GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2015

 

 

SESSION LAW 2015-241

HOUSE BILL 97

 

 

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                                            1,069,066,998          1,065,895,520

 

Department of Public Instruction                                                8,516,769,297          8,419,444,621

 

University of North Carolina – Board of Governors

      Appalachian State University                                                   127,841,892             127,835,582

      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               33,759,228

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

      NC A&T State University                                                         90,898,021               90,898,021

      NC Central University                                                              82,132,848               82,132,848

      NC 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

      UNC‑Asheville                                                                         37,592,283               37,592,283

      UNC‑Chapel Hill

            Academic Affairs                                                              252,265,861             252,265,861

            Health Affairs                                                                   187,779,905             187,779,905

            AHEC                                                                                49,282,678               49,282,678

      UNC‑Charlotte                                                                      198,971,605             198,971,605

      UNC‑Greensboro                                                                  143,459,427             143,459,427

      UNC‑Pembroke                                                                      53,184,870               53,192,105

      UNC‑School of the Arts                                                           28,669,298               28,669,298

      UNC‑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                                              110,112,626               35,984,886

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

      NC School of Science & Mathematics                                      19,786,361               19,787,561

      Aid to Private Institutions                                                        116,719,754             127,419,754

Total University of North Carolina –

Board of Governors                                                            2,746,562,578            2,683,307,927

 

HEALTH AND HUMAN SERVICES

 

      Department of Health and Human Services

      Central Management and Support                                           122,466,586             130,033,253

      Division of Aging and Adult Services                                         43,815,337               43,815,337

      Division of Blind Services/Deaf/HH                                             8,173,207                 8,173,207

      Division of Child Development and Early Education                 232,462,829             243,033,976

      Health Service Regulation                                                         16,105,247               16,110,674

      Division of Medical Assistance                                             3,736,574,943          3,916,237,272

      Division of Mental Health                                                        596,082,420             537,861,308

      NC Health Choice                                                                    12,556,342                    746,758

      Division of Public Health                                                         141,377,220             148,298,428

      Division of Social Services                                                      183,183,263             185,533,263

      Division of Vocation Rehabilitation                                            37,752,132               37,752,132

Total Health and Human Services                                        5,130,549,526            5,267,595,608

 

AGRICULTURE AND NATURAL AND ECONOMIC RESOURCES

 

Department of Agriculture and Consumer Services                        116,314,975             116,955,773

 

Department of Commerce

      Commerce                                                                               57,487,974               57,596,128

      Commerce State‑Aid                                                                20,754,240               18,055,810

 

Department of Cultural Resources

      Cultural Resources                                                                  163,398,267             169,289,403

      Roanoke Island Commission                                                          523,384                    523,384

 

Wildlife Resources Commission                                                      10,153,623               10,023,496

 

Department of Environment and Natural Resources                         81,306,602               82,429,609

 

Department of Labor                                                                      15,995,359               15,822,235

 

JUSTICE AND PUBLIC SAFETY

 

Department of Public Safety                                                       1,848,129,110          1,847,365,626

 

Judicial Department                                                                      484,931,217             484,126,321

 

Judicial Department – Indigent Defense                                         116,002,897             116,629,964

 

Department of Justice                                                                     53,849,464               52,715,592

 

GENERAL GOVERNMENT

 

Department of Administration                                                          61,340,912               58,664,485

 

Office of Administrative Hearings                                                      5,180,184                 5,143,413

 

Department of State Auditor                                                           12,103,663               12,004,791

 

Office of State Controller                                                                22,853,779               22,726,386

 

State Board of Elections                                                                   6,764,842                 6,513,363

 

General Assembly                                                                           57,409,649               57,009,051

 

Office of the Governor

      Office of the Governor                                                                5,822,109                 5,566,174

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

 

Office of State Budget and Management                                           7,683,949                 7,531,408

      OSBM – Reserve for Special Appropriations                            14,781,688                 2,000,000

 

Housing Finance Agency                                                                 21,618,739               25,660,000

 

Department of Insurance                                                                 38,652,279               38,355,246

 

Office of Lieutenant Governor                                                              682,875                    677,972

 

Department of Military and Veterans Affairs                                      9,536,995                 7,806,254

 

Department of Revenue                                                                  81,059,539               80,457,679

 

Department of Secretary of State                                                    11,888,691               11,750,695

 

Department of State Treasurer

      State Treasurer                                                                         10,262,911               10,348,384

      State Treasurer – Retirement for

            Fire and Rescue Squad Workers                                        22,041,299               21,691,299

 

RESERVES, ADJUSTMENTS AND DEBT SERVICE

 

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

Salary Adjustment Reserve                                                             12,500,000               25,000,000

OSHR Minimum of Market Adjustment                                                          0               12,000,000

Reserve for Future Benefit Needs                                                                   0               71,000,000

Workers' Compensation Reserve                                                    23,500,543               21,500,543

Information Technology Reserve                                                     21,320,843               21,320,843

Information Technology Fund                                                          21,755,191               21,681,854

IT Reserve – Budget Transparency Project                                          814,000                               0

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

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

Film and Entertainment Grant Fund                                                 30,000,000               30,000,000

Public Schools Average Daily Membership (ADM)                                         0             107,000,000

UNC System Enrollment Growth Reserve                                                       0               31,000,000

Debt Service

      General Debt Service                                                              713,159,643             701,849,215

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

 

TOTAL CURRENT OPERATIONS –

GENERAL FUND                                                             21,717,958,405          21,913,380,578

 

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                                                                   2,033,330             182,588,544

Over Collections FY 2014-15                                                      445,820,623                               0

Reversions FY 2014-15                                                               415,657,138                               0

Proceeds from Sale of Dix Received in FY 2014-15                         2,000,000                               0

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

Earmarkings of Year End Fund Balance:                                                                                          

      Savings Reserve                                                                    (200,000,000)                              0

      Repairs and Renovations                                                       (400,000,000)                              0

 

Beginning Unreserved Fund Balance                                       264,511,091             182,588,544

 

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                                                       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                                             22,229,611,091        22,758,688,544

 

Adjustments to Availability:  2015 Session

Historic Preservation Tax Credit                                                                     0                (8,000,000)

Modify Corporate Income Tax Rate Trigger,

      Expand Corporate Tax Base, and Repeal Bank

      Privilege Tax                                                                               6,000,000                               0

Phase-In Single Sales Factor Apportionment                                    (7,900,000)             (23,300,000)

Reduce Individual Income Tax

      (Reduces Rate to 5.499% in 2017,

      Restores Medical Deduction,

      and Raises Standard Deduction)                                            (117,300,000)           (437,100,000)

Expand Sales Tax Base                                                                  44,500,000             159,500,000

Transfer Additional Local Sales Tax

      Revenue for Economic Development,

      Public Education, and Community Colleges                                               0              (17,600,000)

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

Repeal Highway Fund Transfer                                                    (215,900,000)           (215,900,000)

Transfer to Medicaid Transformation Fund                                     (75,000,000)           (150,000,000)

Standard & Poor's Settlement Funds                                               19,382,143                               0

Master Settlement Agreement Funds to Golden L.E.A.F.               (10,000,000)             (10,000,000)

Department of Justice Tobacco Settlement                                        2,194,000                               0

Transfer from Federal Insurance Contributions Act

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

Transfer from E-Commerce Fund Cash Balance                                3,000,000                               0

Transfer from DPS Enterprise Resource

      Planning System IT Fund                                                            9,000,000                               0

Adjustment of Transfer from Treasurer's Office                                      62,998                      18,471

Adjustment of Transfer from Insurance Regulatory Fund                       355,915                      58,882

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

 

Subtotal Adjustments to Availability:  2015 Session             (312,308,142)           (713,381,019)

 

Revised General Fund Availability                                        21,917,302,949        22,045,307,525

 

Less General Fund Appropriations                                      (21,734,714,405)      (21,919,468,078)

 

Unappropriated Balance Remaining                                        182,588,544             125,839,447

 

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 four hundred million dollars ($400,000,000) from the unreserved fund balance to the Repairs and Renovations Reserve on June 30, 2015. This subsection becomes effective June 30, 2015.

SECTION 2.2.(d)  Of the funds transferred under subsection (c) of this section to the Repairs and Renovations Reserve:

(1)        The sum of one hundred fifty million dollars ($150,000,000) is appropriated from the Reserve for Repairs and Renovations for the 2015-2016 fiscal year and shall be used in accordance with Section 31.5 of this act.

(2)        If House Bill 943, 2015 Regular Session, is not ratified prior to January 1, 2016, an additional sum of two hundred fifty million dollars ($250,000,000) is appropriated from the Reserve for Repairs and Renovations for the 2015-2016 fiscal year and shall be used in accordance with Section 31.5 of this act. If House Bill 943, 2015 Regular Session, is ratified prior to January 1, 2016, then these funds shall be transferred from the Reserve for Repairs and Renovations to the Savings Reserve Account. 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.

SECTION 2.2.(e)  Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer a total of two hundred million dollars ($200,000,000) 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.(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 and the 2016‑2017 fiscal year.

 

Budget   Fund                                                                          FY 2015‑2016                   FY 2016‑2017

Code      Code         Description                                                    Amount                    Amount

24100     2514          E‑Commerce Fund                                      $3,000,000                             $0

24160     2000          NC FICA Account                                        4,296,802                    641,628

24554     2004          DPS – Enterprise Resource Planning                                                                                                           System IT Fund                                                               9,000,000                               0

 

SECTION 2.2.(g)  The State Controller shall transfer the net proceeds from the sale of the Dorothea Dix Hospital property in the amount of forty-nine million eight hundred ninety-nine thousand four hundred fifty-six dollars ($49,899,456) to the Dorothea Dix Hospital Property Fund, established pursuant to Section 12F.7(b) of this act. 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.

SECTION 2.2.(h)  The State Controller shall reserve from funds available in the General Fund the sum of seventy-five million dollars ($75,000,000) nonrecurring for the 2015-2016 fiscal year and the sum of one hundred fifty million dollars ($150,000,000) nonrecurring for the 2016-2017 fiscal year. The funds reserved in this subsection shall be transferred and deposited in the Medicaid Transformation Fund established in Section 12H.29 of this act. Funds deposited in the Medicaid Transformation Fund 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.(i)  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.

 

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                                                                     $ 112,626,679            $ 90,246,679

 

Division of Highways

      Administration                                                                          33,377,654               33,313,151

      Construction                                                                             45,054,878               42,554,878

      Maintenance                                                                        1,227,435,222          1,300,435,872

      Planning and Research                                                                              0                               0

      OSHA Program                                                                            358,030                    358,030

 

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

 

Intermodal Divisions

      Ferry                                                                                        40,600,395               40,600,395

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

      Aviation                                                                                    38,260,952               33,760,952

      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                                      64,417,173               60,728,046

 

Capital Improvements                                                                       5,019,700                 6,965,700

 

Total Highway Fund Appropriations                                   $ 1,947,788,129       $ 1,989,601,149

 

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                                                                    1,959,030,000          1,918,940,000

Adjustment to Revenue Availability:

      Motor Fuel Tax (Shallow Draft Navigation

            Channel Dredging and Lake Maintenance Fund)                (10,960,000)             (10,390,000)

      Motor Fuel Tax (Wildlife Resources Fund)                                     120,524                    116,409

      Motor Fuel Tax (Noncommercial Leaking

            Petroleum Underground Storage Tank

            Cleanup Fund)                                                                                    0                 1,775,000

      Motor Fuel Tax Distribution                                                     (76,290,000)             (73,800,000)

      Division of Motor Vehicles Fee Adjustments                             75,887,605             152,959,740

 

Revised Total Highway Fund Availability                          $ 1,947,788,129       $ 1,989,601,149

 

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                                                  1,179,455,486          1,193,757,958

 

Total Highway Trust Fund Appropriations                         $ 1,312,540,000       $ 1,339,235,000

 

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                                                            76,290,000               73,800,000

Motor Fuel Tax (Noncommercial Leaking Petroleum

      Underground Storage Tank Cleanup Fund)                                               0                    725,000

Division of Motor Vehicles Fee Adjustments                                   16,180,000               33,510,000

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

 

Total Highway Trust Fund Availability                              $  1,312,540,000       $ 1,339,235,000

 

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.

SECTION 5.1A.(c)  Notwithstanding the provisions of this section, no State agency may accept a grant not anticipated in this act if acceptance of the grant would obligate the State to make future expenditures relating to the program receiving the grant or would otherwise result in a financial obligation as a consequence of accepting the grant funds.

 

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                                      $ 310,455,157          $ 314,950,482

Prekindergarten Program                                                          78,252,110               78,252,110

Public School Building Capital Fund                                        100,000,000             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                                                                              $ 529,902,000          $ 534,397,325

 

SECTION 5.2.(b)  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.(c)  G.S. 18C‑163 reads as rewritten:

"§ 18C‑163.  Expenses of the Lottery.

(a)        Expenses of the Lottery may include any of the following:

(1)        The costs incurred in operating and administering the Commission, including initial start‑up costs.

(2)        The costs resulting from any contracts entered into for the purchase or lease of goods or services required by the Commission.

(3)        A transfer of one million dollars ($1,000,000) annually to the Department of Health and Human Services for gambling addiction education and treatment programs.

(4)        The costs of supplies, materials, tickets, independent studies and audits, data transmission, advertising, promotion, incentives, public relations, communications, bonding for lottery game retailers, printing, and distribution of tickets and shares.

(5)        The costs of reimbursing other governmental entities for services provided to the Commission.

(6)        The costs for any other goods and services needed to accomplish the purposes of this Chapter.

(b)        Expenses of the lottery shall also include a transfer of two million one hundred thousand dollars ($2,100,000) annually to the Department of Public Safety, Alcohol Law Enforcement Branch, for gambling enforcement activities."

SECTION 5.2.(d)  Article 8 of Chapter 18C of the General Statutes is amended by adding the following new sections to read:

"§ 18C‑174.  Number of regional offices limited.

The Lottery Commission shall maintain no more than seven regional offices. A regional office may include a claims center, but in no event shall the Lottery Commission maintain more than seven regional offices as provided in this section.

"§ 18C‑175.  Use of public assistance funds.

The Commission and all lottery game retailers are prohibited from accepting any form of public assistance funds for the purchase of any lottery ticket or participation in any lottery game."

SECTION 5.2.(e)  The Lottery Commission shall adopt any rules necessary to implement the provisions of this section.

 

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

Drivers Education                                                                                           0               27,393,768

State Public School Fund                                                              132,320,490             128,341,640

 

Total Appropriation                                                                 $150,320,490           $173,735,408

 

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

SECTION 5.3.(c)  The clear proceeds of the newly established motor vehicle registration late fee charged pursuant to G.S. 20‑88.03, as enacted by this act, shall be used to provide a dedicated source of revenue for the drivers education program administered by the Department of Public Instruction in accordance with G.S. 115C‑215 and shall be appropriated by the General Assembly for this purpose for the 2016‑2017 and 2017‑2018 fiscal years.

 

INDIAN GAMING EDUCATION REVENUE FUND

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

 

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, (ii) to respond to events as authorized under G.S. 166A‑19.40(a) of the North Carolina Emergency Management Act, (iii) by the State Treasurer to pay death benefits as authorized under Article 12A of Chapter 143 of the General Statutes, (iv) by the Office of the Governor for crime rewards in accordance with G.S. 15‑53 and G.S. 15‑53.1, (v) by the Industrial Commission for supplemental awards of compensation, or (vi) by the Department of Justice for legal fees. 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.

 

VENTURE CAPITAL MULTIPLIER FUND

SECTION 6.3.(a)  G.S. 147‑69.2(b) reads as rewritten:

"(b)      It shall be the duty of the State Treasurer to invest the cash of the funds enumerated in subsection (a) of this section in excess of the amount required to meet the current needs and demands on such funds. The State Treasurer may invest the funds as provided in this subsection. If an investment was authorized by this subsection at the time the investment was made or contractually committed to be made, then that investment shall continue to be authorized by this subsection, and none of the percentage or other limitation on investments set forth in this subsection shall be construed to require the State Treasurer to subsequently dispose of the investment or fail to honor any contractual commitments as a result of changes in market values, ratings, or other investment qualifications. For purposes of computing market values on which percentage limitations on investments in this subsection are based, all investments shall be valued as of the last date of the most recent fiscal quarter.

(12)      It is the intent of the General Assembly that the Escheat Fund provide a perpetual and sustainable source of funding for the purposes authorized by the State Constitution. Accordingly, the following provisions apply:

a.         With respect to assets of the Escheat Fund, in addition to those investments authorized by subdivisions (1) through (6) of this subsection, up to twenty percent (20%) ten percent (10%) of such assets may be invested in the investments authorized under subdivisions (7)(6c) through (9)(9a) of this subsection, notwithstanding the percentage limitations imposed on the Retirement Systems' investments under those subdivisions.

b.         The State Treasurer shall engage a third‑party professional actuary or consultant to conduct a valuation and projection of the financial status of the Escheat Fund. The associated costs for the services may be directly charged to the Escheat Fund. The State Treasurer shall communicate the valuation of the actuary or consultant in an annual report to the Governor, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the chairs of the respective appropriations and appropriate substantive committees of each chamber. The annual report shall evaluate claims by owners upon the Escheat Fund, current and projected investment returns, and projected contributions to the Escheat Fund. In the report, the State Treasurer shall assess the status of utilizing the Escheat Fund as an endowment fund and shall recommend an annual amount available for the funding of scholarships, loans, and grants from the Fund. The annual report shall be presented no later than December 31 of each year.

c.         The State Treasurer shall invest, in addition to those investments authorized by subdivision (12) of this subsection, ten percent (10%) of the net assets of the Escheat Fund as authorized under G.S 147‑69.2A."

SECTION 6.3.(b)  Article 6 of Chapter 147 of the General Statutes is amended by adding a new section to read:

"§ 147‑69.2A.  Investments; special funds held by the State Treasurer.

(a)        Firm to Administer Fund. – Following a public procurement process, a designee of the Governor, a designee of the State Treasurer, a designee of the Speaker of the House of Representatives, and a designee of the President Pro Tempore of the Senate shall jointly and unanimously select a third‑party professional investment management firm, registered with the U.S. Securities and Exchange Commission, to administer the Fund and select investment opportunities appropriate for receiving allocations from the Fund on the basis of potential return on investment and the risks attendant thereto. The State Treasurer shall assign professional and clerical staff to assist in the oversight of the Fund. All costs for the third‑party investment management firm and the professional and clerical staff shall be borne by the Fund pursuant to G.S. 147‑69.3(f). The State Treasurer shall discharge his or her duties with respect to the Fund as a fiduciary consistent with the provisions of applicable law, including, without limitation, G.S. 36E‑3.

(b)        Organization and Reporting. – All documents of the Governor or the State Treasurer concerning the Fund are public records governed by Chapter 132 of the General Statutes and any applicable provisions of the General Statutes protecting confidential information.

The State Treasurer and the Governor shall jointly develop and adopt an investment policy statement for the Fund.

The State Treasurer and Governor shall jointly adopt a common policy to prevent conflicts of interests such that (i) the designees of the State Treasurer and Governor who selected the third‑party investment management firm, (ii) the staff of the State Treasurer overseeing the Fund, and (iii) the third‑party investment management firm's employees selecting or overseeing Fund investments do not provide services for compensation (as an employee, consultant, or otherwise), within two years after the end of their service to the Fund, to any entity in which an investment from the Fund was made.

By October 1, 2015, and at least semiannually thereafter, the State Treasurer shall submit a report to the Governor, the Office of State Budget and Management, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division on investments made from the Fund and any return on investment. This report shall be made for the Fund in lieu of the reports required by G.S. 147‑69.1(e), 147‑69.2(b)(10a), 147‑69.3(h), 147‑69.3(i), and 147‑69.8.

(c)        Types of Investments. – Assets of the Fund may be invested in those types of investments authorized for the North Carolina Retirement Systems by G.S. 147‑69.2(b), notwithstanding the percentage limitations imposed on the Retirement Systems' investments under those subdivisions.

(d)        Report on Escheat Fund Valuation. – The State Treasurer shall engage a third‑party professional actuary or consultant to conduct a valuation and projection of the financial status of the Escheat Fund. The associated costs for the services may be directly charged to the Escheat Fund. The State Treasurer shall communicate the valuation of the actuary or consultant in an annual report to the Governor, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the chairs of the respective appropriations and appropriate substantive committees of each chamber. The annual report shall evaluate claims by owners upon the Escheat Fund, current and projected investment returns, and projected contributions to the Escheat Fund. In the report, the State Treasurer shall assess the status of utilizing the Escheat Fund as an endowment fund and shall recommend an annual amount available for the funding of scholarships, loans, and grants from the Fund. The annual report shall be presented no later than December 31 of each year."

 

STATE AGENCIES/REPORTS ON LEGISLATIVE LIAISONS AND SALARY INFORMATION

SECTION 6.4.  By January 1, 2016, 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 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.

 

EUGENICS COMPENSATION PAYMENTS

SECTION 6.13.  G.S. 143B‑426.51 reads as rewritten:

"§ 143B‑426.51.  Compensation payments.

(a)        A claimant determined to be a qualified recipient under this Part shall receive compensation in the amount determined by this subsection from funds appropriated for these purposes. A qualified recipient shall receive compensation in the form of two three payments. By October 31, 2014, claimants determined by the Commission to be qualified recipients shall receive an initial payment as provided by this section. Claimants determined to be qualified recipients after that date shall receive an initial payment within 60 days of the Commission's determination. A second and payment shall be made as provided for in this section. A final payment shall be made after the exhaustion of all appeals arising from the denial of eligibility for compensation under this Part.

The initial payment to each qualified recipient will be calculated by adding together the number of qualified recipients as of October 1, 2014, and the number of claims outstanding that are pending, then dividing that total number into the sum of ten million dollars ($10,000,000). The initial payment checks shall be remitted by October 31, 2014.

The second payment of fifteen thousand dollars ($15,000) shall be made to each qualified recipient who is determined to be eligible for compensation as of June 1, 2015. The second payment checks shall be remitted by November 1, 2015.

The final payment calculation will be made by taking the balance of compensation funds remaining after the exhaustion of appeals and dividing that sum equally between the number of qualified recipients determined finally to be eligible to receive compensation. The final payment checks shall be remitted within 90 days of the exhaustion of the last appeal. Any qualified claimant who was successful on appeal and who did not receive an initial payment or second payment shall be paid an amount equal to the initial and second payment amount, amounts, plus the amount from the final payment calculation.calculation, and less the amount of any compensation previously received pursuant to this section.

The Office and the State Controller shall collaborate to facilitate the administration of this section so as to effectuate the compensation of qualified recipients as soon as practicable.

…."

 

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 Fund are insufficient."

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

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

(a)        Account Established. – There is established a State Emergency Response Account and Disaster Relief Fund as a reserve in the General Fund. Any funds appropriated to the Account Fund 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 Fund 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.

(c)        Reporting Requirement. – The Governor shall report to the Joint Legislative Commission on Governmental Operations and to the Chairs of the Appropriations Committees of the Senate and House of Representatives on any expenditures from the State Emergency Response Account and Disaster Relief Fund no later than 30 days after making the expenditure. The report shall include a description of the emergency and type of action taken."

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 Account established in G.S. 166A‑19.42.

(17a)    State Emergency Response and Disaster Relief Fund. – The fund 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 State government. 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 funding for the funds, agencies, divisions, and programs subject to continuation review.

SECTION 6.20.(b)  The Senate Appropriations/Base Budget Committee and the House of Representatives Appropriations Committee may review the funds, programs, divisions, and transfers from the Highway Fund listed in this section and shall determine whether to continue, reduce, or eliminate these funds, programs, divisions, and transfers from the Highway Fund, 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, programs, and transfers from the Highway Fund are subject to continuation review as provided in this section:

(1)        Funds, agencies, divisions, and programs financed by transfers from the Highway Fund:

a.         Department of Environment and Natural Resources –

1.         Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund.

2.         Division of Air Quality Inspection and Maintenance Fees.

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

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

5.         Mercury Pollution Prevention Account.

b.         Department of Insurance –

1.         Rescue Squad Workers' Relief Fund.

2.         Volunteer Rescue/EMS Grant Program.

3.         State Fire Protection.

c.         Department of Public Safety – Inmate Road Squads and Litter Crews.

d.         Office of the State Controller – Funding transferred for BEACON support.

e.         Wildlife Resources Commission – Boating Account.

(2)        Other agencies, divisions, and programs:

a.         North Carolina Human Relations Commission.

b.         Department of Health and Human Services –

1.         Office of Minority Health.

2.         Maternal and Child Health Programs.

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 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, 2017, and applies to indebtedness issued, incurred, or refinanced on or after that date.

 

MSA CHANGES

SECTION 6.24.(a)  G.S. 143C‑9‑3 reads as rewritten:

"§ 143C‑9‑3.  Settlement Reserve Fund.

(a)        The "Settlement Reserve Fund" is established in the General Fund as a special fund in the Office of State Budget and Management to receive proceeds from tobacco litigation settlement agreements or final orders or judgments of a court in litigation between tobacco companies and the states. Funds credited to the Settlement Reserve Fund each fiscal year shall be included in General Fund availability as nontax revenue.

(a1)      Each year, the sum of ten million dollars ($10,000,000) from the Settlement Reserve Fund is appropriated to The Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation. The remainder of the funds credited to the Settlement Reserve Fund each fiscal year shall be transferred to the General Fund and included in General Fund availability as nontax revenue.

...."

SECTION 6.24.(b)  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.(c)  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.(d)  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.(e)  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.(f)  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.(g)  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.(h)  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 (c) 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)  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 and disposition of savings from the Highway Fund, federal funds, and other non‑State agency dedicated receipt sources.

(5)        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.(c)  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                                 $21,755,191             $21,681,854

 

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                                                   $7,873,903               $7,873,903

      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                                                                                       –                               –

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

      Compensation Reserve                                                                  $73,337                                

 

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‑eight million dollars ($188,000,000). For fiscal year 2016‑2017, receipts for the Internal Service Fund shall not exceed one hundred eighty‑nine million dollars ($189,000,000). 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.

SECTION 7.2.(b)  For the 2015‑2016 fiscal year, receipts in excess of requirements, including information technology equipment and fixtures, shall be maintained in a separate account to be managed by the Office of State Budget and Management. The amounts received shall be used for the following purposes:

(1)        To offset agency budget shortfalls resulting from Department of Information Technology rate increases.

(2)        To offset Department of Information Technology Internal Service Fund budget shortfalls, if approved by the Office of State Budget and Management.

Any use of excess receipts shall be reported to the Joint Legislative Oversight Committee of Information Technology and the Fiscal Research Division.

SECTION 7.2.(c)  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, 2016.

SECTION 7.2.(d)  For the 2016‑2017 fiscal year, 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 Department of Information Technology, and such funds shall be used only for the replacement of the fixtures and equipment for which the funds were collected. By December 1, 2015, the Department of Information Technology 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.(e)  Agency Billing and Payments. – The State Chief Information Officer shall ensure that bills from the Department of Information Technology 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.

 

INFORMATION TECHNOLOGY RESERVE

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

 

                                                                                                  FY 2015‑2016          FY 2016‑2017

      Government Data Analytics Center                                           $8,100,000               $8,100,000

      Improve Efficiency and Customer

            Service through IT Modernization                                       $8,127,991               $8,061,512

      IT Restructuring                                                                        $3,537,299               $3,740,927

      Economic Modeling Initiative                                                       $500,000                  $500,000

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

      NC Connect                                                                                $593,899                  $788,503

      Law Enforcement Information Exchange                                       $288,474                               –

 

SECTION 7.3.(b)  Of the funds appropriated for Information Technology Modernization, four hundred twenty‑four thousand nine hundred seventy‑four dollars ($424,974) for fiscal year 2015‑2016 and four hundred six thousand three hundred seventy‑four dollars ($406,374) for fiscal year 2016‑2017 shall be transferred to the Department of Revenue to fund three security positions. The security positions shall include a Security Design Engineer, a Security Impact Analyst, and a Security Specialist.

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)  The funds appropriated for IT Restructuring shall be used solely for information technology restructuring planning and implementation.

SECTION 7.3.(e)  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.(f)  The Office of State Budget and Management shall establish a fund code for the Information Technology Reserve Fund and shall manage it separately from other funding for the Department of Information Technology and the State Chief Information Officer.

 

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).

 

DATA CENTERS/CONSOLIDATION

SECTION 7.9.(a)  Beginning with the 2015‑2017 fiscal biennium, the State Chief Information Officer 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 December 1, 2015, the State Chief Information Officer shall present a report on the completed data center consolidation plan to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. On or before May 1, 2016, the State Chief Information Officer shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the number of physical servers eliminated across all departments as a result of data center consolidation and the savings associated with such elimination.

SECTION 7.9.(b)  State agencies shall use the State infrastructure to host their projects, services, data, and applications, except that the State Chief Information Officer may grant an exception if the State agency demonstrates any of the following:

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

(2)        The Department of Information Technology 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.

SECTION 7.9.(c)  The State Chief Information Officer shall establish an enterprise convenience contract with a vendor with offices located in this State for a full range of information technology products and services. These products and services shall include, but are not limited to, networking, security, infrastructure, data center hardware and software, storage, cloud‑based systems and services, unified communications, conferencing, video, and wireless.

SECTION 7.9.(d)  This section does not apply to any agency exempt under G.S. 147‑33.80.

 

INFORMATION TECHNOLOGY PERFORMANCE MEASURES

SECTION 7.11.(a)  On or before January 1, 2016, the State Chief Information Officer shall establish specific, quantifiable performance measures for each function performed by the Department of Information Technology and the State Chief Information Officer. These performance measures shall be posted on the Department of Information Technology Web site and, at a minimum, shall be updated on a monthly basis. Any plans shall include mitigation strategies to resolve any failure to meet established performance measures.

SECTION 7.11.(b)  Any Department of Information Technology reviews of State agency information technology requests for proposal shall ensure the request maximizes vendor participation.

 

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 substitute for paper documents and hardcopy forms. This program shall be developed in consultation with participating agencies. In developing this capability, the State CIO 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, 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)  On or before January 1, 2016, 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.

 

ECONOMIC MODELING INITIATIVE

SECTION 7.14.(a)  Of the funds appropriated to the Information Technology Reserve, the sum of five hundred thousand dollars ($500,000) for the 2015‑2016 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2016‑2017 fiscal year shall be allocated to the Board of Governors of The University of North Carolina for the University of North Carolina at Charlotte (UNC‑Charlotte) to provide economic modeling for the State.

SECTION 7.14.(b)  UNC‑Charlotte shall develop and implement an economic modeling capability to facilitate the efforts of State agencies working to create economic development and growth opportunities for the State. UNC‑Charlotte shall work with State agencies involved in economic development and growth initiatives to define their requirements and to provide timely, effective products to support their needs. All State agencies shall support this effort by providing required data in a timely manner.

SECTION 7.14.(c)  By January 15, 2016, UNC‑Charlotte shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the status of the economic modeling initiative.

 

STATE INFORMATION TECHNOLOGY BUDGETING

SECTION 7.16.(a)  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.

On or before January 1, 2016, 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)  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 on or before January 1, 2016.

 

GOVERNMENTAL 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 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.

SECTION 7.17.(b)  In addition, the State CIO shall coordinate with counties, cities, and local education agencies to facilitate the posting of their respective local entity budgetary and spending data on their respective Internet Web sites and to provide the data to the Local Government Commission (LGC) to be published, in a standardized format, on the State budget transparency Internet Web site established in subsection (a) of this section.

SECTION 7.17.(c)  The Internet Web sites mandated by this section shall be fully functional by April 1, 2016. Each Internet Web site shall:

(1)        Be user‑friendly with easy‑to‑use search features and data provided in formats that can be readily downloaded and analyzed by the public.

(2)        Include budgeted amounts and actual expenditures for each State agency or local entity budget code.

(3)        Include information on receipts and expenditures from and to all sources, including vendor payments, updated on a monthly basis.

SECTION 7.17.(d)  Each State agency, county, city, and local education 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. The LGC shall work with the State CIO to post data on the LGC's Internet Web site in a consistent manner that allows comparisons between the local entities providing data under subdivision (2) of subsection (c) of this section.

SECTION 7.17.(e)  There is appropriated from the General Fund to the Office of State Budget and Management the sum of eight hundred fourteen thousand dollars ($814,000) for the 2015‑2016 fiscal year for the purpose of implementing the provisions of this section.

 

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. The study shall include all of the following:

(1)        State liability issues.

(2)        State and vendor financial liability for data security breaches.

(3)        Methods of allocating risk for the State's vendors and IT contractors, including, but not limited to, the feasibility of maximum liability limits.

(4)        In consultation with the Department of Insurance, an analysis of the feasibility of developing a surplus line insurance policy and rate schedule for data breach liability coverage.

(5)        Federal government requirements.

(6)        State response to data security threats and breaches.

(7)        Third party liability issues.

(8)        Recommendations for managing data liability for the State.

(9)        Data breach liability allocation best practices in the public and private sectors.

 

LAW ENFORCEMENT INFORMATION EXCHANGE AND CJLEADS

SECTION 7.21.(a)  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.

SECTION 7.21.(b)  The Criminal Justice Information Network Board of Directors shall explore the feasibility of sharing data between the Law Enforcement Information Exchange and the Criminal Justice Law Enforcement Automated Data System (CJLEADS).

SECTION 7.21.(c)  CJLEADS shall not be moved from the Government Data Analytics Center (GDAC) in the Department of Information Technology, as created by this act.

SECTION 7.21.(d)  The Department of Public Safety and the State CIO shall ensure that CJLEADS obtains access to federal criminal information deemed to be essential in managing CJLEADS to support criminal justice professionals in accordance with G.S. 143B‑1344(d)(1)a. The Department of Public Safety and the State CIO shall provide a progress report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on or before February 1, 2016, and quarterly thereafter, until the necessary federal criminal information access has been obtained.

 

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, including an investigation of the potential for a cloud‑based unified ERP system.

SECTION 7.22.(b)  During the 2015‑2016 fiscal year, the DIT shall issue a request for information and coordinate demonstrations to determine available options for ERP system development and implementation. During the 2016‑2017 fiscal year, subject to the availability of funding, the DIT shall issue requests for proposal to begin the development and implementation of an ERP system.

SECTION 7.22.(c)  Beginning January 1, 2016, 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 December 1, 2015, and then annually 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 March 1, 2016, 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 March 1, 2016, 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, unless exempted by the Governor, 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.

(4)        Include a request for information to determine the capabilities and costs of available services.

SECTION 7.26.(b)  On or before April 1, 2016, the State Chief Information Officer shall make a written report to the Joint Legislative Oversight Committee on Information Technology on the results of the Department 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)        Community of practice. – A collaboration of organizations with similar requirements, responsibilities, or interests.

(4)        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.

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

(6)        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.

(7)        Enterprise solution. – An information technology solution that can be used by multiple agencies.

(8)        Exempt agencies. – An entity designated as exempt in subsection (b) of this section.

(9)        GDAC. – Government Data Analytics Center.

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

(11)      Information technology or IT. – Set of tools, processes, and methodologies, including, but not limited to, coding and programming; data communications, data conversion, and data analysis; architecture; planning; storage and retrieval; systems analysis and design; systems control; mobile applications; and equipment and services 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.

(12)      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.

(13)      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.

(14)      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.

(15)      Security incident.– A warning or indication of a threat to or breach of information or computer security. The term also includes threats that have already occurred.

(16)      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.

(17)      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.

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

(19)      State CIO approved data center. – A data center designated by the State CIO for State agency use that meets operational standards established by the Department.

(b)        Exemptions. – Except as otherwise specifically provided by law, the provisions of this Chapter do not apply to the following entities: the General Assembly, the Judicial Department, and The University of North Carolina and its constituent institutions. These entities 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. The 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 and services to State agencies.

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

(3)        Establish and document the strategic direction of information technology in the State.

(4)        Assist State agencies in meeting their business objectives.

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

(6)        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.

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

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

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

(10)      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.

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

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

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

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

(15)      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.

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

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

(18)      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.

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

(20)      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.

(21)      Establish and operate, or delegate operations of, centers of expertise (COE) 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.

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

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

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

(25)      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.

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

(27)      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.

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

(29)      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.

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

(31)      Support the operation of the Longitudinal Data Systems Board, as appropriate.

(32)      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.

(33)      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; Departmental personnel and administration.

(a)        State CIO. – The State Chief Information Officer (State CIO) is the head of the Department and a member of the Governor's cabinet. The State CIO is appointed by and serves at the pleasure of the Governor. The State CIO shall be qualified by education and experience for the office. 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)        Departmental Personnel. – The State CIO may appoint one or more deputy State CIOs, each of whom shall be under the direct supervision of the State CIO. The salaries of the deputy State CIOs shall be set by the State CIO. The State CIO and the Deputy State CIOs are exempt from the North Carolina Human Resources Act. Subject to the approval of the Governor and limitations of the G.S. 126‑5, the State CIO may appoint or designate additional managerial and policy making positions, including, but not limited to, the Department's chief financial officer and general counsel, each of whom shall be exempt from the North Carolina Human Resources Act.

(c)        Administration. – The Department shall be managed under the administration of the State CIO. The State CIO shall have the following powers 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)        Approve the selection of the respective agency chief information officers.

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

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

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

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

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

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

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

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

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

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

(14)      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.

(15)      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.

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

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

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

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

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

(21)      Support the operation of the Longitudinal Data Systems Board, as appropriate.

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

(d)        State Ethics Act. – All employees of the Department shall be subject to the provisions of the State Government Ethics Act under Chapter 138A of the General Statutes.

"§ 143B‑1303.  Departmental organization; divisions and units; education community of practice.

(a)        Organization. – The Department shall be organized by the State CIO into divisions and units that support its duties.

(b)        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 and its constituent institutions, 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.

(c)        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.

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

(c)        Participating Agencies. – The State CIO shall prepare detailed plans to transition each of the participating agencies. As the transition plans are completed, the following participating agencies shall transfer information technology personnel, operations, projects, assets, and appropriate funding to the Department of Information Technology:

(1)        Department of Cultural Resources.

(2)        Department of Health and Human Services.

(3)        Department of Revenue.

(4)        Department of Environment and Natural Resources.

(5)        Department of Transportation.

(6)        Department of Administration.

(7)        Department of Commerce.

(8)        Governor's Office.

(9)        Office of State Budget and Management.

(10)      Office of State Human Resources.

(11)      Office of the State Controller.

The State CIO shall ensure that agencies' operations are not adversely impacted during the transition.

(d)        Report on Transition Planning. – The Department of Public Safety, the Community College System Office, and the State Board of Elections shall work with the State CIO to plan their transition to the Department. By October 1, 2018, these agencies, in conjunction with the State CIO, shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on their respective transition plans.

(e)        Separate agencies may transition their information technology to the Department following completion of a transition plan.

"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, as follows:

(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 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)        Based on requirements identified during the strategic planning process, the Department shall develop and transmit to the General Assembly the biennial State Information Technology Plan 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 and funding sources for major projects and other requirements in progress or anticipated to be required during the upcoming fiscal biennium.

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

(6)        As part of the plan, 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.

(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) of this section, and transmit these plans to the Department by a date determined by the State CIO in 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 participating agencies and to separate agencies upon request pursuant to Part 3, Shared Information Technology Services, of this Article. Plans shall be submitted to the Department by a date determined by the State CIO in 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 participating 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 Information Technology Strategic Sourcing Office 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 their 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 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 exemptions or deviations permitted pursuant to G.S. 143B‑1300(b) or (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 participating agencies 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 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 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.

(c)        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.

(d)        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 February 1, 2016, and shall be provided to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by Feburary 1, 2016, but may be submitted incrementally to meet Department requirements. The career paths shall be updated on an annual basis.

(e)        Any new positions established by the Department shall be exempt from the North Carolina Human Resources Act.

(f)         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.

(g)        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 January 1, 2016.

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.

An agency that utilizes the system or software shall be designated as the sponsor for the information technology project or program and shall be responsible for overseeing the planning, development, implementation, and operation of the project or program. The Department and the assigned project managers shall advise and assist the designated agency for the duration of the project.

(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 (i) the project conforms to project management procedures and policies, (ii) the project does not duplicate a capability already existing in the State, (iii) the project conforms to procurement rules and policies, and (iv) 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 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.

(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 information technology 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 (d) 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 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, including recommendations regarding continued approval of the project.

The State CIO shall establish a clearly defined, standardized process for project management that includes time lines 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. 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 business 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.

Participating agency legacy applications shall be moved to the Department once a detailed plan is coordinated and in place for the successful transition of a specific application to the Department. 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.

(b)        The Department shall review all procurements to ensure they meet current technology standards, are not duplicative, meet business objectives, are cost‑effective, and are adequately funded. 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 technology 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 GSA 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 Secretary 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 and budgets for 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. When requested, all State agencies shall provide to the State CIO 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 multiyear 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 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.

(c)        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 subdivision (1) of subsection (c) of this section, an award recommendation shall be submitted to the State CIO 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‑1300(c), 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 the Fiscal Research Division on a quarterly basis.

"§ 143B‑1329.  Multiyear contracts; Attorney General assistance.

(a)        Notwithstanding the cash management provisions of G.S. 147‑86.11, the Department 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.

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

"§ 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 for State agencies.

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 (5) 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 (5) 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)        Any communications or broadband telecommunications services provided pursuant to this section shall not be provided in a manner that would 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(11). 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 web presence; annual report.

(a)        The Department shall plan, develop, implement, and operate a statewide electronic web presence, to include mobile, in order to (i) increase the convenience of members of the public in conducting online transactions with, and obtaining information from, State government and (ii) facilitate the public's 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 January 1, 2016, 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.

(a)        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.

(b)        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.

(c)        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‑1300(b), or 143B‑1300(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 CIO. 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 CIO 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 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.

"Part 9. Criminal Justice Information.

"Part 10. Emergency Telephone Service.

"Part 11. North Carolina Geographic Information Coordinating Council."

SECTION 7A.2.(c)  G.S. 143B‑426.38A is recodified into Part 8 of Article 14 of Chapter 143B of the General Statutes as G.S. 143B‑1344, and reads as rewritten:

"§ 143B‑1344.  Government Data Analytics Center; State data‑sharing requirements.Center.

(a)        State Government Data Analytics. – The State shall initiate across State agencies, departments, and institutions a data integration and data‑sharing initiative that is not intended to replace transactional systems but is instead intended to leverage the data from those systems for enterprise‑level State business intelligence as follows:

(1)        Creation of initiative. – In carrying out the purposes of this section, the Office of the State Chief Information Officer (CIO) shall conduct an ongoing, comprehensive evaluation of State data analytics projects and plans in order 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 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.

(2)        Application to State government. – The initiative shall include all State agencies, departments, and institutions, including The University of North Carolina.

(3)        Governance. – The State CIO shall lead the initiative established pursuant to this section. 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.

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

(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.

(4)        Operationalize. – The implementation process whereby a State agency, department, or institution integrates analytical output into current business processes and systems in order to improve operational efficiency and decision making.

(b)        Government Data Analytics Center. GDAC. ‑ The Government Data Analytics Center is established as a unit of the Department.

(1)        GDAC established. – There is established in the Office of the State CIO the Government Data Analytics Center (GDAC). Purpose. – The purpose of the 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 the previous data integration effort in the Office of the State Controller 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.

(2)        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.

(2)(3)   Powers and duties of the GDAC.duties. – The State CIO shall, through the GDAC, do all of the following:

a.         Continue Manage and coordinate ongoing enterprise data integration efforts, including:

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

2.         The pilot and subsequent phase initiative fordeployment, support, technology improvements, and expansion of the North Carolina Financial Accountability and Compliance Technology System (NCFACTS).(NCFACTS) in order to collect data that will create efficiencies and detect fraud, waste, and abuse across State government.

3.         The development, deployment, support, technology improvements, and expansion of the GDAC Enterprise Solutions.

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

5.         The integration of all available financial data to support more comprehensive State budget and financial analyses.

4.6.      Other capabilities capabilities as developed as part of the initiative.by the GDAC.

b.         Identify technologies currently used in North Carolina that have the capability to support the initiative.

c.         Identify other technologies, especially those with unique capabilities, capabilities that are complementary to existing GDAC analytic solutions that could support the State's business intelligence effort.

d.         Compare capabilities and costs across State agencies.

e.         Ensure implementation is properly supported across State agencies.

f.          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.

g.         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.

h.         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 expertise, (ii) assists in defining business rules so the data can be properly used.used, and (iii) ensures participating State agencies operationalize analytics and report outcomes.

i.          Recommend the most cost‑effective and reliable long‑term hosting solution for enterprise‑level State business intelligence as well as data integration, notwithstanding Section 6A.2(f) of S.L. 2011‑145.any other provision of State law or regulation.

j.          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.

k.         Create efficiencies in State government by ensuring that State agencies use the GDAC for agency business intelligence requirements.

l.          Assist State agencies in developing requirements for the integration or creation of an interface with State agencies' workflow processes and transactional systems to operationalize GDAC analytic solutions.

m.        Establish clear metrics and definitions with participating State agencies for reporting outcomes for each GDAC project.

n.         Evaluate State agency business intelligence projects to determine the feasibility of integrating analytics and reporting with the GDAC and to determine what GDAC services may support the projects.

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

a.         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.

b.         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.

(5)        Project management. – The State CIO and State agencies, 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:

a.         Without the specific approval of the General Assembly, unless the project can be implemented within funds appropriated for GDAC projects.

b.         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.

(c)        Implementation of the Enterprise‑Level Business Intelligence Initiative. –

(1)        Phases of the initiative. – The initiative shall cycle through these phases on an ongoing basis as follows:

a.         Phase I requirements. – In the first phase, the State CIO through GDAC shall:

1.         Inventory existing State agency business intelligence projects, both completed and under development.

2.         Develop a plan of action that does all of the following:

I.          Defines the program requirements, objectives, and end state of the initiative.

II.         Prioritizes projects and stages of implementation in a detailed plan and benchmarked time line.

III.       Includes the effective coordination of all of the State's current data integration initiatives.

IV.       Utilizes 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.

V.        Determines costs associated with the development efforts and identifies potential sources of funding.

VI.       Includes a privacy framework for business intelligence consisting of adequate access controls and end user security requirements.

VII.      Estimates expected savings.

3.         Inventory existing external data sources that are purchased by State agencies to determine whether consolidation of licenses is appropriate for the enterprise.

4.         Determine whether current, ongoing projects support the enterprise‑level objectives.

5.         Determine whether current applications are scalable or are applicable for multiple State agencies or both.

b.         Phase II requirements. – In the second phase, the State CIO through the GDAC shall:

1.         Identify redundancies and recommend to the General Assembly any projects that should be discontinued.

2.         Determine where gaps exist in current or potential capabilities.

c.         Phase III requirements. – In the third phase:

1.         The State CIO through GDAC shall incorporate or consolidate existing projects, as appropriate.

2.         The State CIO shall, notwithstanding G.S. 147‑33.76 or any rules adopted pursuant thereto, eliminate redundant business intelligence projects, applications, software, and licensing.

3.         The State CIO through GDAC shall complete all necessary steps to ensure data integration in a manner that adequately protects privacy.

(2)        Project management. – The State CIO shall ensure that all current and new business intelligence/data analytics projects are in compliance with all State laws, policies, and rules pertaining to information technology procurement, project management, and project funding and that they include quantifiable and verifiable savings to the State. 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.

The Office of the State CIO, 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:

a.         Without the specific approval of the General Assembly unless the project can be implemented within funds appropriated for GDAC projects.

b.         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.

(c)        Data Sharing. –

(1)        General duties of all State agencies. – Except as limited or prohibited by federal law, the head of each State agency, department, and institution shall do all of the following:

a.         Grant the State CIO and 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.

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

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

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

e.         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.

f.          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.

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

h.         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.

(2)        Specific agency requirements. – The following agency‑specific requirements are designed to illustrate but not limit the type and extent of data and information required to be released under subdivision (1) of this subsection:

a.         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.

b.         The North Carolina Rate Bureau (Bureau) shall release to the GDAC, or otherwise provide electronic access to, all data requested by the 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.

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

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

e.         The Department of Revenue shall release to the GDAC, or otherwise provide access to, all data requested by the 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 Secretary of State 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 the 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 sub‑subdivision is performed in accordance with applicable federal law.

f.          The North Carolina Department of Health and Human Services, pursuant to this Part, shall share (i) claims data from NCTRACKS and the accompanying claims data warehouse and (ii) encounter data with the GDAC in order to leverage existing public‑private partnerships and subject matter expertise that can assist in providing outcome‑based analysis of services and programs as well as population health analytics of the Medicaid and LME/MCO patient population.

(3)        All information shared with the 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 subsection.

(d)        Provisions on Privacy and Confidentiality of Information. –

(1)        Status with respect to certain information. – The State CIO and the GDAC shall be deemed to be all of the following for the purposes of this section:

a.         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.

b.         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:

1.         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.

2.         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 such data.

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.

(2)        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:

a.         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.

b.         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 the 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.

c.         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.

d.         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.

(d)(e)   Funding. – The Office of the State CIO, Department of Information Technology, with the support of the Office of State Budget and Management, shall identify and make all efforts to secure any matching funds or other resources to assist in funding this initiative. the GDAC. Savings resulting from the cancellation of projects, software, and licensing, as well as any other savings from the initiative, 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 initiative 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 Office of the State CIO in Phase I of the initiative.CIO.

(e)(f)    Reporting. – The Office of the State CIO shall:

(1)        Submit and present quarterly reports on implementation of Phase I of the initiative and the plan developed as part of that phase On or before March 1 of each year, submit and present a report 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. The State CIO shall submit a report prior to implementing any improvements, expending funding for expansion of existing business intelligence efforts, or establishing other projects as a result of its evaluations, and quarterly thereafter, a written report detailing progress on, and identifying any issues associated with, State business intelligence efforts. The report shall include the following:

a.         A description of project funding and expenditures, cost savings, cost avoidance, efficiency gains, process improvements, and major accomplishments. Cost savings and cost avoidance shall include immediate monetary impacts as well as ongoing projections.

b.         A description of the contribution of funds or resources by those private entities which are participating in public‑private partnerships under this section, including, but not limited to, knowledge transfer and education activities, software licensing, hardware and technical infrastructure resources, personnel resources, and such other resources as agreed upon by the State and the private entity.

(2)        Report the following information as needed: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.

(f)         Data Sharing. –

(1)        General duties of all State agencies. – Except as limited or prohibited by federal law, the head of each State agency, department, and institution shall do all of the following:

a.         Grant the Office of the State CIO 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.

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

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

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

e.         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.

f.          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.

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

h.         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.

(2)        Specific requirements. – The State CIO and 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:

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

b.         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.

c.         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.

d.         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.

e.         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 Secretary of State 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.

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

(g)        Provisions on Privacy and Confidentiality of Information.

(1)        Status with respect to certain information. – The State CIO and the GDAC shall be deemed to be all of the following for the purposes of this section:

a.         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.

b.         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:

1.         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.

2.         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 data.

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.

(2)        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:

a.         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.

b.         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.

c.         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.

d.         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.

(h)        Definition/Additional Requirements. – For the purposes of this section, the term "business intelligence (BI)" means 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. The term also includes (i) 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 and (ii) 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. All State agency business intelligence requirements, including any planning or development efforts associated with creating BI capability, as well as any master data management efforts, shall be implemented through GDAC. The State Chief Information Officer shall ensure that State agencies use the GDAC for agency business intelligence requirements."

SECTION 7A.2.(d)  G.S. 143B‑1351(a), as recodified by this Part, reads as rewritten:

"(a)       The Criminal Justice Information Network Governing Board is established within the Office of the State Chief Information OfficerDepartment of Information Technology, as a Type II transfer, 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 Office of the State Chief Information Officer, for organizational and budgetary purposes only and the Board shall exercise all of its statutory powers in this Article independent of control by the Office of the State Chief Information Officer."

SECTION 7A.2.(e)  G.S. 143B‑1353(a)(2), as recodified by this Part, reads as rewritten:

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

(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 Office Department of Information Technology Services, Technology, to develop and adopt standards for entering, storing, and transmitting information in criminal justice databases and for achieving maximum compatibility among user technologies."

SECTION 7A.2.(f)  G.S. 143B‑1354(b), as recodified by this Part, reads as rewritten:

"(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 Office of the State Chief Information Officer.Department of Information Technology."

 

INSTRUCTIONS TO THE REVISOR OF STATUTES

SECTION 7A.3.  The Revisor of Statutes shall make the following recodifications in connection with creating the Department of Information Technology:

(1)        Article 69 of Chapter 143 of the General Statutes (Criminal Justice Information Network) is recodified as Part 9 of Article 14 of Chapter 143B of the General Statutes with the sections to be numbered as G.S. 143B‑1350 through 143B‑1354, respectively.

(2)        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‑1360 through G.S. 143B‑1370, respectively.

(3)        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‑1375 through 143B‑1378, 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. 18C‑114(b) reads as rewritten:

"(b)      Article 3D of Chapter 147Article 14 of Chapter 143B of the General Statutes shall not apply to the Commission."

SECTION 7A.4.(b)  G.S. 20‑7(b2)(6) reads as rewritten:

"(6)      To the Office of the State Chief Information Officer for the purposes of G.S. 143B‑426.38A.G.S. 143B‑1344."

SECTION 7A.4.(c)  G.S. 20‑43(a) reads as rewritten:

"(a)       All records of the Division, other than those declared by law to be confidential for the use of the Division, shall be open to public inspection during office hours in accordance with G.S. 20‑43.1. A signature recorded in any format by the Division for a drivers license or a special identification card is confidential and shall not be released except for law enforcement purposes. A photographic image recorded in any format by the Division for a drivers license or a special identification card is confidential and shall not be released except for law enforcement purposes or to the Office of the State Chief Information Officer for the purposes of G.S. 143B‑426.38A.G.S. 143B‑1344."

SECTION 7A.4.(d)  G.S. 58‑2‑69(g) reads as rewritten:

"(g)       The Commissioner may contract with the NAIC or other persons for the provision of online services to applicants and licensees, for the provision of administrative services, for the provision of license processing and support services, and for the provision of regulatory data systems to the Commissioner. The NAIC or other person with whom the Commissioner contracts may charge applicants and licensees a reasonable fee for the provision of online services, the provision of administrative services, the provision of license processing and support services, and the provision of regulatory data systems to the Commissioner. The fee shall be agreed to by the Commissioner and the other contracting party and shall be stated in the contract. The fee is in addition to any applicable license application and renewal fees. Contracts for the provision of online services, contracts for the provision of administrative services, and contracts for the provision of regulatory data systems shall not be subject to Article 3, 3C, or 8 of Chapter 143 of the General Statutes or to Article 3D of Chapter 147Article 14 of Chapter 143B of the General Statutes. However, the Commissioner shall: (i) submit all proposed contracts for supplies, materials, printing, equipment, and contractual services that exceed one million dollars ($1,000,000) authorized by this subsection to the Attorney General or the Attorney General's designee for review as provided in G.S. 114‑8.3; and (ii) include in all contracts to be awarded by the Commissioner under this subsection a standard clause which provides that the State Auditor and internal auditors of the Commissioner may audit the records of the contractor during and after the term of the agreement or contract to verify accounts and data affecting fees and performance. The Commissioner shall not award a cost plus percentage of cost agreement or contract for any purpose."

SECTION 7A.4.(e)  G.S. 62‑3(23)i. reads as rewritten:

"i.         The term "public utility" shall not include the State, the Office Department of Information Technology Services,Technology, or the Microelectronics Center of North Carolina in the provision or sharing of switched broadband telecommunications services with non‑State entities or organizations of the kind or type set forth in G.S. 143B‑426.39."

SECTION 7A.4.(f)  G.S. 62A‑41(a), recodified as G.S. 143B‑1361(a) by this Part, reads as rewritten:

"(a)       Membership. – The 911 Board is established in the Office Department of Information Technology Services.Technology. Neither a local government unit that receives a distribution from the fund under G.S. 62A‑46 nor a telecommunication service provider may have more than one representative on the 911 Board. The 911 Board consists of 17 members as follows:

…."

SECTION 7A.4.(g)  G.S. 66‑58.20 reads as rewritten:

"§ 66‑58.20.  Development and implementation of Web portals; public agency links.

(a)        The Office Department of Information Technology Services (ITS)(DIT) shall develop the architecture, requirements, and standards for the development, implementation and operation of one or more centralized Web portals that will allow persons to access State government services on a 24‑hour basis. ITS DIT shall submit its plan for the implementation of the Web portals to the State Chief Information Officer for review and approval. When the plan is approved by the State Chief Information Officer, ITS DIT shall move forward with development and implementation of the statewide Web Portal system.

(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) 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.(h)  G.S. 105‑259(b)(45) reads as rewritten:

"(45)    To furnish tax information to the Office of the State Chief Information Officer under G.S. 143B‑426.38A.pursuant to G.S. 143B‑1344. The use and reporting of individual data may be restricted to only those activities specifically allowed by law when potential fraud or other illegal activity is indicated."

SECTION 7A.4.(i)  G.S. 115C‑529 reads as rewritten:

"§ 115C‑529.  Useful life guidelines.

The State OfficeDepartment of Information Technology Services shall develop and annually revise guidelines for determining the useful life of computers purchased under G.S. 115C‑528. The Division of Purchase and Contract shall develop and periodically revise guidelines for determining the useful life of automobiles, school buses, and photocopiers purchased under G.S. 115C‑528. The Local Government Commission shall develop and periodically revise guidelines for determining the useful life of mobile classroom units purchased under G.S. 115C‑528. Guidelines for computers and photocopiers shall include provisions for upgrades during the term of the contract. The State OfficeDepartment of Information Technology Services,Technology, the Division of Purchase and Contract, and the Local Government Commission shall provide their respective guidelines to the State Board of Education by November 1, 1996. The State Board of Education shall provide the guidelines to local boards of education by January 1, 1997."

SECTION 7A.4.(j)  G.S. 116‑40.22(d) reads as rewritten:

"(d)      Information Technology. – Notwithstanding any other provision of law, the Board of Trustees of an institution shall establish policies and rules governing the planning, acquisition, implementation, and delivery of information technology and telecommunications at the institution. These policies and rules shall provide for security and encryption standards; software standards; hardware standards; acquisition of information technology consulting and contract services; disaster recovery standards; and standards for desktop and server computing, telecommunications, networking, video services, personal digital assistants, and other wireless technologies; and other information technology matters that are necessary and appropriate to fulfill the teaching, educational, research, extension, and service missions of the institution. The Board of Trustees shall submit all initial policies and rules adopted pursuant to this subsection to the Office Department of Information Technology Services for review upon adoption by the Board of Trustees. Any subsequent changes to these policies and rules adopted by the Board of Trustees shall be submitted to the Office Department of Information Technology Services for review. Any comments by the Office Department of Information Technology Services shall be submitted to the Chancellor of that institution."

SECTION 7A.4.(k)  G.S. 126‑5 reads as rewritten:

"§ 126‑5.  Employees subject to Chapter; exemptions.

(c11)    The following are exempt from: (i) the classification and compensation rules established by the State Human Resources Commission pursuant to G.S. 126‑4(1) through (4); (ii) G.S. 126‑4(5) only as it applies to hours and days of work, vacation, and sick leave; (iii) G.S. 126‑4(6) only as it applies to promotion and transfer; (iv) G.S. 126‑4(10) only as it applies to the prohibition of the establishment of incentive pay programs; and (v) Article 2 of Chapter 126 of the General Statutes, except for G.S. 126‑7.1:

(3)        Employees of the Office of the State Chief Information Officer, the OfficeDepartment of Information Technology Services (ITS), (DIT), and employees in all agencies, departments, and institutions with similar classifications as ITS DIT employees, who voluntarily relinquish annual longevity payments, relinquish any claim to longevity pay, voluntarily relinquish any claim to career status or eligibility for career status as approved by the State Chief Information Officer and the Director of the Office of State Human Resources (OSHR).

(d)       (1)        Exempt Positions in Cabinet Department. – Subject to the provisions of this Chapter, which is known as the North Carolina Human Resources Act, the Governor may designate a total of 1,500 exempt positions throughout the following departments and offices:

k.         Office Department of Information Technology Services.Technology.

l.          Office of State Budget and Management.

m.        Office of State Human Resources.

…."

SECTION 7A.4.(l)  G.S. 130A‑309.138(1) reads as rewritten:

"(1)      Develop and maintain a current list of manufacturers that are in compliance with the requirements of G.S. 130A‑309.134 and G.S. 130A‑309.135, post the list to the Department's Web site, and provide the current list to the Office Department of Information Technology Services each time that the list is updated."

SECTION 7A.4.(m)  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 Article 14 of Chapter 143B 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.(n)  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.(o)  G.S. 143‑48.3 reads as rewritten:

"§ 143‑48.3.  Electronic procurement.

(a)        The Department of Administration shall develop and maintain electronic or digital standards for procurement. The Department of Administration shall consult with the Office of the State Controller, the Office Department of Information Technology Services (ITS),Technology, the Department of State Auditor, the Department of State Treasurer, The University of North Carolina General Administration, the Community Colleges System Office, and the Department of Public Instruction.

(b)        The Department of Administration, in conjunction with the Office of the State Controller and the Office Department of Information Technology Services may, upon request, provide to all State agencies, universities, and community colleges, training in the use of the electronic procurement system.

(c)        The Department of Administration shall utilize the Office Department of Information Technology Services as an Application Service Provider for an electronic procurement system. The Office Department of Information Technology Services shall operate this electronic procurement system, through State ownership or commercial leasing, in accordance with the requirements and operating standards developed by the Department of Administration and the financial reporting and accounting procedures of the Office of the State Controller.

(f)         Any State entity or community college operating a functional electronic procurement system established prior to September 1, 2001, may until May 1, 2003, continue to operate that system independently or may opt into the North Carolina E‑Procurement Service. Each entity subject to this section shall notify the Office Department of Information Technology Services by January 1 of each year of its intent to participate in the North Carolina E‑Procurement Service."

SECTION 7A.4.(p)  G.S. 143‑49 reads as rewritten:

"§ 143‑49.  Powers and duties of Secretary.

The Secretary of Administration has the power and authority, and it is the Secretary's duty, subject to the provisions of this Article:

(8)        To establish and maintain a procurement card program for use by State agencies, community colleges, and nonexempted constituent institutions of The University of North Carolina. The Secretary of Administration may adopt temporary rules for the implementation and operation of the program in accordance with the payment policies of the State Controller, after consultation with the Office Department of Information Technology Services.Technology. These rules would include the establishment of appropriate order limits that leverage the cost savings and efficiencies of the procurement card program in conjunction with the fullest possible use of the North Carolina E‑Procurement Service. Prior to implementing the program, the Secretary shall consult with the State Controller, the UNC General Administration, the Community Colleges System Office, the State Auditor, the Department of Public Instruction, a representative chosen by the local school administrative units, and the Office Department of Information Technology Services.Technology. The Secretary may periodically adjust the order limit authorized in this section after consulting with the State Controller, the UNC General Administration, the Community Colleges System Office, the Department of Public Instruction, and the Office Department of Information Technology Services.Technology.

…."

SECTION 7A.4.(q)  G.S. 143‑56 reads as rewritten:

"§ 143‑56.  Certain purchases excepted from provisions of Article.

Unless as may otherwise be ordered by the Secretary of Administration, the purchase of supplies, materials and equipment through the Secretary of Administration shall be mandatory in the following cases:

(1)        Published books, manuscripts, maps, pamphlets and periodicals.

(2)        Perishable articles such as fresh vegetables, fresh fish, fresh meat, eggs, and others as may be classified by the Secretary of Administration.

Purchase through the Secretary of Administration shall not be mandatory for information technology purchased in accordance with Article 3D of Chapter 147Article 14 of Chapter 143B of the General Statutes, for a purchase of supplies, materials or equipment for the General Assembly if the total expenditures is less than the expenditure benchmark established under the provisions of G.S. 143‑53.1, for group purchases made by hospitals, developmental centers, neuromedical treatment centers, and alcohol and drug abuse treatment centers through a competitive bidding purchasing program, as defined in G.S. 143‑129, by the University of North Carolina Health Care System pursuant to G.S. 116‑37(h), by the University of North Carolina Hospitals at Chapel Hill pursuant to G.S. 116‑37(a)(4), by the University of North Carolina at Chapel Hill on behalf of the clinical patient care programs of the School of Medicine of the University of North Carolina at Chapel Hill pursuant to G.S. 116‑37(a)(4), or by East Carolina University on behalf of the Medical Faculty Practice Plan pursuant to G.S. 116‑40.6(c).

All purchases of the above articles made directly by the departments, institutions and agencies of the State government shall, whenever possible, be based on competitive bids. Whenever an order is placed or contract awarded for such articles by any of the departments, institutions and agencies of the State government, a copy of such order or contract shall be forwarded to the Secretary of Administration and a record of the competitive bids upon which it was based shall be retained for inspection and review."

SECTION 7A.4.(r)  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:

…."

SECTION 7A.4.(s)  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.(t)  G.S. 143‑129.8(a) reads as rewritten:

"(a)       In recognition of the complex and innovative nature of information technology goods and services and of the desirability of a single point of responsibility for contracts that include combinations of purchase of goods, design, installation, training, operation, maintenance, and related services, a political subdivision of the State may contract for information technology, as defined in G.S. 147‑33.81(2),G.S. 143B‑1300, using the procedure set forth in this section, in addition to or instead of any other procedure available under North Carolina law."

SECTION 7A.4.(u)  G.S. 143‑135.9(c) reads as rewritten:

"(c)       Information Technology. – The acquisition of information technology by the State of North Carolina shall be conducted using the Best Value procurement method. For purposes of this section, business process reengineering, system design, and technology implementation may be combined into a single solicitation. For acquisitions which the procuring agency and the Division of Purchase and Contracts or the Office Department of Information Technology Services,Technology, as applicable, deem to be highly complex or determine that the optimal solution to the business problem at hand is not known, the use of Solution‑Based Solicitation and Government‑Vendor Partnership is authorized and encouraged. Any county, city, town, or subdivision of the State may acquire information technology pursuant to this section."

SECTION 7A.4.(v)  G.S. 143‑151.16(d) reads as rewritten:

"(d)      The Board may contract with persons for the development and administration of the examinations required by G.S. 143‑151.13(a), for course development related to the examinations, for review of a particular applicant's examination, and for other related services. The person with whom the Board contracts may charge applicants a reasonable fee for the costs associated with the development and administration of the examinations, for course development related to the examinations, for review of the applicant's examinations, and for other related services. The fee shall be agreed to by the Board and the other contracting party. The amount of the fee under this subsection shall not exceed one hundred seventy‑five dollars ($175.00). Contracts for the development and administration of the examinations, for course development related to the examinations, and for review of examinations shall not be subject to Article 3, 3C, or 8 of Chapter 143 of the General Statutes or to Article 3D of Chapter 147Article 14 of Chapter 143B of the General Statutes. However, the Board shall: (i) submit all proposed contracts for supplies, materials, printing, equipment, and contractual services that exceed one million dollars ($1,000,000) authorized by this subsection to the Attorney General or the Attorney General's designee for review as provided in G.S. 114‑8.3; and (ii) include in all proposed contracts to be awarded by the Board under this subsection a standard clause which provides that the State Auditor and internal auditors of the Board may audit the records of the contractor during and after the term of the contract to verify accounts and data affecting fees and performance. The Board shall not award a cost plus percentage of cost agreement or contract for any purpose."

SECTION 7A.4.(w)  G.S. 143‑663(a) reads as rewritten:

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

(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 Office Department of Information Technology Services,Technology, to develop and adopt standards for entering, storing, and transmitting information in criminal justice databases and for achieving maximum compatibility among user technologies.

…."

SECTION 7A.4.(x)  G.S. 143B‑146.13(a) reads as rewritten:

"(a)       No later than December 15, 1998, the Secretary shall develop a school technology plan for the residential schools that meets the requirements of the State school technology plan. In developing a school technology plan, the Secretary is encouraged to coordinate its planning with other agencies of State and local government, including local school administrative units.

The Office Department of Information Technology Services shall assist the Secretary in developing the parts of the plan related to its technological aspects, to the extent that resources are available to do so. The Department of Public Instruction shall assist the Secretary in developing the instructional and technological aspects of the plan.

The Secretary shall submit the plan that is developed to the Office Department of Information Technology Services for its evaluation of the parts of the plan related to its technological aspects and to the Department of Public Instruction for its evaluation of the instructional aspects of the plan. The State Board of Education, after consideration of the evaluations of the Office Department of Information Technology Services and the Department of Public Instruction, shall approve all plans that comply with the requirements of the State school technology plan."

SECTION 7A.4.(y)  G.S. 143B‑951(a) reads as rewritten:

"(a)       The Department of Public Safety may provide to the Office Department of Information Technology Services from the State and National Repositories of Criminal Histories the criminal history of any current or prospective employee, volunteer, or contractor of the Office Department of Information Technology Services.Technology. The Office Department of Information Technology Services shall provide to the Department of Public Safety, along with the request, the fingerprints of the current or prospective employee, volunteer, or contractor, a form signed by the current or prospective employee, volunteer, or contractor consenting to the criminal record check and use of fingerprints and other identifying information required by the State and National Repositories, and any additional information required by the Department of Public Safety. The fingerprints of the current or prospective employee, volunteer, or contractor shall be forwarded to the State Bureau of Investigation for a search of the State's criminal history record file, and the State Bureau of Investigation shall forward a set of fingerprints to the Federal Bureau of Investigation for a national criminal history record check. The Office Department of Information Technology Services shall keep all information obtained pursuant to this section confidential."

SECTION 7A.4.(z)  G.S. 143C‑1‑1(d) reads as rewritten:

"(d)      Definitions. – The following definitions apply in this Chapter:

(17)      Information technology. – As defined in G.S. 147‑33.81(2).G.S. 143B‑1300.

…."

SECTION 7A.4.(aa)  G.S. 143C‑2‑5(a) reads as rewritten:

"(a)       The Director of the Budget shall require the Office of State Budget and Management, with the support of the Office Department of Information Technology Services,Technology, to build and maintain a database and Web site for providing a single, searchable Web site on State spending for grants and contracts to be known as NC OpenBook."

SECTION 7A.4.(bb)  G.S. 143C‑2‑6(a) reads as rewritten:

"(a)       The Office of State Controller, the Department of Administration, and the Office Department of Information Technology Services shall provide the Office of State Budget and Management with the statewide information on State contracts necessary for the development and maintenance of the database and Web site required by this Article, with the information updated at least monthly."

SECTION 7A.4.(cc)  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.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.(dd)  G.S. 143C‑3‑5(b)(4) reads as rewritten:

"(4)      The biennial State Information Technology Plan as outlined in G.S. 147‑33.72BPart 2 of Article 14 of Chapter 143B of the General Statutes to be consistent in facilitating the goals outlined in the Recommended State Budget."

SECTION 7A.4.(ee)  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.(ff)  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 in G.S. 143B‑1300."

SECTION 7A.4.(gg)  G.S. 163‑165.7 reads as rewritten:

"§ 163‑165.7.  Voting systems: powers and duties of State Board of Elections.

(a)        Only voting systems that have been certified by the State Board of Elections in accordance with the procedures and subject to the standards set forth in this section and that have not been subsequently decertified shall be permitted for use in elections in this State. Those certified voting systems shall be valid in any election held in the State or in any county, municipality, or other electoral district in the State. Subject to all other applicable rules adopted by the State Board of Elections and, with respect to federal elections, subject to all applicable federal regulations governing voting systems, paper ballots marked by the voter and counted by hand shall be deemed a certified voting system. The State Board of Elections shall certify optical scan voting systems, optical scan with ballot markers voting systems, and direct record electronic voting systems if any of those systems meet all applicable requirements of federal and State law. The State Board may certify additional voting systems only if they meet the requirements of the request for proposal process set forth in this section and only if they generate either a paper ballot or a paper record by which voters may verify their votes before casting them and which provides a backup means of counting the vote that the voter casts. Those voting systems may include optical scan and direct record electronic (DRE) voting systems. In consultation with the Office Department of Information Technology Services,Technology, the State Board shall develop the requests for proposal subject to the provisions of this Chapter and other applicable State laws. Among other requirements, the request for proposal shall require at least all of the following elements:

(6)        With respect to all voting systems using electronic means, that the vendor provide access to all of any information required to be placed in escrow by a vendor pursuant to G.S. 163‑165.9A for review and examination by the State Board of Elections; the Office Department of Information Technology Services;Technology; the State chairs of each political party recognized under G.S. 163‑96; the purchasing county; and designees as provided in subdivision (9) of subsection (d) of this section.

(d)        Subject to the provisions of this Chapter, the State Board of Elections shall prescribe rules for the adoption, handling, operation, and honest use of certified voting systems, including all of the following:

(9)        Notwithstanding G.S. 132‑1.2, procedures for the review and examination of any information placed in escrow by a vendor pursuant to G.S. 163‑165.9A by only the following persons:

a.         State Board of Elections.

b.         Office Department of Information Technology Services.Technology.

c.         The State chairs of each political party recognized under G.S. 163‑96.

d.         The purchasing county.

Each person listed in sub‑subdivisions a. through d. of this subdivision may designate up to three persons as that person's agents to review and examine the information. No person shall designate under this subdivision a business competitor of the vendor whose proprietary information is being reviewed and examined. For purposes of this review and examination, any designees under this subdivision and the State party chairs shall be treated as public officials under G.S. 132‑2.

…."

SECTION 7A.4.(hh)  G.S. 168A‑3(4a) reads as rewritten:

"(4a)     "Information technology" has the same meaning as in G.S. 147‑33.81.G.S. 143B‑1300. The term also specifically includes information transaction machines."

 

ADMINISTRATIVE MATTERS/DIT

SECTION 7A.5.  No action or proceeding, brought by or against the Office of Information Technology Services or the Office of the State Chief Information Officer that is pending when this Part becomes law, 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 (Department). 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 Part 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.

 

DIT Effective Date

SECTION 7A.6  Except as otherwise provided, this Part is effective when this act becomes law.

 

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 school administrative units shall be reduced in equal increments in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local school 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 school administrative units shall be reduced in equal increments in each of the five years after the 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.

 

COMPETENCY‑BASED LEARNING AND ASSESSMENTS

SECTION 8.12.(a)  It is the intent of the General Assembly to transition to a system of testing and assessments applicable for all elementary and secondary public school students that utilizes competency‑based learning assessments to measure student performance and student growth, whenever practicable. The competency‑based student assessment system should provide that (i) students advance upon mastery, (ii) competencies are broken down into explicit and measurable learning objectives, (iii) assessment is meaningful for students, (iv) students receive differentiated support based on their learning needs, and (v) learning outcomes emphasize competencies that include the application and creation of knowledge.

SECTION 8.12.(b)  In order to develop the use of competency‑based assessments for all elementary and secondary public school students in North Carolina in accordance with subsection (a) of this section, the State Board of Education is encouraged to evaluate the feasibility of integrating competency‑based assessments for use in local school administrative units and as part of the statewide testing system for measuring student performance and student growth. The State Board may examine competency‑based student assessment systems utilized in other states, including potential benefits and obstacles to implementing similar systems in North Carolina, and the relationship between competency‑based assessments and innovative teaching methods utilized in North Carolina schools, such as blended learning models and digital teaching tools.

 

COLLABORATIVE PROCUREMENT

SECTION 8.14.(a)  Section 7.6 of S.L. 2013‑360, as amended by Section 91 of S.L. 2014‑115, is repealed.

SECTION 8.14.(b)  The Department of Public Instruction shall collaborate with the Friday Institute for Educational Innovation of North Carolina State University to implement public school cooperative purchasing agreements for the procurement of information technology goods and services to support public schools. For purposes of this section, the phrase "public school cooperative purchasing agreement" means an agreement implemented pursuant to this section and available for local school administrative units, regional schools, charter schools, or some combination thereof providing for collaborative or collective purchases of information technology goods and services in order to leverage economies of scale and to reduce costs.

SECTION 8.14.(c)  Each public school cooperative purchasing agreement shall be based on a defined statewide information technology need to support education in the public schools. Each public school cooperative purchasing agreement shall allow for equal access to technology tools and services and shall provide a standard competitive cost throughout North Carolina for each tool or service. Public school cooperative purchasing agreements shall follow State information technology procurement laws, rules, and procedures.

SECTION 8.14.(d)  By October 15, 2015, and annually thereafter, the Department of Public Instruction and the Friday Institute shall report on the establishment of the cooperative purchasing agreements, savings resulting from the establishment of the agreements, and any issues impacting the establishment of the agreements. The reports shall be made to the Joint Legislative Oversight Committee on Information Technology, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division.

 

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.

 

TWELVE‑MONTH PERSONNEL POSITIONS FOR VOCATIONAL AGRICULTURE TEACHERS

SECTION 8.22.  G.S. 115C‑302.1(b) reads as rewritten:

"(b)      Salary Payments. – State‑allotted teachers shall be paid for a term of 10 months. State‑allotted months of employment for vocational education to local boards shall be used for the employment of teachers of vocational and technical education for a term of employment to be determined by the local boards of education. However, local boards shall not reduce the term of employment for any vocational agriculture teacher personnel position that was 12 calendar months for the 1982‑83 school year for any school year thereafter. In addition, local boards shall not reduce the term of employment for any vocational agriculture teacher personnel position that was 12 calendar months for the 2003‑2004 school year for any school year thereafter. In addition, local boards shall not reduce the term of employment for any vocational agriculture teacher personnel position that was 12 calendar months for the 2014‑2015 school year for any school year thereafter.

Each local board of education shall establish a set date on which monthly salary payments to State‑allotted teachers shall be made. This set pay date may differ from the end of the month of service. The daily rate of pay for teachers shall equal midway between one twenty‑first and one twenty‑second of the monthly rate of pay. Except for teachers employed in a year‑round school or paid in accordance with a year‑round calendar, or both, the initial pay date for teachers shall be no later than August 31 and shall include a full monthly payment. Subsequent pay dates shall be spaced no more than one month apart and shall include a full monthly payment.

Teachers may be prepaid on the monthly pay date for days not yet worked. A teacher who fails to attend scheduled workdays or who has not worked the number of days for which the teacher has been paid and who resigns, is dismissed, or whose contract is not renewed shall repay to the local board any salary payments received for days not yet worked. A teacher who has been prepaid and continues to be employed by a local board but fails to attend scheduled workdays may be subject to dismissal under G.S. 115C‑325 or other appropriate discipline.

Any individual teacher who is not employed in a year‑round school may be paid in 12 monthly installments if the teacher so requests on or before the first day of the school year. The request shall be filed in the local school administrative unit which employs the teacher. The payment of the annual salary in 12 installments instead of 10 shall not increase or decrease the teacher's annual salary nor in any other way alter the contract made between the teacher and the local school administrative unit. Teachers employed for a period of less than 10 months shall not receive their salaries in 12 installments.

Notwithstanding this subsection, the term "daily rate of pay" for the purpose of G.S. 115C‑12(8) or for any other law or policy governing pay or benefits based on the teacher salary schedule shall not exceed one twenty‑second of a teacher's monthly rate of pay."

 

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 ABC's. – 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)  Evaluation of the School‑Based Accountability System. – G.S. 115C‑105.35(a) reads as rewritten:

"(a)       The School‑Based Management and Accountability Program shall (i) focus on student performance in the basics of reading, mathematics, and communications skills in elementary and middle schools, (ii) focus on student performance in courses required for graduation and on other measures required by the State Board in the high schools, and (iii) hold schools accountable for the educational growth of their students. To those ends, the State Board shall design and implement an accountability system that sets annual performance standards for each school in the State in order to measure the growth in performance of the students in each individual school. During the 2004‑2005 school year and at least every five years thereafter, the State Board shall evaluate the accountability system and, if necessary, modify the testing standards to assure the testing standards continue to reasonably reflect the level of performance necessary to be successful at the next grade level or for more advanced study in the content area.

As part of this evaluation, the Board shall, where available, review the historical trend data on student academic performance on State tests. To the extent that the historical trend data suggest that the current standards for student performance may not be appropriate, the State Board shall adjust the standards to assure that they continue to reflect the State's high expectations for student performance."

SECTION 8.25.(e)  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."

 

SCHOOL SAFETY/STATEWIDE SCHOOL RISK AND RESPONSE MANAGEMENT SYSTEM

SECTION 8.26.(a)  G.S. 115C‑47(40) reads as rewritten:

"(40)    To adopt emergency response plans. – Local boards Adopt School Risk Management Plans. – Each local board of education shall, in coordination with local law enforcement and emergency management agencies, adopt emergency response plans a School Risk Management Plan (SRMP) relating to incidents of school violence. violence for each school in its jurisdiction. In constructing and maintaining these plans, local boards of education and local school administrative units shall utilize the School Risk and Response Management System (SRRMS) established pursuant to G.S. 115C‑105.49A. These plans are not a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6."

SECTION 8.26.(b)  G.S. 115C‑105.49 reads as rewritten:

"§ 115C‑105.49.  School safety exercises.

(a)        At least every two years, once annually, each local school administrative unit is encouraged to shall require each school under its control to hold a full systemwide school safety and school lockdown exercise with the school‑wide tabletop exercise and drill based on the procedures documented in its School Risk Management Plan (SRMP). The drill shall include a practice school lockdown due to an intruder on school grounds. Each school is encouraged to hold a tabletop exercise and drill for multiple hazards included in its SRMP. Schools are strongly encouraged to include local law enforcement agencies that are part of the local board of education's emergency response plan. and emergency management agencies in their tabletop exercises and drills. The purpose of the exercise tabletop exercises and drills shall be to permit participants to (i) discuss simulated emergency situations in a low‑stress environment, (ii) clarify their roles and responsibilities and the overall logistics of dealing with an emergency, and (iii) identify areas in which the emergency response plan SRMP needs to be modified.

(b)        As part of a local board of education's emergency response plan, at least once a year, each school is encouraged to hold a full schoolwide school safety and lockdown exercise with local law enforcement agencies.For the purposes of this section, a tabletop exercise is an exercise involving key personnel conducting simulated scenarios related to emergency planning.

(c)        For the purposes of this section, a drill is a school‑wide practice exercise in which simulated scenarios related to emergency planning are conducted.

(d)        The Department of Public Safety, Division of Emergency Management, and the Center for Safer Schools shall provide guidance and recommendations to local school administrative units on the types of multiple hazards to plan and respond to, including intruders on school grounds."

SECTION 8.26.(c)  Article 8C of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑105.49A.  School Risk and Response Management System.

(a)        The Department of Public Safety, Division of Emergency Management, and the Center for Safer Schools shall construct and maintain a statewide School Risk and Response Management System (SRRMS). The system shall fully integrate and leverage existing data and applications that support school risk planning, exercises, monitoring, and emergency response via 911 dispatch.

(b)        In constructing the SRRMS, the Division of Emergency Management and the Center for Safer Schools shall leverage the existing enterprise risk management database, the School Risk Management Planning tool managed by the Division. The Division shall also leverage the local school administrative unit schematic diagrams of school facilities. Where technically feasible, the SRRMS shall integrate any anonymous tip lines established pursuant to G.S. 115C‑105.51 and any 911‑initiated panic alarm systems authorized as part of a SRMP pursuant to G.S. 115C‑47(40). The Division and the Center for Safer Schools shall collaborate with the Department of Public Instruction and the North Carolina 911 Board in the design, implementation, and maintenance of the SRRMS.

(c)        All data and information acquired and stored in the SRRMS as provided in subsections (a) and (b) of this section are not considered public records as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6."

SECTION 8.26.(d)  G.S. 115C‑105.51 reads as rewritten:

"§ 115C‑105.51.  Anonymous tip lines.lines and monitoring and response applications.

(a)        Each local school administrative unit is encouraged to develop and operate an anonymous tip line, in coordination with local law enforcement and social services agencies, to receive anonymous information on internal or external risks to the school population, school buildings buildings, and school‑related activities. The Department of Public Safety, in consultation with the Department of Public Instruction, may develop standards and guidelines for the development, operation, and staffing of tip lines.

(b)        The Department of Public Instruction, in consultation with the Department of Public Safety, may develop standards and guidelines for the development, operation, and staffing of tip lines.The Department of Public Safety, Division of Emergency Management, and the Center for Safer Schools, in collaboration with the Department of Public Instruction, shall implement and maintain an anonymous safety tip line application for purposes of receiving anonymous student information on internal or external risks to the school population, school buildings, and school‑related activities.

(c)        The Department of Public Instruction may provide information to local school administrative units on federal, State, local, and private grants available for this purpose.The Department of Public Safety, Division of Emergency Management, and the Center for Safer Schools, in collaboration with the Department of Public Instruction and the North Carolina 911 Board, shall implement and maintain a statewide panic alarm system for the purposes of launching real‑time 911 messaging to public safety answering points of internal and external risks to the school population, school buildings, and school‑related activities. The Department of Public Safety, in consultation with the Department of Public Instruction and the North Carolina 911 Board, may develop standards and guidelines for the operations and use of the panic alarm tool.

(d)        The Department of Public Safety shall ensure that the anonymous safety tip line application is integrated with and supports the statewide School Risk and Response Management System (SRRMS) as provided in G.S. 115C‑105.49A. Where technically feasible and cost efficient, the Department of Public Safety is encouraged to implement a single solution supporting both the anonymous safety tip line application and panic alarm system.

(e)        All data and information acquired and stored by the anonymous safety tip line application are not considered public records as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.

(f)         Notwithstanding subsection (e) of this section, the Division may collect the annual aggregate number and type of tips sent to the anonymous tip line. The collection of this aggregate data shall not have any identifying information on the reporter of the tip, including, but not limited to, the school where the incident was reported and the date the tip was reported."

SECTION 8.26.(e)  G.S. 115C‑105.52 reads as rewritten:

"§ 115C‑105.52.  School crisis kits.

The Department of Public Instruction, in consultation with the Department of Public Safety through the North Carolina Center for Safer Schools, may develop and adopt policies on the placement of school crisis kits in schools and on the contents of those kits. The kits should include, at a minimum, basic first‑aid supplies, communications devices, and other items recommended by the International Association of Chiefs of Police.

The principal of each school, in coordination with the law enforcement agencies that are part of the local board of education's emergency response plan, School Risk Management Plan, may place one or more crisis kits at appropriate locations in the school."

SECTION 8.26.(f)  G.S. 115C‑105.53 reads as rewritten:

"§ 115C‑105.53.  Schematic diagrams and emergency access to school buildings for local law enforcement agencies.

(a)        Each local school administrative unit shall provide the following to local law enforcement agencies: (i) schematic diagrams, including digital schematic diagrams, and (ii) either keys to the main entrance of all school buildings or emergency access to key storage devices such as KNOX® boxes for all school buildings. Local school administrative units shall provide updates of the schematic diagrams to local law enforcement agencies when substantial modifications such as new facilities or modifications to doors and windows are made to school buildings. Local school administrative units shall also be responsible for providing local law enforcement agencies with updated access to school building key storage devices such as KNOX® boxes when changes are made to these boxes or devices.buildings when changes are made to the locks of the main entrances or to key storage devices such as KNOX® boxes.

(b)        The Department of Public Instruction, in consultation with the Department of Public Safety, shall develop standards and guidelines for the preparation and content of schematic diagrams and necessary updates. Local school administrative units may use these standards and guidelines to assist in the preparation of their schematic diagrams.

(c)        Schematic diagrams are not considered a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6."

SECTION 8.26.(g)  G.S. 115C‑105.54 reads as rewritten:

"§ 115C‑105.54.  Schematic diagrams and emergency response information provided to Division of Emergency Management.

(a)        Each local school administrative unit shall provide the following to the Division of Emergency Management (Division) at the Department of Public Safety: (i) schematic diagrams, including digital schematic diagrams, and (ii) emergency response information requested by the Division for the School Risk Management Plan (SRMP) and the School Emergency Response Plan (SERP).(SRMP). Local school administrative units shall also provide updated schematic diagrams and emergency response information to the Division when such updates are made. The Division shall ensure that the diagrams and emergency response information are securely stored and distributed as provided in the SRMP and SERP to first responders, emergency personnel, and school personnel and approved by the Department of Public Instruction.

(b)        The schematic diagrams and emergency response information are not considered a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6."

SECTION 8.26.(h)  G.S. 115C‑218.75 reads as rewritten:

"§ 115C‑218.75.  General operating requirements.

(a)        Health and Safety Standards. – A charter school shall meet the same health and safety requirements required of a local school administrative unit. The Department of Public Instruction shall ensure that charter schools provide parents and guardians with information about meningococcal meningitis and influenza and their vaccines at the beginning of every school year. This information shall include the causes, symptoms, and how meningococcal meningitis and influenza are spread and the places where parents and guardians may obtain additional information and vaccinations for their children.

The Department of Public Instruction shall also ensure that charter schools provide parents and guardians with information about cervical cancer, cervical dysplasia, human papillomavirus, and the vaccines available to prevent these diseases. This information shall be provided at the beginning of the school year to parents of children entering grades five through 12. This information shall include the causes and symptoms of these diseases, how they are transmitted, how they may be prevented by vaccination, including the benefits and possible side effects of vaccination, and the places where parents and guardians may obtain additional information and vaccinations for their children.

The Department of Public Instruction shall also ensure that charter schools provide students in grades seven through 12 with information annually on the preventable risks for preterm birth in subsequent pregnancies, including induced abortion, smoking, alcohol consumption, the use of illicit drugs, and inadequate prenatal care.

The Department of Public Instruction shall also ensure that charter schools provide students in grades nine through 12 with information annually on the manner in which a parent may lawfully abandon a newborn baby with a responsible person, in accordance with G.S. 7B‑500.

The Department of Public Instruction shall also ensure that the guidelines for individual diabetes care plans adopted by the State Board of Education under G.S. 115C‑12(31) are implemented in charter schools in which students with diabetes are enrolled and that charter schools otherwise comply with the provisions of G.S. 115C‑375.3.

The Department of Public Instruction shall ensure that charter schools comply with G.S. 115C‑375.2A. The board of directors of a charter school shall provide the school with a supply of emergency epinephrine auto‑injectors necessary to carry out the provisions of G.S. 115C‑375.2A.

(b)        Emergency Response Plan. – ASchool Risk Management Plan. – Each charter school, in coordination with local law enforcement agencies,and emergency management agencies, is encouraged to adopt an emergency response plan a School Risk Management Plan (SRMP) relating to incidents of school violence. In constructing and maintaining these plans, charter schools may utilize the School Risk and Response Management System (SRRMS) established pursuant to G.S. 115C‑105.49A. These plans are not considered a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.

Charter schools are encouraged to provide schematic diagrams and keys to the main entrance of school facilities to local law enforcement agencies, in addition to implementing the provisions in G.S. 115C‑105.49(b) and G.S. 115C‑105.52.

(c)        Policy Against Bullying. – A charter school is encouraged to adopt a policy against bullying or harassing behavior, including cyber bullying, that is consistent with the provisions of Article 29C of this Chapter. If a charter school adopts a policy to prohibit bullying and harassing behavior, the charter school shall, at the beginning of each school year, provide the policy to staff, students, and parents as defined in G.S. 115C‑390.1(b)(8).

(d)        School Safety Exercises. – At least once a year, a charter school is encouraged to hold a full school‑wide lockdown exercise with local law enforcement and emergency management agencies that are part of the charter school's SRMP.

(e)        School Safety Information Provided to Division of Emergency Management. – A charter school is encouraged to provide the following: (i) schematic diagrams, including digital schematic diagrams, and (ii) emergency response information requested by the Division for the SRMP. The schematic diagrams and emergency response information are not considered public records as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6."

SECTION 8.26.(i)  G.S. 115C‑238.66 reads as rewritten:

"§ 115C‑238.66.  Board of directors; powers and duties.

The board of directors shall have the following powers and duties:

(1)        Academic program. –

a.         The board of directors shall establish the standard course of study for the regional school. This course of study shall set forth the subjects to be taught in each grade and the texts and other educational materials on each subject to be used in each grade. The board of directors shall design its programs to meet at least the student performance standards adopted by the State Board of Education and the student performance standards contained in this Chapter.

b.         The board of directors shall conduct student assessments required by the State Board of Education.

c.         The board of directors shall provide the opportunity to earn or obtain credit toward degrees from a community college subject to Chapter 115D of the General Statutes or a constituent institution of The University of North Carolina.

d.         The board of directors shall adopt a school calendar consisting of a minimum of 185 days or 1,025 hours of instruction covering at least nine calendar months.

(2)        Standards of performance and conduct. – The board of directors shall establish policies and standards for academic performance, attendance, and conduct for students of the regional school. The policies of the board of directors shall comply with Article 27 of this Chapter.

(3)        School attendance. – Every parent, guardian, or other person in this State having charge or control of a child who is enrolled in the regional school and who is less than 16 years of age shall cause such child to attend school continuously for a period equal to the time that the regional school shall be in session. No person shall encourage, entice, or counsel any child to be unlawfully absent from the regional school. Any person who aids or abets a student's unlawful absence from the regional school shall, upon conviction, be guilty of a Class 1 misdemeanor. The principal shall be responsible for implementing such additional policies concerning compulsory attendance as shall be adopted by the board of directors, including regulations concerning lawful and unlawful absences, permissible excuses for temporary absences, maintenance of attendance records, and attendance counseling.

(4)        Reporting. – The board of directors shall comply with the reporting requirements established by the State Board of Education in the Uniform Education Reporting System.

(5)        Assessment results. – The board of directors shall provide data to the participating unit in which a student is domiciled on the performance of that student on any testing required by the State Board of Education.

(6)        Education of children with disabilities. – The board of directors shall require compliance with laws and policies relating to the education of children with disabilities.

(7)        Health and safety. – The board of directors shall require that the regional school meet the same health and safety standards required of a local school administrative unit.

The Department of Public Instruction shall ensure that regional schools comply with G.S. 115C‑375.2A. The board of directors of a regional school shall provide the school with a supply of emergency epinephrine auto‑injectors necessary to carry out the provisions of G.S. 115C‑375.2A.

(7a)      Emergency Response Plan. – ASchool Risk Management Plan. – Each regional school, in coordination with local law enforcement agencies, is encouraged to adopt an emergency response plan a School Risk Management Plan (SRMP) relating to incidents of school violence. In constructing and maintaining these plans, a regional school may utilize the School Risk and Response Management System (SRRMS) established pursuant to G.S. 115C‑105.49A. These plans are not considered a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.

(7b)      Schematic diagrams and school crisis kits. – Regional schools are encouraged to provide schematic diagrams and keys to the main entrance of school facilities to local law enforcement agencies, in addition to implementing the provisions in G.S. 115C‑105.49(b) and G.S. 115C‑105.52.

(7c)      School safety exercises. – At least once a year, a regional school is encouraged to hold a full school‑wide lockdown exercise with local law enforcement and emergency management agencies that are part of the regional school's SRMP.

(7d)      Safety information provided to the Department of Public Safety, Division of Emergency Management. – A regional school is encouraged to provide the following: (i) schematic diagrams, including digital schematic diagrams, and (ii) emergency response information requested by the Division for the SRMP. The schematic diagrams and emergency response information are not considered public records as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.

(8)        Driving eligibility certificates. – The board of directors shall apply the rules and policies established by the State Board of Education for issuance of driving eligibility certificates.

(9)        Purchasing and contracts. – The board of directors shall comply with the purchasing and contract statutes and regulations applicable to local school administrative units.

(10)      Exemption from the Administrative Procedures Act. – The board of directors shall be exempt from Chapter 150B of the General Statutes, except final decisions of the board of directors in a contested case shall be subject to judicial review in accordance with Article 4 of Chapter 150B of the General Statutes.

(11)      North Carolina School Report Cards. – A regional school shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or is otherwise provided to the public. A regional school shall ensure that the overall school performance score and grade earned by the regional school for the current and previous four school years is prominently displayed on the school Web site. If a regional school is awarded a grade of D or F, the regional school shall provide notice of the grade in writing to the parent or guardian of all students enrolled in that school.

(12)      Policy against bullying. – A regional school is encouraged to adopt a policy against bullying or harassing behavior, including cyber‑bullying, that is consistent with the provisions of Article 29C of this Chapter. If a regional school adopts a policy to prohibit bullying and harassing behavior, the regional school shall, at the beginning of each school year, provide the policy to staff, students, and parents as defined in G.S. 115C‑390.1(b)(8)."

SECTION 8.26.(j)  G.S. 166A‑19.12 is amended by adding a new subdivision to read:

"(22)    Serving as the lead State agency for the implementation and maintenance of the statewide School Risk and Response Management System (SRRMS) under G.S. 115C‑105.49A."

SECTION 8.26.(k)  By March 1, 2017, each local board of education shall adopt a School Risk Management Plan as required under G.S. 115C‑47(40), as amended by subsection (a) of this section.

SECTION 8.26.(l)  Each charter school is encouraged to adopt a School Risk Management Plan as provided for under G.S. 115C‑218.75, as amended by subsection (h) of this section, by March 1, 2017.

SECTION 8.26.(m)  Each regional school is encouraged to adopt a School Risk Management Plan as provided for under G.S. 115C‑238.66, as amended by subsection (i) of this section, by March 1, 2017.

SECTION 8.26.(n)  By July 1, 2016, the Department of Public Safety shall implement an anonymous safety tip line application and a statewide panic alarm system as required under G.S. 115C‑105.51, as amended by subsection (d) of this section.

SECTION 8.26.(o)  By February 1, 2016, the Department of Public Safety, Division of Emergency Management, and the Center for Safer Schools shall provide a report to the Joint Legislative Commission on Governmental Operations on (i) the status of the School Risk and Response Management System (SRRMS) implementation under G.S. 115C‑105.49A, as enacted by this section, and (ii) the anticipated annual cost to operate and maintain the system.

SECTION 8.26.(p)  Except as otherwise provided for in this section, this section applies beginning with the 2015‑2016 school year.

 

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.

 

AFTER‑SCHOOL QUALITY IMPROVEMENT COMPETITIVE GRANTS

SECTION 8.29.(a)  Of the funds appropriated by this act for the At‑Risk Student Services Alternative School Allotment for the 2015‑2017 fiscal biennium, the State Board of Education shall use up to six million dollars ($6,000,000) for the 2015‑2016 fiscal year and up to six million dollars ($6,000,000) for the 2016‑2017 fiscal year for the After‑School Quality Improvement Grant Program administered by the Department of Public Instruction. The Department may use these funds to provide a second‑year grant to grant recipients approved under the After‑School Quality Improvement Grant Program pursuant to Section 8.19 of S.L. 2014‑100. Of the funds appropriated for the program, the Department of Public Instruction may use up to two hundred thousand dollars ($200,000) for each fiscal year to administer the program.

SECTION 8.29.(b)  The purpose of the After‑School Quality Improvement Grant Program is to fund after‑school learning programs for at‑risk students that raise standards for student academic outcomes by focusing on the following:

(1)        Use of an evidence‑based model with a proven track record of success.

(2)        Inclusion of rigorous, quantitative performance measures to confirm their effectiveness during the grant cycle and at the end of the grant period.

(3)        Alignment with State performance measures, student academic goals, and the North Carolina Standard Course of Study.

(4)        Prioritization in programs to integrate clear academic content, in particular, science, technology, engineering, and mathematics (STEM) learning opportunities or reading development and proficiency instruction.

(5)        Emphasis on minimizing student class size when providing instruction.

(6)        Expansion of student access to learning activities and academic support that strengthen student engagement and leverage community‑based resources, which may include organizations that provide mentoring services and private‑sector employer involvement.

(7)        Emphasis on utilization of digital content to expand learning time, when practicable.

SECTION 8.29.(c)  Grants may be provided for new or existing after‑school learning programs for at‑risk students operated by local school administrative units, charter schools, nonprofits, and nonprofits working in collaboration with local school administrative units. Participants are eligible to receive grants for up to two years in an amount of up to five hundred thousand dollars ($500,000) each year. Programs should focus on serving at‑risk students not performing at grade level as demonstrated by statewide assessments.

A grant participant shall provide certification to the Department of Public Instruction that the grants received under the program shall be matched on the basis of three dollars ($3.00) in grant funds for every one dollar ($1.00) in nongrant funds. Matching funds shall not include other State funds. Matching funds may include in‑kind contributions.

SECTION 8.29.(d)  A nonprofit may act as its own fiscal agent for the purposes of this program. Grant recipients shall report to the Department of Public Instruction after the first year of funding on the progress of the grant, including alignment with State academic standards, data collection for reporting student progress, the source and amount of matching funds, and other measures, before receiving funding for the next fiscal year. Grant recipients shall report after the second year of funding on key performance data, including statewide test results, attendance rates, and promotion rates, and financial sustainability of the after‑school program.

SECTION 8.29.(e)  The Department of Public Instruction shall provide interim reports on the grant program to the Joint Legislative Education Oversight Committee by September 15, 2016, with a final report on the program by September 15, 2017. The final report shall include the final results of the program and recommendations regarding effective after‑school program models, standards, and performance measures based on student performance, leveraging of community‑based resources to expand student access to learning activities and academic support, and the experience of the grant recipients.

SECTION 8.29.(f)  Section 8.19 of S.L. 2014‑100 is repealed.

 

DPI STUDY/IMPROVE OUTCOMES FOR STUDENTS WITH DISABILITIES

SECTION 8.30.(a)  The Department of Public Instruction shall study and develop potential policy changes for improving the outcomes for elementary and secondary students with disabilities, including raising the graduation rates, providing more outcome‑based goals, creating greater access to career‑ready diplomas, increasing integration of accessible digital learning options, and providing earlier and improved transition services planning. The Department shall do at least the following toward achieving the goals set forth in this section:

(1)        Examine current Individualized Education Program (IEP) requirements and develop reforms with greater focus on outcome‑based goals for students with disabilities.

(2)        Solicit input and bring together stakeholders and other interested parties to develop policies on transition services plans for students with disabilities from elementary to middle school, middle to high school, and high school to postsecondary education, and for employment opportunities and adult living options.

(3)        Solicit input and bring together stakeholders to create accessible ways for students with IEPs to access the Future Ready Core Course of Study in more significant numbers as a viable alternative to the Occupational Course of Study.

(4)        Examine model programs that may be employed by local school administrative units aimed at increasing the graduation rate and school performance of students with disabilities.

SECTION 8.30.(b)  By November 15, 2015, and annually thereafter, the Department of Public Instruction shall report to the Joint Legislative Education Oversight Committee on the progress of developing and implementing policy changes on (i) IEP reforms, (ii) transition planning policies, (iii) increased access to Future Ready Core Course of Study for students with disabilities, and (iv) model programs for use by local school administrative units to improve graduation rates and school performance of students with disabilities.

 

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 board of education 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 local school administrative unit 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 board of education 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 local school administrative unit 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‑215(a) reads as rewritten:

"(a)       In accordance with criteria and standards approved by the State Board of Education, the State Superintendent of Public Instruction shall organize and administer a standardized program of driver education to be offered at the public high schools of this State for all physically and mentally qualified persons who (i) are older than 14 years and six months, (ii) are approved by the principal of the school, pursuant to rules adopted by the State Board of Education, (iii) are enrolled in a public or private high school within the State or are receiving instruction through a home school as provided by Part 3 of Article 39 of Chapter 115C of the General Statutes, and (iv) have not previously enrolled in the program. The driver education program shall be for the purpose of making available public education to all students on driver safety and training. The State Board of Education shall use for this purpose all funds appropriated to it for this purpose and may use all other funds that become available for its use for this purpose."

SECTION 8.39.(b)  G.S. 115C‑216(g) reads as rewritten:

"(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 the costs of providing the training and instruction. If a local board of education charges a fee for participation in a driver education course, the local board shall provide a process for reduction or waiver of that fee for students unable to pay the fee due to economic hardship."

SECTION 8.39.(c)  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(11)    No funds shall be transferred into the driver education allotment category."

SECTION 8.39.(d)  Local boards of education shall report to the State Board of Education no later than December 15, 2015, on the following related to driver education programs offered by and through the local school administrative unit for the 2012‑2013, 2013‑2014, 2014‑2015, and 2015‑2016 school years, by year:

(1)        How driver education is provided. The local board of education shall provide detailed information regarding whether the driver education program is offered by the local school administrative unit or whether it contracts with an outside provider. If the local school administrative unit contracts with an outside provider to provide any portion of the driver education program, such as instruction, materials, or the fleet used for driver training, the unit shall provide a detailed summary of information as to the terms of the contract, what the unit is responsible for providing, and what the outside provider has contracted to provide, and a copy of all contracts related to driver education.

(2)        Total cost for the driver education program and per student cost for the program. The local board shall include a detailed explanation of expenditures of all funds associated with the driver education program, written in plain English.

(3)        How the fleet used for driver training is provided and maintained. If the local school administrative unit maintains its own fleet, information regarding the number of vehicles in the fleet, procurement, maintenance, and fuel cost of those vehicles, replacement cycle for the vehicles, and source of funds for the fleet.

(4)        Numbers of students eligible to participate in the driver education program, number of students participating in the program, and numbers of students successfully completing the program.

(5)        Materials used for instruction of the standardized driver education curriculum.

(6)        Methodology for transfer to agencies of student information related to driver education.

(7)        Role of parents and legal guardians in driver education instruction.

(8)        Process for filing and resolving complaints related to the driver education program. If the local school administrative unit has a process, the unit shall provide information on the numbers, types, and resolutions of filed complaints.

(9)        Assessments and evaluations used to determine quality and success of the driver education program.

(10)      Average and maximum length of time between classroom instruction and behind‑the‑wheel instruction.

(11)      Average and maximum number of classroom hours taught per day on regular school days and on any other day.

(12)      Average and maximum number of behind‑the‑wheel hours taught per day on regular school days and on any other day.

(13)      Process, if any, for reviewing driving records for driver education instructors.

(14)      Tracking, if any, of student outcomes when seeking a graduated drivers license. If the local school administrative unit tracks this information, the unit shall provide data on student outcomes, including numbers of students who successfully completed or unsuccessfully completed the written and driving portions of the graduated drivers license examination, respectively.

(15)      If fees are charged for driver education, fee waivers or reductions, if any, provided to students. If fee waivers or reductions are provided, the local school administrative unit should provide data on the policy for fee waivers or reductions, how many students are eligible for and use the waiver or reduction, and the amounts waived or reduced.

SECTION 8.39.(e)  The State Board of Education shall report to the Joint Legislative Education Oversight Committee (Committee) on the information provided by local boards of education on driver education programs under subsection (d) of this section no later than February 15, 2016.

SECTION 8.39.(f)  The Committee shall study the provision of driver education by examining information, findings, and recommendations in the following reports and any additional information that it deems necessary and relevant:

(1)        The National Highway Traffic Safety Administration report issued in May 2015, entitled "State of North Carolina: Technical Assessment of the Driver Education Program."

(2)        The North Carolina Driver Education Strategic Plan prepared in June 2012 by the Driver Education Advisory Committee of the State Board of Education.

(3)        The North Carolina's Driver Education Program Management Review prepared in November 2010 by the Office of State Budget and Management.

(4)        The Program Evaluation Division's report issued in March 2014, entitled "Performance Measurement and Monitoring Would Strengthen Accountability of North Carolina's Driver Education Program."

(5)        Information provided by local boards of education on driver education programs, as reported by the State Board of Education pursuant to subsection (e) of this section.

SECTION 8.39.(g)  The Committee shall make recommendations, which may include proposed legislation, on the study required under subsection (f) of this section to the 2015 General Assembly upon its convening of the 2016 Regular Session on the following issues:

(1)        Lowering the cost of delivery for driver education.

(2)        Adjusting or removing fees for driver education.

(3)        The appropriate level of involvement for parents and legal guardians.

(4)        Appropriate level of involvement of the Department of Transportation, Division of Motor Vehicles.

(5)        Recommendations on alternate providers, such as community colleges or private entities.

SECTION 8.39.(h)  Subsections (a), (b), and (c) of this section are effective July 1, 2016, and apply beginning with the 2016‑2017 school year. Subsections (a), (b), and (c) of this section are repealed effective December 31, 2017. The remainder of this section is effective when this act becomes law.

 

DPI Report on the Educator Licensure processing system

SECTION 8.40.  By October 15, 2016, the Department of Public Instruction shall report to the Joint Legislative Education Oversight Committee regarding the operation of the educator licensure processing system, including implementation of the electronic processing of applications. The report shall include at least the following information:

(1)        The estimated processing time from receipt of application to issuance of a license in each category of licensure, including initial licensure, lateral entry licensure, renewal of a license through the automated electronic system, renewal of a license manually, out‑of‑state licensure reciprocity, and advanced degrees. The report shall include comparative data related to the processing of licenses in each licensure category prior to August 1, 2015.

(2)        The schedule of licensure fees and services, including any changes in the prior year made to the fee amounts or services for which fees are charged.

(3)        Any backlog of the processing of applications existing at the time of the report, including the categories of licensure experiencing such backlog.

(4)        Data for the following from the prior year:

a.         Number of applications received and transactions completed.

b.         Number of newly licensed educators.

c.         Number of licensure renewals.

d.         Demographic information regarding currently licensed educators.

e.         Number of licenses issued by area of licensure and type of license.

f.          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.

 

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. 115C‑309 reads as rewritten:

"§ 115C‑309. Student teachers.

(a)        Student Teacher and Student Teaching Defined. – A "student teacher" is any student enrolled in an educator preparation program at an institution of higher education approved by the State Board of Education for the preparation of teachers who is jointly assigned by that institution and a local board of education to student teach under the direction and supervision of a regularly employed certified teacher.clinical educator, as provided in G.S. 115C‑296.11.

"Student teaching" may include those duties granted to a teacher by G.S. 115C‑307 and any other part of the school program for which either the supervising teacherclinical educator or the principal is responsible.

(b)        Legal Protection. – A student teacher under the supervision of a certifiedlicensed teacher or principal shall have the protection of the laws accorded the certifiedlicensed teacher.

(c)        Assignment of Duties. – It shall be the responsibility of a supervising teacher, clinical educator, in cooperation with the principal and the representative of the teacher‑preparation institution,educator preparation program, to assign to the student teacher responsibilities and duties that will provide adequate preparation for teaching."

SECTION 8.41.(k)  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.(l)  Educator preparation programs approved by the State Board of Education on or before the date this act becomes law 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 after the date this act becomes law 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.  Beginning with the 2015‑2016 school year and for subsequent school years thereafter, 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.

 

Change the Mandatory Training For Local Boards Of Education to every two years

SECTION 8.44.  G.S. 115C‑50(a) reads as rewritten:

"(a)       All members of local boards of education, whether elected or appointed, shall receive a minimum of 12 clock hours of training annually.every two years. The 12 clock hours of training may be earned at any time during the two‑year period and may include the ethics education required by G.S. 160A‑87."

 

Repeal Extracurricular Duties Restriction for teachers with 27 or more years of experience

SECTION 8.45.  G.S. 115C‑47(18a)b. is repealed.

 

Licensure for Retired Substitute teachers with at least 30 years of teaching experience

SECTION 8.46.(a)  G.S. 115C‑296(b)(1) reads as rewritten:

"(1)      Licensure standards.

a.         The licensure program shall provide for initial licensure after completion of preservice training, continuing licensure after three years of teaching experience, and license renewal every five years thereafter, until the retirement of the teacher. The last license renewal received prior to retirement shall remain in effect for five years after retirement. The licensure program shall also provide for licensure based on teaching experience as follows:

1.         Continuing licensure of a teacher as defined in G.S. 115C‑325(6) who has (i) 30 or more years of teaching experience in North Carolina upon the date of retirement of the teacher and (ii) served as a substitute teacher at least once every three years since retirement.

2.         lifetimeLifetime licensure after 50 years of teaching.

b.         The State Board of Education, in consultation with the Board of Governors of The University of North Carolina, shall evaluate and develop enhanced requirements for continuing licensure. The new requirements shall reflect more rigorous standards for continuing licensure and shall be aligned with high‑quality professional development programs that reflect State priorities for improving student achievement. Standards for continuing licensure shall include the following:

1.         For all teachers, at least eight continuing education credits with at least three credits required in a teacher's academic subject area.

2.         Standards for continuing licensure forFor elementary and middle school teachers shall includeteachers, at least three continuing education credits related to literacy. Literacy renewal credits shall include evidence‑based assessment, diagnosis, and intervention strategies for students not demonstrating reading proficiency. Oral language, phonemic and phonological awareness, phonics, vocabulary, fluency, and comprehension shall be addressed in literacy‑related activities leading to license renewal for elementary school teachers.

3.         For retired teachers serving as substitutes seeking a continuing license who qualify under sub‑subdivision a. of this subdivision, at least 640 hours of documented substitute teaching each renewal cycle and eight hours of annual professional development approved by a local school administrative unit.

c.         The State Board of Education, in consultation with local boards of education and the Board of Governors of The University of North Carolina, shall (i) reevaluate and enhance the requirements for renewal of teacher licenses, and (ii) consider modifications in the license renewal achievement and to make it a mechanism for teachers to renew continually their knowledge and professional skills, and (iii) integrate digital teaching and learning into the requirements for licensure renewal."

SECTION 8.46.(b)  This section becomes effective the date the act becomes law and applies beginning with the 2015‑2016 school year. An individual whose teaching license has expired shall be paid as if the individual held a current teaching license in the six months following the effective date of this section if all of the following conditions apply:

(1)        The individual meets the qualifications of G.S. 115C‑296(b)(1)a.1., as enacted by this section.

(2)        The individual has served as a substitute teacher in the six months prior to the effective date of this section.

(3)        The individual indicates to the local school administrative unit in which the individual is employed that he or she is seeking to satisfy the professional development requirements for licensure renewal.

 

teacher assistant allotment

SECTION 8.47.(a)  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(3a)     No funds shall be transferred out of the teacher assistants allotment category."

SECTION 8.47.(b)  This act provides local school administrative units the dollar equivalent of teacher assistant positions based on the following ratios:

(1)        Two teacher assistants for every three classes in kindergarten.

(2)        One teacher assistant for every two classes in grades 1 and 2.

(3)        One teacher assistant for every three classes in grade 3.

For the 2015‑2016 fiscal year, funds shall be distributed based on an estimated statewide average salary and benefits per position and an average class size of 21 students in membership per classroom.

 

Reading Camps offered to first and second grade students

SECTION 8.48.(a)  G.S. 115C‑83.3(4a) reads as rewritten:

"(4a)     "Reading camp" means an additional educational program outside of the instructional calendar provided by the local school administrative unit to (i) any third grade student who does not demonstrate reading proficiency.proficiency and (ii) any first or second grade student who demonstrates reading comprehension below grade level as identified through administration of formative and diagnostic assessments in accordance with G.S. 115C‑83.6. Parents or guardians of the student not demonstrating reading proficiency or demonstrating reading comprehension below grade level shall make the final decision regarding the student's reading camp attendance. Reading camps shall (i) offer at least 72 hours of reading instruction to yield positive reading outcomes for participants; (ii) be taught by compensated, licensed teachers selected based on demonstrated student outcomes in reading proficiency;proficiency or in improvement of difficulties with reading development; and (iii) allow volunteer mentors to read with students at times other than during the 72 hours of reading instruction. The 72 hours of reading instruction shall be provided over no less than three weeks for students in schools using calendars other than year‑round calendars."

SECTION 8.48.(b)  G.S. 115C‑83.6 reads as rewritten:

"§ 115C‑83.6.  Facilitating early grade reading proficiency.

(a)        Kindergarten, first, second, and third grade students shall be assessed with valid, reliable, formative, and diagnostic reading assessments made available to local school administrative units by the State Board of Education pursuant to G.S. 115C‑174.11(a). Difficulty with reading development identified through administration of formative and diagnostic assessments shall be addressed with instructional supports and services. Parents or guardians of first and second grade students demonstrating reading comprehension below grade level as identified through assessments administered pursuant to this subsection shall be encouraged to enroll their student in a reading camp provided by the local school administrative unit. Parents or guardians of a student identified as demonstrating reading comprehension below grade level shall make the final decision regarding a student's reading camp attendance.

(a1)      To the greatest extent possible, kindergarten through third grade reading assessments shall yield data that can be used with the Education Value‑Added Assessment System (EVAAS), or a compatible and comparable system approved by the State Board of Education, to analyze student data to identify root causes for difficulty with reading development and to determine actions to address them.

(b)        Formative and diagnostic assessments and resultant instructional supports and services shall address oral language, phonological and phonemic awareness, phonics, vocabulary, fluency, and comprehension using developmentally appropriate practices.

(c)        Local school administrative units are encouraged to partner with community organizations, businesses, and other groups to provide volunteers, mentors, or tutors to assist with the provision of instructional supports and services that enhance reading development and proficiency."

SECTION 8.48.(c)  G.S. 115C‑83.10 reads as rewritten:

"§ 115C‑83.10.  Accountability measures.

(a)        Each local board of education shall publish annually on a Web site maintained by that local school administrative unit and report in writing to the State Board of Education by September 1 of each year the following information on the prior school year:

(1)        The number and percentage of third grade students demonstrating and not demonstrating reading proficiency on the State‑approved standardized test of reading comprehension administered to third grade students.

(2)        The number and percentage of third grade students who take and pass the alternative assessment of reading comprehension.

(3)        The number and percentage of third grade students retained for not demonstrating reading proficiency.

(4)        The number and percentage of third grade students exempt from mandatory third grade retention by category of exemption as listed in G.S. 115C‑83.7(b).

(5)        The number and percentage of first grade students demonstrating and not demonstrating reading comprehension at grade level.

(6)        The number and percentage of second grade students demonstrating and not demonstrating reading comprehension at grade level.

(b)        Each local board of education shall report annually in writing to the State Board of Education by September 1 of each year a description of all reading interventions provided to students who have been retained under G.S. 115C‑83.7(a). The local board of education shall also include in the report the number of first and second grade students attending a reading camp offered by the local board.

(c)        The State Board of Education shall establish a uniform format for local boards of education to report the required information listed in subsections (a) and (b) of this section and shall provide the format to local boards of education no later than 90 days prior to the annual due date. The State Board of Education shall compile annually this information and submit a State‑level summary to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Joint Legislative Education Oversight Committee by October 15 of each year, beginning with the 2014‑20152015‑2016 school year.

(d)        The State Board of Education and the Department of Public Instruction shall provide technical assistance as needed to aid local school administrative units to implement all provisions of this Part."

SECTION 8.48.(d)  G.S. 115C‑83.11 reads as rewritten:

"§ 115C‑83.11.  Continued support for students demonstrating reading proficiency.proficiency and appropriate reading development.

(a)        Parents or guardians of a student demonstrating reading proficiency appropriate for a third grade student as provided under G.S. 115C‑83.7 or a first or second grade student demonstrating appropriate developmental abilities in reading comprehension may choose to enroll the student in the reading camp as defined in G.S. 115C‑83.3(4a) but may be charged an attendance fee. Local boards of education may establish a fee amount to be equal to the per student program cost of participating in the reading camp, not to exceed eight hundred twenty‑five dollars ($825.00).

(b)        Priority enrollment in the reading camp is for (i) third grade students not demonstrating reading proficiency as provided under G.S. 115C‑83.8.G.S. 115C‑83.8 and (ii) first and second grade students demonstrating reading comprehension below grade level under G.S. 115C‑83.6. Local boards of education shall establish application procedures and enrollment priorities for reading camps for students demonstrating reading proficiency."

SECTION 8.48.(e)  Notwithstanding G.S. 115C‑83.10, as amended by subsection (c) of this section, the State Board of Education and local boards of educations shall include initial information on first and second grade students in the reports required under G.S. 115C‑83.10 by October 15, 2016, and September 1, 2016, respectively.

SECTION 8.48.(f)  This section is effective beginning with the 2015‑2016 school year.

 

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 have failed to comply 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 a lower class size in first grade which, according to research, is 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 forty‑one million eight hundred forty‑six thousand one hundred twenty‑three dollars ($41,846,123) in additional funds to increase the base teacher salary paid by the State by six and one‑tenth percent (6.1 %).

 

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, and any other provision of law, for the 2015‑2016 and 2016‑2017 school years, class size requirements in kindergarten through third grade shall remain unchanged.

 

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‑105.37 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 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.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.

(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.(c)  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 school growth score as provided in G.S. 115C‑83.15 have been identified as low‑performing schools, 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 school 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 school 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.

(a)        Consolidation and Merger. – 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.

(b)        Effective Date. – The merger shall become effective on July 1 immediately following the earlier of the thirty‑first legislative day or the day of adjournment of the next regular session of the General Assembly that begins at least 25 days after the date the State Board approved the merger. If a bill that specifically disapproves the merger is introduced in either house of the General Assembly before the thirty‑first legislative day of that session, the merger becomes effective on the July 1 immediately following the earlier of either the day an unfavorable final action is taken on the bill or the day that session of the General Assembly adjourns without ratifying a bill that specifically disapproves the merger. A merger that is specifically disapproved by a bill enacted into law before it becomes effective does not become effective.

(c)        Legislative Disapproval of Merger. – A bill specifically disapproves a merger if it contains a provision that refers to the written plan of merger and states that the merger is disapproved. Notwithstanding any rule of either house of the General Assembly, any member of the General Assembly may introduce a bill during the first 30 legislative days of any regular session to disapprove a merger that has been approved by the State Board and that has not become effective."

 

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 October 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 2015‑2016 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.

2015‑2016 Teacher Monthly Salary Schedule

Years of Experience                                                               "A" Teachers

0‑4                                                                                    $3,500

5‑9                                                                                      3,650

10‑14                                                                                  4,000

15‑19                                                                                  4,350

20‑24                                                                                  4,650

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)  The twenty‑sixth 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 seven and one‑half percent (7.5%) higher than the salary received by these same employees on the twenty‑fifth step of the salary schedule.

SECTION 9.1.(e)  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.(f)  A teacher compensated in accordance with this salary schedule for the 2015‑2016 school year 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.(g)  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                 $3,909                          ‑                       ‑                     ‑                     ‑

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)  Effective July 1, 2015, any person paid on the State Salary Schedule in the 2013‑2014 school year and employed on July 1, 2015, who does not receive a salary increase on this salary schedule shall receive a nonrecurring salary bonus of eight hundred nine dollars ($809.00).

 

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.

 

EXPAND AGRICULTURAL AND TRANSPORTATION CLASSES TO FRESHMEN AND SOPHOMORES

SECTION 10.4.  G.S. 115D‑20(4)a. reads as rewritten:

"§ 115D‑20.  Powers and duties of trustees.

The trustees of each institution shall constitute the local administrative board of such institution, with such powers and duties as are provided in this Chapter and as are delegated to it by the State Board of Community Colleges. The powers and duties of trustees shall include the following:

(4)        To apply the standards and requirements for admission and graduation of students and other standards established by the State Board of Community Colleges. Notwithstanding any law or administrative rule to the contrary, local community colleges are permitted to offer the following programs:

a.         Subject to the approval of the State Board of Community Colleges, local community colleges may collaborate with local school administrative units to offer courses through the following programs:

1.         Cooperative innovative high school programs as provided by Part 9 of Article 16 of Chapter 115C of the General Statutes.

2.         Academic transition pathways for qualified junior and senior high school students that lead to a career technical education certificate or diploma and academic transition pathways for qualified freshmen and sophomore high school students that lead to a career technical education certificate or diploma in (i) industrial and engineering technologies.technologies, (ii) agriculture and natural resources, or (iii) transportation technology.

3.         College transfer certificates requiring the successful completion of thirty semester credit hours of transfer courses, including English and mathematics, for qualified junior and senior high school students."

 

COLLEGES EARN BUDGET FTE FOR CURRICULUM 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 curriculum courses 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 December 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.

 

YOUTH CAREER CONNECT PROGRAM

SECTION 10.11.(a)  The federal Youth Career Connect Grant awarded to Anson County Schools for 2014‑2018 requires students to enroll in community college courses in the ninth and tenth grades. Notwithstanding any other provision of law, South Piedmont Community College may enroll Anson County Schools freshman (ninth grade) and sophomore (tenth grade) students in community college courses associated with this grant. Ninth and tenth grade students enrolled in curriculum courses at South Piedmont Community College associated with the federal Youth Career Connect Grant shall not be charged tuition.

SECTION 10.11.(b)  South Piedmont Community College shall not earn budget FTE for student course enrollments supported with this grant.

SECTION 10.11.(c)  This section expires June 30, 2018.

 

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 provides 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)        High schools to use curriculum approved by the State Board of Community Colleges, in consultation with the State Board of Education.

(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)        Delivery of remedial courses by high school faculty consistent with policies adopted by the State Board of Community Colleges and the State Board of Education. The policies shall include, at a minimum, the following requirements:

a.         High school faculty teaching the approved remedial courses must successfully complete training requirements as determined by the State Board of Community Colleges, in consultation with the State Board of Education.

b.         The North Carolina Community College System shall provide oversight of the remedial courses to ensure appropriate instructional delivery.

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 March 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 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 of Community Colleges 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 of Community Colleges 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 15, 2015, and shall select the initial recipients for the award of funds no later than February 22, 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.

 

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.  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. For any cash balances placed on deposit with a bank in the form of traditional demand or time deposits, such as checking, savings, or certificate of deposit accounts, these cash balances shall be secured by deposit insurance, surety bonds, or investment securities satisfying the rules or regulations prescribed under G.S. 147‑79."

 

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)        North Carolina Need‑Based Scholarship.

(3)        Elizabeth City State University.

(4)        Fayetteville State University.

(5)        NC School of Science and Mathematics.

(6)        University of North Carolina at Asheville.

(7)        University of North Carolina School of the Arts.

(8)        State funds allocated to NC State University for support to the Agriculture Education/Future Farmers of America Program.

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.

 

LIMIT USE OF STATE FUNDS FOR UNC ADVANCEMENT PROGRAMS

SECTION 11.6.(a)  A constituent institution as defined in G.S. 116‑2 shall not expend more than one million dollars ($1,000,000) of State funds on advancement programs. Constituent institutions shall take reasonable actions to increase the reliance of advancement programs on funds generated from fund‑raising activities.

SECTION 11.6.(b)  This section applies to the 2016‑2017 fiscal year and each subsequent fiscal year.

 

NC GUARANTEED ADMISSION PROGRAM (NCGAP)

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)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall jointly study and evaluate how a deferred admission program, to be known as the North Carolina Guaranteed Admission Program (NCGAP), for students identified as academically at risk and designed pursuant to subsection (c) of this section, would address the issues and help achieve the goals set out in subsection (a) of this section. In its study the Board of Governors and State Board of Community Colleges shall also consider the best procedure for implementing NCGAP and the fiscal impact it may have with respect to enrollment.

SECTION 11.7.(c)  NCGAP shall be a deferred admission program that requires a student who satisfies the admission criteria of a constituent institution, but whose academic credentials are not as competitive as other students admitted to the institution, to enroll in a community college in this State and earn an associate degree prior to enrolling as a student at the constituent institution. A student who earns an associate degree from a community college in this State within three years from the date of the deferred acceptance is guaranteed admission at that constituent institution to complete the requirements for a baccalaureate degree. A constituent institution shall hold in reserve an enrollment slot in the appropriate future academic year for any student who accepts a deferred admission. A constituent institution shall also reduce its enrollment for each academic year by the number of deferred admissions granted for that academic year.

SECTION 11.7.(d)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall report their finding and recommendations to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management by March 1, 2016. The report shall include an analysis of the fiscal impact NCGAP may have with regard to enrollment at constituent institutions of The University of North Carolina and at community colleges, the number of students who may participate in NCGAP, and its effect on FTEs.

SECTION 11.7.(e)  Based on the analysis conducted by the Board of Governors and the State Board of Community Colleges pursuant to subsection (b) of this section and the recommendations made pursuant to subsection (d) of this section, each constituent institution shall design a deferred admission program as part of NCGAP for implementation at the institution. The institution shall design the program so that it may be implemented at the institution beginning with the 2016‑2017 fiscal year and applied to the institution's admission process for the 2017‑2018 academic year and each subsequent academic year.

SECTION 11.7.(f)  The State Board of Community Colleges, in consultation with the Board of Governors of The University of North Carolina, shall adopt rules to ensure that a student participating in NCGAP is provided counseling and assistance in selecting coursework that reflects the student's educational and career goals and that provides a smooth transition from the community college to the constituent institution.

SECTION 11.7.(g)  NCGAP shall be implemented at all constituent institutions and all community colleges beginning with the 2016‑2017 fiscal year and shall apply to admissions policies at each constituent institution and community college beginning with the 2017‑2018 academic year and each subsequent academic year.

SECTION 11.7.(h)  This section does not apply to the North Carolina School of Science and Mathematics.

 

TRANSFORMING PRINCIPAL PREPARATION

SECTION 11.9.(a)  Purpose. – The purpose of this section is to establish a competitive grant program for eligible entities to elevate educators in North Carolina public schools by transforming the preparation of principals across the State. The State Education Assistance Authority (Authority) shall administer this grant program through a cooperative agreement with a private, nonprofit corporation to provide funds for the preparation and support of highly effective future school principals in North Carolina.

SECTION 11.9.(b)  Definitions. – For the purposes of this section, the following definitions apply:

(1)        Eligible entity. – A for‑profit or nonprofit organization or an institution of higher education that has an evidence‑based plan for preparing school leaders who implement school leadership practices linked to increased student achievement.

(2)        High‑need school. – A public school, including a charter school, that meets one or more of the following criteria:

a.         Is a school identified under Part A of Title I of the Elementary and Secondary Education Act of 1965, as amended.

b.         Is a persistently low‑achieving school, as identified by the Department of Public Instruction for purposes of federal accountability.

c.         A middle school containing any of grades five through eight that feeds into a high school with less than a sixty percent (60%) four‑year cohort graduation rate.

d.         A high school with less than a sixty percent (60%) four‑year cohort graduation rate.

(3)        Principal. – The highest administrative official in a public school building with primary responsibility for the instructional leadership, talent management, and organizational development of the school.

(4)        School leader. – An individual employed in a school leadership role, including principal or assistant principal roles.

(5)        Student achievement. – At the whole school level, after three years of leading a school, consistent and methodologically sound measures of:

a.         Student academic achievement.

b.         Aggregated individual student academic growth.

c.         Additional outcomes, such as high school graduation rates, the percentage of students taking advanced‑level coursework, or the percentage of students who obtain a career‑related credential through a national business certification exam.

SECTION 11.9.(c)  Program Authorized. – The Authority shall award grants to eligible entities to support programs that develop well‑prepared school leaders in accordance with the provisions of this section. The Authority shall establish any necessary rules to administer the grant program.

SECTION 11.9.(d)  Contract With a Nonprofit for Administration. – By November 1, 2015, the Authority shall issue a Request for Proposal (RFP) for a private, nonprofit corporation to contract with the Authority for the administration of the program, including making recommendations to the Authority for the award of grants, as authorized by this section. The nonprofit corporation applying to the Authority shall meet at least the following requirements:

(1)        The nonprofit corporation shall be a nonprofit corporation organized pursuant to Chapter 55A of the General Statutes and shall comply at all times with the provisions of section 501(c)(3) of the Internal Revenue Code.

(2)        The nonprofit corporation shall employ sufficient staff who have demonstrated a capacity for the development and implementation of grant selection criteria and a selection process to promote innovative school leader education programs, including:

a.         Focus on school leader talent.

b.         Expertise supporting judgments about grant renewal based on achievement of or substantial school leader progress toward measurable results in student achievement.

c.         Expectation of creating positive experiences working with the educational community in North Carolina to establish the foundation for successfully administering the programs set forth in this section.

(3)        The nonprofit corporation shall comply with the limitations on lobbying set forth in section 501(c)(3) of the Internal Revenue Code.

(4)        No State officer or employee may serve on the board of the nonprofit corporation.

(5)        The board of the nonprofit corporation shall meet at least quarterly at the call of its chair.

SECTION 11.9.(e)  Report on Selection of the Nonprofit. – The Authority shall select a nonprofit corporation to enter into a contract with to administer the program by January 15, 2016. The Authority shall report to the Joint Legislative Education Oversight Committee on the selection of the nonprofit corporation by February 1, 2016.

SECTION 11.9.(f)  Application Requirements. – The nonprofit corporation entering into a contract with the Authority under subsection (d) of this section shall issue an initial RFP with guidelines and criteria for the grants no later than March 1, 2016. An eligible entity that seeks a grant under the program authorized by this section shall submit to the nonprofit corporation an application at such time, in such manner, and accompanied by such information as the nonprofit may require. An applicant shall include at least the following information in its response to the RFP for consideration by the nonprofit corporation:

(1)        The extent to which the entity has a demonstrated record of preparing school leaders who implement school leadership practices linked to increased student achievement.

(2)        The extent to which the entity has a rigorous school leader preparation program design that includes the following research‑based programmatic elements:

a.         A proactive, aggressive, and intentional recruitment strategy.

b.         Rigorous selection criteria based on competencies that are predictive of success as a school leader, including, but not limited to, evidence of significant positive effect on student learning growth in the classroom, at the school‑level, and the local school administrative unit‑level, professional recommendations, evidence of problem solving and critical thinking skills, achievement drive, and leadership of adults.

c.         Alignment to high‑quality national standards for school leadership development.

d.         Rigorous coursework that effectively links theory with practice through the use of field experiences and problem‑based learning.

e.         Full‑time clinical practice of at least five months in duration in an authentic setting, including substantial leadership responsibilities where candidates are evaluated on leadership skills and effect on student outcomes as part of program completion.

f.          Multiple opportunities for school leader candidates to be observed and coached by program faculty and staff.

g.         Clear expectations for and firm commitment from school leaders who will oversee the clinical practice of candidates.

h.         Evaluation of school leader candidates during and at the end of the clinical practice based on the North Carolina School Executive Evaluation Rubric.

i.          A process for continuous review and program improvement based on feedback from partnering local school administrative units and data from program completers, including student achievement data.

j.          Established relationship and feedback loop with affiliated local school administrative units that is used to inform and improve programmatic elements from year to year based on units' needs.

SECTION 11.9.(g)  Priorities. – The nonprofit corporation shall evaluate the applicants for grants by giving priority to an eligible entity with a record of preparing principals demonstrating the following:

(1)        Improvement in student achievement.

(2)        Placement as school leaders in eligible schools.

(3)        A proposed focus on and, if applicable, a record of serving high‑need schools, high‑need local school administrative units, or both.

(4)        A detailed plan and commitment to share lessons learned and to improve the capacity of other entities in reaching similar outcomes.

SECTION 11.9.(h)  Uses of Funds. – By June 1, 2016, the nonprofit corporation shall recommend to the Authority the recipients of grants under the program. Each eligible entity that receives grant funds shall use those funds to carry out the following:

(1)        Recruiting and selecting, based on a rigorous evaluation of the competencies of the school leader candidates participating in the program and their potential and desire to become effective school leaders.

(2)        Operating a school leader preparation program by doing the following:

a.         Utilizing a research‑based content and curriculum, including embedded participant assessments to evaluate candidates before program completion, that prepares candidates to do the following:

1.         Provide instructional leadership, such as developing teachers' instructional practices and analyzing classroom and school‑wide data to support teachers.

2.         Manage talent, such as developing a high‑performing team.

3.         Build a positive school culture, such as building a strong school culture focused on high academic achievement for all students, including gifted and talented students, students with disabilities, and English learners, maintaining active engagement with family and community members, and ensuring student safety.

4.         Develop organizational practices, such as aligning staff, budget, and time to the instructional priorities of the school.

b.         Providing opportunities for sustained and high‑quality job‑embedded practice in an authentic setting where candidates are responsible for moving the practice and performance of a subset of teachers or for school‑wide performance as principal‑in‑planning or interim school leaders.

(3)        Collecting data on program implementation and program completer outcomes for continuous program improvement.

SECTION 11.9.(i)  Duration of Grants. – The nonprofit corporation shall also recommend to the Authority the duration and renewal of grants to eligible entities according to the following:

(1)        The duration of grants shall be as follows:

a.         Grants shall be no more than five years in duration.

b.         The nonprofit corporation may recommend renewal of a grant based on performance, including allowing the grantee to scale up or replicate the successful program as provided in subdivision (2) of this subsection.

(2)        In evaluating performance for purposes of grant renewal and making recommendations to the Authority, the nonprofit corporation shall consider:

a.         For all grantees, the primary consideration in renewing grants shall be the extent to which program participants improved student achievement in eligible schools.

b.         Other criteria from data received in the annual report in subsection (j) of this section may include the following:

1.         The percentage of program completers who are placed as school leaders in this State within three years of receiving a grant.

2.         The percentage of program completers who are rated proficient or above on the North Carolina School Executive Evaluation Rubric.

SECTION 11.9.(j)  Reporting Requirements for Grant Recipients. – Recipients of grants under the program shall submit an annual report to the nonprofit corporation contracting with the Authority, beginning in the third year of the grant, with any information requested by the nonprofit corporation. Whenever practicable and within a reasonable amount of time, grant recipients shall also make all materials developed as part of the program and with grant funds publically available to contribute to the broader sharing of promising practices. Materials shall not include personally identifiable information regarding individuals involved or associated with the program, including, without limitation, applicants, participants, supervisors, evaluators, faculty, and staff, without their prior written consent. The nonprofit corporation shall work with recipients and local school administrative units, as needed, to enable the collection, analysis, and evaluation of at least the following relevant data, within necessary privacy constraints:

(1)        Student achievement in eligible schools.

(2)        The percentage of program completers who are placed as school leaders within three years in the State.

(3)        The percentage of program completers rated proficient or above on school leader evaluation and support systems.

SECTION 11.9.(k)  Licensure Process. – By June 1, 2016, the State Board of Education shall adopt a policy to provide for a specific licensure process applicable to school administrators who provide documentation to the State Board of successful completion of a principal preparation program selected for a competitive grant in accordance with this section.

SECTION 11.9.(l)  Evaluation and Revision of Program. – The nonprofit corporation administering the program shall provide the State Board of Education with the data collected in accordance with subsection (j) of this section on an annual basis. By September 15, 2021, the State Board of Education, in coordination with the Board of Governors of The University of North Carolina, shall revise, as necessary, the licensure requirements for school administrators and the standards for approval of school administrator preparation programs after evaluating the data collected from the grant recipients, including the criteria used in selecting grant recipients and the outcomes of program completers. The State Board of Education shall report to the Joint Legislative Education Oversight Committee by November 15, 2021, on any changes made to the licensure requirements for school administrators and the standards for approval of school administrator preparation programs in accordance with this section.

SECTION 11.9.(m)  Of the funds appropriated each fiscal year for this program, the sum of five hundred thousand dollars ($500,000) shall be allocated to the State Education Assistance Authority to contract with the nonprofit corporation selected pursuant to subsection (e) of this section to establish and administer the program. The State Education Assistance Authority may use up to five percent (5%) of those funds each fiscal year for administrative costs.

SECTION 11.9.(n)  Beginning with the 2016‑2017 fiscal year, of the funds appropriated for this program, the sum of five hundred thousand dollars ($500,000) shall be allocated each fiscal year to the State Education Assistance Authority to award grants to selected recipients.

 

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 threefour 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 2015‑2017 fiscal biennium 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 lines 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 January 1, 2016.

 

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 March 1, 2017, 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."

 

EDUCATION OPPORTUNITIES FOR STUDENTS WITH DISABILITIES

SECTION 11.19.(a)  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, with the assistance of the Department of Health and Human Services, Division of Vocational Rehabilitation and Division of Social Services, the Department of Public Instruction, The University of North Carolina, and the North Carolina Community College System, and in consultation with the North Carolina Postsecondary Education Alliance, community stakeholders, and other interested parties, shall:

(1)        Assess gaps and system needs to support transitions of people with disabilities to adulthood.

(2)        Develop a program and fiscal policies to expand and sustain postsecondary education and employment opportunities for people with disabilities.

(3)        Plan and implement approaches to public awareness about postsecondary education and employment for people with disabilities.

(4)        Plan and implement joint policies and common data indicators for tracking the outcomes of people with disabilities after leaving high school.

(5)        Consider options for technology to link agency databases.

The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall report to the Joint Legislative Education Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services by November 15, 2015, and annually thereafter through November 15, 2017, on the implementation of this section.

SECTION 11.19.(b)  The State Education Assistance Authority shall study strategies for ensuring that the State system of financial assistance for postsecondary education is fully available to assist qualified students with disabilities who are enrolled in certificate‑based, approved university programs developed for them. The Authority shall report to the Joint Legislative Education Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services by March 15, 2016, on the results of this study.

 

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 2016‑2017 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 2016‑2017 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.

The Board of Governors shall disburse the challenge grant funds of two million dollars ($2,000,000) to Western Governors University upon notification and appropriate documentation that the sum of five million dollars ($5,000,000) in private funds has been raised pursuant to this section.

 

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.

 

Centralized Process to Determine Residency for Tuition Purposes

SECTION 11.23.  It is the intent of the General Assembly to establish a coordinated and centralized process for residency determination that enables efficiencies within the public sectors of higher education and that simplifies the process while enhancing accuracy and consistency of outcomes. The State Education Assistance Authority (SEAA) is hereby authorized to perform all functions necessary to implement the coordinated and centralized process to apply the criteria in G.S. 116‑143.1 to determine residency for tuition purposes of students who apply for admission and are admitted to a constituent institution of The University of North Carolina or a community college under the jurisdiction of the State Board of Community Colleges and for students who apply for State‑funded financial aid to attend eligible private postsecondary institutions so that the process will be fully functional for terms of enrollment commencing after December 31, 2016.

The University of North Carolina General Administration and the North Carolina Community College System shall take the necessary actions to facilitate an orderly transition from the campus‑based residency determination system to the coordinated and centralized process authorized in this section. Each of the Division of Motor Vehicles of the Department of Transportation, the Department of Public Instruction, the Department of Commerce, the Department of Health and Human Services, the Department of Revenue, the State Board of Elections, and the State Chief Information Officer shall expeditiously cooperate with the SEAA in verifying electronically, or by other similarly effective and efficient means, evidence submitted to the SEAA for the purposes of classifying an individual as a resident for tuition purposes. The SEAA shall consult with representatives of The University of North Carolina General Administration, the North Carolina Community College System, and the North Carolina Independent Colleges and Universities in implementing the centralized process.

 

PART XII. DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

SUBPART XII‑A. CENTRAL MANAGEMENT AND SUPPORT

 

CREATION OF OFFICE OF PROGRAM EVALUATION REPORTING AND ACCOUNTABILITY WITHIN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

SECTION 12A.3.(a)  Article 3 of Chapter 143B of the General Statutes is amended by adding a new Part to read:

"Part 31A. Office of Program Evaluation Reporting and Accountability.

"§ 143B‑216.52.  Department of Health and Human Services; Office of Program Evaluation Reporting and Accountability.

The Office of Program Evaluation Reporting and Accountability (OPERA) is hereby established within the Department of Health and Human Services. Employees of the OPERA shall be subject to the North Carolina Human Resources Act only as provided in G.S. 126‑5(c1)(31).

"§ 143B‑216.53.  Appointment, qualifications, and removal of OPERA Director.

(a)        The Secretary of Health and Human Services shall appoint a Director of OPERA, who shall perform the duties of the position independently. The Director shall report directly to the Secretary and shall not report to any other deputy, division director, or staff member of the Department.

(b)        The Director must have a minimum of 10 years of experience in program evaluation equivalent to the duties of the office, including at least three years of experience at the management level.

(c)        The Director may only be removed by the Secretary of Health and Human Services effective 30 days after written notification to the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the State Auditor, and the Director of the Fiscal Research Division of the Legislative Services Office. The notification must itemize the causes and particulars justifying the Director's removal.

"§ 143B‑216.54.  Duties of the Office of Program Evaluation Reporting and Accountability.

The Office of Program Evaluation Reporting and Accountability has the following duties:

(1)        To assess the evidentiary basis of all Department programs as recommended by Evidence‑Based Policymaking: A Guide for Effective Government, a project of the Results First Initiative of the Pew Charitable Trusts and the John D. and Katherine T. MacArthur Foundation.

(2)        To identify and evaluate any Department program when directed by the General Assembly, the Secretary, or as deemed necessary by the Director.

(3)        To develop an Internet Web site containing an inventory of departmental programs consisting of the program name and a link to a program profile. For each program, the profile must contain, at a minimum, all of the following:

a.         Legal authority for the program.

b.         Program performance for the past five fiscal years and year to date for the current fiscal year.

1.         Outcome. – The verifiable quantitative effects or results attributable to the program compared to a performance standard.

2.         Output. – The verifiable number of units of services or activities compared to a standard.

3.         Efficiency. – The verifiable total direct and indirect cost per output and per outcome compared to a standard.

4.         Performance standard. – A quantitative indicator based upon best practices, generally recognized standards, or comparisons with relevant programs in other states or regions for gauging achievement of efficiency, output, and outcomes.

5.         Benchmarks. – A broad societal indicator used for gauging ultimate outcomes of the program, such as U.S. Census data.

c.         Funding by source for the current and previous five fiscal years.

d.         Listing of filled and vacant employee positions as specified by the Office of State Budget and Management.

e.         Listing of contracts during the previous fiscal year and of the current fiscal year to date with individuals and firms and the actual and authorized cost, funding source, and purposes of those contracts.

f.          Categorization by evidence of effectiveness as determined by the Office.

g.         Potential return on investment of each program.

h.         Findings and recommendations from internal and external State or federal audits, Office program assessments, and program evaluations.

(4)        To assure that the Office Internet Web site allows users to list all of the following:

a.         Programs that exceeded, met, or did not meet performance standards for efficiency, outputs, and outcomes for the immediate preceding fiscal year.

b.         Programs by category of evidence of effectiveness.

c.         Programs by potential return on investment.

d.         Programs listed in a manner determined useful by the Office.

(5)        To cooperate with and respond promptly to requests for program‑level data and information from the Office of State Budget and Management, the Fiscal Research and Program Evaluation Divisions of the Legislative Services Office, and the State Auditor.

"§ 143B‑216.55.  Powers of the Office of Program Evaluation Reporting and Accountability.

The Office of Program Evaluation Reporting and Accountability is authorized, primarily for the purpose of assessing accurate return on investment, to do all of the following:

(1)        Have unfettered access to any data or record maintained by the Department and to assure its confidentiality when required by State or federal law.

(2)        Interview any Department employee or independent contractor without others present.

(3)        Conduct announced or unannounced inspections of departmental‑owned or departmental‑leased facilities."

SECTION 12A.3.(b)  G.S. 126‑5(c1) 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 Office of Program Evaluation Reporting and Accountability of the Department of Health and Human Services."

 

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 Department of Information Technology created by this act, 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 Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and 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 February 1, 2018, and (ii) all other entities that receive State funds for the provision of health services, including local management entities/managed care organizations, shall be connected by June 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 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 February 29, 2016, 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 February 29, 2016. 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 four hundred sixteen thousand dollars ($1,416,000) for the eight‑month period commencing July 1, 2015, and ending February 29, 2016. The State CIO shall terminate payments for these monthly operational expenses upon the earlier of February 29, 2016, 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 February 29, 2016, 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 February 29, 2016. 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 four hundred sixteen thousand dollars ($1,416,000) for the eight‑month period commencing July 1, 2015, and ending February 29, 2016. The Authority shall terminate payments for these monthly operational expenses upon the earlier of February 29, 2016, 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)        Department. – North Carolina Department of Health and Human Services.

(5)        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.

(6)        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 to an individual's bodily functions, or (iii) serious dysfunction of any bodily organ or part of an individual.

(7)        GDAC. – The North Carolina Government Data Analytics Center.

(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 Advisory Board or Advisory Board. – The Advisory Board established under G.S. 90‑414.8.

(12)      North Carolina Health Information Exchange Authority or Authority. – The entity established pursuant to G.S. 90‑414.7.

(13)      Opt out. – An individual's affirmative decision communicated in writing to disallow his or her protected health information maintained by the Authority from being disclosed to other covered entities or other persons or 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 with which the Authority has contracted for the sole purpose of facilitating the exchange of data with or through the HIE Network.

(17)      Research purposes. – Research purposes referenced in and subject to the standards 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 State needs timely access to certain demographic and clinical information pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds 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 demographic and clinical information available to the State by secure electronic means as set forth in subsection (b) of this section will, with respect to Medicaid and other State‑funded health care programs, improve care coordination within and across health systems, increase care quality for such beneficiaries, 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)        Notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2 and as a condition of receiving State funds, including Medicaid funds, the following entities shall submit at least twice daily, through the HIE network, demographic and clinical information pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds, solely for the purposes set forth in subsection (a) of this section:

(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.

(4)        Each local management entity/managed care organization, as defined in G.S. 122C‑3.

The daily submissions required under this subsection shall be by connection to the HIE Network periodic asynchronous secure structured file transfer or any other secure electronic means commonly used in the industry and consistent with document exchange and data submission standards established by the Office of the National Coordinator for Information Technology within the U.S. Department of Health and Human Services.

"§ 90‑414.5.  State agency and legislative access to HIE Network data.

(a)        The Authority shall provide the Department and the State Health Plan for Teachers and State Employees secure, real‑time access to data and information disclosed through the HIE Network, solely for the purposes set forth in subsection (a) of this section and in G.S. 90‑414.2. The Authority shall limit access granted to the State Health Plan for Teachers and State Employees pursuant to this section to data and information disclosed through the HIE Network that pertains to services (i) rendered to teachers and State employees and (ii) paid for by the State Health Plan.

(b)        At the written request of the Director of the Fiscal Research, Bill Drafting, Research, or Program Evaluation Division of the General Assembly for an aggregate analysis of the data and information disclosed through the HIE Network, the Authority shall provide the professional staff of these Divisions with such aggregated analysis responsive to the Director's request. Prior to providing the Director or General Assembly's staff with any aggregate data or information submitted through the HIE Network or with any analysis of this aggregate data or information, 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. § 164.514, as amended.

"§ 90‑414.6.  State ownership of HIE Network data.

Any data pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries submitted through and stored by 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 aggregated, de‑identified data submitted to and stored by 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. The Authority shall not allow data it receives pursuant to G.S. 90‑414.4 or any other provision of this Article to be used or disclosed by or to any person or entity for commercial purposes or for any other purpose other than those set forth in G.S. 90‑414.4(a) or G.S. 90‑414.2.

"§ 90‑414.7.  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 participation agreement, business associate agreement, or other agreement the Authority or qualified organization or other person or entity enters into with a covered entity participating in submission of data through or accessing the HIE Network.

d.         Notice to the patient by the healthcare provider or other person or entity 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 whose data has been submitted to the HIE Network 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.

g.         Facilitation of HIE Network interoperability with electronic health record systems of all covered entities listed in G.S. 90‑414.4(b).

h.         Minimization of the amount of data required to be submitted under G.S. 90‑414(b) and any use or disclosure of such data to what is determined by the Authority to be required in order to advance the purposes set forth in G.S. 90‑414.2 and G.S. 90‑414(a).

(2)        In consultation with the Advisory Board, set guiding principles for the development, implementation, and operation of the HIE Network.

(3)        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.

(4)        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.

(5)        Establish fees for participation in the HIE Network and report the established fees to the General Assembly, with an explanation of the fee determination process.

(6)        Following consultation with the Advisory Board, develop, approve, and enter into, directly or through qualified organizations acting under the authority of the Authority, written participation agreements with persons or entities that participate in or are granted access or user rights to the HIE Network. The participation agreements shall set forth terms and conditions governing participation in, access to, or use of the HIE Network not less than those set forth in agreements already governing covered entities' participation in the federal eHealth Exchange. 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.

(7)        Receive, access, add, and remove data submitted through and stored by the HIE Network in accordance with this Article.

(8)        Following consultation with the Advisory Board, enter into, directly or through qualified organizations acting under the authority of the Authority, a HIPAA compliant business associate agreement with each of the persons or entities participating in or granted access or user rights to the HIE Network.

(9)        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 and subject to contractual, policy, and other requirements of the Authority upon consideration of and consistent with the business associates' legitimate need for utilizing the HIE Network and privacy and security concerns.

(10)      Facilitate and promote use of the HIE Network by covered entities.

(11)      Actively monitor compliance with this Article by the Department, covered entities, and any other persons or entities participating in or granted access or user rights to the HIE Network or any data submitted through or stored by the HIE Network.

(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 Committee on Health and Human Services and the Joint Legislative Oversight Committee on 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.

(17)      Ensure that the HIE Network interfaces with the federal level HIE, the eHealth Exchange.

"§ 90‑414.8.  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 11 members:

(1)        The following four 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.

d.         A representative of a behavioral health provider.

(2)        The following four 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.

d.         A representative of a health system or integrated delivery network.

(3)        The following three ex officio, nonvoting members:

a.         The State Chief Information Officer or a designee.

b.         The Director of GDAC or a designee.

c.         The Secretary of Health and Human Services, 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 of the Senate 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 technology and 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.

"§ 90‑414.9.  Participation by covered entities.

(a)        Each covered entity that elects to participate in the HIE Network shall enter into a HIPAA compliant business associate agreement described in G.S. 90‑414.5(b)(8) and a written participation agreement described in G.S. 90‑414.5(b)(6) with the Authority or qualified organization prior to submitting data through or in the HIE Network.

(b)        Each covered entity that elects to participate in the HIE Network may authorize its business associates on behalf of the covered entity to submit data through, or access data stored in, 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 to other covered entities for any purpose permitted by HIPAA, unless the individual has exercised the right to opt out.

"§ 90‑414.10.  Continuing right to opt out; effect of opt out.

(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 shall not deny treatment, coverage, or benefits to an individual because of the individual's decision to opt out. However, nothing in this Article is intended to restrict a health care provider from otherwise appropriately terminating a relationship with an individual in accordance with applicable law and professional ethical standards.

(d)        Except as otherwise permitted in 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 made accessible or disclosed to covered entities or any other person or entity 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 NC HIE or its designee to periodically audit compliance with this subsection.

"§ 90‑414.11.  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.

"§ 90‑414.12.  Penalties and remedies; immunity for covered entities and business associates for good faith participation.

(a)        Except as provided in subsection (b) of this section, 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.

(b)        To the extent permitted under or consistent with federal law, a covered entity or its business associate that in good faith submits data through, accesses, uses, discloses, or relies upon data submitted through the HIE Network shall not be subject to criminal prosecution or civil liability for damages caused by such submission, access, use, disclosure, or reliance."

SECTION 12A.5.(e)  G.S. 126‑5(c1) 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:

(32)      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.(a)  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) report to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division. As part of the report 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.

SECTION 12A.6.(b)  Beginning on November 15, 2015, and monthly thereafter, the Department of Health and Human Services shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the status of the implementation of ICD‑10. The Department shall continue to submit the report by the 15th of each month until three consecutive months have passed in which the Department did not issue any hardship advances and until the new Department of Information Technology (DIT), created by this act, can assume this function. Thereafter, the Department or DIT, as appropriate, shall submit this report upon request of the Joint Legislative Oversight Committee on Health and Human Services. The report shall include all of the following items:

(1)        An analysis of claims payments prior to the implementation compared to post implementation by major provider category that identifies any variations in claims payment levels.

(2)        For variations attributable to the implementation of ICD‑10, the report shall include corrective actions and communications that resulted from the identification of the variation.

(3)        An update on hardship advances made to providers for payment issues arising for the implementation of ICD‑10 that specifies the total amount advanced and the total amount recovered to date listed by provider.

 

FUNDS FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH  TECHNOLOGY (NC FAST)

SECTION 12A.7.(a)  Funds appropriated in this act in the amount of five million eight hundred three thousand dollars ($5,803,000) for the 2015‑2016 fiscal year and thirteen million fifty‑two thousand dollars ($13,052,000) for the 2016‑2017 fiscal year along with prior year earned revenue in the amount of nine million four hundred thousand dollars ($9,400,000) 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.

SECTION 12A.7.(b)  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.

 

COMPETITIVE GRANTS/NONPROFIT ORGANIZATIONS

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 sum of ten million six hundred fifty‑three thousand nine hundred eleven dollars ($10,653,911) 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.

SECTION 12A.8.(b)  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:

(1)        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.

(2)        A requirement that nonprofits match a minimum of fifteen percent (15%) of the total amount of the grant award.

(3)        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.

(4)        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:

a.         A program targeting advocacy, support, education, or residential services for persons diagnosed with autism.

b.         A system of residential supports for those afflicted with substance abuse addiction.

c.         A program of advocacy and supports for individuals with intellectual and developmental disabilities or severe and persistent mental illness, substance abusers, or the elderly.

d.         Supports and services to children and adults with developmental disabilities or mental health diagnoses.

e.         A food distribution system for needy individuals.

f.          The provision and coordination of services for the homeless.

g.         The provision of services for individuals aging out of foster care.

h.         Programs promoting wellness, physical activity, and health education programming for North Carolinians.

i.          The provision of services and screening for blindness.

j.          A provision for the delivery of after‑school services for apprenticeships or mentoring at‑risk youth.

k.         The provision of direct services for amyotrophic lateral sclerosis (ALS) and those diagnosed with the disease.

l.          A comprehensive smoking prevention and cessation program that screens and treats tobacco use in pregnant women and postpartum mothers.

m.        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.

(5)        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.

(6)        Allows grants to be awarded to nonprofits for up to two years.

(7)        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.

SECTION 12A.8.(c)  No later than July 1 of each year, 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 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:

(1)        The identity and a brief description of each grantee and each program or initiative offered by the grantee.

(2)        The amount of funding awarded to each grantee.

(3)        The number of persons served by each grantee, broken down by program or initiative.

SECTION 12A.8.(d)  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.

SECTION 12A.8.(e)  For the 2015‑2017 fiscal biennium only, from the funds identified in subsection (a) of this section, the Department shall make allocations as follows:

(1)        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 subsection (b) of this section.

(2)        The sum of one million six hundred twenty‑five thousand dollars ($1,625,000) in each year of the 2015‑2017 fiscal biennium to Triangle Residential Options for Substance Abusers, Inc., (TROSA) for the purpose of assisting individuals with substance abuse addiction. TROSA shall be required to seek future funding through the competitive grants process in accordance with subsection (b) of this section.

 

COMMUNITY HEALTH GRANT PROGRAM CHANGES

SECTION 12A.9.  The Department of Health and Human Services, Office of Rural Health, as renamed under Section 12A.16 of this act, 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, as renamed under Section 12A.16 of this act, 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.

 

STUDY DESIGN AND IMPLEMENTATION OF CONTRACTING SPECIALIST AND CERTIFICATION PROGRAM

SECTION 12A.13.  The Joint Legislative Oversight Committee on Health and Human Services shall study and make recommendations regarding the design of a contracting specialist training and certification program for management level personnel within the Department of Health and Human Services (DHHS) similar to the Certified Local Government Purchasing Officer program and local purchasing and contracts program of the University of North Carolina School of Government.

 

HEALTH CARE COST REDUCTION AND TRANSPARENCY ACT REVISIONS

SECTION 12A.15.(a)  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."

SECTION 12A.15.(b)  G.S. 131E‑214.14 reads as rewritten:

"§ 131E‑214.14.  Disclosure of charity care policy and costs.

(a)        Requirements. – A hospital or ambulatory surgical facility required to file Schedule H, federal form 990, under the Code must provide the public access to its financial assistance policy and its annual financial assistance costs reported on its Schedule H, federal form 990. The information must be submitted annually to the Department in the time, manner, and format required by the Department. The Department must post all of the information submitted pursuant to this subsection on its internet Web site.site in one location and in a manner that is searchable. The posting requirement shall not be satisfied by posting links to internet Web sites. The information must also be displayed in a conspicuous place in the organization's place of business.

…."

 

RENAMING OF OFFICE OF RURAL HEALTH AND COMMUNITY CARE

SECTION 12A.16.(a)  The Office of Rural Health and Community Care within the Department of Health and Human Services, Division of Central Management and Support, is hereby renamed the Office of Rural Health.

SECTION 12A.16.(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.

 

Funds for development of Health Analytics pilot program

SECTION 12A.17.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of seven hundred fifty thousand dollars ($750,000) in nonrecurring funds for the 2015‑2016 fiscal year and the sum of two hundred fifty thousand dollars ($250,000) in recurring funds for the 2015‑2016 fiscal year and the 2016‑2017 fiscal year shall be used for the development and implementation of a pilot program for Medicaid claims analytics and population health management.

SECTION 12A.17.(b)  The Department shall coordinate with the Government Data Analytics Center (GDAC) to develop the pilot program and to provide access to needed data sources, including Medicaid claims data, for the pilot program. The pilot program shall utilize the subject matter expertise and technology available through existing GDAC public‑private partnerships in order to apply analytics in a manner that would maximize health care savings and efficiencies to the State and optimize positive impacts on health outcomes.

SECTION 12A.17.(c)  By November 30, 2015, the Department shall execute all contractual agreements and interagency data‑sharing agreements necessary for development and implementation of the pilot program authorized by this section.

SECTION 12A.17.(d)  By January 15, 2016, the Department and GDAC shall provide a progress report on the pilot program authorized by this section 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 May 31, 2016, the Department and GDAC shall make a final report of their findings and recommendations on the pilot program authorized by this section to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division.

 

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 September 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 for part‑time care shall be seventy‑five percent (75%) of the full‑time co‑payment.

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 January 1, 2016, 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 2015 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's 2015 County Tier Designations.

 

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 January 1, 2016, for the 2015‑2016 fiscal year and no later than September 30 of each year thereafter.

 

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. – Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships. For purposes of this subsection, administrative costs shall include costs associated with partnership oversight, business and financial management, general accounting, human resources, budgeting, purchasing, contracting, and information systems management. 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.

 

STATEWIDE EARLY EDUCATION AND FAMILY SUPPORT PROGRAMS

SECTION 12B.8.(a)  The Joint Legislative Oversight Committee on Health and Human Services shall appoint a subcommittee to study early childhood and family support programs, including the Child Care Subsidy program, NC Prekindergarten program (NC Pre‑K), and the Smart Start program. In conducting the study, the subcommittee shall consider the following:

(1)        The purpose, outcomes, and effectiveness of each program.

(2)        The flexibility needed to ensure the needs of young children in counties across the State are met.

(3)        The potential for streamlined administration across the programs.

(4)        Any other relevant issues the subcommittee deems appropriate.

SECTION 12B.8.(b)  The subcommittee may seek input from other states, stakeholders, and national experts  on early child and family support programs as it deems necessary.

SECTION 12B.8.(c)  The subcommittee shall develop a proposal for a statewide plan that addresses how to meet county or regional needs of children by county or region. The subcommittee shall submit a report on the proposed statewide plan to the Joint Legislative Oversight Committee on Health and Human Services on or before April 1, 2016, at which time the subcommittee shall terminate.

 

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 based on the five‑star‑rated license rate.

b.         All other Department of Defense‑certified child care facilities shall be reimbursed based on 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. No additional expenses shall be incurred beyond the funds budgeted for foster care for the Guardianship Assistance Program (GAP). 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.

 

SUCCESSFUL TRANSITION/FOSTER CARE YOUTH

SECTION 12C.6.(a)  It is the intent of the General Assembly to fund and support transitional living services that demonstrate positive outcomes for youth, attract significant private sector funding, and will lead to the development of evidence‑based programs to serve the at‑risk population described in this section.

SECTION 12C.6.(b)  To that end, there is created the Foster Care Transitional Living Initiative Fund that will support a demonstration project with services provided by Youth Villages to (i) improve outcomes for youth ages 17‑21 years who transition from foster care through implementation of outcome‑based Transitional Living Services, (ii) identify cost‑savings in social services and juvenile and adult correction services associated with the provision of Transitional Living Services to youth aging out of foster care, and (iii) take necessary steps to establish an evidence‑based transitional living program available to all youth aging out of foster care. In implementing these goals, the Foster Care Transitional Living Initiative Fund shall support the following strategies:

(1)        Transitional Living Services, which is an outcome‑based program that follows the Youth Villages Transitional Living Model. Outcomes on more than 7,000 participants have been tracked since the program's inception. The program has been evaluated through an independent Randomized Controlled Trial. Results indicate that Youth Villages Transitional Living Model had positive impacts in a variety of areas, including housing stability, earnings, economic hardship, mental health, and intimate partner violence in comparison to the control population.

(2)        Public‑Private Partnership, which is a commitment by private‑sector funding partners to match one hundred percent (100%) of the funds appropriated to the Foster Care Transitional Living Initiative Fund for the 2015‑2017 fiscal biennium for the purposes of providing Transitional Living Services through the Youth Villages Transitional Living Model to youth aging out of foster care.

(3)        Impact Measurement and Evaluation, which are services funded through private partners to provide independent measurement and evaluation of the impact the Youth Villages Transitional Living Model has on the youth served, the foster care system, and on other programs and services provided by the State which are utilized by former foster care youth.

(4)        Advancement of Evidence‑Based Process, which is the implementation and ongoing evaluation of the Youth Villages Transitional Living Model for the purposes of establishing the first evidence‑based transitional living program in the nation. To establish the evidence‑based program, additional randomized controlled trials may be conducted to advance the model.

SECTION 12C.6.(c)  G.S. 131D‑10.9A reads as rewritten:

"§ 131D‑10.9A.  Permanency Innovation Initiative Oversight Committee created.

(a)        Creation and Membership. – The Permanency Innovation Initiative Oversight Committee is established. The Committee shall be located administratively in the General Assembly. The Committee shall consist of 11 12 members serving staggered terms. In making appointments, each appointing authority shall select members who have appropriate experience and knowledge of the issues to be examined by the Committee and shall strive to ensure racial, gender, and geographical diversity among the membership. The initial Committee members shall be appointed on or after July 1, 2013, as follows:

(1)        Four members shall be appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives. Of the members appointed under this subdivision, at least one shall be a member of the judiciary who shall serve for a term of two years and at least one shall be a representative from the Children's Home Society of North Carolina who shall serve for a term of three years. One member of the House shall be appointed for a one‑year term. The remaining appointee shall serve a one‑year term.

(2)        Four members shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate. Of the members appointed under this subdivision, at least one shall be a representative from the Department of Health and Human Services, Division of Social Services, who shall serve for a term of two years and at least one shall be a representative from The Duke Endowment who shall serve for a term of three years. One member of the Senate shall be appointed for a one‑year term. The remaining appointee shall serve a one‑year term.

(3)        Three Four members shall be appointed by the Governor. Of the members appointed under this subdivision, at least one shall be a representative from a county department of social services who shall serve for a term of three years and years, at least one shall be a representative from the University of North Carolina at Chapel Hill who shall serve for a term of two years. years, and at least one shall be a representative from Youth Villages who shall serve for a term of two years. The remaining member shall serve a one‑year term.

(c)        Purpose and Powers. – The Committee shall:

(1)        Design and implement a data tracking methodology to collect and analyze information to gauge the success of the initiative.initiative established under this section as well as an initiative for foster care youth transitioning to adulthood in accordance with Part 3 of this Article.

(2)        Develop a methodology to identify short‑ and long‑term cost‑savings in the provision of foster care and foster care transitional living services and any potential reinvestment strategies.

(3)        Oversee program implementation to ensure fidelity to the program models identified under subdivisions (1) and (2) of G.S. 131D‑10.9B(a).G.S. 131D‑10.9B(a) and under subdivisions (1) through (4) of G.S. 131D‑10.9G(a).

(4)        Study, review, and recommend other policies and services that may positively impact permanency and well‑being outcomes.permanency, well‑being outcomes, and youth aging out of the foster care system.

…."

 

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 February 1, 2016.

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‑10.2B.  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‑10.2B."

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 March 1, 2016. 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 March 1, 2017.

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 January 1, 2017, 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 January 1, 2017.

 

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. The agreement shall also include requirements and procedures regarding the allocation of all federal and other funds for all programs to be administered by the tribe. 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 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, unless an exemption is obtained from the federal government. The tribe shall also provide the Department with information to verify the unemployment standards included under this condition.

(4)        Requirements and procedures for allocating to the tribe in a timely manner all federal funds, nonfederal matching funds, and State funds for State programs previously borne by the State. However, requirements and procedures for allocating funds pursuant to this subdivision shall not include any funding the tribe receives directly from federal agencies.

(5)        The Department shall, when possible and as allowed by the federal government, adopt funding flexibility for Indian Health Services when such flexibility furthers goals addressing health disparities among American Indians."

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 and State funds for State programs designated to Jackson and Swain counties to serve the Eastern Band of Cherokee Indians for that programprograms 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. Any fund sources from which the tribe receives funds directly from federal agencies are excluded from the requirements of this subdivision.

(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.

(3)        Nothing in this section shall be construed to prevent the Eastern Band of Cherokee Indians from providing further nonfederal matching funds to maximize their receipt of federal funds."

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 within 30 days of the effective date of this act to be used for ongoing operation and maintenance pursuant to implementing the provisions of this section.

SECTION 12C.10.(d)  Approval for the Eastern Band of Cherokee Indians to administer the eligibility process for Medicaid and NC Health Choice is contingent upon federal approval of State Plan amendments and Medicaid waivers by the Centers for Medicare & Medicaid Services (CMS). The Department of Health and Human Services, Division of Medical Assistance (DMA), shall submit any State Plan amendments and Medicaid waivers necessary for the delegation of authority and administrative transfer of function to the Eastern Band of Cherokee Indians or to effectuate the changes required by this section and Section 12C.3 of S.L. 2014‑100. All State Plan amendments and Medicaid waivers submitted as allowed under this subsection shall have an effective date of October 1, 2016. DMA shall submit the State Plan amendments and waivers allowed under this subsection and any related responses to CMS requests for additional information to the Eastern Band of Cherokee Indians for review prior to submission to CMS. If CMS does not approve the State Plan amendments and Medicaid waivers allowed by this subsection, 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 State Plan amendments and Medicaid waivers submitted as allowed under subsection (d) of this section, 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.(e1)  Section 12C.3(b) of S.L. 2014‑100 reads as rewritten:

"SECTION 12C.3.(b)  Beginning October 1, 2014, or upon federal approval, the Eastern Band of Cherokee Indians may begin assuming the responsibility for the Supplemental Nutrition Assistance Program (SNAP). When the Eastern Band of Cherokee Indians assumes responsibility for SNAP, then any State statutes, portions of statutes, or rules relating to the provision of social services regarding SNAP services by a county department of social services for members of the Eastern Band of Cherokee Indians shall no longer apply to the Tribe, and the functions, administration, and funding requirements relating to those social services are thereby delegated to the Eastern Band of Cherokee Indians.

No later than October 1, 2015,2016, and with the exception of services related to special assistance, childcare, and adult care homes, the Eastern Band of Cherokee Indians may assume responsibility for other programs as described under G.S. 108A‑25(e), enacted in subsection (c) of this section. When the Eastern Band of Cherokee Indians assumes responsibility for any of those other programs, then any State statutes, portions of statutes, or rules relating to the provision of services for those programs by a county department of social services for members of the Eastern Band of Cherokee Indians shall no longer apply to the Tribe, and the functions, administration, and funding requirements relating to those programs are thereby delegated to the Eastern Band of Cherokee Indians."

SECTION 12C.10.(e2)  Jackson County and Swain County Departments' of Social Services shall provide NC Medicaid, NC Health Choice, and SNAP eligibility workers on‑site at Qualla Boundary five days per week until the transfer of eligibility determination responsibilities under this section have been completed. The number of days per week eligibility workers are provided on‑site may be amended by agreement between the Counties and the tribe.

SECTION 12C.10.(f)  As soon as practicable, but no later than approval by CMS, USDA, and ACF 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. Failure to approve the APDU shall not hinder the transfer of any social services that do not require approval of federal agencies.

SECTION 12C.10.(f1)  The Department, in collaboration with the Eastern Band of Cherokee Indians, shall draft a project plan to meet the October 1, 2016, effective date required by subsection (d) of this section. The Department shall report on the project plan to the Joint Legislative Oversight Committee on Health and Human Services on or before January 1, 2016.

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.

SECTION 12C.10.(h)  Beginning October 1, 2015, and quarterly thereafter, the Department shall report to the Joint Legislative Oversight Committee on Health and Human Services on the status of implementation of this section until implementation is complete.

 

CHILD PROTECTIVE SERVICES PILOT PROJECT

SECTION 12C.11.(a)  The Department of Health and Human Services, Division of Social Services, shall continue implementing 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) to enhance the Pilot Project 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 Project 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 Project to the Joint Legislative Oversight Committee on Health and Human Services no later than March 1, 2016.

 

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).

 

COMMUNITY‑FOCUSED ELIMINATING HEALTH DISPARITIES INITIATIVE

SECTION 12E.3.(a)  Funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, for the Community‑Focused Eliminating Health Disparities Initiative (CFEHDI) shall be used to provide a maximum of 12 grants‑in‑aid 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‑in‑aid shall 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. The Office of Minority Health shall coordinate and implement the grants‑in‑aid program authorized by this section.

SECTION 12E.3.(b)  In implementing the grants‑in‑aid program authorized by subsection (a) of this section, the Department shall ensure all of the following:

(1)        The amount of any grant‑in‑aid is limited to three hundred thousand dollars ($300,000).

(2)        Only community‑based organizations, faith‑based organizations, local health departments, hospitals, and CCNC networks located in urban and rural areas of the western, eastern, and Piedmont areas of this State are eligible to apply for these grants‑in‑aid. No more than four grants‑in‑aid shall be awarded to applicants located in any one of the three areas specified in this subdivision.

(3)        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.

(4)        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‑in‑aid under this section to affect change in the health status of African‑Americans, Hispanics/Latinos, or American Indians:

a.         Heart Disease.

b.         Stroke.

c.         Diabetes.

d.         Obesity.

e.         Asthma.

f.          HIV/AIDS.

g.         Cancer.

h.         Infant mortality.

i.          Low birth weight.

(5)        The minimum duration of the grant period for any grant‑in‑aid is two years.

(6)        The maximum duration of the grant period for any grant‑in‑aid is three years.

(7)        If approved for a grant‑in‑aid, 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 subsection (a) of this section.

(8)        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‑in‑aid. The Department shall establish the independent panel required by this section.

SECTION 12E.3.(c)  The grants‑in‑aid awarded under this section 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.

SECTION 12E.3.(d)  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 to the CFEHDI for the 2015‑2017 fiscal biennium. The report shall include specific activities undertaken by grantees pursuant to subsection (a) of this section 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:

(1)        Which community‑based organizations, faith‑based organizations, local health departments, hospitals, and CCNC networks received CFEHDI grants‑in‑aid.

(2)        The amount of funding awarded to each grantee.

(3)        Which of the minority populations were served by each grantee.

(4)        Which community‑based organizations, faith‑based organizations, local health departments, hospitals, and CCNC networks 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 the CFEHDI program.

(5)        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.

 

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 The 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) to be paid as follows:

(1)        Except as provided in subdivision (2) of this subsection, the county in which the deceased resided shall pay a fee of one thousand seven hundred fifty dollars ($1,750) and the State shall pay the remaining balance of one thousand fifty dollars ($1,050).

(2)        If the death or fatal injury occurred outside the county in which the deceased resided, the State shall pay the entire fee in the amount of two thousand eight hundred dollars ($2,800)."

SECTION 12E.5.(b)  Subsection (a) of this section becomes effective October 1, 2015, and applies to fees imposed for autopsies performed on or after that date.

 

INCREASE IN MEDICAL EXAMINER FEES

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 dollars ($200.00)."

SECTION 12E.6.(b)  Subsection (a) of this section becomes effective October 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.

 

Improve Maternal and Child Health/Establish Competitive Grants Process

SECTION 12E.11.(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 40th 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 12E.11.(b)  Designation of Lead Agency. – The Department of Health and Human Services, Division of Public Health (Division), shall be the lead agency 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 continuation review of all maternal and child health‑related programs and activities as directed under Section 6.20 of this act, in consultation with the Department of Health and Human Services, Office of Program Evaluation Reporting and Accountability (OPERA), as created in Section 12A.3 of this act.

SECTION 12E.11.(c)  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 Division implement a competitive grants process for local health departments based on maternal and infant health indicators 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 Division shall develop a plan to establish a competitive grants process 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 Division 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 Division to implement the plan supplement and do not supplant existing funds for health and wellness programs and initiatives.

SECTION 12E.11.(d)  Funds for Competitive Grants Process. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Public Health (Division), 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 (c) of this section. The Division shall not use more than five percent (5%) of these funds for administrative purposes.

SECTION 12E.11.(e)  Evaluation Protocol for Future Program Funding. – The Division 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.

 

Increase Fee for Newborn Screening Program

SECTION 12E.12.(a)  G.S. 130A‑125(c) reads as rewritten:

"(c)       A fee of nineteen twenty‑four dollars ($19.00)($24.00) applies to a laboratory test performed by the State Laboratory of Public Health pursuant to this section. The fee for a laboratory test is a departmental receipt of the Department and shall be used to offset the cost of the Newborn Screening Program."

SECTION 12E.12.(b)  Subsection (a) of this section becomes effective October 1, 2015, and applies to fees imposed for laboratory tests performed on or after that date.

 

Limitation on Use of STATE Funds for Family Planning Services, Pregnancy Prevention Activities, and Adolescent Parenting Programs

SECTION 12E.13.  Of the funds appropriated in this act to the Department of Health and Human Services for the 2015‑2017 fiscal biennium, no State funds shall be allocated to renewing or extending existing contracts or entering into new contracts for the provision of family planning services, pregnancy prevention activities, or adolescent parenting programs with any provider that performs abortions. This section shall not be construed to prevent the Department from paying any State Health Plan provider or Medicaid provider for services authorized under the State Health Plan or the State Medicaid Program

 

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 million five hundred eighty‑three thousand three hundred ninety‑four dollars ($40,583,394) for the 2015‑2016 fiscal year and the sum of forty million five hundred eighty‑three thousand three hundred ninety‑four dollars ($40,583,394) for the 2016‑2017 fiscal year shall be used to purchase additional new or existing 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 (DMH/DD/SAS), 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 DMH/DD/SAS is directed to reduce its allocation for single stream funding by one hundred ten million eight hundred eight thousand seven hundred fifty‑two dollars ($110,808,752) in nonrecurring funds for the 2015‑2016 fiscal year and by one hundred fifty‑two million eight hundred fifty thousand one hundred thirty‑three dollars ($152,850,133) in nonrecurring funds for the 2016‑2017 fiscal year. The DMH/DD/SAS is directed to allocate this reduction among the LME/MCOs based on the individual LME/MCO's percentage of the total cash on hand of all of the LME/MCOs in the State. Cash on hand means the sum of the "Total Cash and Investments" plus the "Short‑Term Investments" reported on Schedule "A" of the financial reporting package submitted by the LME/MCOs to the Division of Medical Assistance (DMA) on June 30, 2015. The individual LME/MCO's percentage of the total cash on hand equals the individual LME/MCO's cash on hand divided by the aggregate amount of cash on hand of all of the LME/MCOs in the State. During each year of the 2015‑2017 fiscal biennium, each LME/MCO shall provide at least the same level of services paid for by single stream funding during the 2014‑2015 fiscal year.

SECTION 12F.2.(c)  The Department shall modify the monthly reporting package submitted by the LME/MCOs to the Department to include revenues and expenditures for the State funding sources for single stream, intellectual and developmental disability, and substance abuse services on Schedule D2. Additionally, the Department shall modify appropriate schedules in the LME/MCO monthly reporting package to include unduplicated recipients and encounters in the same level of detail included in each D schedule for each source of funding for the reporting for the current and previous year's month and year‑to‑date periods. The Department shall submit these reports to the Joint Legislative Oversight Committee on Health and Human Services by the third Monday of each month beginning in October 2015.

SECTION 12F.2.(d)  If, on or after June 1, 2016, the Office of State Budget and Management (OSBM) certifies a Medicaid budget surplus in funds 1310 and 1311 and sufficient cash in Budget Code 14445 to meet total obligations for fiscal year 2015‑2016, then the DMA may transfer to the DMH/DD/SAS funds not to exceed the amount of the certified surplus or thirty million dollars ($30,000,000), whichever is less, to offset the reduction in single stream funding required by this section. If, on or after June 1, 2017, the OSBM certifies a Medicaid budget surplus in funds 1310 and 1311 and sufficient cash in Budget Code 14445 to meet total obligations for fiscal year 2016‑2017, then the DMA may transfer to the DMH/DD/SAS funds not to exceed the amount of the certified surplus or thirty million dollars ($30,000,000), whichever is less, to offset the reduction in single stream funding required by this section. The DMH/DD/SAS shall allocate funds transferred pursuant to this subsection among the LME/MCOs based on the individual LME/MCO's percentage of the total cash on hand of all the LME/MCOs in the State, calculated in accordance with subsection (b) of this section. These funds shall be allocated as prescribed by June 30 of each State fiscal year.

SECTION 12F.2.(e)  The Department of Health and Human Services shall develop a maintenance of effort (MOE) spending requirement for all mental health and substance abuse services which must be maintained using non‑federal, State appropriations on an annual basis in order to meet MOE requirements for federal block grant awards. LME/MCOs shall ensure the MOE spending requirement is met using State appropriations.

 

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.

 

DOROTHEA DIX HOSPITAL PROPERTY FUND AND PLAN FOR USE OF FUNDS

SECTION 12F.7.(a)  It is the intent of the General Assembly to use funds deposited in the Dorothea Dix Hospital Property Fund established in subsection (b) of this section to increase the availability of short‑term behavioral health inpatient services around the State and to increase inpatient bed capacity for short‑term care of individuals experiencing an acute mental health, substance abuse, or developmental disability crisis.

SECTION 12F.7.(b)  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.7.(c)  Notwithstanding G.S. 146‑30 or any other provision of law, the State Controller shall transfer a total of forty‑nine million eight hundred ninety‑nine thousand four hundred fifty‑six dollars ($49,899,456) for the 2015‑2016 fiscal year from the net proceeds of the sale of the Dorothea Dix Hospital property into the Dorothea Dix Hospital Property Fund established in G.S. 143C‑9‑2(b1), as enacted by subsection (b) of this section. These funds shall be available for expenditure 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.

SECTION 12F.7.(d)  The Department of Health and Human Services (Department) shall develop a plan to use a portion of the funds deposited in the Dorothea Dix Hospital Property Fund not to exceed twenty‑five million dollars ($25,000,000) to produce 150 new behavioral health inpatient beds. The plan shall include the following components:

(1)        Conversion of existing unused physical health hospital beds in addition to the construction of new inpatient behavioral health facilities.

(2)        The plan shall allow hospitals in rural areas to convert unused acute care beds into licensed, inpatient psychiatric or substance abuse beds without undergoing certificate of need review by the Division of Health Service Regulation, notwithstanding the State Medical Facilities Plan, Article 9 of Chapter 131E of the General Statutes, or any other provision of law to the contrary. All converted beds shall be subject to existing licensure laws and requirements.

(3)        An estimate of the amount from Dorothea Dix Hospital Property Fund needed to pay for the construction of new beds and the renovation or building costs associated with converting existing acute care beds into licensed, short‑term inpatient behavioral health beds designated for voluntarily and involuntarily committed patients.

(4)        A method for ensuring that the 150 inpatient beds are distributed equitably around the State and that the distribution of beds addresses the projected unmet bed need in each LME/MCO catchment area as determined in the 2015 State Medical Facilities Plan produced by the Department of Health and Human Services, Division of Health Services Regulations.

(5)        A proposal for funding the recurring operating cost of the new behavioral health inpatient beds, including the identification of potential new funding sources.

(6)        The newly created behavioral health inpatient beds and facilities shall be named in honor of Dorothea Dix.

SECTION 12F.7.(e)  The Department shall submit recommendations to increase the availability of community‑based, behavioral health treatment and services that will reduce the need for costly emergency department and inpatient services.

SECTION 12F.7.(f)  The Department shall submit the plan required by subsection (d) of this section and the recommendations required by subsection (e) of this section to the Joint Legislative Oversight Committee on Health and Human Services no later than April 1, 2016.

 

COMMUNITY PARAMEDIC MOBILE CRISIS MANAGEMENT PILOT PROGRAM

SECTION 12F.8.(a)  Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of two hundred twenty‑five thousand dollars ($225,000) for fiscal year 2015‑2016 shall be used to continue the Department's community paramedic mobile crisis management program to divert behavioral health consumers from emergency departments by implementing a pilot of the thirteen programs across the State.

SECTION 12F.8.(b)  The Department shall develop an evaluation plan for the community paramedic mobile crisis management pilot program 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 12F.8.(c)  The Department shall submit a report to the Senate Appropriations Committee on Health and Human Services, House Appropriations, Health and Human Services, and the Fiscal Research Division by June 1, 2016, on the progress of the project and the Department's evaluation plan.

SECTION 12F.8.(d)  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 the following:

(1)        An updated version of the evaluation plan required by subsection (b) of this section.

(2)        An estimate of the cost to expand the program incrementally.

(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.

 

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 (100%) 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.

(3)        In subsequent fiscal years, the percentage of the allocation that shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs shall decrease by ten percentage points each fiscal year after the 2016‑2017 fiscal year until it reaches zero percent (0%). The percentage of the allocation remaining that shall be used to purchase inpatient alcohol and substance abuse treatment services from any qualified provider shall increase by ten percentage points each fiscal year after the 2016‑2017 fiscal year until it reaches one hundred percent (100%).

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.

SECTION 12F.12.(d)  This section becomes 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.(a)  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.

SECTION 12F.15.(b)  Funds appropriated in this act for the purposes and in the amounts specified in subsection (a) of this section shall be adjusted or eliminated if the Department 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.

 

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 Me