GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2005

S                                                                                                                                                     7

SENATE BILL 622

Appropriations/Base Budget Committee Substitute Adopted 5/3/05

Pensions & Retirement and Aging Committee Substitute Adopted 5/3/05

Fourth Edition Engrossed 5/5/05

 House Committee Substitute Favorable 6/14/05

 House Committee Substitute #2 Favorable 6/15/05
Seventh Edition Engrossed 6/16/05

 

 

 

Short Title:     2005 Appropriations Act.

(Public)

Sponsors:

 

Referred to:

 

March 17, 2005

 

A BILL TO BE ENTITLED

AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERATIONS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES; to increase fees for licensing of proprietary schools as recommended by the state board; to expand the express review program under the DENR statewide; to increase the charge for appellate division reports to the actual cost; to increase court costs in criminal actions FOR the supplemental pension benefits for sheriffs; to permanently increase the excise tax on cigarettes By 25 a pack beginning July 1, 2005; to permanently increase the excise tax rate on tobacco products other than cigarettes and cigars to 6% beginning July 1, 2005; to equalize the gross premiums tax rates by setting the rate FOR HMOs at 1.9% beginning January 1, 2006; to set the privilege tax on entertainments and movies at 7%; to provide a tax credit equal to 15% of qualifying expenses for certain film productions occurring in this state; to provide for a tax credit of up to $400.00 per employee for small businesses who provide health insurance coverage for employees; to set the insurance regulatory charge at 5.5%; to set the regulatory fee for utilities commission at 0.12%; to set the newborn screening fee at $14.00; to set numerous fees in the DHHS, division of facility services; to increase various Agricultural fees; to increase the cap for cama permit fees to $800.00; to increase general court fees for criminal cases by $9.50; to increase court fees for civil cases by $10.00; to increase the maximum court fee for the administration of estates and trusts to $6,000; to increase the fee for expunction to $125.00; to increase the fees for electronic monitoring; to increase the court costs for failure to wear a seat belt to $75.00; to increase butner property taxes to a rate of 25 per $100.00 valuation; to set fees for the police information network; to increase various department of transportation fees; and to allow the industrial commission to establish fees by rule.

The General Assembly of North Carolina enacts:

 

PART i. INtroduction and title of act

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill,  Michaux

INTRODUCTION

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

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill,  Michaux

TITLE OF ACT

SECTION 1.2.  This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2005."

 

PART iI. current operations and expansion/general fund

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

CURRENT OPERATIONS AND EXPANSION/GENERAL FUND

SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for the biennium ending June 30, 2007, according to the following schedule:

 

Current Operations - General Fund                                  2005-2006             2006-2007

 

EDUCATION

 

Community Colleges System Office                              $    775,206,482     $    763,366,425

 

Department of Public Instruction                                      6,665,028,995        6,639,040,147

 

University of North Carolina - Board of Governors

      Appalachian State University                                             95,723,206             96,112,508

      East Carolina University:

            Academic Affairs                                                        149,258,329           152,405,105

            Health Affairs                                                                45,314,949             45,321,933

      Elizabeth City State University                                          28,557,992             28,159,455

      Fayetteville State University                                              42,743,828             42,798,406

      North Carolina Agricultural and Technical

            State University                                                             75,302,121             75,127,553

      North Carolina Central University                                    58,325,133             58,083,922

      North Carolina School of the Arts                                    21,316,022             20,853,451

      North Carolina State University:

            Academic Affairs                                                        295,194,174           300,333,788

            Agricultural Extension                                                  35,497,987             35,384,433

            Agricultural Research                                                   44,884,495             44,952,506

      University of North Carolina at Asheville                        29,194,226             29,733,101

      University of North Carolina at Chapel Hill:

            Academic Affairs                                                        207,951,612           216,911,650

            Health Affairs                                                              161,817,995           164,024,559

            Area Health Education Centers                                    44,743,422             44,743,422

      University of North Carolina at Charlotte                      128,872,610           130,553,102

      University of North Carolina at Greensboro                  111,426,487           112,582,103

      University of North Carolina at Pembroke                       38,515,524             38,823,063

      University of North Carolina at Wilmington                    73,563,667             75,855,057

      Western Carolina University                                             69,318,618             69,657,116

      Winston-Salem State University                                       47,760,006             47,489,842

      General Administration                                                      48,864,530             48,926,344

      University Institutional Programs                                     35,866,059             34,174,482

      Related Educational Programs                                        115,329,807           116,360,229

      North Carolina School of Science and Mathematics       14,355,420             14,313,392

      UNC Hospitals at Chapel Hill                                            38,670,494             38,634,764

Total University of North Carolina -

      Board of Governors                                                   $ 2,058,368,713    $ 2,082,315,286

 

HEALTH AND HUMAN SERVICES

 

Department of Health and Human Services

      Office of the Secretary                                               $   114,593,090      $   113,593,090

      Division of Aging                                                                29,595,139             29,495,139

      Division of Blind Services/Deaf/HH                                   9,561,797               9,681,220

      Division of  Child Development                                      265,981,736           268,588,518

      Division of Education Services                                         33,852,267             34,281,895

      Division of Facility Services                                             13,102,629             13,569,760

      Division of Medical Assistance                                   2,553,639,668        2,817,546,300

      Division of Mental Health                                               601,583,655           602,869,039

      NC Health Choice                                                               76,706,650             97,511,380

      Division of Public Health                                                150,273,266           144,475,524

      Division of Social Services                                             190,384,693           193,664,285

      Division of Vocational Rehabilitation                              41,755,526             42,142,193

Total Health and Human Services                                   $ 4,081,030,116    $ 4,367,418,343

 

NATURAL AND ECONOMIC RESOURCES

 

Department of Agriculture and Consumer Services         $   51,061,684        $   50,656,509

 

Department of Commerce

      Commerce                                                                           49,265,070             35,278,265

      Commerce State-Aid                                                          29,472,085             12,222,085

      NC Biotechnology Center                                                  12,083,395             10,583,395

      Rural Economic Development Center                              25,852,607             25,552,607

 

Department of Environment and Natural Resources           170,388,004           162,979,324

 

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

 

Department of Labor                                                                14,684,807             14,700,179

 

JUSTICE AND PUBLIC SAFETY

 

Department of Correction                                               $ 1,029,449,707    $ 1,050,558,023

 

Department of Crime Control and Public Safety                   35,576,632             35,974,945

 

Judicial Department                                                                341,682,284           343,820,429

Judicial Department - Indigent Defense                                 94,402,142             89,431,697

 

Department of Justice                                                              78,990,095             79,060,076

 

Department of Juvenile Justice and

      Delinquency Prevention                                                   141,010,329           138,610,329

 

GENERAL GOVERNMENT

 

Department of Administration                                            $   58,934,261        $   58,818,473

 

Office of Administrative Hearings                                            2,987,410               2,969,712

 

Department of State Auditor                                                    10,850,737             10,840,918

 

Office of State Controller                                                        10,043,268             10,044,511

 

Department of Cultural Resources

      Cultural Resources                                                             66,834,719             61,883,584

      Roanoke Island Commission                                                1,783,374               1,783,374

 

State Board of Elections                                                             5,067,543               5,069,307

 

General Assembly                                                                     42,934,588             46,965,432

 

Office of the Governor

      Office of the Governor                                                         5,324,590               5,344,528

      Office of State Budget and Management                            5,019,735               5,021,795

      OSBM - Reserve for Special Appropriations                    5,686,429               4,311,429

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

 

Department of Insurance

      Insurance                                                                              28,088,214             28,110,582

      Insurance -

            Volunteer Safety Workers' Compensation                   2,500,000               4,500,000

 

Office of Lieutenant Governor                                                     754,737                   753,037

 

Department of Revenue                                                            82,128,036             81,245,969

 

Department of Secretary of State                                              8,784,018               8,764,932

 

Department of State Treasurer

      State Treasurer                                                                       8,690,595               8,295,843

      State Treasurer - Retirement for

            Fire and Rescue Squad Workers                                    8,551,457               8,551,457

 

TRANSPORTATION

 

Department of Transportation                                              $                   0           $                  0

 

RESERVES, ADJUSTMENTS, AND DEBT SERVICE

 

Reserve for Compensation Increases                               $  237,728,000       $  229,728,000

 

Salary Adjustment Fund:  2005-2007 Biennium                      4,500,000               4,500,000

 

Salary Adjustment Fund:  2004-2005 Fiscal Year                   4,500,000               4,500,000

 

Reserve for Teachers' and State Employees'

      Retirement Contribution                                                    13,810,800             13,810,800

 

Reserve for Retirement System Payback                               25,000,000                               0

 

Reserve for Death Benefit Trust                                              12,899,200             12,899,200

 

Reserve for Disability Income Plan                                          6,586,500               6,586,500

 

Reserve for State Health Plan                                                137,400,000           183,200,000

 

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

 

Reserve for Information Technology Rate Adjustments        (2,300,000)            (2,300,000)

 

Information Technology Fund                                                  24,375,000               8,025,000

 

MH/DD/SAS Trust Fund                                                           10,000,000                               0

 

Health and Wellness Trust Fund Senior Rx Program            14,000,000                               0

 

Reserve for Job Development Investment Grants (JDIG)       9,000,000               9,000,000

 

Reserve for Housing Finance                                                     5,000,000                               0

 

Reserve for HB 1048 - DWI Task Force

      Recommendations                                                                 1,000,000                               0

 

Reserve for Increased Fuel Costs                                              3,000,000                               0

 

Debt Service

      General Debt Service                                                       489,544,211           619,291,140

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

 

TOTAL CURRENT OPERATIONS -

      GENERAL FUND                                                  $ 17,077,927,894  $ 17,417,450,912

 

 

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

GENERAL FUND AVAILABILITY STATEMENT

SECTION 2.2.(a)  The General Fund availability used in developing the 2005-2007 biennial budget is shown below:

                                                                                                FY 2005-2006       FY 2006-2007

 

Unappropriated Balance Remaining

      from Previous Year                                                         $                   0       $  146,394,939

Projected Over Collections FY 2004-2005                        527,200,000                               0

Projected Reversions FY 2004-2005                                     75,000,000                               0

Less Earmarkings of Year-End Credit Balance                                                                          

      Savings Reserve Account                                                (170,000,000)                             0

      Repairs and Renovations                                                 (102,955,000)                             0

Beginning Unreserved Credit Balance                    $     329,245,000     $    146,394,939

           

Revenues Based on Existing Tax Structure            $ 15,250,100,000  $ 15,903,000,000

           

Nontax Revenues                                                                                                                         

      Investment Income                                                              75,300,000             78,500,000

      Judicial Fees                                                                      142,200,000           147,900,000

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

      Insurance                                                                              56,600,000             58,800,000

      Other Nontax Revenues                                                    150,400,000           161,800,000

      Highway Trust Fund/Use Tax

            Reimbursement Transfer                                            252,558,117           252,663,009

      Highway Fund Transfer                                                       16,200,000             16,200,000

Subtotal Nontax Revenues                                           $     793,258,117     $    815,863,009

           

Total General Fund Availability                              $ 16,372,603,117  $ 16,865,257,948

           

Adjustments to Availability:  2005 Session                                                                          

      Streamlined Sales Tax Changes                                         61,700,000             89,500,000

      Extend 4.5% Sales Tax Rate                                            413,400,000           458,700,000

      Other Sales Tax Changes:                                                                                                       

            Apply Sales Tax to Service Contracts

                  and Warranties                                                         10,100,000             16,800,000

            Apply Sales Tax to Candy                                             11,000,000             15,800,000

      Excise Tax on Cigarettes and

            Other Tobacco Products                                            142,000,000           165,000,000

      Extend Marginal Individual Income

            Tax Rate of 8.25%                                                        40,200,000             91,700,000

      Continue Use Tax Line on Individual Returns                    3,200,000               3,200,000

      Conform Estate Tax to Federal Sunset                              30,600,000           121,600,000

      Film Industry Jobs Incentives                                             (6,000,000)            (6,000,000)

      IRC Update - Partial Conformance                                   (8,000,000)          (10,700,000)

      Small Business Tax Credit for

            Health Insurance Coverage                                         (17,700,000)          (39,800,000)

      Privilege Tax on Entertainment                                         18,000,000             30,000,000

      Gross Premium Tax Rate on

            Health Maintenance Organizations                              14,300,000             14,300,000

      Increase Earmarking for NC Grape Growers Council         (150,000)                (150,000)

      Justice and Public Safety Fees                                           20,428,271             20,428,271

      Transfer from Tobacco Trust Fund                                    34,000,000             30,000,000

      Transfers from Special Revenue and Other Funds             9,803,950                               0

      Reimburse Debt Service for Certain Capital

            Facilities and Land Acquisition

            per S.L. 2004-179                                                           5,958,723             21,060,827

      Adjust Transfer from Insurance Regulatory Fund                  256,513                   243,813

      Adjust Transfer from Treasurer's Office                                468,478                     67,478

      DOR-Revenue Enhancement Initiative                              97,500,000             97,500,000

      Proceeds from the Sale of Polk Building                           4,977,781                               0

 

Subtotal Adjustments to Availability: 

      2005 Session                                                             $     886,043,716  $   1,119,250,389

 

Revised General Fund Availability                         $ 17,258,646,833  $ 17,984,508,337

 

Less: General Fund Appropriations                       ($17,112,251,894) ($17,417,450,912)

 

Unappropriated Balance Remaining                        $     146,394,939    $     567,057,425

 

SECTION 2.2.(b)  Notwithstanding G.S. 143-16.4(a2), of the funds credited to the Tobacco Trust Account from the Master Settlement Agreement pursuant to Section 6(2) of S.L. 1999-2 during the 2005-2007 fiscal biennium, the sum of thirty-four million dollars ($34,000,000) for the 2005-2006 fiscal year and the sum of thirty million dollars ($30,000,000) for the 2006-2007 fiscal year shall be transferred from the Department of Agriculture and Consumer Services, Budget Code 23703 (Tobacco Trust Fund) to the State Controller to be deposited in Nontax Budget Code 19978 (Intrastate Transfers) to support General Fund appropriations for the 2005-2006 and 2006-2007 fiscal years.

SECTION 2.2.(b1)  Notwithstanding the provisions of G.S. 143-15.2 and G.S. 143-15.3, the State Controller shall transfer only one hundred seventy million dollars ($170,000,000) from the unreserved credit balance to the Savings Reserve Account on June 30, 2005.

SECTION 2.2.(c)  G.S. 143-15.3 is amended by adding a new subsection to read:

"(a2)    The transfer of funds to the Savings Reserve Account in accordance with this section or any other provision of law is not an "appropriation made by law", as that phrase is used in Article V, Section 7(1) of the North Carolina Constitution."

This subsection becomes effective June 30, 2005.

SECTION 2.2.(d)  Notwithstanding G.S. 143-15.2 and G.S. 143-15.3A, the State Controller shall transfer one hundred two million nine hundred fifty-five thousand dollars ($102,955,000) from the unreserved credit balance to the Repairs and Renovations Reserve Account on June 30, 2005. Funds transferred under this section to the Repairs and Renovations Reserve Account are appropriated for the 2005-2006 fiscal year to be used in accordance with G.S. 143-15.3A.  This subsection becomes effective June 30, 2005.

SECTION 2.2.(e)  When the Highway Trust Fund was created in 1989, the revenue from the sales tax on motor vehicles was transferred from the General Fund to the Highway Trust Fund. To offset this loss of revenue from the General Fund, the Highway Trust Fund was required to transfer one hundred seventy million dollars ($170,000,000) to the General Fund each year, an amount equal to the revenue in 1989 from the sales tax on motor vehicles. This transfer did not, however, make the General Fund whole after the transfer of the sales tax revenue because no provision has been made to adjust the amount for the increased volume of transactions and increased vehicle prices.  The additional eighty million dollars ($80,000,000) transferred from the Highway Trust Fund to the General Fund by this act is an effort to recover a portion of the sales tax revenues that would have gone to the General Fund over the last 16 years.

SECTION 2.2.(f)  Notwithstanding G.S. 105-187.9(b)(1), the sum to be transferred under that subdivision for the 2005-2006 fiscal year and for the 2006-2007 fiscal year is two hundred fifty million dollars ($250,000,000).

SECTION 2.2.(g)  Section 2.2(g) of S.L. 2002-126 is repealed.

SECTION 2.2.(h)  Notwithstanding any other provision of law to the contrary, effective July 1, 2005, cash balances remaining in special funds on June 30, 2005, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 (Intrastate Transfers) according to the schedule that follows.  These funds shall be used to support General Fund appropriations for the 2005-2006 fiscal year.

 

Fund                                                                                                           Amount Transferred

Department of Environment and Natural Resources

Budget Code 24300, Fund Code 2338 (DAQ-Inspections

      and Maintenance - Air Pollution)                                                               $     300,000

Budget Code 24300, Fund Code 2106 (DEH - Sleep Products)                          200,000

Budget Code 24300, Fund Code 2735 (DLR - Sedimentation Fees)                  200,000

Budget Code 24306, Fund Code 2127 (DWM - Clean-Up Dry

      Cleaning Solvent)                                                                                             4,350,000

Budget Code 24300, Fund Code 2310 (DWQ - Well Construction Fund)         100,000

Budget Code 24300, Fund Code 2335 (DWQ - Lab Certification Fees)            100,000

Budget Code 24300, Fund Code 2341 (DWQ - Water Permits)                         500,000

Budget Code 64306, Fund Code 6341 (DWQ - WW Treatment

      Maintenance and Repair)                                                                                    100,000

Budget Code 24304, Fund Code 2982 (DWQ - Riparian Buffer

      Restoration)                                                                                                      2,000,000

 

Department of Correction

Budget Code 24502 (Inmate Canteen/Welfare Fund)                                           440,000

 

Judicial Department

Budget Code 22005, Fund Code 2263 (Worthless Check Fund)                         100,000

 

Department of Administration

Budget Code 24160, Fund Code 2000 (NC Flex)                                                  913,950

 

SECTION 2.2.(i)  The transfer of cash from the Department of Correction, Budget Code 74500, Fund Code 7100 (Prison Enterprises) to Nontax Budget Code 19978 (Intrastate Transfers) shall be increased by five hundred thousand dollars ($500,000), effective July 1, 2005, for the 2005-2006 fiscal year.

SECTION 2.2.(j)  Notwithstanding G.S. 143-15.3B(a) for the 2005-2007 fiscal biennium only, the appropriation to the Clean Water Management Trust Fund for the 2005-2006 fiscal year is only sixty-two million dollars ($62,000,000) as provided by this act, and the appropriation for the 2006-2007 fiscal year is only sixty-two million dollars ($62,000,000) as provided by this act. The funds appropriated by this act to the Clean Water Management Trust Fund shall be used as provided by G.S. 143-15.3B(b).

 

PART iII. current operations and expansion/highway fund

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the biennium ending June 30, 2007, according to the following schedule:

 

Current Operations - Highway Fund                               2005-2006              2006-2007

 

Department of Transportation                                                                                                      

      Administration                                                               $   91,585,812        $   94,034,411

 

Division of Highways                                                                                                                   

      Administration                                                                     30,621,612             30,632,164

      Construction                                                                      139,010,000           139,750,000

      Maintenance                                                                      831,680,458           828,853,288

      Planning and Research                                                          4,280,000               4,280,000

      OSHA Program                                                                         425,000                   425,000

 

Ferry Operations                                                                       21,264,811             21,264,811

 

State Aid

      Municipalities                                                                     91,910,000             92,650,000

      Public Transportation                                                         66,466,447             89,866,447

      Railroads                                                                              17,308,153             17,101,153

 

Governor's Highway Safety                                                           293,118                   293,118

 

Division of Motor Vehicles                                                     96,047,914             95,468,137

 

Other State Agencies                                                              238,941,823           232,345,961

 

Reserves and Transfers                                                             23,174,852             25,274,852

 

TOTAL                                                                             $ 1,653,010,000    $ 1,672,239,342

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

HIGHWAY FUND AVAILABILITY STATEMENT

SECTION 3.2.  The Highway Fund availability used in developing the 2005-2007 biennial budget is shown below:

 

Highway Fund Availability Statement                              2005-2006               2006-2007

 

Beginning Credit Balance                                                  $     10,490,000     $                        -

Estimated Revenue                                                              1,642,520,000        1,712,940,000

Estimated Reversions                                                                                  -                                -

 

Total Highway Fund Availability                                     $ 1,653,010,000    $ 1,712,940,000

 

PART iv. highway trust fund appropriations

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

HIGHWAY TRUST FUND APPROPRIATIONS

SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the biennium ending June 30, 2007, according to the following schedule:

 

Current Operations - Highway Trust Fund                    2005-2006              2006-2007

 

Intrastate System                                                                 $ 472,112,366        $ 496,924,658

Urban Loops                                                                            190,902,579           200,935,637

Aid to Municipalities                                                                49,535,599             52,138,988

Secondary Roads                                                                       86,825,599             90,358,988

Program Administration                                                           41,295,740             42,918,720

Transfer to General Fund                                                       252,558,117           252,663,009

           

GRAND TOTAL CURRENT OPERATIONS

      AND EXPANSION                                                   $ 1,093,230,000    $ 1,135,940,000

 

PART V. BLOCK GRANTS

 

Requested by:            Representatives Insko, Barnhart

DHHS BLOCK GRANTS

SECTION 5.1.(a)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2006, according to the following schedule:

 

COMMUNITY SERVICES BLOCK GRANT

 

01.       Community Action Agencies                                                      $ 15,071,666

 

02.       Limited Purpose Agencies                                                                  837,315

 

03.       Department of Health and Human Services

to administer and monitor

the activities of the

Community Services Block Grant                                                      837,315

 

TOTAL COMMUNITY SERVICES BLOCK GRANT                                $ 16,746,296

 

SOCIAL SERVICES BLOCK GRANT

 

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

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

 

02.       Allocation for in-home services provided

by county departments of

social services                                                                                   2,101,113

 

03.       Adult day care services                                                                     2,155,301

 

04.       Child Protective Services/CPS Investigative

            Services/Child Medical Evaluation Program                                     238,321

 

05.       Foster Care Services - CCI's                                                           1,706,063

 

06.       Division of Aging and Adult Services - Home and Community

            Care Block Grant                                                                               1,834,077

 

07.       UNC-CH CARES Program for training and

            consultation services                                                                            247,920

 

08.       Mental Health Services Program                                                        422,003

 

09.       Division of Mental Health, Developmental Disabilities, and

            Substance Abuse Services - Developmentally Disabled

            Services Program                                                                              5,000,000

 

10.       Division of Mental Health, Developmental Disabilities,

            and Substance Abuse Services                                                          3,234,601

 

11.       Division of Services for the Blind - Independent

            Living Program                                                                                  3,182,987

 

12.       Division of Vocational Rehabilitation Services -

            Easter Seals Society/UCP                                                                   188,263

 

13.       Office of the Secretary - Office of Economic

            Opportunity for N.C. Senior Citizens'

            Federation for outreach services to

low-income elderly persons                                                                  41,302

 

14.       Child Care Subsidies                                                                         3,150,000

 

15.       Division of Facility Services -

Adult Care Licensure Program                                                            411,897

 

16.       Division of Facility Services -

Mental Health Licensure                                                                     205,668

 

17.       State administration                                                                          1,706,017

 

18.       Division of Mental Health, Developmental

            Disabilities, and Substance Abuse Services -

            Administration                                                                                        18,098

 

19.       Division of Facility Services                                                                 37,204

 

20.       Office of the Secretary - NC Interagency Council

            for Coordinating Homeless Programs                                               250,000

 

21.       Department of Administration

            for the N.C. State Commission of Indian Affairs

            In-Home Services Program for the Elderly                                       203,198

 

22.       Transfer to Preventative Health Services Block

            Grant for HIV/AIDS education, counseling, and

            testing                                                                                                    145,819

 

TOTAL SOCIAL SERVICES BLOCK GRANT                                           $ 55,348,041

 

LOW-INCOME ENERGY BLOCK GRANT

 

01.       Energy Assistance Programs                                                      $ 13,208,740

 

02.       Crisis Intervention                                                                             9,592,387

 

03.       Administration                                                                                   3,186,258

                County DSS                                                       $1,930,734

                Division of Social Services                             $   300,000

                Division of Mental Health, Developmental

                Disabilities, and Substance Abuse

                   Services                                                          $       7,146

                Local Residential Energy Efficiency

                   Service Providers                                          $   353,820

                Office of the Secretary                                    $   594,558

 

04.       Weatherization Program                                                                   4,343,072

 

05.       Department of Administration -

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

 

06.       Heating Air Repair and Replacement Program                               2,025,687

 

TOTAL LOW-INCOME ENERGY BLOCK GRANT                                 $ 32,410,984

 

MENTAL HEALTH SERVICES BLOCK GRANT

 

01.       Provision of community-based

services for severe and persistently

mentally ill adults                                                                           $ 6,983,202

 

02.       Provision of community-based

services to children                                                                           3,921,991

 

03.       Comprehensive Treatment Services

Program for Children                                                                        1,500,000

 

04.       Administration                                                                                      568,911

 

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT                        $ 12,974,104

 

SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT

 

01.       Provision of community-based

alcohol and drug abuse services,

tuberculosis services, and services

provided by the Alcohol and Drug Abuse

Treatment Centers                                                                       $ 20,441,082

 

02.       Continuation of services for

pregnant women and women

with dependent children                                                                    8,069,524

 

03.       Continuation of services to

IV drug abusers and others at risk

for HIV diseases                                                                                4,816,378

 

04.       Child Substance Abuse Prevention                                                  5,835,701

 

05.       Provision of services to children

and adolescents                                                                                  4,940,500

 

06.       Juvenile Services - Family Focus                                                       851,156

 

07.       Allocation to the Division of Public Health

for HIV/STD Risk Reduction Projects                                               383,980

 

08.       Allocation to the Division of Public Health

for HIV/STD Prevention by County Health

Departments                                                                                          209,576

 

09.       Allocation to the Division of Public Health

for the Maternal and Child Health Hotline                                           37,779

 

10.       Administration                                                                                   2,596,307

 

TOTAL SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT                                                         $ 48,181,983

 

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

 

01.       Child care subsidies                                                                   $158,708,393

 

02.       Quality and availability initiatives                                                  33,059,644

 

03.       Administrative expenses                                                                   7,163,654

 

04.       Transfer from TANF Block Grant for

child care subsidies                                                                         81,292,880

 

TOTAL CHILD CARE AND DEVELOPMENT FUND

BLOCK GRANT                                                                                           $280,224,571

 

TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT

 

01.       Work First Cash Assistance                                                      $107,794,365

 

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

 

03.       Child Welfare Workers for local DSS                                          12,452,391

 

04.       Support Our Students - Department of

            Juvenile Justice and Delinquency

            Prevention                                                                                          2,749,642

 

05.       Family Violence Prevention                                                             1,200,000

 

06.       Work First - After-School Services for

At-Risk Children

YWCA Central Carolinas

Youth Development Programs  $176,000                                      2,249,642

 

07.       Division of Social Services -

Administration                                                                                      356,291

 

08.       Office of the Secretary -

Administration                                                                                        60,249

 

09.       Child Welfare Training                                                                     2,550,000

 

10.       Boys and Girls Clubs                                                                        1,000,000

 

11.       Work Central Career Advancement Center                                        550,000

 

12.       Special Children's Adoption Fund                                                    3,000,000

 

13.       Maternity Homes                                                                                  838,000

 

14.       After-School Programs for At-Risk Youth in

            Middle Schools                                                                                     500,000

 

15.       Pregnancy Prevention Initiatives                                                     2,500,000

 

16.       Subsidized Child Care for TANF Recipients                                35,331,547

 

17.       TANF Automation Projects                                                                 592,500

 

18.       NC FAST Implementation                                                                2,717,298

 

19.       Transfer to the Child Care and

            Development Fund Block Grant

            for child care subsidies                                                                  81,292,880

 

20.       Transfer to Social Services Block Grant for

            County Departments of Social Services for

            Children's Services                                                                            4,500,000

 

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT                                                                             $356,888,120

 

MATERNAL AND CHILD HEALTH BLOCK GRANT

 

01.       Healthy Mothers/Healthy Children

Block Grants to Aid-to-County                                                        9,189,236

 

02.       Children's Health Services Aid-to-County                                      7,364,216

 

03.       Healthy Beginnings Aid-to-County                                                     404,559

 

04.       Maternal Health Aid-to-County                                                          397,761

 

05.       Children's Health Services                                                               2,878,883

 

06.       Office of Women's Health and

            Maternal Health Activities                                                                   114,063

 

07.       State Center for Health Statistics                                                          28,874

 

08.       Local Technical Assistance & Training                                                46,866

 

09.       Injury and Violence Prevention                                                           149,438

 

10.       Office of Minority Health                                                                     99,352

 

11.       Special Supplemental Nutrition Program

            for Women, Infants and Children (WIC)                                              25,713

 

12.       Immunization Program - Vaccine Distribution                                 819,997

 

13.       Administration                                                                                      518,137

 

14.       Adolescent Pregnancy Prevention Coalition of NC                          150,000

 

TOTAL MATERNAL AND CHILD

HEALTH BLOCK GRANT                                                                           $ 22,207,095

 

PREVENTIVE HEALTH SERVICES BLOCK GRANT

 

01.       Statewide Health Promotion Programs                                        $3,653,520

 

02.       Rape Crisis/Victims' Services

Program - Council for Women                                                          197,112

 

03.       Transfer from Social Services

Block Grant - HIV/AIDS education,

counseling, and testing                                                                         145,819

 

04.       Oral Health                                                                                            134,251

 

05.       Administration and Program Support                                                 121,271

 

06.       Osteoporosis Task Force Operating Costs                                        150,000

 

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT                   $4,401,973

 

GENERAL PROVISIONS

SECTION 5.1.(b)  Information to Be Included in Block Grant Plans. - The Department of Health and Human Services shall submit a separate plan for each Block Grant received and administered by the Department, and each plan shall include the following:

(1)       A delineation of the proposed allocations by program or activity, including State and federal match requirements.

(2)       A delineation of the proposed State and local administrative expenditures.

(3)       An identification of all new positions to be established through the Block Grant, including permanent, temporary, and time-limited positions.

(4)       A comparison of the proposed allocations by program or activity with two prior years' program and activity budgets and two prior years' actual program or activity expenditures.

(5)       A projection of current year expenditures by program or activity.

(6)       A projection of federal Block Grant funds available, including unspent federal funds from the current and prior fiscal years.

SECTION 5.1.(c)  Changes in Federal Fund Availability. - If the Congress of the United States increases the federal fund availability for any of the Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall allocate the increase proportionally across the program and activity appropriations identified for that Block Grant in this section.  In allocating an increase in federal fund availability, the Department shall not propose funding for new programs or activities not appropriated in this section or increase State administrative expenditures.

If the Congress of the United States decreases the federal fund availability for any of the Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall reduce State administration by at least the percentage of the reduction in federal funds. After determining the State administration, the remaining reductions shall be allocated proportionately across the program and activity appropriations identified for that Block Grant in this section. In allocating a decrease in federal fund availability, the Department shall not eliminate the funding for a program or activity appropriated in this section unless it is related to the State administration.

Prior to allocating the change in federal fund availability, the proposed allocation must be approved by the Office of State Budget and Management. If the Department adjusts the allocation of any Block Grant due to changes in federal fund availability, then a report shall be made to the Joint Legislative Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(d)  All changes to the budgeted allocations to the Block Grants administered by the Department of Health and Human Services that are not specifically addressed in this section shall be approved by the Office of State Budget and Management, and a report shall be submitted to the Joint Legislative Commission on Governmental Operations for review prior to implementing the changes. All changes to the budgeted allocations to the Block Grant shall be reported immediately to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(e)  The Department of Health and Human Services shall develop a monitoring and oversight plan for all recipients, both public and private, and subrecipients of the federal Block Grant funding. The plan shall be modeled after the Department's performance contracting initiative and include the following:

(1)       Performance standards for recipients.

(2)       Financial audit standards for non-State entities equivalent to the requirements in G.S. 143-6.2 for non-State entities receiving State funds.

(3)       Means for collecting performance data from recipients.

(4)       Any other information necessary for monitoring and overseeing the use of Block Grant funding.

The Department shall provide the plan to the Fiscal Research Division by January 1, 2006.

SECTION 5.1.(f)  The Department of Health and Human Services shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on positions funded from federal Block Grants. The report shall include the following for each Block Grant:

(1)       All State positions currently funded through the Block Grant, including permanent, temporary, and time-limited positions.

(2)       Budgeted salary and fringe benefits for each position.

(3)       Identify the percentage of Block Grant funds used to fund each position.

The report shall be submitted no later than December 1, 2005.

SOCIAL SERVICES BLOCK GRANT

SECTION 5.1.(g)  Social Services Block Grant funds appropriated to the North Carolina Inter-Agency Council for Coordinating Homeless Program are exempt from the provisions of 10A NCAC 71R.0201(3).

LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM

SECTION 5.1.(h)  Additional emergency contingency funds received may be allocated for Energy Assistance Payments or Crisis Intervention Payments without prior consultation with the Joint Legislative Commission on Governmental Operations. Additional funds received shall be reported to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division upon notification of the award. The Department of Health and Human Services shall not allocate funds for any activities, including increasing administration, other than assistance payments, without prior consultation with the Joint Legislative Commission on Governmental Operations.

MENTAL HEALTH BLOCK GRANT

SECTION 5.1.(i)  The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this section in the Mental Health Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2005-2006 fiscal year, and the sum of four hundred twenty-two thousand three dollars ($422,003) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2005-2006 fiscal year shall be used to continue a Comprehensive Treatment Services Program for Children in accordance with Section 10.25 of this act.

SECTION 5.1.(j)  The Department of Health and Human Services shall contract with the University of North Carolina at Chapel Hill for the purpose of providing psychology student stipends in the amount of fifty thousand dollars ($50,000) for the 2005-2006 fiscal year. Twenty-five thousand dollars ($25,000) of this contract shall be paid from the Mental Health Block Grant.

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

SECTION 5.1.(k)  The sum of no more than four hundred thousand dollars ($400,000) appropriated in this section to the Department of Health and Human Services in the Child Care and Development Fund Block Grant may be used for the operations of the Medical Child Care Pilot.

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

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

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES BLOCK GRANT (TANF)

SECTION 5.1.(n)  The sum of four hundred sixteen thousand five hundred forty dollars ($416,540) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2005-2006 fiscal year shall be used to support administration of TANF-funded programs.

SECTION 5.1.(o)  The sum of two million seven hundred forty-nine thousand six hundred forty-two dollars ($2,749,642) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services and transferred to the Department of Juvenile Justice and Delinquency Prevention for the 2005-2006 fiscal year shall be used to support the existing Support Our Students Program, including gang prevention, and to expand the Program statewide, focusing on low-income communities in unserved areas. These funds shall not be used for administration of the Program.

SECTION 5.1.(p)  The sum of one million two hundred thousand dollars ($1,200,000) appropriated under this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2005-2006 fiscal year shall be used to provide domestic violence services to Work First recipients.  These funds shall be used to provide domestic violence counseling, support, and other direct services to clients.  These funds shall not be used to establish new domestic violence shelters or to facilitate lobbying efforts.  The Division of Social Services may use up to seventy-five thousand dollars ($75,000) in TANF funds to support one administrative position within the Division of Social Services to implement this subsection.

Each county department of social services and the local domestic violence shelter program serving the county shall jointly develop a plan for utilizing these funds. The plan shall include the services to be provided and the manner in which the services shall be delivered. The county plan shall be signed by the county social services director or the director's designee and the domestic violence program director or the director's designee and submitted to the Division of Social Services by December 1, 2005. The Division of Social Services, in consultation with the Council for Women, shall review the county plans and shall provide consultation and technical assistance to the departments of social services and local domestic violence shelter programs, if needed.

The Division of Social Services shall allocate these funds to county departments of social services according to the following formula:  (i) each county shall receive a base allocation of five thousand dollars ($5,000); and (ii) each county shall receive an allocation of the remaining funds based on the county's proportion of the statewide total of the Work First caseload as of July 1, 2005, and the county's proportion of the statewide total of the individuals receiving domestic violence services from programs funded by the Council for Women as of July 1, 2005. The Division of Social Services may reallocate unspent funds to counties that submit a written request for additional funds.

The Department of Health and Human Services shall report on the uses of these funds no later than March 1, 2006, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(q)  The sum of two million two hundred forty-nine thousand six hundred forty-two dollars ($2,249,642) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used to expand after-school programs and services for at-risk children. The Department shall develop and implement a grant program to award grants to community-based programs that demonstrate the ability to reach children at risk of teen pregnancy, school dropout, and gang participation. The Department shall award grants to community-based organizations that demonstrate the ability to develop and implement linkages with local departments of social services, area mental health programs, schools, and other human services programs in order to provide support services and assistance to the child and family. These funds may be used to fund one position within the Division of Social Services to coordinate at-risk after-school programs and shall not be used for other State administration. The Department shall report no later than March 1, 2006, on its progress in complying with this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(r)  The sum of twelve million four hundred fifty-two thousand three hundred ninety-one dollars ($12,452,391) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant for the 2005-2006 fiscal year for Child Welfare Improvements, shall be allocated to the county departments of social services for hiring or contracting staff to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and postadoption services for eligible families.

SECTION 5.1.(s)  The sum of two million five hundred fifty thousand dollars ($2,550,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for fiscal year 2005-2006 shall be used to support various child welfare training projects as follows:

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

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

(3)       Provide training for residential child care facilities.

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

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

SECTION 5.1.(u)  The sum of three million dollars ($3,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 2005-2006 fiscal year shall be used in accordance with Section 10.48 of this act.  The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A-50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.

SECTION 5.1.(v)  The sum of one million seven hundred six thousand sixty three dollars ($1,706,063) appropriated in this section in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for child caring agencies for the 2005-2006 fiscal year shall be allocated to the State Private Child Caring Agencies Fund.

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

SECTION 5.1.(x)  The sum of five hundred fifty thousand dollars ($550,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant shall be transferred to Work Central, Inc. Work Central, Inc., shall report on the number of people served and the services received as a result of the receipt of funds. The report shall contain expenditure data, including the amount of funds used for administration and direct training. The report shall also include the number of people who have been employed as a direct result of services provided by Work Central, Inc., including the length of employment in the new position. The Department of Health and Human Services shall evaluate the program and ensure that services provided are not duplicative of local employment security commissions in the nine counties served by Work Central, Inc. The evaluation report shall be submitted to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than May 1, 2006.

SECTION 5.1.(y)  The sum of two million seven hundred seventeen thousand two hundred ninety-eight dollars ($2,717,298) in this section appropriated to the Department of Health and Human Services in the TANF Block Grant shall be used to implement N.C. FAST (North Carolina Families Accessing Services through Technology). The N.C. FAST Program involves the entire automation initiative through which families access services and local departments of social services deliver benefits, supervised by the Department of Health and Human Services, Divisions of Social Services, Aging and Adult Services, Medical Assistance, and Child Development. The statewide automated initiative shall be implemented in compliance with federal regulations in order to ensure federal financial participation in the project. The Department of Health and Human Services shall report on its compliance with this subsection to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than January 1, 2006.

SECTION 5.1.(z)  The sum of five hundred thousand dollars ($500,000) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant shall be used to expand after-school programs for at-risk children attending middle school. The Department shall develop and implement a grant program to award funds to community-based programs demonstrating the capacity to reach children at risk of teen pregnancy, school dropout, and gang participation. These funds shall not be used for training or administration at the State level. All funds shall be distributed to community-based programs, focusing on those communities where similar programs do not exist in middle schools. The Department shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on its progress in complying with this subsection no later than May 1, 2006.

MATERNAL AND CHILD HEALTH BLOCK GRANT

SECTION 5.1.(aa)  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104-193 (42 U.S.C. 710), for the 2005-2006 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an Abstinence Until Marriage Education Program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C-81(e1)(4). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.

SECTION 5.1.(bb)  The Department of Health and Human Services shall ensure that there will be follow-up testing in the Newborn Screening Program.

SECTION 5.1.(cc)  Of the funds budgeted in the Maternal and Child Health Block Grant, three million two hundred fifty thousand dollars ($3,250,000) shall be used for a school nurse funding initiative for the 2005-2006 fiscal year. The Department of Health and Human Services, Division of Public Health, in conjunction with the Department of Public Instruction, shall provide funds to communities to hire school nurses. The program will fund approximately 65 time-limited nurses.  The criteria shall include determining the areas in the greatest need for school nurses with the greatest inability to pay for these nurses.  Among other criteria, consideration shall also be given to (i) the current nurse-to-student ratio; (ii) the economic status of the community; and (iii) the health needs of area children.

There shall be no supplanting of local or Title I funds with these block grant funds. Communities shall maintain their current level of effort and funding for school nurses. No block grant funds shall be used for funding nurses for State agencies. All funding shall be used for direct services.

The Department of Health and Human Services shall report on the use of funds allocated under this section by December 1, 2005, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representatives Hunter, Warren 

NER BLOCK GRANTS

SECTION 5.2.(a)  Appropriations from federal block grant funds are made for fiscal year ending June 30, 2006, according to the following schedule:

 

COMMUNITY DEVELOPMENT BLOCK GRANT

 

            01.    State Administration                                      $   1,000,000

 

            02.    Urgent Needs and Contingency                          1,000,000

 

            03.    Scattered Site Housing                                     13,200,000

 

            04.    Economic Development                                     8,710,000

 

            05.    Community Revitalization                                13,500,000

 

            06.    State Technical Assistance                                    450,000

 

            07.    Housing Development                                        2,000,000

 

            08.    Infrastructure                                                       5,140,000

 

TOTAL COMMUNITY DEVELOPMENT

BLOCK GRANT - 2006 Program Year                        $ 45,000,000

 

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

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

SECTION 5.2.(d)  Limitations on Community Development Block Grant Funds. - Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State Administration; not less than one million dollars ($1,000,000) may be used for Urgent Needs and Contingency; up to thirteen million two hundred thousand dollars ($13,200,000) may be used for Scattered Site Housing; up to eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development, including Urban Redevelopment Grants and Small Business or Entrepreneurial Assistance; not less than thirteen million five hundred thousand dollars ($13,500,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to two million dollars ($2,000,000) may be used for Housing Development; up to five million one hundred forty thousand dollars ($5,140,000) may be used for Infrastructure.  If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.

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

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

SECTION 5.2.(g)  The Department of Commerce shall consult with the Joint Legislative Commission on Governmental Operations prior to reallocating Community Development Block Grant Funds.  Notwithstanding the provisions of this subsection, whenever the Director of the Budget finds that:

(1)       A reallocation is required because of an emergency that poses an imminent threat to public health or public safety, the Director of the Budget may authorize the reallocation without consulting the Commission. The Department of Commerce shall report to the Commission on the reallocation no later than 30 days after it was authorized and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency.

(2)       The State will lose federal block grant funds or receive less federal block grant funds in the next fiscal year unless a reallocation is made, the Department of Commerce shall provide a written report to the Commission on the proposed reallocation and shall identify the reason that failure to take action will result in the loss of federal funds. If the Commission does not hear the issue within 30 days of receipt of the report, the Department may take the action without consulting the Commission.

 

PART VI. general provisions

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

APPROPRIATION OF CASH BALANCES AND RECEIPTS

SECTION 6.1.(a)  Expenditures of cash balances, federal funds, departmental receipts, grants, and gifts from the various General Fund, Special Revenue Fund, Enterprise Fund, Internal Service Fund, and Trust and Agency Fund budget codes are appropriated and authorized for the 2005-2007 fiscal biennium as follows:

(1)       For all budget codes listed in "State of North Carolina, Recommended Continuation Budget 2005-2007, Volumes 1 through 6", cash balances and receipts are appropriated up to the amounts specified in Volumes 1 through 6, as adjusted by the General Assembly, for the 2005-2006 fiscal year and the 2006-2007 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items specified in Volumes 1 through 6, or otherwise authorized by the General Assembly.

(2)       For all budget codes that are not listed in "State of North Carolina, Recommended Continuation Budget 2005-2007, Volumes 1 through 6", cash balances and receipts are appropriated for each year of the 2005-2007 fiscal biennium up to the level of actual expenditures for the 2004-2005 fiscal year, unless otherwise provided by law. Funds may be expended only for the programs, purposes, objects, and line items authorized for the 2004-2005 fiscal year.

(3)       Notwithstanding subdivisions (1) and (2) of this subsection, 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 2005-2006 fiscal year and the 2006-2007 fiscal year and shall be used only to pay debt service requirements.

(4)       Notwithstanding subdivisions (1) and (2) of this subsection, 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 2005-2006 fiscal year and the 2006-2007 fiscal year.

All these cash balances, federal funds, departmental receipts, grants, and gifts shall be expended and reported in accordance with the provisions of the Executive Budget Act, except as otherwise provided by law and this section.

SECTION 6.1.(b)  Receipts collected in a fiscal year in excess of the amounts authorized by this section shall remain unexpended and unencumbered until appropriated by the General Assembly in a subsequent fiscal year, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by the Executive Budget Act.

Overrealized receipts are appropriated up to the amounts necessary to implement this subsection.

In addition to the consultation and reporting requirements set out in G.S. 143-23 and G.S. 143-27, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on any overrealized receipts approved for expenditure under this subsection by the Director of the Budget. The report shall include the source of the receipt, the amount overrealized, the amount authorized for expenditure, and the rationale for expenditure.

SECTION 6.1.(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.

SECTION 6.1.(d)  Notwithstanding subsections (a) and (b) of this section, if Senate Bill 1126, 2005 Session, or substantially similar legislation revising the Coastal Recreational Fishing License program or establishing a unified fishing license for hunting and fishing in coastal, joint, and inland waters, becomes law, any receipts from license revenues generated pursuant to such legislation are hereby appropriated for the 2005-2006 fiscal year and the 2006-2007 fiscal year for programs and purposes authorized by law.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

CONTINGENCY AND EMERGENCY FUND ALLOCATIONS

SECTION 6.2.  Funds in the amount of five million dollars ($5,000,000) for the 2005-2006 fiscal year and five million dollars ($5,000,000) for the 2006-2007 fiscal year are appropriated in this act to the Contingency and Emergency Fund.  Of these funds:

(1)       Up to five hundred thousand dollars ($500,000) for the 2005-2006 fiscal year may be used for purposes related to the Base Realignment and Closure Act (BRAC); and

(2)       Up to five hundred thousand dollars ($500,000) for the 2005-2006 fiscal year and up to five hundred thousand dollars ($500,000) for the 2006-2007 fiscal year may be expended for purposes other than those set out in G.S. 143-23(a1)(2) or in subdivision (1) of this section.

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

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

EXPENDITURES OF FUNDS IN RESERVES LIMITED

SECTION 6.3.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

BUDGET REPORTS ACCURATELY REFLECT PROJECTED RECEIPTS, EXPENDITURES, FUND BALANCES, AND ACTUAL COLLECTIONS

SECTION 6.4.  G.S. 143-11(a) reads as rewritten:

" 143-11.  Survey of departments. departments and recommended budget report.

(a)       On or before the fifteenth day of December, biennially in the even-numbered years, the Director shall make a complete, careful survey of the operation and management of all the departments, bureaus, divisions, officers, boards, commissions, institutions, and agencies and undertakings of the State and all persons or corporations who use or expend State funds, in the interest of economy and efficiency, and of obtaining a working knowledge upon which to base recommendations to the General Assembly as to appropriations for maintenance and special funds and capital expenditures for the succeeding biennium. If the Director and the Commission shall agree in their recommendations for the budget for the next biennial period, he shall prepare their report in the form of a proposed budget, together with such comment and recommendations as they may deem proper to make. If the Director and Commission shall not agree in substantial particulars, the Director shall prepare the proposed budget based on his own conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as representing their views. The budget report shall contain a complete and itemized plan of all proposed expenditures for each State department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation who receives or may receive for use and expenditure any State funds, in accordance with the classification of funds and accounts adopted by the State Controller, and of the estimated revenues and borrowings for each year in the ensuing biennial period beginning with the first day of July thereafter. Opposite each line item of the proposed expenditures, the budget shall show in separate parallel columns:

(1)       Proposed expenditures and receipts for each fiscal year of the biennium;

(2)       The certified budget for the preceding fiscal year;

(3)       The currently authorized budget for the preceding fiscal year;

(4)       Actual expenditures and receipts for the most recent fiscal year for which actual expenditure information is available; and

(5)       Proposed increases and decreases.

Revenue and expenditure information shall be no less specific than the two-digit level in the State Accounting System Chart of Accounts as prescribed by the State Controller. The budget shall clearly differentiate between general fund expenditures for operating and maintenance, special fund expenditures for any purpose, and proposed capital improvements. The budget report shall include accurate projections of receipts, expenditures, and fund balances for all budget codes, funds, and accounts. Estimated receipts, including tuition collected by university or community college institutions, shall be adjusted to reflect actual collections from the previous fiscal year, unless the Director either (i) recommends a change that will result in collections in the budget year that differ from the actual collections of the prior year or (ii) otherwise determines there is a more reasonable basis upon which to accurately project receipts."

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

AUTHORIZATION TO ESTABLISH RECEIPT-SUPPORTED POSITIONS

SECTION 6.5.  Notwithstanding G.S. 143-34.1(a1), a department, institution, or other agency of State government may establish receipt-supported positions authorized in this act upon approval by the Director of the Budget.  The Director, if necessary, may establish a receipt-supported position pursuant to this section at an annual salary amount different from the salary amount set out in this act if (i) funds are available from the proposed funding source and (ii) the alternative salary amount remains within the established salary range grade identified for the job classification of the affected receipt-supported position established in this act. The Director shall not change the job classifications or increase the number of receipt-supported positions specified in this act without prior consultation with the Joint Legislative Commission on Governmental Operations.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

develop and implement OVERHEAD COST RECOVERY

SECTION 6.6.(a)  The General Assembly finds that the General Fund  supports many State agencies that provide services and administer programs that impact all of State government.  These agencies include the Office of the Governor, the Office of State Controller, the Department of Administration, including the Office of State Personnel, State Property Office, Office of State Construction, and the Division of Purchase and Contract, the Secretary of State, the Office of State Treasurer, and the Office of State Auditor.  The General Assembly also finds that the General Fund supports the departmental administrative overhead costs for many receipt-supported programs, activities, boards, and commissions.  The General Assembly further finds that only federally funded programs routinely reimburse the State for such administrative overhead activities through an indirect cost allocation method.  The General Assembly finds that an indirect cost allocation program should be established to recover overhead and indirect costs from all receipt-supported programs, activities, boards, and commissions.

SECTION 6.6.(b)  The Office of State Budget and Management shall study the collection of overhead receipts and develop an overhead cost recovery program. In implementing this section, the Office of State Budget and Management shall do the following:

(1)       For each receipt, determine the authority and requirements for the allocation of overhead costs and collection of overhead receipts.

(2)       For each receipt for which the State currently redirects a portion for overhead costs, ensure that all future receipts revert to the General Fund in accordance with the State Budget Manual, except as otherwise required by law.

(3)       For each receipt for which the State does not currently redirect a portion for overhead costs, establish an indirect cost allocation methodology and redirect a portion of future receipts for overhead costs to the General Fund, except as otherwise required by law.

(5)       Estimate the anticipated reimbursement to the General Fund for the 2006-2007 fiscal year.

(6)       Effective with the 2006-2007 fiscal year, the Office of State Budget and Management shall implement the overhead cost recovery program to maximize reimbursement of statewide indirect costs supported by the General Fund.

SECTION 6.6.(c)  The Office of State Budget and Management shall report on its progress in implementing this section to the Chairs of the Senate Committee on Appropriations/Base Budget, the Chairs of the House of Representatives Committee on Appropriations, and the Fiscal Research Division by April 1, 2006.  The report shall recommend any statutory changes required to implement the requirements of this section.

SECTION 6.6.(d)  The requirements of this section shall apply to all receipts credited to a State agency, special revenue fund, enterprise fund, internal service fund, or trust fund, except as otherwise provided by law.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

PRIOR CONSULTATION WITH THE JOINT LEGISLATIVE COMMISSION ON GOVERNMENTAL OPERATIONS

SECTION 6.7.(a)  The last paragraph of G.S. 120-76(8) is recodified as G.S. 120-76.1 and reads as rewritten:

" 120-76.1.  Prior consultation with the Commission.

(a)       Notwithstanding the provisions of this subdivision G.S. 120-76(8) or any other provision of law requiring prior consultation by the Governor with the Commission, whenever an expenditure is required because of an emergency that poses an imminent threat to public health or public safety, and is either the result of a natural event, such as a hurricane or a flood, or an accident, such as an explosion or a wreck, the Governor may take action under this subsection without consulting the Commission if the action is determined by the Governor to be related to the emergency. The Governor shall report to the Commission on any expenditures made under this paragraph subsection no later than 30 days after making the expenditure and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency.

(b)       Any agency, board, commission, or other entity required under G.S. 120-76(8) or any other provision of law to consult with the Commission prior to taking an action shall submit a detailed report of the action under consideration to the Chairs of the Commission, the Commission Assistant, and the Fiscal Research Division of the General Assembly. If the Commission does not hold a meeting to hear the consultation within 60 days of receiving the submission of the detailed report, the consultation requirement is satisfied."

SECTION 6.7.(b)  G.S. 143-23(a1) reads as rewritten:

"(a1)    Notwithstanding the provisions of subsection (a) of this section, a department, institution, or other spending agency may, with approval of the Director of the Budget, spend more than was appropriated for:

(1)       An object or line item within a purpose or program so long as the total amount expended for the purpose or program is no more than was appropriated from all sources for the purpose or program for the fiscal period;

(2)       A purpose or program, without consultation with the Joint Legislative Commission on Governmental Operations, if the overexpenditure of the purpose or program is:

a.         Required by a court, Industrial Commission, or administrative hearing officer's order;

b.         Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or

c.         Required to call out the National Guard.

The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations on any overexpenditures under this subdivision; or

(3)       A purpose or program, after consultation with the Joint Legislative Commission on Governmental Operations in accordance with G.S. 120-76(8), and only if: (i) the overexpenditure is required to continue the purpose or programs due to complications or changes in circumstances that could not have been foreseen when the budget for the fiscal period was enacted and (ii) the scope of the purpose or program is not increased. The consultation is required as follows:

a.         For a purpose or program with a certified budget of up to five million dollars ($5,000,000), consultation is required when the authorization for the overexpenditure exceeds ten percent (10%) of the certified budget;

b.         For a purpose or program with a certified budget of from five million dollars ($5,000,000) up to twenty million dollars ($20,000,000), consultation is required when the authorization for the overexpenditure exceeds five hundred thousand dollars ($500,000) or seven and one-half percent (7.5%) of the certified budget, whichever is greater;

c.         For a purpose or program with a certified budget of twenty million dollars ($20,000,000) or more, consultation is required when the authorization for the overexpenditure exceeds one million five hundred thousand dollars ($1,500,000) or five percent (5%) of the certified budget, whichever is greater;

d.         For a purpose or program supported by federal funds or when expenditures are required for the reasons set out in subdivision (2) of this subsection, no consultation is required.

If the Joint Legislative Commission on Governmental Operations does not meet for more than 30 days, the Director of the Budget may satisfy the requirements of the subsection to report to or consult with the Commission by reporting to or consulting with a joint meeting of the Chairs of the Appropriations Committees of the Senate and the House of Representatives."

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

CONSULTATION NOT REQUIRED PRIOR TO ESTABLISHING OR INCREASING FEES IN ACCORDANCE WITH BUDGET ACT

SECTION 6.8.(a)  Notwithstanding G.S. 12-3.1(a), an agency is not required to consult with the Joint Legislative Commission on Governmental Operations prior to establishing or increasing a fee as authorized or anticipated in the Current Operations and Capital Improvements Appropriations Act of 2005 or the House of Representatives Appropriations Committee Report on the Continuation, Expansion and Capital Budgets, which was distributed in the House of Representatives and used to explain this act.

SECTION 6.8.(b)  This section expires June 30, 2007.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

STATE MONEY RECIPIENTS/CONFLICT OF INTEREST POLICY/vendor fraud

SECTION 6.9.(a)  G.S. 143-6.2 reads as rewritten:

" 143-6.2.  Use of State funds by non-State entities.

(a)       Disbursement and Use of State Funds. - Every non-State entity that receives, uses, or expends any State funds shall use or expend the funds only for the purposes for which they were appropriated by the General Assembly. State funds include federal funds that flow through the State. For the purposes of this section, the term "non-State entity" means a firm, corporation, partnership, association, unit of local government, public authority, or any other person, organization, group, or governmental entity that is not a State agency, department, or institution. For the purposes of this section, "unit of local government" has the meaning set out in G.S. 159-7(15) and "public authority" has the meaning set out in G.S. 159-7(10).

(a1)     Every non-State entity subject to the provisions of subsection (a) of this section shall file with the State agency or department disbursing funds to the entity a copy of that entity's policy addressing conflicts of interest that may arise involving the entity's management employees and the members of its board of directors or other governing body before funds may be disbursed to the entity. The policy shall address situations in which any of these individuals may directly or indirectly benefit, except as the entity's employees or members of the board or other governing body, from the entity's disbursing of State funds, and shall include actions to be taken by the entity or the individual, or both, to avoid conflicts of interest and the appearance of impropriety.

(a2)     A vendor of goods or services that receives payment from a State agency or department shall not be required to file a conflict of interest policy with the State agency or department disbursing funds.

(b)       For the purposes of this section, the term "grantee" means a non-State entity that receives a grant of State funds from a State agency, department, or institution but does not include any non-State entity subject to the audit and other reporting requirements of the Local Government Commission. The term "grantee" shall not include a vendor of goods or services. The term "subgrantee" means a non-State entity that receives a grant of State funds from a grantee or from another subgrantee but does not include any non-State entity subject to the audit and other reporting requirements of the Local Government Commission. The terms "State grant funds" and "State grants" do not include any payment made by the Medicaid program, the Teachers' and State Employees' Comprehensive Major Medical Plan, or other similar medical programs.

(c)       Compliance by Non-State Entities. - If the Director of the Budget finds that a non-State entity has spent or encumbered State funds for an unauthorized purpose, the Director shall take appropriate administrative action to ensure that no further irregularities occur and shall report to the Attorney General any facts that pertain to an apparent violation of a criminal law or an apparent instance of malfeasance, misfeasance, or nonfeasance in connection with the use of State funds.

(c1)     Fraud by Vendors. - If the Director of the Budget finds that a vendor of goods or services may have obtained State funds fraudulently, the Director shall report all facts that pertain to the alleged fraud to the Attorney General and to the appropriate local law enforcement authorities.

(d)       The Office of State Budget and Management shall adopt rules to ensure the uniform administration of State grants by all grantor State agencies and grantees or subgrantees. The rules shall establish policies and procedures for disbursements of grants and for State agency oversight, monitoring, and evaluation of grantees and subgrantees. Such policies and procedures shall:

(1)       Ensure that the purpose and reporting requirements of each grant are specified to the grantee.

(2)       Ensure that grantees specify the purpose and reporting requirements for grants made to subgrantees.

(3)       Ensure that funds are spent in accordance with the purposes for which they were granted.

(4)       Hold the grantees and subgrantees accountable for the legal and appropriate expenditure of State grant funds.

(5)       Provide for adequate oversight and monitoring to prevent the misuse of State funds.

(6)       Establish mandatory periodic reporting requirements for grantees and subgrantees, including methods of reporting, to provide financial and program performance information. The mandatory periodic reporting requirements shall require grantees and subgrantees to file with the State Auditor copies of reports and statements that are filed with State agencies pursuant to this subsection.

(7)       Require grantees and subgrantees to maintain reports, records, and other information to properly account for the expenditure of all State grant funds and to make such reports, records, and other information available to the grantor State agency for oversight, monitoring, and evaluation purposes.

(8)       Require grantees and subgrantees to ensure that work papers in the possession of their auditors are available to the State Auditor for the purposes set out in subsection (h) of this section.

(9)       Require grantees to be responsible for managing and monitoring each project, program, or activity supported by State grant funds and each subgrantee project, program, or activity supported by State grant funds.

(10)     Provide procedures for the suspension of further disbursements or use of State grant funds for noncompliance with these rules or other inappropriate use of the funds.

(11)     Provide procedures for use in appropriate circumstances for reinstatement of disbursements that have been suspended for noncompliance with these rules or other inappropriate use of State grant funds.

(12)     Provide procedures for the recovery and return to the grantor State agency of unexpended State grant funds from a grantee or subgrantee if the grantee or subgrantee is unable to fulfill the purposes of the grant.

(13)     Require grantees to report their policies addressing conflicts of interest that may arise involving the entity's management employees and the members of its board of directors or other governing body before funds may be disbursed to the entity. The policy shall meet the requirements of subsection (a1) of this section.

(e)       Notwithstanding the provisions of G.S. 150B-2(8a)b, rules adopted pursuant to subsection (d) of this section are subject to the provisions of Chapter 150B of the General Statutes.

(f)        The Office of State Budget and Management shall consult with the Office of the State Auditor and the Attorney General in establishing the rules required by subsection (d) of this section.

(g)       The Office of State Budget and Management, after consultation with the administering agency, shall have the power to suspend disbursement of State grant funds to grantees or subgrantees, to prevent further use of State grant funds already disbursed, and to recover State grant funds already disbursed for noncompliance with rules adopted pursuant to subsection (d) of this section. If the grant funds are a pass-through of funds granted by an agency of the United States, then the Office of State Budget and Management must consult with the granting agency of the United States and the State agency that is the recipient of the pass-through funds prior to taking the actions authorized by this subsection.

(h)       Audit Oversight. - The State Auditor has audit oversight, with respect to State grant funds received by the grantee or subgrantee, pursuant to Article 5A of Chapter 147 of the General Statutes, of every grantee or subgrantee that receives, uses, or expends State grant funds. A grantee or subgrantee must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State grant funds received by the grantee or subgrantee. The grantee or subgrantee must furnish any additional financial or budgetary information requested by the State Auditor, including audit work papers in the possession of any auditor of a grantee or subgrantee directly related to the use and expenditure of State grant funds.

(i)        Not later than May 1, 2007, and by May 1 of every succeeding year, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on all grantees or subgrantees that failed to comply with this section during the prior fiscal year, including the amount of State funds that were disbursed to each of those grantees or subgrantees during that fiscal year and the amount of State funds that were withheld.

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

(k)       Civil Actions. - Civil actions to recover State funds or to obtain other mandatory orders in the name of the State on relation of the Attorney General, or in the name of the Office of State Budget and Management, shall be filed in the General Court of Justice in Wake County."

SECTION 6.9.(b)  This section applies to non-State entities that receive State funds on or after July 1, 2005, and State funds shall not be disbursed to those entities on or after July 1, 2005, until the entity files the policy required by this section with the disbursing agency or department.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

NON-STATE ENTITIES SHALL NOT HAVE OUTSTANDING TAX ASSESSMENTS/APPLICABILITY OF REPORTING REQUIREMENTS

SECTION 6.10.(a)  G.S. 143-6.2 is amended by adding a new subsection to read:

"(c1)    No Overdue Tax Debts. - No grantee or subgrantee shall receive a grant of State funds from a State agency, department, or institution if the grantee or subgrantee has any overdue tax debts, as defined by G.S. 105-243.1, at the federal, State, or local level."

SECTION 6.10.(b)  This section shall apply to all State grant funds appropriated or awarded on or after July 1, 2005.  Grants awarded prior to July 1, 2005, shall be subject to the reporting requirements in effect at the time the grant was made.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

INFORMATION TECHNOLOGY fund availability statement

SECTION 6.13.  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 2005-2006       FY 2006-2007

Receipts from Information Technology

      Enterprise Fee (G.S. 147-33.82)                                       $5,000,000             $5,000,000

 

Transfer from June 30, 2005, Information Technology

      Services Internal Service Fund cash balance to

            support statewide IT initiatives                                    $5,000,000

 

Appropriation from General Fund                                         $24,375,000             $8,025,000

 

Total Funds Available                                                         $34,375,000            $13,025,000.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

INFORMATION TECHNOLoGY APPROPRIATIONS

SECTION 6.14.  Appropriations are made from the Information Technology Fund established in G.S. 147-33.72H as follows:

 

Office of Information Technology Services                      FY 2005-2006   FY 2006-2007

      To establish  two project management assistant

            positions and one enterprise licensing position

            and to purchase and maintain asset management

            software and enterprise licenses.                                        $1,600,000      $1,400,000

      To continue existing activities including project

            management assistance, security, asset management,

            legal support, and legacy system assessment.                    $5,100,000      $3,300,000

      To provide services previously supported by

            cross subsidies in the rate structure, including

            State portal maintenance, security services,

            enterprise identity management, and office

            operations.                                                                             $6,300,000      $5,800,000

      To facilitate consolidation of information

            technology services in State agencies.                                  $500,000

 

Office of State Controller

      To initiate replacement of the State's personnel

            and payroll systems consistent with the analysis

            and findings of the Statewide Business Infra-

            structure study.                                                                   $20,875,000      $2,525,000

 

Total Appropriation                                                                    $34,375,000   $13,025,000

 

Funds appropriated under this section are subject to the reporting requirement set out in G.S. 147-33.72H.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

Monitor and Evaluate Lease Purchase Activity

SECTION 6.17.(a)  By December 30, 2005, the Office of State Budget and Management, in consultation with the Office of State Treasurer, the Office of State Controller, and the Department of Administration shall:

(1)       Develop and implement a management process that does all of the following:

a.         Standardizes the criteria used by executive branch agencies to evaluate the business case for acquisitions by lease purchase.

b.         Provides for executive branch agency budget submissions that clearly show current and proposed debt service requirements occasioned by existing and proposed lease purchase agreements.

c.         Provides that all lease purchase agreements entered into by executive branch agencies are centrally inventoried and monitored.

d.         Includes debt accruing through lease purchase activity by executive branch agencies in the annual report of the Debt Affordability Advisory Committee required by G.S. 142-101.

e.         Evaluates the advantages of a pooled or master lease arrangement.

(2)       Prepare a consolidated report summarizing by State agency all lease purchase expenditures in the current fiscal year and all lease purchase expenditures planned for the upcoming fiscal year and submit the report to the Chairs of the House of Representatives and Senate Appropriations Committees and to the Fiscal Research Division on the first day of the 2006 and 2007 Regular Sessions of the General Assembly.

SECTION 6.17.(b)  This section does not apply to The University of North Carolina.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

PRIVATE license PLATES on publicly owned motor vehicles

SECTION 6.18.(a)  Section 6.14(b) of S.L. 2001-424 is repealed.

SECTION 6.18.(b)  This section becomes effective April 30, 2005.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

UNIFORM PAYROLL SYSTEM

SECTION 6.19.  G.S. 143B-426.39 reads as rewritten:

" 143B-426.39.  Powers and duties of the State Controller.

The State Controller shall:

(6)       Operate a central payroll system, in accordance with G.S. 143-3.2 and 143-34.1. Prescribe, develop, operate, and maintain a uniform payroll system, in accordance with G.S. 143-3.2 and G.S. 143-34.1, for all State agencies. This uniform payroll system shall be designed to assure compliance with all legal and constitutional requirements. When the State Controller finds it expedient to do so because of a State agency's size and location, the State Controller may authorize a State agency to operate its own payroll system. Any State agency authorized by the State Controller to operate its own payroll system shall comply with the requirements adopted by the State Controller.

."

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

study state construction inspections

SECTION 6.20.(a)  There is created the Legislative Study Commission on State Construction Inspections (Commission).  The purpose of the study shall be to examine the following:

(1)       The scope and nature of each type of inspection of private and public construction projects performed or required by State agencies.

(2)       The extent to which State inspections overlap with inspections performed by local governments.

(3)       The total cost of the State's inspection of public and private construction projects.

(4)       The comparative efficiencies and efficacies of each type of inspection of private and public construction projects performed or required by State agencies to determine whether:

a.         The inspections can be combined to save the costs of administrations and to limit any hardships on public and private entities engaged in construction projects.

b.         Any inspections should be otherwise modified in scope or eliminated.

(5)       The level of training of the various inspectors in the State agencies and whether the training is satisfactory for the types of inspections performed.

(6)       Any other matter related to increasing the efficiency and efficacy of the State's inspection of public and private construction projects.

SECTION 6.20.(b)  The Commission shall consist of 14 members appointed as follows:

(1)       Five voting members appointed by the Speaker of the House of Representatives.

(2)       Five voting members appointed by the President Pro Tempore of the Senate.

(3)       Four nonvoting ex officio members, or their designees, including the Commissioner of Labor, the Commissioner of Insurance, the Secretary of Administration, and the Secretary of Health and Human Services.

The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each appoint a cochair for the Commission. The Commission may contract for consultant services as provided by G.S. 120-32.02. Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional and clerical staff to assist in the work of the Commission. Clerical staff shall be furnished to the Commission through the offices of the House of Representatives and the Senate Directors of Legislative Assistants. The Commission may meet in the Legislative Building or the Legislative Office Building upon the approval of the Legislative Services Commission. Members of the Commission shall receive per diem, subsistence, and travel allowances at the rate established in G.S. 120-3.1. The appointing authority shall fill vacancies.

The Commission, while in the discharge of its official duties, may exercise all the powers provided under the provisions of G.S. 120-19 through G.S. 120-19.4, including the power to request all officers, agents, agencies, and departments of the State to provide any information, data, or documents within their possession, ascertainable from their records, or otherwise available to them, and the power to subpoena witnesses.

SECTION 6.20.(c)  By May 1, 2006, the Commission shall report its findings, conclusions, and recommendations, including any legislative proposals, to the General Assembly. The Commission shall expire upon filing its final report.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux, Gibson

CLEAN WATER MANAGEMENT TRUST FUND board of trustees/STUDY STEWARDSHIP of conservation easements

SECTION 6.22.  The Clean Water Management Trust Fund Board of Trustees shall study management and stewardship of conservation easements. The Board shall report its findings and any recommendations to the Environmental Review Commission by December 1, 2005.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

COMMISSION ON STATE PROPERTY FUNDS

SECTION 6.23.  Of the funds appropriated to the Department of Administration for the 2005-2006 fiscal year, the Director of the Budget shall transfer two hundred thousand dollars ($200,000) to the Commission on State Property established in Article 78 of Chapter 143 of the General Statutes.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux, Insko

COLLABORATION AMONG DEPARTMENTS OF ADMINISTRATION, health and human services, JUVENILE JUSTICE AND DELINQUENCY PREVENTION, and PUBLIC INSTRUCTION ON SCHOOL-BASED CHILD AND FAMILY TEAM INITIATIVE

SECTION 6.24.(a)  Department of Public Instruction. -

(1)       Program established. - There is established the School-Based Child and Family Team Initiative. The purpose of the Initiative is to identify and coordinate appropriate community services and supports for children at risk of school failure or out-of-home placement in order to address the physical, social, legal, emotional, and developmental factors that affect academic performance. The Department of Health and Human Services, the Department of Public Instruction, the Department of Juvenile Justice and Delinquency Prevention, the Administrative Office of the Courts, and other State agencies that provide services for children shall share responsibility and accountability to improve outcomes for these children and their families. The Initiative shall be based on the following principles:

a.         The development of a strong infrastructure of interagency collaboration;

b.         One child, one team, one plan;

c.         Individualized strengths-based care;

d.         Accountability;

e.         Cultural competence;

f.          Children at risk of school failure or out-of-home placement may enter the system through any participating agency;

g.         Services shall be specified, delivered, and monitored through a unified Child and Family Plan that is outcome-oriented and evaluation-based;

h.         Services shall be the most efficient in terms of cost and effectiveness and shall be delivered in the most natural settings possible;

i.          Out-of-home placements for children shall be a last resort and shall include concrete plans to bring the children back to a stable, permanent home, their schools, and their community; and

j.          Families and consumers shall be involved in decision making throughout service planning, delivery, and monitoring.

(2)       Local level responsibilities. - In coordination with the North Carolina Child and Family Leadership Council (Council), the local board of education shall establish the School-Based Child and Family Team Initiative (Initiative) at designated schools and shall appoint the Child and Family Team Leaders who shall be a school nurse and a school social worker. Each local management entity that has any selected schools in its catchment area shall appoint a Care Coordinator, and any Department of Social Services that has a selected school in its catchment area shall appoint a Child and Family Teams Facilitator. The Care Coordinators and Child and Family Team Facilitators shall have as their sole responsibility working with the selected schools in their catchment areas and shall provide training to school-based personnel, as required. The Child and Family Team Leaders shall identify and screen children who are potentially at risk of academic failure or out-of-home placement due to physical, social, legal, emotional, or developmental factors. Based on the screening results, responsibility for developing, convening, and implementing the Child and Family Team is as follows:

a.         School personnel shall take the lead role for those children and their families whose primary unmet needs are related to academic achievement.

b.         The local management entity shall take the lead role for those children and their families whose primary unmet needs are related to mental health, substance abuse, and/or developmental disabilities and who meet the criteria for the target population established by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

c.         The local Department of Public Health shall take the lead role for those children and their families whose primary unmet needs are health-related.

d.         The Department of Social Services Facilitator shall take the lead for those children and their families whose primary unmet needs are related to child welfare, abuse, or neglect.

e.         A representative from the district court or juvenile justice shall take the lead for those children and their families whose primary unmet needs are related to community safety or legal issues.

A representative from each agency shall participate as a member of the Team as needed. Team members shall coordinate, monitor, and assure the successful implementation of a unified Child and Family Plan.

(3)       Reporting requirements. - School-Based Child and Family Team Leaders shall provide data to the Council for inclusion in their report to the North Carolina General Assembly. The report shall include the following:

a.         The number of and other demographic information on children served;

b.         The amount and source of funds expended to implement the Initiative;

c.         Information on how families and consumers are involved in decision making throughout service planning, delivery, and monitoring;

d.         Information on the number of children screened, the number of children assigned to a Team, and the service needs of the children served;

e.         Information on the placement of children in programs or facilities outside the child's home and outside the child's county and the average length of stay in residential treatment, transition, and return to home;

f.          The number of children diverted from institutions, other out-of-home placements, or from the custody of the department of social services because of unmet behavioral health needs;

g.         A description of the services provided;

h.         Other information as required by the Council to evaluate success in local programs and ensure appropriate outcomes; and

i.          Recommendations on needed improvements.

(4)       Local Advisory Committee. - In each county with a participating school, a Local Child and Family Team Advisory Committee shall be chaired by the superintendent of the local LEA and the head of a participating county agency as elected by the Committee. The Committee shall include the directors of the county departments of social services and health, the directors of the local management entity, the chief district court judge, the chief court counselor, and representatives of other agencies providing services to children, as designated by the Committee. The members of the Committee shall meet as needed to monitor and support the successful implementation of the School-Based Child and Family Team Initiative.

The Local Child and Family Team Advisory Committee may designate existing cross-agency collaboratives or councils as working groups or to provide assistance in accomplishing established goals.

SECTION 6.24.(b)  Department of Administration.

(1)       North Carolina Child and Family Leadership Council established. - There is established the North Carolina Child and Family Leadership Council (Council). The Council shall be located within the Department of Administration for organizational and budgetary purposes.

(2)       Purpose. - The purpose of the Council is to review and advise the Governor in the development of the School-Based Child and Family Teams Initiative and to ensure the active participation and collaboration in the Initiative by all State agencies and their local counterparts providing services to children in order to increase the academic success and reduce out-of-home and out-of-county placements of children at risk of academic failure.

(3)       Membership. - The Superintendent of Public Instruction and the Secretary of Health and Human Services shall serve as cochairs of the Council. Council membership shall include the Secretary of the Department of Juvenile Justice and Delinquency Prevention, the Director of the Administrative Office of the Courts, and other members as appointed by the Governor.

(4)       The Council may:

a.         As needed, sign an annual memorandum of agreement (MOA) among the named State agencies to define the purposes of the program and to ensure that program goals are accomplished.

b.         As needed, recommend a local MOA to be signed annually by the superintendent of the local LEA, the directors of the county departments of social services and health, the directors of the local management entity, the chief district court judge, the chief court counselor.

c.         Increase capacity in the school setting to address the needs of children in need of academic, health, mental health, social, and legal services.

d.         Resolve State policy issues, as identified at the local level, which interfere with effective implementation of the Child and Family Team Initiative.

e.         Direct the integration of resources as needed to meet goals and ensure that the Initiative promotes the most effective and efficient use of resources and eliminates duplication of effort.

f.          Ensure that children receiving services are screened initially to identify needs and assessed periodically to determine progress and sustained improvement in educational, health, safety, behavioral, and social outcomes.

g.         Establish criteria for defining success in local programs and ensure appropriate outcomes.

h.         Develop an evaluation process based on expected outcomes to ensure the goals and objectives of this initiative are achieved.

i.          Review progress made on integrating policies and resources across State agencies, reaching expected outcomes, and accomplishing other goals.

j.          Report semiannually on progress made to the Office of the Governor and the General Assembly.

The Council may designate existing cross-agency collaboratives or councils as working groups or to provide assistance in accomplishing established goals.

(5)       Program services. - In order to ensure that children receiving services are appropriately served, the affected State and local agencies shall:

a.         Provide only those services that are known to be effective based upon research or national standards of best practices.

b.         Develop uniform screening mechanisms and a set of outcomes that are shared across affected State agencies to measure children's progress in home, school, and community settings.

c.         Review services provided across affected State agencies to ensure that children's needs are met.

d.         Eliminate cost shifting and facilitate cost-sharing among governmental agencies with respect to service development, service delivery, and monitoring for participating children and their families.

SECTION 6.24.(c)  Department of Health and Human Services. - The Secretary of the Department of Health and Human Services shall ensure that all agencies within the Department collaborate in the development and implementation of the School-Based Child and Family Team Initiative and provide all required support to ensure that the Initiative is successful.

SECTION 6.24.(d)  Department of Juvenile Justice and Delinquency Prevention. - The Secretary of the Department of Juvenile Justice and Delinquency Prevention shall ensure that all agencies within the Department collaborate in the development and implementation of the School-Based Child and Family Team Initiative and provide all required support to ensure that the Initiative is successful.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

Limit Sale of Dorothea Dix and Blue Ridge Road Properties

SECTION 6.25.  G.S. 146-27 reads as rewritten:

" 146-27.  The role of the Department of Administration in sales, leases, and rentals.rentals; approval by General Assembly.

(a)       General. - Every Except as otherwise provided by this section, every sale, lease, rental, or gift of land owned by the State or by any State agency shall be made by the Department of Administration and approved by the Governor and Council of State. A lease or rental of land owned by the State may not exceed a period of 99 years. The Department of Administration may initiate proceedings for sales, leases, rentals, and gifts of land owned by the State or by any State agency.

(b)       Large Disposition. - If a proposed disposition is a sale or gift of land with an appraised value of at least twenty-five thousand dollars ($25,000), the sale or gift shall not be made until after consultation with the Joint Legislative Commission on Governmental Operations.

(c)       Exceptions. - Notwithstanding any other provision of law, the following State-owned property shall not be sold without the prior approval of the General Assembly:

(1)       The property encompassing the Dorothea Dix Hospital campus.

(2)       The property described in the 1995 Capital Area Master Plan for State Government, Blue Ridge Road Area, developed by O'Brien/Atkins, except for the Special Development District."

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

AHEC STUDY/HORACE WILLIAMS AIRPORT

SECTION 6.26.  The Legislative Research Commission shall study the continued viability of the Area Health Education Centers (AHEC) program if the Horace Williams Airport is not available and report its findings to the General Assembly no later than the reconvening of the 2005 Regular Session of the General Assembly in 2006. In conducting the study, the Legislative Research Commission should invite all physicians and pilots frequently participating in the AHEC program to appear before the Commission.

The University of North Carolina at Chapel Hill shall operate the Horace Williams Airport and continue air transportation support for the AHEC program and the public from that location until 30 days after sine die adjournment of the 2005 Regular Session of the General Assembly.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

No funds budgeted for replaced equipment

SECTION 6.27.  Once a State agency has purchased and installed equipment that performs the same function as equipment it leases, the agency shall not continue to budget funds for leased equipment that it no longer needs.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

RIGHT OF INSURED TO REDEEM HEALTH CARE OR PRESCRIPTION DRUG BENEFIT.

SECTION 6.28.  G.S. 58-50-30 is amended by adding the following new subsection to read:

"(g1)    An insured beneficiary under a health benefit plan shall have the right to redeem a health care or prescription drug benefit at any provider or pharmacy. The insurer, third-party administrator, or any other entity providing a health care or prescription drug benefit for the insurer shall redeem the health care or prescription drug benefit and reimburse the provider or pharmacy in the same manner, to the same extent, at the same rate, and on the same payment schedule as the insurer, third-party administrator, or other entity would to a provider or pharmacy that is a party to a provider or pharmacy provider contract."

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

HEALTH BENEFIT PLAN CO-PAYMENTS

SECTION 6.29.  G.S. 58-50-30(a3) reads as rewritten:

"(a3)    Whenever any health benefit plan, subscriber contract, or policy of insurance issued by a health maintenance organization, hospital or medical service corporation, or insurer governed by Articles 1 through 67 of this Chapter provides coverage for medically necessary treatment, the insurer shall not impose any limitation on treatment or levels of coverage if performed by a duly licensed chiropractor acting within the scope of the chiropractor's practice as defined in G.S. 90-151 unless a comparable limitation is imposed on the medically necessary treatment if performed or authorized by any other duly licensed physician. An insurer shall not impose as a limitation on treatment or level of coverage a co-payment amount charged to the insured for chiropractic services that is higher than the co-payment amount charged to the insured for the services of a duly licensed primary care physician for the same medically necessary treatment or condition."

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill,  Michaux

Training Retirement systems division Personnel

SECTION 6.30.  Of the funds appropriated from the General Fund to the Department of State Treasurer, Retirement Systems Division, the sum of up to one hundred twenty-eight thousand three hundred fifty dollars ($128,350) may be used in each year of the 2005-2007 fiscal biennium to provide training for Retirement Systems Division employees to meet the increasing demands on the Retirement Systems due to record retirements of public employees over the next 17 years. The Division shall report annually to the General Assembly on the training that has been provided to its staff to meet these increasing demands.

 

Requested by:            Representatives Crawford, Clary, Earle, Nye, Owens, Sherrill, Michaux

Amend the Tobacco Reserve Fund to Promote the Health and Wellness of the State's Citizens and Economic Development

SECTION 6.32.(a)  G.S. 66-291(b)(2) reads as rewritten:

"(2)      To the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow on account of units sold in the State in a particular year was greater than the State's allocable share of the total payments that such manufacturer would have been required to make in that year under the Master Settlement Agreement (as determined pursuant to section IX(i)(2) of the Master Settlement Agreement, and before any of the adjustments or offsets described in section IX(i)(3) of that Agreement other than the Inflation Adjustment)the Master Settlement Agreement payments, as determined pursuant to Section IX(i) of that agreement, including after final determination of all adjustments, that the manufacturer would have been required to make on account of the units sold had it been a participating manufacturer, the excess shall be released from escrow and revert back to such tobacco product manufacturer; or".

SECTION 6.32.(b)  If this section, or any portion of the amendment made to G.S. 66-291(b)(2) by this section, is held by a court of competent jurisdiction to be unconstitutional, then G.S. 66-291(b)(2) shall be deemed to be repealed in its entirety.  If G.S. 66-291(b)(2) shall thereafter be held by a court of competent jurisdiction to be unconstitutional, then this section shall be repealed, and G.S. 66-291(b)(2) shall be restored as if no amendments had been made by this section.  Neither any judicial holding of unconstitutionality nor the repeal of G.S. 66-291(b)(2) shall affect, impair, or invalidate any other portion of Part 1 of Article 37 of Chapter 66 of the General Statutes or the application of Part 1 of Article 37 of Chapter 66 of the General Statutes to any other person or circumstance, and the remaining portions of Part 1 of Article 37 of Chapter 66 of the General Statutes shall at all times continue in full force and effect.

SECTION 6.32.(c)  This section becomes effective October 1, 2006.

 

PART vII. PUBLIC SCHOOLS

 

Requested by:            Representatives Jeffus, Tolson, Yongue

TEACHER SALARY SCHEDULES

SECTION 7.1.(a)  Effective for the 2005-2006 school year, the Director of the Budget shall transfer from the Reserve for Experience Step Salary Increase for Teachers and Principals in Public Schools funds necessary to implement the teacher salary schedules set out in subsection (b) of this section and for longevity in accordance with subsection (d) of this section, including funds for the employer's retirement and social security contributions for all teachers whose salaries are supported from the State's General Fund.

These funds shall be allocated to individuals according to rules adopted by the State Board of Education.

SECTION 7.1.(b)  The following monthly salary schedules shall apply for the 2005-2006 fiscal year to certified personnel of the public schools who are classified as teachers.  The schedule contains 30 steps with each step corresponding to one year of teaching experience.

 

2005-2006 Monthly Salary Schedule

"A" Teachers

 

Years of Experience                     "A" Teachers                          NBPTS Certification

 

             0                                             $2,558                                              N/A

             1                                             $2,600                                              N/A

             2                                             $2,644                                              N/A

             3                                             $2,800                                          $3,136

             4                                             $2,941                                          $3,294

             5                                             $3,075                                          $3,444

             6                                             $3,204                                          $3,588

             7                                             $3,308                                          $3,705

             8                                             $3,356                                          $3,759

             9                                             $3,406                                          $3,815

           10                                             $3,456                                          $3,871

           11                                             $3,505                                          $3,926

           12                                             $3,557                                          $3,984

           13                                             $3,607                                          $4,040

           14                                             $3,660                                          $4,099

           15                                             $3,715                                          $4,161

           16                                             $3,770                                          $4,222

           17                                             $3,825                                          $4,284

           18                                             $3,884                                          $4,350

           19                                             $3,942                                          $4,415

           20                                             $4,000                                          $4,480

           21                                             $4,063                                          $4,551

           22                                             $4,124                                          $4,619

           23                                             $4,189                                          $4,692

           24                                             $4,254                                          $4,764

           25                                             $4,319                                          $4,837

           26                                             $4,386                                          $4,912

           27                                             $4,454                                          $4,988

           28                                             $4,524                                          $5,067

           29                                             $4,596                                          $5,148

 

 

 

2005-2006 Monthly Salary Schedule

"M" Teachers

 

Years of Experience                 "M" Teachers                         NBPTS Certification

 

             0                                             $2,814                                              N/A

             1                                             $2,860                                              N/A

             2                                             $2,908                                              N/A

             3                                             $3,080                                          $3,450

             4                                             $3,235                                          $3,623

             5                                             $3,383                                          $3,789

             6                                             $3,524                                          $3,947

             7                                             $3,639                                          $4,076

             8                                             $3,692                                          $4,135

             9                                             $3,747                                          $4,197

           10                                             $3,802                                          $4,258

           11                                             $3,856                                          $4,319

           12                                             $3,913                                          $4,383

           13                                             $3,968                                          $4,444

           14                                             $4,026                                          $4,509

           15                                             $4,087                                          $4,577

           16                                             $4,147                                          $4,645

           17                                             $4,208                                          $4,713

           18                                             $4,272                                          $4,785

           19                                             $4,336                                          $4,856

           20                                             $4,400                                          $4,928

           21                                             $4,469                                          $5,005

           22                                             $4,536                                          $5,080

           23                                             $4,608                                          $5,161

           24                                             $4,679                                          $5,240

           25                                             $4,751                                          $5,321

           26                                             $4,825                                          $5,404

           27                                             $4,899                                          $5,487

           28                                             $4,976                                          $5,573

           29                                             $5,056                                          $5,663

 

SECTION 7.1.(c)  Annual longevity payments for teachers shall be at the rate of one and one-half percent (1.5%) of base salary for 10 to 14 years of State service, two and twenty-five hundredths percent (2.25%) of base salary for 15 to 19 years of State service, three and twenty-five hundredths percent (3.25%) of base salary for 20 to 24 years of State service, and four and one-half percent (4.5%) of base salary for 25 or more years of State service.  The longevity payment shall be paid in a lump sum once a year.

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

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

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

SECTION 7.1.(f)  Speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.

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

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

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

SCHOOL-BASED ADMINISTRATOR SALARY SCHEDULE

SECTION 7.2.(a)  Effective for the 2005-2006 school year, the Director of the Budget shall transfer from the Reserve for Compensation Increases funds necessary to implement the salary schedules for school-based administrators as provided in this section.  These funds shall be used for State-paid employees only.

SECTION 7.2.(b)  The base salary schedule for school-based administrators shall apply only to principals and assistant principals.  The base salary schedule for the 2005-2006 fiscal year, commencing July 1, 2005, is as follows:

 

2005-2006

Principal and Assistant Principal Salary Schedules

Classification

 

Yrs. of                 Assistant                Prin I               Prin II             Prin III            Prin IV

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

 

0-4                      3,267                                -                        -                      -                      -

5                         3,417                                -                        -                      -                      -

6                         3,559                                -                        -                      -                      -

7                         3,675                                -                        -                      -                      -

8                         3,728                        3,728                        -                      -                      -

9                         3,783                        3,783                        -                      -                      -

10                       3,839                        3,839               3,895                      -                      -

11                       3,895                        3,895               3,951                      -                      -

12                       3,951                        3,951               4,007              4,066                      -

13                       4,007                        4,007               4,066              4,127              4,187

14                       4,066                        4,066               4,127              4,187              4,251

15                       4,127                        4,127               4,187              4,251              4,314

16                       4,187                        4,187               4,251              4,314              4,379

17                       4,251                        4,251               4,314              4,379              4,445

18                       4,314                        4,314               4,379              4,445              4,514

19                       4,379                        4,379               4,445              4,514              4,582

20                       4,445                        4,445               4,514              4,582              4,654

21                       4,514                        4,514               4,582              4,654              4,726

22                       4,582                        4,582               4,654              4,726              4,798

23                       4,654                        4,654               4,726              4,798              4,872

24                       4,726                        4,726               4,798              4,872              4,949

25                       4,798                        4,798               4,872              4,949              5,027

26                       4,872                        4,872               4,949              5,027              5,107

27                       4,949                        4,949               5,027              5,107              5,209

28                       5,027                        5,027               5,107              5,209              5,313

29                       5,107                        5,107               5,209              5,313              5,419

30                       5,209                        5,209               5,313              5,419              5,527

31                       5,313                        5,313               5,419              5,527              5,638

32                                -                        5,419               5,527              5,638              5,751

33                                -                                -               5,638              5,751              5,866

34                                -                                -               5,751              5,866              5,983

35                                -                                -                        -              5,983              6,103

36                                -                                -                        -              6,103              6,225

37                                -                                -                        -                      -              6,350

 

2005-2006

Principal and Assistant Principal Salary Schedules

Classification

 

Yrs. of                   PrinV                  PrinVI             PrinVII           PrinVIII

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

 

0-14                  4,314                                   -                       -                       -

15                      4,379                                   -                       -                       -

16                      4,445                          4,514                       -                       -

17                      4,514                          4,582              4,726                       -

18                      4,582                          4,654              4,798              4,872

19                      4,654                          4,726              4,872              4,949

20                      4,726                          4,798              4,949              5,027

21                      4,798                          4,872              5,027              5,107

22                      4,872                          4,949              5,107              5,209

23                      4,949                          5,027              5,209              5,313

24                      5,027                          5,107              5,313              5,419

25                      5,107                          5,209              5,419              5,527

26                      5,209                          5,313              5,527              5,638

27                      5,313                          5,419              5,638              5,751

28                      5,419                          5,527              5,751              5,866

29                      5,527                          5,638              5,866              5,983

30                      5,638                          5,751              5,983              6,103

31                      5,751                          5,866              6,103              6,225

32                      5,866                          5,983              6,225              6,350

33                      5,983                          6,103              6,350              6,477

34                      6,103                          6,225              6,477              6,607

35                      6,225                          6,350              6,607              6,739

36                      6,350                          6,477              6,739              6,874

37                      6,477                          6,607              6,874              7,011

38                      6,607                          6,739              7,011              7,151

39                              -                          6,874              7,151              7,294

40                              -                          7,011              7,294              7,440

41                              -                                   -              7,440              7,589

 

SECTION 7.2.(c)  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:

Number of Teachers

Classification                                         Supervised

 

Assistant Principal

Principal I                                          Fewer than 11 Teachers

Principal II                                         11-21 Teachers

Principal III                                        22-32 Teachers

Principal IV                                        33-43 Teachers

Principal V                                         44-54 Teachers

Principal VI                                        55-65 Teachers

Principal VII                                      66-100 Teachers

Principal VIII                                     More than 100 Teachers

 

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

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

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

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

SECTION 7.2.(g)  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 7.2.(h)  Participants in an approved full-time masters in school administration program shall receive up to a 10-month stipend at the beginning salary of an assistant principal during the internship period of the masters program.  For the 2005-2006 fiscal year and subsequent fiscal years, the stipend shall not exceed the difference between the beginning salary of an assistant principal and any fellowship funds received by the intern as a full-time student, including awards of the Principal Fellows Program. The Principal Fellows Program or the school of education where the intern participates in a full-time masters in school administration program shall supply the Department of Public Instruction with certification of eligible full-time interns.

SECTION 7.2.(i)  During the 2005-2006 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.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

CENTRAL OFFICE SALARIES

SECTION 7.3.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2005-2006 fiscal year, beginning July 1, 2005.

School Administrator I                     $2,932            $5,533

School Administrator II                    $3,112            $5,869

School Administrator III                  $3,303            $6,225

School Administrator IV                  $3,436            $6,474

School Administrator V                   $3,574            $6,735

School Administrator VI                  $3,792            $7,143

School Administrator VII                 $3,945            $7,430

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 7.3.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2005-2006 fiscal year, beginning July 1, 2005.

Superintendent I                                $4,187            $7,883

Superintendent II                               $4,445            $8,359

Superintendent III                              $4,716            $8,868

Superintendent IV                             $5,005            $9,406

Superintendent V                               $5,312            $9,980

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

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

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

SECTION 7.3.(f)  The annual salary increase for all permanent full-time personnel paid from the Central Office Allotment shall be the greater of five hundred dollars ($500.00) or two and one-half percent (2.5%), commencing July 1, 2005. The State Board of Education shall allocate these funds to local school administrative units.  The local boards of education shall establish guidelines for providing salary increases to these personnel.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

NONCERTIFIED PERSONNEL SALARY

SECTION 7.4.(a)  The annual salary increase for permanent, full-time noncertified public school employees whose salaries are supported from the State's General Fund shall be the greater of five hundred dollars ($500.00) or two and one-half percent (2.5%), commencing July 1, 2005.

SECTION 7.4.(b)  Local boards of education shall increase the rates of pay for such employees who were employed for all or part of fiscal year 2004-2005 and who continue their employment for fiscal year 2005-2006 by providing an annual salary increase for employees of the greater of five hundred dollars ($500.00) or two and one-half percent (2.5%).

For part-time employees, the pay increase shall be pro rata based on the number of hours worked.

SECTION 7.4.(c)  The State Board of Education may adopt salary ranges for noncertified personnel to support increases of the greater of five hundred dollars ($500.00) or two and one-half percent (2.5%) for the 2005-2006 fiscal year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

BONUS FOR CERTIFIED PERSONNEL AT THE TOP OF THEIR SALARY SCHEDULES

SECTION 7.5.  Effective July 1, 2005, any permanent certified personnel employed on July 1, 2003, and paid on the teacher salary schedule with 29+ years of experience shall receive a one-time bonus equivalent to the average increase of the 26 to 29 year steps.  Effective July 1, 2005, any permanent personnel employed on July 1, 2004, and paid at the top of the principal and assistant principal salary schedule shall receive a one-time bonus equivalent to two percent (2%).

For permanent part-time personnel, the one-time bonus shall be adjusted pro rata. Personnel defined under G.S. 115C-325(a)(5a) are not eligible to receive the bonus.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES

SECTION 7.6.(a)  Funds for Supplemental Funding. - The General Assembly finds that it is appropriate to provide supplemental funds in low-wealth counties to allow those counties to enhance the instructional program and student achievement.  Therefore, funds are appropriated to State Aid to Local School Administrative Units for the 2005-2006 fiscal year and the 2006-2007 fiscal year to be used for supplemental funds for the schools.

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

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

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

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

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

a.         Anticipated county property tax revenue availability,

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

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

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

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

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

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

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

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

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

c.         Add to the resulting amount the:

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

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

3.         Personal property value for the county.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 7.6.(h)  Nonsupplant Requirement. - A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2005-2007 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:

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

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

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

SECTION 7.6.(i)  Reports. - The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2006, if it determines that counties have supplanted funds.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING

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

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

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

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

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

(5)       Provide a base for the consolidated funds allotment of at least seven hundred forty thousand seventy-four dollars ($740,074), excluding textbooks for the 2005-2006 fiscal year and a base of seven hundred forty thousand seventy-four dollars ($740,074) for the 2006-2007 fiscal year.

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

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

SECTION 7.7.(b)  Nonsupplant Requirement. - A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2005-2007 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 7.7.(e)  Reports. - The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2006, if it determines that counties have supplanted funds.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

DISADVANTAGED STUDENT SUPPLEMENTAL FUNDING

SECTION 7.8.(a)  Funds are appropriated in this act to address the capacity needs of local school administrative units to meet the needs of disadvantaged students.  Each local school administrative unit shall use funds allocated to it for disadvantaged student supplemental funding to implement a plan jointly developed by the unit and the LEA Assistance Program team.  The plan shall be based upon the needs of students in the unit not achieving grade-level proficiency. The plan shall detail how these funds shall be used in conjunction with all other supplemental funding allotments such as Low-Wealth, Small County, At-Risk Student Services/Alternative Schools, and Improving Student Accountability, to provide instructional and other services that meet the educational needs of these students. Prior to the allotment of disadvantaged student supplemental funds, the plan shall be approved by the State Board of Education.

Funds received for disadvantaged student supplemental funding shall be used, consistent with the policies and procedures adopted by the State Board of Education, only to:

(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; and

(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 districts receiving funding under the Disadvantaged Student Supplemental Fund to purchase the Education Value Added Assessment System in order to provide in-depth analysis of student performance and help identify strategies for improving student achievement.

SECTION 7.8.(b)  Funds are appropriated in this act to evaluate the Disadvantaged Students Supplemental Funding Initiative. The State Board of Education shall use these funds to:

(1)       Evaluate the strategies implemented by local school administrative units with Disadvantaged Student Supplemental Funds and other supplemental funds and assess their impact on student performance; and

(2)       Evaluate the efficiency and effectiveness of the technical assistance and support provided to local school administrative units by the Department of Public Instruction.

The State Board of Education shall report the results of the evaluation to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by February 15, 2006, and by January 15 of each subsequent year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

STUDENTS WITH LIMITED ENGLISH PROFICIENCY

SECTION 7.9.(a)  The State Board of Education shall develop guidelines for identifying and providing services to students with limited proficiency in the English language.

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

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

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

SECTION 7.9.(b)  The Department of Public Instruction shall prepare a current head count of the number of students classified with limited English proficiency by December 1 of each year.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FLEXIBILITY FOR THE HIGHEST PRIORITY ELEMENTARY SCHOOLS

SECTION 7.10.  The State Board of Education may allow high priority schools that have made high growth for three consecutive years to be removed from the list of high priority schools.  If a local board of education chooses to have a school removed from the list of high priority schools, the additional high priority funding for that school shall be discontinued.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

AT-RISK STUDENT SERVICES/ALTERNATIVE SCHOOLS

SECTION 7.11.  The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Student allotment each year for the 2005-2006 fiscal year and for the 2006-2007 fiscal year to implement G.S. 115C-12(24).

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FUNDS FOR CHILDREN WITH DISABILITIES

SECTION 7.12.  The State Board of Education shall allocate funds for children with disabilities on the basis of two thousand eight hundred thirty-eight dollars and thirty-nine cents ($2,838.39) per child for a maximum of 168,602 children for the 2005-2006 school year.  Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) twelve and five-tenths percent (12.5%) of the 2005-2006 allocated average daily membership in the local school administrative unit.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FUNDS FOR ACADEMICALLY GIFTED CHILDREN

SECTION 7.13.  The State Board of Education shall allocate funds for academically or intellectually gifted children on the basis of nine hundred twenty-six dollars and fifty-five cents ($926.55) per child. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2005-2006 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The State Board shall allocate funds for no more than 55,895 children for the 2005-2006 school year.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

EXPENDITURE OF FUNDS TO IMPROVE STUDENT ACCOUNTABILITY

SECTION 7.14.(a)  Funds appropriated for the 2005-2006 and 2006-2007 fiscal years for Student Accountability Standards shall be used to assist students to perform at or above grade level in reading and mathematics in grades 3-8 as measured by the State's end-of-grade tests. The State Board of Education shall allocate these funds to LEAs based on the number of students who score at Level I or Level II on either reading or mathematics end-of-grade tests in grades 3-8. Funds in the allocation category shall be used to improve the academic performance of (i) students who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 or (ii) students who are performing at Level I or II on the writing tests in grades 4 and 7. These funds may also be used to improve the academic performance of students who are performing at Level I or II on the high school end-of-course tests. These funds shall not be transferred to other allocation categories or otherwise used for other purposes.  Except as otherwise provided by law, local boards of education may transfer other funds available to them into this allocation category.

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

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

These funds shall be allocated to local school administrative units for the 2005-2006 fiscal year within 30 days of the date this act becomes law.

SECTION 7.14.(b)  Funds appropriated for Student Accountability Standards shall not revert at the end of each fiscal year but shall remain available for expenditure until August 31 of the subsequent fiscal year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

LITIGATION RESERVE FUNDS

SECTION 7.15.  The State Board of Education may expend up to five hundred thousand dollars ($500,000) each year for the 2005-2006 and 2006-2007 fiscal years from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

BASE BUDGET REDUCTION TO DEPARTMENT OF PUBLIC INSTRUCTION

SECTION 7.16.  Notwithstanding any other provision of law, the Department of Public Instruction may use salary reserve funds and other funds and may transfer funds within the Department's continuation budget to implement budget reductions for the 2005-2006 fiscal year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

REPLACEMENT SCHOOL BUSES FUNDS

SECTION 7.17.(a)  The State Board of Education may impose any of the following conditions on allotments to local boards of education for replacement school buses:

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

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

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

(4)       The Department of Administration, Division of Purchase and Contract, in cooperation with the State Board of Education, shall solicit bids for the direct purchase of school buses and activity buses and shall establish a statewide term contract for use by the State Board of Education. Local boards of education and other agencies shall be eligible to purchase from the statewide term contract. The State Board of Education shall also solicit bids for the financing of school buses.

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

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

SECTION 7.17.(b)  Any term contract for the purchase or lease-purchase of school buses or school activity buses shall not require vendor payment of the electronic procurement transaction fee of the North Carolina E-Procurement Service.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

EXPENDITURES FOR DRIVING ELIGIBILITY CERTIFICATES

SECTION 7.18.  G.S. 115C-12(28) reads as rewritten:

" 115C-12.  Powers and duties of the Board generally.

The general supervision and administration of the free public school system shall be vested in the State Board of Education. The State Board of Education shall establish policy for the system of free public schools, subject to laws enacted by the General Assembly. The powers and duties of the State Board of Education are defined as follows:

(28)     Duty to Develop Rules for Issuance of Driving Eligibility Certificates. - The State Board of Education shall adopt the following rules to assist schools in their administration of procedures necessary to implement G.S. 20-11 and G.S. 20-13.2:

a.         To define what is equivalent to a high school diploma for the purposes of G.S. 20-11 and G.S. 20-13.2. These rules shall apply to all educational programs offered in the State by public schools, charter schools, nonpublic schools, or community colleges.

b.         To establish the procedures a person who is or was enrolled in a public school or in a charter school must follow and the requirements that person shall meet to obtain a driving eligibility certificate.

c.         To require the person who is required under G.S. 20-11(n) to sign the driving eligibility certificate to provide the certificate if he or she determines that one of the following requirements is met:

1.         The person seeking the certificate is eligible for the certificate under G.S. 20-11(n)(1) and is not subject to G.S. 20-11(n1).

2.         The person seeking the certificate is eligible for the certificate under G.S. 20-11(n)(1) and G.S. 20-11(n1).

These rules shall apply to public schools and charter schools.

d.         To provide for an appeal to an appropriate education authority by a person who is denied a driving eligibility certificate. These rules shall apply to public schools and charter schools.

e.         To define exemplary student behavior and to define what constitutes the successful completion of a drug or alcohol treatment counseling program. These rules shall apply to public schools and charter schools.

The State Board also shall develop policies as to when it is appropriate to notify the Division of Motor Vehicles that a person who is or was enrolled in a public school or in a charter school no longer meets the requirements for a driving eligibility certificate.

The State Board shall develop a form for parents, guardians, or emancipated juveniles, as appropriate, to provide their written, irrevocable consent for a school to disclose to the Division of Motor Vehicles that the student no longer meets the conditions for a driving eligibility certificate under G.S. 20-11(n)(1) or G.S. 20-11(n1), if applicable, in the event that this disclosure is necessary to comply with G.S. 20-11 or G.S. 20-13.2. Other than identifying under which statutory subsection the student is no longer eligible, no other details or information concerning the student's school record shall be released pursuant to this consent. This form shall be used for students enrolled in public schools or charter schools.

The State Board of Education may use funds appropriated for drivers education to cover the costs of driving eligibility certificates."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

DISCREPANCIES BETWEEN ANTICIPATED AND ACTUAL ADM

SECTION 7.19.(a)  If the State Board of Education does not have sufficient resources in the ADM Contingency Reserve line item to make allotment adjustments in accordance with the Allotment Adjustments for ADM Growth provisions of the North Carolina Public Schools Allotment Policy Manual, the State Board of Education may use funds appropriated to State Aid for Public Schools for this purpose.

SECTION 7.19.(b)  If the higher of the first or second month average daily membership in a local school administrative unit is at least two percent (2%) or 100 students lower than the anticipated average daily membership used for allotments for the unit, the State Board of Education shall reduce allotments for the unit.  The reduced allotments shall be based on the higher of the first or second month average daily membership plus one-half of the number of students overestimated in the anticipated average daily membership.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

CHARTER SCHOOL ADVISORY COMMITTEE/CHARTER SCHOOL EVALUATION

SECTION 7.20.  The State Board of Education may spend up to fifty thousand dollars ($50,000) a year from State Aid to Local School Administrative Units for the 2005-2006 and 2006-2007 fiscal years to continue support of a charter school advisory committee and to continue to evaluate charter schools.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

MENTOR TEACHER FUNDS MAY BE USED FOR FULL-TIME MENTORS

SECTION 7.21.(a)  The State Board of Education shall grant flexibility to a local board of education regarding the use of mentor funds to provide mentoring support, provided the local board submits a detailed plan on the use of the funds to the State Board and the State Board approves that plan. The plan shall include information on how all mentors in the local school administrative unit have been or will be adequately trained to provide mentoring support.

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

SECTION 7.21.(b)  The State Board, after consultation with the Professional Teaching Standards Commission, shall adopt standards for mentor training.

SECTION 7.21.(c)  Each local board of education with a plan approved pursuant to subsection (a) of this section shall report to the State Board on the impact of its mentor program on teacher retention.  The State Board shall analyze these reports to determine the characteristics of mentor programs that are most effective in retaining teachers and shall report its findings to the Joint Legislative Education Oversight Committee by October 15, 2006.

SECTION 7.21.(d)  In addition to the report required in subsection (c) of this section, the State shall also evaluate the effectiveness of a representative sample of local mentor programs and report on its findings to the Joint Legislative Education Oversight Committee and the Fiscal Research Division by December 15, 2006.   The evaluation shall focus on quantitative evidence, quality of service delivery, and satisfaction of those involved.  The report shall include the results of the evaluation and recommendations both for improving mentor programs generally and for an appropriate level of State support for mentor programs.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

VISITING INTERNATIONAL EXCHANGE TEACHERS

SECTION 7.22.(a)  G.S. 115C-105.25(b) is amended by adding a new subdivision to read:

"(5a)    Positions allocated for classroom teachers may be converted to dollar equivalents to contract for visiting international exchange teachers. These positions shall be converted at the statewide average salary for classroom teachers, including benefits. The converted funds shall be used only to cover the costs associated with bringing visiting international exchange teachers to the local school administrative unit through a State-approved visiting international exchange teacher program and supporting the visiting exchange teachers."

SECTION 7.22.(b)  The Visiting International Faculty Program is a State-approved visiting international exchange teacher program.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FUNDS TO IMPLEMENT THE ABCS OF PUBLIC EDUCATION

SECTION 7.23.(a)  The State Board of Education shall use funds appropriated in this act for State Aid to Local School Administrative Units to provide incentive funding for schools that met or exceeded the projected levels of improvement in student performance during the 2004-2005 school year, in accordance with the ABCs of Public Education Program.  In accordance with State Board of Education policy:

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

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

b.         Up to five hundred dollars ($500.00) for each teacher assistant.

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

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

b.         Up to three hundred seventy-five dollars ($375.00) for each teacher assistant.

SECTION 7.23.(b)  The State Board of Education may use funds appropriated to the State Public School Fund for assistance teams to low-performing schools.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

LEA ASSISTANCE PROGRAM

SECTION 7.24.  Of the funds appropriated to the State Public School Fund, the State Board of Education shall use five hundred thousand dollars ($500,000) for the 2005-2006 fiscal year and five hundred thousand dollars ($500,000) for the 2006-2007 fiscal year to provide assistance to the State's low-performing Local School Administrative Units (LEAs) and to assist schools in meeting adequate yearly progress in each subgroup identified in the No Child Left Behind Act of 2001. The State Board of Education shall report to the Office of State Budget and Management, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the expenditure of these funds by May 15, 2006, and by December 15, 2007. The report shall contain: (i) the criteria for selecting LEAs and schools to receive assistance, (ii) measurable goals and objectives for the assistance program, (iii) an explanation of the assistance provided, (iv) findings from the assistance program, (v) actual expenditures by category, (vi) recommendations for the continuance of this program, and (vii) any other information the State Board deems necessary. These funds shall not revert at the end of each fiscal year but shall remain available until expended for this purpose.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

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

SECTION 7.25.(a)  Funds appropriated for the Uniform Education Reporting System shall not revert at the end of the 2005-2006 and 2006-2007 fiscal years but shall remain available until expended.

SECTION 7.25.(b)  This section becomes effective June 30, 2005.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

PUBLIC SCHOOL BUILDING CAPITAL AND TECHNOLOGY FUND

SECTION 7.26.(a)  The title of Article 38A of Chapter 115C of the General Statutes reads as rewritten:

"Article 38A.

Public School Building Capital and Technology Fund."

SECTION 7.26.(b)  G.S. 115C-546.1 reads as rewritten:

" 115C-546.1.  Creation of Fund; administration.

(a)       There is created the Public School Building Capital and Technology Fund. The Fund shall be used to assist county governments in meeting their public school building capital needs and their equipment needs under their local school technology plans.

(b)       Each calendar quarter, the Secretary of Revenue shall remit to the State Treasurer for credit to the Public School Building Capital Fund an amount equal to the applicable fraction provided in the table below five sixty-ninths (5/69) of the net collections received during the previous quarter by the Department of Revenue under G.S. 105-130.3. Of these funds, two million eight hundred twelve thousand five hundred dollars ($2,812,500) shall be for credit to the State Public School Fund, and the remainder shall be for credit to the Public School Capital and Technology Fund. All funds deposited in the Public School Building Capital and Technology Fund shall be invested as provided in G.S. 147-69.2 and G.S. 147-69.3.

Period                                   Fraction

10/1/97 to 9/30/98              One-fifteenth (1/15)

10/1/98 to 9/30/99              Two twenty-ninths (2/29)

10/1/99 to 9/30/00              One-fourteenth (1/14)

After 9/30/00                       Five sixty-ninths (5/69)

(c)       The Fund shall be administered by the Department of Public Instruction. "

SECTION 7.26.(c)  Notwithstanding the provisions of G.S. 115C-546.1(b), as rewritten by subsection (a) of this section, for the first quarter of the 2005-2006 fiscal year only, the Secretary of Revenue shall remit to the State Treasurer an amount equal to five sixty-ninths of the net collections received during the previous quarter by the Department of Revenue under G.S. 105-130.3. Of these funds, four million eight hundred twelve thousand five hundred dollars ($4,812,500) shall be for credit to the State Public School Fund, and the remainder shall be for credit to the Public School Capital and Technology Fund.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

LEA SALES TAX REFUND REPORTING

SECTION 7.27.(a)  G.S. 105-164.14(c) reads as rewritten:

"(c)      Certain Governmental Entities. - A governmental entity listed in this subsection is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity and telecommunications service. Sales and use tax liability indirectly incurred by a governmental entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the governmental entity and is being erected, altered, or repaired for use by the governmental entity is considered a sales or use tax liability incurred on direct purchases by the governmental entity for the purpose of this subsection. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund is due within six months after the end of the governmental entity's fiscal year. The Secretary shall make an annual report to the Department of Public Instruction and the Fiscal Research Division of the General Assembly by January 1 of the amount of refunds, identified by taxpayer, claimed under subdivisions (2b) and (2c) of this subsection over the preceding year.

This subsection applies only to the following governmental entities:

(1)       A county.

(2)       A city as defined in G.S. 160A-1.

(2a)     A consolidated city-county as defined in G.S. 160B-2.

(2b)     A local school administrative unit.

(2c)     A joint agency created by interlocal agreement among local school administrative units pursuant to G.S. 160A-462 to jointly purchase food service-related materials, supplies, and equipment on their behalf.

(3)       A metropolitan sewerage district or a metropolitan water district in this State.

(4)       A water and sewer authority created under Chapter 162A of the General Statutes.

(5)       A lake authority created by a board of county commissioners pursuant to an act of the General Assembly.

(6)       A sanitary district.

(7)       A regional solid waste management authority created pursuant to G.S. 153A-421.

(8)       An area mental health, developmental disabilities, and substance abuse authority, other than a single-county area authority, established pursuant to Article 4 of Chapter 122C of the General Statutes.

(9)       A district health department, or a public health authority created pursuant to Part 1A of Article 2 of Chapter 130A of the General Statutes.

(10)     A regional council of governments created pursuant to G.S. 160A-470.

(11)     A regional planning and economic development commission or a regional economic development commission created pursuant to Chapter 158 of the General Statutes.

(12)     A regional planning commission created pursuant to G.S. 153A-391.

(13)     A regional sports authority created pursuant to G.S. 160A-479.

(14)     A public transportation authority created pursuant to Article 25 of Chapter 160A of the General Statutes.

(14a)   A facility authority created pursuant to Part 4 of Article 20 of Chapter 160A of the General Statutes.

(15)     A regional public transportation authority created pursuant to Article 26 of Chapter 160A of the General Statutes, or a regional transportation authority created pursuant to Article 27 of Chapter 160A of the General Statutes.

(16)     A local airport authority that was created pursuant to a local act of the General Assembly.

(17)     A joint agency created by interlocal agreement pursuant to G.S. 160A-462 to operate a public broadcasting television station.

(18)     Repealed by Session Laws 2001-474, s. 7, effective November 29, 2001.

(19)     Repealed by Session Laws 2001-474, s. 7, effective November 29, 2001.

(20)     A constituent institution of The University of North Carolina, but only with respect to sales and use tax paid by it for tangible personal property or services that are eligible for refund under this subsection acquired by it through the expenditure of contract and grant funds.

(21)     The University of North Carolina Health Care System.

(22)     A regional natural gas district created pursuant to Article 28 of Chapter 160A of the General Statutes."

SECTION 7.27.(b)  G.S. 105-259(b) is amended by adding a new subdivision to read:

"(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 unless the disclosure is made for one of the following purposes:

(32)     To provide the report required under G.S. 105-164.14(c) to the Department of Public Instruction and the Fiscal Research Division of the General Assembly."

SECTION 7.27.(c)  In addition to the report required under G.S. 105-164.14(c), as amended by this section, the Secretary of Revenue shall make a report to the Department of Public Instruction and the Fiscal Research Division of the General Assembly within 30 days after this act becomes law of the amount of refunds, identified by taxpayer, claimed under subdivisions (2b) and (2c) of G.S. 105-164.14(c) during the 2002-2003, 2003-2004, and 2004-2005 fiscal years.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

REVIEW OF STANDARDS FOR MASTERS IN SCHOOL ADMINISTRATION PROGRAMS

SECTION 7.28.  The State Board of Education, in consultation with the Board of Governors of The University of North Carolina, shall review standards for Masters in School Administration programs to ensure that appropriate competencies related to teacher retention, teacher evaluations, teacher support programs, and teacher effectiveness are included and emphasized.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

EVALUATION OF SCHOOL PRINCIPALS

SECTION 7.29.  Chapter 115C of the General Statutes is amended by adding a new section to read:

" 115C-286.1.  Evaluations of principals.

Local school administrative units shall evaluate all principals and assistant principals at least once each year. Either the superintendent or the superintendent's designee shall conduct the evaluations.

The State Board shall determine the standards and criteria to be used in the evaluations. A local board shall use the performance standards and criteria adopted by the State Board unless the board develops an alternative evaluation that is properly validated and that includes standards and criteria similar to those adopted by the State Board."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

PLANNING TIME FOR TEACHERS

SECTION 7.30.  The State Board of Education shall report on best practices from North Carolina schools for providing a minimum of five hours per week within the instructional day for planning, collaborating with colleagues and parents, and professional development, especially within elementary school schedules. The State Board shall submit its report to the Education Cabinet and to the Joint Legislative Education Oversight Committee by January 15, 2006.

The State Board shall disseminate this information about best practices to schools and school systems across the State.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

LEARN AND EARN HIGH SCHOOLS

SECTION 7.32.(a)  Funds are appropriated in this act for the Learn and Earn high school workforce development program.  The purpose of the program is to create rigorous and relevant high school options that provide students with the opportunity and assistance to earn an associate degree or two years of college credit by the conclusion of the year after their senior year in high school. The State Board of Education shall work closely with the Education Cabinet and the New Schools Project in administering the program.

SECTION 7.32.(b)  These funds shall be used to establish new high schools in which a local school administrative unit, two- and four-year colleges and universities, and local employers work together to ensure that high school and postsecondary college curricula operate seamlessly and meet the needs of participating employers.

Funds shall not be allotted until Learn and Earn high schools are certified as operational.

SECTION 7.32.(c)  During the first year of its operation, a high school established under G.S. 115C-238.50 shall be allotted a principal regardless of the number of State-paid teachers assigned to the school or the number of students enrolled in the school.  The budget flexibility authorized by G.S. 115C-105.25 does not apply to these positions.

SECTION 7.32.(d)  The State Board of Education, in consultation with the State Board of Community Colleges and The University of North Carolina Board of Governors, shall conduct an annual evaluation of this program.  The evaluation shall include measures as identified in G.S. 115C-238.55. It shall also include: (i) an accounting of how funds and personnel resources were utilized and their impact on student achievement, retention, and employability; (ii) recommended statutory and policy changes; and (iii) recommendations for improvement of the program.  The State Board of Education shall report the results of this evaluation to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by January 15 of each fiscal year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FLEXIBILITY FOR HIGH SCHOOL INNOVATION

SECTION 7.33.(a)  Part 9 of Article 16 of Chapter 115C of the General Statutes reads as rewritten:

"Part 9. Cooperative Innovative High School Programs.

" 115C-238.50.  Purpose.

(a)       The purpose of this Part is to authorize boards of trustees of community colleges and local boards of education to jointly establish local boards of education to jointly establish with one or more boards of trustees cooperative innovative programs in high schools and community colleges or universities that will expand students' opportunities for educational success through high quality instructional programming. These cooperative innovative high school programs shall target:

(1)       High school students who are at risk of dropping out of school before attaining a high school diploma; or

(2)       High school students who would benefit from accelerated academic instruction.

(b)       All the cooperative innovative high school programs established under this Part shall:

(1)       Prepare students adequately for future learning in the workforce or in an institution of higher education.

(2)       Expand students' educational opportunities within the public school system.

(3)       Be centered on the core academic standards represented by the college preparatory or tech prep program of study as defined by the State Board of Education.

(4)       Encourage the cooperative or shared use of resources, personnel, and facilities between public schools and community colleges. colleges or universities, or both.

(5)       Integrate and emphasize both academic and technical skills necessary for students to be successful in a more demanding and changing workplace.

(6)       Emphasize parental involvement and provide consistent counseling, advising, and parent conferencing so that parents and students can make responsible decisions regarding course taking and can track the students' academic progress and success.

(7)       Be held accountable for meeting measurable student achievement results.

(8)       Encourage the use of different and innovative teaching methods.

(9)       Establish joint institutional responsibility and accountability for support of students and their success.

(10)     Effectively utilize existing funding sources for high school, community college, university, and vocational programs and actively pursue new funding from other sources.

(11)     Develop methods for early identification of potential participating students in the middle grades and through high school.

(12)     Reduce the percentage of students needing remedial courses upon their initial entry from high school into a college or university.

(c)       Programs developed under this Part that target students who are at risk of dropping out of high school before attaining a high school diploma shall:

(1)       Provide these students with the opportunity to graduate from high school possessing the core academic skills needed for postsecondary education and high-skilled employment.

(2)       Enable students to complete a technical or academic program in a field that is in high demand and has high wages.

(3)       Set and achieve goals that significantly reduce dropout rates and raise high school and community college retention, certification, and degree completion rates.

(4)       Enable students who complete these programs to pass employer exams, if applicable.

(d)       Cooperative innovative high school programs that offer accelerated learning programs shall:

(1)       Provide a flexible, customized program of instruction for students who would benefit from accelerated, higher level coursework or early graduation from high school.

(2)       Enable students to obtain a high school diploma in less than four years and years, to begin or complete an associate degree program or program, to master a certificate or vocational program.program, or to earn up to two years of college credit.

(3)       Offer a college preparatory academic core and in-depth studies in a career or technical field that will lead to advanced programs or employment opportunities in engineering, health sciences, or teaching.

(e)       Cooperative innovative high school programs may include the creation of a school within a school, a technical high school, or a high school or technical center located on the campus of a community college.college or university.

(f)        Students are eligible to attend these programs as early as ninth grade.

" 115C-238.50A.  Definitions.

The following definitions apply in this Part:

(1)       Constituent institution. - A constituent institution as defined in G.S. 116-2(4).

(2)       Education partner. - An education partner as provided in G.S. 115C-238.52.

(3)       Governing board. - The State Board of Community Colleges, the Board of Governors of The University of North Carolina, or the Board of the North Carolina Independent Colleges and Universities.

(4)       Local board of trustees. - The board of trustees of a community college, constituent institution of The University of North Carolina, or private college located in North Carolina.

" 115C-238.51.  Application process.

(a)       A local board of education and a at least one local board of trustees of a community college shall jointly apply to establish a cooperative innovative high school program under this Part.

(b)       The application shall contain at least the following information:

(1)       A description of a program that implements the purposes in G.S. 115C-238.50.

(2)       A statement of how the program relates to the Economic Vision Plan adopted for the economic development region in which the program is to be located.

(3)       The facilities to be used by the program and the manner in which administrative services of the program are to be provided.

(4)       A description of student academic and vocational achievement goals and the method of demonstrating that students have attained the skills and knowledge specified for those goals.

(5)       A description of how the program will be operated, including budgeting, curriculum, transportation, and operating procedures.

(6)       The process to be followed by the program to ensure parental involvement.

(7)       The process by which students will be selected for and admitted to the program.

(8)       A description of the funds that will be used and a proposed budget for the program. This description shall identify how the average daily membership (ADM) and full-time equivalent (FTE) students are counted.

(9)       The qualifications required for individuals employed in the program.

(10)     The number of students to be served.

(11)     A description of how the program's effectiveness in meeting the purposes in G.S. 115C-238.50 will be measured.

(c)       The application shall be submitted to the State Board of Education and the State Board of Community Colleges applicable governing Boards by November 1 of each year. The State Board of Education and the State Board of Community Colleges Boards shall appoint a joint advisory committee to review the applications and to recommend to the State Boards those programs that meet the requirements of this Part and that achieve the purposes set out in G.S. 115C-238.50.

(d)       The State Board of Education and the State Board of Community Colleges shall approve two cooperative innovative high school programs in each of the State's economic development regions. The State Boards may approve programs recommended by the joint advisory committee or may approve other programs that were not recommended. The State Boards shall approve all applications by March 15 of each year. No application shall be approved unless the State Boards State Board of Education and the applicable governing Board find that the application meets the requirements set out in this Part and that granting the application would achieve the purposes set out in G.S. 115C-238.50. Priority shall be given to applications that are most likely to further State education policies, to address the economic development needs of the economic development regions in which they are located, and to strengthen the educational programs offered in the local school administrative units in which they are located.

" 115C-238.52.  Participation by other education partners.

(a)       Any or all of the following education partners may participate in the development of a cooperative innovative program under this Part that is targeted to high school students who would benefit from accelerated academic instruction:

(1)       A constituent institution of The University of North Carolina.

(2)       A private college or university located in North Carolina.

(3)       A private business or organization.

(4)       The county board of commissioners in the county in which the program is located.

(b)       Any or all of the education partners listed in subsection (a) of this section that participate shall:

(1)       Jointly apply with the local board of education and the local board of trustees of the community college to establish a cooperative innovative program under this Part.

(2)       Be identified in the application.

(3)       Sign the written agreement under G.S. 115C-238.53(b).

" 115C-238.53.  Program operation.

(a)       A program approved by the State shall be is accountable to the local board of education.

(b)       A program approved under this Part shall operate under the terms of a written agreement signed by the local board of education, local board of trustees of the community college, trustees, State Board of Education, and State Board of Community Colleges. applicable governing Board. The agreement shall incorporate the information provided in the application, as modified during the approval process, and any terms and conditions imposed on the program by the State Board of Education and the State Board of Community Colleges. applicable governing Board. The agreement may be for a term of no longer than five school years.

(c)       A program may be operated in a facility owned or leased by the local board of education, the local board of trustees of the community college, trustees, or the education partner, if any.

(d)       A program approved under this Part shall provide instruction each school year for at least 180 days during nine calendar months, shall comply with laws and policies relating to the education of students with disabilities, and shall comply with Article 27 of this Chapter.

(e)       A program approved under this Part may use State, federal, and local funds allocated to the local school administrative unit, to the State Board of Community Colleges, applicable governing Board, and to the community college or university to implement the program. If there is an education partner and if it is a public body, the program may use State, federal, and local funds allocated to that body.

(f)        Except as provided in this Part and pursuant to under the terms of the agreement, a program is exempt may be exempted by the applicable governing Board from laws and rules applicable to a local board of education, a local school administrative unit, a community college, a constituent institution, or a local board of trustees of a community college.trustees.

" 115C-238.54.  Funds for programs.

(a)       The Department of Public Instruction shall assign a school code for each program that is approved under this Part. All positions and other State and federal allotments that are generated for this program shall be assigned to that school code. Notwithstanding G.S. 115C-105.25, once funds are assigned to that school code, the local board of education may use these funds for the program and may transfer these funds between funding allotment categories.

(b)       The local board of trustees of a community college may allocate State and federal funds for a program that is approved under this Part.

(c)       An education partner under G.S. 115C-238.52 that is a public body may allocate State, federal, and local funds for a program that is approved under this Part.

(d)       If not an education partner under G.S. 115C-238.52, a county board of commissioners in a county where a program is located may nevertheless appropriate funds to a program approved under this Part.

(e)       The local board of education and the local board of trustees of the community college are strongly encouraged to seek funds from sources other than State, federal, and local appropriations. They are strongly encouraged to seek funds the Education Cabinet identifies or obtains under G.S. 116C-4.

" 115C-238.55.  Evaluation of programs.

The State Board of Education and the State Board of Community Colleges governing Boards shall evaluate the success of students in programs approved under this Part. Success shall be measured by high school retention rates, high school completion rates, high school dropout rates, certification and associate degree completion, admission to four-year institutions, postgraduation employment in career or study-related fields, and employer satisfaction of employees who participated in and graduated from the programs. Beginning October 15, 2005, and annually thereafter, the Boards shall jointly report to the Joint Legislative Education Oversight Committee on the evaluation of these programs. If, by October 15, 2006, the Boards determine any or all of these programs have been successful, they shall jointly develop a prototype plan for similar programs that could be expanded across the State. This plan shall be included in their report to the Joint Legislative Education Oversight Committee that is due by October 15, 2007."

SECTION 7.33.(b)  It is the intent of the General Assembly that three cooperative innovative high school programs are established that emphasize the educational development of high school students in the areas of science and mathematics in a nonresidential setting.  One of these programs shall be located in the eastern region of the State, one shall be located in the central region of the State, and one shall be located in the western region of the State.  The State Board of Education shall begin planning for the design and implementation of these programs and shall report their plan to the Joint Legislative Education Oversight Committee and the Fiscal Research Division of the General Assembly by March 15, 2006.

The plan shall include, but not be limited to, the following aspects of the proposed programs:

(1)       Programmatic design including location, curriculum, student access, and calendar.

(2)       Projected costs of operation, including instructional, administrative, transportation, capital, and other costs.

(3)       Any plans for coordination with institutes of higher education.

(4)       Proposed implementation schedule.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FUNDS FOR EDUCATION OF STUDENTS AT ECKERD YOUTH ALTERNATIVES THERAPEUTIC CAMP

SECTION 7.35.  Of the funds appropriated for at-risk student services/alternative schools, the State Board shall transfer to the Department of Juvenile Justice and Delinquency Prevention the sum of six hundred thousand dollars ($600,000) for the 2005-2006 fiscal year and the sum of six hundred thousand dollars ($600,000) for the 2006-2007 fiscal year to provide for the education of North Carolina students referred by the public schools to Eckerd Youth Alternatives therapeutic camps.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

MINIMIZE TIME DEVOTED TO STANDARDIZED TESTS

SECTION 7.37.  G.S. 115C-174.12(a) reads as rewritten:

"(a)      The State Board of Education shall establish policies and guidelines necessary for minimizing the time students spend taking tests administered through State and local testing programs, for minimizing the frequency of field testing at any one school, and for otherwise carrying out the provisions of this Article. These policies and guidelines shall include the following:

(1)       Schools shall devote no more than two days of instructional time per year to the taking of practice tests that do not have the primary purpose of assessing current student learning;

(2)       Students in a school shall not be subject to field tests or national tests during the two-week period preceding the administration of end-of-grade tests, end-of-course tests, or the school's regularly scheduled final exams; and

(3)       No school shall participate in more than two field tests at any one grade level during a school year unless that school volunteers, through a vote of its school improvement team, to participate in an expanded number of field tests.

These policies shall reflect standard testing practices to insure reliability and validity of the sample testing. The results of the field tests shall be used in the final design of each test. The State Board of Education's policies regarding the testing of children with disabilities shall (i) provide broad accommodations and alternate methods of assessment that are consistent with a child's individualized education program and section 504 (29 U.S.C. 794) plans, (ii) prohibit the use of statewide tests as the sole determinant of decisions about a child's graduation or promotion, and (iii) provide parents with information about the Statewide Testing Program and options for students with disabilities. The State Board shall report its proposed policies and proposed changes in policies to the Joint Legislative Education Oversight Committee prior to adoption.

The State Board of Education may appoint an Advisory Council on Testing to assist in carrying out its responsibilities under this Article."

 

Requested by:            Representative McLawhorn

TEACHER WORKING CONDITIONS SURVEY

SECTION 7.40.(a)  Funds in the amount of two hundred fifteen thousand dollars ($215,000) for the 2005-2006 fiscal year and two hundred ninety thousand dollars ($290,000) for the 2006-2007 fiscal year are appropriated in section 2.1 of this act to administer the Governor's Teacher Working Conditions Survey Initiative. These funds shall be used by the State Board of Education, in collaboration with the North Carolina Professional Teaching Standards Commission to (i) administer the survey on a biennial basis, (ii) establish an advisory board to oversee implementation of recommendations from the survey, and (iii) support the NC Network in providing customized analysis to incorporate in school improvement plans.

SECTION 7.40.(b)  The State Board of Education may supplement these funds with gifts or other private funds donated for this purpose.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

PLAN AND FUNDING FOR A VIRTUAL HIGH SCHOOL

SECTION 7.41.(a)  The State Board of Education, the Board of Governors of The University of North Carolina, the Independent Colleges and Universities, and the State Board of Community Colleges shall develop E-learning standards and plans for infrastructures that provide virtual learning opportunities accessible to students and other citizens through all North Carolina schools, universities, and community colleges. In developing the plan for the public schools, the State Board of Education shall focus initially on high schools while also researching and developing, where appropriate, E-learning for middle schools, junior high schools, and elementary schools. E-learning programs shall support both teachers and students.

SECTION 7.41.(b)  As used in this section, "E-learning" is electronic learning that includes a wide set of applications and processes, such as Web-based learning, computer-based learning, virtual classrooms, and digital collaboration. It includes the delivery of content via Internet, intranet/extranet (LAN/WAN), audiotape, videotape, satellite broadcast, interactive television, and CD-ROM.

SECTION 7.41.(c)  It is the intent of the General Assembly to give public schools the highest priority in funding for and development of E-learning. Funding for E-learning should be a new appropriation and not come exclusively from existing funds.

SECTION 7.41.(d)  The State Board of Education shall use funds appropriated for a virtual high school to establish and implement a pilot virtual high school during the 2005-2006 school year and the 2006-2007 school year.

The State Board of Education shall include in the pilot program instruction on personal financial literacy. This instruction shall be designed to equip students with the knowledge and skills they need, before they become self-supporting, to make critical decisions regarding their personal finances. The components of instruction shall include, at a minimum, consumer financial education, personal finance, and personal credit.

SECTION 7.41.(e)  If the pilot program is successful, it is the intent of the General Assembly to provide funding to implement a virtual high school on a statewide basis for the 2006-2007 fiscal year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FEASIBILITY STUDY FOR DEVELOPING REGIONAL EDUCATION NETWORKS

SECTION 7.42.  The North Carolina Rural Economic Development Center and the e-NC Authority, in collaboration with interested providers of broadband services, representatives from local school administrative units, The University of North Carolina, private colleges, the State Board of Education, the State Chief Information Officer, and the Community College System shall perform a feasibility study on developing regional education networks that provide and sustain broadband service access to individual students and teachers in schools, community colleges, and universities.

The study shall include (i) an evaluation of existing technology and service applications such as the statewide infrastructure, the North Carolina Research and Education Network, and networks such as Winston-Net and (ii) an evaluation of newer technology such as wireless broadband access. It shall recommend ways to maximize the use of these existing resources to support growth in broadband service access to the State, including underserved regions.

The North Carolina Rural Economic Development Center and the e-NC Authority shall report the results of the study to the 2006 Regular Session of the 2005 General Assembly.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

assistance with SCHOOL TECHNOLOGY NEEDS

SECTION 7.43.(a)  G.S. 115C-102.6A(c) is amended by adding a new subdivision to read:

"(c)      Components of the State school technology plan shall include at least the following:

(17)     A baseline template for:

a.         Technology and service application infrastructure, including broadband connectivity, personnel recommendations, and other resources needed to operate effectively from the classroom desktop to local, regional, and State networks, and

b.         An evaluation component that provides for local school administrative unit accountability for maintaining quality upgradeable systems."

SECTION 7.43.(b)  No later than October 31, 2005, the Department of Public Instruction shall hold regional workshops for local school administrative units to provide guidance in developing local school system technology plans that meet the criteria established in the State school technology plan, including the components added under subsection (a) of this section.

SECTION 7.43.(c)  G.S. 115C-102.7 is amended by adding the following new subsection to read:

"(c)      The Department of Public Instruction shall randomly check local school system technology plans to ensure that local school administrative units are implementing their plans as approved. The Department shall report to the State Board of Education and the State Chief Information Officer on which local school administrative units are not complying with their plans. The report shall include the reasons these local school administrative units are out of compliance and a recommended plan of action to support each of these local school administrative units in carrying out their plans."

SECTION 7.43.(d)  The State Board of Education shall determine the total amount of funds needed for the recurring total cost of ownership to implement, maintain, and upgrade technology infrastructures and instructional technology as specified in the revised local school system technology plans. This shall include personnel costs for both technical and instructional needs so that a three- to five-year budget plan can be developed for the General Assembly.

SECTION 7.43.(e)  The State Board of Education shall also study and identify the types of resources needed to operate schools designed to meet the needs of twenty-first century learners.

The State Board shall report the results of this study to the 2006 Regular Session of the 2005 General Assembly.

SECTION 7.43.(f)  2IIn order to provide assistance to local school administrative units with E-rate applications, the Department of Public Instruction shall, within existing funds, ensure that a minimum of one full-time coordinator is assigned this responsibility. The Department shall notify local school administrative units about the person or office assigned the responsibility of providing assistance with E-rate applications.

The Department shall provide the State Board of Education with an annual report on E-rate, including funding, commitments, and enrollment by local school administrative units.

As used in this section, "E-rate" is the mechanism to provide discount rates to support universal telecommunications services for use by schools and libraries as provided in section 254 of the federal Telecommunications Act of 1996.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

SCHOOL EMPLOYEE SALARY STUDY

SECTION 7.47.  The Joint Legislative Education Oversight Committee shall study the current salary structure for teachers and other school employees.  In the course of the study, the Committee shall:

(1)       Develop a plan to get the State moving toward the national average in teacher salaries by 2008 and toward the top 10 states in the nation by 2010.

(2)       Consider strategies for maintaining the lead in teacher salaries in the Southeastern United States.

(3)       Consider the need to reduce the number of steps on the teacher salary schedule, increase the beginning teacher salary, and enable an individual to reach the maximum salary sooner.

(4)       Perform a market-sensitive analysis of the skills and knowledge needed to be a successful teacher to determine what it takes to make the schedule attractive and competitive.

(5)       Consider the placement of appropriate extraordinary increases on schedule for achievement of career status, teacher retention, and other purposes.

(6)       Determine the need to modify the masters schedule differential.

(7)       Determine the need to modify the alternative salary schedules to reward different levels of academic preparation and career accomplishments such as attainment of national certification.

(8)       Consider the appropriate relationship of the school counselor's and psychologist's schedules to the schedules for other members of the school-based staff.

(9)       Determine the need to modify the administrator salary schedule.

(10)     Consider how personal leave and other fringe benefits contribute to the compensation packages for employees.

(11)     Consider the need to modify pay scales for teacher assistants and other noncertified personnel.

(12)     Consider other matters the Committee deems appropriate.

The Committee shall report the results of its study to the 2006 Regular Session of the 2005 General Assembly.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

zero-based budget review of the Department of Public Instruction

SECTION 7.49.(a)  There is created the Legislative Study Commission on the Budget of the Department of Public Instruction.  The purpose of the Commission is to perform a zero-based budget review of the Department of Public Instruction.

SECTION 7.49.(b)  The Commission shall consist of five members of the House of Representatives appointed by the Speaker of the House of Representatives and five members of the Senate appointed by the President Pro Tempore of the Senate.

The Speaker of the House of Representatives shall designate one Representative as cochair, and the President Pro Tempore shall designate one Senator as cochair. Vacancies on the Commission shall be filled by the same appointing authority as made the initial appointment.

SECTION 7.49.(c)  In performing a zero-based budget review of the Department of Public Instruction, the Commission shall:

(1)       Consider the mission and goals of the Department, as set out in statutes and in the rules, policies, and practices of the Department;

(2)       Evaluate the mission and goals of the Department in view of the Leandro decision, the No Child Left Behind Act of 2001, the academic performance of students in the public schools, and the needs of the State and its citizens, and propose any necessary revisions;

(3)       Evaluate the efficiency and effectiveness of the Department of Public Instruction in furthering the missions and goals of the Department, including any proposed revisions. This evaluation shall include (i) the role of the Department of Public Instruction, its administrative structure, organization, and its statutory powers and duties; (ii) the role of the State Board of Education as the head of the Department of Public Instruction, its composition, organization, and constitutional and statutory powers and duties; and (iii) the role of the State Superintendent as secretary and chief administrative officer of the State Board, the State Superintendent's selection, and the State Superintendent's constitutional and statutory powers and duties;

(4)       Evaluate each program within the Department to determine (i) whether and to what extent it is required by State or federal law; (ii) what extent it achieves the mission and goals of the Department; and (iii) whether there are alternative ways to achieve the mission and goals of the Department, including proposed revisions, in a more efficient and effective manner;

(5)       Assess the activities performed in each program, the major benefits provided by the program, the current cost and staffing levels for the program, the rationale for the cost and staffing levels, and the administrative and other overhead costs of the program;

(6)       Determine the level of funding and staff necessary to accomplish the goals and missions of the Department, including proposed revisions, without regard to past levels of funding.

SECTION 7.49.(d)  The Commission, while in the discharge of its official duties, may exercise all powers provided for under G.S. 120-19 and G.S. 120-19.1 through G.S. 120-19.4. The Commission may meet at any time upon the joint call of the cochairs. The Commission may meet in the Legislative Building or the Legislative Office Building.

The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Commission in its work. The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the Commission, and the expenses relating to the clerical employees shall be borne by the Commission. The Commission may contract for professional, clerical, or consultant services as provided by G.S. 120-32.02. If the Commission hires a consultant, the consultant shall not be a State employee or a person currently under contract with the State to provide services.

All State departments and agencies and local governments and their subdivisions shall furnish the Commission with any information in their possession or available to them.

The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Commission in its work. The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the Commission, and the expenses relating to the clerical employees shall be borne by the Commission.

SECTION 7.49.(e)  The Commission shall report the results of its study and its recommendations to the 2006 Regular Session of the 2005 General Assembly upon its convening. The Commission shall terminate upon filing its final report or upon the convening of the 2006 Regular Session of the 2005 General Assembly, whichever is earlier.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

facilitate hiring of teachers

SECTION 7.50.  G.S. 115C-296 reads as rewritten:

" 115C-296.  Board sets certification Certification requirements.

(a)       State Board of Education Shall Certify Teachers. - The State Board of Education shall have entire control of certifying all applicants for teaching positions in all public elementary and high schools of North Carolina; and it Carolina, subject to laws enacted by the General Assembly. An applicant must meet the requirements for a highly qualified teacher under the No Child Left Behind Act of 2001, 20 U.S.C. 6301, et seq., to be certified in North Carolina. The State Board shall prescribe the rules and regulations for the renewal and extension of all certificates and shall determine and fix the salary for each grade and type of certificate which  that it authorizes.

The State Board of Education may require an applicant for an initial bachelors degree certificate or graduate degree certificate to demonstrate the applicant's academic and professional preparation by achieving a prescribed minimum score on a standard examination appropriate and adequate for that purpose. The

(a1)     Certification of Beginning In-State and Out-of-State Teachers. - The certification requirements for an initial bachelors degree certificate or masters degree certificate for a beginning teacher who has completed an approved teacher education program and who is an in-State applicant or an applicant from another state shall include the following:

(1)       An applicant for a certificate as an elementary education teacher or a special education teacher shall demonstrate academic and professional preparation by either (i) achieving a prescribed minimum score on a standard examination appropriate and adequate for that purpose or (ii) otherwise meeting the requirements for a highly qualified teacher under the No Child Left Behind Act of 2001.

(2)       An applicant for a certificate in all other areas of certification shall demonstrate academic and professional preparation by either (i) achieving a prescribed minimum score on a standard examination appropriate and adequate for that purpose, (ii) completing an appropriate academic major, graduate degree, or comparable coursework, or (iii) otherwise meeting the requirements for a highly qualified teacher under the No Child Left Behind Act of 2001.

(a2)     Certification of Teachers From Other States With Less Than Three Years of Experience. - A teacher from another state who (i) has less than three years of experience as a full-time classroom teacher, (ii) is fully certified and highly qualified, as provided in the No Child Left Behind Act of 2001 in that other state, and (iii) is employed as a teacher by a local school administrative unit in North Carolina, is deemed to have satisfied the academic and professional preparation required to receive initial certification in North Carolina, except as otherwise provided in the No Child Left Behind Act of 2001. The initial certification shall be granted for the period of time necessary for the teacher to acquire three years of full-time teaching experience in North Carolina and the other state combined, whichever is longer.

(a3)     Certification of In-State and Out-of-State Teachers With at Least Three Years of Experience. - A teacher from North Carolina or another state who (i) has three or more years of experience as a full-time teacher, (ii) is fully certified and highly qualified as provided in the No Child Left Behind Act of 2001 in North Carolina or in that other state, and (iii) is employed as a teacher by a local school administrative unit in North Carolina, is deemed to have satisfied the academic and professional preparation required to receive continuing certification in North Carolina, except as otherwise provided in the No Child Left Behind Act of 2001.

(a4)     Certification of Visiting International Faculty. - The State Board of Education shall issue an international faculty certificate to an individual on a cultural exchange visa who (i) has a university degree and a teaching certificate in his or her country, (ii) is qualified in his or her home country to teach the subjects he or she will teach, (iii) speaks English proficiently, and (iv) meets the definition of highly qualified under the No Child Left Behind Act of 2001. The certificate shall be granted for the period of time during which the teacher holds a cultural exchange visa, not to exceed three consecutive years.

An individual on a cultural exchange visa shall not be eligible to receive any other teacher certificate.

(a5)     Testing Requirements. - An applicant for teacher certification shall not be required to take and pass a standard examination except as required by subsection (a1) of this section or the No Child Left Behind Act of 2001.

The State Board of Education shall permit an applicant to fulfill any such testing requirement before or during the applicant's second year of teaching provided the applicant took the examination at least once during the first year of teaching. The State Board of Education shall make any required standard initial certification exam sufficiently rigorous and raise the prescribed minimum score as necessary to ensure that each applicant has adequate academic and professional preparation to teach.

(a1)     The State Board shall adopt policies that establish the minimum scores for any required standard examinations and other measures necessary to assess the qualifications of professional personnel as required under subsection (a)(a1) of this section.section or the No Child Left Behind Act of 2001. For purposes of this subsection, the State Board shall not be subject to Article 2A of Chapter 150B of the General Statutes. At least 30 days prior to changing any policy adopted under this subsection, the State Board shall provide written notice to all North Carolina schools of education and to all local boards of education. The written notice shall include the proposed revised policy.

(a2) (a6)   Fees for Teacher Certification. - The State Board of Education shall impose the following schedule of fees for teacher certification and administrative changes:

(1)       Application for demographic or administrative changes to a certificate, $30.00.

(2)       Application for a duplicate certificate or for copies of documents in the certification files, $30.00.

(3)       Application for a renewal, extension, addition, upgrade, and variation to a certificate, $55.00.

(4)       Initial application for New, In-State Approved Program Graduate, $55.00.

(5)       Initial application for Out of State certificate, certificate for a teacher from another state, $85.00.

(6)       All other applications, $85.00.

The applicant must pay the fee at the time the application is submitted.

(b)       Standards for Teacher and School Administrator Education Programs, Entry Into Teacher Education Programs, and Continuing Certification. - 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 certified in North Carolina. To the end that teacher preparation programs are upgraded to reflect a more rigorous course of study, the State Board of Education, as lead agency in coordination and cooperation with the University Board of Governors, the Board of Community Colleges and such other public and private agencies as are necessary, shall continue to refine the several certification 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. The certification program shall provide for initial certification after completion of preservice training, continuing certification after three years of teaching experience, and certificate renewal every five years thereafter, until the retirement of the teacher. The last certificate renewal received prior to retirement shall remain in effect for five years after retirement.

The State Board of Education, as lead agency in coordination with the Board of Governors of The University of North Carolina and any other public and private agencies as necessary, shall continue to raise standards for entry into teacher education programs.

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 certification. The new requirements shall reflect more rigorous standards for continuing certification and to the extent possible shall be aligned with quality professional development programs that reflect State priorities for improving student achievement.

The State Board of Education, in consultation with local boards of education and the Board of Governors of The University of North Carolina, shall reevaluate and enhance the requirements for renewal of teacher certificates. The State Board shall consider modifications in the certificate renewal achievement and to make it a mechanism for teachers to renew continually their knowledge and professional skills. The State Board shall adopt new standards for the renewal of teacher certificates by May 15, 1998.

The standards for approval of institutions of teacher education shall require that teacher education programs for students who do not major in special education include demonstrated competencies in the identification and education of children with learning disabilities. The State Board of Education shall incorporate the criteria developed in accordance with G.S. 116-74.21 for assessing proposals under the School Administrator Training Program into its school administrator program approval standards.

All North Carolina institutions of higher education that offer teacher education programs, masters degree programs in education, or masters degree programs in school administration shall provide performance reports to the State Board of Education. The performance reports shall follow a common format, shall be submitted according to a plan developed by the State Board, and shall include the information required under the plan developed by the State Board.

(b1)     Performance Reports for Teacher and School Administrator Education Programs. - The State Board of Education shall develop a plan to provide a focused review of teacher education programs and the current process of accrediting these programs in order to ensure that the programs produce graduates that are well prepared to teach. The plan shall include the development and implementation of a school of education performance report for each teacher education program in North Carolina. The performance report shall include at least the following elements: (i) quality of students entering the schools of education, including the average grade point average and average score on preprofessional skills tests that assess reading, writing, math and other competencies; (ii) graduation rates; (iii) time-to-graduation rates; (iv) average scores of graduates on professional and content area examination for the purpose of certification; (v) percentage of graduates receiving initial certification; (vi) percentage of graduates hired as teachers; (vii) percentage of graduates remaining in teaching for four years; (viii) graduate satisfaction based on a common survey; and (ix) employer satisfaction based on a common survey. The performance reports shall follow a common format. The performance reports shall be submitted annually. The State Board of Education shall develop and implement a plan to be implemented beginning in the 1998-99 school year to reward and sanction approved teacher education programs and masters of education programs and to revoke approval of those programs based on the performance reports and other criteria established by the State Board of Education.

The State Board also shall develop and implement a plan for annual performance reports for all masters degree programs in education and school administration in North Carolina. To the extent it is appropriated, the performance report shall include similar indicators to those developed for the performance report for teacher education programs. The performance reports shall follow a common format.

Both plans for performance reports also shall include a method to provide the annual performance reports to the Board of Governors of The University of North Carolina, the State Board of Education, and the boards of trustees of the independent colleges. The State Board of Education shall review the schools of education performance reports and the performance reports for masters degree programs in education and school administration each year the performance reports are submitted. The State Board shall submit the performance report for the 1999-2000 school year to the Joint Legislative Education Oversight Committee by December 15, 2000. Subsequent performance reports shall be submitted to the Joint Legislative Education Oversight Committee on an annual basis by October 1.

(c)       Lateral Entry. - 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. To this end, before the 1985-86 school year begins, the State Board of Education shall develop criteria and procedures to accomplish the employment of such individuals as classroom teachers. Regardless of credentials or competence, no one shall begin teaching above the middle level of differentiation. Skilled individuals who choose to enter the profession of teaching laterally may be granted a provisional an alternative teaching certificate for no more than five three years prior to completing the requirements for lateral entry and shall be required to obtain certification before contracting for a sixth fourth year of service with any local administrative unit in this State.

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

(d)       Suspension and Revocation of Certificates. - The State Board shall adopt rules to establish the reasons and procedures for the suspension and revocation of certificates. The State Board shall revoke the certificate of a teacher or school administrator if the State Board receives notification from a local board or the Secretary of Health and Human Services that a teacher or school administrator has received an unsatisfactory or below standard rating under G.S. 115C-333(d). In addition, the State Board may revoke or refuse to renew a teacher's certificate when:

(1)       The Board identifies the school in which the teacher is employed as low-performing under G.S. 115C-105.37 or G.S. 143B-146.5; and

(2)       The State Board shall automatically revoke the certificate of a teacher or school administrator without the right to a hearing upon receiving verification of the identity of the teacher or school administrator together with a certified copy of a criminal record showing that the teacher or school administrator has entered a plea of guilty or nolo contendere to or has been finally convicted of any of the following crimes: Murder in the first or second degree, G.S. 14-17; Conspiracy or solicitation to commit murder, G.S. 14-18.1; Rape or sexual offense as defined in Article 7A of Chapter 14 of the General Statutes. Felonious assault with deadly weapon with intent to kill or inflicting serious injury, G.S. 14-32; Kidnapping, G.S. 14-39; Abduction of children, G.S. 14-41; Crime against nature, G.S. 14-177; Incest, G.S. 14-178 or G.S. 14-179; Employing or permitting minor to assist in offense against public morality and decency, G.S. 14-190.6; Dissemination to minors under the age of 16 years, G.S. 14-190.7; Dissemination to minors under the age of 13 years, G.S. 14-190.8; Displaying material harmful to minors, G.S. 14-190.14; Disseminating harmful material to minors, G.S. 14-190.15; First degree sexual exploitation of a minor, G.S. 14-190.16; Second degree sexual exploitation of a minor, G.S. 14-190.17; Third degree sexual exploitation of a minor, G.S. 14-190.17A; Promoting prostitution of a minor, G.S. 14-190.18; Participating in prostitution of a minor, G.S. 14-190.19; Taking indecent liberties with children, G.S. 14-202.1; Solicitation of child by computer to commit an unlawful sex act, G.S. 14-202.3; Taking indecent liberties with a student, G.S. 14-202.4; Prostitution, G.S. 14-204; and child abuse under G.S. 14-318.4. The Board shall mail notice of its intent to act pursuant to this subdivision by certified mail, return receipt requested, directed to the teacher or school administrator at their last known address. The notice shall inform the teacher or school administrator that it will revoke the person's certificate unless the teacher or school administrator notifies the Board in writing within 10 days after receipt of the notice that the defendant identified in the criminal record is not the same person as the teacher or school administrator. If the teacher or school administrator provides this written notice to the Board, the Board shall not revoke the certificate unless it can establish as a fact that the defendant and the teacher or school administrator are the same person.

(3)       In addition, the State Board may revoke or refuse to renew a teacher's certificate when:

a.         The Board identifies the school in which the teacher is employed as low-performing under G.S. 115C-105.37 or G.S. 143B-146.5; and

b.         The assistance team assigned to that school makes the recommendation to revoke or refuse to renew the teacher's certificate for one or more reasons established by the State Board in its rules for certificate suspension or revocation.

The State Board may issue subpoenas for the purpose of obtaining documents or the testimony of witnesses in connection with proceedings to suspend or revoke certificates. In addition, the Board shall have the authority to contract with individuals who are qualified to conduct investigations in order to obtain all information needed to assist the Board in the proper disposition of allegations of misconduct by certificated persons.

(e)       Mentor Program. - The State Board of Education shall develop a mentor program to provide ongoing support for teachers entering the profession. In developing the mentor program, the State Board shall conduct a comprehensive study of the needs of new teachers and how those needs can be met through an orientation and mentor support program. For the purpose of helping local boards to support new teachers, the State Board shall develop and distribute guidelines which address optimum teaching load, extracurricular duties, student assignment, and other working condition considerations. These guidelines shall provide that initially certified teachers not be assigned extracurricular activities unless they request the assignments in writing and that other noninstructional duties of these teachers be minimized. The State Board shall develop and coordinate a mentor teacher training program. The State Board shall develop criteria for selecting excellent, experienced, and qualified teachers to be participants in the mentor teacher training program.

(f)        Masters/Advanced Competencies Certificate. - The State Board of Education, after consultation with the Board of Governors of The University of North Carolina, shall develop a new category of teacher certificate known as the "Masters/Advanced Competencies" certificate. To receive this certificate, an applicant shall successfully complete a masters degree program that includes rigorous academic preparation in the subject area which the applicant will teach and in the skills and knowledge expected of a master teacher or the applicant shall demonstrate to the satisfaction of the State Board that the candidate has acquired the skills and knowledge expected of a master teacher.

Persons who qualify for a "G" certificate prior to September 1, 2000, shall be awarded a "Masters/Advanced Competencies" certificate without meeting additional requirements. On and after September 1, 2000, no additional "G" certificates shall be awarded.

(g)       Provisional Licenses, Temporary Permits, and Emergency Permits. - Notwithstanding any other provision of this section, the State Board of Education shall continue to issue provisional licenses, temporary permits, and emergency permits that are valid through June 30, 2006, on the same basis as they were issued prior to July 1, 2005."

SECTION 7.50.(b)  This section is effective when it becomes law and applies to all persons initially employed as teachers by a local school administrative unit in North Carolina beginning with the 2005-2006 school year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

redirect refundable sales to State Public School Fund

SECTION 7.51.(a)  G.S. 105-164.14(c)(2b) and (2c) are repealed.

SECTION 7.51.(b)  Part 8 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:

" 105-164.44H.  Transfer to State Public School Fund.

Each fiscal year, the Secretary of Revenue shall transfer at the end of each quarter from the State sales and use tax net collections received by the Department of Revenue under Article 5 of Chapter 105 of the General Statutes to the State Treasurer for the State Public School Fund, one-fourth of the amount transferred the preceding fiscal year plus or minus the percentage of that amount by which the total collection of State sales and use taxes increased or decreased during the preceding fiscal year."

SECTION 7.51.(c)  Subsection (b) of this section becomes effective July 1, 2006. Notwithstanding the provisions of G.S. 105-164.44H, for the 2006-2007 fiscal year, the amount transferred to the State Public School Fund each quarter shall equal one-fourth of the amount refunded under G.S. 105-164.4(c)(2b) and (2c) during the 2005-2006 fiscal year plus or minus the percentage of that amount by which the total collection of State sales and use tax increased or decreased during the preceding fiscal year. The remainder of this section becomes effective July 1, 2005, and applies to sales made on or after that date. 

 

Requested by:            Representatives Jeffus, Tolson, Yongue

SMALL SPECIALTY HIGH SCHOOLS PILOT PROGRAM

SECTION 7.52.(a) Funds are appropriated in this act for a pilot program to create 11 small specialty high schools within existing schools. The purpose of the program is to improve graduation rates and to achieve higher student performance as measured by standard tests and postgraduate gainful employment or admission into an institution of higher education. The State Board of Education shall work closely with the Education Cabinet and the New Schools Project in administering the program.

SECTION 7.52.(b) The State Board of Education shall conduct an evaluation of this program. The evaluation shall include measures as identified in G.S. 115C-238.55. It shall also include: (i) an accounting of how funds and personnel resources were utilized and their impact on student achievement, retention, and employability; and (ii) recommendations for improvement of the program. The State Board of Education shall report the results of this evaluation to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by November 15, 2006.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Ensure DHHS Schools Receive Federal Funds

SECTION 7.54.(a)  It is the intent of the General Assembly that the schools operated by the Department of Health and Human Services participate in federal funding to the same degree as other public schools in the State. The Department of Public Instruction shall ensure that the Department of Health and Human Services schools receive a proportionate share of federal funds for public schools.

SECTION 7.54.(b)  G.S. 115C-66 reads as rewritten:

" 115C-66.  Administrative units classified.

Each county of the State shall be classified as a county school administrative unit, the schools of which, except in city administrative units, shall be under the general supervision and control of a county board of education with a county superintendent as the administrative officer.

A city school administrative unit shall be classified as an area within a county or adjacent parts of two or more contiguous counties which has been or may be approved by the State Board of Education as such a unit for purposes of school administration. The general administration and supervision of a city administrative unit shall be under the control of a board of education with a city superintendent as the administrative officer.

All local school administrative units, whether city or county, shall be dealt with by the State school authorities in all matters of school administration in the same way.

For purposes of eligibility for federal grant funds, the Department of Health and Human Services is hereby classified as a public authority, which is the school administrative agency for the schools that it operates, and shall be considered as such by the State school authorities in the administration and distribution of federal grant funds."

SECTION 7.54.(c)  The Department of Health and Human Services shall report on the use, type, and amount of funds received from federal funding and other Department of Public Instruction funding under this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division by January 31, 2006.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

ESTABLISH THE office of SCHOOL READINESS IN THE DEPARTMENT OF public instruction

SECTION 7.55.(a)  An Office of School Readiness shall be established in the Department of Public Instruction to ensure school readiness for North Carolina's children through increased coordination and effectiveness of the State's public prekindergarten programs and through improved transitions for at-risk children into kindergarten.  The Office of School Readiness shall have oversight of public prekindergarten programs serving three- and four-year-olds, which includes the More at Four prekindergarten programs, exceptional children's preschool programs, Head Start programs, and other public school prekindergarten programs funded through State and federal sources.  The position of Executive Director for the More at Four prekindergarten program shall become an Associate Superintendent in the Department of Public Instruction and will oversee and direct the Office of School Readiness.  This position shall report to the Deputy State Superintendent in the Department of Public Instruction.  The Office of School Readiness shall coordinate closely with the Division of Child Development in the Department of Health and Human Services on standards, licensing, training, and other issues related to school readiness programs.  The Office of School Readiness shall also work closely with the North Carolina Partnership for Children, Inc., in coordinating programs at the local level and on other issues related to prekindergarten education.

SECTION 7.55.(b)  The More at Four prekindergarten program shall be transferred from the Office of the Governor to the Department of Public Instruction and will become part of the Office of School Readiness.  This transfer shall have all the elements of a Type I transfer, as defined in G.S. 143A-6.

SECTION 7.55.(c)  The Head Start Collaboration Office shall be transferred from the Department of Health and Human Services to the Office of School Readiness.

SECTION 7.55.(d)  The More at Four Task Force shall be reconstituted and renamed the North Carolina School Readiness Task Force. The Superintendent of Public Instruction and the Secretary of the Department of Health and Human Services shall appoint the members of the North Carolina School Readiness Task Force from representatives of publicly funded prekindergarten programs and services, including the More at Four prekindergarten program, preschool programs in the public schools, Head Start, the North Carolina Partnership for the Children, Inc., as well as other stakeholders, including Early Intervention and the Division of Child Development.

SECTION 7.55.(e)  The State Board of Education, in consultation with the Office of the Governor and the Department of Health and Human Services, shall develop an organizational plan for the Office of School Readiness.  The plan shall include the staffing structure and budget of the Office of School Readiness, including the role in the Office of School Readiness of current Department of Public Instruction positions funded by Title I and IDEA Part B federal programs.  The State Board of Education shall submit a progress report by January 15, 2006, and a final report by April 1, 2006, to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Joint Legislative Education Oversight Committee.

SECTION 7.55.(f)  This section becomes effective July 1, 2006, for organizational and budgetary changes.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Purchases for the student transportation system

SECTION 7.56.  G.S. 115C-522(a) reads as rewritten:

"(a)      It shall be the duty of local boards of education to purchase or exchange all supplies, equipment, and materials, and these purchases shall be made in accordance with Article 8 of Chapter 143 of the General Statutes. These purchases may be made from contracts made by the Department of Administration. Title to instructional supplies, office supplies, fuel and janitorial supplies, enumerated in the current expense fund budget and purchased out of State funds, shall be taken in the name of the local board of education which shall be responsible for the custody and replacement: Provided, that no contracts shall be made by any local school administrative unit for purchases unless provision has been made in the budget of the unit to pay for the purchases, unless surplus funds are on hand to pay for the purchases, or unless the contracts are made pursuant to G.S. 115C-47(28) and G.S. 115C-528 and adequate funds are available to pay in the current fiscal year the sums obligated for the current fiscal year.

Tires for the student transportation system shall be purchased from the statewide term contract. The State Board of Education shall adopt rules regarding equipment standards for other supplies, equipment, and materials related to student transportation. The transportation.

The State Board may adopt guidelines for any commodity that needs safety features. If a commodity that needs safety features is available on statewide term contract, any guidelines adopted by the State Board must at a minimum meet the safety standards of the statewide term contract. Compliance with Article 8 of Chapter 143 of the General Statutes is not mandatory for the purchase of published books, manuscripts, maps, pamphlets, and periodicals.

(1)       Where competition is available, local school administrative units may utilize the:

a.         E-Quote service of the NC E-Procurement system as one means of solicitation in seeking informal bids for purchases subject to the bidding requirements of G.S. 143-131; and

b.         Division of Purchase and Contract's electronic Interactive Purchasing System as one means of advertising formal bids on purchases subject to the bidding requirements of G.S. 143-129 and applicable rules regarding advertising. This sub-subdivision does not prohibit a local school administrative unit from using other methods of advertising.

(2)       In order to provide an efficient transition of purchasing procedures, the Secretary of the Department of Administration and the local school administrative units shall establish a local school administrative unit purchasing user group. The user group shall be comprised of a proportionate number of representatives from the Department of Administration and local school administrative unit purchasing and finance officers. The user group shall examine any issues that may arise between the Department of Administration and local school administrative units, including the new relationship between the Department and the local school administrative units, the appropriate exchange of information, the continued efficient use of E-Procurement, appropriate bid procedures, and any other technical assistance that may be necessary for the purchase of supplies and materials."

 

Requested by:            Representative Dickson

study of school transportation

SECTION 7.57.  Of the funds appropriated for Low-Wealth Supplemental Funding for the 2005-2006 fiscal year, the Department of Public Instruction shall use up to two hundred thousand dollars ($200,000) for a study of the current allotment formula for school transportation. The study shall be conducted by an independent consultant.

In the course of the study, the consultant shall consider whether (i) the current formula sufficiently encourages the efficient and effective use of school transportation funds by urban and rural school systems, (ii) the formula is adequately and equitably meeting the needs of school systems, and (iii) the formula is appropriate in light of the Leandro litigation. The consultant shall also propose options for reducing the severe and growing disparity in funding that exists under the formula among local school administrative units.

The consultant shall report the results of its study to the State Board of Education by December 1, 2005. The State Board of Education shall consider the consultant's report and shall report its recommendations to the Joint Legislative Education Oversight Committee by March 15, 2006.

 

Requested by:            Representative Hilton

AUTHORIZATION FOR ADDITIONAL CHARTER SCHOOLS

SECTION 7.58.(a)  G.S. 115C-238.29D(b) reads as rewritten:

"(b)      The State Board shall authorize no more than five charter schools per year in one local school administrative unit. The State Board shall authorize no more than 100 110 charter schools statewide. statewide for the 2005-2006 fiscal year, 120 for the 2006-2007 fiscal year, and 130 for the 2007-2008 and subsequent fiscal years. If more than five charter schools in one local school administrative unit or more than 100 the maximum number of schools permitted statewide meet the standards for final approval, the State Board shall give priority to applications that are most likely to further State education policies and to strengthen the educational program offered in the local school administrative units in which they are located."

SECTION 7.58.(b)  This section shall become effective only if North Carolina receives a federal grant under the Public Charter Schools Program for start-up funds for charter schools for the 2005-2006 fiscal year.

 

Requested by:            Representative Daughtry

schools must spend up to 60% of expansion funds in the classroom

SECTION 7.59.  It is the intent of the General Assembly that each local administrative unit spends at least sixty percent (60%) of the State expansion budget funding it receives in the classroom.  Expenditures in the classroom shall include expenditures for instructional personnel and for supplies, equipment, textbooks, and materials in the classroom.

The State Board of Education shall monitor these expenditures and report to the Joint Legislative Education Oversight Committee prior to September 15, 2006, and September 15, 2007, on local school administrative units that do not comply with this intent.

 

Requested by:            Representatives Crawford, Yongue

TEACH FOR AMERICA

SECTION 7.60.  Funds in the amount of two hundred thousand dollars ($200,000) for the 2005-2006 fiscal year and two hundred thousand dollars ($200,000) for the 2006-2007 fiscal year are appropriated in section 2.1 of this act to recruit additional teachers through the Teach for America Program.

 

PART VIII. COMMUNITY COLLEGES

 

Requested by:            Representatives Jeffus, Tolson, Yongue

USE OF FUNDS FOR THE COLLEGE INFORMATION SYSTEM PROJECT

SECTION 8.1.(a)  Funds appropriated to the Community Colleges System Office for the College Information System Project shall not revert at the end of the 2004-2005 fiscal year but shall remain available until expended.

SECTION 8.1.(b)  The Community Colleges System Office shall report on a quarterly basis to the Joint Legislative Education Oversight Committee on the implementation of the College Information System Project.

SECTION 8.1.(c)  Subsection (a) of this section becomes effective June 30, 2005.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

CARRYFORWARD FOR EQUIPMENT

SECTION 8.2.(a)  Subject to the approval of the Office of State Budget and Management and cash availability, the North Carolina Community Colleges System Office may carry-forward an amount not to exceed fifteen million dollars ($15,000,000) of the operating funds that were not reverted in fiscal year 2004-2005 to be reallocated to the State Board of Community Colleges' Equipment Reserve Fund.  These funds shall be distributed to colleges consistent with G.S. 115D-31.

SECTION 8.2.(b)  This section becomes effective June 30, 2005.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

SALARIES OF COMMUNITY COLLEGE FACULTY AND PROFESSIONAL STAFF

SECTION 8.3.(a)  The minimum salaries for community college faculty shall be based on the following education levels:

(1)       Vocational Diploma/Certificate or Less. - This education level includes faculty members who are high school graduates, have vocational diplomas, or have completed one year of college.

(2)       Associate Degree or Equivalent. - This education level includes faculty members who have an associate degree or have completed two or more years of college but have no degree.

(3)       Bachelors Degree.

(4)       Masters Degree or Education Specialist.

(5)       Doctoral Degree.

SECTION 8.3.(b)  For the 2005-2006 school year, the minimum salaries for nine-month, full-time, curriculum community college faculty shall be as follows:

                                             Education Level                                           Minimum Salary

                                                                                                                       2005-2006

Vocational Diploma/Certificate or Less                              $29,795

Associate Degree or Equivalent                                            $30,246

Bachelors Degree                                                                   $32,204

Masters Degree or Education Specialist                              $33,940

Doctoral Degree                                                                     $36,443

No full-time faculty member shall earn less than the minimum salary for his or her education level.

The pro rata hourly rate of the minimum salary for each education level shall be used to determine the minimum salary for part-time faculty members.

SECTION 8.3.(c)

(1)       It is the intent of the General Assembly to encourage community colleges to make faculty salaries a priority and to reward colleges that have taken steps to achieve the national average, therefore:

a.         If the average faculty salary at a community college is one hundred percent (100%) or more of the national average community college faculty salary, the college may transfer up to eight percent (8%) of the State funds allocated to it for faculty salaries.

b.         If the average faculty salary at a community college is at least ninety-five percent (95%) but less than one hundred percent (100%) of the national average community college faculty salary, the college may transfer up to six percent (6%) of the State funds allocated to it for faculty salaries.

c.         If the average faculty salary at a community college is at least ninety percent (90%) but less than ninety-five percent (95%) of the national average community college faculty salary, the college may transfer up to five percent (5%) of the State funds allocated to it for faculty salaries.

d.         If the average faculty salary at a community college is at least eighty-five percent (85%) but less than ninety percent (90%) of the national average community college faculty salary, the college may transfer up to three percent (3%) of the State funds allocated to it for faculty salaries.

e.         If the average faculty salary at a community college is eighty-five percent (85%) or less of the national average community college faculty salary, the college may transfer up to two percent (2%) of the State funds allocated to it for faculty salaries.

Except as provided by subdivision (2) of this subsection, a community college shall not transfer a greater percentage of the State funds allocated to it for faculty salaries than is authorized by this subsection.

(2)       With the approval of the State Board of Community Colleges, a community college at which the average faculty salary is eighty-five percent (85%) or less of the national average may transfer a greater percentage of the State funds allocated to it for faculty salaries than is authorized by sub-subdivision e. of subdivision (1) of this subsection. The State Board shall approve the transfer only for purposes that directly affect student services.

(3)       A local community college may use all State funds allocated to it except for Literacy Funds and Funds for New and Expanding Industry Training to increase faculty salaries.

SECTION 8.3.(d)  As used in this section:

(1)       "Average faculty salary at a community college" means the total nine-month salary from all sources of all nine-month, full-time, curriculum faculty at the college, as determined by the North Carolina Community College System on October 1 of each year.

(2)       "National average community college faculty salary" means the nine-month, full-time, curriculum salary average, as published by the Integrated Postsecondary Education Data System (IPEDS), for the most recent year for which data are available.

SECTION 8.3.(e)  The State Board of Community Colleges shall adopt rules to implement the provisions of this section.

SECTION 8.3.(f)  The State Board of Community Colleges shall report to the appropriations subcommittees on education, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the Fiscal Research Division, and the Office of State Budget and Management by December 1, 2005, and every year thereafter through December 1, 2009, on the implementation of this section.

SECTION 8.3.(g)  Funds appropriated in this act for salary increases shall be used to increase faculty and professional staff salaries by an average of two percent (2%). These increases are in addition to other salary increases provided for in this act and shall be calculated on the average salaries prior to the issuance of the compensation increase. Colleges may provide additional increases from funds available.

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

WORKFORCE DEVELOPMENT PROGRAMS

SECTION 8.4.(a)  Article 1 of Chapter 115D of the General Statutes is amended by adding a new G.S. 115D-5.1 to be entitled "Workforce Development Programs"; G.S. 115D-5(d) is recodified as G.S. 115D-5.1(a); G.S. 115D-5(k) is recodified as G.S. 115D-5.1(b); and G.S. 115D-5(i) is recodified as G.S. 115D-5.1(c).

SECTION 8.4.(b)  G.S. 115D-5.1, as enacted by subsection (a) of this section, reads as rewritten:

" 115D-5.1.  Workforce Development Programs.

(a)       Community colleges shall assist in the preemployment and in-service training of employees in industry, business, agriculture, health occupation and governmental agencies. Such training shall include instruction on worker safety and health standards and practices applicable to the field of employment. The State Board of Community Colleges shall make appropriate regulations including the establishment of maximum hours of instruction which may be offered at State expense in each in-plant training program. No instructor or other employee of a community college shall engage in the normal management, supervisory and operational functions of the establishment in which the instruction is offered during the hours in which the instructor or other employee is employed for instructional or educational purposes.

(b)       The North Carolina Community College System's New and Expanding Industry Training (NEIT) Program Guidelines, which were adopted by the State Board of Community Colleges on April 18, 1997, apply to all funds appropriated for the Program after June 30, 1997. A project approved as an exception under these Guidelines, or these Guidelines as modified by the State Board of Community Colleges, shall be approved for one year only.

(c)       The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on September 1 of each year on expenditures for the New and Expanding Industry Training Program each fiscal year. The report shall include, for each company or individual that receives funds for the New and Expanding Industry Training Program:

(1)       The total amount of funds received by the company or individual;

(2)       The amount of funds per trainee received by the company or individual;

(3)       The amount of funds received per trainee by the community college training the trainee;

(4)       The number of trainees trained by company and by community college; and

(5)       The number of years the companies or individuals have been funded.

(d)       Funds available to the New and Expanding Industry Training Program shall not revert at the end of a fiscal year but shall remain available until expended.

(e)       There is created within the North Carolina Community College System the Customized Industry Training (CIT) Program. The CIT Program shall offer programs and training services as new options for assisting existing business and industry to remain productive, profitable, and within the State. Before a business or industry qualifies to receive assistance under the CIT Program, the President of the North Carolina Community College System shall determine that:

(1)       The business is making an appreciable capital investment;

(2)       The business is deploying new technology; and

(3)       The skills of the workers will be enhanced by the assistance.

The State Board shall report on an annual basis to the Joint Legislative Education Oversight Committee on:

(1)       The total amount of funds received by a company under the CIT Program;

(2)       The amount of funds per trainee received by that company;

(3)       The amount of funds received per trainee by the community college delivering the training;

(4)       The number of trainees trained by the company and community college; and

(5)       The number of years that company has been funded.

The State Board shall adopt rules and policies to implement this section."

SECTION 8.4.(c)  Notwithstanding any other provision of law, the State Board of Community Colleges may use funds appropriated to it for the New and Expanding Industry Training Program to operate programs under the Customized Industry Training Program.

SECTION 8.4.(d)  G.S. 115D-5.1(d), as enacted by this section, becomes effective June 30, 2005.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

REPORT ON THE ADEQUACY OF MULTICAMPUS FUNDS

SECTION 8.5.  The General Assembly finds that additional data are needed to determine the adequacy of multicampus and off-campus center funds; therefore, multicampus colleges and colleges with off-campus centers shall report annually, beginning September 1, 2005, to the Community Colleges System Office on all expenditures by line item of funds used to support their multicampuses and off-campus centers.  The Community Colleges System Office shall report on these expenditures to the Education Appropriation Subcommittees of the House of Representatives and the Senate, the Office of State Budget and Management, and the Fiscal Research Division by October 1 of each year.

Notwithstanding any other provision of law, funds appropriated to the Community Colleges System Office for multicampus colleges or off-campus centers shall be used only for the administration of the multicampus college or off-campus center for which the funds were allotted. These funds shall not be transferred to any other campus or center, or used for any other purpose.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

EDUCATION PROGRAM AUDITING FUNCTION

SECTION 8.6.  G.S. 115D-5(m) reads as rewritten:

"(m)     The State Board of Community Colleges shall require auditors of community college programs to use a statistically valid sample size in performing program audits of community colleges. The State Board of Community Colleges shall maintain an education program auditing function that conducts an annual audit of each community college operating under the provisions of this Chapter. The purpose of the annual audit shall be to ensure that college programs and related fiscal operations comply with State law, State regulations, State Board policies, and System Office guidance. The State Board of Community Colleges shall require auditors of community college programs to use a statistically valid sample size in performing program audits of community colleges. All education program audit findings 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 shall assess a twenty-five percent (25%) fiscal penalty in addition to the audit exception on all audits of both dollars and student membership hours excepted when the audit exceptions result from nonprocessing errors."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

FERRY BOAT OPERATOR TRAINING FEASIBILITY STUDY

SECTION 8.7.(a)  The State Board of Community Colleges, in consultation with the Ferry Division of the Department of Transportation, shall study the need for training for ferry boat operators. In conducting the study, the State Board shall consider the following:

(1)       Types of training needed and whether it is feasible for the community colleges to provide this training.

(2)       Estimated number of students.

(3)       Estimated employment opportunities for the students.

(4)       Start-up costs for the program and resources for those costs.

(5)       Location of the training.

SECTION 8.7.(b)  The State Board shall report to the Joint Legislative Education Oversight Committee and the Joint Legislative Transportation Oversight Committee on its findings and recommendations no later than December 1, 2005.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

EXTEND THE SUNSET ON TRAINING AND REEMPLOYMENT CONTRIBUTIONS MADE BY EMPLOYERS

SECTION 8.8.(a)  Section 8 of S.L. 1999-321, as amended by Section 30.5(f) of S.L. 2001-424, reads as rewritten:

"Section 8. Section 1 of this act is effective with respect to calendar quarters beginning on or after April 1, 1999. Section 7 of this act becomes effective July 1, 1999. The remainder of this act is effective with respect to calendar quarters beginning on or after January 1, 2000. G.S. 96-6.1, as enacted by Section 2 of this act, is repealed effective with respect to calendar quarters beginning on or after January 1, 2006."

SECTION 8.8.(b)  G.S. 96-6.1 is amended by adding a new subsection to read:

"(c)      Sunset. - This section is repealed effective with respect to calendar quarters beginning on or after January 1, 2011."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

DEFENSE TECHNOLOGY INNOVATION CENTER

SECTION 8.11.  Funds appropriated in this act for North Carolina Electronics and Information Technologies Association's Defense Technology Innovation Center shall be used for the following:

(1)       Site selection and acquisition, including the purchase or lease of real property to house the Center; the construction of buildings or other site structures; the improvement or refurbishment of existing structures to provide appropriate laboratory and administrative space; and the improvement of existing infrastructure at the facility, including improvements to utility, telecommunications, and Internet infrastructure.

(2)       Equipment acquisition, including acquisition of laboratory equipment and supplies and office furniture, equipment, and supplies.

(3)       Employment of staff to support the mission of the Center and to oversee day-to-day operations of the Center.

(4)       Implementation of a comprehensive business and marketing plan for the Center.

(5)       Development of a tenant screening process and the recruitment of appropriate tenants for the Center.

(6)       Administration and operation of the Center and the development of a sustainable business plan for the Center.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

COMMUNITY COLLEGE CAPITAL FUNDS

SECTION 8.12.  Notwithstanding G.S. 115D-31 or any other provision of law, funds appropriated in this act for community college capital projects do not have to be matched by local funds.

 

Requested by:            Representatives Jeffus, Tolson, Yongue 

IMPLEMENT PROPRIETARY SCHOOLS LICENSING FEE INCREASE

SECTION 8.14. The State Board of Community Colleges may implement an increase in fees for licensing of proprietary schools in accordance with the following fee schedule adopted by the State Board of Community Colleges on November 18, 2004:

 

Initial License Fee                              $2,500

License Renewal Fee                         $1,250 plus $50.00 per program

Program Addition Fee                        $200.00

Single Course Addition Fee               $200.00

Relocation/Site Visit Fee                  $400.00

Remote Site Initial Fee                      $1,000

Remote Site Renewal Fee                  $750.00

Site Assessment                                  $200.00

 

Requested by:            Representatives Jeffus, Tolson, Yongue

EXEMPT COMMUNITY COLLEGE MASSAGE AND BODYWORK THERAPY PROGRAMS FROM LICENSURE BY THE NORTH CAROLINA BOARD OF MASSAGE AND BODYWORK THERAPY

SECTION 8.15.  G.S. 90-631 reads as rewritten:

" 90-631.  Massage and bodywork therapy schools.

(a)       The Board shall establish rules for the approval of massage and bodywork therapy schools. These rules shall include:

(1)       Basic curriculum standards that ensure graduates have the education and skills necessary to carry out the safe and effective practice of massage and bodywork therapy.

(2)       Standards for faculty and learning resources.

(3)       Requirements for reporting changes in instructional staff and curriculum.

(4)       A description of the process used by the Board to approve a school.

Any school that offers a training program in massage and bodywork therapy may make application for approval to the Board. The Board shall grant approval to schools, whether in this State or another state, that meet the criteria established by the Board. The Board shall maintain a list of approved schools.schools and a list of community college programs operating pursuant to subsection (b) of this section.

(b)       A massage and bodywork therapy program operated by a North Carolina community college that is accredited by the Southern Association of Colleges and Schools is exempt from the approval process, licensure process, or both, established by the Board. The college shall certify annually to the Board that the program meets or exceeds the minimum standards for curriculum, faculty, and learning resources established by the Board. Students who complete the program shall qualify for licenses from the Board as if the program were approved, licensed, or both, by the Board.

(c)       A massage and bodywork therapy program operated by a degree or diploma granting college or university that offers a degree or diploma in massage therapy and is accredited by any accrediting agency that is recognized by the United States Department of Education and is licensed by the North Carolina Community College System or The University of North Carolina Board of Governors is exempt from the approval process, licensure process, or both, established by the Board. The college or university shall certify annually to the Board that the program meets or exceeds the minimum standards for curriculum, faculty, and learning resources established by the Board. Students who complete the program shall qualify for licenses from the Board as if the program were approved, licensed, or both, by the Board."

 

Requested by:            Representatives Howard, Holliman

Davidson County Community College Truck Driver Training

SECTION 8.16.  Of the funds appropriated to the Community College System Office for the State Board Reserve in FY05-06, $39,500 shall be used to start a Truck Driver Training Program at the Davie Campus of Davidson County Community College. Beginning in FY06-07, Davidson County Community College's Davie Campus Truck Driver Training Program shall be included in the Special Allotments line item at the same level as the other Truck Driver Training Programs.  The State Board of Community Colleges shall report the anticipated cost of the new program to the House Appropriations Subcommittee on Education by May 15, 2006.

 

PART iX. UNIVERSITIES

 

Requested by:            Representatives Jeffus, Tolson, Yongue

UNC budget reduction report

SECTION 9.1.  The Chancellor of each constituent institution shall report to the Board of Governors of The University of North Carolina on the reductions made to the General Fund budget codes in order to meet the reduction amounts for that institution, including the positions eliminated and the actions taken on nonpersonnel costs. The President of The University of North Carolina shall report to the Board of Governors of The University of North Carolina on the reductions made to the General Fund budget codes controlled by the Board in order to meet the reduction amounts for those entities. The report shall include the positions eliminated and the actions taken on nonpersonnel costs to achieve the reductions. The Board of Governors shall make a summary report to the Office of State Budget and Management and the Fiscal Research Division by December 31, 2005, on all reductions made by these entities and constituent institutions in order to reduce the budgets by the targeted amounts.  The report shall include the positions eliminated and the actions taken on nonpersonnel costs to achieve the reductions.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

ENROLLMENT GROWTH FUND/ENCOURAGE PARTNERSHIPS FOR NEW 2 + 2 PROGRAMS

SECTION 9.2.(a)  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina, the sum of eighteen million eighty-seven thousand four hundred sixty-three dollars ($18,087,463) for the 2005-2006 fiscal year and the sum of eighteen million eighty-seven thousand four hundred sixty-three dollars ($18,087,463) for the 2006-2007 fiscal year shall be held in reserve to be used for distance education programs for undergraduate and graduate students. The Board of Governors shall apportion the funds among the programs, as it deems appropriate.

The Board of Governors shall report to the Joint Legislative Education Oversight Committee by February 1, 2006, regarding the implementation of this subsection and shall include in its report the following:  a list of each program receiving funds under this subsection, the amount received by the program, and the purpose for which the funds were used.

SECTION 9.2.(b)  The University of North Carolina Board of Governors' Task Force on Meeting Teacher Supply and Demand called for the President to develop a plan for enrollment growth in the University System's teacher education programs to respond to the State's shortage of teachers.  In a presentation to the Joint Legislative Education Oversight Committee and to the Board of Governors, a commitment was made to increase the number of teacher education graduates in 2005-2006 and in 2006-2007. The Office of the President of The University of North Carolina shall obtain plans from each campus as to how they will maintain their current enrollment in the teacher education programs and achieve their growth targets to ensure such increases in those programs occur. Plans may include using enrollment growth funds for targeted admissions, enhanced student support, and advising, recruiting, increases in faculty in necessary instructional areas that lead to certification, and other methods the Office of the President believes will achieve those results. The Office of the President shall report back to the Office of State Budget and Management and the Joint Legislative Education Oversight Committee no later than December 30, 2005, on each campus's plan for increasing teacher education graduates. No later than March 31, 2006, the Office of the President shall submit a report on progress towards meeting this priority for the 2006-2007 academic year, based on each campus's current students in the education programs, and the students who have been accepted for the 2006-2007 fiscal year who are enrolling in the education programs. The report shall also explain the distribution of enrollment growth funds by specific initiative.

SECTION 9.2.(c)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall strongly encourage the constituent institutions and the community colleges that do not currently have 2 + 2 programs that emphasize teacher education to design and enter into formal partnerships to offer those 2 + 2 programs. The Board of Governors and the Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee by February 1, 2006, regarding the status of existing 2 + 2 programs and any new partnerships established.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

ENROLLMENT GROWTH FUNDING MODEL

SECTION 9.4.  The Office of State Budget and Management, jointly with The University of North Carolina and the Fiscal Research Division of the General Assembly, shall conduct a comprehensive review of the enrollment funding model to review the assumptions contained within each element of the formula, to obtain current benchmark information related to specific elements within the formula, and to examine the impact of alternative elements and assumptions.  An alternative to the current model shall be the result of this analysis.  This alternative shall be used to prepare a request for enrollment growth funding for the budget to be submitted for the 2007 Session of the General Assembly and shall be shown in comparison to the use of the current formula.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

UNC-NCCCS 2+2 E-LEARNING INITIATIVE

SECTION 9.5.  Funds appropriated in this act to The University of North Carolina and the North Carolina Community College System for the UNC-NCCCS 2+2 E-Learning Initiative shall be used to fund further development of online courses for 2+2 programs.  Based on a mutually agreed upon decision by the State Board of Education Chairman, the President of the North Carolina Community College System, and the President of The University of North Carolina as to the areas of greatest need, funds are available to support joint technology development, systems to track student progress and articulation between a North Carolina community college and a University of North Carolina campus, and to develop technology to support online courses and 2+2 programs.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

USE OF ESCHEAT FUND FOR NEED-BASED FINANCIAL AID PROGRAMS

SECTION 9.6.(a)  There is appropriated from the Escheat Fund income to the Board of Governors of The University of North Carolina the sum of sixty-seven million two hundred forty-eight thousand sixteen dollars ($67,248,016) for fiscal year 2005-2006 and the sum of sixty-seven million six hundred thirty-eight thousand sixteen dollars ($67,638,016) for fiscal year 2006-2007; and to the State Board of Community Colleges the sum of thirteen million nine hundred eighty-one thousand two hundred two dollars ($13,981,202) for fiscal year 2005-2006 and the sum of thirteen million nine hundred eighty-one thousand two hundred two dollars ($13,981,202) for fiscal year 2006-2007. These funds shall be allocated by the North Carolina State Educational Assistance Authority (SEAA) for need-based student financial aid in accordance with G.S. 116B-7.

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

SECTION 9.6.(b)  There is appropriated from the Escheat Fund to the Board of Governors of The University of North Carolina the sum of seven hundred eighty thousand dollars ($780,000) for the 2005-2006 fiscal year and the sum of one million one hundred seventy thousand dollars ($1,170,000) for the 2006-2007 fiscal year to be allocated to the SEAA for need-based student financial aid to be used in accordance with G.S. 116B-7 and this act. The SEAA shall use these funds only to provide scholarship loans (known as the Millennium Teaching Scholarship Loan Program) to North Carolina high school seniors interested in preparing to teach in the State's public schools who also enroll at any of the Historically Black Colleges and Universities that do not have Teaching Fellows.  An allocation of 20 grants of six thousand five hundred dollars ($6,500) each shall be given to the three universities without any Teaching Fellows for the purposes specified in this subsection.

The SEAA shall administer these funds and shall establish any additional criteria needed to award these scholarship loans, the conditions for forgiving the loans, and the collection of the loan repayments when necessary.

SECTION 9.6.(c)  If the interest income generated from the Escheat Fund is insufficient to pay the appropriations made in subsections (a) and (b) of this section, the difference may be taken from the Escheat Fund principal to reach the appropriations referenced in this section; however, under no circumstances shall the Escheat Fund principal be reduced below the sum of four hundred million dollars ($400,000,000).

SECTION 9.6.(d)  All obligations to students for uses of the funds set out in sections that were made before the date this act becomes law shall be fulfilled as to students who remain eligible under the provisions of the respective programs.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

STUDY OF DISTANCE EDUCATION

SECTION 9.7.(a)  The Joint Legislative Education Oversight Committee shall contract with a consultant as provided by G.S. 120-70.82(c) to analyze the distance education programs at the institutions in The University System. The study shall identify any duplication in course and program offerings, leader courses and programs at campuses in a particular area of study, the cost of developing online courses, and determine which campuses are best suited to offer a particular course or program of study. The findings of the study shall be reported to the Joint Legislative Education Oversight Committee no later than April 30, 2006.

SECTION 9.7.(b)  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for General Administration, the sum of one hundred fifty thousand dollars ($150,000) for the 2005-2006 fiscal year shall be transferred to the General Assembly to be allocated to the Joint Legislative Education Oversight Committee to implement this section.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

INFORMATION TECHNOLOGY PROCUREMENT

SECTION 9.8.  For purposes of purchasing hardware, software licenses, and multiyear maintenance agreements, The University of North Carolina and its constituent institutions may participate in the aggregation of purchasing administered by the Office of State Technology Services, as defined in G.S. 147-33.72F.  The Office of State Budget and Management shall conduct a cost comparison study of hardware, software license, and multiyear maintenance agreement purchases made by The University of North Carolina and its constituent institutions and by the Office of State Technology Services, to determine if further aggregation is cost-justified.  The Study shall also include an analysis of aggregated purchases by the University System and the effect of educational discounts available to the University System.  The report of comparative unit costs shall be completed by December 31, 2005.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

BOARD OF GOVERNORS' DENTAL SCHOLARSHIPS

SECTION 9.9.(a)  The current Board of Governors' Dental Scholarship Program, under the purview of the Board of Governors of The University of North Carolina, shall make any awards to students admitted after July 1, 2005, as scholarship loan awards. The Board of Governors' Dental Scholarship Program is administered by the Board of Governors of The University of North Carolina. The Board of Governors' Dental Scholarship Program shall be used to provide a four-year scholarship loan of relevant tuition and fees, mandatory medical insurance, required laptop computers for first-year students, required dental equipment, and an annual payment of five thousand dollars ($5,000) per year to students who have been accepted for admission to the School of Dentistry at the University of North Carolina at Chapel Hill. The Board may adopt standards, including minimum grade point average and DAT scores, for awarding these scholarship loans to ensure that only the most qualified students receive them.  The Board shall make an effort to identify and encourage minority and economically disadvantaged youth to enter the program.  All scholarship loans shall be evidenced by notes made payable to the Board that shall bear interest at the rate of ten percent (10%) per year beginning September 1 after completion of the program, or immediately after termination of the scholarship loan, whichever is earlier.  The scholarship loan may be terminated by the recipient withdrawing from school or by the recipient not meeting the standards set by the Board. The Board shall forgive the loan if, within seven years after graduation, the recipient practices dentistry in North Carolina for four years. The Board shall also forgive the loan if it finds that it is impossible for the recipient to practice dentistry in North Carolina for four years, within seven years after graduation, because of the death or permanent disability of the recipient.  All unused funds appropriated to or otherwise received by the Board for scholarships, all funds received as repayment of scholarship loans, and all interest earned on these funds shall revert to the General Fund at the end of each fiscal year.

SECTION 9.9.(b)  Any dental scholarship awarded prior to July 1, 2005, shall remain a scholarship and shall not be converted to a scholarship loan unless the recipient agrees to the conversion.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

BOARD OF GOVERNORS' MEDICAL SCHOLARSHIPS

SECTION 9.10.(a)  The current Board of Governors' Medical Scholarship Program, under the purview of the Board of Governors of The University of North Carolina, shall make any awards to students admitted after July 1, 2005, as scholarship loan awards. The Board of Governors' Medical Scholarship Program is administered by the Board of Governors of The University of North Carolina.  The Board of Governors' Medical Scholarship Program shall be used to provide a four-year scholarship loan of relevant tuition and fees, mandatory medical insurance, required laptop computers, and an annual payment of five thousand dollars ($5,000) per year to students who have been accepted for admission to either Duke University School of Medicine, Brody School of Medicine at East Carolina University, the University of North Carolina at Chapel Hill School of Medicine, or the Wake Forest University School of Medicine. The Board may adopt standards, including minimum grade point average and MCAT scores, for awarding these scholarship loans to ensure that only the most qualified students receive them. The Board shall make an effort to identify and encourage minority and economically disadvantaged youth to enter the program. All scholarship loans shall be evidenced by notes made payable to the Board that shall bear interest at the rate of ten percent (10%) per year beginning September 1 after completion of the program, or immediately after termination of the scholarship loan, whichever is earlier. The scholarship loan may be terminated by the recipient withdrawing from school or by the recipient not meeting the standards set by the Board. The Board shall forgive the loan if, within seven years after graduation, the recipient practices medicine in North Carolina for four years. The Board shall also forgive the loan if it finds that it is impossible for the recipient to practice medicine in North Carolina for four years, within seven years after graduation, because of the death or permanent disability of the recipient. All unused funds appropriated to or otherwise received by the Board for scholarships, all funds received as repayment of scholarship loans, and all interest earned on these funds shall revert to the General Fund at the end of each fiscal year.

SECTION 9.10.(b)  Any medical scholarship awarded prior to July 1, 2005, shall remain a scholarship and shall not be converted to a scholarship loan unless the recipient agrees to the conversion.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

TEACHER SCHOLARSHIPS FUNDS

SECTION 9.11.(a)  Article 23 of Chapter 116 of the General Statutes is amended by adding the following new section:

" 116-209.38.  Future Teachers of North Carolina Scholarship Loan Fund.

(a)       There is established the Future Teachers of North Carolina Scholarship Loan Fund. The purpose of the Fund is to provide a two-year scholarship loan of six thousand five hundred dollars ($6,500) per year for any North Carolina student pursuing a college degree to teach in the public schools of the State. The scholarship loan shall be paid only for the student's junior and senior years. The scholarship loan is available if the student is enrolled in a State institution of higher education or a private institution of higher education located in this State that has an accredited teacher preparation program for students planning to become certified teachers in North Carolina. The State Education Assistance Authority shall administer the Fund and shall award 100 scholarship loans annually.

(b)       The Board of Governors of The University of North Carolina, in consultation with the State Board of Education and the State Board of Community Colleges, shall develop the criteria for awarding the scholarship loans under this section and shall adopt very stringent standards for awarding these scholarship loans to ensure that only the best students receive them. Additional criteria for awarding a scholarship loan under this section shall include all of the following:

(1)       The student is one who either: (i) maintained a "B" or better average in college and is enrolled as a junior or senior in a teacher preparation program at any of the institutions described by subsection (a) of this section; or (ii) completed a college transfer curriculum at a community college in the State's community college system, maintained a "B" or better average in the community college courses, and is accepted and enrolled in a teacher preparation program at one of the institutions described by subsection (a) of this section.

(2)       The student agrees to become certified in math, science, special education, or English as a Second Language and teach full-time in that subject area in a North Carolina public school for four years within five years after graduation.

(3)       Any additional criteria that the Board of Governors of The University of North Carolina, in consultation with the State Board of Education and the State Board of Community Colleges, considers necessary to administer the Fund effectively.

(c)       If a student who is awarded a scholarship loan under this section fails to comply with the provisions of this section or the terms of the agreement awarding the scholarship loan, then the student shall repay the full amount of the scholarship loan provided to the student and the appropriate amount of interest as determined by the State Education Assistance Authority.

(d)       The Board of Governors of The University of North Carolina, the State Board of Education, and the State Board of Community Colleges shall: (i) prepare a clear written explanation of the Future Teachers of North Carolina Scholarship Fund and the information regarding the availability and criteria for awarding the scholarship loans, and (ii) shall provide that information to the appropriate counselors in each local school system and the appropriate institutions of higher education and shall charge those counselors to inform students about the scholarship loans and to encourage them to apply for the scholarship loans.

(e)       The Board of Governors of The University of North Carolina shall adopt rules to implement this section.

(f)        The Board of Governors of The University of North Carolina shall report to the Joint Legislative Education Oversight Committee by March 1 each year regarding the Fund and scholarship loans awarded from the Fund."

SECTION 9.11.(b)  Of the funds appropriated in this act to the State Education Assistance Authority, the sum of six hundred fifty thousand dollars ($650,000) for the 2005-2006 fiscal year and the sum of one million three hundred thousand dollars ($1,300,000) for the 2006-2007 fiscal year shall be used to implement this act.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

UNC-ASHEVILLE RETAIN SALE PROCEEDS

SECTION 9.12.  Notwithstanding any other provision of law, the University of North Carolina at Asheville may retain the proceeds from the sale of its existing chancellor's residence and appurtenant land. The University of North Carolina at Asheville may use the proceeds from the sale of its existing chancellor's residence and the appurtenant land to construct or otherwise acquire a new chancellor's residence. Proceeds from the sale not used for that purpose within two fiscal years of the sale shall revert to the General Fund.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

UNC BOND PROJECT MODIFICATIONS

SECTION 9.13.(a)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at Elizabeth City State University by changing the scope of "Mitchell-Lewis Residence Hall-Comprehensive Renovation" to be a replacement project instead of a renovation. Section 2(a) of S.L. 2000-3 is therefore amended in the portion under Elizabeth City State University by replacing "Mitchell Lewis Residence Hall-Comprehensive Renovation" with "Mitchell Lewis Residence Hall-Replacement."

SECTION 9.13.(b)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at North Carolina Central University by the cancellation of "Latham Residence Hall-Comprehensive Renovation". The unused monies from "Latham Residence Hall-Comprehensive Renovation" should be transferred to "Eagleson Residence Hall-Comprehensive Renovation". Section 2(a) of S.L. 2000-3 is therefore amended in the portion under North Carolina Central University by reducing the money allocated to "Latham Residence Hall-Comprehensive Renovation" by reducing that amount by two million three hundred seventy-three thousand four hundred fifty-seven dollars ($2,373,457) to a total of one million thirty-eight thousand one hundred forty-three dollars ($1,038,143) and by increasing the allocation to "Eagleson Residence Hall-Comprehensive Renovation" by two million three hundred seventy-three thousand four hundred fifty-seven dollars ($2,373,457) to create a total allocation of nine million two hundred forty-two thousand nine hundred fifty-seven dollars ($9,242,957).

SECTION 9.13.(c)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at the University of North Carolina at Wilmington by the cancellation of "King Hall Classroom Building-Comprehensive Renovation" and by transferring the unused funds to the following projects listed under the portion entitled University of North Carolina at Wilmington:  "Academic & Classroom Facilities," "General Classroom Bldg.", "Hinton James Hall Classroom Bldg.-Comprehensive Renovation," "Friday Hall Laboratory Bldg.-Comprehensive Renovation," "Kenan Auditorium-Comprehensive Renovation." Section 2(a) of S.L. 2000-3 is therefore amended in the portion under the University of North Carolina at Wilmington by:

(1)       Reducing the allocation to "King Hall Classroom Building-Comprehensive Renovation" by three million one hundred sixty-eight thousand six hundred eighty-nine dollars ($3,168,689) to create a total allocation of three hundred fifty-eight thousand seven hundred eleven dollars ($358,711).

(2)       Increasing the allocation to "General Classroom Building" by six hundred seventy-nine thousand seven hundred seventy-eight dollars ($679,778) to create a total allocation of thirteen million three hundred twenty-six thousand seven hundred seventy-eight dollars ($13,326,778).

(3)       Increasing the allocation to "Academic & Classroom Facilities" by nine hundred ninety-one thousand one hundred twenty-three dollars ($991,123) to create a total allocation of thirty-four million twenty-three thousand two hundred twenty-three dollars ($34,023,223).

(4)       Increasing the allocation to "Hinton James Hall Classroom Building-Comprehensive Renovation" by one hundred seventy-six thousand six hundred nine dollars ($176,609) to create a total allocation of two million eight hundred six thousand five hundred sixty-one dollars ($2,806,561).

(5)       Increasing the allocation to "Kenan Auditorium-Comprehensive Renovation" by one hundred fifty-one thousand seven hundred forty-nine dollars ($151,749) to create a total allocation of two million seventy-three thousand seven hundred twenty-four dollars ($2,073,724).

(6)       Increasing the allocation to "Friday Hall Laboratory Building-Comprehensive Renovation" by one million one hundred sixty-nine thousand four hundred thirty dollars ($1,169,430) to create a total allocation of eight million eight hundred sixty-two thousand eight hundred thirty dollars ($8,862,830).

SECTION 9.13.(d)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at the University of North Carolina at Pembroke by the cancellation of "West Residence Hall-Comprehensive Renovation" and by transferring the unused funds to a new project, "North and Belk Residence Halls-Fire Safety Improvements and Renovations" and by the cancellation of "Campuswide Infrastructure Improvements" and by transferring those unused funds to a new project, "Biotechnology Teaching Labs and Classroom Building". Section 2(a) of S.L. 2000-3 is therefore amended in the portion under University of North Carolina at Pembroke by:

(1)       Reducing the allocation to "West Residence Hall-Comprehensive Renovation" by eight hundred seventy-nine thousand three hundred dollars ($879,300) to a total allocation of ninety-eight thousand dollars ($98,000).

(2)       Reducing the allocation to "Campuswide Infrastructure Improvements" by one million seven hundred thirty thousand three hundred eighty-two dollars ($1,730,382) to a total allocation of two hundred sixty-six thousand two hundred eighteen dollars ($266,218).

(3)       Adding a new project entitled "North and Belk Residence Halls-Fire Safety Improvements and Renovations $879,300".

(4)       Adding a new project entitled "Biotechnology Teaching Labs and Classroom Building $1,730,382".

SECTION 9.13.(e)  Pursuant to Section 2(b) of S.L. 2000-3, the General Assembly finds that it is in the best interest of the State to respond to current educational and research program requirements at Western Carolina University by the cancellation of "Killian Education & Allied Professional Bldg.-Partial Renovation" and "Conversion of Old Student Health Center to Residential & Academic Space" and by transferring the unused funds to "Stillwell Lab Bldg.-Comprehensive Renovation". Section 2(a) of S.L. 2000-3 is therefore amended in the portion under Western Carolina University by:

(1)       Reducing the allocation to "Killian Education & Allied Professional Bldg.-Partial Renovation" by one million two hundred ninety-seven thousand nine hundred twenty-four dollars ($1,297,924) to a total allocation of two hundred forty-eight thousand three hundred seventy-six dollars ($248,376).

(2)       Reducing the allocation to "Conversion of Old Student Health Center to Residential & Academic Space" by one million four hundred ninety-six thousand nine hundred forty-five dollars ($1,496,945) to a total allocation of three hundred ninety thousand one hundred fifty-five dollars ($390,155).

(3)       Increasing the allocation to "Stillwell Lab Bldg-Comprehensive Renovation" by two million seven hundred ninety-four thousand eight hundred sixty-nine dollars ($2,794,869) to a total allocation of seventeen million eight hundred fifty-two thousand three hundred sixty-nine dollars ($17,852,369).

SECTION 9.13.(f)  Nothing in this section is intended to supersede any other requirement of law or policy for approval of the substituted capital improvement projects.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

REPEAL NC SCHOOL OF SCIENCE AND MATH TUITION GRANT

SECTION 9.14.(a)  G.S. 116-238.1 is repealed.

SECTION 9.14.(b)  This section becomes effective July 1, 2005, but shall not apply to any student who was eligible for a legislative tuition grant under G.S. 116-238.1 before the 2006-2007 academic year. A student who was eligible for the legislative tuition grant before the 2006-2007 academic year shall continue to be eligible for the legislative tuition grant provided the student continues to meet the criteria provided by G.S. 116-238.1.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

NORTH CAROLINA AGRICULTURAL AND TECHNICAL STATE UNIVERSITY FUNDS

SECTION 9.16.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2005-2006 fiscal year the sum of one million eighty-eight thousand nine hundred forty-one dollars ($1,088,941) shall be allocated to North Carolina Agricultural and Technical State University for agricultural and research extension programs.  It is the intent of the General Assembly to fully fund these programs for the 2006-2007 fiscal year.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

TRANSFER PROSPECTIVE TEACHER SCHOLARSHIP LOAN AND TEACHER ASSISTANT SCHOLARSHIP LOAN TO THE NC STATE EDUCATION ASSISTANCE AUTHORITY

SECTION 9.17.(a)  The Scholarship Loan Fund for Prospective Teachers is transferred from the Department of Public Instruction to the State Education Assistance Authority.  This transfer shall have all of the elements of a Type I transfer, as defined in G.S. 143A-6.

SECTION 9.17.(b)  G.S. 115C-468 is recodified as G.S. 116-209.33. G.S. 115C-469, 115C-470, and 115C-472.1 are repealed. G.S. 115C-471 is recodified as G.S. 116-209.34.

SECTION 9.17.(c)  G.S. 115C-468 recodified by subsection (b) of this section as G.S. 116-209.33 reads as rewritten:

" 116-209.33.  Establishment of fund.Scholarship Loan Fund for Prospective Teachers.

(a)       There is established a revolving fund known as the "Scholarship Loan Fund for Prospective Teachers". The purpose of the Fund is to provide scholarship loans to qualified individuals who are pursuing college degrees to become teachers. The State Education Assistance Authority shall administer the Fund.

(b)       Criteria The State Education Assistance Authority, in consultation with the State Board of Education, shall develop criteria for awarding scholarship loans from the fund shall include measures the Fund. These criteria shall include:

(1)       Measures of academic performance including grade point averages, scores on standardized tests, class rank, and recommendations of guidance counselors and principals.

(2)       North Carolina residency. - For purposes of this section, residency shall be determined by the same standard as residency for tuition purposes pursuant to G.S. 116-143.1.

(3)       The geographic areas or subjects of instruction in which the demand for teachers is greatest.

(4)       To the extent practical, an equal number of scholarships shall be awarded in each of the State's Congressional Districts.

(5)       Any additional criteria that the State Education Assistance Authority considers necessary to administer the Fund effectively, including the following:

a.         Consideration of the appropriate numbers of minority applicants and applicants from diverse socioeconomic backgrounds to receive scholarships pursuant to this section.

b.         Consideration of the commitment an individual applying to receive funds demonstrates to the profession of teaching.

(c)       The Superintendent of Public InstructionState Education Assistance Authority may earmark each year up to twenty percent (20%) of the funds available for scholarship loans each yearunder this section for awards to applicants who have been employed for at least one year as teacher assistants and who are currently employed as teacher assistants. Preference for these scholarship loans from funds earmarked for teacher assistants shall be given first to applicants who worked as teacher assistants for at least five years and whose positions as teacher assistants were abolished and then to applicants who already hold a baccalaureate degree or who have already been formally admitted to an approved teacher education program in North Carolina. The criteria for awarding scholarship loans to applicants who worked as teacher assistants for at least five years and whose positions as teacher assistants were abolished shall include whether the teacher assistant has been admitted to an approved teacher education program in North Carolina.for the Teacher Assistant Scholarship Fund established in G.S. 116-209.35.

The Superintendent of Public Instruction may further earmark a portion of these funds each year for two-year awards to applicants who have been employed for at least one year as teacher assistants to attend community colleges to get other skills of use in public schools or to get an early childhood associate degree. The provisions of this Article shall apply to these scholarship loans except that a recipient of one of these scholarship loans may receive credit upon the amount due by reason of the loan as provided in G.S. 115C-471(5) or by working in a nonteaching position in the North Carolina public schools or by working in a licensed child care center in North Carolina."

SECTION 9.17.(d)  G.S. 115C-471 recodified by subsection (b) of this section as G.S. 116-209.34 reads as rewritten:

" 116-209.34.  Fund administered by State Superintendent of Public Instruction; rules and regulations.State Education Assistance Authority; rule-making authority.

(a)       The Scholarship Loan Fund for Prospective Teachers shall be administered by the State Superintendent of Public Instruction, under rules adopted by the State Board of Education and subject to the following directions and limitations:The State Education Assistance Authority shall establish the terms and conditions for the scholarship loans consistent with the following:

(1)       Any resident of North Carolina who is interested in preparing to teach in the public schools of the State may apply in writing to the State Superintendent of Public Instruction for a regular scholarship loan in the amount of not more than two thousand five hundred dollars ($2,500) per academic school year. An applicant who has been employed for at least one year as a teacher assistant and who is currently employed as a teacher assistant may apply for a scholarship loan from funds earmarked for teacher assistants in the amount of not more than one thousand two hundred dollars ($1,200) per academic school year.The loan amount shall be not more than four thousand dollars ($4,000) per academic school year for a maximum of four years for applicants who are pursuing a college degree to become a teacher.

(2)       All scholarship loans shall be evidenced by notes made payable to the State Board of Education Authority that bear interest at the rate of ten percent (10%) per annum from and after September 1 following fulfillment by a prospective teacher of the requirements for a certificate based upon the entry level degree; or in the case of persons already teaching in the public schools who obtain scholarship loans, the notes shall bear interest at the prescribed rate from and after September 1 of the school year beginning immediately after the use of the scholarship loans; or in the event any such scholarship is terminated under the provisions of subdivision (3) of this section, the notes shall bear interest from the date of termination. A minor recipient who signs a note shall also obtain the endorsement thereon by a parent, if there be a living parent, unless the endorsement is waived by the Superintendent of Public Instruction. The minor recipient shall be obligated upon the note as fully as if the recipient were of age and shall not be permitted to plead such minority as a defense in order to avoid the obligations undertaken upon the notes.year, beginning September 1 after graduation, or immediately after termination of the scholarship loan, whichever is earlier.

(3)       Each recipient of a scholarship loan under the provisions of this program shall be eligible for scholarship loans each year until the recipient has qualified for a certificate based upon the entry level degree, but the recipient shall not be so eligible for more than the minimum number of years normally required for qualifying for the certificate. The permanent withdrawal of any recipient from college or failure of the recipient to do college work in a manner acceptable to the State Superintendent of Public Instruction shall immediately forfeit the recipient's right to retain the scholarship and subject the scholarship to termination by the State Superintendent of Public Instruction in the Superintendent's discretion. A scholarship loan shall be terminated upon the recipient's withdrawing from school or a finding by the Authority that the recipient fails to meet the standards set by the Authority. All terminated scholarships shall be regarded as vacant and subject to being awarded to other eligible persons.

(4)       Except under emergency conditions applicable to the State Superintendent of Public Instruction, recipients of scholarship loans shall enter the public school system of North Carolina at the beginning of the next school term after qualifying for a certificate based upon the entry level degree or, in case of persons already teaching in the public schools, at the beginning of the next school term after the use of the loan. All teaching service for which the recipient of any scholarship loan is obligated shall be rendered by August 31 of the seventh school year following graduation.

(5)(4)  For each full school year taught in a North Carolina public school, the recipient of a scholarship loan shall receive credit upon the amount due by reason of the loan equal to the loan amount for a school year as provided in the note plus credit for the total interest accrued on that amount. Also, the recipient of the loan shall receive credit upon the total amount due by reason of all four years of the loan if the recipient teaches for three consecutive years, The Authority shall forgive a four-year loan if, within seven years after graduation, the recipient teaches for four years at a North Carolina public school or at a school operated by the United States government in North Carolina. The Authority shall also forgive a four-year loan if, within seven years after graduation, the recipient teaches for three consecutive years, or for three years interrupted only by an approved leave of absence, at a North Carolina public school that is in a low-performing school system or a school system on warning status at the time the recipient accepts employment with the local school administrative unit. In lieu of teaching in the public school, a recipient may elect to pay in cash the full amount of scholarship loans received plus interest then due thereon or any part thereof that has not been canceled by the State Board of Education by reason of teaching service rendered.For loans of less than four years, the Authority shall forgive one year for each year the recipient teaches, within four years of graduation, at a North Carolina public school or a school operated by the United States government in North Carolina.

(6)(5)  If any recipient of a scholarship loan dies during the period of attendance at a college or university under a scholarship loan or before the scholarship loan is satisfied by payment or teaching service, any balance shall be automatically canceled.

If any recipient of a scholarship loan fails to fulfill the recipient's obligations under subdivision (4) of this section, other than as provided above, the amount of the loan and accrued interest, if any, shall be due and payable from the time of failure to fulfill the recipient's obligations. The Authority may forgive or reduce any loan payment if the Authority considers that extenuating circumstances exist that would make teaching or repayment impossible.

(7)(6)  The State Superintendent of Public Instruction shall award scholarship loans with due consideration to factors and circumstances such as aptitude, purposefulness, scholarship, character, financial need, and geographic areas or subjects of instruction in which the demands for teachers are greatest. Since the primary purpose of this Article is to attract worthy young people to the teaching profession, preference for scholarship loans, except for the scholarship loans from funds earmarked for teacher assistants, shall be given to high school seniors in the awarding of scholarships. In awarding scholarship loans from funds earmarked for teacher assistants, preference shall be given to applicants who have already earned a baccalaureate degree or who have been formally admitted to an approved teacher education program in North Carolina.The Authority shall ensure that all repayments, including the accrued interest, are placed in the Fund.

(b)       The State Education Assistance Authority, in consultation with the State Board of Education, shall adopt rules to implement G.S. 116-209.33, 116-209.34, and 116-209.35."

SECTION 9.17.(e)  This section becomes effective January 1, 2006, and applies to scholarship loans awarded on or after that date.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

UNIVERSITY SYSTEM AND COMMUNITY COLLEGE SYSTEM JOINT STUDY OF HIGHER EDUCATION STRATEGY/AMEND REPORTING REQUIREMENT

SECTION 9.18.  Section 6.2 of S.L. 2004-179 reads as rewritten:

"SECTION 6.2. These studies shall be designed to provide information and recommendations that will assist the General Assembly in setting priorities for funding to address the strategic higher education needs of the State. The Board of Governors, the State Board, and their consultant shall periodically report their findings to a higher education programming subcommittee of the Joint Legislative Education Oversight Committee. The two boards and their consultant shall report the preliminary results of the study to the General Assembly and to the Joint Legislative Education Oversight Committee by April 15, 2005, June 15, 2005, and shall file a final report and recommendations with the General Assembly and the Joint Legislative Education Oversight Committee no later than December 31, 2005.December 31, 2006."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

DISTINGUISHED PROFESSORS ENDOWMENT TRUST FUND

SECTION 9.21.(a)  G.S. 116-41.15 reads as rewritten:

" 116-41.15.  Distinguished Professors Endowment Trust Fund; allocation; administration.

(a)       For constituent institutions other than focused growth institutions and special needs institutions, the amount appropriated to the trust shall be allocated by the Board as follows:

(1)       On the basis of one three hundred thirty-four thousand dollar ($334,000) challenge grant for each six hundred sixty-six thousand dollars ($666,000) raised from private sources; or

(2)       On the basis of one one hundred sixty-seven thousand dollar ($167,000) challenge grant for each three hundred thirty-three thousand dollars ($333,000) raised from private sources.sources; or

(3)       On the basis of one challenge grant of up to six hundred sixty-seven thousand dollars ($667,000) for funds raised from private sources in twice the amount of the challenge grant.

If an institution chooses to pursue the use of the allocated challenge grant funds described in either subdivision (1) or(1), subdivision (2) (2), or subdivision (3) of this subsection, the challenge grant funds shall be matched by funds from private sources on a two-to-one basis.the basis of two dollars of private funds for every one dollar of State funds.

(b)       For focused growth institutions and special needs institutions, the amount appropriated to the trust shall be allocated by the Board as follows:

(1)       On the basis of one five hundred thousand dollar ($500,000) challenge grant for each five hundred thousand dollars ($500,000) raised from private sources; or

(2)       On the basis of one two hundred fifty thousand dollar ($250,000) challenge grant for each two hundred fifty thousand dollars ($250,000) raised from private sources.sources; or

(3)       On the basis of one challenge grant of up to one million dollars ($1,000,000) for funds raised from private sources in the same amount as the challenge grant.

If an institution chooses to pursue the use of the allocated challenge grant funds described in either subdivision (1) or(1), subdivision (2)(2), or subdivision (3) of this subsection, the challenge grant funds shall be matched by funds from private sources on a one-to-one basis.the basis of one dollar of private funds for every dollar of State funds.

(c)       Matching funds shall come from contributions made after July 1, 1985, and pledged for the purposes specified by G.S. 116-41.14. Each participating constituent institution's board of trustees shall establish its own Distinguished Professors Endowment Trust Fund, and shall maintain it pursuant to the provision of G.S. 116-36 to function as a depository for private contributions and for the State matching funds for the challenge grants. The State matching funds shall be transferred to the constituent institution's Endowment Fund upon notification that the institution has received and deposited the appropriate amount required by this section in its own Distinguished Professors Endowment Trust Fund. Only the net income from that account shall be expended in support of the distinguished professorship thereby created."

SECTION 9.21.(b)  G.S. 116-41.16 reads as rewritten:

" 116-41.16.  Distinguished Professors Endowment Trust Fund; contribution commitments.

(a)       For constituent institutions other than focused growth institutions and special needs institutions, contributions may also be eligible for matching if there is:

(1)       A commitment to make a donation of at least six hundred sixty-six thousand dollars ($666,000), as prescribed by G.S. 143-31.4, and an initial payment of one hundred eleven thousand dollars ($111,000) to receive a grant described in G.S. 116-41.15(a)(1); or

(2)       A commitment to make a donation of at least three hundred thirty-three thousand dollars ($333,000), as prescribed by G.S. 143-31.4, and an initial payment of fifty-five thousand five hundred dollars ($55,500) to receive a grant described in G.S. 116-41.15(a)(2);(2); or

(3)       A commitment to make a donation in excess of six hundred sixty-six thousand dollars ($666,000), as prescribed by G.S. 143-31.4, and an initial payment of one-sixth of the committed amount to receive a grant described in G.S. 116-41.15(a)(3);

and if the initial payment is accompanied by a written pledge to provide the balance within five years after the date of the initial payment. Each payment on the balance shall be no less than the amount of the initial payment and shall be made on or before the anniversary date of the initial payment. Pledged contributions may not be matched prior to the actual collection of the total funds. Once the income from the institution's Distinguished Professors Endowment Trust Fund can be effectively used pursuant to G.S. 116-41.17, the institution shall proceed to implement plans for establishing an endowed chair.

(b)       For focused growth institutions and special needs institutions, contributions may also be eligible for matching if there is:

(1)       A commitment to make a donation of at least five hundred thousand dollars ($500,000), as prescribed by G.S. 143-31.4, and an initial payment of eighty-three thousand three hundred dollars ($83,300) to receive a grant described in G.S. 116-41.5(b)(1); or

(2)       A commitment to make a donation of at least two hundred fifty thousand dollars ($250,000), as prescribed by G.S. 143-31.4, and an initial payment of forty-one thousand six hundred dollars ($41,600) to receive a grant described in G.S. 116-41.15(b)(2);(2); or

(3)       A commitment to make a donation in excess of five hundred thousand dollars ($500,000), as prescribed by G.S. 143-31.4, and an initial payment of one-sixth of the committed amount to receive a grant described in G.S. 116-41.15(b)(3);

and if the initial payment is accompanied by a written pledge to provide the balance within five years after the date of the initial payment. Each payment on the balance shall be no less than the amount of the initial payment. Pledged contributions may not be matched prior to the actual collection of the total funds. Once the income from the institution's Distinguished Professors Endowment Trust Fund can be effectively used pursuant to G.S. 116-41.17, the institution shall proceed to implement plans for establishing an endowed chair."

SECTION 9.21.(c)  G.S. 116-41.17 reads as rewritten:

" 116-41.17.  Distinguished Professors Endowment Trust Fund; establishment of chairs.

When the sum of the challenge grant and matching funds in the Scholars' Distinguished Professors Endowment Trust Fund reaches:

(1)       One million dollars ($1,000,000), if the sum of funds described in G.S. 116-41.15(1); or G.S. 116-41.15(a)(1) or G.S. 116-41.15(b)(1); or

(2)       Five hundred thousand dollars ($500,000), if the sum of funds described in G.S. 116-41.15(2);G.S.  116-41.15(a)(2) or G.S. 116-41.15(b)(2); or

(3)       An amount up to two million dollars ($2,000,000), if the sum of funds described in G.S. 116-41.15(a)(3) or G.S. 116-41.15(b)(3);

the board of trustees may recommend to the Board, for its approval, the establishment of an endowed chair or chairs. The Board, in considering whether to approve the recommendation, shall include in its consideration the programs already existing in The University of North Carolina. If the Board approves the recommendation, the chair or chairs shall be established. The chair or chairs, the property of the constituent institution, may be named in honor of a donor, benefactor, or honoree of the institution, at the option of the board of trustees."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

UNC MAY ENCOURAGE THE ESTABLISHMENT OF PRIVATE, NONPROFIT CORPORATIONS TO SUPPORT THE UNIVERSITY SYSTEM AND ASSIGN UNC EMPLOYEES TO ASSIST WITH THOSE CORPORATIONS

SECTION 9.22.  Article 1 of Chapter 116 of the General Statutes is amended by adding a new Part to read:

"Part 2B. Private, Nonprofit Corporations.

" 116-30.20.  Establishment of private, nonprofit corporations.

The Board of Governors of The University of North Carolina shall encourage the establishment of private, nonprofit corporations to support the constituent institutions of The University of North Carolina and The University System. The President of The University of North Carolina and the chancellors of the constituent institutions may assign employees to assist with the establishment and operation of a nonprofit corporation and may make available to the corporation office space, equipment, supplies, and other related resources; provided, the sole purpose of the corporation is to support The University of North Carolina or one or more of its constituent institutions.

The board of directors of each such private, nonprofit corporation shall secure and pay for the services of The University System's internal auditors or employ a certified public accountant to conduct an audit of the financial accounts of the corporation. The board of directors shall transmit to the Board of Governors a copy of the annual financial audit report of the private, nonprofit corporation."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

ELIMINATE REPORTING REQUIREMENT FOR SCHOOL ADMINISTRATOR TRAINING PROGRAMS

SECTION 9.23.  G.S. 116-74.21 reads as rewritten:

" 116-74.21.  Establishment of a competitive proposal process for school administrator programs.

(a)       The Board of Governors shall develop and implement a competitive proposal process and criteria for assessing proposals to establish school administrator training programs within the constituent institutions of The University of North Carolina. To facilitate the development of the programs, program criteria, and the proposal process, the Board of Governors may convene a panel of national school administrator program experts and other professional training program experts to assist it in designing the program, the proposal process, and criteria for assessing the proposals.

(b)       No more than 12 school administrator programs shall be established under the competitive proposal program. In selecting campus sites, the Board of Governors shall be sensitive to the racial, cultural, and geographic diversity of the State. Special priority shall be given to the following factors: (i) the historical background of the institutions in training educators; (ii) the ability of the sites to serve the geographic regions of the State, such as, the far west, the west, the triad, the piedmont, and the east; and, (iii) whether the type of roads and terrain in a region make commuting difficult. A school administrator program may provide for instruction at one or more campus sites.

(c)       The Board of Governors shall study the issue of supply and demand of school administrators to determine the number of school administrators to be trained in the programs in each year of each biennium. The Board of Governors shall report the results of this study to the Joint Legislative Education Oversight Committee no later than March 1, 1994, and annually thereafter.the biennium and report the results of this study to the Joint Legislative Education Oversight Committee no later than March 1 annually.

(d)       The Board of Governors shall develop a budget for the programs established under subsection (a) of this section that reflects the resources necessary to establish and operate school administrator programs that meet the vision of the report submitted to the 1993 General Assembly by the Educational Leadership Task Force.

(e)       The Board of Governors shall report annually on the implementation of the act no later than December 1 of each year."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

CONTINUE ACADEMIC COMMON MARKET PROGRAM

SECTION 9.24.  Part 5 of Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:

" 116-43.10.  Academic Common Market program.

(a)       The Southern Regional Education Board operates an Academic Common Market program. Under this program, qualified students from participating states may apply to attend programs at public universities in participating states that are not available in their home state's university system. North Carolina's participation for graduate programs provides a cost-effective means of offering educational access for North Carolina residents. North Carolinians are able to attend graduate programs that are not available at The University of North Carolina at reduced rates, and the State avoids the cost associated with the development of new academic programs.

(b)       The Board of Governors of The University of North Carolina may continue participation in the Southern Regional Education Board's Academic Common Market at the graduate program level. The Board of Governors shall examine the graduate programs offered in The University of North Carolina System and select for participation only those graduate programs that are likely to be unique or are not commonly available in other Southern Regional Education Board states. Out-of-state tuition shall be waived for students who are residents of other Southern Regional Education Board states and who are participating in the Academic Common Market program. If accepted into The University of North Carolina graduate programs that are part of the Academic Common Market, these students shall pay in-State tuition and shall be treated for all purposes of The University of North Carolina as residents of North Carolina.

(c)       Once a student is enrolled in The University of North Carolina System under the Academic Common Market program, the student shall be entitled to pay in-State tuition as long as the student is enrolled in that graduate program. The Board of Governors shall provide a report on the Academic Common Market program to the Joint Legislative Education Oversight Committee by September 2007 and each biennium thereafter."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

BRODY SCHOOL OF MEDICINE AT ECU/MEDICARE RECEIPTS/FAMILY MEDICINE CENTER

SECTION 9.26.(a)  G.S. 116-36.6 reads as rewritten:

" 116-36.6.  Brody School of Medicine at East Carolina University School of Medicine; University; Medicare receipts.

The Brody School of Medicine at East Carolina University School of Medicine shall request, on a regular basis consistent with the State's cash management plan, funds earned by the School from Medicare reimbursements for education costs. Upon receipt, these funds shall be allocated as follows:

(1)       The portion of the Medicare reimbursement generated through the effort and expense of the Brody School of Medicine's Medical Faculty Practice Plan shall be transferred to the appropriate Medical Faculty Practice Plan account within the School of Medicine. The Medical Faculty Practice Plan shall assume responsibility for any of these funds that subsequently must be refunded due to final audit settlements.

(2)       The funds from this source budgeted by the General Assembly as part of the School of Medicine's General Fund budget code shall be credited to that code as a receipt.

(3)       The remainder of the funds shall be transferred to a special fund account on deposit with the State Treasurer. This special fund account shall be used for any necessary repayment of Medicare funds due to final audit settlements for funds allocated under subdivision (2) of this subsection. When the amount of these reimbursement funds has been finalized by audit for each year, those funds remaining in the special fund shall be available for specific capital improvement projects for the East Carolina University School of Medicine. Requests by East Carolina University for use of these funds shall be made to the Board of Governors of The University of North Carolina. Approval of projects by the Board of Governors shall be reported to the Joint Legislative Commission on Governmental Operations, and the reports shall include projected costs and sources of funds for operation of the approved projects.

(2a)     Funds that were received pursuant to this section prior to July 1, 2005, and that were transferred to a special fund account on deposit with the State Treasurer are appropriated to the Brody School of Medicine at East Carolina University and may be expended by the Brody School of Medicine for the family medicine center and for purposes consistent with its stated mission."

SECTION 9.26.(b)  Subsections (b) and (c) of Section 87 of Chapter 321 of the 1993 Session Laws are repealed.

SECTION 9.26.(c)  Notwithstanding any other provisions of law, the Board of Governors of The University of North Carolina may authorize the design and construction of a new capital project, a family medicine center, on the Health Sciences Campus of the Brody School of Medicine at East Carolina University, that would replace the existing family medicine facility that has reached capacity. The family medicine center is also used as a clinical teaching site for medical students, and the existing facility is functionally outdated for this purpose. The cost of the facility is estimated to be thirty million dollars ($30,000,000). The Board of Governors of The University of North Carolina may authorize the financing of the project with funds available to the Brody School of Medicine at East Carolina University from Medicare reimbursements for education costs, gifts, grants, receipts, self-liquidating indebtedness, or other funds, or any combination of these funds, but not including funds appropriated from the General Fund of the State.

SECTION 9.26.(d)  Effective July 1, 2005, the Brody School of Medicine Medical Faculty Practice Plan shall no longer be required to reimburse the General Fund for use of outpatient facilities built with General Fund monies.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

ENHANCE NUTRITION IN UNIVERSITY AND COMMUNITY COLLEGE FOOD PROGRAMS

SECTION 9.28.(a)  For nutritional purposes, the Board of Governors of The University of North Carolina and the State Board of Community Colleges shall adopt policies governing any food programs operated by the constituent institutions or local community colleges that prohibit: (i) the use of cooking oils in those food programs that contain trans-fatty acids, or (ii) the sale of processed foods containing trans-fatty acids that were formed during the commercial processing of the foods.

SECTION 9.28.(b)  The policies adopted in compliance with this section shall be implemented by August 1, 2007.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Scholarship Loan for Prospective Coaches

SECTION 9.31. Article 23 of Chapter 116 of the General Statutes is amended by adding a new section to read:

" 116-209.36.  Coaching and Assistant Coaching Scholarship Fund.

(a)       There is established the Coaching and Assistant Coaching Scholarship Fund. The purpose of the Fund is to provide scholarship loans to students who are pursuing college degrees to become public schoolteachers and coaches. Coaching and Assistant Coaching Fellows shall be offered a curriculum that advances coaching skills and that instills a strong motivation not only to remain in the coaching profession but to provide leadership in the schools where they coach. The State Education Assistance Authority shall administer the Fund. The Fund shall provide 25 scholarship loans per year.

(b)       Criteria for awarding the scholarship loans shall be developed by the State Education Assistance Authority in consultation with the Board of Governors of The University of North Carolina and shall include all of the following:

(1)       An applicant shall be enrolled in an accredited bachelors degree program in an institution of higher education in North Carolina.

(2)       All students shall enter into a legal agreement and promissory note with the Authority to accept employment as a coach or coaching assistant in an elementary or secondary school in North Carolina in exchange for receiving any funds, which agreement shall include stipulation that the student agrees to accept employment in rural or other need-based counties.

(3)       An applicant shall be a resident of North Carolina. For purposes of this section, residency shall be determined by the same standard as residency for tuition purposes pursuant to G.S. 116-143.1.

(4)       Any additional criteria that the State Education Assistance Authority considers necessary to administer the Fund effectively, including all of the following:

a.         Consideration of the appropriate numbers of minority applicants and applicants from diverse socioeconomic backgrounds to receive scholarships pursuant to this section.

b.         Consideration of the academic qualifications of the individuals applying to receive funds.

c.         Consideration of the commitment an individual applying to receive funds demonstrates to the profession of coaching.

(c)       The State Education Assistance Authority shall: (i) prepare a clear written explanation of the Coaching and Assistant Coaching Scholarship Fund and the information regarding the availability and criteria for awarding the scholarships, and (ii) provide that information to the appropriate counselors in each local school system and shall charge those counselors to inform students about the scholarships and to encourage them to apply for the scholarships.

(d)       The State Education Assistance Authority shall administer the Fund and shall ensure that the loan amount is limited to four thousand dollars ($4,000) per recipient per year.

(e)       The Authority shall ensure that the following loan cancellations and repayment schedules apply to all funds distributed pursuant to this section:

(1)       The individual who graduates with a bachelors degree and who works as a school coach or coaching assistant in a rural or other need-based area of North Carolina shall have that amount of the loan cancelled that is based on the amount of time employed and the number of academic years funds were received. One full year of employment shall cancel one academic year's loan.

(2)       The individual who graduates with a bachelors degree and who works as a school coach or assistant coach in a rural or other need-based area of North Carolina for the equivalent of the total number of academic years funds were received shall have the entire loan cancelled.

(3)       The individual who graduates with a bachelors degree and who does not work as a school coach or assistant coach in a rural or other need-based area of North Carolina for any or all of the equivalent of the number of years funds were received shall repay the loan to the Authority according to a schedule prescribed in the promissory note, plus ten percent (10%) annual interest.

(4)       The individual who does not graduate with a bachelors degree shall repay the loan according to a schedule prescribed by the Authority, not to exceed fifteen percent (15%) annual interest. In establishing a schedule and interest rate, the Authority shall take into consideration the reasons the individual did not graduate with a bachelors degree.

The Authority shall ensure that all repayments, including accrued interest, shall be placed in the Fund.

The Authority may forgive or reduce any loan repayment if the Authority considers that extenuating circumstances exist that would make repayment impossible.

(f)        The State Education Assistance Authority, in consultation with the Board of Governors of The University of North Carolina, shall adopt rules to implement this section.

(g)       The State Education Assistance Authority shall report to the Joint Legislative Education Oversight Committee by March 1 each year regarding the Fund and scholarships awarded from the Fund."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Limit out-of-state enrollment in the North Carolina School of the Arts

SECTION 9.32.  G.S. 116-64 reads as rewritten:

" 116-64.  Establishment of school.

(a)       There is hereby established, and there shall be maintained, a school for the professional training of students having exceptional talent in the performing arts which shall be defined as an educational institution of the State, to serve the students of North Carolina and other states, particularly other states of the South. The school shall be designated the "North Carolina School of the Arts".

(b)       Beginning with the fall of 2007, the North Carolina School of the Arts shall limit the proportion of nonresident students as defined in G.S. 116-143.1 in the entering freshman class to forty percent (40%). By the fall of 2008, and continuing each academic year thereafter, the proportion of nonresident students as defined in G.S. 116-143.1 in the entering freshman class shall be limited to thirty-five percent (35%)."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Nursing Scholars Program

SECTION 9.33. G.S. 90-171.61 is amended by adding a new subsection to read:

"(b1)    If a recipient is awarded a scholarship loan under this program and is enrolled, or accepted for enrollment, in a baccalaureate nursing program, but is unable to pursue the course of study in nursing for a semester due to limited faculty resources at the institution for that semester, then the recipient shall continue to receive the scholarship loan for that semester and shall not be required to forfeit or repay the scholarship loan for that semester provided that the recipient remains otherwise eligible for the program. This waiver shall be valid for only one semester of study and may extend a recipient's eligibility for funding under the program by no more than one semester."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Professional Development Programs for Public School Employees

SECTION 9.34.(a)  G.S. 115C-12(26) reads as rewritten:

" 115C-12.  Powers and duties of the Board generally.

The general supervision and administration of the free public school system shall be vested in the State Board of Education. The State Board of Education shall establish policy for the system of free public schools, subject to laws enacted by the General Assembly. The powers and duties of the State Board of Education are defined as follows:

(26)     Duty to Monitor and Make Recommendations Regarding Professional Development Programs. - The State Board of Education shall identify State and local needs for professional development for professional public school employees based upon the State's educational priorities for improving student achievement. The State Board also shall recommend strategies for addressing these needs. The strategies must be research-based, proven in practice, and designed for data-driven evaluation. The State Board shall report its findings and recommendations to the Joint Legislative Education Oversight Committee, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Board of Governors of The University of North Carolina prior to January 15, 2002, and shall review, revise, and resubmit those findings and recommendations annually thereafter. The State Board shall evaluate the reports submitted by the Board of Governors under  G.S. 116-11(12a) to determine whether the programs for professional development provided by the Center for School Leadership Development address the State and local needs identified by the State Board and whether the programs are using the strategies recommended by the State Board. Prior to January 15th of each year, the State Board shall report the results of its analysis to the Board of Governors and to the Joint Legislative Education Oversight Committee. Education, in collaboration with the Board of Governors of The University of North Carolina, shall identify and make recommendations regarding meaningful professional development programs for professional public school employees. The programs shall be aligned with State education goals and directed toward improving student academic achievement. The State Board shall annually evaluate and, after consultation with the Board of Governors, make recommendations regarding professional development programs based upon reports submitted by the Board of Governors under G.S. 116-11(12a)."

SECTION 9.34.(b)  G.S. 116-11(12a) reads as rewritten:

" 116-11.  Powers and duties generally.

The powers and duties of the Board of Governors shall include the following:

(12a)   Notwithstanding any other law, theThe Board of Governors of The University of North Carolina shall implement, administer, and revise programs for meaningful professional development for professional public school employees in accordance with based upon the evaluations and recommendations made by the State Board of Education under G.S. 115C-12(26). The programs shall be aligned with State education goals and directed toward improving student academic achievement. The Board of Governors shall submit to the State Board of Education an annual written report that uses data to assess and evaluate the effectiveness of the programs for professional development offered by the Center for School Leadership Development. The report shall clearly document how the programs address the State needs identified by the State Board of Education and whether the programs are utilizing the strategies recommended by the State Board. The Board of Governors also shall submit this report to the Joint Legislative Education Oversight Committee, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives prior to September 15th of each year.The Board of Governors shall submit to the State Board of Education an annual report evaluating the professional development programs administered by the Board of Governors."

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Study In-State Teacher Tuition Benefit

SECTION 9.35.  The Joint Legislative Education Oversight Committee shall study the current law regarding the in-State tuition rate available to certain teachers for courses relevant to teacher certification or professional development as a teacher.  In its study, the Committee shall consider the difficulty some teachers have in establishing North Carolina as their domicile, the fact that school systems on the borders of the State often recruit nonresidents who commute from their homes to teach in the North Carolina public school system and so are unable to establish this State as their domicile and any other relevant issues. The Committee shall make an interim report regarding its findings and recommendations to the 2005 General Assembly by May 30, 2007, and shall make a final report of its findings and recommendations to the 2007 General Assembly.

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Prorate Legislative Tuition Grant for Part-time students in Education and Nursing

SECTION 9.36.  G.S. 116-21.2 reads as rewritten:

" 116-21.2.  Legislative tuition grants to aid students attending private institutions of higher education.

(a)       In addition to any funds appropriated pursuant to G.S. 116-19 and in addition to all other financial assistance made available to institutions, or to students attending these institutions, there is granted to each full-time North Carolina undergraduate student attending an approved institution as defined in G.S. 116-22, a sum, to be determined by the General Assembly for each academic year which shall be distributed to the student as provided by this subsection.

(a1)     In addition to any funds appropriated pursuant to G.S. 116-19 and in addition to all other financial assistance made available to institutions, or to students attending these institutions, there is granted to each North Carolina student who is enrolled as a part-time undergraduate in a course of study for nursing or teaching at an approved institution as defined in G.S. 116-22, a pro rata share of the tuition grant provided for by subsection (a) of this section.

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

(c)       In Except as provided in subsection (a1) of this section, in the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority. Each approved institution shall be subject to examination by the State Auditor for the purpose of determining whether the institution has properly certified eligibility and enrollment of students and credited grants paid on behalf of the students.

(d)       In the event there are not sufficient funds to provide each eligible student with a full grant:grant or a pro rata grant as provided by subsections (a) and (a1) of this section:

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

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

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

 

Requested by:            Representatives Jeffus, Tolson, Yongue

Center for Craft, Creativity, and Design

SECTION 9.37.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the Center for Craft, Creativity, and Design at the University of North Carolina at Asheville, the sum of two hundred thousand dollars ($200,000) in recurring funds for the 2005-2006 fiscal year shall be held in reserve for the Center for Craft, Creativity, and Design at the University of North Carolina at Asheville. The funds shall be disbursed to the University of North Carolina at Asheville when the Center receives the interest earnings from an endowment for graduate scholarships at the Center.

 

Requested by:            Representative McLawhorn

FUNDS FOR THE NORTH CAROLINA CENTER ON THE ADVANCEMENT OF TEACHING

SECTION 9.38.  Funds in the amount of one million two hundred eighty-five thousand dollars ($1,285,000) for the 2005-2006 fiscal year and one million two hundred ten thousand dollars ($1,210,000) for the 2006-2007 fiscal year are appropriated in section 2.1 of this act in expansion funds for the North Carolina Center on the Advancement of Teaching.

 

PART X. DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

Requested by:            Representatives Insko, Barnhart

INFORMATION TECHNOLOGY

SECTION 10.1.(a)  To support its information technology initiatives, the Department of Health and Human Services shall develop the following:

(1)       A detailed business plan.

(2)       An information technology plan directly tied to business requirements.

(3)       An IT architecture.

The Department of Health and Human Services shall ensure that the planning documents extend three to five years and include detailed shortfall analyses and associated cost assessments. The Department of Health and Human Services shall forward the documents to the Office of Information Technology Services, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by December 1, 2005. The Office of Information Technology Services shall review the documents and report its findings and recommendations to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by January 31, 2006.

SECTION 10.1.(b)  The Department of Health and Human Services shall develop a project plan for each of its information technology projects.  These plans shall include the following:

(1)       A detailed description of the project.

(2)       A description of how the project improves Department operations and service to customers.

(3)       The projected cost of the project by year and phase.

(4)       Deliverables required to implement each phase of the system.

(5)       The date that each deliverable is to be implemented.

(6)       The cost of implementing each deliverable.

(7)       What capabilities each deliverable adds to the project.

SECTION 10.1.(c)  The Department of Health and Human Services shall provide the plans to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than October 1, 2005, with subsequent updates provided quarterly. The Department of Health and Human Services shall notify the Division of Fiscal Research within 10 days when costs, completion dates, or system capabilities change and provide a report detailing the impact of the change.

SECTION 10.1.(d)  The Department of Health and Human Services shall not spend more than the amounts appropriated by the General Assembly for information technology projects and may not allocate funds appropriated for one information technology project to any other information technology project.

SECTION 10.1.(e)  The Department of Health and Human Services shall use funds appropriated for the 2005-2006 and 2006-2007 fiscal years for the North Carolina Families Accessing Services through Technology (NC FAST) program only for program-specific development, deliverables, and maintenance costs associated with the NC FAST program.

 

Requested by:            Representatives Insko, Barnhart

OFFICE OF POLICY AND PLANNING

SECTION 10.2.  Article 3 of Chapter 143B is amended by adding the following new Part to read:

"Part 34. Office of Policy and Planning.

" 143B-216.70.  Office of Policy and Planning.

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

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

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

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

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

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

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

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

 

Requested by:            Representatives Insko, Barnhart

SENIOR CARES PROGRAM ADMINISTRATION

SECTION 10.4.(a)  The Department of Health and Human Services may administer the "Senior Cares" prescription drug access program approved by the Health and Wellness Trust Fund Commission and funded from the Health and Wellness Trust Fund.

SECTION 10.4.(b)  This section expires December 31, 2005.

 

Requested by:            Representatives Insko, Barnhart

NONMEDICAID REIMBURSEMENT CHANGES

SECTION 10.5.  Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program.

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

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

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

                                           Medical Eye                      Rehabilitation Except

Family Size                        Care Adults                         DSB Over 55 Grant                      Other

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

        2                                        5,940                                    10,944                                   5,300

        3                                        6,204                                    13,500                                   6,400

        4                                        7,284                                    16,092                                   7,500

        5                                        7,821                                    18,648                                   7,900

        6                                        8,220                                    21,228                                   8,300

        7                                        8,772                                    21,708                                   8,800

        8                                        9,312                                    22,220                                   9,300

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

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

                  Income              State Participation                Client Participation

            (% of poverty)

                 0-150%                        100%                                            0%

             151-200%                          75%                                          25%

             201-250%                          50%                                          50%

             251-300%                          25%                                          75%

             300% and over                     0%                                       100%

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

 

Requested by:            Representatives Insko, Barnhart

PHYSICIAN SERVICES

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

 

Requested by:            Representatives Insko, Barnhart

LIABILITY INSURANCE

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

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

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

 

Requested by:            Representatives Insko, Barnhart

DHHS PAYROLL DEDUCTION FOR CHILD CARE SERVICES

SECTION 10.8.  Part 1 of Article 3 of Chapter 143B of the General Statutes is amended by adding the following new section to read:

" 143B-139.6B.  Department of Health and Human Services; authority to deduct payroll for child care services.

Notwithstanding G.S. 143-3.3 and pursuant to rules adopted by the State Controller, an employee of the Department of Health and Human Services may, in writing, authorize the Department to periodically deduct from the employee's salary or wages paid for employment by the State, a designated lump sum to be paid to satisfy the cost of services received for child care provided by the Department."

 

Requested by:            Representatives Insko, Barnhart

COMMUNITY HEALTH CENTERS FUNDS

SECTION 10.9.(a)  Of the funds appropriated in this act for Community Health Grants, the sum of two million dollars ($2,000,000) in recurring funds for the 2005-2006 fiscal year and the sum of two million dollars ($2,000,000) in recurring funds for the 2006-2007 fiscal year shall be used for State-designated rural health centers and public health departments and other clinics to:

(1)       Increase access to preventative and primary care services by uninsured or medically indigent patients in existing or new health center locations;

(2)       Establish community health center services in counties where no such services exist;

(3)       Create new services or augment existing services provided to uninsured or medically indigent patients, including primary care and preventative medical services, dental services, pharmacy, and behavioral health; and

(4)       Increase capacity necessary to serve the uninsured by enhancing or replacing facilities, equipment, or technologies.

Grant funds may not be used to enhance or increase compensation or other benefits of personnel, administrators, directors, consultants, or any other parties. Grant funds may not be used to finance or satisfy any existing debt.

SECTION 10.9.(b)  The Office shall work with the North Carolina Community Health Center Association (hereafter "NCCHCA") and the North Carolina Public Health Association (hereafter "NCPHA") to establish an advisory committee to develop an objective and equitable process for awarding grant funds. The Office shall also develop auditing and accountability procedures. Not more than one percent (1%) of the funds appropriated in this section may be used to reimburse the Office for administering the grant program in collaboration with the NCCHCA and the NCPHA.

SECTION 10.9.(c)  Recipients of grant funds shall provide to the Office annually a written report detailing the number of additional uninsured and medically indigent patients that are cared for, the types of services that were provided, and any other information requested by the Office as necessary for evaluating the success of the grant program.

SECTION 10.9.(d)  The Office shall work with the NCCHCA and NCPHA to study and present recommendations for continuing funds to support the expansion of community health centers, State-designated rural health centers, and public health departments to serve more of the State's uninsured and indigent population. The Office shall submit the report to the 2006 Regular Session of the 2005 General Assembly upon its convening.

 

Requested by:            Representatives Insko, Barnhart

PROVIDER REIMBURSEMENT RATES

SECTION 10.10.  Except for rate increases funded in this act, the Department of Health and Human Services shall maintain reimbursement rates paid to service providers at fiscal year 2004-2005 levels during the 2005-2006 fiscal year. Exceptions made by the Department shall be made on a case-by-case basis and must be approved by the Office of the Secretary. Changes in rate structures that result in lower payments to the providers are exempted from this requirement. As used in this section, "service providers" includes subcontractors, such as counties, area agencies on aging, departments of social services, departments of public health, child developmental services agencies, and local management entities.

 

Requested by:            Representatives Insko, Barnhart

MEDICAID

SECTION 10.11.(a)  Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy. Funds appropriated for these services shall be expended in accordance with the following schedule of services and payment bases. All services and payments are subject to the language at the end of this subsection.

Services and payment bases:

(1)       Hospital inpatient. - Payment for hospital inpatient services will be prescribed in the State Plan as established by the Department of Health and Human Services.

(2)       Hospital outpatient. - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Health and Human Services.

(3)       Nursing facilities. - Payment for nursing facility services will be prescribed in the State Plan as established by the Department of Health and Human Services. Nursing facilities providing services to Medicaid recipients who also qualify for Medicare must be enrolled in the Medicare program as a condition of participation in the Medicaid program. State facilities are not subject to the requirement to enroll in the Medicare program. Residents of nursing facilities who are eligible for Medicare coverage of nursing facility services must be placed in a Medicare-certified bed. Medicaid shall cover facility services only after the appropriate services have been billed to Medicare. The Division of Medical Assistance shall allow nursing facility providers sufficient time from the effective date of this act to certify additional Medicare beds if necessary. In determining the date that the requirements of this subdivision become effective, the Division of Medical Assistance shall consider the regulations governing certification of Medicare beds and the length of time required for this process to be completed.

(4)       Intermediate care facilities for the mentally retarded. - As prescribed in the State Plan as established by the Department of Health and Human Services.

(5)       Drugs. - Drug costs as allowed by federal regulations plus a professional services fee per month, excluding refills for the same drug or generic equivalent during the same month. Reimbursement shall be available for up to five brand-name prescription drugs per recipient per month, including refills, and for an unlimited number of generic prescription drugs per recipient, per month. Payments for drugs are subject to the provisions of subsection (h) of this section and to the provisions at the end of this subsection or in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. The professional services fee shall be five dollars and sixty cents ($5.60) per prescription for generic drugs and four dollars ($4.00) per prescription for brand-name drugs. Adjustments to the professional services fee shall be established by the General Assembly. In addition to the professional services fee, the Department may pay an enhanced fee for pharmacy services. As used in this subsection, "brand name" means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and "established name" has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act as amended, 21 U.S.C. 352(e)(3).

(6)       Physicians, chiropractors, podiatrists, optometrists, dentists, certified nurse midwife services, nurse practitioners. - Fee schedules as developed by the Department of Health and Human Services. Payments for dental services are subject to the provisions of subsection (g) of this section.

(7)       Community Alternative Program, EPSDT screens. - Payment to be made in accordance with the rate schedule developed by the Department of Health and Human Services.

(8)       Home health and related services, private duty nursing, clinic services, prepaid health plans, durable medical equipment. - Payment to be made according to reimbursement plans developed by the Department of Health and Human Services.

(9)       Medicare Buy-In. - Social Security Administration premium.

(10)     Ambulance services. - Uniform fee schedules as developed by the Department of Health and Human Services. Public ambulance providers will be reimbursed at cost.

(11)     Hearing aids. - Wholesale cost plus a dispensing fee to the provider.

(12)     Rural health clinic services. - Provider-based, reasonable cost; nonprovider-based, single-cost reimbursement rate per clinic visit.

(13)     Family planning. - Negotiated rate for local health departments. For other providers, see specific services, for instance, hospitals, physicians.

(14)     Independent laboratory and X-ray services. - Uniform fee schedules as developed by the Department of Health and Human Services.

(15)     Optical supplies. - Payment for materials is made to a contractor in accordance with 42 C.F.R. 431.54(d). Fees paid to dispensing providers are negotiated fees established by the State agency based on industry charges.

(16)     Ambulatory surgical centers. - Payment as prescribed in the reimbursement plan established by the Department of Health and Human Services.

(17)     Medicare crossover claims. - By not later than October 1, 2005, the Department shall apply Medicaid medical policy to Medicare claims for dually eligible recipients. The Department shall pay an amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Health and Human Services.

(18)     Physical therapy and speech therapy. - Services limited to EPSDT-eligible children. Payments are to be made only to qualified providers at rates negotiated by the Department of Health and Human Services. Physical therapy (including occupational therapy) and speech therapy services are subject to prior approval and utilization review.

(19)     Personal care services. - Payment in accordance with the State Plan approved by the Department of Health and Human Services.

(20)     Case management services. - Reimbursement in accordance with the availability of funds to be transferred within the Department of Health and Human Services.

(21)     Hospice. - Services may be provided in accordance with the State Plan developed by the Department of Health and Human Services.

(22)     Other mental health services. - Unless otherwise covered by this section, coverage is limited to:

a.         Services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) when provided in agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services, and reimbursement is made in accordance with a State Plan developed by the Department of Health and Human Services not to exceed the upper limits established in federal regulations, and

b.         For children eligible for EPSDT services provided by:

1.         Licensed or certified psychologists, licensed clinical social workers, certified clinical nurse specialists in psychiatric mental health advanced practice, nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, licensed psychological associates, licensed professional counselors, licensed marriage and family therapists, certified clinical addictions specialists, and certified clinical supervisors, when Medicaid-eligible children are referred by the Community Care of North Carolina primary care physician, a Medicaid-enrolled psychiatrist, or the area mental health program or local management entity, and

2.         Institutional providers of residential services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) for children and Psychiatric Residential Treatment Facility services that meet federal and State requirements as defined by the Department.

c.         For Medicaid-eligible adults, services provided by licensed or certified psychologists, licensed clinical social workers, certified clinical nurse specialists in psychiatric mental health advanced practice, and nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, licensed psychological associates, licensed professional counselors, licensed marriage and family therapists, certified clinical addictions specialists, and certified clinical supervisors, Medicaid-eligible adults may be self-referred.

d.         Payments made for services rendered in accordance with this subdivision shall be to qualified providers in accordance with approved policies and the State Plan. Nothing in sub-subdivision b. or c. of this subdivision shall be interpreted to modify the scope of practice of any service provider, practitioner, or licensee, nor to modify or attenuate any collaboration or supervision requirement related to the professional activities of any service provider, practitioner, or licensee. Nothing in sub-subdivision b. or c. of this subdivision shall be interpreted to require any private health insurer or health plan to make direct third-party reimbursements or payments to any service provider, practitioner, or licensee.

e.         The Department of Health and Human Services shall not enroll licensed psychological associates, licensed professional counselors, licensed marriage and family therapists, certified clinical addiction specialists, and certified clinical supervisors until all of the following conditions have been met:

1.         The fiscal impact of payments to these qualified providers has been projected;

2.         Funding for any projected requirements in excess of budgeted Division of Medical Assistance funding has been identified from within State funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to support area mental health programs or county programs, or identified from other sources; and

3.         Approval has been obtained from the Office of State Budget and Management to transfer these State or other source funds from the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to the Division of Medical Assistance. Upon approval and implementation, the Department of Health and Human Services shall, on a quarterly basis, provide a status report to the Office of State Budget and Management and the Fiscal Research Division.

Notwithstanding G.S. 150B-21.1(a), the Department of Health and Human Services may adopt temporary rules in accordance with Chapter 150B of the General Statutes further defining the qualifications of providers and referral procedures in order to implement this subdivision. Coverage policy for services defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services under sub-subdivisions a. and b.2. of this subdivision shall be established by the Division of Medical Assistance.

(23)     Medically necessary prosthetics or orthotics. - Reimbursement in accordance with the State Plan approved by the Department of Health and Human Services, except that in order to be eligible for reimbursement, providers must be Board certified not later than July 1, 2005. Medically necessary prosthetics and orthotics are subject to prior approval and utilization review.

(24)     Health insurance premiums. - Payments to be made in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal regulations.

(25)     Medical care/other remedial care. - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates. Services addressed by this subdivision are limited to those prescribed in the State Plan as established by the Department of Health and Human Services.

(26)     Pregnancy-related services. - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.

Services and payment bases may be changed with the approval of the Director of the Budget.

Payment is limited to Medicaid-enrolled providers that purchase a performance bond in an amount not to exceed one hundred thousand dollars ($100,000) naming as beneficiary the Department of Health and Human Services, Division of Medical Assistance, or provide to the Department a validly executed letter of credit or other financial instrument issued by a financial institution or agency honoring a demand for payment in an equivalent amount. The Department may waive or limit the requirements of this paragraph for one or more classes of Medicaid-enrolled providers based on the provider's dollar amount of monthly billings to Medicaid or the length of time the provider has been licensed in this State to provide services. In waiving or limiting requirements of this paragraph, the Department shall take into consideration the potential fiscal impact of the waiver or limitation on the State Medicaid Program. The Department may adopt temporary rules in accordance with G.S. 150B-21.1 as necessary to implement this provision.

Reimbursement is available for up to 24 visits per recipient per year to any one or a combination of the following: physicians, clinics, hospital outpatient, optometrists, chiropractors, and podiatrists. Prenatal services, all EPSDT children, emergency rooms, and mental health services subject to independent utilization review are exempt from the visit limitations contained in this paragraph. Exceptions may be authorized by the Department of Health and Human Services where the life of the patient would be threatened without such additional care.

SECTION 10.11.(b)  Allocation of Nonfederal Cost of Medicaid. - The State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section. In addition, the State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the federal Medicare Part D clawback payments under the Medicare Modernization Act of 2004.

SECTION 10.11.(c)  Co-Payment for Medicaid Services. - The Department of Health and Human Services may establish co-payments up to the maximum permitted by federal law and regulation and required by this subsection in order to achieve reductions in the budget in fiscal years 2005-2006 and 2006-2007.

SECTION 10.11.(d)  Medicaid and Work First Family Assistance, Income Eligibility Standards. - The maximum net family annual income eligibility standards for Medicaid and Work First Family Assistance and the Standard of Need for Work First Family Assistance shall be as follows:

                   Categorically Needy                                        Medically Needy

                             WFFA*

      Family                  Standard                             Families and

         Size                     of Need                         Children Income

                                                                                     Level            AA, AB, AD*

          1                           $4,344                                 $2,172                $2,900

          2                             5,664                                   2,832                   3,800

          3                             6,528                                   3,264                   4,400

          4                             7,128                                   3,564                   4,800

          5                             7,776                                   3,888                   5,200

          6                             8,376                                   4,188                   5,600

          7                             8,952                                   4,476                   6,000

          8                             9,256                                   4,680                   6,300

*Work First Family Assistance (WFFA); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).

 

The payment level for Work First Family Assistance shall be fifty percent (50%) of the standard of need.

These standards may be changed with the approval of the Director of the Budget with the advice of the Advisory Budget Commission.

SECTION 10.11.(e)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to all elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines, as revised each April 1. 

SECTION 10.11.(f)  ICF and ICF/MR Work Incentive Allowances. - The Department of Health and Human Services may provide an incentive allowance to Medicaid-eligible recipients of ICF and ICF/MR facilities who are regularly engaged in work activities as part of their developmental plan and for whom retention of additional income contributes to their achievement of independence. The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department. The incentive allowances may be as follows:

Monthly Net Wages                 Monthly Incentive Allowance

              $1.00 to $100.99                               Up to $50.00

         $101.00 to $200.99                                         $80.00

         $201.00 to $300.99                                       $130.00

         $301.00 and greater                                       $212.00.

SECTION 10.11.(g)  Dental Coverage Limits. - Dental services shall be provided on a restricted basis in accordance with rules adopted by the Department to implement this subsection.

SECTION 10.11.(h)  The Department of Health and Human Services shall not impose prior authorization requirements under the State Medical Assistance Program on medications prescribed for Medicaid recipients for the treatment of: (i) mental illness, including, but not limited to, medications for schizophrenia, bipolar disorder, and major depressive disorder, or (ii) HIV/AIDS.

SECTION 10.11.(i)  Exceptions to Service Limitations, Eligibility Requirements, and Payments. - Service limitations, eligibility requirements, and payments bases in this section may be waived by the Department of Health and Human Services, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, contracting for services, managed care plans, or community-based services programs in accordance with plans approved by the United States Department of Health and Human Services or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient. The Department of Health and Human Services may proceed with planning and development work on the Program of All-Inclusive Care for the Elderly.

SECTION 10.11.(j)  Volume Purchase Plans and Single Source Procurement. - The Department of Health and Human Services, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other contracting processes in order to improve cost containment.

SECTION 10.11.(k)  Cost-Containment Programs. - The Department of Health and Human Services, Division of Medical Assistance, may undertake cost-containment programs, including contracting for services, preadmissions to hospitals, and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.

SECTION 10.11.(l)  For all Medicaid eligibility classifications for which the federal poverty level is used as an income limit for eligibility determination, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines.

SECTION 10.11.(m)  The Department of Health and Human Services shall provide Medicaid to 19-, 20-, and 21-year-olds in accordance with federal rules and regulations.

SECTION 10.11.(n)  The Department of Health and Human Services shall provide coverage to pregnant women and to children according to the following schedule:

(1)       Pregnant women with incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(2)       Infants under the age of one with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(3)       Children aged one through five with family incomes equal to or less than one hundred thirty-three percent (133%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(4)       Children aged six through 18 with family incomes equal to or less than the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(5)       The Department of Health and Human Services shall provide Medicaid coverage for adoptive children with special or rehabilitative needs regardless of the adoptive family's income.

Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy. In order to reduce county administrative costs and to expedite the provision of medical services to pregnant women, to infants, and to children described in subdivisions (3) and (4) of this subsection, no resources test shall be applied.

SECTION 10.11.(o)  Medicaid enrollment of categorically needy families with  children shall be continuous for one year without regard to changes in income or assets.

SECTION 10.11.(p)  The Division of Medical Assistance, Department of Health and Human Services, may provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.

SECTION 10.11.(q)  If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Health and Human Services, may use funds that are identified to support the cost of development and acquisition of equipment and software through contractual means to improve and enhance information systems that provide management information and claims processing. The Department of Health and Human Services shall identify adequate funds to support the implementation and first year's operational costs that exceed the currently allocated funds for the new contract for the fiscal agent for the Medicaid Management Information System.

SECTION 10.11.(r)  The Department of Health and Human Services may adopt temporary or emergency rules according to the procedures established in G.S. 150B-21.1 and G.S. 150B-21.1A when it finds that these rules are necessary to maximize receipt of federal funds within existing State appropriations, to reduce Medicaid expenditures, and to reduce fraud and abuse. Prior to the filing of these temporary or emergency rules with the Rules Review Commission and the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary or emergency rule and its effect on State appropriations and local governments.

SECTION 10.11.(s)  The Department shall report to the Fiscal Research Division of the Legislative Services Office and to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Health and Human Services or the Joint Legislative Health Care Oversight Committee on any change it anticipates making in the Medicaid program that impacts the type or level of service, reimbursement methods, or waivers, any of which require a change in the State Plan or other approval by the Centers for Medicare and Medicaid Services (CMS). The reports shall be provided at the same time they are submitted to CMS for approval.

SECTION 10.11.(t)  The Department of Health and Human Services shall provide Medicaid coverage for family planning services to men and women of childbearing age with family income equal to or less than one hundred eighty-five percent (185%) of the federal poverty level under the family planning demonstration waiver approved by the federal government. Implementation shall be made by October 1, 2005.  The Department may use up to six hundred seventy-five thousand dollars ($675,000) of funds in the Women's Health Services Fund to provide State matching funds for the family-planning demonstration waiver.  The remainder of the funds in the Women's Health Services Fund shall be used for community-based organizations that are currently receiving these funds in accordance with the purposes of the Fund.

SECTION 10.11.(u)  The Department of Health and Human Services may apply federal transfer of assets policies, as described in Title XIX, section 1917(c) of the Social Security Act, including the attachment of liens, to real property excluded as  "income producing", tenancy-in-common, or as nonhomesite property made "income producing" under Title XIX, section 1902(r)(2) of the Social Security Act. The transfer of assets policy shall apply only to an institutionalized individual or the individual's spouse as defined in Title XIX, section 1917(c) of the Social Security Act. This subsection becomes effective no earlier than October 1, 2001. Federal transfer of asset policies and attachment of liens to properties excluded as tenancy-in-common or as nonhomesite property made "income producing" in accordance with this subsection shall become effective not earlier than November 1, 2002.

SECTION 10.11.(v)  When implementing the Supplemental Security Income (SSI) method for considering equity value of income-producing property, the Department shall, to the maximum extent possible, employ procedures to mitigate the hardship to Medicaid enrollees occurring from application of the Supplemental Security Income (SSI) method.

SECTION 10.11.(w)  Unless required for compliance with federal law, the Department shall not change medical policy affecting the amount, sufficiency, duration, and scope of health care services and who may provide services until the Division of Medical Assistance has prepared a five-year fiscal analysis documenting the increased cost of the proposed change in medical policy and submitted it for Departmental review. If the fiscal impact indicated by the fiscal analysis for any proposed medical policy change exceeds three million dollars ($3,000,000) in total requirements for a given fiscal year, then the Department shall submit the proposed policy change with the fiscal analysis to the Office of State Budget and Management and the Fiscal Research Division. The Department shall not implement any proposed medical policy change exceeding three million dollars ($3,000,000) in total requirements for a given fiscal year unless the source of State funding is identified and approved by the Office of State Budget and Management. The Department shall provide the Office of State Budget and Management and the Fiscal Research Division a quarterly report itemizing all medical policy changes with total requirements of less than three million dollars ($3,000,000).

SECTION 10.11.(x)  The Department shall develop, amend, and adopt medical coverage policy in accordance with the following:

(1)       During the development of new medical coverage policy or amendment to existing medical coverage policy, consult with and seek the advice of the Physician Advisory Group of the North Carolina Medical Society and other organizations the Secretary deems appropriate. The Secretary shall also consult with and seek the advice of officials of the professional societies or associations representing providers who are affected by the new medical coverage policy or amendments to existing medical coverage policy.

(2)       At least 45 days prior to the adoption of new or amended medical coverage policy, the Department shall:

a.         Publish the proposed new or amended medical coverage policy on the Department's Web site;

b.         Notify all Medicaid providers of the proposed, new, or amended policy; and

c.         Upon request, provide persons copies of the proposed medical coverage policy.

(3)       During the 45-day period immediately following publication of the proposed new or amended medical coverage policy, accept oral and written comments on the proposed new or amended policy.

(4)       If, following the comment period, the proposed new or amended medical coverage policy is modified, then the Department shall, at least 15 days prior to its adoption:

a.         Notify all Medicaid providers of the proposed policy;

b.         Upon request, provide persons notice of amendments to the proposed policy; and

c.         Accept additional oral or written comments during this 15-day period.

SECTION 10.11.(y)  For the purposes of investigating and reducing client fraud and abuse, the Department of Health and Human Services, Division of Medical Assistance, shall, unless prohibited by federal law, include in the Medicaid enrollment process the requirement that the applicant for Medicaid consent to or authorize in writing the release of the applicant's medical records for the three years immediately preceding the application for Medicaid benefits.  The Department shall obtain and use information from the applicant's medical records in a manner and form that complies with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), P.L. 104-191, as amended, and that protects the privacy of the information as required by other applicable federal or State law. In addition to fraud and abuse detection, the Department may require the applicant's consent for other purposes permitted by HIPAA and required or authorized by other applicable federal or State law.

 

Requested by:            Representatives Insko, Barnhart

DISPOSITION OF DISPROPORTIONATE SHARE RECEIPTS

SECTION 10.12.(a)  Disproportionate share receipts reserved at the end of the 2005-2006 and 2006-2007 fiscal years shall be deposited with the Department of State Treasurer as nontax revenue for each of those fiscal years.

SECTION 10.12.(b)  For each year of the 2005-2007 fiscal biennium, as it receives funds associated with Disproportionate Share Payments from State hospitals, the Department of Health and Human Services, Division of Medical Assistance, shall deposit up to one hundred million dollars ($100,000,000) of these Disproportionate Share Payments to the Department of State Treasurer for deposit as nontax revenue.  Any Disproportionate Share Payments collected in excess of one hundred million dollars ($100,000,000) shall be reserved by the State Treasurer for future appropriations.

 

Requested by:            Representatives Insko, Barnhart

COUNTY MEDICAID COST SHARE

SECTION 10.13.(a)  Effective July 1, 2000, the county share of the cost of Medicaid services currently and previously provided by area mental health authorities shall be increased incrementally each fiscal year until the county share reaches fifteen percent (15%) of the nonfederal share by State fiscal year 2009-2010.

SECTION 10.13.(b)  Effective July 1, 2000, the county share of the cost of Medicaid Personal Care Services paid to adult care homes shall be decreased incrementally each fiscal year until the county share reaches fifteen percent (15%) of the nonfederal share by State fiscal year 2009-2010.

 

Requested by:            Representatives Insko, Barnhart

MEDICAID COST CONTAINMENT ACTIVITIES

SECTION 10.14.  The Department of Health and Human Services may use not more than three million dollars ($3,000,000) in the 2005-2006 fiscal year and not more than three million dollars ($3,000,000) in the 2006-2007 fiscal year in Medicaid funds budgeted for program services to support the cost of administrative activities when cost-effectiveness and savings are demonstrated.  The funds shall be used to support activities that will contain the cost of the Medicaid Program, including contracting for services or hiring additional staff.  Medicaid cost-containment activities may include prospective reimbursement methods, incentive-based reimbursement methods, service limits, prior authorization of services, periodic medical necessity reviews, revised medical necessity criteria, service provision in the least costly settings, plastic magnetic stripped Medicaid identification cards for issuance to Medicaid enrollees, fraud detection software or other fraud detection activities, technology that improves clinical decision making, credit balance recovery and data mining services, and other cost-containment activities.  Funds may be expended under this section only after the Office of State Budget and Management has approved a proposal for the expenditure submitted by the Department. Proposals for expenditure of funds under this section shall include the cost of implementing the cost-containment activity and documentation of the amount of savings expected to be realized from the cost-containment activity.  The Department shall provide a copy of proposals for expenditures under this section to the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

MEDICAID RESERVE FUND TRANSFER

SECTION 10.15.  Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143-23.2, the sum of fifty million dollars ($50,000,000) for the 2005-2006 fiscal year and the sum of fifty million dollars ($50,000,000) for the 2006-2007 fiscal year shall be allocated as prescribed by G.S. 143-23.2(b) for Medicaid programs. Notwithstanding the prescription in G.S. 143-23.2(b) that these funds not reduce State general revenue funding, these funds shall replace the reduction in general revenue funding effected in this act.

 

Requested by:            Representatives Insko, Barnhart

EXPAND COMMUNITY CARE OF NORTH CAROLINA MANAGEMENT TO ADDITIONAL MEDICAID RECIPIENTS

SECTION 10.17.(a)  The Department of Health and Human Services shall expand the scope of Community Care of NC, Inc., care management model to recipients of Medicaid and dually eligible individuals with a chronic condition and long-term care needs.  In expanding the scope, the Department shall focus on the Aged, Blind, and Disabled, and CAP-DA populations for improvement in management, cost-effectiveness, and local coordination of services through Community Care of NC, Inc., and in collaboration with local providers of care.  The Department shall target personal care services, private duty nursing, home health, durable medical equipment, ancillary professional services, specialty care, residential services, including skilled nursing facilities, home infusion therapy, pharmacy, and other services determined target-worthy by the Department.  The Department shall pilot communitywide initiatives and shall expand statewide successful models.

SECTION 10.17.(b)  The Department of Health and Human Services may work with the federal government to attain the necessary regulatory and policy relief to better align policy and economic incentives to improve care in the most cost-effective manner and attain savings through controlled utilization of services.

SECTION 10.17.(c)  The Department of Health and Human Services may pay network and primary care providers an enhanced PMPM care management fee and shall also provide additional block grant funds for start-up during the pilot phase. 

SECTION 10.17.(d)  Community Care of NC, Inc., and the Department of Health and Human Services shall review the prescribing of diagnostic testing by physicians to determine if overutilization is occurring.  The Department shall include the results of the review in the report required under subsection (e) of this section. If the Department finds that overutilization is occurring, it shall implement a plan to reduce or eliminate the overutilization.

SECTION 10.17.(e)  The Department of Health and Human Services shall report on the implementation of this section, including resulting savings and quality improvement benchmarks, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than March 1, 2007.

 

Requested by:            Representatives Insko, Barnhart

TICKET TO WORK/MEDICAID ELIGIBILITY STUDY

SECTION 10.18.  The Department of Health and Human Services shall study and develop a plan for the implementation of the Ticket to Work Program. The Department shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division not later than March 1, 2006, on the results of its study. The report shall include what system changes need to be made to implement the Ticket to Work Program, how soon the changes can be made, and an analysis of the five-year fiscal impact of the Program.

 

Requested by:            Representatives Insko, Barnhart

MEDICAID PERSONAL CARE SERVICES LIMITATIONS

SECTION 10.19.(a)  The Department of Health and Human Services, Division of Medical Assistance, shall reduce the cost of providing personal care services under the Medicaid program by six million dollars ($6,000,000) for the 2005-2006 fiscal year and by eight million dollars ($8,000,000) for the 2006-2007 fiscal year.  The Department shall accomplish the reduction by implementing a utilization management system for personal care services. The Division of Medical Assistance shall work with Community Care of North Carolina (CCNC) to determine how CCNC can help with the review of the need for and utilization of personal care services.

SECTION 10.19.(b)  The Division of Medical Assistance shall study and determine additional utilization/prior authorization systems for personal care services and other home- and community-based services that can be provided to individuals who meet medical criteria and that can be implemented when the new MMIS goes into effect.  The Department of Health and Human Services, Division of Medical Assistance, shall report the plan for implementation of this section, including costs, not later than May 1, 2006, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representative Insko

DDA GROUP HOME FUNDING

SECTION 10.19A.(a)  The Department of Health and Human Services may develop a plan to use State funds appropriated to support group homes for persons with developmental disabilities to expand the funding available under the CAP-MR/DD waiver and to use the increased waiver funds, in part, to pay for group home services.  In developing this plan, the Department shall ensure that the total funding available to the group homes is not reduced. 

SECTION 10.19A.(b)  The Department of Health and Human Services may submit a progress report on implementation of this section not later than February 1, 2006, and a final report not later than May 1, 2006, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division.

 

Requested by:            Representative Nye

Implement Electronic Quality Prescription Management Program

SECTION 10.19B.  The Department of Health and Human Services, Division of Medical Assistance, shall implement an Electronic Quality Prescription Management program for prescription drugs through the use of personal data assistance (PDA) technology.

 

Requested by:            Representatives Insko, Barnhart

COMMUNITY ALTERNATIVE PROGRAMS REIMBURSEMENT SYSTEM

SECTION 10.20.(a)  The Department of Health and Human Services, Division of Medical Assistance, shall study developing a new system for reimbursing the Community Alternatives Programs.  The new system shall:

(1)       Use a case-mix reimbursement system, similar to the one used by nursing facilities and home health agencies, to determine the level of care provided and the amount paid for the care provided;

(2)       Incorporate into the case-mix system, the home environment and social support systems; and

(3)       Use the Resource Utilization Groups-III (RUG-III) to determine the level of need for Community Alternatives Programs services.

SECTION 10.20.(b)  Not later than May 1, 2006, the Department of Health and Human Services, Division of Medical Assistance, shall report on the development of the new system, including an implementation schedule. Full implementation of the new system shall be not later than January 1, 2007. The Department shall submit the report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

DMA ACCESS TO HEALTH INSURANCE INFORMATION TO ENSURE RECOUPMENT OF MEDICAID FUNDS  SPENT ON MEDICAL CARE COVERED BY INSURANCE

SECTION 10.21.(a)  Part 1 of Article 50 of Chapter 58 of the General Statutes is amended by adding the following new section to read:

" 58-50-46.  Insurers to provide certain information to Department of Health and Human Services.

(a)       As used in this section, the terms:

(1)       'Department' means the Department of Health and Human Services.

(2)       'Division' means the Division of Medical Assistance of the Department of Health and Human Services.

(3)       'Health benefit plan' and 'insurer' have the meaning applicable under G.S. 58-3-167.

(4)       'Medical assistance' means medical assistance benefits provided under the State Medical Assistance Plan.

(b)       Every insurer issuing a health benefit plan shall provide to the Department of Health and Human Services, upon its request, information, including automated data matches conducted under the direction of the Department of Health and Human Services, Division of Medical Assistance, as necessary for the purpose of identifying individuals covered under the insurer's health benefit plans who are also recipients of medical assistance. To facilitate the Division in obtaining this and other related information, every insurer shall:

(1)       Cooperate with the Division to determine whether a named individual who is a recipient of medical assistance may be covered under the insurer's health benefit plan and eligible to receive benefits under the health benefit plan for services provided under the State Medical Assistance Plan;

(2)       Accept the Division's authorization for the provision of medical services on behalf of the recipient of medical assistance as the insurer's authorization for the provision of services covered under the insurer's health benefit plan; and

(3)       Respond to the request for information within 30 working days after receipt of written proof of loss or claim for payment for health care services provided to a recipient of medical assistance who is covered by the insurer's health benefit plan.

(c)       An insurer that complies with this section shall not be liable on that account in any civil or criminal action or proceedings brought by an individual covered under the insurer's health benefit plan, or the individual's beneficiaries."

SECTION 10.21.(b)  G.S. 108A-70 reads as rewritten:

" 108A-70.  Recoupment of amounts spent on medical care.

(a)       The Department may garnish the wages, salary, or other employment income of, and the Secretary of Revenue shall withhold amounts from State tax refunds to, any person who:

(1)       Is required by court or administrative order to provide health benefit plan coverage for the cost of health care services to a child eligible for medical assistance under Medicaid; and

(2)       Has received payment from a third party for the costs of such services; but

(3)       Has not used such payments to reimburse, as appropriate, either the other parent or guardian of the child or the provider of the services;

to the extent necessary to reimburse the Department for expenditures for such costs under this Part; provided, however, claims for current and past due child support shall take priority over any such claims for the costs of such services.

(b)       To the extent that payment for covered services has been made under G.S. 108A-55 for health care items or services furnished to an individual, in any case where a third party has a legal liability to make payments, the Department of Health and Human Services is considered to have acquired the rights of the individual to payment by any other party for those health care items or services.

(c)       The Department of Health and Human Services, Division of Medical Assistance, may request, receive, and use information obtained pursuant to G.S. 58-50-46 in order to enforce this section."

 

Requested by:            Representatives Nye, Barnhart

VERIFICATION OF STATE RESIDENCY FOR MEDICAL ASSISTANCE

SECTION 10.21A.(a)  G.S. 108A-24(6) reads as rewritten:

"(6)      "Resident," unless otherwise defined by federal regulation, is a person who is living in North Carolina at the time of application with the intent to remain permanently or for an indefinite period; or who is a person who enters North Carolina seeking employment or with a job commitment. For purposes of Part 6 of this Article, a person is not a resident of this State if the person is determined ineligible for medical assistance benefits under G.S. 108A-55.3."

SECTION 10.21A.(b)  Part 6 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new section to read:

" 108A-55.3. Verification of State residency required for medical assistance.

(a)       At the time of application for medical assistance benefits, the applicant shall provide satisfactory proof that the applicant is a resident of North Carolina and that the applicant is not maintaining a temporary residence or abode incident to receiving medical assistance under this Part.

(b)       An applicant may meet the requirements of subsection (a) of this section by providing at least two of the following documents:

(1)       A valid North Carolina drivers license.

(2)       A current North Carolina rent or mortgage payment receipt or utility bill in the applicant's name with the applicant's current address.

(3)       A valid North Carolina motor vehicle registration in the applicant's name and showing the applicant's current address.

(4)       A document showing that the applicant is employed in this State.

(5)       One or more documents proving that the applicant's domicile in a prior state of residency has been terminated.

(6)       Tax records.

(7)       A document showing that the applicant has registered with a public or private employment service in this State.

(8)       Evidence that the applicant has enrolled the applicant's children in a public or private school or child care facility located in this State.

(9)       Evidence that the applicant is receiving public assistance other than medical assistance in this State.

(10)     Records from a health department located in this State.

(11)     Evidence of other social or economic relationships with the State.

(c)       For applicants, including those who are homeless, who declare under penalty of perjury that they do not have one of the verifying documents in subsection (b) of this section, any other evidence that verifies residence may be considered. However, a declaration, affidavit, or other statement from the applicant or another person that the applicant is a resident is insufficient in the absence of other credible evidence.

(d)       The Division of Medical Assistance shall not provide payment for medical assistance provided to an applicant unless or until the applicant has met the requirements of this section.

(e)       Unless otherwise provided for under Title 19 of the Social Security Act, a child under age 18 is a resident of the state where the child's parent or legal guardian is domiciled.

(f)        This section does not apply to an applicant whose eligibility for medical assistance is excepted from State residency requirements under federal law."

 

Requested by:            Representatives Nye, Insko, Barnhart

MEDICAID TRANSFER OF ASSETS POLICY APPLICABLE TO TRANSFER OF LIFE ESTATES

SECTION 10.21B.  For the purposes of determining eligibility for Medical Assistance, the Department of Health and Human Services may apply federal transfer of assets policies, as described in Title XIX, Section 1917(c) of the Social Security Act, to (i) life estates purchased by or on behalf of the recipient, other than life estates excluded from countable resources under this section, and (ii) to real property excluded as "income producing", tenancy-in-common, or as nonhomesite property made "income producing" under Title XIX, Section 1902(r)(2) of the Social Security Act. The Department shall exclude from countable resources any life estate in real property that is in the recipient's home, is measured by the recipient's life, and is the result of the transfer of a remainder interest.

Federal transfer of assets policies to "income producing" real property under Title XIX, Section 1902(r)(2) of the Social Security Act shall become effective not earlier than October 1, 2001. Federal transfer of asset policies applied to real property excluded as tenancy-in-common, or as nonhomesite property made "income producing" in accordance with this subsection shall become effective not earlier than November 1, 2002. Federal transfer of asset policies applied to life estates in accordance with this subsection shall become effective not earlier than October 1, 2005.

 

Requested by:            Representative Nye

MEDICAID ESTATE RECOVERY TO INCLUDE LIENS ON REAL PROPERTY

SECTION 10.21C.(a)  G.S. 108A-70.5 reads as rewritten:

" 108A-70.5.  Medicaid Estate Recovery Plan.

(a)       There is established in the Department of Health and Human Services, the Medicaid Estate Recovery Plan, as required by the Omnibus Budget Reconciliation Act of 1993, to recover from the estates of recipients of medical assistance an equitable amount of the State and federal shares of the cost paid the recipient.1993. The Department shall administer the program in accordance with applicable federal law and regulations, including those under Title XIX of the Social Security Act, 42 U.S.C. 1396(p). To the extent allowed by section 1396(p) of Title XIX of the Social Security Act, the Department may impose liens against real property, including the home, of a recipient of medical assistance.

(b)       As used in this section:

(1)       "Medical assistance" means medical care services paid for by the North Carolina Medicaid Program on behalf of the recipient:

a.         If the recipient of any age is receiving these medical care services as an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution, and cannot reasonably be expected to be discharged to return home; or

b.         If the recipient is 55 years of age or older and is receiving these medical care services, including related hospital care and prescription drugs, for nursing facility services, personal care services, or home- and community-based services.one or more of the following medical care services:

1.         Nursing facility services.

2.         Home and community-based services.

3.         Hospital care and prescription drugs related to nursing facility services or home and community-based services.

4.         Personal care services.

5.         Medicare premiums.

6.         Private duty nursing.

7.         Home health aide services.

8.         Home health therapy.

9.         Speech pathology services.

10.       Hospice services.

(2)       "Estate" means all the real and personal property considered assets of the estate available for the discharge of debt pursuant to G.S. 28A-15-1.

(3)       'Home' means property in which a recipient has, or had immediately before or at the time of the recipient's death, an ownership interest or legal title to, consisting of the recipient's dwelling and the land used and operated in connection with the dwelling.

(c)       The amount the Department recovers from the estate of any recipient shall not exceed the amount of medical assistance made on behalf of the recipient  and shall be recoverable only for medical care services prescribed in subsection (b) of this section. The To the extent that allowable Medicaid claims are not satisfied as a result of the execution of any liens held by the Department, the Department is a fifth-class creditor, as prescribed in G.S. 28A-19-6, for purposes of determining the order of claims against an estate; provided, however, that judgments in favor of other fifth-class creditors docketed and in force before the Department seeks recovery for medical assistance shall be paid prior to recovery by the Department.

(d)       The Department of Health and Human Services shall adopt rules pursuant to Chapter 150B of the General Statutes to implement the Plan, including rules to waive whole or partial recovery when this recovery would be inequitable because it would work an undue hardship or because it would not be administratively cost-effective and rules to ensure that all recipients are notified that their estates are subject to recovery at the time they become eligible to receive medical assistance.

(e)       Regarding trusts that contain the assets of an individual who is disabled as defined in Title 19 of Section 1014(a)(3) of the Social Security Act, as amended, if the trust is established and managed by a nonprofit association, to the extent that amounts remaining in the beneficiary's account upon the death of the beneficiary are not retained by the nonprofit association, the trust pays to the Department from these remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the North Carolina Medicaid Program."

SECTION 10.21C.(b)  Part 6 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new sections to read:

" 108A-70.6.  Postponement of estate recovery required in cases of undue hardship.

(a)       The Department shall postpone or waive estate recovery, including the execution of a lien in whole or in part, when the Department determines that the estate recovery or the execution of the lien would work an undue hardship to an heir or a beneficiary of the Medicaid recipient.

(b)       A claim of undue hardship to an heir or beneficiary shall be made in writing to the Department within 30 days after the receipt of notification of the Medicaid lien or claim. The claim for hardship shall describe the financial circumstance of the heir or beneficiary and the basis for the claim.

(c)       An undue hardship exists if:

(1)       The property subject to the lien has a tax value less than or equal to thirty thousand dollars ($30,000);

(2)       The property subject to the lien is the sole source of income for a surviving heir or beneficiary, and the loss of the net income derived from the property would result in the heir's or beneficiary's annual gross income to fall below one hundred percent (100%) of the federal poverty guidelines in the year in which the hardship is claimed; or

(3)       The sale of the property would be required to satisfy the Department's claim, and all of the following conditions are met:

a.         The heir or beneficiary resided in the decedent's home on a continual basis for at least 24 months immediately prior to the date of the recipient's death and the heir or beneficiary was using the property as a principal place of residence on the date of the recipient's death;

b.         The heir or beneficiary has, from the time the Department first presents its claim for recovery against the deceased recipient's estate and after, annual gross income in the amount not exceeding one hundred  fifty percent (150%) of the federal poverty income standard;

c.         The heir or beneficiary owns no other real property or agrees to sell other real property in partial payment of the Department's claim; and

d.         The heir or beneficiary owns other assets not exceeding a net value of thirty thousand dollars ($30,000).

" 108A-70.7.  Notice of claim or lien.

(a)       The Department shall provide each applicant for medical assistance, or the applicant's representative, written notice that:

(1)       Receipt of medical assistance may result in a Medicaid claim or lien upon the recipient's estate, including the recipient's home, to recover costs paid on behalf of the recipient for medical assistance in accordance with G.S. 108A-70.5; and

(2)       Receipt of medical assistance as an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution, when the recipient cannot reasonably be expected to be discharged to return home may result in a lien upon the recipient's home prior to the recipient's death in accordance with G.S. 108A-70.5.

(b)       Notice under this section shall also explain the hardship conditions under which estate recovery, including the execution of a lien, may be postponed or waived.

" 108A-70.8.  County departments of social services to provide information.

The Department may require the county department of social services administering medical assistance to gather and provide the Department with the information and administrative or legal assistance needed to recover medical assistance under G.S. 108A-70.5. The Department shall pay to the county department of social services an amount equal to twenty percent (20%) of the State share of recovery collected by the Department. The Department may withhold payments under this section for a county department's failure to comply with the Department's requirements under this section."

 

Requested by:            Representatives Wright, Stam

MEDICAID WAIVER/TRANSFER OF ASSETS LOOK-BACK

SECTION 10.21D.  The Department of Health and Human Services, Division of Medical Assistance, shall request a waiver from the Centers for Medicare and Medicaid Services (CMS) such that the look-back period for determining transfer of assets for the purpose of establishing or retaining eligibility for Medicaid may be increased from three years to five years and from five to eight years for purposes of estate recovery.  If the waiver is granted, the Department shall implement the waiver. If the waiver is implemented, the increased look-back period shall apply to applications for establishing or retaining eligibility submitted on and after the effective date of the waiver. The Department shall report on the status of the waiver to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division not later than April 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

NC HEALTH CHOICE APPROPRIATIONS/CLAIMS PROCESSING

SECTION 10.22.(a)  The total amount of State funds expended for the Health Insurance Program for Children (NC Health Choice) in the 2005-2006 fiscal year and the 2006-2007 fiscal year shall not exceed the amount of State funds appropriated to match federal funds for the Program for the 2003-2004 fiscal year and the 2004-2005 fiscal year.  The Department shall manage program enrollment in a way that maximizes the number of children served within existing funds.

SECTION 10.22.(b)  The Department of Health and Human Services shall either (i) amend an existing contract, or (ii) issue a Request for Proposal to contract for administration and claims processing of the NC Health Choice Program. The contract shall provide for applying Medicaid rates for service providers as provided by law. The Department shall schedule the review process for proposals received such that the Department has signed a contract with the selected contractor not later than July 1, 2006. The contract shall provide for full implementation of administration and claims processing, including the application of Medicaid rates for service providers other than prescription drug and dental care providers, not later than July 1, 2007. The Department shall study the impact of paying dental care providers at Medicaid rates and shall make its recommendation to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than May 1, 2006.

SECTION 10.22.(c)  Effective July 1, 2007, G.S. 108A-70.22, G.S. 108A-70.24, and Part 5 of Article 3 of Chapter 135 of the General Statutes are repealed.

SECTION 10.22.(d)  Effective July 1, 2007, G.S. 108A-70.20 reads as rewritten:

" 108A-70.20.  Program established.

The Health Insurance Program for Children is established. The Program shall be administered by the Department of Health and Human Services in accordance with this Part and as required under Title XXI and related federal rules and regulations. Administration of Program benefits and claims processing shall be as provided under Part 5 of Article 3 of Chapter 135 of the General Statutes."

SECTION 10.22.(e)  G.S. 108A-70.21(b) and (d) read as rewritten:

"(b)      Benefits. - Except as otherwise provided for eligibility, fees, deductibles, copayments, and other cost-sharing charges, health benefits coverage provided to children eligible under the Program shall be equivalent to coverage provided for dependents under the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan, including optional prepaid plans. Prescription drug providers shall accept as payment in full, for outpatient prescriptions filled, ninety percent (90%) of the average wholesale price for the prescription drug or the amounts published by the Centers for Medicare and Medicaid Services plus a dispensing fee of five dollars and sixty cents ($5.60) per prescription for generic drugs and four dollars ($4.00) per prescription for brand name drugs. All otherExcept for dental care providers, health care providers providing services to Program enrollees shall accept as payment in full for services rendered the maximum allowable charges under the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan State Medical Assistance Program for services less any copayments assessed to enrollees under this Part. Dental care providers providing services to Program enrollees shall accept as payment in full for services rendered the maximum allowable charges under the Teachers' and State Employees' Comprehensive Major Medical Plan for services less any co-payments assessed to enrollees under this Part. No child enrolled in the Plan's self-insured indemnity program shall be required by the Plan to change health care providers as a result of being enrolled in the Program.

In addition to the benefits provided under the Plan, the following services and supplies are covered under the Health Insurance Program for Children established under this Part:

(1)       Dental: Oral examinations, teeth cleaning, and scaling twice during a 12-month period, full mouth X-rays once every 60 months, supplemental bitewing X-rays showing the back of the teeth once during a 12-month period, fluoride applications twice during a 12-month period, fluoride varnish, sealants, simple extractions, therapeutic pulpotomies, prefabricated stainless steel crowns, and routine fillings of amalgam or other tooth-colored filling material to restore diseased teeth. No benefits are to be provided for services under this subsection that are not performed by or upon the direction of a dentist, doctor, or other professional provider approved by the Plan nor for services and materials that do not meet the standards accepted by the American Dental Association.

(2)       Vision: Scheduled routine eye examinations once every 12 months, eyeglass lenses or contact lenses once every 12 months, routine replacement of eyeglass frames once every 24 months, and optical supplies and solutions when needed. Optical services, supplies, and solutions must be obtained from licensed or certified ophthalmologists, optometrists, or optical dispensing laboratories. Eyeglass lenses are limited to single vision, bifocal, trifocal, or other complex lenses necessary for a Plan enrollee's visual welfare. Coverage for oversized lenses and frames, designer frames, photosensitive lenses, tinted contact lenses, blended lenses, progressive multifocal lenses, coated lenses, and laminated lenses is limited to the coverage for single vision, bifocal, trifocal, or other complex lenses provided by this subsection. Eyeglass frames are limited to those made of zylonite, metal, or a combination of zylonite and metal. All visual aids covered by this subsection require prior approval of the Plan. Upon prior approval by the Plan, refractions may be covered more often than once every 12 months.

(3)       Hearing: Auditory diagnostic testing services and hearing aids and accessories when provided by a licensed or certified audiologist, otolaryngologist, or other hearing aid specialist approved by the Plan. Prior approval of the Plan is required for hearing aids, accessories, earmolds, repairs, loaners, and rental aids.

The Department may provide services to children aged birth through five years enrolled in the Program through the State Medical Assistance managed care program. Services provided through the managed care program shall be paid from Program funds.

(d)       Cost-Sharing. - There shall be no deductibles, copayments, or other cost-sharing charges for families covered under the Program whose family income is at or below one hundred fifty percent (150%) of the federal poverty level, except that fees for outpatient prescription drugs are applicable and shall be one dollar ($1.00) for each outpatient generic prescription drug and for each outpatient brand-name prescription drug for which there is no generic substitution available. The fee for each outpatient brand-name prescription drug for which there is a generic substitution available is three dollars ($3.00). Families covered under the Program whose family income is above one hundred fifty percent (150%) of the federal poverty level shall be responsible for copayments to providers as follows:

(1)       Five dollars ($5.00) per child for each visit to a provider, except that there shall be no copayment required for well-baby, well-child,well child or age-appropriate immunization services;

(2)       Five dollars ($5.00) per child for each outpatient hospital visit;

(3)       A one dollar ($1.00) fee for each outpatient generic prescription drug and for each outpatient brand-name prescription drug for which there is no generic substitution available. The fee for each outpatient brand-name prescription drug for which there is a generic substitution available is ten dollars ($10.00).

(4)       Twenty dollars ($20.00) for each emergency room visit unless:

a.         The child is admitted to the hospital, or

b.         No other reasonable care was available as determined by the Claims Processing Contractor of the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan.

Copayments required under this subsection for prescription drugs apply only to prescription drugs prescribed on an outpatient basis."

 

Requested by:            Representatives Insko, Barnhart

LONG-TERM PLAN FOR MEETING MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES NEEDS

SECTION 10.24.(a)  The Secretary of the Department of Health and Human Services shall, in consultation with interested advocacy groups and affected State and local agencies, develop a long-range plan for addressing the mental health, developmental disabilities, and substance abuse services needs of the State. The plan shall be consistent with the plan developed pursuant to G.S. 122C-102, and shall address the following:

(1)       The services needed at the community level within each LME in order to ensure an adequate level of services to the average number of persons needing the services based on population projections.

(2)       The full continuum of services needed for each disability group within an LME, including:

a.         Which services could be regional or multi-LME based;

b.         What percent of the population each LME would expect to use State-level facilities; and

c.         An inventory of existing services within each LME for each disability group, and the gaps that exist;

(3)       Projected growth in services for each disability group within each LME or region that can reasonably be managed over the ensuing five-year period; and

(4)       Projected start-up costs and the total funding needed in each year from the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs to implement the long-range plan.

Funds shall not be transferred from the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs until the Secretary has consulted with the Joint Legislative Commission on Governmental Operations, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Chairs of the Senate Appropriations Committee on Health and Human Services and the House of Representatives Appropriations Subcommittee on Health and Human Services.

SECTION 10.24.(b)  Moneys in the Trust Fund established pursuant to G.S. 143-15D shall be used to establish or expand community-based services only if sufficient recurring funds can be identified within the Department from funds currently budgeted for mental health, developmental disabilities, and substance abuse services, area mental health programs or county programs, or local government.

SECTION 10.24.(c)  Not later than December 1, 2006, the Department of Health and Human Services shall report on the implementation of this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

COMPREHENSIVE TREATMENT SERVICES PROGRAM

SECTION 10.25.(a)  The Department of Health and Human Services shall continue the Comprehensive Treatment Services Program for children at risk for institutionalization or other out-of-home placement. The Program shall be implemented by the Department in consultation with the Department of Juvenile Justice and Delinquency Prevention, the Department of Public Instruction, and other affected State agencies. The purpose of the Program is to provide appropriate and medically necessary residential and nonresidential treatment alternatives for children at risk of institutionalization or other out-of-home placement. Program funds shall be targeted for non-Medicaid eligible children. Program funds may also be used to expand a system-of-care approach for services to children and their families statewide. The program shall include the following:

(1)       Behavioral health screening for all children at risk of institutionalization or other out-of-home placement.

(2)       Appropriate and medically necessary residential and nonresidential services for deaf children.

(3)       Appropriate and medically necessary residential and nonresidential treatment services, including placements for sexually aggressive youth.

(4)       Appropriate and medically necessary residential and nonresidential treatment services, including placements for youths needing substance abuse treatment services and children with serious emotional disturbances.

(5)       Multidisciplinary case management services, as needed.

(6)       A system of utilization review specific to the nature and design of the Program.

(7)       Mechanisms to ensure that children are not placed in department of social services custody for the purpose of obtaining mental health residential treatment services.

(8)       Mechanisms to maximize current State and local funds and to expand use of Medicaid funds to accomplish the intent of this Program.

(9)       Other appropriate components to accomplish the Program's purpose.

(10)     The Secretary of the Department of Health and Human Services may enter into contracts with residential service providers.

(11)     A system of identifying and tracking children placed outside of the family unit in group homes, therapeutic foster care home settings, and other out-of-home placements.

SECTION 10.25.(b)  In order to ensure that children at risk for institutionalization or other out-of-home placement are appropriately served by the mental health, developmental disabilities, and substance abuse services system, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall do the following with respect to services provided to these children:

(1)       Provide only those treatment services that are medically necessary.

(2)       Implement utilization review of services provided.

(3)       Adopt the following guiding principles for the provision of services:

a.         Service delivery system must be outcome-oriented and evaluation-based.

b.         Services should be delivered as close as possible to the child's home.

c.         Services selected should be those that are most efficient in terms of cost and effectiveness.

d.         Services should not be provided solely for the convenience of the provider or the client.

e.         Families and consumers should be involved in decision making throughout treatment planning and delivery.

(4)       Implement all of the following cost-reduction strategies:

a.         Preauthorization for all services except emergency services.

b.         Levels of care to assist in the development of treatment plans.

c.         Clinically appropriate services.

SECTION 10.25.(c)  The Department shall collaborate with other affected State agencies such as the Department of Juvenile Justice and Delinquency Prevention, the Department of Public Instruction, the Administrative Office of the Courts, and with local departments of social services, area mental health programs, and local education agencies to eliminate cost shifting and facilitate cost-sharing among these governmental agencies with respect to the treatment and placement services.

SECTION 10.25.(d)  The Department shall not allocate funds appropriated for Program services until a Memorandum of Agreement has been executed between the Department of Health and Human Services, the Department of Public Instruction, and other affected State agencies. The Memorandum of Agreement shall address specifically the roles and responsibilities of the various departmental divisions and affected State agencies involved in the administration, financing, care, and placement of children at risk of institutionalization or other out-of-home placement.  The Department shall not allocate funds appropriated in this act for the Program until Memoranda of Agreement between local departments of social services, area mental health programs, local education agencies, and the Administrative Office of the Courts and the Department of Juvenile Justice and Delinquency Prevention, as appropriate, are executed to effectuate the purpose of the Program.  The Memoranda of Agreement shall address issues pertinent to local implementation of the Program, including provision for the immediate availability of student records to a local school administrative unit receiving a child placed in a residential setting outside the child's home county.

SECTION 10.25.(e)  Notwithstanding any other provision of law to the contrary, services under the Comprehensive Treatment Services Program are not an entitlement for non-Medicaid eligible children served by the Program.

SECTION 10.25.(f)  Of the funds appropriated in this act for the Comprehensive Treatment Services Program, the Department of Health and Human Services shall establish a reserve of three percent (3%) to ensure availability of these funds to address specialized needs for children with unique or highly complex problems.

SECTION 10.25.(g)  The Department of Health and Human Services, in conjunction with the Department of Juvenile Justice and Delinquency Prevention, the Department of Public Instruction, and other affected agencies, shall report on the following Program information:

(1)       The number and other demographic information of children served.

(2)       The amount and source of funds expended to implement the Program.

(3)       Information regarding the number of children screened, specific placement of children, including the placement of children in programs or facilities outside of the child's home county, and treatment needs of children served.

(4)       The average length of stay in residential treatment, transition, and return to home.

(5)       The number of children diverted from institutions or other out-of-home placements such as training schools and State psychiatric hospitals and a description of the services provided.

(6)       Recommendations on other areas of the Program that need to be improved.

(7)       Other information relevant to successful implementation of the Program.

SECTION 10.25.(h)  The Department shall submit a report on December 1, 2005, on the implementation of this section and a final report not later than April 1, 2006, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

CHILD AND FAMILY TEAMS/INTEGRATED SERVICES PROGRAM FOR childREN AND FAMILIES

SECTION 10.25A.(a)  Program established. - There is established the Integrated Services Program for Children and Families.  The purpose of the Program is to identify and coordinate appropriate community services and supports for children "at risk" and their families.  The Program shall be based on accountability, the development of a strong infrastructure of interagency collaboration, individualized strengths-based care, cultural competence, child and family involvement, and community-based services delivered in the most appropriate and natural settings for the child and the child's family. The Department of Health and Human Services, the Department of Public Instruction, the Department of Juvenile Justice and Delinquency Prevention, the Administrative Office of the Courts, and other State agencies that provide services for children shall share responsibility and accountability to improve outcomes for children with or at risk for academic, behavioral, health, social, or safety problems and who require assistance from multiple agencies in order to succeed in school and live with their families or in a family-like setting in their community.

SECTION 10.25A.(b)  The integrated services program for children and families shall be based on the following principles:

(1)       One child, one team, one plan; and

(2)       A child "at risk" may enter the system of care through any participating agency.

(3)       Services shall be:

a.         Specified in one unified Child and Family Plan that is outcome-oriented and evaluation-based;

b.         Planned, delivered, and monitored through one unified School- or Community-Based Child and Family Team;

c.         Delivered as close as possible to the child's home;

d.         The most efficient in terms of cost and effectiveness;

e.         Out-of-home placements for children shall be a last resort and shall include concrete plans to bring the children back to a stable, permanent home, their schools and their community; and

f.          Families and consumers shall be involved in decision making throughout service planning, delivery, and monitoring.

SECTION 10.25A.(c)  Leadership Council established. - There is established the North Carolina Child and Family Leadership Council ("Council").  The Superintendent of Public Instruction and the Secretary of Health and Human Services shall serve as cochairs of the Council.  Council membership shall include the Secretary of the Department of Juvenile Justice and Delinquency Prevention, the Director of the Administrative Office of the Courts, and other members as appointed by the Governor.  The Council shall ensure that policies addressing the needs of children are consistent; that children receiving services are screened initially to identify needs; assessed periodically to determine progress and ensure sustained improvement in educational, health, safety, behavioral, and social outcomes; and that the Program promotes the more effective and efficient use of resources and eliminates duplication of effort.

The Council shall meet at least quarterly to:

(1)       Develop a memorandum of agreement (MOA) to be reviewed and signed annually among the named State agencies to define the purposes of the program and to ensure that program goals are accomplished.

(2)       Work with local collaboratives or councils to develop a local MOA.

(3)       Develop a plan and time line for implementation of school-based child and family teams.

(4)       Respond to and resolve State policy issues identified at the local level which interfere with effective implementation of the Program.

(5)       Direct the integration of resources as needed to meet goals.

(6)       Ensure appropriate outcomes.

(7)       Establish criteria for defining success in local programs.

(8)       Review progress made on integrating policies and resources across State agencies, reaching definitive child and family outcomes, and accomplishing other goals.

(9)       Report semiannually on progress made to the Office of the Governor and the General Assembly.

The Council may designate existing cross agency collaboratives or councils as working groups or to provide assistance in accomplishing established goals.

SECTION 10.25A.(d)  Local level responsibilities. - A Local Child and Family Team Advisory Committee shall be chaired by the superintendent of the local school administrative unit and the head of a participating county agency as elected by the Committee. The Committee shall include the directors of the county departments of social services and health, the directors of the local management entity, the chief district court judge, the chief court counselor, and representatives of other agencies providing services to children, as designated by the Committee. They shall sign and implement annually a memorandum of agreement (MOA) approved by the State Council.  A copy of the MOA shall be maintained on file at the State and local level of each of the named agencies and in the Office of the Governor.

In accordance with the local MOA, each local committee shall develop a plan for integrating children's services. The plan shall include:

(1)       Specified outcomes;

(2)       Implementation process, including milestones;

(3)       Program organization and agency responsibilities;

(4)       Criteria for measuring program success;

(5)       Reporting requirements;

(6)       Administrative and technology support requirements;

(7)       Training requirements;

(8)       Resources requirements;

(9)       Time periods in which the specified services must be provided; and

(10)     Defined commitments of staff leadership and time across agencies and at multiple levels.

The plan shall be implemented in each county using all available resources.

SECTION 10.25A.(e)  Program Services. - In order to ensure that children receiving Program services are appropriately served, the affected State and local agencies shall:

(1)       Provide only those services that are known to be effective based upon research or national standards of best practices.

(2)       Develop a set of outcomes that are shared across affected State agencies to measure children's progress in home, school, and community settings.

(3)       Implement utilization review of services provided across affected State agencies to ensure that children's needs are met.

(4)       Named State agencies, local departments of social services, local management entities and their provider communities, and local education agencies shall eliminate cost shifting and shall facilitate cost-sharing among governmental agencies with respect to service development, service delivery, and monitoring for Program children and their families.

SECTION 10.25A.(f)  Report to Leadership Council. - Each county shall report annually to the North Carolina Child and Family Leadership Council on the status of the Program.  The report shall include the following:

(1)       The number and other demographic information of children served.

(2)       The amount and source of funds expended to implement the Program.

(3)       Information regarding how families and consumers are involved in decision making throughout service planning, delivery, and monitoring.

(4)       Information regarding the number of children screened, specific placement of children, including the placement of children in programs or facilities outside of the child's home, outside the child's county, and service needs of children served.

(5)       The average length of stay in residential treatment, transition, and return to home.

(6)       The number of children diverted from institutions or other out-of-home placements such as detention, Youth Development Centers, State psychiatric hospitals, those diverted from the custody of the department of social services because of unmet behavioral health needs, and a description of the services provided.

(7)       Recommendations on other areas of the Program that need improvement.

(8)       Efficiencies created by implementing the Program.

(9)       Other information relevant to successful implementation of the Program.

SECTION 10.25A.(g)  The North Carolina Child and Family Leadership Council shall submit an interim report on implementation of this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the House Appropriations Subcommittee on Justice and Public Safety, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division on or before April 1, 2006, and a final report on or before January 1, 2007.

 

Requested by:            Representatives Insko, Barnhart

SERVICES TO MULTIPLY DIAGNOSED ADULTS

SECTION 10.26.(a)  In order to ensure that multiply diagnosed adults are appropriately served by the mental health, developmental disabilities, and substance abuse services system, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall do the following with respect to services provided to these adults:

(1)       Implement the following guiding principles for the provision of services:

a.         Service delivery system must be outcome-oriented and evaluation-based.

b.         Services should be delivered as close as possible to the consumer's home.

c.         Services selected should be those that are most efficient in terms of cost and effectiveness.

d.         Services should not be provided solely for the convenience of the provider or the client.

e.         Families and consumers should be involved in decision making throughout treatment planning and delivery.

(2)       Provide those treatment services that are medically necessary.

(3)       Implement utilization review of services provided.

SECTION 10.26.(b)  The Department of Health and Human Services shall implement all of the following cost-reduction strategies:

(1)       Preauthorization for all services except emergency services.

(2)       Criteria for determining medical necessity.

(3)       Clinically appropriate services.

SECTION 10.26.(c)  No State funds shall be used for the purchase of single-family or other residential dwellings to house multiply diagnosed adults.

SECTION 10.26.(d)  The Department shall submit a progress report on implementation of this section not later than February 1, 2006, and a final report not later than May 1, 2006, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

EXTEND MENTAL HEALTH CONSUMER ADVOCACY PROGRAM CONTINGENT UPON FUNDS APPROPRIATED BY THE 2007 GENERAL ASSEMBLY

SECTION 10.27.  Section 4 of S.L. 2001-437, as amended by Section 10.30 of S.L. 2002-126, and as further amended by Section 10.10 of S.L. 2003-284, reads as rewritten:

"SECTION 4. Sections 1.1 through 1.21(b) of this act become effective July 1, 2002. Section 2 of this act becomes effective only if funds are appropriated by the 2005 General Assembly for that purpose. Section 2 of this act becomes effective July 1 of the fiscal year for which funds are appropriated by the 2005 General Assembly for that purpose. The remainder of this act is effective when it becomes law."

 

Requested by:            Representatives Insko, Barnhart

TRANSITION PLANNING FOR STATE PSYCHIATRIC HOSPITALS

SECTION 10.28.(a)  In keeping with the United States Supreme Court decision in Olmstead vs. L.C. & E.W. and State policy to provide appropriate services to clients in the least restrictive and most appropriate environment, the Department of Health and Human Services shall continue to implement a plan for the transition of patients from State psychiatric hospitals to the community or to other long-term care facilities, as appropriate. The goal is to develop mechanisms and identify resources needed to enable patients and their families to receive the necessary services and supports based on the following guiding principles:

(1)       Individuals shall be provided acute psychiatric care in non-State facilities when appropriate.

(2)       Individuals shall be provided acute psychiatric care in State facilities only when non-State facilities are unavailable.

(3)       Individuals shall receive evidenced-based psychiatric services and care that are cost-efficient.

(4)       The State shall minimize cost shifting to other State and local facilities or institutions.

SECTION 10.28.(b)  The Department of Health and Human Services shall conduct an analysis of the individual patient service needs and shall develop and implement an individual transition plan, as appropriate, for patients in each hospital.  The State shall ensure that each individual transition plan, as appropriate, shall take into consideration the availability of appropriate alternative placements based on the needs of the patient and within resources available for the mental health, developmental disabilities, and substance abuse services system. In developing each plan, the Department shall consult with the patient and the patient's family or other legal representative.

SECTION 10.28.(c)  In accordance with the plan established in subsections (a) and (b) of this section, any nonrecurring savings in State appropriations that result from reductions in beds or services shall be placed in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs.  These funds shall be used to facilitate the transition of clients into appropriate community-based services and supports in accordance with G.S. 143-15.3D. Recurring savings realized through implementation of this section shall be retained by the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, (i) for implementation of subsections (a) and (b) of this section and (ii) to support the recurring costs of additional community-based placements from Division facilities in accordance with Olmstead vs. L.C. & E.W.

SECTION 10.28.(d)  The Department of Health and Human Services shall submit reports on the status of implementation of this section to the Joint Legislative Commission on Governmental Operations, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division.  These reports shall be submitted on December 1, 2005, and May 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

MENTAL RETARDATION CENTER DOWNSIZING

SECTION 10.29.(a)  In accordance with the Department of Health and Human Services' plan for mental health, developmental disabilities, and substance abuse services system reform, the Department shall ensure that the downsizing of the State's regional mental retardation facilities is continuously based upon residents' needs and the availability of community-based services with a targeted goal of four percent (4%) each year. The Department shall implement cost-containment and reduction strategies to ensure the corresponding financial and staff downsizing of each facility. The Department shall manage the client population of the mental retardation centers in order to ensure that placements for ICF/MR level of care shall be made in non-State facilities. Admissions to State ICF/MR facilities are permitted only as a last resort and only upon approval of the Department. The corresponding budgets for each of the State mental retardation centers shall be reduced, and positions shall be eliminated as the census of each facility decreases. At no time shall mental retardation center positions be transferred to other units within a facility or assigned nondirect care activities such as outreach.

SECTION 10.29.(b)  The Department of Health and Human Services shall apply any savings in State appropriations in each year of the 2005-2007 fiscal biennium that result from reductions in beds or services as follows:

(1)       The Department shall place nonrecurring savings in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs and use the savings to facilitate the transition of clients into appropriate community-based services and support in accordance with G.S. 143-15.3D;

(2)       The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall retain recurring savings realized through implementation of this section to support the recurring costs of additional community-based placements from Division facilities in accordance with Olmstead vs. L.C. & E.W. In determining the savings in this section, savings shall include all savings realized from the downsizing of the State mental retardation centers, including the savings in direct State appropriations in the budgets of the State mental retardation centers; and

(3)       The Department of Health and Human Services, Division of Medical Assistance, shall transfer any recurring Medicaid savings resulting from the downsizing of State-operated MR centers from the ICF-MR line in Medicaid to the CAP-MR/DD line.

SECTION 10.29.(c)  Notwithstanding G.S. 122C-181(c), the Secretary of Health and Human Services shall close one mental retardation center effective July 1, 2006. The Department of Health and Human Services shall maintain downsizing of other mental retardation centers occurring in the 2005-2006 fiscal year for the 2006-2007 fiscal year. The Department shall accomplish downsizing in accordance with this section and the State Plan for Mental Health, Developmental Disabilities, and Substance Abuse Services. The Department shall use all savings resulting from downsizing occurring on and after July 1, 2005, as set forth in subsection (b) of this section.

SECTION 10.29.(d)  The Department of Health and Human Services shall report on its progress in complying with this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The Department shall submit the progress report no later than January 15, 2006, and submit a final report no later than May 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

PRIVATE AGENCY UNIFORM COSt-FINDING REQUIREMENT

SECTION 10.30.  G.S. 122C-147.2 reads as rewritten:

" 122C-147.2.  Purchase of services and reimbursement rates.

(a)       When funds are used to purchase services, the following provisions apply:

(1)       Reimbursement rates for specific types of service shall be negotiated between the Secretary and the area authority. The negotiation shall begin with the rate determined by the a standardized cost-finding and rate-setting procedure that is required by G.S. 122C-143.2(a) or by another method approved by the Secretary.

(2)       The reimbursement rate used for the payment of services shall incorporate operating and administrative costs, including costs for property in accordance with G.S. 122C-147.

(b)       To ensure uniformity in rates charged to area programs and funded with State-allocated resources, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services of the Department of Health and Human Services may require a private agency that provides services under contract with an area program or county program, except for hospital services that have an established Medicaid rate, to complete an agency-wide uniform cost finding in accordance with subsection (a) of this section. The resulting cost shall be the maximum included for the private agency in the contracting area program's unit cost finding. If a private agency fails to timely and accurately complete the required agency-wide uniform cost finding in a manner acceptable to the Department's controller's office, the Department may suspend all Department funding and payment to the private agency until such time as an acceptable cost finding has been completed by the private agency and approved by the Department's controller's office."

 

Requested by:            Representatives Insko, Barnhart

DHHS POLICIES AND PROCEDURES IN DELIVERING COMMUNITY MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES

SECTION 10.31.  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall in cooperation with area mental health authorities and county programs, identify and eliminate administrative and fiscal barriers created by existing State and local policies and procedures in the delivery of community-based mental health, developmental disabilities, and substance abuse services provided through the area programs and county programs, including services provided through the Comprehensive Treatment Services Program for Children and services delivered to multiply diagnosed adults.  The Department shall implement changes in policies and procedures in order to facilitate all of the following:

(1)       The provision of services to adults and children as defined in the Mental Health System Reform State Plan as priority or targeted populations.

(2)       A revised system of allocating State and federal funds to area mental health authorities and county programs that reflects projected needs, including the impact of system reform efforts rather than historical allocation practices and spending patterns.

(3)       The provision of services to children not deemed eligible for the Comprehensive Treatment Services Program for Children, but who would otherwise be in need of medically necessary treatment services to prevent out-of-home placement.

(4)       The provision of services in the community to adults remaining in and being placed in State institutions addressed in Olmstead v. L.C. & E.W.

Area mental health, developmental disabilities, and substance abuse services authorities and county programs shall use all funds appropriated for and necessary to provide mental health, developmental disabilities, and substance abuse services to meet the need for these services.

The Department, in consultation with the area mental health authorities and county programs, shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services on the progress in implementing these changes. The report shall be submitted on October 1, 2005, and February 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

RULES PERTAINING TO CONFLICT OF INTEREST IN REFERRALS TO PROVIDER AGENCIES

SECTION 10.33.  G.S. 122C-26 reads as rewritten:

" 122C-26.  Powers of the Commission.

In addition to other powers and duties, 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;

(2)       Issue declaratory rulings needed to implement the provisions and purposes of this Article;

(3)       Adopt rules governing appeals of decisions to approve or deny licensure under this Article;

(4)       Adopt rules for the waiver of rules adopted under this Article; and

(5)       Adopt rules applicable to facilities licensed under this Article:

a.         Establishing personnel requirements of staff employed in facilities;

b.         Establishing qualifications of facility administrators or directors;

c.         Establishing requirements for death reporting including confidentiality provisions related to death reporting; and

d.         Establishing requirements for patient advocates. advocates; and

e.         Providing that facility personnel that have a pecuniary interest in any provider agency that provides services to facility clients may not refer  facility clients to provider agencies."

 

Requested by:            Representatives Insko, Barnhart

LEGISLATIVE OVERSIGHT COMMITTEE ON MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES TO STUDY OVERSIGHT AND MONITORING BY DEPARTMENT OF HEALTH AND HUMAN SERVICES OF SERVICES TO MENTAL HEALTH CONSUMERS

SECTION 10.34.  The Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services shall study the oversight and monitoring roles and activities of the Divisions of: Social Services, Facility Services, Medical Assistance, and Mental Health, Developmental Disabilities, and Substance Abuse Services, of the Department of Health and Human Services.  The study shall focus on how the oversight and monitoring activities benefit consumers of mental health, developmental disabilities, and substance abuse services in residential settings, and shall include in its report recommendations on ensuring quality of care and increasing efficiency in the provision of services.  The Oversight Committee shall report its findings and recommendations to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than April 1, 2006.

 

Requested by:            Representative Insko

APPEALS PROCESS FOR CLIENTS OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES PROGRAMS

SECTION 10.35.  G.S. 122C-151.2 reads as rewritten:

" 122C-151.2.  Appeal by area authorities and county programs.programs; rules governing appeals process for clients of area authorities or county programs.

(a)       The area authority or county program may appeal to the Commission any action regarding rules under the jurisdiction of the Commission or rules under the joint jurisdiction of the Commission and the Secretary.

(b)       The area authority or county program may appeal to the Secretary any action regarding rules under the jurisdiction of the Secretary.

(b1)     The Commission shall adopt rules governing an appeals process for clients to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and the Secretary. The appeals process shall ensure that area authority and county program services meet the requirements of applicable statutes and the rules of the Commission and the Secretary.

(b2)     By January 1, 2006, the Department of Health and Human Services shall consult with the State Consumers and Families Advisory Council to develop and implement a standardized appeals process to be followed by each local management entity (LME). The appeals process shall include a requirement that the LMEs inform each client of the client's right to complain directly to the State Office of Consumer Empowerment and Customer Services in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

(c)       Appeals shall be conducted according to rules adopted by the Commission and Secretary and in accordance with Chapter 150B of the General Statutes."

 

Requested by:            Representatives Insko, Barnhart

DHHS STUDY OF ACCREDITATION OF RESIDENTIAL TREATMENT FACILITIES

SECTION 10.35A.(a)  The Department of Health and Human Services shall study the feasibility of establishing accreditation requirements for residential treatment facilities.  In conducting the study, the Department shall identify accreditation organizations and a review of their standards and shall consider the following:

(1)       The financial and other impact accreditation will have on the facilities affected.

(2)       The feasibility of developing an alternative to accreditation for small facilities.

(3)       The potential for a reduction in the number of visits required by a local management entity if a residential facility were accredited.

(4)       Review of accreditation requirements of other states.

(5)       Cost of accreditation to the State and affected providers.

(6)       The specific requirements to meet accreditation.

SECTION 10.35A.(b)  The Department of Health and Human Services shall report its findings and recommendations to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division not later than March 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

SENIOR CENTER OUTREACH

SECTION 10.37.(a)  Funds appropriated to the Department of Health and Human Services, Division of Aging and Adult Services, for the 2005-2007 fiscal biennium, shall be used by the Division of Aging and Adult Services to enhance senior center programs as follows:

(1)       To expand the outreach capacity of senior centers to reach unserved or underserved areas; or

(2)       To provide start-up funds for new senior centers.

All of these funds shall be allocated by October 1 of each fiscal year.

SECTION 10.37.(b)  Prior to funds being allocated pursuant to this section for start-up funds for a new senior center, the county commissioners of the county in which the new center will be located shall:

(1)       Formally endorse the need for such a center;

(2)       Formally agree on the sponsoring agency for the center; and

(3)       Make a formal commitment to use local funds to support the ongoing operation of the center.

SECTION 10.37.(c)  State funding shall not exceed seventy-five percent (75%) of reimbursable costs.

 

Requested by:            Representatives Insko, Barnhart

STATE-COUNTY SPECIAL ASSISTANCE

SECTION 10.38.(a)  The eligibility of Special Assistance recipients residing in adult care homes on August 1, 1995, shall not be affected by an income reduction in the Special Assistance eligibility criteria resulting from adoption of the Rate Setting Methodology Report and Related Services, providing these recipients are otherwise eligible. The maximum monthly rate for these residents in adult care home facilities shall be one thousand two hundred thirty-one dollars ($1,231) per month per resident.

SECTION 10.38.(b)  Effective October 1, 2005, the maximum monthly rate for residents in adult care home facilities shall be one thousand one hundred twenty-four dollars ($1,124) per month per resident unless adjusted by the Department in accordance with subsection (e) of this section.

SECTION 10.38.(c)  Effective October 1, 2005, the maximum monthly rate for residents in Alzheimer/Dementia special care units shall be one thousand five hundred fifteen dollars ($1,515) per month per resident unless adjusted by the Department in accordance with subsection (e) of this section.

SECTION 10.38.(d)  It is the intent of the General Assembly to protect individuals who meet current eligibility standards for State-County Special Assistance from becoming disenfranchised from the program as a result of any changes proposed in this section. Therefore, subject to any necessary approvals by the Center for Medicare & Medicaid Services (CMS), the eligibility of Special Assistance recipients who resided in adult care homes on September 30, 2003, and remain continuously eligible shall not be affected by an income reduction in the Special Assistance eligibility criteria, providing these recipients are otherwise eligible. The maximum monthly rate for these residents in adult care home facilities shall be one thousand ninety-one dollars ($1,091) per month per resident.

SECTION 10.38.(e)  Notwithstanding any other provision of this section, the Department of Health and Human Services shall review activities and costs related to the provision of care in adult care homes and shall determine what costs may be considered to properly maximize allowable reimbursement available through Medicaid personal care services for adult care homes (ACH-PCS) under federal law.  As determined, and with any necessary approval from the Centers for Medicare and Medicaid Services (CMS), and the approval of the Office of State Budget and Management, the Department may transfer necessary funds from the State-County Special Assistance program within the Division of Social Services to the Division of Medical Assistance and may use those funds as State match to draw down federal matching funds to pay for such activities and costs under Medicaid's personal care services for adult care homes (ACH-PCS), thus maximizing available federal funds.  The established rate for State-County Special Assistance set forth in subsections (b) and (c) of this section shall be adjusted by the Department to reflect any transfer of funds from the Division of Social Services to the Division of Medical Assistance and related transfer costs and responsibilities from State-County Special Assistance to the Medicaid personal care services for adult care homes (ACH-PCS).  Such rate adjustments to the Special Assistance rate shall be effective with the effective date of increased reimbursement under ACH-PCS. The Division of Medical Assistance shall apply income disregards for current recipients such that cost and rate adjustments made under this subsection do not render otherwise eligible recipients ineligible for services.  In no event shall the reimbursement for services through the ACH-PCS exceed the average cost of such services as determined by the Department from review of cost reports as required and submitted by adult care homes. The Department shall report any transfers of funds and modifications of rates to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

SECTION 10.38.(f)  Subject to approval by the Centers for Medicare and Medicaid Services (CMS), the Department may implement a less restrictive income methodology allowed under Section 1902(r)(2) of the Social Security Act. The methodology shall be an income disregard for a special purpose and shall be applied only to individuals whose countable income exceeds the current State-County Special Assistance payment standard. The amount of the disregard shall not exceed the value of reductions in the Special Assistance rate occurring on and after October 1, 2003. The income disregarded under this subsection shall be used to reduce the Medicaid payment for the individual's personal care services provided in an adult care home.

Subsequent to approval by CMS under this subsection, the maximum value of an income disregard may be increased by the amount of any reduction in the Special Assistance rate authorized under this section, plus the amount calculated by the annual cost-of-living adjustment factor applied to Supplemental Security Income and Social Security Benefits, rounded up to the nearest dollar.

The effective date of an income disregard approved under this subsection shall be the first day of the third month following approval by CMS.

 

Requested by:            Representatives Insko, Barnhart

SPECIAL ASSISTANCE IN-HOME

SECTION 10.39.(a)  The Department of Health and Human Services may use funds from the existing State-County Special Assistance for Adults budget to provide Special Assistance payments to eligible individuals in in-home living arrangements. These payments may be made for up to 1,000 individuals during the 2005-2006 fiscal year and the 2006-2007 fiscal year. The standard monthly payment to individuals enrolled in the Special Assistance in-home program shall be seventy-five percent (75%) of the monthly payment the individual would receive if the individual resided in an adult care home and qualified for Special Assistance, except if a lesser payment amount is appropriate for the individual as determined by the local case manager. For State fiscal year 2005-2006, qualified individuals shall not receive payments at rates less than they would have been eligible to receive in State fiscal year 2004-2005. The Department shall implement Special Assistance in-home eligibility policies and procedures to assure that in-home program participants are those individuals who need and, but for the in-home program, would seek placement in an adult care home facility. The Department's policies and procedures shall include the use of a functional assessment. The Department shall make this in-home option available to all counties on a voluntary basis. To the maximum extent possible, the Department shall consider geographic balance in the dispersion of payments to individuals across the State.

SECTION 10.39.(b)  The Department shall report on or before January 1, 2006, and on or before January 1, 2007, to the cochairs of the House of Representatives Appropriations Committee, the House of Representatives Appropriations Subcommittee on Health and Human Services, the cochairs of the Senate Appropriations Committee, and the cochairs of the Senate Appropriations Committee on Health and Human Services. This report shall include the following information:

(1)       A description of cost savings that result from allowing individuals eligible for State-County Special Assistance the option of remaining in the home.

(2)       A complete fiscal analysis of the in-home option to include all federal, State, and local funds expended.

(3)       How much case management is needed and which types of individuals are most in need of case management.

(4)       The geographic location of individuals receiving payments under this section.

(5)       A description of the services purchased with these payments.

(6)       A description of the income levels of individuals who receive payments under this section and the impact on the Medicaid program.

(7)       Findings and recommendations as to the feasibility of continuing or expanding the in-home program.

(8)       The level and quantity of services (including personal care services) provided to the demonstration project participants compared to the level and quantity of services for residents in adult care homes.

SECTION 10.39.(c)  The Department shall incorporate data collection tools designed to compare quality of life among institutionalized versus noninstitutionalized populations (i.e., an individual's perception of his or her own health and well-being, years of healthy life, and activity limitations). To the extent national standards are available, the Department shall utilize those standards.

 

Requested by:            Representatives Insko, Barnhart

LICENSURE OF RESIDENTIAL TREATMENT FACILITIES

SECTION 10.40.(a) Article 2 of Chapter 122C of the General Statutes is amended by adding the following new section to read:

" 122C-23.1.  Licensure of residential treatment facilities.

The General Assembly finds: 

(1)       That much of the care for residential treatment facility residents is paid by the State and the counties;

(2)       That the cost to the State for care for residents of residential treatment facilities is substantial, and high vacancy rates in residential treatment facilities further increase the cost of care;

(3)       That the proliferation of residential treatment facilities results in costly duplication and underuse of facilities and may result in lower quality service;

(4)       There is currently no ongoing relationship between some applicants for licensure and local management entities (LMEs) that are responsible for the placement of children and adults in residential treatment facilities; and

(5)       That it is necessary to protect the general welfare and lives, health, and property of the people of the State for the local management entity (LME) to verify that additional beds are needed in the LME's catchment area before new residential treatment facilities are licensed. This process is established to ensure that unnecessary costs to the State do not result, residential treatment facility beds are available where needed, and that individuals who need care in residential treatment facilities may have access to quality care.

Based on these findings, the Department of Health and Human Services may license new residential treatment facilities if the applicant for licensure submits with the application a letter of support obtained from the local management entity in whose catchment area the facility will be located. The letter of support shall be submitted to the Department of Health and Human Services, Division of Facility Services and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, and shall specify the number of existing beds in the same type of facility in the catchment area and the projected need for additional beds of the same type of facility. As used in this subsection, "residential treatment facility" means a "residential facility" as defined in and licensed under this Chapter, but not subject to Certificate of Need requirements under Article 9 of Chapter 131E of the General Statutes.

SECTION 10.40.(b)  This section applies to  license applications pending and license applications submitted on and after the effective date of this act.

 

Requested by:            Representatives Insko, Barnhart, Clary

REGULATORY CHANGES TO IMPROVE QUALITY AND SAFETY IN HOME CARE SERVICES, MENTaL HEALTH FACILITIES, ADULT CARE HOMES, AND CERTAIN HOSPITAL FACILITIES

SECTION 10.40A.(a)  G.S. 131E-140(b) reads as rewritten:

" 131E-140.  Rules and enforcement.

(b)       The Department shall enforce the rules adopted or amended by the Commission with respect to home care agencies.agencies and shall conduct an inspection of each agency at least every three years."

SECTION 10.40A.(b)  G.S. 122C-23(e) reads as rewritten:

" 122C-23.  Licensure.

(e)       Unless a license is provisional or has been suspended or revoked, it shall be valid for a period not to exceed two years from the date of issue. The expiration date of a license shall be specified on the license when issued. Renewal of a regular license is contingent upon receipt of information required by the Secretary for renewal and continued compliance with this Article and the rules of the Commission and the Secretary. Licenses for facilities that have not served any clients during the previous 12 months are not eligible for renewal."

SECTION 10.40A.(c)  G.S. 122C-25(a) reads as rewritten:

" 122C-25.  Inspections; confidentiality.

(a)       The Secretary shall make or cause to be made inspections that the Secretary considers necessary. Facilities licensed under this Article shall be subject to inspection at all times by the Secretary. All residential facilities as defined in G.S. 122C-3(14)e. shall be inspected on an annual basis. The Division of Facility Services may conduct routine, follow-up, and complaint-generated inspections more frequently as needed to ensure compliance with health and safety requirements.

"

SECTION 10.40A.(d)  G.S. 122C-25 is amended by adding the following new subsection to read:

"(d)      All residential facilities, as defined in G.S. 122C-3(14)e. shall ensure that the DHHS Care Line number is posted conspicuously in a public place in the facility."

SECTION 10.40A.(e)  G.S. 131D-2 is amended by adding the following new subsection to read:

"(j)       Adult care homes shall post the DHHS Care Line number conspicuously in a public place in the facility."

SECTION 10.40A.(f)  G.S. 131D-2(b)(1a) reads as rewritten:

" 131D-2.  Licensing of adult care homes for the aged and disabled.

(b)       Licensure; inspections. -

(1a)     The Division of Facility Services shall inspect all adult care homes and adult care units in nursing homes on an annual basis and may conduct routine, follow-up, and complaint-generated inspections more frequently as needed to ensure compliance with health and safety requirements. In addition to the licensing and inspection requirements mandated by subdivision (1) of this subsection, the Department shall ensure that adult care homes required to be licensed by this Article are monitored for licensure compliance on a regular basis. In carrying out this requirement, the Department shall work with county departments of social services to do the routine monitoring and to have the Division of Facility Services oversee this monitoring and perform any follow-up inspection called for. The Department shall monitor regularly the enforcement of rules pertaining to air circulation, ventilation, and room temperature in resident living quarters. These rules shall include the requirement that air conditioning or at least one fan per resident bedroom and living and dining areas be provided when the temperature in the main center corridor exceeds 80 degrees Fahrenheit. The Department shall also keep an up-to-date directory of all persons who are administrators as defined in subdivision (1a) of subsection (a) of this section."

SECTION 10.40A.(g)  G.S. 131D-2(b)(1a) reads as rewritten:

"(1a)    In addition to the licensing and inspection requirements mandated by subdivision (1) of this subsection, the Department shall ensure that adult care homes required to be licensed by this Article are monitored for licensure compliance on a regular basis. In carrying out this requirement, the Department shall work with county departments of social services to do the routine monitoring and to have the Division of Facility Services oversee this monitoring and perform any follow-up inspection called for. In addition, the Department shall ensure that adult care homes are inspected every two years to determine compliance with physical plant and life-safety requirements. The Department shall monitor regularly the enforcement of rules pertaining to air circulation, ventilation, and room temperature in resident living quarters. These rules shall include the requirement that air conditioning or at least one fan per resident bedroom and living and dining areas be provided when the temperature in the main center corridor exceeds 80 degrees Fahrenheit. The Department shall also keep an up-to-date directory of all persons who are administrators as defined in subdivision (1a) of subsection (a) of this section."

SECTION 10.40A.(h)  G.S. 122C-21 reads as rewritten:

" 122C-21.  Purpose.

The purpose of this Article is to provide for licensure of facilities for the mentally ill, developmentally disabled, and substance abusers by the development, establishment, and enforcement of basic rules governing:

(1)       The provision of services to individuals who receive services from licensable facilities as defined by this Chapter, and

(2)       The construction, maintenance, and operation of these licensable facilities that in the light of existing knowledge will ensure safe and adequate treatment of these individuals. The Department shall ensure that licensable facilities are inspected every two years to determine compliance with physical plant and life-safety requirements."

SECTION 10.40A.(i)  G.S. 131E-140 reads as rewritten:

" 131E-140.  Rules and enforcement.

(a)       The Commission is authorized to may adopt, amend and repeal all rules necessary for the implementation of this Part. Part and Part 3A of Article 6 of this Chapter. Provided, these rules shall not extend, modify, or limit the licensing of individual health professionals by their respective licensing boards; nor shall these rules in any way be construed to extend the appropriate scope of practice of any individual health care provider.

(a1)     The Commission shall adopt rules that recognize the different types of home care services and shall adopt specific requirements for the provision of each type of home care service.

(a2)     The Commission shall adopt rules defining geographic service areas for in-home aide services and staffing qualifications for licensed home care agencies.

(a3)     The Commission shall adopt rules prohibiting licensed home care agencies from hiring individuals listed on the Health Care Personnel Registry in accordance with G.S. 131E-256(a)(1).

(a4)     The Commission shall adopt rules requiring applicants for home care licensure to receive training in the requirements for licensure, the licensure process, and the rules pertaining to the operation of a home care agency.

(b)       The Department shall enforce the rules adopted or amended by the Commission with respect to home care agencies."

SECTION 10.40A.(j)  G.S. 131E-136 reads as rewritten:

" 131E-136.  Definitions.

As used in this Part, unless otherwise specified:

(1)       "Commission" means the North Carolina Medical Care Commission.

(1a)     "Geographic service area" means the geographic area in which a licensed agency provides home care services.

(2)       "Home care agency" means a private or public organization that provides home care services.

(2a)     "Home care agency director" means the person having administrative responsibility for the operation of the licensed agency site.

(2b)     "Home care client" means an individual who receives home care services.

(3)       "Home care services" means any of the following services and directly related medical supplies and appliances, which are  provided to an individual in a place of temporary or permanent residence used as an individual's home:

a.         Nursing care provided by or under the supervision of a registered nurse;

b.         Physical, occupational, or speech therapy, when provided to an individual who also is receiving nursing services, or any other of these therapy services, in a place of temporary or permanent residence used as the individual's home;

c.         Medical social services;

d.         In-home aide services that involve hands-on care to an individual;

e.         Infusion nursing services; and

f.          Assistance with pulmonary care, pulmonary rehabilitation or ventilation.

The term does not include: health promotion, preventative health and community health services provided by public health departments; maternal and child health services provided by public health departments, by employees of the Department of Health and Human Services under G.S. 130A-124, or by developmental evaluation centers under contract with the Department of Health and Human Services to provide services under G.S. 130A-124; hospitals licensed under Article 5 of Chapter 131E of the General Statutes when providing follow-up care initiated to patients within six months after their discharge from the hospital; facilities and programs operated under the authority of G.S. 122C and providing services within the scope of G.S. 122C; schools, when providing services pursuant to Article 9 of Chapter 115C; the practice of midwifery by a person licensed under Article 10A of Chapter 90 of the General Statutes; hospices licensed under Article 10 of Chapter 131E of the General Statutes when providing care to a hospice patient; an individual who engages solely in providing his own services to other individuals; incidental health care provided by an employee of a physician licensed to practice medicine in North Carolina in the normal course of the physician's practice; or nursing registries if the registry discloses to a client or the client's responsible party, before providing any services, that (i) it is not a licensed home care agency, and (ii) it does not make any representations or guarantees concerning the training, supervision, or competence of the personnel provided.

(4)       "Home health agency" means a home care agency which is certified to receive Medicare and Medicaid reimbursement for providing nursing care, therapy, medical social services, and home health aide services on a part-time, intermittent basis as set out in G.S. 131E-176(12), and is thereby also subject to Article 9 of Chapter 131E."

SECTION 10.40A.(k)  Article 6 of Chapter 131E of the General Statutes is amended by adding a new Part to read:

"Part 3A. Home Care Clients' Bill of Rights.

" 131E-144.1.  Legislative intent.

It is the intent of the General Assembly to support an individual's desire to live at home and receive home care services.

" 131E-144.2.  Definitions.

Unless otherwise specified, the definitions that are provided in Part 3 of Article 6 of this Chapter apply in this Part.

" 131E-144.3.  Declaration of home care clients' rights.

Each client of a home care agency shall have the following rights:

(1)       To be informed and participate in his or her plan of care.

(2)       To be treated with respect, consideration, dignity, and full recognition of his or her individuality and right to privacy.

(3)       To receive care and services that are adequate, appropriate, and in compliance with relevant federal and State laws and rules and regulations.

(4)       To voice grievances about care and not be subjected to discrimination or reprisal for doing so.

(5)       To have his or her personal and medical records kept confidential and not be disclosed without appropriate written consent.

(6)       To be free of mental and physical abuse, neglect, and exploitation.

(7)       To receive a written statement of services provided by the agency and the charges the client is liable for paying.

(8)       To be informed of the process for acceptance and continuance of service and eligibility determination.

(9)       To accept or refuse services.

(10)     To be informed of the agency's on-call service.

(11)     To be informed of supervisory accessibility and availability.

(12)     To be advised of the agency's procedures for discharge.

(13)     To receive a reasonable response to his or her requests of the agency.

(14)     To be notified within 10 days when the agency's license has been revoked, suspended, canceled, annulled, withdrawn, recalled, or amended.

(15)     To be advised of the agency's policies regarding patient responsibilities.

" 131E-144.4.  Notice to client.

(a)       During the agency's initial evaluation visit or before furnishing services, a home care agency shall provide each client with the following:

(1)       A copy of the declaration of home care clients' rights.

(2)       A copy of the agency's policies regarding client responsibilities as it relates to safety and care plan compliance.

(3)       The address and telephone number for information, questions, or complaints about services provided by the agency.

(4)       The address and telephone number of the section of the Department of Health and Human Services responsible for the enforcement of the provisions of this Part.

(b)       Receipts for the declaration of home care clients' rights and contact information required in this section shall be signed by the client and shall be retained in the agency's files.

" 131E-144.5. Implementation.

Responsibility for implementing the provisions of this Part shall rest with the home care agency director. Each agency shall provide appropriate training to implement this Part.

" 131E-144.6.  Enforcement and investigation.

(a)       The Department of Health and Human Services shall be responsible for enforcing the provisions of this Part. The Department shall investigate complaints made to it and reply within a reasonable period of time, not to exceed 60 days.

(a1)     When the Department of Health and Human Services receives a complaint alleging a violation of the provisions of this Part pertaining to client care or client safety, the Department shall initiate an investigation as follows:

(1)       Immediately upon receipt of the complaint if the complaint alleges a life-threatening situation.

(2)       Within 24 hours if the complaint alleges abuse of a client as defined by G.S. 131D-20(1).

(3)       Within 48 hours if the complaint alleges neglect of a client as defined by G.S. 131D-20(8).

(4)       Within two weeks in all other situations.

The investigation shall be completed within 30 days. The requirements of this section are in addition to and not in lieu of any investigatory and reporting requirements for health care personnel pursuant to Article 15 of this Chapter, or for adult protective services pursuant to Article 6 of Chapter 108A of the General Statutes.

(b)       A home care agency shall investigate, within 72 hours, complaints made to the agency by a home care client or the client's family and must document both the existence of the complaint and the resolution of the complaint.

" 131E-144.7.  Confidentiality.

(a)       The Department of Health and Human Services may to inspect home care clients' medical records maintained at the agency when necessary to investigate any alleged violation of this Part.

(b)       The Department shall maintain the confidentiality of all persons who register complaints with the Department and of all medical records inspected by the Department. A person who has filed a complaint shall have access to information about a complaint investigation involving a specific home care client if written authorization is obtained from the client or legal representative."

SECTION 10.40A.(l)  G.S. 131E-140 is amended by adding the following new subsection to read:

"(a1)    The Commission shall adopt rules defining the scope of permissible advertising and promotional practice by home care agencies."

SECTION 10.40A.(m)  The Department of Health and Human Services shall study whether there are any additional "health care facilities" and "health care personnel" that are employed in health care settings, including unlicensed health care settings, that should be contained in the Health Care Personnel Registry and listed in G.S. 131E-256.  The Department shall report its findings and recommendations to the North Carolina Study Commission on Aging by December 1, 2005.

SECTION 10.40A.(n)  Not later than March 1, 2006, the Department of Health and Human Services shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on the number of calls received by the DHHS Care Line that had to be referred to the Division of Facility Services complaint hotline.

SECTION 10.40A.(o)  Subsection (i) of this section becomes effective January 1, 2006. Subsections (c) and (d) of this section become effective July 1, 2007, except that the Division may conduct inspections more frequently than annually prior to July 1, 2007, as funds and personnel permit. The remainder of this section becomes effective July 1, 2005.

 

Requested by:            Representative Earle

VALIDATE CERTAIN CERTIFICATES OF NEED

SECTION 10.40B.  Notwithstanding the requirements of Chapter 150B and Article 9 of Chapter 131E of the General Statutes, and notwithstanding any past compliance or failure to comply with those requirements, a certificate of need issued by the Department of Health and Human Services for the development of a health care facility that has been completed and licensed prior to the effective date of this act is hereby validated.

 

Requested by:            Representatives Insko, Barnhart

USE OF UNLICENSED HEALTH CARE PERSONNEL TO PERFORM TECHNICAL ASPECTS OF MEDICATION ADMINISTRATION IN NURSING HOMES

SECTION 10.40C.(a)  Article 6 of Chapter 131E of the General Statutes is amended by adding the following new section to read:

" 131E-114.2. Use of unlicensed health care personnel to perform technical aspects of medication administration.

(a)       Facilities licensed and medication administration services provided under this Part may utilize unlicensed health care personnel to perform the technical aspects of medication administration consistent with G.S. 90-171.20(7) and (8), and G.S. 90-171.43.

(b)       The Commission shall adopt rules to implement this section. Rules adopted by the Commission shall include:

(1)       Training and competency evaluation of medication aides as provided for under this section.

(2)       Requirements for listing under the Medication Aide Registry as provided for under G.S. 131E-271.

(3)       Requirements for supervision of medication aides by licensed health professionals or appropriately qualified supervisory personnel consistent with this Part."

SECTION 10.40C.(b)  Article 9C of Chapter 90 of the General Statutes is amended by adding the following new section to read:

" 90-171.56. Medication aide requirements.

The Board of Nursing shall do the following:

(1)       Establish standards for faculty requirements for medication aide training; and

(2)       Provide ongoing review and evaluation, and recommend changes, for faculty and medication aide training requirements to support safe medication administration and improve client, resident, and patient outcomes."

SECTION 10.40C.(c)  Article 16 of Chapter 131E of the General Statutes is amended by adding the following new section to read:

" 131E-270. Medication Aide Registry.

(a)       The Department shall establish and maintain a Medication Aide Registry containing the names of all health care personnel in North Carolina who have successfully completed a medication aide training program that has been approved by the North Carolina Board of Nursing and successfully passed a State-administered medication aide competency exam."

SECTION 10.40C.(d)  This section becomes effective October 1, 2005. The North Carolina Board of Nursing and the Department of Health and Human Services shall report on the implementation of this act to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division not later than March 1, 2006, and annually thereafter.

 

Requested by:            Representative Wright

DHHS and COMMUNITY COLLEGES STUDY USE OF MEDICATION AIDES to perform technical aspects of medication administration

SECTION 10.40D.(a)  The Secretary of Health and Human Services and the President of the Community Colleges System shall jointly convene a study group to review and consider the use of medication aides to perform the technical aspects of medication administration.  The study group shall consist of members representing at least the following entities and licensed health care facilities and providers:

(1)       Appointed by the Secretary of Health and Human Services:

a.         Adult care homes.

b.         Home care agencies.

c.         Ambulatory surgical centers.

d.         Hospitals.

e.         Facilities providing mental health, developmental disabilities, and substance abuse services.

f.          Nursing homes.

g.         The nursing profession, as recommended by the Board of Nursing.

(2)       Community colleges appointed by the President of the Community Colleges System.

(3)       The Secretary of the Department of Correction.

(4)       Others as may be appointed by the Secretary of Health and Human Services or the President of the Community Colleges System.

SECTION 10.40D.(b)  The study group shall address at least the following in its study and its recommendations regarding medication aide performance of the technical aspects of medication administration:

(1)       Training and competency evaluation of medication aides;

(2)       Training standards;

(3)       Ongoing review and evaluation of medication aide training; and

(4)       Requirements for supervision of medication aides.

SECTION 10.40D.(c)  The Secretary of Health and Human Services and the President of the Community Colleges System shall report the progress and recommendations of the study group to the 2006 Regular Session of the 2005 General Assembly upon its convening, and the 2007 General Assembly upon its convening.  Recommendations to the 2006 Regular Session of the 2005 General Assembly may include proposed legislation.  A copy of the report shall be provided to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division at the same time as the report is submitted to the General Assembly.

SECTION 10.40D.(d)  The Department of Health and Human Services shall continue its pilot program on the use of medication aides and shall report on the status of the pilot programs at the same time and to the same persons as the study group report to the General Assembly.

SECTION 10.40D.(f)  G.S. 115C-47 is amended by adding the following new subdivision to read:

" 115C-47.   Powers and duties generally.

In addition to the powers and duties designated in G.S. 115C-36, local boards of education shall have the power or duty:

(45)     At the discretion of the board, to adopt policies and procedures authorizing schools that operate programs under G.S. 115C-307(c) to utilize unlicensed health care personnel to perform the technical aspects of medication administration to students. If adopted, the policies and procedures shall be consistent with the requirements of Article 9A of Chapter 90 of the General Statutes and shall include the following:

a.         Training and competency evaluation of medication aides as provided for under G.S. 131E-270.

b.         Requirements for listing under the Medication Aide Registry as provided for under G.S. 131E-271.

c.         Requirements for supervision of medication aides by licensed health professionals or appropriately qualified supervisory personnel consistent with Articles 5, 6, 10, and 16 of Chapter 131E of the General Statutes."

 

Requested by:            Representatives Insko, Barnhart

SOCIAL SERVICES COMMISSION TECHNICAL CORRECTION

SECTION 10.42.  G.S. 108A-14(a)(8) reads as rewritten:

" 108A-14.  Duties and responsibilities.

(a)       The director of social services shall have the following duties and responsibilities:

(8)       To supervise adult care homes under the rules and regulations of the Social ServicesMedical Care Commission;

."

 

Requested by:            Representatives Insko, Barnhart

CHILD SUPPORT PROGRAM/ENHANCED STANDARDS

SECTION 10.43.(a)  The Department of Health and Human Services shall develop and implement performance standards for each of the State and county child support enforcement offices across the State. To develop these performance standards, the Department of Health and Human Services shall evaluate other private and public child support models and national standards as well as other successful collections models. These performance standards shall include the following:

(1)       Cost per collections.

(2)       Consumer satisfaction.

(3)       Paternity establishments.

(4)       Administrative costs.

(5)       Orders established.

(6)       Collections on arrearages.

(7)       Location of absent parents.

(8)       Other related performance measures.

The Department of Health and Human Services shall monitor the performance of each office and shall implement a system of reporting that allows each local office to review its performance as well as the performance of other local offices. The Department of Health and Human Services shall publish an annual performance report that shall include the statewide and local office performance of each child support office.

SECTION 10.43.(b)  The Department of Health and Human Services shall report on its progress, in compliance with this section, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by May 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

MULTIPLE RESPONSE SYSTEM

SECTION 10.45.(a)  The Department of Health and Human Services, Division of Social Services, shall continue working with local departments of social services to implement a multiple response system of child protection. Local departments of social services shall continue systems already in place. The multiple response system shall provide a family-centered approach to child protective services in which local departments of social services use family assessment tools and family support principles when responding to selected reports of suspected child abuse, neglect, and dependency, including establishing a system of care with child and family teams.

SECTION 10.45.(b)  The Department of Health and Human Services shall expand this project using both State appropriations and any non-State funding sources that can be identified for this purpose. Funds appropriated in this act to the Department for this purpose may be allocated to counties for multiple response system implementation, and counties may use these funds and other resources available for this purpose.

 

Requested by:            Representatives Insko, Barnhart

FOSTER CARE AND ADOPTION ASSISTANCE PAYMENTS

SECTION 10.46.(a)  The maximum rates for State participation in the foster care assistance program are established on a graduated scale as follows:

(1)       $390.00 per child per month for children aged birth through 5;

(2)       $440.00 per child per month for children aged 6 through 12; and

(3)       $490.00 per child per month for children aged 13 through 18.

Of these amounts, fifteen dollars ($15.00) is a special needs allowance for the child.

SECTION 10.46.(b)  The maximum rates for State participation in the adoption assistance program are established on a graduated scale as follows:

(1)       $390.00 per child per month for children aged birth through 5;

(2)       $440.00 per child per month for children aged 6 through 12; and

(3)       $490.00 per child per month for children aged 13 through 18.

SECTION 10.46.(c)  In addition to providing board payments to foster and adoptive families of HIV-infected children, as prescribed in Section 23.28 of Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated for this purpose shall be used to provide medical training in avoiding HIV transmission in the home.

SECTION 10.46.(d)  The maximum rates for the State participation in HIV foster care and adoption assistance are established on a graduated scale as follows:

(1)       $800.00 per child per month with indeterminate HIV status;

(2)       $1,000 per child per month confirmed HIV-infected, asymptomatic;

(3)       $1,200 per child per month confirmed HIV-infected, symptomatic; and

(4)       $1,600 per child per month terminally ill with complex care needs.

 

Requested by:            Representatives Insko, Barnhart

CHILD CARING INSTITUTIONS

SECTION 10.47.(a)  The Office of the State Auditor shall conduct an audit to evaluate overhead rates and reimbursements for child caring institutions receiving State funding. Of the funds appropriated to the Department of Health and Human Services, Office of the Controller, the sum of one hundred fifty thousand dollars ($150,000) shall be transferred to the State Auditor to conduct the audit. The audit shall include the following:

(1)       A detailed evaluation of each child caring institution's cost allocation processes.

(2)       A determination of whether the allocated costs are consistent in different agencies.

(3)       A determination of the basis used for cost allocation by each agency.

(4)       The methodology used to assign direct and indirect costs to specific child caring institution programs.

(5)       A determination of whether the overhead charged is reasonable for that specific type of nonprofit, based on national surveys.

(6)       A determination of how agency utilization rates impact the child caring institutions' cost allocation and subsequent State reimbursements.

(7)       An examination of rate-setting methodologies used by other states and how North Carolina's payment to child caring institutions compare to other states.

(8)       Recommendations on how to develop equitable, reasonable rates.

(9)       An examination of the feasibility of providing child caring institutions with the opportunity to compete based on providing the best service at least cost.

The Office of the State Auditor shall report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than March 1, 2006. The written report shall include copies of working papers developed during the course of the audit.

SECTION 10.47.(b)  The Department of Health and Human Services shall establish standardized rates for child caring institutions in this State. These rates shall be effective January 1, 2006, and shall be updated annually on July 1. Rate-setting recommendations provided by the Office of the State Auditor shall be incorporated into the Department of Social Services rate-setting methodology.

SECTION 10.47.(c)  Until standardized rates are set, child caring institutions' maximum reimbursement 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, counties shall include county and IV-E reimbursements.

SECTION 10.47.(d)  Minimum reimbursement for foster parents providing services through child caring institutions shall not be lower than the rates established by the General Assembly.

 

Requested by:            Representatives Insko, Barnhart

SPECIAL CHILDREN ADOPTION FUND

SECTION 10.48.(a)  Of the funds appropriated to the Department of Health and Human Services in this act, the sum of one hundred thousand dollars ($100,000) shall be used to support the Special Children Adoption Fund for the 2005-2006 fiscal year. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A-50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services. No local match shall be required as a condition for receipt of these funds. In accordance with State rules for allowable costs, the Special Children Adoption Fund may be used for post-adoption services for families whose income exceeds two hundred percent (200%) of the federal poverty level.

SECTION 10.48.(b)  Of the total funds appropriated for the Special Children Adoption Fund each year, twenty percent (20%) of the total funds available shall be reserved for payment to participating private adoption agencies. If the funds reserved in this subsection for payments to private agencies have not been spent on or before March 31, 2006, the Division of Social Services may reallocate those funds, in accordance with this section, to other participating adoption agencies.

SECTION 10.48.(c)  The Division of Social Services shall monitor the total expenditures in the Special Children Adoption Fund and redistribute unspent funds to ensure that the funds are used according to the guidelines established in subsection (a) of this section. The Division shall implement strategies to ensure that funds that have historically reverted for this program are used for the intended purpose. The Division shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on the expenditures and activities of the program no later than December 1, 2005, and June 30, 2006.

 

Requested by:            Representatives Insko, Barnhart

STUDY TO IDENTIFY ADOPTION INCENTIVES FOR CHILDREN WHO ARE DIFFICULT TO PLACE

SECTION 10.49.  The Department of Health and Human Services shall conduct a study to identify potential incentives for adoption of children who are difficult to place and the associated costs for each incentive. The study shall identify incentives currently in place in individual counties and the associated costs. The study shall identify funding sources available to support each incentive. The Department shall report the results of its study to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than October 1, 2005.

 

Requested by:            Representatives Insko, Barnhart

LIMITATION ON STATE ABORTION FUND

SECTION 10.50.  The limitations on funding of the performance of abortion established in Section 23.27 of Chapter 324 of the 1995 Session Laws, as amended by Section 23.8A of Chapter 507 of the 1995 Session Laws, apply to the 2005-2006 and 2006-2007 fiscal years.

 

Requested by:            Representatives Insko, Barnhart

TANF BENEFIT IMPLEMENTATION

SECTION 10.51.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2005-2007", prepared by the Department of Health and Human Services and presented to the General Assembly as revised in accordance with subsection (b) of this section, except that the provision contained in the approved North Carolina Temporary Assistance for Needy Families State Plan FY 2005-2007 eliminating pay-after-performance as a benefit delivery method for two-parent families will only be implemented if the federal two-parent work participation rate is eliminated. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2005, through September 30, 2007. The Department shall submit the State Plan, as revised in accordance with subsection (b) of this section, to the United States Department of Health and Human Services, as amended by this act or any other act of the 2005 General Assembly.

SECTION 10.51.(b)  The counties approved as Electing Counties in North Carolina's Temporary Assistance for Needy Families State Plan FY 2005-2007 as approved by this section are:  Beaufort, Caldwell, Catawba, Iredell, Lenoir, Lincoln, Macon, McDowell, Sampson, and Stokes.

SECTION 10.51.(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 fiscal years 2005 through 2007, pursuant to G.S. 108A-27(e), shall operate under the Electing County budget requirements effective July 1, 2005. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2005.

 

Requested by:            Representatives Insko, Barnhart

Intensive Family Preservation Services Funding and Performance Enhancements

SECTION 10.51A.(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 10.51A.(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 Intensive Family Preservation Services shall provide information and data that allows for:

(1)       An established follow-up system with a minimum of six months of follow-up services.

(2)       Detailed information on the specific interventions applied including utilization indicators and performance measurement.

(3)       Cost-benefit data.

(4)       Data on long-term benefits associated with Intensive Family Preservation Services. This data shall be obtained by tracking families through the intervention process.

(5)       The number of families remaining intact and the associated interventions while in IFPS and 12 months thereafter.

(6)       The number and percentage by race of children who received Intensive Family Preservation Services compared to the ratio of their distribution in the general population involved with Child Protective Services.

SECTION 10.51A.(c)  The Department shall establish performance-based funding protocol and shall only provide funding to those programs and entities providing the required information specified in subsection (b) of this section. The amount of funding shall be based on the individual performance of each program.

SECTION 10.51A.(d)  The Department shall report on the implementation of this section not later than February 1, 2006, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

RESIDENTIAL SCHOOLS REPORTING

SECTION 10.52.  The Office of Education Services shall report not later than December 1, 2005, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on the activities of the Eastern North Carolina School for the Deaf at Wilson, the North Carolina School for the Deaf at Morganton, and the Governor Morehead School for the Blind. The report shall include enrollment numbers at the schools, the budgets, and the academic status of the schools as defined under the ABCs program.

 

Requested by:            Representatives Insko, Barnhart

FUNDS FOR SCHOOL NURSES

SECTION 10.53.  Of the funds appropriated in this act to the Department of Health and Human Services, the sum of one million five hundred thousand dollars ($1,500,000) for the 2005-2006 fiscal year and the sum of one million five hundred thousand dollars ($1,500,000) for the 2006-2007 fiscal year shall be used for the school nurse funding initiative.  The Department of Health and Human Services, Division of Public Health, in conjunction with the Department of Public Instruction, shall provide funds to communities to hire school nurses.  The program will fund 30 permanent local nurses. The criteria shall include determining the areas in greatest need for school nurses with the greatest inability to pay for these nurses. Other criteria to be considered shall include:  (i) the current nurse-to-student ratio; (ii) the economic status of the community; and (iii) the health needs of area children.  The Department of Health and Human Services and the Department of Public Instruction shall review the responsibilities of school nurses and consider substituting licensed practical nurses for registered nurses, as licensure and certification requirements permit, as a way to fund additional nurses beyond the 30 nurses funded under this section.

There shall be no supplanting of local, State, or federal funds with these funds. Communities shall maintain their current level of effort and funding for school nurses. These funds shall not be used for funding nurses for State agencies. All funding shall be used for direct services.

The Department of Health and Human Services shall report on the use of funds allocated under this section by December 1, 2005, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

EARLY INTERVENTION REPORTING AND EVALUATION

SECTION 10.54.(a)  The Department of Health and Human Services, Division of Public Health, shall report on Early Intervention services. The report shall include the number of children served, the number and types of services and evaluations provided, and the budget for each Children's Developmental Services Agency. In addition, the Division of Public Health shall evaluate its Early Intervention Program provider network, including provider certification and continuing education requirements.

SECTION 10.54.(b)  The Department of Health and Human Services shall analyze the reimbursement rates for Early Intervention services, and may adjust rates according to the findings of the analysis.

SECTION 10.54.(c)  The Division of Public Health shall analyze the program funding for the Children with Special Needs Program and shall develop a plan to utilize these funds within the Early Intervention Program. The Division shall report its findings and recommendations to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than December 1, 2005.

 

Requested by:            Representatives Insko, Barnhart

EARLY INTERVENTION PROGRAM RULES ADOPTED BY COMMISSION FOR HEALTH SERVICES

SECTION 10.54A.  Part 1 of Article 5 of Chapter 130A of the General Statutes is amended by adding the following new section to read:

" 130A-126.  Rule-making authority for birth - three-year-old early intervention program.

The rule-making authority for the birth - three-year-old early intervention program through Part C of the Individuals with Disabilities Act (IDEA) is transferred from the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services to the Commission for Health Services."

 

Requested by:            Representatives Insko, Barnhart

Children's Developmental Services Agency of the Smokies

SECTION 10.54B.  Western Carolina University shall continue to operate the Children's Developmental Services Agency of the Smokies.

 

Requested by:            Representatives Insko, Barnhart

CHRONIC DISEASE PREVENTION ACTIVITIES INVENTORY

SECTION 10.56.  In order to reduce costs and eliminate duplication of effort, the Department of Health and Human Services shall create an inventory of all chronic disease prevention activities, funding, staffing, and other resources for these activities, including funding and resources for related task forces and committees. The inventory shall include at a minimum, heart disease, stroke, diabetes, osteoporosis, and cancer. The Department shall create a plan to combine task forces and activities for chronic disease prevention and shall explore collapsing these task forces and committees into the Healthy Carolinians structure. The Department shall report on the inventory and the Department's recommendations not later than February 1, 2006, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

 

Requested by:            Representatives Insko, Barnhart

PILOT PROGRAM FOR AUTOMATIC EXTERNAL DEFIBRILLATORS IN PUBLIC BUILDINGS

SECTION 10.57.(a)  The Department of Health and Human Services, Division of Public Health, shall develop a pilot program to place Automated External Defibrillators (AED) in public buildings, including public gymnasiums, that do not have an operational AED in place. In selecting pilot sites, the Department shall ensure geographic representation of the State.

SECTION 10.57.(b)  Of the funds appropriated in this act to the Department of Health and Human Services, the sum of seventeen thousand dollars ($17,000) for the 2005-2006 fiscal year, and the sum of six thousand dollars ($6,000) for the 2006-2007 fiscal year shall be used to purchase AED units, conduct on-site training at the pilot sites, and conduct ongoing education and awareness campaigns to the general public in the piloted sites. The Department shall ensure that training in the use of an AED shall be conducted in accordance with G.S. 90-21.15(b)(3). The Heart Disease and Stroke Prevention Branch of the Division of Public Health shall be responsible for the purchase of AEDs, the training of pilot program participants, and evaluation of the pilot program.

SECTION 10.57.(c)  The Department of Health and Human Services shall report on the location, establishment, and implementation of the pilot sites to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on or before March 1, 2006.

 

Requested by:            Representatives Insko, Barnhart

IMMUNIZATION PROGRAM FUNDING

SECTION 10.58.(a)  Of the funds appropriated in this act to the Department of Health and Human Services for childhood immunization programs for positions, operating support, equipment, and pharmaceuticals, the sum of one million dollars ($1,000,000) for the 2005-2006 fiscal year and the sum of one million dollars ($1,000,000) for the 2006-2007 fiscal year may be used for projects and activities that are also designed to increase childhood immunization rates in North Carolina. These projects and activities shall include the following:

(1)       Outreach efforts at the State and local levels to improve service delivery of vaccines. Outreach efforts may include educational seminars, media advertising, support services to parents to enable children to be transported to clinics, longer operating hours for clinics, and mobile vaccine units.

(2)       Continued development of an automated immunization registry.

SECTION 10.58.(b)  Funds authorized to be used for immunization efforts under subsection (a) of this section shall not be used to fund additional State positions in the Department of Health and Human Services or contracts, except for contracts to develop an automated immunization registry or contracts with local health departments for outreach.

 

Requested by:            Representatives Insko, Barnhart

AIDS DRUG ASSISTANCE PROGRAM

SECTION 10.59.(a)  For the 2005-2006 fiscal year and for the 2006-2007 fiscal year, HIV-positive individuals with incomes at or below one hundred twenty-five percent (125%) of the federal poverty level are eligible for participation in ADAP. Eligibility for participation in ADAP during the 2005-2007 fiscal biennium shall not be extended to individuals with incomes above one hundred twenty-five percent (125%) of the federal poverty level.

SECTION 10.59.(b)  The Department of Health and Human Services shall make an interim report on ADAP program utilization by January 1, 2006, and a final report on ADAP program utilization by May 1, 2006, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on ADAP. The reports shall include ADAP program utilization as follows:

(1)       Monthly data on total cumulative AIDS/HIV cases reported in North Carolina.

(2)       Monthly data on the number of individuals who have applied to participate in ADAP that have been determined to be ineligible.

(3)       Monthly data on the income level of participants in ADAP and of individuals who have applied to participate in ADAP who have been determined to be ineligible.

(4)       Monthly data on fiscal year-to-date expenditures of ADAP. The interim report shall contain monthly data on the calendar year-to-date expenditures of ADAP.

(5)       An update on the sta