 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred thirty‑nine million dollars ($139,000,000) with the Department of State Treasurer to be accounted for as nontax revenue. These deposits shall represent the return of General Fund appropriations, nonfederal revenue, fund balances, or other resources from State‑owned and State‑operated hospitals which are used to provide indigent and nonindigent care services. The return from State‑owned and State‑operated hospitals to DHHS will be made from nonfederal resources in an amount equal to the amount of the payments from the Division of Medical Assistance for uncompensated care. The treatment of any revenue derived from federal programs shall be in accordance with the requirements specified in the Code of Federal Regulations, Title 2, Part 225.

 

MEDICAID SPECIAL FUND TRANSFER

SECTION 12H.11.  Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143C‑9‑1, there is appropriated from the Medicaid Special Fund to the Department of Health and Human Services the sum of forty‑three million dollars ($43,000,000) for the 2015‑2016 fiscal year and the sum of forty‑three million dollars ($43,000,000) for the 2016‑2017 fiscal year. These funds shall be allocated as prescribed by G.S. 143C‑9‑1(b) for Medicaid programs. Notwithstanding the prescription in G.S. 143C‑9‑1(b) that these funds not reduce State general revenue funding, these funds shall replace the reduction in general revenue funding effected in this act.

 

MISCELLANEOUS MEDICAID PROVISIONS

SECTION 12H.12.(a)  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 12H.12.(b)  Cost Containment Programs. – The Department of Health and Human Services, Division of Medical Assistance, may undertake cost containment programs, including contracting for services, preadmissions to hospitals, and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.

SECTION 12H.12.(c)  Medicaid Identification Cards. – The Department shall issue Medicaid identification cards to recipients on an annual basis with updates as needed.

 

MISCELLANEOUS HEALTH CHOICE PROVISIONS

SECTION 12H.14.(a)  G.S. 108A‑70.18(4a) is repealed.

SECTION 12H.14.(b)  G.S. 108A‑70.20 reads as rewritten:

"§ 108A‑70.20.  Program established.

The Health Insurance Program for Children is established. The Program shall be known as North Carolina Health Choice for Children, and it shall be administered by the Department of Health and Human Services in accordance with this Part and as required under Title XXI and related federal rules and regulations. Administration of Program benefits and claims processing shall be as provided under Part 5 of Article 3 of Chapter 135 of the General Statutes.described in 42 C.F.R. § 447.45(d)(1)."

SECTION 12H.14.(c)  Subsections (g) and (h) of G.S. 108A‑70.21 are repealed.

SECTION 12H.14.(d)  G.S. 108A‑70.21(i) reads as rewritten:

"(i)        No Lifetime Maximum Benefit Limit. – Benefits provided to an enrollee in the Program shall not be subject to a maximum lifetime limit.may be subject to lifetime maximum limits set forth in Medicaid and NC Health Choice medical coverage policies adopted pursuant to G.S. 108A‑54.2."

SECTION 12H.14.(e)  G.S. 108A‑70.27(c) is repealed.

 

REINSTATE COST SETTLEMENT PURSUANT TO 1993 STATE AGREEMENT

SECTION 12H.17.  Effective July 1, 2015, the cost settlement for outpatient Medicaid services performed by Vidant Medical Center, which was previously known as Pitt County Memorial Hospital, shall be at one hundred percent (100%) of allowable costs.

 

Covered Services and Payment for Services

SECTION 12H.18.  Except as otherwise specifically provided in this act or another act passed during the 2015 Regular Session, the authorized State plan services, co‑pays, reimbursement rates, and fees shall remain the same as those authorized as of June 30, 2015.

 

Drug Reimbursement Using Average Acquisition Cost

SECTION 12H.19.(a)  The Department of Health and Human Services, Division of Medical Assistance, (Department) shall adopt an average acquisition cost methodology for brand and generic drug ingredient pricing to be effective beginning on January 1, 2016. The drug ingredient pricing methodology shall be consistent with new federal requirements or, if the new federal requirements have not yet been finalized by July 1, 2015, consistent with the most recent draft federal requirements. In adopting a new drug ingredient pricing methodology, the Department shall also do all of the following:

(1)        Raise the average dispensing fee to a weighted average amount that does not exceed twelve dollars ($12.00).

(2)        Set actual dispensing fees that maintain a higher dispensing fee for preferred and generic drugs and a lower dispensing fee for brand and nonpreferred drugs.

(3)        Ensure that ingredient prices are updated at least monthly.

SECTION 12H.19.(b)  In addition to the requirements in subsection (a) of this section, the Department may also set tiered dispensing fees that establish a higher dispensing fee for providers who dispense a lower volume of prescriptions and a lower dispensing fee for providers who dispense a higher volume of prescriptions, as long as the weighted average amount of all the tiered dispensing fees does not exceed twelve dollars ($12.00).

SECTION 12H.19.(c)  In order to implement this section, the Department shall either amend the State plan amendment request submitted to the Centers for Medicare and Medicaid Services (CMS) pursuant to Section 12H.8 of S.L. 2014‑100 so that it conforms with the requirements of this section or shall withdraw that State plan amendment and submit a new State plan amendment request to CMS that conforms with the requirements of this section, in accordance with the procedures set forth in G.S. 108A‑54.1A.

 

Medicaid Dental Service Cost Settlement

SECTION 12H.20.  The Department of Health and Human Services, Division of Medical Assistance, shall submit a State Plan Amendment request to the Centers for Medicare and Medicaid Services to assure that all State‑operated dental schools receive the same reimbursement for dental services provided to North Carolina Medicaid beneficiaries.

 

Mobile Dental Provider Enrollment

SECTION 12H.21.  For mobile dental providers seeking enrollment as a Medicaid provider, and upon reenrollment of current Medicaid mobile dental providers, the Department of Health and Human Services, Division of Medicaid Assistance, shall require as a condition of enrollment or reenrollment that the mobile dental provider show proof of a contractual affiliation with dental practice that is not mobile, and the Department shall require the mobile dental provider to use the National Provider Identifier (NPI) of the non‑mobile dental practice for purposes of filing claims.

 

Increase Rates for Private Duty Nursing

SECTION 12H.22.  Effective January 1, 2016, the Department of Health and Human Services, Division of Medical Assistance, shall increase by ten percent (10%) the rate paid for private duty nursing services provided pursuant to Clinical Coverage Policy 3G.

 

RESTRICTING GRADUATE MEDICAL PAYMENTS

SECTION 12H.23.(a)  The Department of Health and Human Services shall submit a State Plan Amendment to modify Section 4.19‑A of the Medicaid State Plan, such that, effective October 1, 2015, no Medicaid provider may receive reimbursement for Graduate Medical Education (GME) in addition to their DRG Unit Value (Base) rate under the methodology as defined in the current Medicaid State Plan.

SECTION 12H.23.(b)  This modification shall be implemented upon approval by the Centers for Medicare and Medicaid Services (CMS).

SECTION 12H.23.(c)  The Department of Health and Human Services, Division of Medical Assistance, shall be exempt from the 90‑day prior submission requirement in G.S. 108A‑54.1A in order to submit the State Plan amendment required to implement this section.

 

Medicaid Transformation and Reorganization

SECTION 12H.24.(a)  Intent and Goals. – It is the intent of the General Assembly to transform the State's current Medicaid program to a program that provides budget predictability for the taxpayers of this State while ensuring quality care to those in need. The new Medicaid program shall be designed to achieve the following goals:

(1)        Ensure budget predictability through shared risk and accountability.

(2)        Ensure balanced quality, patient satisfaction, and financial measures.

(3)        Ensure efficient and cost‑effective administrative systems and structures.

(4)        Ensure a sustainable delivery system.

SECTION 12H.24.(b)  Structure of Delivery System. – The transformed Medicaid program described in subsection (a) of this section shall be organized according to the following principles and parameters:

(1)        The Health Benefits Authority (Authority), created in subsection (h1) of this section, shall have full budget and regulatory authority to manage the State's Medicaid and NC Health Choice programs, except the General Assembly shall determine eligibility categories and income thresholds.

(2)        Among its initial tasks, the Authority shall:

a.         Determine the structural and financial qualifications required for managed care organizations (MCOs) and provider‑led entities (PLEs). The majority of the members of a PLE's governing board shall be composed of providers as defined in G.S. 108C‑2 or entities composed of providers.

b.         Designate six regions within the State. Regions must be composed of whole counties. Regions do not have to be contiguous, and it is not the intent of the General Assembly to require that every county be included in at least one of the six regions.

(3)        The Authority shall enter into contractual relationships with MCOs and PLEs for the delivery of all Medicaid health care items and services. All contracts shall be the result of a request for proposals (RFP) issued by the Authority and the submission of competitive bids by MCOs and PLEs. The governing principles and minimum terms and conditions of the RFPs, bids, and contracts are described in subsection (d) of this section.

(4)        The number and nature of the contracts required under subdivision (3) of this subsection shall be as follows:

a.         Three contracts between the Authority and any combination of individual MCOs and individual PLEs. Each of these contracts shall provide statewide coverage for all Medicaid health care items and services (statewide contracts).

b.         Up to 12 contracts between the Authority and individual PLEs for coverage of specified regions (regional contracts). Regional contracts shall be in addition to the three statewide contracts required under sub‑subdivision a. of this subdivision. Each regional contract shall provide coverage throughout the entire region for all Medicaid health care items and services. A PLE may bid on more than one region. The Authority shall have full discretion to enter into one, two, or no regional contracts in any region.

(5)        As a result of the contracts entered into by the Authority under subdivision (3) of this subsection, a recipient shall have at least three, but no more than five enrollment choices for the provision of all Medicaid health care items and services. The Authority shall provide for annual open enrollment periods and shall determine the process for assigning recipients who do not select a MCO or PLE during the enrollment period.

SECTION 12H.24.(c)  Time Line. – The following milestones for Medicaid transformation shall occur no later than the following dates:

(1)        When this act becomes law. ‑

a.         The Health Benefits Authority is created pursuant to subsection (h1) of this section and appointments to the Authority's Board shall be made pursuant to G.S. 143B‑1405.

b.         The Joint Legislative Oversight Committee on the Health Benefits Authority (LOC‑HBA) is created pursuant to subsection (l) of this section to oversee the Medicaid and NC Health Choice programs.

(2)        September 1, 2015. – The Department of Health and Human Services (Department) shall establish the Medicaid stabilization team pursuant to subsection (g) of this section.

(3)        October 1, 2015. ‑

a.         The Authority is designated as the single state agency for the administration of Medicaid and NC Health Choice.

b.         The Department and the Authority shall enter into agreements necessary for the Authority to supervise the Department's administration of the Medicaid and NC Health Choice programs.

(4)        February 1, 2016. – The Authority shall submit requests for waivers and State Plan amendments to the Centers for Medicare and Medicaid Services necessary to implement Medicaid transformation.

(5)        March 1, 2016. – The Authority shall report recommended statutory changes to the North Carolina General Statutes to the LOC‑HBA.

(6)        April 1, 2017. – The initial recipient enrollment period begins.

(7)        August 1, 2017. – Capitated full‑risk contracts begin.

SECTION 12H.24.(d)  Requests for Proposals; Bids; Terms & Conditions of Contracts. – The following shall be components of the initial RFPs, responsive bids to the initial RFPs, and the initial contracts that are required under subsection (b) of this section.

(1)        An RFP may solicit bids for a statewide contract, a regional contract, or both, and may propose variable contract durations.

(2)        RFPs must require at least all of the following:

a.         Full‑risk capitation for all Medicaid health care items and services.

b.         Coverage for all program aid categories except the dual eligible categories for which Medicaid only pays Medicare premiums.

c.         All bidders meet solvency requirements established by the Department of Insurance pursuant to subsection (k1) of this section.

d.         All bidders meet the same standards and metrics for risk, outcomes, and quality.

e.         All bidders establish appropriate networks or providers to deliver services.

f.          All bidders subcontract with existing LME/MCOs for behavioral health services for up to three years at a capitation rate that is no less than the most recently negotiated rate for the then current scope of benefits paid to LME/MCOs.

g.         All bidders agree not to limit providers' ability to contract with other MCOs and PLEs.

h.         All bidders must connect to the Health Information Exchange Network or any successor information technology entity or architecture specified by the Authority in order to ensure effective systems and connectivity to support clinical coordination of care, exchange of information, and the availability of data to the Authority to manage the Medicaid and NC Health Choice program for the State.

i.          All bidders ensure that their contracts with providers include value‑based payment systems that support the achievement of overall performance, quality, and outcome measures.

(3)        All bids must respond to the requirements of subdivision (2) of this subsection and must also include at least all of the following:

a.         For statewide contracts, a description of how the MCO or PLE will ensure access to appropriate care throughout the State.

b.         For regional contracts, a description of how the PLE will ensure access to appropriate care throughout the region.

c.         Proposed competitive medical loss ratios.

d.         Proposed full‑risk capitated rates based on Centers for Medicare and Medicaid Services (CMS) actuarial soundness and industry standards as well as risk adjusted rate ranges using claims data from fiscal year 2014‑2015. Actuarial calculations must include utilization assumptions consistent with industry and local standards.

e.         Methods to ensure program integrity against provider fraud, waste, and abuse at all levels.

(4)        In addition to the requirements of subdivisions (1) through (3) of this subsection, each contract must provide for all of the following:

a.         Negotiated full‑risk capitated rates, including a portion that is at risk for achievement of quality and outcome measures.

b.         Negotiated competitive medical loss ratios.

c.         Compliance by the MCO or PLE with all CMS requirements for the Medicaid and NC Health Choice programs.

d.         Defined measures and goals for risk adjusted health outcomes, quality of care, patient satisfaction, and cost. Each component must be measured and monitored continually and reported at set intervals as determined by the Authority. Each component shall be subject to specific accountability measures, including penalties. The Authority may use organizations such as National Committee for Quality Assurance (NCQA), Physician Consortium for Performance Improvement (PCPI), Healthcare Effectiveness Data and Information Set (HEDIS), or any others necessary to develop effective measures for outcomes and quality.

e.         Acceptance of full responsibility by the MCO or PLE for all grievance and appeals.

f.          Ability of the MCO or PLE to exclude providers from networks based on economic or quality standards.

g.         Ability of the MCO or PLE to terminate the capitation rate required under sub‑subdivision f. of subdivision (2) of this subsection if termination of the rate is mutually agreed to by the LME/MCO.

h.         Agreement that covered benefits will not be reduced from the covered services in effect on the date the contract is awarded except in instances where the Authority reduces a covered service for all recipients and for all contracts.

SECTION 12H.24.(e)  Monthly Progress Report. – Beginning November 1, 2015, and monthly thereafter until October 1, 2018, the Health Benefits Authority shall report to the LOC‑HBA and the Fiscal Research Division on the State's progress toward completing Medicaid transformation. The March 1, 2016, report shall contain proposed changes to the North Carolina General Statutes that are necessary to implement Medicaid transformation.

SECTION 12H.24.(f)  Maintain Funding Mechanisms. – In developing the waivers and State Plan amendments necessary to implement this section, the Authority shall work with the Centers for Medicare & Medicaid Services (CMS) to attempt to preserve existing levels of funding generated from Medicaid‑specific funding streams, such as assessments, to the extent that the levels of funding may be preserved. If such Medicaid‑specific funding cannot be maintained as currently implemented, then the Authority shall advise the LOC‑HBA created in subsection (h1) of this section of any modifications necessary to maintain as much revenue as possible within the context of Medicaid transformation. If such Medicaid‑specific funding streams cannot be preserved through the transformation process or if revenue would decrease, it is the intent of the General Assembly to modify such funding streams so that any supplemental payments to providers are more closely aligned to improving health outcomes and achieving overall Medicaid goals.

SECTION 12H.24.(g)  DHHS Role in Medicaid Transformation. – During Medicaid transformation, the Department of Health and Human Services, Division of Medical Assistance (Division), shall cooperate with the Authority to ensure a smooth transition of the Medicaid and NC Health Choice programs and shall perform all of the following functions:

(1)        The Department and the Authority shall enter into agreements necessary for the Authority to supervise the Department's administration of the Medicaid and NC Health Choice programs until the transformed Medicaid program is completed.

(2)        The Department of Health and Human Services, Office of the Secretary, (Office of the Secretary) shall organize a Medicaid stabilization team to do the following:

a.         Maintain the Medicaid and NC Health Choice programs until Medicaid transformation has been completed.

b.         Work with the Authority during the transition.

c.         Develop strategies to successfully complete the requirements of sub‑subdivisions a. and b. of this subdivision.

d.         Make recommendations to the LOC‑HBA on any additional authorization or funding necessary to successfully complete the requirements of sub‑subdivisions a. and b. of this subdivision.

e.         With assistance from the Office of State Human Resources, conduct interviews and meetings with designated essential employees of the Division to explain the transition process, including options for the employees and the bonus payment system established under this subsection.

f.          No later than September 1, 2015, report to the LOC‑HBA on the plan to communicate to employees, as required by sub‑subdivision e. of this subdivision.

(3)        The Office of the Secretary shall identify the key managers, leaders, and decision makers to be part of the stabilization team and, no later than September 1, 2015, shall submit a list of these people and their roles to the Authority and the LOC‑HBA.

(4)        No later than September 1, 2015, the Secretary of Health and Human Services (Secretary) shall identify and designate "essential positions" throughout the Department without which the Medicaid and NC Health Choice programs could not operate on a day‑to‑day basis. Such positions designated by the Secretary may include any position, whether subject to or exempt from the State Personnel Act or whether supervisory or nonsupervisory, as long as the position is essential to the operation of Medicaid or NC Health Choice. Because the designation is based on the functions to be performed and because of the nature of the bonuses provided under this subsection, the designation of a position as essential may not be revoked, and the Secretary may designate both open and filled positions.

(5)        In order to encourage employees to remain in their positions working on Medicaid and NC Health Choice within the Department, employees serving in positions designated as essential positions under this subsection shall be eligible for the following benefits:

a.         Effective August 1, 2015, any employee working in a designated essential position within the Division shall receive a bonus at each pay period that is equal to five percent (5%) of the employee's earnings for that period.

b.         Effective August 1, 2015, any employee working in a designated essential position within the Department, but outside of the Division, whose salary is paid with federal Medicaid funds shall also receive a five percent (5%) bonus, paid in the same manner as bonuses are paid under sub‑subdivision a. of this subdivision. If such an employee working outside of the Division does not work full‑time on Medicaid issues, then the amount of the bonus shall be calculated by first multiplying the employee's earnings for that period by the percentage of the employee's time spent on Medicaid issues and then multiplying that product by five percent (5%).

c.         Any employee who received bonus payments under sub‑subdivisions a. or b. of this subdivision who is still employed within the Division or within the Department as of July 31, 2017, or who is employed within the Authority, shall receive a final bonus payment equal to the sum of all the bonus payments that the employee had received since July 1, 2015, under sub‑subdivision a. of this subdivision. No employee departing before July 31, 2017, shall be eligible to receive any portion of such a final bonus payment, and no property right is created by this subsection for employees that depart before July 31, 2017.

d.         The bonus payments paid under this subsection are made notwithstanding G.S. 126‑4(2) or any other provision of law. Notwithstanding G.S. 135‑1(7a), bonus payments paid under this subsection shall not count as "compensation" for purposes of the Retirement System for Teachers and State Employees, nor shall the Department of Health and Human Services be required to make payments to the Retirement System based on the amounts paid as bonuses. Additionally, bonus payments paid under this subsection shall not count as "compensation" or "salary" for calculating severance payments under G.S. 126‑8.5 or calculating unemployment benefits.

(6)        The Department shall not enter into any new contracts, or renew or extend any contracts that existed prior to the effective date of this subsection, related to the Medicaid or NC Health Choice programs without the express prior approval of the Board of the Authority. The Department and the Division shall ensure that any Medicaid‑related or NC Health Choice‑related State contract entered into after the effective date of this act contains a clause that allows the Department or the Division to terminate the contract without cause upon 30 days' notice. Any contract signed by the Department or the Division after the effective date of this act that lacks such a termination clause shall, nonetheless, be deemed to include such a clause and shall be cancellable without cause upon 30 days' notice.

SECTION 12H.24.(h1)  Creation of Health Benefits Authority. – Effective when this act becomes law, the Health Benefits Authority as established in this section shall be a single, unified cabinet‑level department. In accordance with the time line set out in subsection (c) of this section, the Health Benefits Authority shall administer and operate all functions, powers, duties, obligations, and services related to the Medicaid and NC Health Choice programs. In accordance with the time line set out in subsection (c) of this section, all functions, powers, duties, obligations, and services vested in the Department of Health and Human Services, Division of Medical Assistance, are vested in the Health Benefits Authority.

SECTION 12H.24.(h2)  G.S. 143B‑6 reads as rewritten:

"§ 143B‑6.  Principal departments.

In addition to the principal departments enumerated in the Executive Organization Act of 1971, all executive and administrative powers, duties, and functions not including those of the General Assembly and its agencies, the General Court of Justice and the administrative agencies created pursuant to Article IV of the Constitution of North Carolina, and higher education previously vested by law in the several State agencies, are vested in the following principal departments:

(12)      Health Benefits Authority."

SECTION 12H.24.(h3)  Chapter 143B of the General Statutes is amended by adding a new Article to read:

"Article 14.

"Health Benefits Authority.

"§ 143B‑1400.  Creation and organization.

There is hereby established the Health Benefits Authority (Authority) to administer and operate the Medicaid and NC Health Choice programs. The Authority shall be governed by a board, which shall be responsible for ensuring quality health outcomes to eligible recipients at a predictable cost to the taxpayers of this State. The Authority shall be the designated single State agency for the administration and operation of the Medicaid and NC Health Choice programs.

"§ 143B‑1405.  Board of the Health Benefits Authority.

(a)        The Board of the Health Benefits Authority shall consist of the following:

(1)        Three members appointed by the Governor.

(2)        Two members appointed by the General Assembly, on the recommendation of the President Pro Tempore of the Senate.

(3)        Two members appointed by the General Assembly, on the recommendation of the Speaker of the House of Representatives.

(4)        The Secretary of Health and Human Services or the Secretary's designee, who shall serve as an ex officio nonvoting member of the Board.

(b)        Each appointed member of the board shall have expertise from at least one of the following areas:

(1)        The administration of large health delivery systems.

(2)        Health insurance.

(3)        Health actuarial science.

(4)        Health economics.

(5)        Health law and policy.

In making appointments to the Board under this section, each appointing authority shall consult with the other appointing authorities to ensure adequate representation from all of the areas of expertise listed in this subsection.

(c)        The following individuals may not serve on the Board:

(1)        An individual who receives or has received Medicaid payments during the six months prior to serving on the Board for providing health care or services to enrollees of the North Carolina Medicaid or NC Health Choice programs.

(2)        An individual who is or has been during the six months prior to serving on the Board a registered lobbyist for a provider, or association of providers, receiving payments from the North Carolina Medicaid or NC Health Choice programs, or an employee of such a lobbyist.

(3)        An individual who has, within six months of appointment, been an officer or employee of the State.

As used in this subsection, the term "provider" includes any parent, subsidiary, or affiliated legal entity, and the term "provider" has the same meaning as defined under G.S. 108C‑2.

(d)        Board members appointed under subdivision (1) through (3) of subsection (a) of this section shall serve for a term of four years. The Governor shall have the power to remove any member of the Board from office for misfeasance, malfeasance, or nonfeasance in accordance with the provisions of G.S. 143B‑13 of the Executive Organization Act of 1973. Appointing authorities shall fill any vacancies that arise to complete the term of the vacating Board member.

(e)        In making the initial appointments, the appointing authorities shall, in order to stagger terms, designate one person appointed under subdivision (1) of subsection (a) of this section, one person appointed under subdivision (2) of subsection (a) of this section, and one person appointed under subdivision (3) of subsection (a) of this section to serve until June 30, 2017. The remaining four appointees shall serve until June 30, 2019. Future appointees shall serve terms of four years, with staggered terms based on this section. Board members may serve up to two consecutive terms, not including the abbreviated two‑year terms that establish staggered terms or terms of less than two years that result from the filling of a vacancy.

(f)         The Governor shall designate a chair of the Board from among the appointed voting members of the Board. The Board member designated as the chair shall serve as a chair at the pleasure of the Governor. The chair shall serve on the Governor's Cabinet. If the Governor does not appoint a chair, the Board may select a chair from among its voting members. The Board‑selected chair shall serve in that capacity until such time as the Governor appoints a chair.

(g)        The Board shall meet at least monthly until August 1, 2017, and at least quarterly thereafter. The Board may also meet at the call of the chair or at the request of a majority of the voting Board members. A majority of the voting Board members constitutes a quorum for conducting business.

(h)        The voting members of the Board are State officers and not State employees. No voting member may serve on the Board while employed as a State employee.

(i)         The voting members of the Board shall be compensated in an amount sufficient to obtain quality professionals with experience managing large businesses, insurance programs, and health systems. The initial compensation for voting Board members shall be established by the Office of State Human Resources no later than October 1, 2015. Thereafter, the compensation of voting Board members shall be set by the Board under G.S. 143B‑1410(3) and shall be comparable to compensation paid to the members of boards operating large health insurance plans but shall not exceed the highest compensation paid to a member of the Council of State. When adjusting members' compensation, the Board shall provide a justification to the Office of State Human Resources based upon a survey of comparable health insurance plans.

"§ 143B‑1410.  Powers and duties of the Board of the Health Benefits Authority.

(a)        The Board of the Health Benefits Authority shall have the following powers and duties:

(1)        Administer and operate the Medicaid and NC Health Choice programs. None of the powers and duties enumerated in the other subdivisions of this subsection shall be construed to limit the broad grant of authority to administer and operate the Medicaid and NC Health Choice programs.

(2)        Employ the Medicaid Director, who shall be responsible for the daily operation of the Authority, and other staff, including legal staff. In hiring staff, the Board may offer employment contracts for a term.

(3)        Set compensation for the employees, including performance‑based bonuses based on meeting budget or other targets, and for the voting Board members.

(4)        Procure office space for the Authority.

(5)        Notwithstanding G.S. 143‑64.20, enter into contracts for the administration of the Medicaid and NC Health Choice programs, as well as manage such contracts, including contracts of a consulting or advisory nature.

(6)        Employ or contract for independent internal auditing staff that report directly to the Board rather than to the Medicaid Director. Notwithstanding subsection (b) of this section, this function may not be delegated.

(7)        Pursuant to G.S. 108A‑1, supervise the county departments of social services in their administration of eligibility determinations. Pursuant to subdivision (5) of this subsection, the Board may contract with the Department of Health and Human Services or any other appropriate party to perform this task or a portion of this task.

(8)        Define and approve the following for the Authority and the programs managed by the Authority:

a.         Business policy.

b.         Strategic plans, including desired health outcomes for the covered populations, which shall do the following:

1.         Be developed at a frequency of no less than every five years with the input of stakeholders.

2.         Identify key opportunities and challenges facing the organization.

3.         Identify the Authority's strengths and weaknesses to address these opportunities and challenges.

4.         Identify key goals for the Authority for this time period, consistent with the reform goals identified by the General Assembly.

5.         Identify output and outcome performance measures to quantify the Authority's progress toward these goals.

6.         Identify strategies to reach these goals.

7.         Be used as a guide for units within the Authority to establish unit‑specific operational plans at the same frequency.

c.         Performance management system, including quantitative indicators for goals and objectives, which shall do the following:

1.         Be developed and implemented within the first year of the creation of the Authority, and updated no less than annually thereafter with available data.

2.         Establish quantitative performance measures focusing on the quality and efficiency of service delivery and administration, using a nationally recognized quality improvement effort allowing comparison of North Carolina to other states as those developed by, but not limited to, the federal Medicaid Quality Measurement Program and the Baldridge Quality Program.

3.         Establish measurable objectives for each goal identified in the strategic plan, and performance updated annually.

4.         Establish, for each objective, benchmark activities, including an estimated date of completion, the area for which efforts are attempting a change, a quantitative indicator of success for the area, and quarterly milestones allowing Authority managers and employees to monitor progress throughout the year.

5.         Establish mechanisms for obtaining data necessary for the collection and public distribution of performance information.

d.         Program and policy changes.

e.         Operational budget and assumptions.

(9)        Establish and adjust all program components, except for eligibility, of the Medicaid and NC Health Choice programs within the appropriated and allocated budget.

(10)      Adopt rules related to the Medicaid and NC Health Choice programs.

(11)      Develop midyear budget correction plans and strategies and then take midyear budget corrective actions necessary to keep the Medicaid and NC Health Choice programs within budget.

(12)      Approve or disapprove and oversee all expenditures to be charged to or allocated to the Medicaid and NC Health Choice programs by other State departments or agencies.

(13)      Develop and present to the Joint Legislative Oversight Committee on the Health Benefits Authority and the Office of State Budget and Management by January 1 of each year, beginning in 2016, the following information for the Medicaid and NC Health Choice programs:

a.         A detailed four‑year forecast of expected changes to enrollment growth and enrollment mix.

b.         What program changes will be made by the Authority in order to stay within the existing budget for the programs based on the next fiscal year's forecasted enrollment growth and enrollment mix.

c.         The cost to maintain the current level of services based on the next fiscal year's forecasted enrollment growth and enrollment mix.

(14)      Secure and pay for the services of the State Auditor's Office to conduct annual audits of the financial accounts of the Authority.

(15)      Publish the Annual Medicaid Report, which shall contain, at a minimum, the following:

a.         Details on the Authority's performance over the prior four years on the following:

1.         The identified quantitative measures from its strategic plan and performance management system.

2.         A comparison of the identified quantitative measures from its strategic plan and performance management system and other states participating in the quality improvement effort.

b.         Annual audited financial statements.

(16)      Publish in an electronic format, and update on at least a monthly basis, at least the following information about the Medicaid and NC Health Choice programs:

a.         Enrollment by program aid category by county.

b.         Per member per month spending by category of service.

c.         Spending and receipts by fund along with a detailed variance analysis.

d.         A comparison of the above figures to the amounts forecasted and budgeted for the corresponding time period.

(b)        The Board may delegate any of its powers and duties to the Medicaid Director and other staff of the Authority and, upon adoption of an annual budget, shall delegate to the Medicaid Director its powers and duties pursuant to sub‑subdivisions d. and e. of subdivision (8) of subsection (a) of this section. In delegating powers or duties, however, the Board maintains the responsibility for the performance of those powers or duties.

(c)        Pursuant to G.S. 108E‑2‑1, the General Assembly retains the authority to determine the eligibility categories and income thresholds for the Medicaid and NC Health Choice programs.

"§ 143B‑1415.  Variations from certain State laws.

Although generally subject to the laws of this State, the following exemptions, limitations, and modifications apply to the Health Benefits Authority, notwithstanding any other provision of law:

(1)        Employees of the Authority shall not be subject to the North Carolina Human Resources Act, except as provided in G.S. 126‑5(c1)(31).

(2)        The Authority may retain private legal counsel and is not subject to G.S. 114‑2.3 or G.S. 147‑17(a) through (c).

(3)        The Authority's employment contracts offered pursuant to G.S. 143B‑1410(a)(2) are not subject to review and approval by the Office of State Human Resources. The Authority's employment of supplementary staff for temporary work is not subject to review and approval by the Office of State Human Resources including the requirements of G.S. 126‑6.3.

(4)        If the Authority establishes alternative procedures for the review and approval of contracts, then the Authority is exempt from State contract review and approval requirements, but may still choose to utilize the State contract review and approval procedures for particular contracts.

(5)        The Board of the Authority may move into a closed session for any of the reasons listed in G.S. 143‑318.11, as well as for discussions on the following:

a.         Rates, contract amounts, or any other amounts to be paid to any entity, including the amount of any transfers to any other State agency or Division.

b.         Audits and investigations.

c.         Development of the annual budget forecast report for the General Assembly, as required by G.S. 143B‑1410(a)(14).

d.         Development of a strategic plan.

e.         Any report to be submitted to the General Assembly.

(6)        Documents created for, or developed during, a closed session of the Board for one of the reasons specifically listed in the sub‑subdivisions of subdivision (5) of this section, as well as any minutes from such a closed session of the Board, that would otherwise become public record by operation of Chapter 132 of the General Statutes, shall not become public record until the item under discussion has been made public through the publishing of the relevant rate or amount, findings from an audit or investigation, the annual budget forecast report, the strategic plan, or a report to the General Assembly.

"§ 143B‑216.1420.  Cooling off period for certain Health Benefits Authority employees.

(a)        Ineligible Vendors. – The Board shall not contract for goods or services with a vendor that employs or contracts with a person who is a former State Medicaid or NC Health Choice employee and uses that person in the administration of a contract with the Authority.

(b)        Vendor Certification. – The Medicaid Director shall require each vendor submitting a bid or contract to certify that the vendor will not use a former Medicaid or NC Health Choice employee in the administration of a contract with the Authority in violation of the provisions of subsection (a) of this section. Any person who submits a certification required by this subsection knowing the certification to be false shall be guilty of a Class I felony.

(c)        A violation of the provisions of this section shall void the contract.

(d)        Definitions. – As used in this section, the following terms mean:

(1)        Administration of a contract. – Oversight of the performance of a contract, authority to make decisions regarding a contract, interpretation of a contract, or participation in the development of specifications or terms of a contract or in the preparation or award of a contract.

(2)        Former Medicaid or NC Health Choice employee. – A person who, for any period within the preceding six months, was employed as an employee or contract employee of the Authority, who in the six months immediately preceding termination of State employment, participated personally in either the award or management of an Authority contract with the vendor, or made regulatory or licensing decisions that directly applied to the vendor.

"§ 143B‑216.1425.  Medicaid Reserve Account.

(a)        The Medicaid Reserve Account is established as a nonreverting reserve in the General Fund. The purpose of the Medicaid Reserve Account is to provide for unexpected budgetary shortfalls within the Medicaid and NC Health Choice programs that result from program expenditures in excess of the amount appropriated for the Medicaid and NC Health Choice programs by the General Assembly and which continue to exist after the Health Benefits Authority makes its best efforts to control costs through midyear budget corrections under G.S. 143B‑1410(a)(12).

(b)        The Medicaid Reserve Account shall have the following minimum and maximum target balances:

(1)        Minimum target. – Five percent (5%) of a given fiscal year's General Fund appropriations for capitation payments for both the Medicaid and NC Health Choice programs.

(2)        Maximum target. – Twelve percent (12%) of a given fiscal year's General Fund appropriations for capitation payments for both the Medicaid and NC Health Choice programs.

(c)        Notwithstanding G.S. 143C‑1‑2(b), any funds appropriated to the Health Benefits Authority for the Medicaid or NC Health Choice programs and that remain unencumbered at the end of a fiscal year shall, rather than revert to the General Fund, be credited to the Medicaid Reserve Account. Any funds to be deposited in the Medicaid Reserve Account that would cause the fund balance to exceed the maximum target balance for the Medicaid Reserve Account shall instead be credited to the General Fund.

(d)        Medicaid Reserve Account funds may be disbursed by the Health Benefits Authority to manage budgetary shortfalls in the Medicaid and NC Health Choice programs only after all of the following occur:

(1)        The Board of the Health Benefits Authority certifies that there is a projected Medicaid shortfall in the current fiscal year.

(2)        The Health Benefits Authority has already made midyear budget corrections under G.S. 143B‑1410(a)(12), but those midyear budget corrections have not achieved the projected budget savings.

(3)        The Health Benefits Authority reports to the Joint Legislative Commission on Governmental Operations on its intent to disburse Medicaid Reserve Account funds. The report shall include a detailed analysis of receipts, payments, claims, and transfers, including an identification of and explanation of the recurring and nonrecurring components of the shortfall.

Medicaid Reserve Account funds may be disbursed in accordance with this subsection even if it results in the fund balance falling below the minimum target balance for the Medicaid Reserve Account."

SECTION 12H.24.(i)  Board Start‑Up. – The following activities shall facilitate the timely commencement of the Health Benefits Authority:

(1)        The Board of the Health Benefits Authority may meet prior to October 1, 2015, in order to begin organizing and preparing to govern the Medicaid and NC Health Choice programs. The Board may begin meeting as soon as a majority of the appointments have been made and upon the call of the chair; however, the initial meeting shall be no later than September 1, 2015. The Division of Medical Assistance shall provide administrative support and meeting space to the Board prior to November 1, 2015.

(2)        If the Governor does not make initial appointments to the Board by September 1, 2015, the Board members who have been appointed may select a chair from among the appointed members and may conduct the business of the Authority. Actions taken by the Board under this subdivision shall be official actions of the Board, provided a majority of the appointed Board members are present and approve the action.

(3)        In order to set the initial compensation for the voting Board members, the Office of State Human Resources shall survey the compensation paid to the members of comparable large health insurance plans. The Office shall complete the survey no later than September 1, 2015, and set the initial compensation for voting Board members no later than October 1, 2015. A voting Board member shall be eligible to receive compensation beginning on the first business day following the effective date of the member's appointment.

SECTION 12H.24.(j)  Transfer of Rules. – Effective October 1, 2015, all rules and policies exempted from rule making related to the Medicaid and NC Health Choice programs shall transfer to the Health Benefits Authority. In its March 1, 2016, report to the Joint Legislative Oversight Committee on the Health Benefits Authority, the Health Benefits Authority shall include recommendations for additional exemptions from the rule‑making requirements and contested case provisions in Chapter 150B of the General Statutes.

SECTION 12H.24.(k)  Legal Actions. – For any legal action involving the Medicaid or NC Health Choice programs in which the Division of Medical Assistance or the Department of Health and Human Services is named as a party, the Health Benefits Authority may be joined as a party by reason of transfer of interest upon motion of any party pursuant to Rule 25(d) of the North Carolina Rules of Civil Procedure. This subsection shall not be construed to limit any other opportunities for joinder or intervention that are otherwise allowed under the North Carolina Rules of Civil Procedure or elsewhere under law.

SECTION 12H.24.(k1)  The Commissioner of Insurance shall establish solvency requirements for MCOs and PLEs that contract with the Health Benefits Authority pursuant to this section. The same requirements shall apply to and may be based on existing requirements for similarly situated regulated entities. The Commissioner shall consult with the Authority in developing the requirements. The Commissioner shall make recommendations, including any statutory changes, to the Joint Legislative Oversight Committee on the Health Benefits Authority by March 1, 2016.

SECTION 12H.24.(l)  Legislative Oversight of Medicaid. – Chapter 120 of the General Statutes is amended by adding the following new Article:

"Article 23B.

"Joint Legislative Oversight Committee on the Health Benefits Authority.

"§ 120‑209.  Creation and membership of Joint Legislative Oversight Committee on the Health Benefits Authority.

(a)        The Joint Legislative Oversight Committee on the Health Benefits Authority is established. The Committee consists of 14 members as follows:

(1)        Seven members of the Senate appointed by the President Pro Tempore of the Senate, at least two of whom are members of the minority party.

(2)        Seven members of the House of Representatives appointed by the Speaker of the House of Representatives, at least two of whom are members of the minority party.

(b)        Terms on the Committee are for two years and begin on the convening of the General Assembly in each odd‑numbered year except initial appointments begin on the date of appointment. Members may complete a term of service on the Committee even if they do not seek reelection or are not reelected to the General Assembly, but resignation or removal from service in the General Assembly constitutes resignation or removal from service on the Committee.

(c)        A member continues to serve until a successor is appointed. A vacancy shall be filled within 30 days by the officer who made the original appointment.

"§ 120‑209.1.  Purpose and powers of Committee.

(a)        The Joint Legislative Oversight Committee on the Health Benefits Authority shall examine budgeting, financing, administrative, and operational issues related to the Medicaid and NC Health Choice programs and to the Health Benefits Authority.

(b)        The Committee may make periodic reports to the General Assembly on matters for which it may report to a regular session of the General Assembly.

"§ 120‑209.2.  Organization of Committee.

(a)        The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate a cochair of the Joint Legislative Oversight Committee on the Health Benefits Authority. The Committee shall meet upon the joint call of the cochairs.

(b)        A quorum of the Committee is eight members. No action may be taken except by a majority vote at a meeting at which a quorum is present.

(c)        Members of the Committee receive subsistence and travel expenses, as provided in G.S. 120‑3.1. The Committee may contract for consultants or hire employees in accordance with G.S. 120‑32.02. The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work. Upon the direction of the Legislative Services Commission, the Directors of Legislative Assistants of the Senate and of the House of Representatives shall assign clerical staff to the Committee. The expenses for clerical employees shall be borne by the Committee.

(d)        The Committee cochairs may establish subcommittees for the purpose of examining issues relating to its Committee charge.

"§ 120‑209.3.  Additional powers.

The Joint Legislative Oversight Committee on the Health Benefits Authority, while in discharge of official duties, shall have access to any paper or document, and may compel the attendance of any State official or employee before the Committee or secure any evidence under G.S. 120‑19. In addition, G.S. 120‑19.1 through G.S. 120‑19.4 shall apply to the proceedings of the Committee as if it were a joint committee of the General Assembly.

"§ 120‑209.4.  Reports to Committee.

Whenever the Health Benefits Authority is required by law to report to the General Assembly or to any of its permanent, study, or oversight committees or subcommittees, the Health Benefits Authority shall transmit a copy of the report to the cochairs of the Joint Legislative Oversight Committee on the Health Benefits Authority."

SECTION 12H.24.(m)  G.S. 120‑208.1(a)(2)b. is repealed.

SECTION 12H.24.(n)  Recodification; Technical and Conforming Changes. – The Revisor of Statutes shall recodify existing law related to Medicaid and NC Health Choice, including Parts 6, 6A, 7, and 8 of Article 2, Article 5, and Article 7 of Chapter 108A of the General Statutes, as well as Chapters 108C and 108D of the General Statutes, into a new Chapter 108E of the General Statutes to be entitled "Medicaid and NC Health Choice Health Benefit Programs" and to have the following structure:

Article 1. Administration of the Medicaid and NC Health Choice Programs

Part 1. Establishment of the Medicaid Program

Part 2. Establishment of the NC Health Choice Program

Part 3. Administration by County Departments of Social Services

Article 2. Medicaid and NC Health Choice Eligibility

Part 1. In General

Part 2. Eligibility for Medicaid

Part 3. Eligibility for NC Health Choice

Article 3. Medicaid and NC Health Choice Benefits and Cost‑Sharing

Part 1. In General

Part 2. Medicaid Benefits and Cost‑Sharing

Part 3. NC Health Choice Benefits and Cost‑Sharing

Article 4. Medicaid and NC Health Choice Provider Requirements

Part 1. Provider Enrollment

Part 2. Provider Reimbursement and Recovery

Part 3. Hospital Assessment Act

Part 4. Other

Article 5. Third‑Party Liability

Part 1. In General

Part 2. Subrogation

Part 3. Insurance

Part 4. Estate Recovery

Article 6. Fraud and Criminal Activity

Article 7. Appeals

Part 1. Eligibility Appeals for Medicaid and NC Health Choice

Part 2. Benefit Appeals for Medicaid

Subpart 1. Generally

Subpart 2. Medicaid Managed Care for Behavioral Health Services            Appeals

Part 3. Benefit Reviews for NC Health Choice

Part 4. Provider Appeals

When recodifying, the Revisor is authorized to change all references to the North Carolina Department of Health and Human Services or to the Division of Medical Assistance to instead be references to the Health Benefits Authority. The Revisor may separate subsections of existing statutory sections into new sections and, when necessary to organize relevant law into its proper place in the above structure, may rearrange sentences that currently appear within subsections. The Revisor may modify statutory citations throughout the General Statutes, as appropriate, and may modify any references to statutory Divisions, such as "Chapter," "Article," "Part," "section," or "subsection." Within Articles 4 and 5 of Chapter 108A of the General Statutes, the Revisor of Statutes shall append to each reference to the North Carolina Department of Health and Human Services or to the Secretary of the Department the language "and, with respect to Medicaid and NC Health Choice, the Health Benefits Authority." The Revisor of Statutes may conform names and titles changed by this subsection, and may correct statutory references as required by this subsection, throughout the General Statutes. In making the changes authorized by this subsection, the Revisor may also adjust subject and verb agreement and the placement of conjunctions. The Revisor shall consult with the Department of Health and Human Services and the new Health Benefits Authority on this recodification.

SECTION 12H.24.(o)  G.S. 108A‑1 reads as rewritten:

"§ 108A‑1.  Creation.

Every county shall have a board of social services or a consolidated human services board created pursuant to G.S. 153A‑77(b) which shall establish county policies for the programs established by this Chapter in conformity with the rules and regulations of the Social Services Commission and under the supervision of the Department of Health and Human Services. Provided, however, county policies for the program of medical assistance shall be established in conformity with the rules and regulations of the Department of Health and Human Services Health Benefits Authority."

SECTION 12H.24.(p)  G.S. 108A‑54.1A reads as rewritten:

"§ 108A‑54.1A.  Amendments to Medicaid State Plan and Medicaid Waivers.

(a)        No provision in the Medicaid State Plan or in a Medicaid Waiver may expand or otherwise alter the scope or purpose of the Medicaid program from that authorized by law enacted by the General Assembly. For purposes of this section, the term "amendments to the State Plan" includes State Plan amendments, Waivers, and Waiver amendments.The Authority is expressly authorized and required to take any and all necessary action to amend the State Plan and waivers in order to keep the program within the certified budget.

(b)        The Department may submit amendments to the State Plan only as required under any of the following circumstances:

(1)        A law enacted by the General Assembly directs the Department to submit an amendment to the State Plan.

(2)        A law enacted by the General Assembly makes a change to the Medicaid Program that requires approval by the federal government.

(3)        A change in federal law, including regulatory law, or a change in the interpretation of federal law by the federal government requires an amendment to the State Plan.

(4)        A change made by the Department to the Medicaid Program requires an amendment to the State Plan, if the change was within the authority granted to the Department by State law.

(5)        An amendment to the State Plan is required in response to an order of a court of competent jurisdiction.

(6)        An amendment to the State Plan is required to ensure continued federal financial participation.

(c)        Amendments to the State Plan submitted to the federal government for approval shall contain only those changes that are allowed by the authority for submitting an amendment to the State Plan in subsection (b) of this section.

(d)        No fewer than 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its Web site and notify the members of the Joint Legislative Oversight Committee on the Health Benefits Authority and the Fiscal Research Division that the amendment has been posted. This requirement shall not apply to draft or proposed amendments submitted to the federal government for comments but not submitted for approval. The amendment shall remain posted on the Department's Web site at least until the plan has been approved, rejected, or withdrawn. If the authority for submitting the amendment to the State Plan is pursuant to subdivision (3), (4), (5), or (6) of subsection (b) of this section, then, prior to submitting an amendment to the federal government, the Department shall submit to the General Assembly members receiving notice under this subsection and to the Fiscal Research Division an explanation of the amendment, the need for the amendment, and the federal time limits required for implementation of the amendment.

(e)        The Department shall submit an amendment to the State Plan to the federal government by a date sufficient to provide the federal government adequate time to review and approve the amendment so the amendment may be effective by the date required by the directing authority in subsection (b) of this section. Additionally, if a change is made to the Medicaid program by the General Assembly and that change requires an amendment to the State Plan, then the amendment shall be submitted at least 90 days prior to the effective date of the change as provided in the legislation.

(f)         Any public notice required under 42 C.F.R. 447.205 shall, in addition to any other posting requirements under federal law, be posted on the Department's Web site. Upon posting such a public notice, the Department shall notify the members of the Joint Legislative Oversight Committee on the Health Benefits Authority and the Fiscal Research Division that the public notice has been posted. Public notices shall remain posted on the Department's Web site."

SECTION 12H.24.(q)  G.S. 108A‑54.2(d) is repealed.

SECTION 12H.24.(r)  Part 1 of Article 2 of Chapter 108E of the General Statutes, created by the recodification process described in subsection (n) of this section, shall include the following two new sections:

"§ 108E‑2‑1.  General Assembly sets eligibility categories.

Eligibility categories and income thresholds are set by the General Assembly, and the Authority shall not alter the eligibility categories and income thresholds from those authorized by the General Assembly. The Authority is expressly authorized to adopt temporary and permanent rules regarding eligibility requirements and determinations, to the extent that they do not conflict with parameters set by the General Assembly.

"§ 108E‑2‑2.  Counties determine eligibility.

Counties determine eligibility in accordance with Chapter 108A of the General Statutes."

SECTION 12H.24.(s)  G.S. 126‑5 is amended by adding a new subdivision to read:

"§ 126‑5.  Employees subject to Chapter; exemptions.

(c1)      Except as to the provisions of Articles 6 and 7 of this Chapter, the provisions of this Chapter shall not apply to:

(31)      Employees of the Health Benefits Authority."

SECTION 12H.24.(t)  G.S. 143B‑153 reads as rewritten:

"§ 143B‑153.  Social Services Commission – creation, powers and duties.

There is hereby created the Social Services Commission of the Department of Health and Human Services with the power and duty to adopt rules and regulations to be followed in the conduct of the State's social service programs with the power and duty to adopt, amend, and rescind rules and regulations under and not inconsistent with the laws of the State necessary to carry out the provisions and purposes of this Article. Provided, however, the Department of Health and Human ServicesHealth Benefits Authority shall have the power and duty to adopt rules and regulations to be followed in the conduct of the State's medical assistance program.

…."

SECTION 12H.24.(u)  G.S. 150B‑1 reads as rewritten:

"§ 150B‑1.  Policy and scope.

(d)        Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:

(9)        The Department of Health and Human Services Health Benefits Authority in adopting new or amending existing medical coverage policies for the State Medicaid and NC Health Choice programs pursuant to G.S. 108A‑54.2.

(20)      The Department of Health and Human Services Health Benefits Authority in implementing, operating, or overseeing new 1915(b)/(c) Medicaid Waiver programs or amendments to existing 1915(b)/(c) Medicaid Waiver programs.

(22)      The Department of Health and Human Services Health Benefits Authority with respect to the content of State Plans, State Plan Amendments, and Waivers approved by the Centers for Medicare and Medicaid Services (CMS) for the North Carolina Medicaid Program and the NC Health Choice program.

(e)        Exemptions From Contested Case Provisions. – The contested case provisions of this Chapter apply to all agencies and all proceedings not expressly exempted from the Chapter. The contested case provisions of this Chapter do not apply to the following:

(17)      The Department of Health and Human Services Health Benefits Authority with respect to the review of North Carolina Health Choice Program determinations regarding delay, denial, reduction, suspension, or termination of health services, in whole or in part, including a determination about the type or level of services.

…."

SECTION 12H.24.(v)  Appropriation. – Of the funds appropriated from the General Fund to the Department of Health and Human Services, Division of Medical Assistance, the sum of five million dollars ($5,000,000) in recurring funds for the 2015‑2016 and the 2016‑2017 fiscal years shall be used to accomplish the Medicaid transformation required by this section. These funds shall provide a State match for an estimated five million dollars ($5,000,000) in federal funds beginning in the 2015‑2016 fiscal year. Upon request of the Board, but no later than October 1, 2015, the Department shall transfer these funds to the Health Benefits Authority to be used for Medicaid transformation.

SECTION 12H.24.(w)  Medicaid Transformation Reserve Fund. – The Medicaid Transformation Reserve Fund is established in the Office of State Budget and Management as a nonreverting reserve in the General Fund. The purpose of the Medicaid Transformation Reserve Fund is to provide funds for converting from a fee‑for‑services payment system to a capitated payment system. Funds reserved in the Medicaid Transformation Reserve Fund shall be available only upon an appropriation by act of the General Assembly and do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. The sum of one hundred eighty‑five million six hundred four thousand six hundred fifty‑three dollars ($185,604,653) in nonrecurring funds for fiscal year 2015‑2016 and the sum of one hundred eighty‑five million six hundred four thousand six hundred fifty‑three dollars ($185,604,653) in nonrecurring funds for fiscal year 2016‑2017 are hereby reserved in the Medicaid Transformation Reserve Fund.

SECTION 12H.24.(x)  Effective Date. – Subsections (n) through (u) of this section become effective October 1, 2015. The remainder of this section is effective when this act becomes law.

 

Increase Rates to Primary Care Physicians and Discontinue Primary Care Case Management

SECTION 12H.25.(a)  Effective January 1, 2016, the current Medicaid and Health Choice primary care case management (PCCM) program is discontinued. The Department of Health and Human Services shall not renew or extend the contract for PCCM services with North Carolina Community Care Networks, Inc. (NCCCN), beyond December 31, 2015.

SECTION 12H.25.(b)  The Department of Health and Human Services shall take all actions necessary to discontinue the current Medicaid and Health Choice PCCM program as implemented by NCCCN. As soon as reasonably possible, but no later than October 1, 2015, the Department shall submit to the Centers for Medicare and Medicaid Services (CMS) a Medicaid State plan amendment eliminating the PCCM program. If CMS has not approved the State plan amendment by January 1, 2016, the Department of Health and Human Services nevertheless shall discontinue all payments related to the PCCM program beginning January 1, 2016, unless and until CMS denies the State plan amendment.

SECTION 12H.25.(c)  This section shall not be construed to prohibit the Department of Health and Human Services from developing or utilizing contracts for managed care other than PCCM after January 1, 2016.

SECTION 12H.25.(d)  Effective January 1, 2016, G.S. 108A‑70.21(b) reads as rewritten:

"(b)      Benefits. – All health benefits changes of the Program shall meet the coverage requirements set forth in this subsection. 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 North Carolina Medicaid Program except for the following:

No benefits are to be provided for services and materials under this subsection that do not meet the standards accepted by the American Dental Association.

The Department shall provide services to children enrolled in the NC Health Choice Program through Community Care of North Carolina (CCNC) and shall pay Community Care of North Carolina providers the per member, per month fees as allowed under Medicaid."

SECTION 12H.25.(e)  Effective January 1, 2016, the rates paid to primary care physicians shall be one hundred percent (100%) of Medicare rates. For purposes of this section, the term primary care physicians refers to those physicians for whom the Affordable Care Act required payment at one hundred percent (100%) of the Medicare rate until January 1, 2015, and all OB/GYN physicians.

SECTION 12H.25.(f)  Upon the discontinuation of the PCCM program, of the funds previously used for the NCCCN contract, the Department shall use six million four hundred seventy‑five thousand dollars ($6,475,000) in fiscal year 2015‑2016 and twelve million nine hundred fifty thousand dollars ($12,950,000) in fiscal year 2016‑2017 to directly fund local health departments' continued services related to the Care Coordination for Children (CC4C) program, which was previously funded through the contract with NCCCN.

 

NC Health Choice Cost Settlement

SECTION 12H.26.  Effective July 1, 2015, hospital outpatient services covered by NC Health Choice shall be cost settled at seventy percent (70%) of allowable costs, using the same methodology that is used for Medicaid.

 

Blood Glucose Testing Equipment and Supplies

SECTION 12H.27.(a)  Notwithstanding any other provision of law, the Department of Health and Human Services, Division of Medical Assistance, (Department) is authorized to use any reimbursement methodology or arrangement to provide Medicaid coverage for blood glucose testing equipment and supplies, provided that the Department's total requirements, net of rebates, for providing blood glucose testing equipment and supplies does not exceed one million nine hundred thirty‑three thousand three hundred fifty‑seven dollars ($1,933,357) in fiscal year 2015‑2016 and two million twenty thousand nine hundred seventy‑four dollars ($2,020,974) in fiscal year 2016‑2017.

SECTION 12H.27.(b)  Any state plan amendment submitted to implement this section shall not be subject to the 90‑day prior submission requirement of G.S. 108A‑54.1A(e).

 

Medicaid Contingency Reserve

SECTION 12H.28.(a)  Funds in the Medicaid Contingency Reserve established by Section 12H.38 of S.L. 2014‑100 shall be used only for budget shortfalls in the Medicaid Program that occur during the 2015‑2016 fiscal year. These funds shall be available for expenditure only upon an appropriation by act of the General Assembly.

SECTION 12H.28.(b)  It is the intent of the General Assembly to appropriate funds from the Medicaid Contingency Reserve only if:

(1)        The Director of the Budget, after the State Controller has verified that receipts are being used appropriately, has found that additional funds are needed to cover a shortfall in the Medicaid budget for the State fiscal year.

(2)        The Department of Health and Human Services or the Health Benefits Authority created in Section 12H.24 of this act has submitted a State plan amendment to the Centers for Medicare and Medicaid Services to delink eligibility for Medicaid from eligibility for State‑County Special Assistance, to be effective 90 days after the date of submission of the State plan amendment. At least 45 days prior to submitting that State plan amendment, the Department of Health and Human Services or the Health Benefits Authority must have submitted a draft of that plan to the Joint Legislative Oversight Committee on the Health Benefits Authority and, if the General Assembly was not in session, must have consulted with the Committee on that draft.

(3)        The Director of the Budget has reported immediately to the Fiscal Research Division on the amount of the shortfall found in accordance with subdivision (1) of this subsection. This report shall include an analysis of the causes of the shortfall, such as (i) unanticipated enrollment and mix of enrollment, (ii) unanticipated growth or utilization within particular service areas, (iii) errors in the data or analysis used to project the Medicaid budget, (iv) the failure of the program to achieve budgeted savings, (v) other factors and market trends that have impacted the price of or spending for services, (vi) variations in receipts from prior years or from assumptions used to prepare the Medicaid budget for the current fiscal year, or (vii) other factors. The report shall also include data in an electronic format that is adequate for the Fiscal Research Division to confirm the amount of the shortfall and its causes.

SECTION 12H.28.(c)  Effective 90 days after the State plan amendment is submitted to the Centers for Medicare and Medicaid Services (CMS) or when CMS approves the State plan amendment, whichever occurs later, eligibility for Medicaid coverage is delinked from eligibility for State‑County Special Assistance and recipients of State‑County Special Assistance no longer automatically qualify for Medicaid coverage solely because of their receipt of State‑County Special Assistance.

SECTION 12H.28.(d)  Nothing in this section shall be construed to limit the authority of the Governor to carry out his duties under the Constitution.

 

SUBPART XII‑I. DHHS BLOCK GRANTS

 

DHHS BLOCK GRANTS

SECTION 12I.1.(a)  Except as otherwise provided, appropriations from federal block grant funds are made for each year of the fiscal biennium ending June 30, 2017, according to the following schedule:

 

TEMPORARY ASSISTANCE FOR NEEDY                       FY 2015‑2016          FY 2016‑2017

FAMILIES (TANF) FUNDS

 

Local Program Expenditures

 

      Division of Social Services

 

      01. Work First Family Assistance                                           $57,167,454             $57,167,454

 

      02. Work First County Block Grants                                        80,093,566               78,073,437

 

      03. Work First Electing Counties                                                2,378,213                 2,378,213

 

      04. Adoption Services – Special Children

            Adoption Fund                                                                     2,026,877                 2,026,877

 

      05. Child Protective Services – Child Welfare

            Workers for Local DSS                                                        9,412,391                 9,412,391

 

      06. Child Welfare Collaborative                                                     632,416                    632,416

 

Division of Child Development and Early Education

 

      07. Subsidized Child Care Program                                          35,248,910               37,419,801

 

      08. Swap Child Care Subsidy                                                     6,352,644                 6,352,644

 

      09. Pre‑K Swap Out                                                                16,829,306               12,333,981

 

Division of Public Health

 

      10. Teen Pregnancy Prevention Initiatives                                    2,950,000                 2,950,000

 

DHHS Administration

 

      11. Division of Social Services                                                    2,482,260                 2,482,260

 

      12. Office of the Secretary                                                               34,042                      34,042

 

      13. Eligibility Systems – Operations and

            Maintenance                                                                         2,738,926                 4,206,640

 

      14. NC FAST Implementation                                                    1,313,384                 1,865,799

 

Transfers to Other Block Grants

 

Division of Child Development and Early Education

 

      15. Transfer to the Child Care and

            Development Fund                                                             71,773,001               71,773,001

 

Division of Social Services

 

      16. Transfer to Social Services Block

            Grant for Child Protective Services –

            Training                                                                                1,300,000                 1,300,000

 

      17. Transfer to Social Services Block

            Grant for Child Protective Services                                       5,040,000                 5,040,000

 

      18. Transfer to Social Services Block

            Grant for County Departments of

            Social Services for Children's Services                                  4,148,001                 4,148,001

 

      19. Transfer to Social Services Block

            Grant – Foster Care Services                                                1,385,152                 1,385,152

 

TOTAL TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES (TANF) FUNDS                                    $303,306,543           $300,982,109

 

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)

EMERGENCY CONTINGENCY FUNDS

 

Local Program Expenditures

 

Division of Child Development and Early Education

 

      01. Subsidized Child Care                                                        29,033,340               28,600,000

 

      02. Subsidized Child Care Swap Out                                          4,547,023                               0

 

TOTAL TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES (TANF) EMERGENCY

CONTINGENCY FUNDS                                                        $33,580,363             $28,600,000

 

SOCIAL SERVICES BLOCK GRANT

 

Local Program Expenditures

 

Divisions of Social Services and Aging and Adult Services

 

      01. County Departments of Social Services

            (Transfer From TANF $4,148,001)                                  $27,427,015             $27,165,668

 

      02. Child Protective Services

            (Transfer From TANF)                                                         5,040,000                 5,040,000

 

      03. State In‑Home Services Fund                                               2,382,970                 1,943,950

 

      04. Adult Protective Services                                                      1,245,363                 1,245,363

 

      05. State Adult Day Care Fund                                                   1,994,084                 1,994,084

 

      06. Child Protective Services/CPS

            Investigative Services – Child Medical

            Evaluation Program                                                                  563,868                    563,868

 

      07. Special Children Adoption Incentive Fund                                462,600                    462,600

 

      08. Child Protective Services – Child

            Welfare Training for Counties

            (Transfer From TANF)                                                         1,300,000                 1,300,000

 

      09. Home and Community Care Block

            Grant (HCCBG)                                                                   1,696,888                 1,696,888

 

      10. Child Advocacy Centers                                                          375,000                    375,000

 

      11. Guardianship                                                                        3,978,360                 3,978,360

 

      12. Foster Care Services

            (Transfer From TANF)                                                         1,385,152                 1,385,152

 

Division of Central Management and Support

 

      13. DHHS Competitive Block Grants

            for Nonprofits                                                                       3,852,500                 3,852,500

 

      14. NC FAST – Operations and

            Maintenance                                                                            712,324                    939,315

 

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

 

      15. Mental Health Services – Adult and

            Child/Developmental Disabilities Program/

            Substance Abuse Services – Adult                                        4,030,730                 4,030,730

 

DHHS Program Expenditures

 

Division of Services for the Blind

 

      16. Independent Living Program                                                 3,361,323                 3,361,323

 

Division of Health Service Regulation

 

      17. Adult Care Licensure Program                                                 381,087                    381,087

 

      18. Mental Health Licensure and

            Certification Program                                                               190,284                    190,284

 

DHHS Administration

 

      19. Division of Aging and Adult Services                                        577,745                    577,745

 

      20. Division of Social Services                                                       559,109                    559,109

 

      21. Office of the Secretary/Controller's Office                                127,731                    127,731

 

      22. Division of Child Development and

            Early Education                                                                         13,878                      13,878

 

      23. Division of Mental Health, Developmental

      Disabilities, and Substance Abuse Services                                       27,446                      27,446

 

      24. Division of Health Service Regulation                                       118,946                    118,946

 

TOTAL SOCIAL SERVICES BLOCK GRANT                    $61,804,403             $61,331,027

 

LOW‑INCOME ENERGY ASSISTANCE BLOCK GRANT

 

Local Program Expenditures

 

Division of Social Services

 

      01. Low‑Income Energy Assistance

            Program (LIEAP)                                                             $40,244,534             $39,303,674

 

      02. Crisis Intervention Program (CIP)                                       40,244,534               39,303,674

 

Local Administration

 

Division of Social Services

 

      03. County DSS Administration                                                  6,454,961                 6,454,961

 

DHHS Administration

 

      04. Office of the Secretary/DIRM                                                  412,488                    412,488

 

      05. Office of the Secretary/Controller's Office                                  18,378                      18,378

 

      06. NC FAST Development                                                       1,075,319                 3,381,373

 

Transfers to Other State Agencies

 

Department of Environment and Natural

Resources (DENR)

 

      07. Weatherization Program                                                      11,847,017               11,570,050

 

      08. Heating Air Repair and Replacement

            Program (HARRP)                                                               6,303,514                 6,156,147

 

      09. Local Residential Energy Efficiency Service

            Providers – Weatherization                                                      475,046                    475,046

 

      10. Local Residential Energy Efficiency Service

            Providers – HARRP                                                                252,761                    252,761

 

      11. DENR – Weatherization Administration                                   475,046                    475,046

 

      12. DENR – HARRP Administration                                             252,760                    252,760

 

Department of Administration

 

      13. N.C. Commission on Indian Affairs                                            87,736                      87,736

 

TOTAL LOW‑INCOME ENERGY

      ASSISTANCE BLOCK GRANT                                     $108,144,094           $108,144,094

 

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

 

Local Program Expenditures

 

Division of Child Development and Early Education

 

      01. Child Care Services

            (Smart Start $7,000,000)                                               $154,678,008           $152,370,856

 

      02. Electronic Tracking System                                                      801,240                    401,492

 

      03. Transfer from TANF Block Grant

            for Child Care Subsidies                                                     71,773,001               71,773,001

 

      04. Quality and Availability Initiatives

            (TEACH Program $3,800,000)                                          26,514,964               26,019,987

 

DHHS Administration

 

Division of Child Development and Early Education

 

      05. DCDEE Administrative Expenses                                          9,049,505                 9,049,505

 

Division of Social Services

 

      06. Local Subsidized Child Care

            Services Support                                                                15,930,279               15,930,279

 

      07. NC FAST Development                                                          186,404                    586,152

 

Division of Central Administration

 

      08. DHHS Central Administration – DIRM

            Technical Services                                                                   775,000                    775,000

 

      09. Central Regional Maintenance                                                  202,000                    202,000

 

      10. Child Care Health Consultation Contracts                                  62,205                      62,205

 

TOTAL CHILD CARE AND DEVELOPMENT

      FUND BLOCK GRANT                                                   $279,972,606           $277,170,477

 

MENTAL HEALTH SERVICES BLOCK GRANT

 

Local Program Expenditures

 

      01. Mental Health Services – Child                                           $3,619,833               $3,619,833

 

      02. Administration                                                                         200,000                    200,000

 

      03. Mental Health Services – Adult/Child                                  11,755,152               11,755,152

 

      04. Crisis Solutions Initiative – Critical

            Time Intervention                                                                     750,000                    750,000

 

      05. Mental Health Services – First

            Psychotic Symptom Treatment                                                 643,491                    643,491

 

TOTAL MENTAL HEALTH SERVICES

      BLOCK GRANT                                                                 $16,968,476             $16,968,476

 

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

 

Local Program Expenditures

 

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

 

      01. Substance Abuse – HIV and IV Drug                                 $3,919,723               $3,919,723

 

      02. Substance Abuse Prevention                                                 8,669,284                 8,669,284

 

      03. Substance Abuse Services – Treatment for

            Children/Adults                                                                   29,519,883               29,519,883

 

      04. Crisis Solutions Initiatives – Walk‑In

            Crisis Centers                                                                          420,000                    420,000

 

      05. Crisis Solutions Initiatives – Collegiate

            Wellness/Addiction Recovery                                               1,085,000                 1,085,000

 

      06. Crisis Solutions Initiatives – Community

            Paramedic Mobile Crisis Management                                       60,000                      60,000

 

      07. Crisis Solutions Initiatives – Innovative

            Technologies                                                                             41,000                      41,000

 

      08. Crisis Solutions Initiatives – Veteran's Crisis                             250,000                    250,000

 

      09. Administration                                                                         454,000                    454,000

 

Division of Public Health

 

      10. HIV Testing for Individuals in Substance

Abuse Treatment                                                                                 765,949                    765,949

 

TOTAL SUBSTANCE ABUSE PREVENTION

      AND TREATMENT BLOCK GRANT                             $45,184,839             $45,184,839

 

MATERNAL AND CHILD HEALTH BLOCK GRANT

 

Local Program Expenditures

 

Division of Public Health

 

      01. Children's Health Services

            (Safe Sleep Campaign

            $45,000; Prevent Blindness $560,837;

            Community‑Based

            Sickle Cell Centers $100,000)                                            $7,574,703               $7,574,703

 

      02. Women's Health

            (March of Dimes $350,000; Teen Pregnancy

            Prevention Initiatives $650,000;

            17P Project $52,000; Nurse‑Family

            Partnership $509,018; Carolina Pregnancy

            Care Fellowship $300,000)                                                  6,520,148                 6,520,148

 

      03. Oral Health                                                                                44,901                      44,901

 

      04. Evidence‑Based Programs in Counties

            With Highest Infant Mortality Rates                                       1,575,000                 1,575,000

 

DHHS Program Expenditures

 

Division of Public Health

 

      05. Children's Health Services                                                     1,342,928                 1,342,928

 

      06. Women's Health – Maternal Health                                          107,714                    107,714

 

      07. State Center for Health Statistics                                              158,583                    158,583

 

      08. Health Promotion – Injury and

            Violence Prevention                                                                   87,271                      87,271

 

DHHS Administration

 

Division of Public Health

 

      09. Division of Public Health Administration                                   552,571                    552,571

 

TOTAL MATERNAL AND CHILD

      HEALTH BLOCK GRANT                                                $17,963,819             $17,963,819

 

PREVENTIVE HEALTH SERVICES BLOCK GRANT

 

Local Program Expenditures

 

      01. Physical Activity and Prevention                                          $2,034,060               $2,034,060

 

      02. Injury and Violence Prevention

            (Services to Rape Victims – Set‑Aside)                                   173,476                    173,476

 

      03. Community‑Focused Eliminating Health

            Disparities Initiative Grants                                                    2,756,855                               0

 

DHHS Program Expenditures

 

Division of Public Health

 

      04. HIV/STD Prevention and

            Community Planning                                                                145,819                    145,819

 

      05. Oral Health Preventive Services                                               320,074                    451,809

 

      06. Laboratory Services – Testing,

            Training, and Consultation                                                          21,012                      21,012

 

      07. Injury and Violence Prevention

            (Services to Rape Victims – Set‑Aside)                                   192,315                    192,315

 

      08. State Laboratory Services – Testing,

            Training, and Consultation                                                        199,634                    199,634

 

      09. Heart Disease and Stroke Prevention                                       273,772                    405,507

 

      10. Performance Improvement and

            Accountability                                                                          839,736                    971,471

 

      11. Physical Activity and Nutrition                                                    68,073                      68,073

 

      12. State Center for Health Statistics                                              107,291                    107,291

 

DHHS Administration

 

Division of Public Health

 

      13. Division of Public Health                                                          172,820                    172,820

 

      14. Division of Public Health –

Physical Activity and Nutrition Branch                                               1,243,899                               0

 

TOTAL PREVENTIVE HEALTH

SERVICES BLOCK GRANT                                                    $8,548,836               $4,943,288

 

COMMUNITY SERVICES BLOCK GRANT

 

Local Program Expenditures

 

Office of Economic Opportunity

 

      01. Community Action Agencies                                             $24,047,065             $24,047,065

 

      02. Limited Purpose Agencies                                                     1,335,948                 1,335,948

 

DHHS Administration

 

      03. Office of Economic Opportunity                                            1,335,948                 1,335,948

 

TOTAL COMMUNITY SERVICES

      BLOCK GRANT                                                                 $26,718,961             $26,718,961

 

GENERAL PROVISIONS

SECTION 12I.1.(b)  Information to Be Included in Block Grant Plans. – The Department of Health and Human Services shall submit a separate plan for each Block Grant received and administered by the Department, and each plan shall include the following:

(1)        A delineation of the proposed allocations by program or activity, including State and federal match requirements.

(2)        A delineation of the proposed State and local administrative expenditures.

(3)        An identification of all new positions to be established through the Block Grant, including permanent, temporary, and time‑limited positions.

(4)        A comparison of the proposed allocations by program or activity with two prior years' program and activity budgets and two prior years' actual program or activity expenditures.

(5)        A projection of current year expenditures by program or activity.

(6)        A projection of federal Block Grant funds available, including unspent federal funds from the current and prior fiscal years.

SECTION 12I.1.(c)  Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall allocate the increase proportionally across the program and activity appropriations identified for that Block Grant in this section. In allocating an increase in federal fund availability, the Office of State Budget and Management shall not approve funding for new programs or activities not appropriated in this section.

If the Congress of the United States decreases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall develop a plan to adjust the Block Grants based on reduced federal funding.

Notwithstanding the provisions of this subsection, for fiscal years 2015‑2016 and 2016‑2017, increases in the federal fund availability for the Temporary Assistance to Needy Families (TANF) Block Grant shall be used only for the North Carolina Child Care Subsidy program to pay for child care in four‑ or five‑star‑rated facilities for four‑year‑old children and shall not be used to supplant State funds.

Prior to allocating the change in federal fund availability, the proposed allocation must be approved by the Office of State Budget and Management. If the Department adjusts the allocation of any Block Grant due to changes in federal fund availability, then a report shall be made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

SECTION 12I.1.(d)  Except as otherwise provided, appropriations from federal Block Grant funds are made for each year of the fiscal biennium ending June 30, 2017, according to the schedule enacted for State fiscal years 2015‑2016 and 2016‑2017 or until a new schedule is enacted by the General Assembly.

SECTION 12I.1.(e)  All changes to the budgeted allocations to the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services that are not specifically addressed in this section shall be approved by the Office of State Budget and Management, and the Office of State Budget and Management shall consult with the Joint Legislative Oversight Committee on Health and Human Services for review prior to implementing the changes. The report shall include an itemized listing of affected programs, including associated changes in budgeted allocations. All changes to the budgeted allocations to the Block Grants shall be reported immediately to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. This subsection does not apply to Block Grant changes caused by legislative salary increases and benefit adjustments.

SECTION 12I.1.(f)  Except as otherwise provided, the Department of Health and Human Services shall have flexibility to transfer funding between the Temporary Assistance for Needy Families (TANF) Block Grant and the TANF Emergency Contingency Funds Block Grant so long as the total allocation for the line items within those block grants remains the same.

 

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS

SECTION 12I.1.(g)  The sum of eighty million ninety‑three thousand five hundred sixty‑six dollars ($80,093,566) for the 2015‑2016 fiscal year and the sum of seventy‑eight million seventy‑three thousand four hundred thirty‑seven dollars ($78,073,437) for the 2016‑2017 fiscal year appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, shall be used for Work First County Block Grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures.

SECTION 12I.1.(h)  The sum of nine million four hundred twelve thousand three hundred ninety‑one dollars ($9,412,391) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in TANF funds for each year of the 2015‑2017 fiscal biennium 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.

Counties shall maintain their level of expenditures in local funds for Child Protective Services workers. Of the Block Grant funds appropriated for Child Protective Services workers, the total expenditures from State and local funds for fiscal years 2015‑2016 and 2016‑2017 shall not be less than the total expended from State and local funds for the 2012‑2013 fiscal year.

SECTION 12I.1.(i)  The sum of two million twenty‑six thousand eight hundred seventy‑seven dollars ($2,026,877) appropriated in this section in TANF funds to the Department of Health and Human Services, Special Children Adoption Fund, for each year of the 2015‑2017 fiscal biennium shall be used in accordance with G.S. 108A‑50.2. 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.

 

SOCIAL SERVICES BLOCK GRANT

SECTION 12I.1.(j)  The sum of twenty‑seven million four hundred twenty‑seven thousand fifteen dollars ($27,427,015) for the 2015‑2016 fiscal year and the sum of twenty‑seven million one hundred sixty‑five thousand six hundred sixty‑eight dollars ($27,165,668) for the 2016‑2017 fiscal year appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used for county block grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures.

SECTION 12I.1.(k)  The sum of one million three hundred thousand dollars ($1,300,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for each year of the 2015‑2017 fiscal biennium shall be used to support various child welfare training projects as follows:

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

(2)        Provide training for residential child caring facilities.

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

SECTION 12I.1.(l)  The Department of Health and Human Services is authorized, subject to the approval of the Office of State Budget and Management, to transfer Social Services Block Grant funding allocated for departmental administration between divisions that have received administrative allocations from the Social Services Block Grant.

SECTION 12I.1.(m)  Social Services Block Grant funds appropriated for the Special Children Adoption Incentive Fund will require a fifty‑percent (50%) local match.

SECTION 12I.1.(n)  The sum of five million forty thousand dollars ($5,040,000) appropriated in this section in the Social Services Block Grant for each year of the 2015‑2017 fiscal biennium shall be allocated to the Department of Health and Human Services, Division of Social Services. The Division shall allocate these funds to local departments of social services to replace the loss of Child Protective Services State funds that are currently used by county governments to pay for Child Protective Services staff at the local level. These funds shall be used to maintain the number of Child Protective Services workers throughout the State. These Social Services Block Grant funds shall be used to pay for salaries and related expenses only and are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty‑five percent (25%).

SECTION 12I.1.(o)  The sum of three million eight hundred fifty‑two thousand five hundred dollars ($3,852,500) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Central Management and Support, shall be used for DHHS competitive block grants pursuant to Section 12A.8 of this act for each year of the 2015‑2017 fiscal biennium. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).

SECTION 12I.1.(p)  The sum of three hundred seventy‑five thousand dollars ($375,000) appropriated in this section in the Social Services Block Grant for each year of the 2015‑2017 fiscal biennium to the Department of Health and Human Services, Division of Social Services, shall be used to continue support for the Child Advocacy Centers, and the funds are exempt from the provisions of 10A NCAC 71R .0201(3).

SECTION 12I.1.(q)  The sum of three million nine hundred seventy‑eight thousand three hundred sixty dollars ($3,978,360) for each year of the 2015‑2017 fiscal biennium appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Divisions of Social Services and Aging and Adult Services, shall be used for guardianship services pursuant to Chapter 35A of the General Statutes. The Department may expend funds appropriated in this section to support (i) existing corporate guardianship contracts during the 2015‑2016 and 2016‑2017 fiscal years and (ii) guardianship contracts transferred to the State from local management entities or managed care organizations during the 2015‑2016 and 2016‑2017 fiscal years.

 

LOW‑INCOME ENERGY ASSISTANCE BLOCK GRANT

SECTION 12I.1.(r)  Additional emergency contingency funds received may be allocated for Energy Assistance Payments or Crisis Intervention Payments without prior consultation with the Joint Legislative Oversight Committee on Health and Human Services. Additional funds received shall be reported to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division upon notification of the award. The Department of Health and Human Services shall not allocate funds for any activities, including increasing administration, other than assistance payments, without prior consultation with the Joint Legislative Oversight Committee on Health and Human Services.

SECTION 12I.1.(s)  The sum of forty million two hundred forty‑four thousand five hundred thirty‑four dollars ($40,244,534) for the 2015‑2016 fiscal year and the sum of thirty‑nine million three hundred three thousand six hundred seventy‑four dollars ($39,303,674) for the 2016‑2017 fiscal year appropriated in this section in the Low‑Income Energy Assistance Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used for Energy Assistance Payments for the households of (i) elderly persons age 60 and above with income up to one hundred thirty percent (130%) of the federal poverty level and (ii) disabled persons eligible for services funded through the Division of Aging and Adult Services.

County departments of social services shall submit to the Division of Social Services an outreach plan for targeting households with 60‑year‑old household members no later than August 1 of each year. The outreach plan shall comply with the following:

(1)        Ensure that eligible households are made aware of the available assistance, with particular attention paid to the elderly population age 60 and above and disabled persons receiving services through the Division of Aging and Adult Services.

(2)        Include efforts by the county department of social services to contact other State and local governmental entities and community‑based organizations to (i) offer the opportunity to provide outreach and (ii) receive applications for energy assistance.

(3)        Be approved by the local board of social services or human services board prior to submission.

 

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

SECTION 12I.1.(t)  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 12I.1.(u)  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.

 

MENTAL HEALTH SERVICES BLOCK GRANT

SECTION 12I.1.(v)  The sum of six hundred forty‑three thousand four hundred ninety‑one dollars ($643,491) appropriated in this section in the Mental Health Services Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for each year of the 2015‑2017 fiscal biennium is allocated for Mental Health Services – First Psychotic Symptom Treatment. The Division shall report on (i) the specific evidence‑based treatment and services provided, (ii) the number of persons treated, and (iii) the measured outcomes or impact on the participants served. The Division shall report to the House of Representatives Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than December 31, 2016.

 

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

SECTION 12I.1.(w)  The sum of two hundred fifty thousand dollars ($250,000) appropriated in this section in the Substance Abuse Prevention and Treatment Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for each year of the 2015‑2017 fiscal biennium shall be allocated to the Department of Administration, Division of Veterans Affairs, to establish a call‑in center to assist veterans in locating service benefits and crisis services. The call‑in center shall be staffed by certified veteran peers within the Division of Veterans Affairs and trained by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

 

MATERNAL AND CHILD HEALTH BLOCK GRANT

SECTION 12I.1.(x)  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 2015‑2016 fiscal year or the 2016‑2017 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) and (4a). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.

SECTION 12I.1.(y)  The Department of Health and Human Services shall ensure that there will be follow‑up testing in the Newborn Screening Program.

SECTION 12I.1.(z)  The sum of one million five hundred seventy‑five thousand dollars ($1,575,000) appropriated in this section in the Maternal and Child Health Block Grant to the Department of Health and Human Services, Division of Public Health, for each year of the 2015‑2017 fiscal biennium shall be used for evidence‑based programs in counties with highest infant mortality rates. The Division shall report on (i) the counties selected to receive the allocation, (ii) the specific evidenced‑based services provided, (iii) the number of women served, and (iv) any impact on the counties' infant mortality rate. The Division shall report its findings to the House of Representatives Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than December 31, 2016.

SECTION 12I.1.(aa)  The sum of one hundred thousand dollars ($100,000) allocated in this section in the Maternal and Child Health Block Grant to the Department of Health and Human Services, Division of Public Health, for each year of the 2015‑2017 fiscal biennium for community‑based sickle cell centers shall not be used to supplant existing State or federal funds.

SECTION 12I.1.(bb)  No more than fifteen percent (15%) of the funds provided in this section in the Maternal and Child Health Block Grant to Carolina Pregnancy Care Fellowship shall be used for administrative purposes. The balance of those funds shall be used for direct services.

 

PART XIII. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

 

TVA SETTLEMENT FUNDS

SECTION 13.2.  In fiscal year 2015‑2016, The Department of Agriculture and Consumer Services shall apply for two million two hundred forty thousand dollars ($2,240,000) from the Tennessee Valley Authority Settlement Agreement in compliance with the requirements of paragraphs 122 through 128 of the Consent Decree entered into by the State in State of Alabama et al. v. Tennessee Valley Authority, Civil Action 3:11‑cv‑00170 in the United States District Court for the Eastern District of Tennessee, and Appendix C to the Compliance Agreement. The funds received by the State shall be allocated to the following programs for projects, with priority given to projects in the counties of Avery, Buncombe, Burke, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, McDowell, Mitchell, Swain, Transylvania, Watauga, and Yancey:

(1)        One million dollars ($1,000,000) to the Agriculture Cost Share Program for Nonpoint Source Pollution Control.

(2)        Five hundred thousand dollars ($500,000) to the Department's Bioenergy Development Program.

(3)        Five hundred thousand dollars ($500,000) to the North Carolina Agricultural Development and Farmland Preservation Trust Fund to be used, notwithstanding G.S. 106‑744, in the areas specified in this section.

(4)        Two hundred forty thousand dollars ($240,000) to the North Carolina Agricultural Water Resources Assistance Program.

 

DISPOSITION OF ROSE HILL LABORATORY PROPERTY

SECTION 13.3.  The Department of Administration shall sell the building and associated real property formerly used to house the Veterinary Diagnostic Laboratory located in the Town of Rose Hill in Duplin County.

 

DRUG MANUFACTURING LICENSING AND REGISTRATION FEES

SECTION 13.4.(a)  G.S. 106‑140.1(h) reads as rewritten:

"(h)       The Commissioner shall adopt rules to implement the registration requirements of this section. These rules may shall provide for an annual registration fee of up to five hundred dollars ($500.00)one thousand dollars ($1,000) for companies operating as manufacturers, wholesalers, or repackagers.manufacturers or repackagers and seven hundred dollars ($700.00) for companies operating as wholesalers. The Department of Agriculture and Consumer Services shall use these funds for the implementation of the North Carolina Food, Drug and Cosmetic Act."

SECTION 13.4.(b)  G.S. 106‑145.4(b) reads as rewritten:

"§ 106‑145.4.  Application and fee for license.

"(b)      Fee. – An application for an initial license or a renewed license as a wholesale distributor shall be accompanied by a nonrefundable fee of five hundred dollars ($500.00) one thousand dollars ($1,000) for a manufacturer or three hundred fifty dollars ($350.00) seven hundred dollars ($700.00) for any other person."

 

FOOD MANUFACTURER AND RETAILER INSPECTION FEES

SECTION 13.5.  G.S. 106‑254 reads as rewritten:

"§ 106‑254.  Inspection fees; wholesalers; retailers and cheese factories.

For the purpose of defraying the expenses incurred in the enforcement of this Article, the owner, proprietor or operator of each ice cream factory where ice cream, milk shakes, milk sherbet, sherbet, water ices, mixes for frozen or semifrozen desserts and other similar frozen or semifrozen food products are made or stored, or any cheese factory or butter‑processing plant that disposes of its products at wholesale to retail dealers for resale in this State shall pay to the Commissioner of Agriculture each year an inspection fee of forty dollars ($40.00).one hundred dollars ($100.00). Each maker of ice cream, milk shakes, milk sherbet, sherbet, water ices and/or other similar frozen or semifrozen food products who disposes of his product at retail only, and cheese factories, shall pay to the Commissioner of Agriculture an inspection fee of ten dollars ($10.00) fifty dollars ($50.00) each year. The inspection fee of ten dollars ($10.00) fifty dollars ($50.00) shall not apply to conventional spindle‑type milk‑shake mixers, but shall apply to milk‑shake dispensing and vending machines, which operate on a continuous or automatic basis."

 

Spay/Neuter Program Revisions

SECTION 13.7.  G.S. 19A‑63 reads as rewritten:

"§ 19A‑63.  Eligibility for distributions from Spay/Neuter Account.

(a)        A county or city is eligible for reimbursement from the Spay/Neuter Account if it meets the following condition:

(1)        The county or city offers one or more of the following programs to low‑income persons on a year‑round basis for the purpose of reducing the cost of spaying and neutering procedures for dogs and cats:

a.         A spay/neuter clinic operated by the county or city.

b.         A spay/neuter clinic operated by a private organization under contract or other arrangement with the county or city.

c.         A contract or contracts with one or more veterinarians, whether or not located within the county, to provide reduced‑cost spaying and neutering procedures.

d.         Subvention of the spaying and neutering costs incurred by low‑income pet owners through the use of vouchers or other procedure that provides a discount of the cost of the spaying or neutering procedure fixed by a participating veterinarian or other provider.

e.         Subvention of the spaying and neutering costs incurred by persons who adopt a pet from an animal shelter operated by or under contract with the county or city.

(2)        Reserved for future codification purposes.

(b)        For purposes of this Article, the term "low‑income person" shall mean an individual who qualifies for one or more of the programs of public assistance administered by the Department of Health and Human Services pursuant to Chapter 108A of the General Statutes or whose annual household income is under three hundred percent (300%) lower than one hundred percent (100%) of the federal poverty level guidelines published by the United States Department of Health and Human Services.

(c)        Each county shall make rules or publish guidelines that designate what proof a low‑income person must submit to establish that the person qualifies for public assistance under subsection (b) of this section or has an annual household income lower than three hundred percent (300%) one hundred percent (100%) of the federal poverty level guidelines published by the United States Department of Health and Human Services."

 

Conservation Reserve Enhancement Program Report

SECTION 13.8.(a)  The Department of Agriculture and Consumer Services shall study and report on the activities of the Conservation Reserve Enhancement Program. The report shall include, at a minimum, the following components:

(1)        A listing of contracts currently in effect and contracts entered into in each of the last five fiscal years, including the acreage and location of the land under contract and the distribution of contracts by duration.

(2)        A five‑year projection of future funding requirements.

(3)        A detailed listing of the conservation practices used at project sites over the last five fiscal years and an assessment of the effectiveness of those practices for preventing or reducing nonpoint source pollution.

(4)        An assessment of the effectiveness and impact of the program in both protection of waterways from nonpoint source pollution and the leveraging of additional programs and efforts to reduce nonpoint source pollution.

SECTION 13.8.(b)  The Department shall submit its findings and report to the chairs of the Senate Appropriations Committee on Natural and Economic Resources and the House Appropriations Committee on Agriculture and Natural and Economic Resources and to the Fiscal Research Division no later than April 1, 2016.

 

Beer Marketing

SECTION 13.9.  The additional funds allocated by this act to the Marketing Division of the Department of Agriculture and Consumer Services shall be used for the promotion of beer produced in the State.

 

REPEAL MINE SAFETY AND HEALTH ACT

SECTION 13.10.(a)  Article 2A of Chapter 74 of the General Statutes is repealed.

SECTION 13.10.(b)  G.S. 130A‑460 reads as rewritten:

"§ 130A‑460.  Report to Department of Labor.

(c)        Subsection (b) shall not apply to inspections conducted for the Industrial Commission pursuant to G.S. 97‑76 and shall not affect the allocation of responsibilities set forth in G.S. 74‑24.4(c).G.S. 97‑76."

 

LABOR CONSULTATIVE SERVICES BUREAU INSPECT MINES & QUARRIES

SECTION 13.11.(a)  The Department of Labor, Consultative Services Bureau, shall inspect mines and quarries in the State in a manner consistent with inspections conducted by the Mine and Quarry Bureau prior to the date this section becomes effective.

SECTION 13.11.(b)  This section is effective when it becomes law.

 

PART XIV. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

 

PROSPERITY ZONE DENR LIAiSONS

SECTION 14.1.  Section 4.1 of S.L. 2014‑18 reads as rewritten:

"SECTION 4.1. No later than January 1, 2015, the Departments of Commerce, Environment and Natural Resources, and Transportation shall have at least one employee physically located in the same office in each of the Collaboration for Prosperity Zones set out in G.S. 143B‑28.1 to serve as that department's liaison with the other departments and with local governments, schools and colleges, planning and development bodies, and businesses in that zone. The departments shall jointly select the office. For purposes of this Part, the Department of Commerce may contract with a North Carolina nonprofit corporation pursuant to G.S. 143B‑431A, as enacted by this act, to fulfill the departmental liaison requirements for each office in each of the Collaboration for Prosperity Zones.Zones, and the Department of Environment and Natural Resources shall fulfill the departmental liaison requirements from existing positions.

No later than January 1, 2015, the Community Colleges System Office shall designate at least one representative from a community college or from the Community Colleges System Office to serve as a liaison in each Collaboration for Prosperity Zone for the community college system, the community colleges in the zone, and other educational agencies and schools within the zone. A liaison may be from a business center located in a community college. These liaisons are not required to be collocated with the liaisons from the Departments of Commerce, Environment and Natural Resources, and Transportation.

No later than January 1, 2015, the State Board of Education shall designate at least one representative from a local school administrative unit or from the Department of Public Instruction to serve as a liaison in each Collaboration for Prosperity Zone for the local school administrative units and other public schools within the zone. These liaisons are not required to be collocated with the liaisons from the Departments of Commerce, Environment and Natural Resources, and Transportation."

 

IMPROVE FINANCIAL MANAGEMENT OF ENVIRONMENTAL STEWARDSHIP FUNDS THROUGH CONSERVATION GRANT FUND

SECTION 14.2.  G.S. 147‑69.2(d) reads as rewritten:

"(d)      The State Treasurer may invest funds deposited pursuant to subdivision (a)(17i)subdivisions (a)(17i) or (a)(17j) of this section in any of the investments authorized under subdivisions (1) through (6) and subdivision (8) of subsection (b) of this section. The State Treasurer may require a minimum deposit, up to one hundred thousand dollars ($100,000), and may assess a reasonable fee, not to exceed 15 basis points, as a condition of participation pursuant to this subsection. Funds deposited pursuant to this subsection shall remain the funds of the North Carolina Conservation Easement Endowment Fund, Fund or the Conservation Grant Fund, as applicable, and interest or other investment income earned thereon shall be prorated and credited to the North Carolina Conservation Easement Endowment Fund Fund or the Conservation Grant Fund on the basis of the amounts thereof contributed,contributed to the respective Funds, figured according to sound accounting principles."

 

ALLOW REVENUE GENERATED FROM TIMBER SALE TO BE RETAINED IN A NONREVERTING ACCOUNT FOR A PERIOD OF FOUR YEARS

SECTION 14.3.  The Department of Environment and Natural Resources' Stewardship Program may retain revenue generated from timber harvesting on the Great Coharie property in the Conservation Grant Endowment Interest Fund (6705) for the purpose of restoration and stewardship of that property and these funds are hereby appropriated for that purpose. Any unused portion of this revenue remaining in the Fund on June 30, 2019, shall revert to the General Fund.

 

Separate Natural Heritage Program from Clean Water Management Trust Fund

SECTION 14.4.  Subdivisions (8e) and (9) of subsection (c) and subsection (d) of G.S. 113A‑253 are repealed.

 

Environmental Management of Impaired Water Bodies

SECTION 14.5.(a)  Of the funds appropriated in this act to the Clean Water Management Trust Fund, the sum of four million five hundred thousand dollars ($4,500,000) in the 2015‑2017 fiscal biennium shall be used by the Department of Environment and Natural Resources to research, implement, and monitor in situ strategies beyond traditional watershed controls that have the potential to mitigate water quality impairments resulting from aquatic flora, sediment, nutrients, or other water quality variables that impair or have the potential to impair water bodies of the State.

SECTION 14.5.(b)  The Department shall extend existing contracts related to in situ water quality remediation strategies for two years at a price less than current terms and may enter into new purchase or lease agreements for equipment, goods, or contractor services prior to June 30, 2017. The Department, in consultation with the Environmental Management Commission, shall have the authority to determine the size, scope, and location of a new project or expansion of the scope of an existing project as well as the methods to be deployed; provided, however, that the Department shall issue a Request for Proposal for any new leases or purchases authorized by this subsection and shall evaluate and select contractors or equipment based on likelihood of success in addition to price.

SECTION 14.5.(c)  The General Assembly finds that there is a need for timely initiation of projects authorized by this section during the biennium to expedite mitigation of impaired waters of the State and federal review and approval of these projects prior to deployment. Therefore, any contract, lease, purchase, or other agreement entered into under this section shall not be subject to the requirements of Article 3, 3D, or 8 of Chapter 143 of the General Statutes in order to expedite deployment.

SECTION 14.5.(d)  The General Assembly further finds that existing rules or proposed rules intended to address water quality of impaired water bodies may need to be modified based on the completion and analysis of projects authorized or extended by this section and that there is a need to better understand the impact of in situ mitigation on overall water quality of impaired water bodies. Therefore, any rules issued by the Commission or directed by the General Assembly that pertain to basinwide nutrient management and mitigation of water quality for impaired water bodies, as defined by the federal government, and that have been temporarily delayed by a prior act of the General Assembly or Commission, shall have an effective date of two additional years or one year after the completion of the projects described in this subsection, whichever is later.

SECTION 14.5.(e)  The Department and Commission shall consider and include in situ strategies, as described in subsection (a) of this section, in their development, review, and modifications of basinwide water quality management plans or related water quality mitigation modeling.

 

Inlet and Port Access Management

SECTION 14.6.(a)  G.S. 143‑215.73F reads as rewritten:

"§ 143‑215.73F.  Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund.

(a)        Fund Established. – The Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund is established as a special revenue fund. The Fund consists of fees credited to it under G.S. 75A‑3, 75A‑38, G.S. 75A‑3 and G.S. 75A‑38 and 105‑449.126. taxes credited under G.S. 105‑449.126.

(b)        Uses of Fund. – Revenue in the Fund may only be used to for the following purposes:

(1)        To provide the State's share of the costs associated with any dredging project designed to keep shallow draft navigation channels located in State waters or waters of the state located within lakes navigable and safe, or for safe.

(2)        For aquatic weed control projects in waters of the State located within lakes under Article 15 of Chapter 113A of the General Statutes. Funding for aquatic weed control projects is limited to five hundred thousand dollars ($500,000) in each fiscal year.

(c)        Cost‑Share. – Any project funded by revenue from the Fund must be cost‑shared with non‑State dollars on a one‑to‑one basis, provided that the cost‑share for a lake located within a component of the State Parks System shall be provided by the Division of Parks and Recreation of the Department of Environment and Natural Resources. The Division of Parks and Recreation may use funds allocated to the State Parks System for capital projects under G.S. 113‑44.15 for the cost‑share.

(d)        Waiver of Cost‑Share. – The Secretary may waive or modify the non‑State cost‑share requirement for dredging projects that (i) alleviate a navigational emergency or (ii) represent an opportunity to supplement or leverage Corps funding that would be lost if a cost‑share was required. The Secretary may only waive or modify the non‑State cost‑share requirement up to an amount not to exceed five hundred thousand dollars ($500,000) per project.

(e)        Return of Non‑State Entity Funds. – Non‑State entities that contribute to the Fund for a particular project or group of projects may make a written request to the Secretary that the contribution be returned if the contribution has not been spent or encumbered within two years of receipt of the contribution by the Fund. If the written request is made prior to the funds being spent or encumbered, the Secretary shall return the funds to the entity within 30 days after the later of (i) receiving the request or (ii) the expiration of the two‑year period described by this subsection.

(f)         Reporting. – The Secretary shall report any waivers or modifications of the cost‑share requirement made under subsection (d) of this section within 30 days of issuing the waiver or modification to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division of the General Assembly. The report shall include an explanation of the factors in subsection (d) of this section that are the basis for the waiver or modification decision.

(g)        Definitions. – The following definitions apply in this section:

(1)        Corps. – The United States Army Corps of Engineers.

(2)        Costs associated with a dredging project. – Includes the cost of the dredging operation, surveys or studies directly attributable to the project, and the costs of disposal of dredged material.

(3)        Navigational emergency. – With respect to a shallow draft navigation channel, the removal of or statement of intent to remove one or more navigational buoys by the United States Coast Guard from the channel due to shoaling.

(4)        Shallow draft navigation channel. – (i) a A waterway connection with a maximum depth of 16 feet between the Atlantic Ocean and a bay or the Atlantic Intracoastal Waterway, (ii) a river entrance to the Atlantic Ocean through which tidal and other currents flow, or (iii) other interior coastal waterways. "Shallow draft navigation channel" The term includes the Atlantic Intracoastal Waterway and its side channels, Beaufort Harbor, Bogue Inlet, Carolina Beach Inlet, the channel from Back Sound to Lookout Back, channels connected to federal navigation channels, Lockwoods Folly River, Manteo/Shallowbag Bay, including Oregon Inlet, Masonboro Inlet, New River, New Topsail Inlet, Rodanthe, Hatteras Inlet, Rollinson, Shallotte River, Silver Lake Harbor, and the waterway connecting Pamlico Sound and Beaufort Harbor."

SECTION 14.6.(b)  Notwithstanding G.S. 143‑215.73F, the funds available in the Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund shall be reserved for all of the following purposes:

(1)        The sum of four million dollars ($4,000,000) shall be reserved for Oregon Inlet dredging needs.

(2)        The sum of one hundred fifty thousand dollars ($150,000) shall be reserved to reimburse the Department of Administration for its costs associated with exploring options for acquiring Oregon Inlet and the adjacent real property, including, but not limited to, surveys and appraisals, legal research, and studies related to sand management, engineering proposals, and larval transport.

(3)        The sum of seven hundred fifty thousand dollars ($750,000) shall be reserved to reimburse the Department of Administration for its costs associated with the implementation of Section 14.7(g) of S.L. 2014‑100. Upon completion of the actions defined in Sections 14.7(a) through (f) of S.L. 2014‑100 by the Secretary of Administration and the federal government, Section 14.7(g) of S.L. 2014‑100 is repealed. The Department of Administration shall use the report submitted by the Department of Transportation pursuant to Section 14.7(h) of S.L. 2014‑100 and consult with the Department of Transportation when prioritizing condemnation of all existing and future transportation corridors on the Outer Banks, a right retained by the State and recorded in a deed executed on August 7, 1958, when these lands were conveyed to the federal government.

(4)        The sum of two hundred fifty thousand dollars ($250,000) shall be reserved for use by the Department of Environment and Natural Resources to update the Beach and Inlet Management Plan. The Department may enter into a sole‑source contract of up to two hundred fifty thousand dollars ($250,000) with the firm that developed the initial Plan to have the firm update the Plan. The updated Plan shall include a recommended schedule for ongoing inlet maintenance. No later than December 1, 2016, the Department shall report to the Environmental Review Commission on the updated Plan.

The conditions on funding set out in G.S. 143‑215.73F(c) may not be waived pursuant to G.S. 143‑215.73F(d) for funds reserved for the Oregon Inlet dredging needs set out in subdivision (1) of this subsection. If State funds reserved for the purposes listed above are not spent or encumbered by June 30, 2016, the State funds shall be unreserved and made available for any of the uses set out in G.S. 143‑215.73F.

SECTION 14.6.(c)  Article 21 of Chapter 143 of the General Statutes is amended by adding a new Part to read:

"Part 8C. Deep Draft Navigation Channel Dredging and Maintenance Fund.

"§ 143‑215.73G.  Deep Draft Navigation Channel Dredging and Maintenance Fund.

(a)        Fund Established. – The Deep Draft Navigation Channel Dredging and Maintenance Fund is established as a special revenue fund. The Fund consists of General Fund appropriations, gifts, or grants, including monies contributed by a non‑State entity for a particular dredging project or group of projects and any other revenues specifically allocated to the Fund by an act of the General Assembly.

(b)        Uses of the Fund. – Revenue credited to the Fund may only be used for costs associated with projects providing safe and efficient navigational access to a State Port, including the design, construction, expansion, modification, or maintenance of deep draft navigation channels, turning basins, berths, and related structures, as well as surveys or studies related to any of the foregoing and the costs of disposal of dredged material.

(c)        Conditions on Funding. – State funds credited to the Fund from the sources described in subsection (a) of this section must be cost‑shared on a one‑to‑one basis with funds provided by the State Ports Authority, provided that:

(1)        Funds contributed to the Fund by a non‑State entity are not considered State funds and may be used to provide the cost‑share required by this subsection.

(2)        The Secretary may waive or modify the cost‑share requirement for any project that supplements Corps funding for a study authorized by the Corps related to navigational access to a State Port, based on availability of alternate funding sources.

(d)        Return of Non‑State Entity Funds. – Non‑State entities that contribute to the Fund for a particular project or group of projects may make a written request to the Secretary that the contribution be returned if the contribution has not been spent or encumbered within two years of receipt of the contribution by the Fund. If the written request is made prior to the funds being spent or encumbered, the Secretary shall return the funds to the entity within 30 days after the later of (i) receiving the request or (ii) the expiration of the two‑year period described by this subsection.

(e)        Definitions. – The following definitions apply in this Part:

(1)        Corps. – The United States Army Corps of Engineers.

(2)        State Port. – Facilities at Wilmington or Morehead City managed or operated by the State Ports Authority."

SECTION 14.6.(d)  SPA Memorandum of Agreement. – The State Ports Authority shall negotiate with the United States Army Corps of Engineers (hereafter, "Corps") a memorandum of agreement allowing for nonfederal funding of dredging and related studies or maintenance at the State Ports located at Wilmington and Morehead City. The memorandum required by this subsection shall be for as long a term as possible.

SECTION 14.6.(e)  DENR Memorandum of Agreement. – The Division of Water Resources of the Department of Environment and Natural Resources shall negotiate with the Corps a memorandum of agreement allowing for nonfederal funding of dredging of Oregon Inlet. The memorandum required by this subsection shall be for as long a term as possible.

SECTION 14.6.(f)  Port Access Lands Acquisition Agreement. – Notwithstanding Chapter 146 of the General Statutes or any other provision of law, the Department of Administration, on behalf of the State, shall seek to initiate negotiations with the appropriate agency of the federal government for an agreement to acquire the federally owned property necessary for management of deep draft navigation channels providing access to State Port facilities at Morehead City from the federal government in exchange for State‑owned real property.

(1)        Interagency cooperation. – The North Carolina Ports Authority and the Department of Transportation shall be included in the planning and carrying out of these negotiations, but the ultimate approval authority remains solely with the Secretary of the Department of Administration.

(2)        Terms of agreement. – The Secretary of the Department of Administration shall have the authority to negotiate the terms of the acquisition agreement. The agreement (i) shall provide for the acquisition of interests in real property described in this subsection and no other; (ii) shall provide that the conveyances described in the agreement become effective as soon as practicable; and (iii) shall incorporate the relevant terms of this subsection.

(3)        Execution of deeds. – Within 30 days of the acquisition becoming effective, the Attorney General shall execute any documents or deeds necessary to effectuate the acquisition under the exact terms set forth in the acquisition agreement. All State agencies and officials shall cooperate to the fullest extent possible in effectuating the acquisition agreement.

(4)        Reporting. – Within 30 days after an agreement is entered into pursuant to this section, the Secretary of the Department of Administration shall report to the Joint Legislative Commission on Governmental Operations on the terms of the agreement.

SECTION 14.6.(g)  Contested Case Exemption. – G.S. 150B‑1(e) is amended by adding a new subdivision to read:

"(e)       Exemptions From Contested Case Provisions. – The contested case provisions of this Chapter apply to all agencies and all proceedings not expressly exempted from the Chapter. The contested case provisions of this Chapter do not apply to the following:

(22)      The Secretary of Environment and Natural Resources for the waiver or modification of non‑State cost‑share requirements under G.S. 143‑215.73F and G.S. 143‑215.73G."

SECTION 14.6.(h)  The General Assembly finds that the New Inlet Dam or "The Rocks" is a breakwater established by the United States Army Corps of Engineers in the late 1800s. The New Inlet Dam is composed of two components, a Northern Component that extends from Federal Point to Zeke's Island and a Southern Component that extends southwestward from Zeke's Island and separates the New Inlet from the main channel of the Cape Fear River. The General Assembly further finds that the Southern Component of the New Inlet Dam impedes the natural flow of water between the Cape Fear River and the Atlantic Ocean that occurred prior to emplacement of the dam. The General Assembly further finds that it is necessary to remove the Southern Component of the New Inlet Dam in order to reestablish the natural hydrodynamic flow between the Cape Fear River and the Atlantic Ocean. To this end, the Department of Environment and Natural Resources shall do all of the following:

(1)        Notify the United States Army Corps of Engineers of the State's intent to remove the Southern Component of the New Inlet Dam.

(2)        Issue a Request for Proposals for a firm capable of conducting all aspects of removal of the Southern Component of the New Inlet Dam, including securing all necessary State and federal permits and developing and implementing a removal plan. Identification of a capable firm pursuant to this section shall be done in accordance with Article 8 of Chapter 143 of the General Statutes.

(3)        Execute a contract with the firm chosen to implement subdivision (2) of this subsection and exercise oversight of the fulfillment of the contract. Execution of a contract pursuant to this section shall be done in accordance with Article 8 of Chapter 143 of the General Statutes.

(4)        Request approval from the National Oceanic and Atmospheric Administration to adjust the boundary established for Zeke's Island for both of the following changes:

a.         Moving the current western boundary 200 feet seaward and removing the area that lies between the current boundary and the new boundary from the North Carolina National Estuarine Research Reserve.

b.         Compensating for any loss of acreage pursuant to sub‑subdivision a. of this subdivision by adding a corresponding amount of acreage to the northern boundary of Zeke's Island from adjacent acreage at Fort Fisher State Recreation Area.

(5)        If the Department obtains approval from the National Oceanic and Atmospheric Administration to adjust the boundary established for Zeke's Island as described in subdivision (4) of this subsection, the Coastal Resources Commission shall amend 15A NCAC 070 .0105 (North Carolina Coastal Reserve: Reserve Components) as follows:

a.         Definitions. – "Reserve Components Rule" means 15A NCAC 070 .0105 (North Carolina Coastal Reserve: Reserve Components) for purposes of this section and its implementation.

b.         Reserve Components Rule. – Until the effective date of the revised permanent rule that the Coastal Resources Commission is required to adopt pursuant to sub‑subdivision d. of this subdivision, the Commission and the Department of Environment and Natural Resources shall implement the Reserve Components Rule, as provided in sub‑subdivision c. of this subdivision.

c.         Implementation. – Notwithstanding the Reserve Components Rule, the Commission shall adjust the boundary established for Zeke's Island in conformance with any boundary change that is approved by the National Oceanic and Atmospheric Administration pursuant to subdivision (4) of this subsection.

d.         Additional rule‑making authority. – The Commission shall adopt a rule to replace the Reserve Components Rule. Notwithstanding G.S. 150B‑19(4), the rule adopted by the Commission pursuant to this subdivision shall be substantively identical to the provisions of sub‑subdivision c. of this subdivision. Rules adopted pursuant to this subdivision are not subject to Part 3 of Article 2A of Chapter 150B of the General Statutes. Rules adopted pursuant to this subdivision shall become effective as provided in G.S. 150B‑21.3(b1) as though 10 or more written objections had been received as provided by G.S. 150B‑21.3(b2).

e.         Effective date. – Sub‑subdivision c. of this subdivision expires when permanent rules to replace sub‑subdivision c. of this subdivision have become effective, as provided by sub‑subdivision d. of this subdivision.

Notwithstanding any other provision of law, the Department of Environment and Natural Resources may use funds from the Deep Draft Navigation Channel Dredging and Maintenance Fund, established pursuant to G.S. 143‑215.73G, as enacted by subsection (c) of this section, to implement this subsection.

SECTION 14.6.(i)  Coastal Waterways User Identification Number and Fee. – Article 1 of Chapter 75A of the General Statutes is amended by adding a new section to read:

"§ 75A‑5.3.  Coastal Waterways User Identification Number required.

(a)        Definitions. – As used in this section, "coastal fishing waters" has the same meaning as in G.S. 113‑129.

(b)        Coastal Waterways User Identification Number Required. – All of the following vessels are required to be numbered with a Coastal Waterways User Identification Number issued by the Wildlife Resources Commission:

(1)        A vessel required to be numbered pursuant to G.S. 75A‑4 that is 24 feet or more in length and that is operated in the coastal fishing waters of the State.

(2)        A vessel that (i) is numbered in accordance with applicable federal law or in accordance with a federally approved numbering system of another state, (ii) is 24 feet or more in length, and (iii) is used to engage in commercial or recreational fishing in the coastal fishing waters of the State under any of the following fishing licenses:

a.         A Standard Commercial Fishing License issued pursuant to G.S. 113‑168.2.

b.         A Retired Standard Commercial Fishing License issued pursuant to G.S. 113‑168.3.

c.         A Shellfish License issued pursuant to G.S. 113‑169.2.

d.         A Recreational Commercial Gear License issued pursuant to G.S. 113‑173.

e.         A Coastal Recreational Fishing License issued pursuant to G.S. 113‑174.2 or G.S. 113‑351.

f.          A For‑Hire License issued pursuant to G.S. 113‑174.3.

(c)        Fees. – The annual fee for a Coastal Waterways User Identification Number shall be calculated by rounding down the length of the vessel to the nearest foot, dividing this length by eight, and multiplying the result by the length of the vessel rounded down to the nearest foot. The result of this calculation shall be rounded down to the nearest cent, and this result shall be the dollar amount of the annual fee for each vessel. Notwithstanding this subsection, an annual fee for a Coastal Waterways User Identification Number shall not be greater than the fee for a 100‑foot vessel. The funds collected pursuant to this section shall be credited on a quarterly basis to the Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund established by G.S. 143‑215.73F.

(d)        Renewal of Number. – An owner of a vessel issued a Coastal Waterways User Identification Number pursuant to this section shall renew the number on or before the number expires. If the number is not renewed before it expires, it shall lapse and be void until such time as it may thereafter be renewed. Application for renewal shall be submitted on a form approved by the Commission and shall be accompanied by a fee in the amount set forth in subsection (c) of this section.

(e)        Duplicate Number. – The Commission shall issue a duplicate number for a Coastal Waterways User Identification Number upon application by the person entitled to hold the number if the Commission is satisfied the original number has been lost, stolen, mutilated, destroyed, or has become illegible.

(f)         Vessel Change of Ownership. – Should the ownership of a vessel with a valid Coastal Waterways User Identification Number change, a new application form with the fee set forth in subsection (c) of this section shall be filed with the Commission by the new owner upon expiration if the new owner intends to use the vessel as described in subsection (b) of this section. Coastal Waterways User Identification Numbers are not transferable from one vessel to another.

(g)        Duration. – Coastal Waterways User Identification Numbers are valid for a period of 12 months from the date of issuance. Subsequent renewals made before the expiration date of the number are valid the first day after the expiration of the currently valid number. Renewals made after the number expires are valid for a period of 12 months from the date of issuance.

(h)        Display. – Notwithstanding G.S. 75A‑5(k), the Coastal Waterways User Identification Number shall be displayed on each side of the bow of the vessel.

(i)         Penalty. – A person who fails to obtain and display the Coastal Waterways User Identification Number required by this section is responsible for an infraction as provided in G.S. 14‑3.1 and shall pay a fine equal to the amount of the fee for the applicable Coastal Waterways User Identification Number.

(j)         Rule Making. – The Wildlife Resources Commission shall adopt rules to implement this section."

SECTION 14.6.(j)  G.S. 75A‑5.2(c) reads as rewritten:

"(c)       As compensation for services rendered to the Commission and to the general public, vessel agents shall receive the surcharge listed below. The surcharge shall be added to the fee for each certificate issued.

(1)        Renewal of certificate of number – $3.00.

(2)        Transfer of ownership and certificate of number – $5.00.

(3)        Issuance of new certificate of number – $5.00.

(4)        Issuance of duplicate certificate of number – $3.00.

(5)        Issuance or transfer of certificate of title – $5.00.

(6)        Issuance of new, duplicate, or renewal Coastal Waterways User Identification Number – $3.50."

SECTION 14.6.(k)  The Wildlife Resources Commission shall disseminate information regarding the Coastal Waterways User Identification Number to the public in order to inform affected vessel owners of the Coastal Waterways User Identification Number requirements.

SECTION 14.6.(l)  Coastal Waterways User Fee Administrative Costs. – Notwithstanding G.S. 75A‑3, of the funds to be transferred to the Shallow Draft Navigation Channel and Lake Dredging Fund pursuant to G.S. 75A‑3, the Wildlife Resources Commission may retain up to two hundred fifty thousand dollars ($250,000) in each fiscal year of the 2015‑2017 fiscal biennium to implement subsections (i), (j), and (k) of this section.

SECTION 14.6.(m)  Amend Dare County Occupancy Tax. – Effective July 1, 2015, for net proceeds collected on or after that date, Chapter 449 of the 1985 Session Laws, as amended by Chapters 177 and 906 of the 1991 Session Laws, Part VII of S.L. 2001‑439, and Section 7 of S.L. 2010‑78, is amended by adding a new section to read:

"Sec. 3.3. Waterway Maintenance. – Notwithstanding any provision restricting the use of taxes authorized in this act, the county may use up to three million dollars ($3,000,000) of the net proceeds of the taxes authorized by Sections 3.1 and 3.2 of this act per fiscal year for maintenance of waterways located wholly or partially in the county. This section is repealed for fiscal years beginning on or after July 1, 2020."

SECTION 14.6.(n)  Section 1 of S.L. 2013‑182 is repealed.

SECTION 14.6.(o)  G.S. 153A‑132(i), as rewritten by S.L. 2013‑182, reads as rewritten:

"(i)        A county may by ordinance prohibit the abandonment of vessels in navigable waters within the county's ordinance‑making jurisdiction, subject to the provisions of this subsection. The provisions of this section shall apply to abandoned vessels in the same manner that they apply to abandoned or junked motor vehicles to the extent that the provisions may apply to abandoned vessels. For purposes of this subsection, an "abandoned vessel" is one that meets any of the following:

(1)        A vessel that is moored, anchored, or otherwise located for more than 30 consecutive days in any 180 consecutive‑day period without permission of the dock owner.

(2)        A vessel that is in danger of sinking, has sunk, is resting on the bottom, or is located such that it is a hazard to navigation or is an immediate danger to other vessels.

Shipwrecks, vessels, cargoes, tackle, and other underwater archeological remains that have been in place for more than 10 years shall not be considered abandoned vessels and shall not be removed under the provisions of this section without the approval of the Department of Cultural Resources, which is the legal custodian of these properties pursuant to G.S. 121‑22 and G.S. 121‑23. This subsection applies only to the counties set out in G.S. 113A‑103(2)."

SECTION 14.6.(p)  The Coastal Resources Commission shall amend its rules for the use of temporary erosion control structures to provide for all of the following:

(1)        Allow the placement of temporary erosion control structures on a property that is experiencing coastal erosion even if there are no imminently threatened structures on the property if the property is adjacent to a property where temporary erosion control structures have been placed.

(2)        Allow the placement of contiguous temporary erosion control structures from one shoreline boundary of a property to the other shoreline boundary, regardless of proximity to an imminently threatened structure.

(3)        The termination date of all permits for contiguous temporary erosion control structures on the same property shall be the same and shall be the latest termination date for any of the permits.

(4)        The replacement, repair, or modification of damaged temporary erosion control structures that are either legally placed with a current permit or legally placed with an expired permit, but the status of the permit is being litigated by the property owner.

SECTION 14.6.(q)  The Coastal Resources Commission shall adopt temporary rules to implement subsection (p) of this section no later than December 31, 2015. The Commission shall also adopt permanent rules to implement this section.

SECTION 14.6.(r)  Subsections (a) through (i) of G.S. 75A‑5.3, as enacted by subsection (i) of this section, become effective January 1, 2016.

 

USE OF OYSTER SHELLS PROHIBITED IN COMMERCIAL LANDSCAPING

SECTION 14.7.(a)  Article 20 of Chapter 113 of the General Statutes is amended by adding a new section to read:

"§ 113‑270.  Use of oyster shells by landscape contractors prohibited.

(a)        No landscape contractor shall use oyster shells as a ground cover.

(b)        Enforcement of the prohibition set forth in this section shall be under the jurisdiction of the Marine Fisheries Commission.

(c)        For purposes of this section, landscape contractor shall have the definition set forth in G.S. 89D‑11."

SECTION 14.7.(b)  T