GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2017

S                                                                                                                                                     2

SENATE BILL 257

Appropriations/Base Budget Committee Substitute Adopted with unengrossed amendments 5/10/17

Finance Committee favorable with unengrossed amendments 5/10/17

Pensions and Retirement and Aging Committee Substitute Adopted 5/10/17

 

Short Title:      Appropriations Act of 2017.

(Public)

Sponsors:

 

Referred to:

 

March 15, 2017

A BILL TO BE ENTITLED

AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERATIONS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.

The General Assembly of North Carolina enacts:

 

PART I. INTRODUCTION AND TITLE OF ACT

 

Title of Act

SECTION 1.1.  This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2017."

 

Introduction

SECTION 1.2.  The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget in accordance with the State 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.

 

PART II. CURRENT OPERATIONS AND EXPANSION/GENERAL FUND

 

Current Operations and Expansion/General Fund

SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for the fiscal biennium ending June 30, 2019, according to the following schedule:

 

Current Operations – General Fund                                    FY 2017‑2018         FY 2018‑2019

 

EDUCATION

 

Community Colleges System Office                                    $ 1,110,762,099       $ 1,130,467,649

 

Department of Public Instruction                                            9,000,478,792          9,340,668,173

 

Appalachian State University                                                     134,672,993             134,672,993

East Carolina University

      Academic Affairs                                                                 214,598,809             214,598,809

      Health Affairs                                                                         74,373,798               75,014,745

Elizabeth City State University                                                    31,964,712               31,154,712

Fayetteville State University                                                        52,116,162               52,116,162

NC A&T State University                                                            91,203,482               91,203,482

NC Central University                                                                  83,243,559               83,243,559

NC State University

      Academic Affairs                                                                 409,648,050             407,648,050

      Agricultural Extension                                                            41,895,231               41,895,231

      Agricultural Research                                                             52,636,905               52,636,905

UNC‑Asheville                                                                             38,750,625               38,750,625

UNC‑Chapel Hill

      Academic Affairs                                                                 248,309,119             248,309,119

      Health Affairs                                                                       189,665,032             189,665,032

      AHEC                                                                                     56,783,693               62,183,693

UNC‑Charlotte                                                                           226,376,692             226,376,692

UNC‑Greensboro                                                                        150,156,774             150,156,774

UNC‑Pembroke                                                                            53,711,549               53,715,428

UNC‑School of the Arts                                                               30,424,499               30,424,499

UNC‑Wilmington                                                                       120,327,946             120,327,946

Western Carolina University                                                         89,729,461               89,730,641

Winston‑Salem State University                                                   64,717,512               64,717,512

General Administration                                                                42,172,369               42,172,369

University Institutional Programs                                               102,624,192             152,976,706

Related Educational Programs                                                   110,268,501             110,768,501

NC School of Science & Math                                                     20,958,012               20,959,212

Aid to Private Institutions                                                          155,169,754             165,719,754

 

Total University of North Carolina – Board of Governors     2,885,699,431          2,951,139,151

 

HEALTH AND HUMAN SERVICES

 

Department of Health and Human Services

      Central Management and Support                                        124,254,579             138,439,922

      Division of Aging & Adult Services                                      45,106,213               45,139,285

      Division of Blind Services/Deaf/HH                                        8,418,832                 8,478,672

      Division of  Child Development & Early Education            268,984,429             272,511,265

      Division of Health Service Regulation                                   18,438,099               19,052,444

      Division of Medical Assistance                                         3,688,012,697          3,802,858,741

      Division of Mental Health, Developmental Disabilities,

            & Substance Abuse Services                                          684,418,672             655,413,652

      NC Health Choice                                                                       459,077                    396,238

      Division of Health Benefits                                                      9,742,662                 9,786,700

      Division of Public Health                                                     151,257,798             149,748,494

      Division of Social Services                                                   197,255,967             203,399,766

      Division of Vocational Rehabilitation                                    38,711,023               38,932,726

Total Health and Human Services                                           5,235,060,048          5,344,157,905

 

NATURAL AND ECONOMIC RESOURCES

 

Department of Agriculture and Consumer Services                   127,483,175             125,111,877

 

Department of Commerce

      Commerce                                                                             140,647,735             134,736,660

      Commerce State‑Aid                                                              15,275,793               15,175,793

 

Wildlife Resources Commission                                                   10,678,051               10,792,605

 

Department of Environmental Quality                                         70,669,650               71,154,583

 

Department of Labor                                                                    17,531,715               17,736,687

 

Department of Natural and Cultural Resources                         175,344,439             173,625,934

Department of Natural and Cultural

      Resources – Roanoke Island                                                        555,571                    555,571

 

JUSTICE AND PUBLIC SAFETY

 

Department of Public Safety                                                   1,977,021,279          1,996,753,751

 

Judicial Department                                                                    516,549,931             523,749,357

 

Judicial Department – Indigent Defense                                    120,413,821             121,363,932

 

Department of Justice                                                                   55,904,112               56,445,076

 

 

GENERAL GOVERNMENT

 

Department of Administration                                                     62,265,447               62,596,178

 

Office of Administrative Hearings                                                 5,906,579                 6,004,787

 

Department of State Auditor                                                        13,585,122               13,737,445

 

Office of State Controller                                                             23,579,858               23,949,466

 

State Board of Elections                                                                 6,600,070                 6,662,401

 

General Assembly                                                                         65,126,273               65,531,379

 

Office of the Governor                                                                   5,887,379                 5,945,252

 

Office of the Governor – Special Projects                                      2,001,625                 2,001,625

 

Office of State Budget and Management

      Office of State Budget and Management                                8,009,843                 8,084,541

      OSBM – Reserve for Special Appropriations                           2,000,000                 2,000,000

 

Housing Finance Agency                                                              10,660,000               10,660,000

 

Department of Insurance                                                              40,519,795               40,918,283

 

Office of Lieutenant Governor                                                          793,477                    771,266

 

Military and Veterans Affairs                                                       10,302,913                 8,372,298

 

Department of Revenue                                                                84,633,619               85,471,978

 

Department of Secretary of State                                                 13,070,985               13,281,617

 

Department of State Treasurer

      State Treasurer                                                                          4,802,959                 4,821,416

      State Treasurer – Retirement for Fire

            and Rescue Squad Workers                                              27,645,361               27,995,361

 

DEPARTMENT OF INFORMATION TECHNOLOGY     51,515,580               51,661,844

 

 

RESERVES, ADJUSTMENTS, AND DEBT SERVICE                                                       

 

Contingency & Emergency Fund                                                   5,000,000                 5,000,000

Other Operating Reserves                                                                  500,000                    500,000

Classification and Compensation System                                       3,900,000                 7,800,000

Statutory Pay Plan Reserve                                                          20,365,642               21,503,791

Workers' Compensation Settlement Reserve                                  2,000,000                               0

Salary Adjustment Fund                                                                 5,000,000                 5,000,000

University System Enrollment Reserve                                        46,571,112               94,734,518

Film and Entertainment Grant Fund                                            15,000,000               15,000,000

Supplement Disaster Recovery Act                                              70,000,000                               0

Matching Funds for Disaster Recovery                                        80,000,000                               0

Enterprise Resource Planning                                                         3,000,000               10,000,000

NC Promise Tuition Plan                                                                              0               11,000,000

Public Schools Average Daily Membership Reserve                                    0               48,410,289

 

Debt Service

      General Debt Service                                                            727,166,339             770,458,736

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

 

TOTAL CURRENT OPERATIONS –

      GENERAL FUND                                                     $ 22,879,102,000     $ 23,445,125,555

 

General Fund Availability Statement

SECTION 2.2.(a)  The General Fund availability used in developing the 2017‑2019 fiscal biennial budget is shown below:

 

                                                                                                 FY 2017‑2018          FY 2018‑2019

Unappropriated Balance                                                          $ 208,607,416          $ 307,044,290

Disaster Recovery Appropriations (S.L. 2016‑124)                  (200,928,370)                              0

Transfer From Savings Reserve                                                  100,928,370                               0

Revised Unappropriated Balance                                               108,607,416                               0

Over Collections FY 2016‑17                                                     580,600,000                               0

Reversions FY 2016‑17                                                              271,000,000                               0

Replenish Savings Reserve (S.L. 2016‑124)                             (100,928,370)                              0

Earmarkings of Year End Fund Balance:

      Savings Reserve                                                                   (263,000,000)                              0

      Repairs and Renovations                                                     (120,000,000)                              0

Beginning Unreserved Fund Balance                                     476,279,046             307,044,290

 

Revenues Based on Existing Tax Structure                       22,303,700,000        23,299,200,000

 

Non‑tax Revenues

Investment Income                                                                       60,100,000               60,600,000

Judicial Fees                                                                                240,900,000             240,500,000

Disproportionate Share                                                               164,700,000             149,600,000

Insurance                                                                                       75,500,000               75,500,000

Master Settlement Agreement (MSA)                                        127,200,000             127,200,000

Other Non‑Tax Revenues                                                           180,600,000             182,900,000

Subtotal Non‑tax Revenues                                                      849,000,000             836,300,000

 

 

Total General Fund Availability                                         23,628,979,046        24,442,544,290

 

Adjustments to Availability:  2017 Session

Tax Law Changes                                                                      (323,700,000)           (709,500,000)

Diversion of Taxes From Short‑Term Lease

      or Rental of Motor Vehicles to Highway Fund                    (10,000,000)             (10,000,000)

Diversion to Savings Reserve (S.L. 2017‑5)                                                 0              (91,455,000)

Divert Additional MSA funds to Golden Leaf                          (10,000,000)             (10,000,000)

Transfer from Federal Insurance Contributions Act (FICA)          1,500,000                               0

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

Transfer from Department of Insurance                                            729,111                 1,125,434

Transfer from the Department of the State Treasurer                   (5,463,867)               (5,445,410)

 

Subtotal Adjustments to Availability:  2017 Session             (421,934,756)           (900,274,976)

 

Revised General Fund Availability                                 $ 23,207,044,290     $ 23,542,269,314

 

Less General Fund Net Appropriation                                 (22,900,000,000)      (23,445,125,555)

 

Unappropriated Balance Remaining                                   $ 307,044,290            $ 97,143,759

 

SECTION 2.2.(b)  Notwithstanding the provisions of G.S. 143C‑4‑3(a), the State Controller shall transfer a total of one hundred twenty million dollars ($120,000,000) from the unreserved fund balance to the Repairs and Renovations Reserve on June 30, 2017. This subsection becomes effective June 30, 2017. Funds transferred under this section to the Repairs and Renovations Reserve are appropriated for the 2017‑2018 fiscal year and shall be used in accordance with Section 36.5 of this act.

SECTION 2.2.(c)  Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer a total of three hundred sixty‑three million nine hundred twenty‑eight thousand three hundred seventy dollars ($363,928,370) from the unreserved fund balance to the Savings Reserve Account on June 30, 2017. This transfer is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2017.

SECTION 2.2.(d)  Notwithstanding any other provision of law to the contrary, effective June 30, 2017, one million five hundred thousand dollars ($1,500,000) from the NC FICA Account (Budget Code 24160/Fund Code 2000) shall be transferred to the State Controller to be deposited in the appropriate budget code as determined by the State Controller. These funds shall be used to support the General Fund appropriations as specified in this act for the 2017‑2018 fiscal year.

SECTION 2.2.(e)  The State Controller shall reserve from funds available in the General Fund the sum of seventy‑five million dollars ($75,000,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of seventy‑five million dollars ($75,000,000) in nonrecurring funds for the 2018‑2019 fiscal year. The funds reserved in this subsection shall be transferred and deposited in the Medicaid Transformation Fund established in Section 12H.29 of S.L. 2015‑241. Funds deposited in the Medicaid Transformation Fund do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

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

SECTION 2.2.(g)  G.S. 105‑187.9(a) reads as rewritten:

 "(a)     Distribution. – Taxes Of the taxes collected under this Article at the rate of eight percent (8%) (8%), the sum of ten million dollars ($10,000,000) shall be credited annually to the Highway Fund, and the remainder shall be credited to the General Fund. Taxes collected under this Article at the rate of three percent (3%) shall be credited to the North Carolina Highway Trust Fund."

SECTION 2.2.(h)  Subsection (g) of this section is effective when this act becomes law and applies to taxes collected on or after that date.

 

PART III. CURRENT OPERATIONS/HIGHWAY FUND

 

Current Operations and Expansion/Highway Fund

SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2019, according to the following schedule:

 

Current Operations – Highway Fund                                  FY 2017‑2018          FY 2018‑2019

 

Department of Transportation

      Administration                                                                     $ 96,416,366            $ 94,370,410

 

Division of Highways

      Administration                                                                        34,782,224               34,782,224

      Construction                                                                           76,100,000               76,100,000

      Maintenance                                                                       1,389,482,939          1,440,670,935

      Planning and Research                                                                            0                               0

      OSHA Program                                                                           358,030                    358,030

 

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

 

Intermodal Divisions

      Ferry                                                                                        44,983,375               44,983,375

      Public Transportation                                                              92,527,592               92,527,592

      Aviation                                                                                  94,312,773             104,012,773

      Rail                                                                                          43,659,362               43,850,362

      Bicycle and Pedestrian                                                                724,032                    724,032

 

Governor's Highway Safety                                                              255,367                    255,367

Division of Motor Vehicles                                                        127,257,318             124,525,997

 

Other State Agencies, Reserves, Transfers                                   33,270,363               38,801,934

 

Capital Improvements                                                                     9,616,700                 8,600,000

 

Total Highway Fund Appropriations                               $ 2,191,246,441       $ 2,252,063,031

 

Highway Fund Availability Statement

SECTION 3.2.  The Highway Fund availability used in developing the 2017‑2019 fiscal biennial budget is shown below:

 

Highway Fund Availability Statement                                  FY 2017‑2018         FY 2018‑2019

Unreserved Fund Balance                                                   $                       0      $                       0

Estimated Revenue                                                                  2,179,096,441          2,237,763,031

Adjustment to Revenue Availability:

      Division of Motor Vehicles Hearing Fees                                2,150,000                 4,300,000

      Highway Use Tax Lease Proceeds                                         10,000,000               10,000,000

 

Total Highway Fund Availability                                      $ 2,191,246,441       $ 2,252,063,031

 

Unappropriated Balance                                                      $                       0      $                       0

 

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

 

Highway Trust Fund Appropriations

SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2019, according to the following schedule:

 

Current Operations – Highway Trust Fund                        FY 2017‑2018          FY 2018‑2019

 

Program Administration                                                            $ 35,156,560            $ 35,156,560

Debt Service                                                                                 52,160,868               50,036,452

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

State Ports Authority                                                                    45,000,000               45,000,000

Transfer to Highway Fund                                                                400,000                    400,000

FHWA State Match                                                                        4,640,000                 4,640,000

Strategic Prioritization Funding Plan for

      Transportation Investments                                               1,361,257,401          1,402,087,304

 

Total Highway Trust Fund Appropriations                     $ 1,547,614,829       $ 1,586,320,316

 

Highway Trust Fund Availability Statement

SECTION 4.2.  The Highway Trust Fund availability used in developing the 2017‑2019 fiscal biennial budget is shown below:

 

Highway Trust Fund Availability                                         FY 2017‑2018          FY 2018‑2019

Unreserved Fund Balance                                                   $                       0      $                       0

Estimated Revenue                                                                  1,547,614,829          1,586,320,316

Adjustment to Revenue Availability                                                            0                               0

 

Total Highway Trust Fund Availability                            $ 1,547,614,829       $ 1,586,320,316

 

Unappropriated Balance                                                      $                       0      $                       0

 

PART V. OTHER APPROPRIATIONS

 

Cash Balances and Other Appropriations

SECTION 5.1.(a)  Cash balances, federal funds, departmental receipts, grants, and gifts from the General Fund, revenue funds, enterprise funds, and internal service funds are appropriated for the 2017‑2019 fiscal biennium as follows:

(1)        For all budget codes listed in the Governor's Recommended Budget for the 2017‑2019 fiscal biennium, dated March 2017, and in the Budget Support Document, fund balances and receipts are appropriated up to the amounts specified, as adjusted by the General Assembly, for the 2017‑2018 fiscal year and the 2018‑2019 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items or as otherwise authorized by the General Assembly. Expansion budget funds listed in those documents are appropriated only as otherwise provided in this act.

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

a.         Any receipts that are required to be used to pay debt service requirements for various outstanding bond issues and certificates of participation are appropriated up to the actual amounts received for the 2017‑2018 fiscal year and the 2018‑2019 fiscal year and shall be used only to pay debt service requirements.

b.         Other funds, cash balances, and receipts of funds that meet the definition issued by the Governmental Accounting Standards Board of a trust or agency fund are appropriated for and in the amounts required to meet the legal requirements of the trust agreement for the 2017‑2018 fiscal year and the 2018‑2019 fiscal year.

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

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

 

Other Receipts from Pending Grant Awards

SECTION 5.2.(a)  Notwithstanding G.S. 143C‑6‑4, State agencies may, with approval of the Director of the Budget, spend funds received from grants awarded subsequent to the enactment of this act for grant awards that are for less than two million five hundred thousand dollars ($2,500,000), do not require State matching funds, and will not be used for a capital project. State agencies shall report to the Joint Legislative Commission on Governmental Operations within 30 days of receipt of such funds.

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

SECTION 5.2.(b)  The Office of State Budget and Management shall work with the recipient State agencies to budget grant awards according to the annual program needs and within the parameters of the respective granting entities. Depending on the nature of the award, additional State personnel may be employed on a time‑limited basis. Funds received from such grants are hereby appropriated and shall be incorporated into the authorized budget of the recipient State agency.

SECTION 5.2.(c)  Notwithstanding the provisions of this section, no State agency may accept a grant not anticipated in this act if acceptance of the grant would obligate the State to make future expenditures relating to the program receiving the grant or would otherwise result in a financial obligation as a consequence of accepting the grant funds.

 

EDUCATION LOTTERY FUNDS/CHANGES TO REVENUE ALLOCATIONS/NEEDS‑BASED CAPITAL FUND

SECTION 5.3.(a)  The appropriations made from the Education Lottery Fund for the 2017‑2019 fiscal biennium are as follows:

                                                                                                 FY 2017‑2018          FY 2018‑2019

 

Noninstructional Support Personnel                                         $372,266,860           $372,266,860

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

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

Needs‑Based School Capital Fund                                               75,000,000               75,000,000

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

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

School‑Based Administrator Compensation                                28,004,257               33,668,556

 

TOTAL APPROPRIATION                                                 $694,717,960           $700,382,259

 

SECTION 5.3.(b)  G.S. 18C‑162 reads as rewritten:

"§ 18C‑162.  Allocation of revenues.

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

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

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

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

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

(a1)      Advertising costs shall not exceed two percent (2%) of the total annual revenues, as described in this Chapter.

...."

SECTION 5.3.(c)  G.S. 18C‑163(b) reads as rewritten:

"(b)      Expenses of the lottery shall also include a all of the following:

(1)        A transfer of two million one hundred thousand dollars ($2,100,000) annually to the Department of Public Safety, Alcohol Law Enforcement Branch, for gambling enforcement activities.

(2)        Advertising costs."

SECTION 5.3.(d)  G.S. 18C‑164 reads as rewritten:

"§ 18C‑164.  Transfer of net revenues.

(b)        From the Education Lottery Fund, theThe Office of State Budget and Management shall transfer any a sum equal to five percent (5%) of the net revenue in excess of the amount appropriated from the Education Lottery Fund in a fiscal of the prior year to the Education Lottery Reserve Fund. A special revenue fund for this purpose shall be established in the State treasury to be known as the Education Lottery Reserve Fund, and that fund shall be capped atmaintain a minimum balance of fifty million dollars ($50,000,000). Monies in the Education Lottery Reserve Fund may be appropriated only as provided in subsection (e) of this section.

(e)        If Notwithstanding the minimum balance requirement contained in subsection (b) of this section, if the actual net revenues are less than the appropriation for that given year, then the Governor may shall transfer from the Education Lottery Reserve Fund an amount sufficient to equal the appropriation by the General Assembly. To the extent that the funds described in this subsection are required to be appropriated, they are hereby appropriated for the purpose set forth in this subsection.

(f)        Actual net revenues in excess of the amounts appropriated in a fiscal year shall remain in the Education Lottery Fund."

SECTION 5.3.(e)  There is created the Needs‑Based Public School Capital Fund to be administered by the Superintendent of Public Instruction. The Fund shall be used to award grants to counties designated as development tier one or development tier two, as defined by G.S. 143B‑437.08, to assist with their critical public school building capital needs. The Superintendent of Public Instruction shall award grants to counties in accordance with the following priorities:

(1)        Counties designated as development tier one areas.

(2)        Counties with greater need and less ability to generate sales tax and property tax revenue.

(3)        Counties with a high debt‑to‑tax revenue ratio.

(4)        The extent to which a project will address critical deficiencies in adequately serving the current and future student population.

SECTION 5.3.(f)  Grant funds awarded under this section shall be subject to a matching requirement from the recipient county as follows:

(1)        For a county designated as a development tier one area, the grant shall not exceed two dollars ($2.00) in grant funds for every one dollar ($1.00) provided by the county.

(2)        For a county designated as a development tier two area, the grant shall not exceed one dollar ($1.00) for every one dollar ($1.00) provided by the county.

The total amount awarded to a single county in a fiscal year shall not exceed ten million dollars ($10,000,000). The total aggregate amount awarded from the Fund in a fiscal year shall not exceed one hundred million dollars ($100,000,000). Grant funds shall be used for new capital projects only. Grant funds shall not be used for real property acquisition or for operational lease agreements.

SECTION 5.3.(g)  On or before April 1 of each year, a grant recipient shall submit to the Superintendent of Public Instruction an annual report for the preceding year that describes the progress of the project for which the grant was received. The grant recipient shall submit a final report to the State Superintendent of Public Instruction within three months of the completion of the project.

SECTION 5.3.(h)  On or before May 1 of each year, the Superintendent of Public Instruction shall submit a report to the chairs of the Senate Appropriations Committee on Education/Higher Education, the chairs of the House Appropriations Committee on Education, and the Fiscal Research Division. The report shall contain at least all of the following information for the fiscal year:

(1)        Number and description of projects awarded.

(2)        Total cost of each project and amount supported by the Fund.

(3)        Projections for local school administrative unit capital needs for the next 30 years, based upon present conditions and estimated demographic changes.

(4)        Any legislative recommendations for improving the Fund program.

 

CIVIL PENALTY AND FORFEITURE FUND

SECTION 5.4.(a)  Appropriations are made from the Civil Penalty and Forfeiture Fund for the fiscal biennium ending June 30, 2019, as follows:

                                                                                                  FY 2017‑2018          FY 2018‑2019

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

State Public School Fund                                                           155,754,970             155,754,970

Total Appropriation                                                               $173,754,970           $173,754,970

SECTION 5.4.(b)  Excess receipts realized in the Civil Penalty and Forfeiture Fund in each year of the 2017‑2019 fiscal biennium shall remain unspent until appropriated by a further act of the General Assembly.

 

INDIAN GAMING EDUCATION REVENUE FUND

SECTION 5.5.  Notwithstanding G.S. 143C‑9‑7, the sum of six million dollars ($6,000,000) in each year of the 2017‑2019 fiscal biennium is transferred from the Indian Gaming Education Revenue Fund to the Department of Public Instruction, Textbooks, and Digital Resources Allotment.

 

Disaster Relief Funding

SECTION 5.6.(a)  Funding. – Of the funds appropriated in this act to the State Emergency Response and Disaster Relief Fund, the sum of one hundred fifty million dollars ($150,000,000) shall be used as follows:

(1)        Eighty million dollars ($80,000,000) to provide the State match for federal disaster assistance programs.

(2)        Seventy million dollars ($70,000,000) to provide further relief to areas assisted financially under S.L. 2016‑124. Funds described in this subdivision may be expended only upon a further act of the General Assembly.

SECTION 5.6.(b)  Limitation. – The Governor may not use the funds described in subsection (a) of this section to make budget adjustments under G.S. 143C‑6‑4 or to make reallocations under G.S. 166A‑19.40(c). Nothing in this subsection shall be construed to prohibit the Governor from exercising the Governor's authority under these statutes with respect to funds other than those described in subsection (a) of this section.

SECTION 5.6.(c)  No Reversion of Funds. – Funds described in subsection (a) of this section shall remain available to implement the provisions of this section until the General Assembly directs the reversion of any unexpended and unencumbered funds. G.S. 143C‑6‑23(f1)(1) shall not apply to funds described in subsection (a) of this section.

 

PART VI. GENERAL PROVISIONS

 

CONTINGENCY AND EMERGENCY FUND LIMITATION

SECTION 6.1.  G.S. 143C‑4‑4(b) reads as rewritten:

"(b)      Authorized Uses. – Notwithstanding any other provision of law, funds appropriated to the Contingency and Emergency Fund may be used only for expenditures required: (i) by a court or Industrial Commission order, (ii) to respond to events as authorized under G.S. 166A‑19.40(a) of the North Carolina Emergency Management Act, or (iii) for other statutorily authorized purposes or other contingencies and emergencies.(iii) by the State Treasurer to pay death benefits as authorized under Article 12A of Chapter 143 of the General Statutes, (iv) by the Office of the Governor for crime rewards in accordance with G.S. 15‑53 and G.S. 15‑53.1, (v) by the Industrial Commission for supplemental awards of compensation, or (vi) by the Department of Justice to pay prevailing party legal fees pursuant to court order."

 

ESTABLISHING OR INCREASING FEES

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

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

 

EXPENDITURES OF FUNDS IN RESERVES LIMITED

SECTION 6.3.  Article 4 of Chapter 143C of the General Statutes is amended by adding a new section to read:

"§ 143C‑4‑8.  Use of funds appropriated to a reserve.

All funds appropriated into a reserve by a Current Operations Appropriations Act or other act of the General Assembly may be expended only for the purpose or purposes for which the reserve was established."

 

CAP STATE FUNDED PORTION OF NONPROFIT SALARIES

SECTION 6.4.  Article 6 of Chapter 143C of the General Statutes is amended by adding a new section to read:

"§ 143C‑6‑21.1.  Limitation on use of State funds for nonprofit salaries.

No more than one hundred twenty thousand dollars ($120,000) in State funds, including any interest earnings accruing from those funds, may be used for the annual salary of any individual employee of a nonprofit organization."

 

MSA Fund/Increase Appropriation to Golden L.E.A.F.

SECTION 6.5.  G.S. 143C‑9‑3(a1) reads as rewritten:

"(a1)    Each year, the sum of tentwenty million dollars ($10,000,000)($20,000,000) from the Settlement Reserve Fund is appropriated to The Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation, and these funds shall not be subject to G.S. 143C‑6‑23. The remainder of the funds credited to the Settlement Reserve Fund each fiscal year shall be transferred to the General Fund and included in General Fund availability as nontax revenue."

 

Clarify Base Budget Definition

SECTION 6.6.(a)  G.S. 143C‑1‑1(d) reads as rewritten:

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

(1)        Appropriation. – An enactment by the General Assembly authorizing the withdrawal of money from the State treasury. An enactment by the General Assembly that authorizes, specifies, or otherwise provides that funds may be used for a particular purpose is not an appropriation.

(1c)      Base Budget. – That part of the recommended State budget that provides the baseline for the next biennium. The base budget for each State agency shall be the authorized budget for that agency with adjustments only for the following:

a.         Annualization of programs and positions.

b.         Reductions to adjust for items funded with nonrecurring funds during the prior fiscal biennium.

c.         Increases to adjust for nonrecurring reductions during the prior fiscal biennium.

d.         Adjustments for federal payroll tax changes.

e.         Rate increases in accordance with the terms of existing leases of real property.

f.          Adjustments to receipt projections, made in accordance with G.S. 143C‑3‑5(b)(2)c.

g.         Reconciliation of intragovernmental and intergovermental transfers.

h.         Adjustments for statutory appropriations.

(28)      Statutory appropriation. – An appropriation that authorizes the withdrawal of funds from the State treasury during fiscal years extending beyond the current fiscal biennium, without further act of the General Assembly.

…."

SECTION 6.6.(b)  G.S. 115C‑562.8(b) reads as rewritten:

"(b)      The General Assembly finds that, due to the critical need in this State to provide opportunity for school choice for North Carolina students, it is imperative that the State provide an increase of funds of at least ten million dollars ($10,000,000) each fiscal year for 10 years to the Opportunity Scholarship Grant Fund Reserve. Therefore, there is appropriated from the General Fund to the Reserve the following amounts for each fiscal year to be used for the purposes set forth in this section:

Fiscal Year                                                                            Appropriation

2017‑2018                                                                                   $44,840,000

2018‑2019                                                                                   $54,840,000

2019‑2020                                                                                   $64,840,000

2020‑2021                                                                                   $74,840,000

2021‑2022                                                                                   $84,840,000

2022‑2023                                                                                   $94,840,000

2023‑2024                                                                                 $104,840,000

2024‑2025                                                                                 $114,840,000

2025‑2026                                                                                 $124,840,000

2026‑2027                                                                                 $134,840,000

For the 2027‑2028 fiscal year and each fiscal year thereafter, there is appropriated from the General Fund to the Reserve the sum of one hundred forty‑four million eight hundred forty thousand dollars ($144,840,000) to be used for the purposes set forth in this section. In developing for a fiscal year the base budget, as defined in G.S. 143C‑1‑1, the Director of the Budget shall include the appropriated amount set forth in this subsection for that particular fiscal year."

SECTION 6.6.(c)  Section 11A.3(i) of S.L. 2016‑94 reads as rewritten:

"SECTION 11A.3.(i)  Subsections (a) and (b) of this section apply beginning with the 2016‑2017 school year. Subsections (g) andSubsection (h) of this section becomebecomes effective July 1, 2017."

SECTION 6.6.(d)  Subsection (a) of this section becomes effective July 1, 2017, and applies beginning with the base budget developed for the 2018‑2019 fiscal year. The remainder of this section is effective when it becomes law.

 

Use of State Funds/Employment of Outside Counsel

SECTION 6.7.(a)  G.S. 147‑17 reads as rewritten:

"§ 147‑17.  May employ counsel in cases wherein State is interested.

(a)        No department, officer, agency, institution, commission, bureau or other organized activity of the State which receives support in whole or in part from the State shall employ any private counsel, except with the approval of the Governor. The Governor shall give his approval only if the Attorney General has advised him, as provided in subsection (b) of this section, that it is impracticable for the Attorney General to render the legal services. In any case or proceeding, civil or criminal, in or before any court or agency of this State or any other state or the United States, or in any other matter in which the State of North Carolina is interested, the Governor may employ such special private counsel as he may deem proper or necessary to represent the interest of the State, and may fix the compensation for their services.

(b)        The Attorney General shall be counsel for all departments, officers, agencies, institutions, commissions, bureaus or other organized activities of the State which receive support in whole or in part from the State. Whenever the Attorney General shall advise the Governor that it is impracticable for him to render legal services to any State agency, officer, institution, commission, bureau or other organized activity, or to defend a State employee or former employee as authorized by Article 31A of Chapter 143 of the General Statutes, the Governor may authorize the employment of such private counsel, as in his judgment, should be employed to render such services, and may fix the compensation for their services.

(c)        The Governor may direct that the compensation fixed under this section for special private counsel shall be paid out of appropriations or other funds credited to the appropriate department, agency, institution, commission, bureau, or other organized activity of the State or out of the Contingency and Emergency Fund.

(c1)      Notwithstanding subsection (c) of this section and G.S. 143C‑4‑4(b), no State funds shall be withdrawn from the State treasury to pay for litigation services provided by private counsel except as expressly authorized by an appropriation of the General Assembly. As used in this subsection, litigation services include legal work conducted in anticipation of, or in preparation for, any suit or action. As used in this section, private counsel includes any licensed attorney retained, engaged, or otherwise representing a department, officer, agency, institution, commission, bureau, or other organized activity of the State but does not include a licensed attorney who holds a permanent budgeted position in either the Department of Justice or the applicable department, officer, agency, institution, commission, bureau, or other organized activity of the State.

(d)       In those instances when a department, officer, agency, institution, commission, bureau, or other organized activity of the State which receives support in whole or in part from the State shall employ private counsel other than the Attorney General as permitted by law, such employed counsel shall allocate authority between counsel and the State client in conformance with Rule 1.2 of the North Carolina Rules of Professional Conduct. In those instances where more than one counsel is providing legal representation, counsel, or service on a legal matter on behalf of a State client, the client shall designate in writing which of its legal counsel possesses final decision‑making authority on behalf of the State client, and other co‑counsel shall, consistent with the Rules of Professional Conduct, cooperate with such designated lead counsel."

SECTION 6.7.(b)  G.S. 114‑2.3 reads as rewritten:

"§ 114‑2.3.  Use of private counsel limited.

(a)        Every agency, institution, department, bureau, board, or commission of the State, authorized by law to retain private counsel, shall obtain written permission from the Attorney General prior to employing private counsel. This section does not apply to counties, cities, towns, other municipal corporations or political subdivisions of the State, or any agencies of these municipal corporations or political subdivisions, or to county or city boards of education.

(b)        Article 2A of this Chapter applies to any contract to retain private counsel authorized by the Attorney General under this section.

(c)        Except as provided in G.S. 147‑17, the Attorney General shall represent the State in any action requiring the State to be a party under G.S. 1‑72.3.

(d)       No State funds shall be withdrawn from the State treasury to pay for litigation services provided by private counsel except as expressly authorized by an appropriation of the General Assembly. As used in this subsection, litigation services include legal work conducted in anticipation of, or in preparation for, any suit or action. As used in this section, private counsel includes any licensed attorney retained, engaged, or otherwise representing a department, officer, agency, institution, commission, bureau, or other organized activity of the State but does not include a licensed attorney who holds a permanent budgeted position in either the Department of Justice or the applicable department, officer, agency, institution, commission, bureau, or other organized activity of the State."

SECTION 6.7.(c)  G.S. 136‑18.03(b) reads as rewritten:

"(b)      Authorization. – The Department of Transportation may engage the services of private counsel with the pertinent expertise to provide legal services related to any project undertaken by the Department. The Department shall supervise and manage the private counsel engaged under this section and, excluding legal services related to workers' compensation claims brought by Department employees, shall not be required to obtain written permission or approval from the Attorney General under G.S. 114‑2.3. G.S. 147‑17(c1) and G.S. 114‑2.3(d) do not apply to this section."

SECTION 6.7.(d)  G.S. 20‑194(b) reads as rewritten:

"(b)      In the event that a member of the Highway Patrol or any other State law‑enforcement officer is sued in a civil action as an individual for acts occurring while such member was alleged to be acting within the course and scope of his office, employment, service, agency or authority, which was alleged to be a proximate cause of the injury or damage complained of, the Attorney General is hereby authorized to defend such employee through the use of a member of his staff or, in his discretion, employ private counsel, subject to the provisions of Article 31A of Chapter 143 and G.S. 147‑17. G.S. 147‑17(a) through (c) and (d). Any judgment rendered as a result of said civil action against such member of the Highway Patrol or other State law‑enforcement officer, for acts alleged to be committed within the course and scope of his office, employment, service, agency or authority shall be paid as an expense of administration up to the limit provided in the Tort Claims Act."

SECTION 6.7.(e)  G.S. 143B‑30.1(g) reads as rewritten:

"(g)      In the discretion of the Commission, G.S. 114‑2.3 and G.S. 147‑17(a) through (c) (c1) shall not apply to the Commission if the Commission is being sued by another agency, institution, department, bureau, board, or commission of the State, whether such body is created by the Constitution or by statute. The chairman, upon approval of a majority of the Commission, may retain private counsel to represent the Commission to be paid with available State funds to defend such litigation either independently or in cooperation with the Department of Justice. If private counsel is to be so retained to represent the Commission, the chairman shall designate lead counsel who shall possess final decision‑making authority with respect to the representation, counsel, or service for the Commission. Other counsel for the Commission shall, consistent with the Rules of Professional Conduct, cooperate with such designated lead counsel."

SECTION 6.7.(f)  G.S. 143C‑6‑9 reads as rewritten:

"§ 143C‑6‑9.  Use of lapsed salary savings.

(a)        Lapsed salary savings may be expended only for nonrecurring purposes or line items.

(b)        Lapsed salary savings shall not be used to pay for litigation services provided by private counsel. As used in this subsection, litigation services and private counsel are as defined in G.S. 147‑17(c1) and G.S. 114‑2.3(d)."

 

Pending Litigation

SECTION 6.8.  Any reference to either the State Board of Elections or the State Ethics Commission in either this act or the Committee Report described in Section 39.2 of this act does not constitute a waiver by the General Assembly regarding the validity and constitutionality of S.L. 2017‑6.

 

PART VII. PUBLIC SCHOOLS

 

Funds for Children with Disabilities

SECTION 7.1.(a)  The State Board of Education shall allocate additional funds for children with disabilities on the basis of four thousand one hundred twenty‑five dollars and twenty‑seven cents ($4,125.27) per child for fiscal years 2017‑2018 and 2018‑2019. Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) twelve and one‑half percent (12.5%) of its 2017‑2018 allocated average daily membership in the local school administrative unit. The dollar amounts allocated under this section for children with disabilities shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve children with disabilities.

SECTION 7.1.(b)  G.S. 115C‑105.25(b) reads as rewritten:

"(b)      Subject to the following limitations, local boards of education may transfer and may approve transfers of funds between funding allotment categories:

(1)        Repealed by Session Laws 2013‑360, s. 8.14, effective July 1, 2013.

(1a)      Funds for children with disabilities, careercareer and technical education,education and other purposes may be transferred only as permitted by federal law and the conditions of federal grants or as provided through any rules that the State Board of Education adopts to ensure compliance with federal regulations.

(1b)      No funds shall be transferred out of the children with disabilities allotment category.

…."

 

Funds for Academically Gifted Children

SECTION 7.2.(a)  The State Board of Education shall allocate additional funds for academically or intellectually gifted children on the basis of one thousand three hundred fourteen dollars and fifty‑six cents ($1,314.56) per child for fiscal years 2017‑2018 and 2018‑2019. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2017‑2018 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The dollar amounts allocated under this section for academically or intellectually gifted children shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.

SECTION 7.2.(b)  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(3b)    No funds shall be transferred out of the academically or intellectually gifted children allotment category."

 

Supplemental Funding in Low‑Wealth Counties

SECTION 7.3.(a)  Use of Funds for Supplemental Funding. – All funds received pursuant to this section shall be used only (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, school computer technicians, instructional supplies and equipment, staff development, and textbooks and digital resources and (ii) for salary supplements for instructional personnel and instructional support personnel. Local boards of education are encouraged to use at least twenty‑five percent (25%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades three through eight.

SECTION 7.3.(b)  Definitions. – As used in this section, the following definitions apply:

(1)        Anticipated county property tax revenue availability. – The county‑adjusted property tax base multiplied by the effective State average tax rate.

(2)        Anticipated total county revenue availability. – The sum of the following:

a.         Anticipated county property tax revenue availability.

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

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

(3)        Anticipated total county revenue availability per student. – 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. – The sum of all anticipated total county revenue availability divided by the average daily membership for the State.

(5)        Average daily membership. – 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. – Computed as follows:

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

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

c.         Add to the resulting amount the following:

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

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

3.         Personal property value for the county.

(7)        County‑adjusted property tax base per square mile. – 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. – 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. – 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. – The average of effective county tax rates for all counties.

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

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

(13)      Sales assessment ratio studies. – Sales assessment ratio studies performed by the Department of Revenue under G.S. 105‑289(h).

(14)      State average adjusted property tax base per square mile. – 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.

(15)      State average current expense appropriations per student. – 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.

(16)      Supplant. – To decrease local per student current expense appropriations from one fiscal year to the next fiscal year.

(17)      Weighted average of the three most recent annual sales assessment ratio studies. – 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 7.3.(c)  Eligibility for Funds. – Except as provided in subsection (g) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%).

SECTION 7.3.(d)  Allocation of Funds. – Except as provided in subsection (f) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools. To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county's wealth as a percentage of State average wealth by the State average current expense appropriations per student. The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit located in whole or in part in the county based on the average daily membership of the county's students in the school units. If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.

SECTION 7.3.(e)  Formula for Distribution of Supplemental Funding Pursuant to This Section Only. – The formula in this section is solely a basis for distribution of supplemental funding for low‑wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low‑wealth counties.

SECTION 7.3.(f)  Minimum Effort Required. – A county shall receive full funding under this section if the county (i) maintains an effective county tax rate that is at least one hundred percent (100%) of the effective State average tax rate in the most recent year for which data are available or (ii) maintains a county appropriation per student to the school local current expense fund of at least one hundred percent (100%) of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools. A county that maintains a county appropriation per student to the school local current expense fund of less than one hundred percent (100%) of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools shall receive funding under this section at the same percentage that the county's appropriation per student to the school local current expense fund is of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools.

SECTION 7.3.(g)  Nonsupplant Requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2017‑2019 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if all of the following criteria apply:

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

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

The State Board of Education shall adopt rules to implement the requirements of this subsection.

SECTION 7.3.(h)  Counties Containing a Base of the Armed Forces. – Notwithstanding any other provision of this section, for the 2017‑2019 fiscal biennium, counties containing a base of the Armed Forces of the United States that have an average daily membership of more than 23,000 students shall receive the same amount of supplemental funding for low‑wealth counties as received in the 2012‑2013 fiscal year.

SECTION 7.3.(i)  Funds for EVAAS Data. – Notwithstanding the requirements of subsection (a) of this section, local school administrative units may utilize funds allocated under this section to purchase services that allow for extraction of data from the Education Value‑Added Assessment System (EVAAS).

SECTION 7.3.(j)  Reports. – For the 2017‑2019 fiscal biennium, the State Board of Education shall report to the Fiscal Research Division prior to May 15 of each year if it determines that counties have supplanted funds.

SECTION 7.3.(k)  Department of Revenue Reports. – The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year. The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present‑use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105‑277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.

 

Small County School System Supplemental Funding

SECTION 7.4.(a)  Allotment Schedule for the 2017‑2019 Fiscal Biennium. – Except as otherwise provided in subsection (d) of this section, each eligible county school administrative unit shall receive a dollar allotment according to the following schedule:

Allotted ADM                             Small County Allotment

                                 0‑600                                       $1,710,000

                          601‑1,300                                       $1,820,000

                       1,301‑1,700                                       $1,548,700

                       1,701‑2,000                                       $1,600,000

                       2,001‑2,300                                       $1,560,000

                       2,301‑2,600                                       $1,470,000

                       2,601‑2,800                                       $1,498,000

                       2,801‑3,200                                       $1,548,000

SECTION 7.4.(b)  Phase‑Out Provision for the 2017‑2018 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section in the 2017‑2018 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local school administrative units shall be reduced in equal increments in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local school administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2016‑2017 in any fiscal year. A local school administrative unit shall not become ineligible for funding if either the highest of the first two months total projected average daily membership for the current year or the higher of the first two months total prior year average daily membership would otherwise have made the unit eligible for funds under the schedule in subsection (a) of this section.

SECTION 7.4.(c)  Phase‑Out Provision for the 2018‑2019 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section in the 2018‑2019 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local school administrative units shall be reduced in equal increments in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2017‑2018 in any fiscal year. A local school administrative unit shall not become ineligible for funding if either the highest of the first two months total projected average daily membership for the current year or the higher of the first two months total prior year average daily membership would otherwise have made the unit eligible for funds under the schedule in subsection (a) of this section.

SECTION 7.4.(d)  Nonsupplant Requirement for the 2017‑2019 Fiscal Biennium. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2017‑2019 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year or the year for which the most recent data are available, if all of the following criteria apply:

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

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

The State Board of Education shall adopt rules to implement the requirements of this subsection.

SECTION 7.4.(e)  Reports. – For the 2017‑2019 fiscal biennium, the State Board of Education shall report to the Fiscal Research Division prior to May 15 of each fiscal year if it determines that counties have supplanted funds.

SECTION 7.4.(f)  Use of Funds. – Local boards of education are encouraged to use at least twenty percent (20%) of the funds they receive pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades three through eight.

Local school administrative units may also utilize funds allocated under this section to purchase services that allow for extraction of data from the Education Value‑Added Assessment System (EVAAS).

 

Disadvantaged Student Supplemental Funding (DSSF)

SECTION 7.5.(a)  Funds appropriated in this act for disadvantaged student supplemental funding shall be used, consistent with the policies and procedures adopted by the State Board of Education, only to do the following:

(1)        Provide instructional positions or instructional support positions.

(2)        Provide professional development.

(3)        Provide intensive in‑school or after‑school remediation, or both.

(4)        Purchase diagnostic software and progress‑monitoring tools.

(5)        Provide funds for teacher bonuses and supplements. The State Board of Education shall set a maximum percentage of the funds that may be used for this purpose.

The State Board of Education may require local school administrative units receiving funding under the Disadvantaged Student Supplemental Fund to purchase the Education Value‑Added Assessment System (EVAAS) in order to provide in‑depth analysis of student performance and help identify strategies for improving student achievement. This data shall be used exclusively for instructional and curriculum decisions made in the best interest of children and for professional development for their teachers and administrators.

SECTION 7.5.(b)  Disadvantaged student supplemental funding (DSSF) shall be allotted to a local school administrative unit based on (i) the unit's eligible DSSF population and (ii) the difference between a teacher‑to‑student ratio of 1:21 and the following teacher‑to‑student ratios:

(1)        For counties with wealth greater than ninety percent (90%) of the statewide average, a ratio of 1:19.9.

(2)        For counties with wealth not less than eighty percent (80%) and not greater than ninety percent (90%) of the statewide average, a ratio of 1:19.4.

(3)        For counties with wealth less than eighty percent (80%) of the statewide average, a ratio of 1:19.1.

(4)        For local school administrative units receiving DSSF funds in fiscal year 2005‑2006, a ratio of 1:16. These local school administrative units shall receive no less than the DSSF amount allotted in fiscal year 2006‑2007.

For the purpose of this subsection, wealth shall be calculated under the low‑wealth supplemental formula as provided for in this act.

SECTION 7.5.(c)  If a local school administrative unit's wealth increases to a level that adversely affects the unit's disadvantaged student supplemental funding (DSSF) allotment ratio, the DSSF allotment for that unit shall be maintained at the prior year level for one additional fiscal year.

 

Uniform Education Reporting System (UERS) Funds

SECTION 7.6.  Funds appropriated in this act for the Uniform Education Reporting System (UERS) for the 2017‑2019 fiscal biennium shall not revert at the end of each fiscal year but shall remain available until expended.

 

BUDGET REDUCTIONS/DEPARTMENT OF PUBLIC INSTRUCTION

SECTION 7.7.(a)  Notwithstanding G.S. 143C‑6‑4, the Department of Public Instruction may, after consultation with the Office of State Budget and Management and the Fiscal Research Division, reorganize the Department, if necessary, to implement the budget reductions for the 2017‑2019 fiscal biennium. Consultation shall occur prior to requesting budgetary and personnel changes through the budget revision process. The Department of Public Instruction shall provide a current organization chart and the proposed organization chart clearly identifying the changes for the Department in the consultation process and shall report to the Joint Legislative Commission on Governmental Operations on any reorganization, including any movement of positions and funds between fund codes on a recurring basis.

SECTION 7.7.(b)  In implementing budget reductions for the 2017‑2019 fiscal biennium, the Department of Public Instruction shall make no reduction to funding for the State Public School Fund, including for the following residential schools: Eastern North Carolina School for the Deaf, the North Carolina School for the Deaf, and the Governor Morehead School, except that the Department may, in its discretion, reduce positions at these institutions that have been vacant for more than 16 months. The Department shall also make no transfers from or reduction to funding or positions for any of the following:

(1)        Communities in Schools of North Carolina, Inc.

(2)        Teach For America, Inc.

(3)        Beginnings for Parents of Children Who are Deaf or Hard of Hearing, Inc.

(4)        The Excellent Public Schools Act, Read to Achieve Program, initially established under Section 7A.1 of S.L. 2012‑142.

(5)        The North Carolina School Connectivity Program.

(6)        The Achievement School District.

(7)        Positions appointed by and with a direct report to the State Superintendent of Public Instruction, including those positions described in Section 7.10 of this act.

 

DPI/Alignment of Federal Funds

SECTION 7.8.  The Department of Public Instruction, in consultation with the Office of State Budget and Management, shall align federal funds to accurately reflect the amount projected to be spent by the Department in each year of the 2017‑2019 fiscal biennium in accordance with the State Budget Act, Chapter 143C of the General Statutes, as part of the certification of the budget for the 2017‑2019 fiscal biennium.

 

Administration of the Excellent Public Schools Act

SECTION 7.9.(a)  From the funds appropriated to implement Section 7A.1 of S.L. 2012‑142, as amended, for the 2017‑2019 fiscal biennium only, the Department of Public Instruction shall use those funds for the following 13 time‑limited positions that support the kindergarten through third grade formative reading assessments pursuant to G.S. 115C‑83.6:

Position                                                                 Title

65017164                                                  Project Administrator

65017165                                                  Project Lead

65017166                                                  Project Lead

65017167                                                  Program Assistant V

65017169                                                  Northeast Consultant

65017170                                                  Southeast Consultant

65017171                                                  North Central Consultant

65017172                                                  Sandhills Consultant

65017173                                                  Piedmont Triad Consultant

65017174                                                  Southwest Consultant

65017250                                                  Northwest Consultant

65017251                                                  Western Consultant

65021990                                                  Project Coordinator

SECTION 7.9.(b)  The positions listed in subsection (a) of this section shall be in addition to the 11 permanent, full‑time positions authorized by Section 7A.12 of S.L. 2012‑142.

SECTION 7.9.(c)  This section expires June 30, 2019.

 

Superintendent of Public Instruction Support Staff

SECTION 7.10.  Of the funds appropriated by this act to the Department of Public Instruction for the 2017‑2019 fiscal biennium, the Superintendent of Public Instruction may use up to four hundred thirty‑two thousand six hundred forty‑four dollars ($432,644) to appoint, in addition to any other personnel appointed by the Superintendent, up to five full‑time equivalent exempt policy‑making positions, as defined in G.S. 126‑5(b)(3), to staff the office of the Superintendent and assist in the administration of the Superintendent's duties under Article III and Section 4(2) of Article IX of the North Carolina Constitution as an elected officer and member of the Council of State and as secretary and chief administrative officer of the State Board of Education. Personnel appointed to these positions shall be exempt from the North Carolina Human Resources Act and shall report solely to the Superintendent of Public Instruction. The Superintendent of Public Instruction shall fix the salaries of the personnel for the office of the Superintendent within the funds available as provided by this section. The personnel for the office of the Superintendent of Public Instruction within the Department of Public Instruction shall be in addition to any staff appointed to the Department in accordance with G.S. 115C‑21(a)(1). The appointments shall not be subject to approval or disapproval by the State Board of Education.

 

Carryforward of Certain DPI Funds

SECTION 7.11.(a)  Section 8.7(g) of S.L. 2016‑94 reads as rewritten:

"SECTION 8.7.(g)  Of the funds appropriated to the Department of Public Instruction by this act for the 2016‑2017 fiscal year to support teacher compensation models and advanced teaching roles, the Department may use up to two hundred thousand dollars ($200,000) for the State Board of Education to contract with an independent research organization for the pilot evaluations. Any remaining funds may be used to award funds to selected local school administrative units for the implementation of the pilots in accordance with this section. Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year for the pilot and for the evaluation of the pilot shall not revert at the end of the fiscal year but shall remain available until expended."

SECTION 7.11.(b)  Section 8.27(i) of S.L. 2016‑94 reads as rewritten:

"SECTION 8.27.(i)  Use of Funds. – Of the funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year to implement the LATP programs, the Department may use up to two hundred thousand dollars ($200,000) in nonrecurring funds for the State Board of Education to contract with the independent research organization as required by this section. Any remaining funds shall be used to award one‑year grants to each LATP program selected under subsection (c) of this section for the purposes of implementing the program. Each selected LATP program shall be awarded a proportional amount of the funds available. Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year to implement the LATP programs and for the evaluation of the LATP programs shall not revert at the end of the fiscal year but shall remain available until expended."

SECTION 7.11.(c)  Section 5 of S.L. 2016‑110 reads as rewritten:

"SECTION 5. There is appropriated from the General Fund to the Department of Public Instruction four hundred thousand dollars ($400,000) in recurring funds for the 2016‑2017 fiscal year for salary and benefits for the ASD Superintendent, staff, and other expenses associated with the ASD. Any funds appropriated for this purpose that are unexpended at the end of the 2016‑2017 fiscal year shall not revert but shall remain available for one‑time start‑up expenses of the ASD until the end of the 2017‑2018 fiscal year. There is appropriated from the General Fund to the Department of Public Instruction five hundred thousand dollars ($500,000) for the 2016‑2017 fiscal year to contract with an independent research organization to conduct the evaluation required in Section 4 of this act. Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year for the evaluation shall not revert at the end of the fiscal year but shall remain available until expended."

SECTION 7.11.(d)  This section becomes effective June 30, 2017.

 

Prohibit Transfer of Limited English Proficiency Funds

SECTION 7.12.  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(10a)  No funds shall be transferred out of the limited English proficiency allotment category."

 

Prohibit Transfer of Textbooks and Digital Resources Funds

SECTION 7.13.  G.S. 115C‑105.25 reads as rewritten:

"§ 115C‑105.25.  Budget flexibility.

(a)        Consistent with improving student performance, a local board shall provide maximum flexibility to schools in the use of funds to enable the schools to accomplish their goals.

(b)        Subject to the following limitations, local boards of education may transfer and may approve transfers of funds between funding allotment categories:

(12)      No funds shall be transferred out of the textbooks and digital resources allotment category.

(c)        To ensure that parents, educators, and the general public are informed on how State funds have been used to address local educational priorities, each local school administrative unit shall publish the following information on its Web site by October 15 of each year:

(4)        A description of any transfer of funds from the textbooks and digital resources allotment into another allotment category with an explanation of why the transfer from the textbooks and digital resources allotment was made to a different allotment category.

(5)        A chart that clearly reflects how the local school administrative unit spent State funds."

 

Limitations on K‑5 Classroom Teacher Positions/Program Enhancement Teachers

SECTION 7.14.(a)  Section 1(a)(2) of S.L. 1995‑450 is repealed.

SECTION 7.14.(b)  Beginning with the 2017‑2018 fiscal year, the funding allotment for classroom teachers in the State Public School Fund shall be replaced with the following funding allotments:

(1)        Classroom teachers in grades kindergarten through five.

(2)        Classroom teachers in grades six through 12.

SECTION 7.14.(c)  G.S. 115C‑105.25(b) reads as rewritten:

"(b)      Subject to the following limitations, local boards of education may transfer and may approve transfers of funds between funding allotment categories:

(5a)      Positions allocated for classroom teachers may be converted to dollar equivalents to contract for visiting international exchange teachers through a visiting international exchange teacher program approved by the State. These positions shall be converted at the statewide average salary for classroom teachers, including benefits. The converted funds shall be used only to provide visiting international exchange teachers with salaries commensurate with their experience levels, to provide any State‑approved bonuses, and to cover the costs associated with supporting visiting international exchange teachers within the local school administrative unit, including programming and related activities, background checks, medical coverage, and other program administration services in accordance with the federal regulations for the Exchange Visitor Program, 22 C.F.R. Part 62.

(5b)      Except as provided in subdivision (5a) of this subsection, positions allocated for classroom teachers and instructional support personnel may be converted as follows:

a.         For the allotment for classroom teachers in grades six through 12, classroom teacher positions may be converted to dollar equivalents for any purpose authorized by the policies of the State Board of Education. These positions shall be converted at the salary on the first step of the "A" Teachers Salary Schedule. Certified position allotmentsThese positions shall not be transferred to dollars to hire the same type of position.

b.         For the allotment for classroom teachers in grades kindergarten through five, classroom teacher positions allocated for each grade in accordance with State Board of Education policy shall be used only for classroom teacher positions, including program enhancement teachers, as defined in G.S. 115C‑301(f)(2), serving students in grades kindergarten through five. Those positions shall not be converted to dollar equivalents for any purpose except to contract for visiting international exchange teachers under subdivision (5a) of this subsection.

c.         For the allotment for instructional support personnel, instructional support personnel positions may be converted to dollar equivalents for any purpose authorized by the policies of the State Board of Education. These positions shall be converted at the salary on the first step of the "A" Teachers Salary Schedule. These positions shall not be transferred to dollars to hire the same type of position.

…."

SECTION 7.14.(d)  It is the intent of the General Assembly to use the data collected in accordance with the reporting requirements set forth in Section 2 of S.L. 2017‑9 to fund a new allotment for kindergarten through fifth grade program enhancement teachers for local school administrative units beginning with the 2018‑2019 fiscal year.

 

Class Size Flexibility for Current Pilot Programs

SECTION 7.15.(a)  Section 8.7(i) of S.L. 2016‑94 is repealed.

SECTION 7.15.(b)  Notwithstanding G.S. 115C‑301 or Section 1(b) of S.L. 2017‑9, local school administrative units approved by the State Board of Education to participate in the teacher compensation models and advanced teaching roles pilot program established under Section 8.7 of S.L. 2016‑94 may allow a certain number of schools that were identified in their proposals to exceed individual class size requirements in kindergarten through third grade for the duration of the pilot program ending with the 2019‑2020 school year as follows:

(1)        Chapel‑Hill Carrboro City Schools: 20 schools.

(2)        Charlotte‑Mecklenburg Schools: 46 schools.

(3)        Edgecombe County Schools: 14 schools.

(4)        Pitt County Schools: four schools.

(5)        Vance County Schools: three schools.

(6)        Washington County Schools: five schools.

SECTION 7.15.(c)  In addition to the schools listed in subsection (b) of this section, schools participating in the existing Project LIFT, Inc., program in Charlotte‑Mecklenburg Schools (CMS) may exceed individual class size requirements in kindergarten through third grade for the duration of that program. The schools participating in the Project LIFT, Inc., program are those schools within the feeder area for West Charlotte High School governed by the collaborative agreement between the CMS Board of Education and Project Leadership and Investment for Transformation.

SECTION 7.15.(d)  Subsection (b) of this section expires June 30, 2020.

 

Improve Education Financial and Information Transparency

SECTION 7.16.(a)  The Department of Public Instruction shall implement the School Business System Modernization Plan, as proposed by the State Board of Education in the report required by Section 8.15(b) of S.L. 2016‑94, using the funds appropriated by this act for that purpose. It is the intent of the General Assembly to fund a multiphase, multiyear project to (i) modernize State and local education financial, human capital, and school information systems, (ii) provide for a common reporting system and analytics system, (iii) integrate financial, payroll, human resources, and related human capital systems through the use of a new software as a service enterprise resource planning (ERP) solution, make enhancements to existing local systems, or both, and (iv) link the State licensure system with the upgraded local systems. The State Superintendent of Public Instruction (State Superintendent) shall review and improve business processes in the Department of Public Instruction, as appropriate, and modernize State systems at the Department.

SECTION 7.16.(b)  The State Superintendent shall work with the Friday Institute for Educational Innovation at North Carolina State University, the Government Data Analytics Center (GDAC), local superintendents, charter school leadership, and local school administrative unit personnel administrators and finance officers to establish common data reporting requirements, consistent with the Uniform Education Reporting System established by the State Board of Education. All local school administrative units and charter schools shall comply with the reporting requirements.

SECTION 7.16.(c)  Of the funds appropriated to the Department of Public Instruction by this act for the school business system modernization plan for the 2017‑2019 fiscal biennium, the Department may use the sum of up to one million four hundred thirty thousand dollars ($1,430,000) in the 2017‑2018 fiscal year and one million four hundred twenty thousand dollars ($1,420,000) in the 2018‑2019 fiscal year to establish positions, to contract for services, or both for business‑specific project management. The State Superintendent shall be responsible for the implementation of the activities specified under this subsection and may appoint one of the positions established pursuant to Section 7.10 of this act to oversee the business‑specific project management required to implement the school business system modernization plan and other operating costs as necessary.

SECTION 7.16.(d)  Of the funds appropriated to the Department of Public Instruction by this act for the school business system modernization plan for the 2017‑2019 fiscal biennium, the Department shall transfer up to three million two hundred fifty thousand dollars ($3,250,000) for the 2017‑2018 fiscal year and up to two hundred fifty thousand dollars ($250,000) for the 2018‑2019 fiscal year to GDAC to leverage existing public‑private partnerships for the development and deployment of a data integration service that consolidates data from financial, human resources, licensure, student information, and related systems. Implementation shall also include development and deployment of a modern analytical platform and reporting environment. By December 1, 2017, GDAC shall execute any contractual agreements and interagency data sharing agreements necessary to develop the reporting system established by this section.

SECTION 7.16.(e)  As required by Section 8.15(c) of S.L. 2016‑94, the State Superintendent shall issue a Request for Proposal for an ERP software as a service solution by October 1, 2017. The State Superintendent may issue additional requests for proposals as needed to complete the requirements of subsection (a) of this section. The State Superintendent shall select the vendors for the development and implementation of the ERP and other enhancement solutions.

SECTION 7.16.(f)  Prior to executing any contractual agreements and interagency data sharing agreements necessary to develop the financial reporting system as provided for in this section, the State Superintendent shall submit to the Joint Legislative Education Oversight Committee (Committee) and the Fiscal Research Division an initial report by September 15, 2017, on the progress of GDAC's development and deployment of a data integration service that consolidates data from financial, human resources, licensure, student information, and related systems. The State Superintendent shall also submit an interim report to the Committee and the Fiscal Research Division by January 30, 2018, on the selection of a vendor for an ERP software as a service solution. Thereafter, the State Superintendent shall submit annual reports to the Committee and the Fiscal Research Division by March 15 of each year on the expenditure of funds for the project and progress of implementation until the completion of the project.

SECTION 7.16.(g)  Funds appropriated to the Department of Public Instruction for the 2017‑2019 fiscal biennium to implement the school business modernization system shall not revert at the end of the fiscal year but shall remain available until expended.

 

Office of Charter Schools/Web‑based Record and Data Management

SECTION 7.17.(a)  The Department of Public Instruction shall use up to two hundred thousand dollars ($200,000) each fiscal year of the 2017‑2019 fiscal biennium to support the purchase of a Web‑based electronic records and data reporting management system to automate and streamline reporting and accountability requirements to assist the Office of Charter Schools (OCS) in complying with the annual reporting obligations of charter schools from the following available funds:

(1)        For the 2017‑2018 fiscal year, the Department shall use funds appropriated to the Department for the Uniform Education Reporting System (UERS) by S.L. 2015‑241 for the 2016‑2017 fiscal year that were unexpended and did not revert at the end of the 2016‑2017 fiscal year in accordance with Section 8.7 of that act.

(2)        For the 2018‑2019 fiscal year, the Department shall use funds appropriated to the Department for UERS by this act for the 2017‑2018 fiscal year that are unexpended and do not revert at the end of the 2017‑2018 fiscal year in accordance with Section 7.6 of this act.

SECTION 7.17.(b)  The Department shall purchase a system pursuant to subsection (a) of this section that meets all of the following requirements:

(1)        Allows OCS to develop and assign submission types to manage compliance with applicable law, control document transparency reporting, and create and manage users and roles throughout the system.

(2)        Controls collections of documents to assist in core authorizing functions, including the charter school application and charter school renewal processes.

(3)        Provides for the visualization of academic, financial, and demographic information for either an individual school or a portfolio of charter schools.

(4)        Provides for the safe and secure electronic storage of documents in a Tier 3 datacenter that meets the following standards:

a.         Sarbanes‑Oxley Act (SOX) compliant, including Statement on Auditing Standards (SAS) No. 70, Statement on Standards for Attestation Engagements (SSAE) No. 16, Service Organization Control (SOC) No. 1, and SOC No. 2.

b.         Health Insurance Portability and Accountability Act (HIPAA) compliant, including the Office for Civil Rights (OCR) HIPAA Audit Protocol.

c.         Payment Card Industry (PCI) Data Security Standard (DSS) compliant.

d.         Safe Harbor certification program compliant.

 

State Board of Education/Use of State Funds

SECTION 7.18.(a)  G.S. 115C‑11 reads as rewritten:

"§ 115C‑11.  Organization and internal procedures of Board.

(a)        Presiding Officer. – The State Board of Education shall elect from its membership a chairman and vice‑chairman. A majority of the Board shall constitute a quorum for the transaction of business. In accordance with the provisions of this section, Perper diem and expenses of the appointive members of the Board shall be provided by the General Assembly.pursuant to G.S. 138‑5. The chairman of the Board shall preside at all meetings of the Board. In the absence of the chairman, the vice‑chairman shall preside; in the absence of both the chairman and the vice‑chairman, the Board shall name one of its own members as chairman pro tempore.

(b)        Regular Meetings of Board. – The regular meetings of the Board shall be held each month on a day certain, as determined by the Board. The Board shall determine the hour of the meeting, which may be adjourned from day to day, or to a day certain, until the business before the Board has been completed. Per diem and expenses of appointive and advisory members of the Board shall be provided for up to two business days each month for the regular meetings of the State Board.

(b1)      Annual meeting with the State Board of Community Colleges and the Board of Governors of The University of North Carolina. The State Board of Education shall meet with the State Board of Community Colleges and the Board of Governors of The University of North Carolina at least once a year to discuss educational matters of mutual interest and to recommend to the General Assembly such policies as are appropriate to encourage the improvement of public education at every level in this State. The meeting in 1987 and every three years thereafter shall be hosted by the University Board of Governors, the meeting in 1988 and every three years thereafter shall be hosted by the State Board of Education, and the meeting in 1989 and every three years thereafter shall be hosted by the State Board of Community Colleges. Per diem and expenses of appointive and advisory members of the Board shall be provided for the annual meeting required by this subsection.

(c)        Special Meetings. – Special meetings of the Board may be set at any regular meeting or may be called by the chairman or by the secretary upon the approval of the chairman: Provided, a special meeting shall be called by the chairman upon the request of any five members of the Board. In case of regular meetings and special meetings, the secretary shall give notice to each member, in writing, of the time and purpose of the meeting, by letter directed to each member at his home post‑office address. Such notice must be deposited in the Raleigh Post Office at least three days prior to the date of meeting. Appointive and advisory members of the Board shall not receive per diem and expenses for special meetings of the Board set pursuant to this subsection.

(f)        Committees. – The Board may create from its membership such committees as it deems necessary to facilitate its business. The chairman of the Board shall with approval of the majority of the Board appoint members to the several committees authorized by the Board and to any additional committees which the chairman may deem to be appropriate. Appointive and advisory members of the Board shall not receive per diem and expenses for committee meetings of the Board, except for a committee meeting held on the same day as a regular meeting of the Board for which per diem and expenses are provided in accordance with subsection (b) of this section.

(f1)      General Limitation on Per Diem and Expenses. – Except as otherwise provided in this section and G.S. 115C‑12.1, appointive and advisory members of the Board shall not receive per diem and expenses for activities of the Board, unless such per diem and expenses is otherwise authorized by law for an individual member of the Board serving the State in another capacity.

…."

SECTION 7.18.(b)  G.S. 115C‑12.1 reads as rewritten:

"§ 115C‑12.1.  Training of State Board members.

The State Board of Education shall establish minimum training requirements for members of the State Board of Education. All Board members shall participate in training programs, as required by the State Board. Per diem and expenses of appointive and advisory members of the State Board shall be provided to members for the training required by this section."

SECTION 7.18.(c)  Article 2 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑13.5.  Prohibition on use of State funds to employ private counsel in litigation.

Notwithstanding G.S. 114‑2.3 and G.S. 147‑17, the State Board of Education shall not use any State funds to employ private counsel to provide litigation services to the State Board of Education. As used in this section, litigation services include legal work conducted in anticipation of or in preparation for any suit or action. As used in this section, private counsel includes any licensed attorney retained, engaged, or otherwise representing the State Board of Education but does not include a licensed attorney who holds a permanent budgeted position in either the Department of Justice or the State Board of Education."

SECTION 7.18.(d)  The State Board of Education may only appoint the following personnel positions to support the meetings and direct operations of the office of the State Board of Education:

Position number                                  Title

(1)      65023576                                            Attorney I.

(2)      60009384                                            Attorney II.

(3)      65003194                                            Paralegal II.

(4)      60095070                                            Administrative Assistant I.

The State Board of Education may utilize other staff employed through the Department of Public Instruction to provide administrative and technical assistance to the State Board and to carry out the directives of the State Board.

SECTION 7.18.(e)  Subsection (c) of this section shall not apply to State funds that are encumbered for the 2016‑2017 fiscal year for the purposes of employing private counsel to represent the State Board of Education.

 

Teachers/Isolated K‑12 Schools

SECTION 7.19.  G.S. 115C‑301, as amended by S.L. 2017‑9, is amended by adding a new subsection to read:

"(g1)    Notwithstanding any other provision of this section, the State Board of Education shall allot additional classroom teachers to schools containing grades kindergarten through 12 when consolidation is not feasible due to the geographic isolation of the school and the school meets at least one of the following criteria for geographic isolation:

(1)        The school is located in a local school administrative unit in which the average daily membership is less than 1.5 per square mile.

(2)        The school is located in a local school administrative unit for a county containing more than 150,000 acres of national forest owned by the federal government and managed by the United States Forest Service pursuant to G.S. 104‑5.

The State Board shall allot teachers to geographically isolated schools pursuant to this subsection on the basis of one classroom teacher per grade level and shall allot teachers to the remainder of the local school administrative unit in accordance with the formulas for the regular classroom teacher allotments."

 

Turning TAs into Teachers Pilot Expansion

SECTION 7.20.  Section 8.29 of S.L. 2016‑94 reads as rewritten:

"TEACHER ASSISTANT TUITION REIMBURSEMENT PILOT PROGRAM

"SECTION 8.29.(a)  Purpose. – The purpose of this section is to establish a pilot program for for, beginning with the 2016‑2017 fiscal year, the local boards of education of the Anson County, Franklin County, Moore County, Richmond County, and Scotland County school administrative units and, beginning with the 2017‑2018 fiscal year, the local boards of education of the Alamance‑Burlington Schools, Beaufort County Schools, Bertie County Schools, Duplin County Schools, Edenton‑Chowan Schools, Edgecombe County Schools, Guilford County Schools, Halifax County Schools, Nash‑Rocky Mount Schools, Northampton County Schools, Randolph County Schools, Tyrrell County Schools, Vance County Schools, and Washington County Schools to provide tuition assistance awards to part‑time or full‑time teacher assistants working in those local school administrative units to pursue a college degree that will result in teacher licensure. Tuition assistance awards under the program may be provided for part‑time or full‑time coursework. A local board of education may grant a teacher assistant academic leave to pursue coursework that may only be taken during working hours. A teacher assistant receiving an award under the program shall fulfill the student teaching requirements of an educator preparation program by working in the teacher assistant's employing local school administrative unit. A teacher assistant may continue to receive salary and benefits while student teaching in the local school administrative unit in accordance with G.S. 115C‑310.

"SECTION 8.29.(d)  The local boards of education participating in the pilot program for the 2016‑2017 fiscal year shall jointly report to the Joint Legislative Education Oversight Committee by September 1, 2017, 2017. All of the local boards of education participating in the pilot program shall jointly report to the Joint Legislative Education Oversight Committee by September 1, 2018, and by September 1 of each year thereafter on the results of the pilot program, including at least the following information:

(1)        The number and amount of funds in tuition assistance awards provided to teacher assistants.

(2)        The number of teacher assistant recipients who achieved teacher licensure, including the period of time from the issue of an initial tuition assistance award to the time of achieving licensure.

(3)        The number of recipients who remained employed in the local school administrative unit after achieving teacher licensure."

 

Driver Safety Incentive Program

SECTION 7.21.(a)  G.S. 115C‑215(a) reads as rewritten:

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

SECTION 7.21.(b)  G.S. 115C‑216(g) reads as rewritten:

"(g)      Fee for Instruction. – The local boards of education shall fund driver education courses from funds available to them and may charge each student participating in a driver education course a fee of up to sixty‑five dollars ($65.00) to offset in an amount not to exceed the actual costs of providing the training and instruction.course to each individual student. If a local board of education charges a fee for participation in a driver education course, the local board shall may provide a process for reduction or waiver of that fee for students unable to pay the fee due to economic hardship.hardship, including a process for the local board to be reimbursed for the portion of the course fee that is not charged to an eligible student under the Driver Safety Incentive Program pursuant to G.S. 115C‑217."

SECTION 7.21.(c)  Article 14 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑217.  Driver Safety Incentive Program.

(a)        Reimbursement of Driver Education Costs. – Within the funds made available for this purpose, the Department of Public Instruction shall establish the Driver Safety Incentive Program (Program) for the reimbursement of the direct costs for a driver education course to a parent or legal guardian of a child who (i) is at least 15 years old but less than 18 years old and (ii) successfully obtains a Level 1 limited learner's permit, in accordance with G.S. 20‑11, on the child's first attempt at obtaining the permit. The Department shall establish eligibility guidelines for reimbursable costs that shall include a course of driver education prescribed in G.S. 115C‑215 or a course of driver instruction at a licensed commercial driver training school. The reimbursement amount shall be up to two hundred seventy‑five dollars ($275.00) of the direct costs for one driver education course.

If a local board of education reduces or waives the driver education course fee for a student pursuant to G.S. 115C‑216(g), the local board may apply for reimbursement to the Department for the portion of the course fee not charged to a student who is eligible for reimbursement under the Program. The total amount of reimbursement to both the parent or legal guardian and the local board of education shall not exceed two hundred seventy‑five dollars ($275.00).

(b)        Application. – A parent or legal guardian eligible for reimbursement of the driver education direct costs shall apply to the Department of Public Instruction within 90 days of the child obtaining the limited learner's permit. The application shall be submitted in the form required by the Department and shall include (i) documentation from the Division of Motor Vehicles that the child obtained the limited learner's permit on the first attempt and (ii) an invoice or other documentation approved by the Department to demonstrate the direct costs of the driver education course for which the parent or legal guardian is seeking reimbursement.

If a local board of education has reduced or waived the driver education course fee pursuant to G.S. 115C‑216(g) for a student who is eligible for reimbursement under the Program, the student shall provide any documentation necessary to the local board so that the local board may apply to the Department for the reimbursement of the portion of the fee that was not charged to the student. The local board of education may submit an application for reimbursement under this section for up to 60 days after the eligible student provides the local board the documentation required for the application.

(c)        Distribution. – The Department of Public Instruction shall make payments for reimbursement within 60 days of the receipt of an application that meets the requirements of this section. In the event that total requests for reimbursement exceed the amounts available for distribution, the monies available shall be distributed in the order of receipt of completed, eligible applications in each fiscal year. In the subsequent fiscal year when funds are available, the Department shall prioritize payment for eligible reimbursement applications submitted in the prior fiscal year that were not paid due to lack of available funds.

(d)       Administration. – The State Board of Education, in consultation with the Department of Transportation, Division of Motor Vehicles, shall establish any rules necessary for the administration of the reimbursement program by the Department of Public Instruction, including (i) eligibility rules for a person less than 18 years of age who is no longer a dependent of a parent or legal guardian and (ii) submission of applications in accordance with the provisions of this section. For the purposes of this Program, the Division of Motor Vehicles shall implement a process to provide documentation to drivers obtaining their limited learner's permits on the first attempt. The Department of Public Instruction may use up to five percent (5%) of the funds appropriated for the Program each fiscal year for administrative costs, including reimbursing the Division of Motor Vehicles for costs related to providing documentation to drivers obtaining their limited learner's permits on the first attempt.

(e)        Report. – The Department of Public Instruction shall report by March 15 of each fiscal year to the Fiscal Research Division and the Joint Legislative Education Oversight Committee on the administration of the reimbursement program for the prior fiscal year, including (i) the amount of reimbursement funds distributed under the Program, (ii) the type of driver education course submitted for reimbursement of costs, including if the course was operated solely by a local board of education, by a local board of education contracting with another public or a private entity for delivery of the course, or a licensed commercial driver training school, (iii) the extent to which the reimbursement amount covers the total direct cost of driver education courses, (iv) the amount of reimbursements requested by local boards of education to cover reduced or waived course fees, and (v) an estimate of the cost of the Program for the upcoming fiscal year."

SECTION 7.21.(d)  G.S. 115C‑105.25(b)(11) is repealed.

SECTION 7.21.(e)  Section 5.3(c) of S.L. 2015‑241, as amended by Section 5.2 of S.L. 2016‑94, is repealed.

SECTION 7.21.(f)  Subsections (a) and (b) of this section apply beginning with the 2017‑2018 school year. Subsection (c) of this section applies to driver education courses completed on or after July 1, 2017.

 

Cooperative Innovative High School Funding Changes

SECTION 7.22.(a)  Legislative Findings. – The General Assembly finds the following in regard to the State's long‑term, ongoing investment in providing high school students with opportunities to obtain postsecondary credit and career credentials at no cost to the student in order to maximize cost savings to students in obtaining a postsecondary education:

(1)        Dual enrollment opportunities for high school students have been available in the State for many years but began to significantly grow in the early‑ to mid‑2000s as a result of the General Assembly's enactment of the Innovative Education Initiatives Act and the establishment of the cooperative innovative high school program pursuant to Part 9 of Article 16 of Chapter 115C of the General Statutes. This act demonstrated the State's commitment in prioritizing cooperative efforts between secondary schools and institutions of higher education so as to reduce the high school dropout rate, increase high school and college graduation rates, decrease the need for remediation in institutions of higher education, and raise certificate, associate, and bachelor degree completion rates.

(2)        To ensure continued efficiency in the investment of State funds to provide postsecondary dual enrollment programs for high school students, the General Assembly directed the State Board of Education and the State Board of Community Colleges to jointly establish the Career and College Promise Program pursuant to Section 7.1A of S.L. 2011‑145, effective January 1, 2012, to consolidate existing cooperative efforts between secondary schools and institutions of higher education by providing (i) for specific pathways for obtaining college credit that is transferable to community colleges and institutions of higher education, (ii) for college credit leading to a subject‑area certificate, diploma, or degree, and (iii) through enrollment at a cooperative innovative high school, enabling students to concurrently obtain a high school diploma and to begin or complete an associate degree program, master a certificate or vocational program, or earn up to two years of college credit within five years.

(3)        The recent growth in the establishment of cooperative innovative high school programs has resulted in a steady increase in full‑time equivalent (FTE) student enrollment at community colleges due to the maturation of those programs, including an increase of one hundred forty percent (140%) in FTE enrollment for these students between 2008‑2009 and 2013‑2014.

(4)        The implementation of other Career and College Promise pathways enabling certain traditional high school students to concurrently enroll in postsecondary courses leading to a defined academic goal has also resulted in a recent rise in student enrollment at community colleges with a thirty percent (30%) increase in the College Transfer pathway and a twenty‑one percent (21%) increase in the Career and Technical Education pathway between 2012‑2013 and 2013‑2014.

(5)        For the 2013‑2014 academic year, the General Assembly appropriated fifty‑seven million dollars ($57,000,000) in State funds to cover community college FTE for 11,389 students during the first year of full implementation of the Career and College Promise Program.

(6)        For the 2015‑2016 fiscal year, the General Assembly appropriated the following amounts to cover the cost of cooperative innovative high schools and other Career and College Promise programs as follows:

a.         For the cooperative innovative high school allotment, the sum of twenty‑five million four hundred eighty‑eight thousand seven hundred twenty‑five dollars ($25,488,725).

b.         For community college FTE for the following:

1.         For students enrolled in cooperative innovative high schools, the sum of forty‑two million two hundred ninety‑one thousand three hundred eighty‑six dollars (42,291,386).

2.         For students enrolled in courses that count toward the College Transfer pathway, the sum of twenty‑one million three hundred forty‑three thousand five hundred seven dollars ($21,343,507).

3.         For students enrolled in courses that count toward the Career and Technical Education pathway, the sum of twenty‑one million seven hundred eight thousand nine hundred thirty‑two dollars ($21,708,932).

c.         For the reimbursement of tuition for constituent institutions of the University of North Carolina as a partner institution of higher education to a cooperative innovative high school, the sum of one million nine hundred forty‑five thousand two hundred one dollars ($1,945,201).

d.         For the reimbursement of tuition for private colleges located in North Carolina that are a partner institution of higher education to a cooperative innovative high school, the sum of four hundred fifty‑seven thousand six hundred thirty‑nine dollars ($457,639).

(7)        Since considerable State funds have been appropriated on an ongoing basis to cover the cost of high school student enrollment at community colleges, constituent institutions, and approved private colleges pursuant to G.S. 115C‑238.54 and G.S. 115D‑5(b)(12) as part of the Career and College Promise programs, it is necessary to examine the total cost of these programs and prioritize the appropriation of State funds to achieve the General Assembly's goal of maximizing cost savings to students in obtaining a postsecondary education. This includes reducing funds allocated for the cooperative innovative high school allotment for local school administrative units with established programs and new programs in areas of the State with significant resources to support those schools and to more effectively utilize these funds in supporting and establishing cooperative innovative high schools in economically distressed areas of the State.

SECTION 7.22.(b)  Study. – In accordance with the legislative finding set forth in subdivision (7) of subsection (a) of this section, by February 15, 2018, the State Board of Community Colleges, the Board of Governors of The University of North Carolina, and the State Board of Education shall study and report to the Senate Appropriations Committee on Education/Higher Education, the House Appropriations Committee on Education, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the costs associated with the Career and College Promise Program, including operation of cooperative innovative high schools and the cost of concurrent enrollment in the high school and the institution of higher education, student outcomes related to the Program, and any legislative recommendations on modifications to the administration and funding for the Program, including the use of State funds for the planning and establishment of new cooperative innovative high schools in economically distressed areas of the State. Legislative recommendations shall also specifically address the use of the funds for the cooperative innovative high school allotment, whether the allotment is necessary for the operation of the schools, and how modification or discontinuation of the allotment would impact the programs.

SECTION 7.22.(c)  Established Cooperative Innovative High Schools Located in Tier III Areas. – For the 2017‑2018 fiscal year, notwithstanding G.S. 115C‑238.54 and any other provision of law to the contrary, for a cooperative innovative high school that, as of July 1, 2017, (i) was approved under G.S. 115C‑238.51A(c), (ii) has received a cooperative innovative high school allotment for at least three of the prior fiscal years, and (iii) is located in a development tier three area as defined in G.S. 143B‑437.08, the cooperative innovative high school allotment amount established by the Department of Public Instruction for the 2017‑2018 fiscal year shall be reduced by twenty‑five percent (25%). For the 2018‑2019 fiscal year and subsequent fiscal years, these same schools shall receive a fifty percent (50%) reduction of the cooperative innovative high school allotment amount established by the Department of Public Instruction for each fiscal year in which the allotment is allocated to local school administrative units for approved cooperative innovative high schools. For the 2017‑2019 fiscal biennium, these schools shall continue to receive additional State funds for community college FTE and tuition reimbursement for institutions of higher education, as applicable.

SECTION 7.22.(d)  Certain New Cooperative Innovative High Schools Located in Tier I Areas. – Of the funds made available to the Department of Public Instruction for the 2017‑2019 fiscal biennium from the reduction in the cooperative innovative high school allotment for certain schools in accordance with subsection (c) of this section, the Department shall allocate the sum of three hundred sixteen thousand six hundred forty‑six dollars ($316,646) in each fiscal year to Northampton County Schools for the Northampton County New Tech Early College and to Washington County Schools for the Washington County Early College High School.

SECTION 7.22.(e)  Other New Cooperative Innovative High Schools Located in Tier I Areas. – For the 2017‑2019 fiscal biennium, the Department of Public Instruction shall allocate funds to local school administrative units located in a development tier one area as defined in G.S. 143B‑437.08 as of July 1, 2017, with a cooperative innovative high school that (i) was approved by the State Board of Education under G.S. 115C‑238.51A(c) and (ii) did not receive cooperative innovative high school allotment funds in a prior fiscal year as follows:

(1)        For the 2017‑2018 fiscal year, any of the remaining funds available after the Department allocates funds to the local school administrative units as required by subsection (d) of this section shall be allocated in equal amounts by the Department to local school administrative units for each eligible cooperative innovative high school located in the unit.

(2)        For the 2018‑2019 fiscal year, any of the remaining funds available after the Department allocates funds to the local school administrative units as required by subsection (d) of this section shall be allocated in equal amounts of up to three hundred sixteen thousand six hundred forty‑six dollars ($316,646) to local school administrative units for each eligible cooperative innovative high school located in the unit.

SECTION 7.22.(f)  Reporting Requirement on the Career and College Promise Programs. – G.S. 115D‑5 is amended by adding a new subsection to read:

"(x)      In addition to the evaluation of cooperative innovative high schools by the State Board of Education pursuant to G.S. 115C‑238.55, the State Board of Community Colleges, in conjunction with the State Board of Education and the Board of Governors of The University of North Carolina, shall evaluate the success of students participating in the Career and College Promise Program, including the College Transfer pathway and the Career and Technical Education pathway. 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 the programs. The Boards shall jointly report by January 15 of each year to the Joint Legislative Education Oversight Committee."

SECTION 7.22.(g)  Certain CIHSs Operating Without Additional Funds. – Beginning with the 2017‑2018 school year and for subsequent school years thereafter, notwithstanding G.S. 115C‑238.51A(c) and G.S. 115C‑238.54, Charlotte Middle College at Merancas Campus, Charlotte Teacher Cadet Early College, Harnett County Early College, Agriculture and Science Early College, Onslow Early College High School, and Wake CTE High School North shall be permitted to operate in accordance with G.S. 115C‑238.53 and G.S. 115C‑238.54 as cooperative innovative high schools approved under G.S. 115C‑238.51A(c) and shall be subject to the evaluation requirements of G.S. 115C‑238.55.

 

Preparing Future Workforce in Coding and Mobile App Development Grant Program

SECTION 7.23.(a)  Program Purpose. – The Department of Public Instruction shall establish the Coding and Mobile Application Grant Program (Program) to develop industry partnerships with local school administrative units and charter schools to design and implement computer science, coding, and mobile application development curricular programs for middle school and high school students. Funds appropriated for the Program shall be used to award competitive grants of up to four hundred thousand dollars ($400,000) each fiscal year to grant recipients. Grant funds shall be used for the purchase of equipment, digital materials, and related capacity building activities, which may include teacher professional development for coding, computer science, and mobile application development initiatives. Grant recipients shall use no more than five percent (5%) of the grant award each fiscal year for administrative costs.

SECTION 7.23.(b)  Program Criteria and Guidelines; Applications. – By August 15, 2017, the Superintendent of Public Instruction shall establish criteria and guidelines for grant applications and Program requirements for local school administrative units and charter schools, including sufficient curricular rigor for courses offered to students. The Department of Public Instruction shall accept applications for the first year of the Program until October 15, 2017. For subsequent fiscal years in which funds are available for new applications to the Program, the Department shall accept applications until May 15 of that year. Grant applicants shall submit at least the following information in their applications:

(1)        A description of how the proposed partnership initiative will provide increased career opportunities for students to engage in high‑wage, high‑skill, and high‑demand occupations.

(2)        Demonstrated evidence of employer demand for the partnership initiative and related career and technical education (CTE) training, including documentation of industry involvement in the partnership initiative.

(3)        A proposed budget for the partnership initiative, including demonstrated commitment of local or regional partners to sustain the programs beyond the initial grant funding.

(4)        A description of how the proposed initiative aligns with other programs, including CTE, Career and College Pathways, and postsecondary programs and, if appropriate, how equipment necessary for the initiative will be utilized by partners.

(5)        A description of how the project will create innovative, nontraditional, and immediate career pathways for students to enter high demand jobs in the development of mobile software applications.

SECTION 7.23.(c)  Selection of Recipients. – In selecting recipients for the Program, the Superintendent of Public Instruction shall consider diversity among the pool of applicants, including geographic location, the positive impact on the community of industry partnerships, and the size of the student population served by the recipient, in order to award funds to the extent possible to grant recipients that represent different characteristics of the State. The Superintendent of Public Instruction shall select initial grant recipients by November 15, 2017, to begin implementation of the partnership initiatives under the Program as early as the spring semester of the 2017‑2018 school year. For subsequent fiscal years in which funds are available for new applications to the Program, the Superintendent shall select grant recipients by July 15 of that year.

SECTION 7.23.(d)  Reporting Requirements. – By August 1 of each year of the Program, grant recipients shall submit a report to the Department of Public Instruction, beginning with an initial report by August 1, 2018, for the preceding year in which grant funds were expended that provides at least the following information on the partnership initiative:

(1)        The use of grant funds.

(2)        The number of students by grade level participating in the partnership initiative.

(3)        The number of students who subsequently participated in work‑based opportunities, internships, or apprenticeship programs and a description of the types of opportunities for those students.

(4)        Student outcome data regarding job attainment and postsecondary opportunities as a result of the partnership initiative.

(5)        Any other information the Superintendent of Public Instruction deems necessary.

By September 15 of each year of the Program, the Department shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division, beginning with an initial report by September 15, 2018, on grant recipients and implementation of the program, including the information required to be reported to the Department pursuant to this subsection and any legislative recommendations for modifications or expansion of the Program.

 

Extended Learning and Integrated Student Supports Competitive Grant Program

SECTION 7.24.(a)  Of the funds appropriated by this act for the At‑Risk Student Services Alternative School Allotment for the 2017‑2019 fiscal biennium, the Department of Public Instruction shall use up to six million dollars ($6,000,000) for the 2017‑2018 fiscal year and up to six million dollars ($6,000,000) for the 2018‑2019 fiscal year for the Extended Learning and Integrated Student Supports Competitive Grant Program (Program). Of these funds, the Department of Public Instruction may use up to two hundred thousand dollars ($200,000) for each fiscal year to administer the Program.

SECTION 7.24.(b)  The purpose of the Program is to fund high‑quality, independently validated extended learning and integrated student support service programs for at‑risk students that raise standards for student academic outcomes by focusing on the following:

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

(2)        Inclusion of rigorous, quantitative performance measures to confirm effectiveness of the program.

(3)        Deployment of multiple tiered supports in schools to address student barriers to achievement, such as strategies to improve chronic absenteeism, anti‑social behaviors, academic growth, and enhancement of parent and family engagement.

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

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

(6)        Minimization of student class size when providing instruction or instructional supports and interventions.

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

(8)        Utilization of digital content to expand learning time, when appropriate.

SECTION 7.24.(c)  Grants shall be used to award funds for new or existing eligible programs for at‑risk students operated by (i) nonprofit corporations and (ii) nonprofit corporations working in collaboration with local school administrative units. Grant participants are eligible to receive grants for up to two years in an amount of up to five hundred thousand dollars ($500,000) each year. Programs should focus on serving (i) at‑risk students not performing at grade level as demonstrated by statewide assessments, (ii) students at‑risk of dropout, and (iii) students at‑risk of school displacement due to suspension or expulsion as a result of anti‑social behaviors. Priority consideration shall be given to applications demonstrating models that focus services and programs in schools that are identified as low‑performing pursuant to G.S. 115C‑105.37.

A grant participant shall provide certification to the Department of Public Instruction that the grants received under the program shall be matched on the basis of three dollars ($3.00) in grant funds for every one dollar ($1.00) in nongrant funds. Matching funds shall not include other State funds. The Department shall also give priority consideration to an applicant that is a nonprofit corporation working in partnership with a local school administrative unit resulting in a match utilizing federal funds under Part A of Title I of the Elementary and Secondary Education Act of 1965, as amended, or Title IV of the Higher Education Act of 1965, as amended, and other federal or local funds. Matching funds may include in‑kind contributions for up to fifty percent (50%) of the required match.

SECTION 7.24.(d)  A nonprofit corporation may act as its own fiscal agent for the purposes of this Program. Grant recipients shall report to the Department of Public Instruction for the year in which grant funds were expended on the progress of the program, including alignment with State academic standards, data collection for reporting student progress, the source and amount of matching funds, and other measures, before receiving funding for the next fiscal year. Grant recipients shall also submit a final report on key performance data, including statewide test results, attendance rates, graduation rates, and promotion rates, and financial sustainability of the program.

SECTION 7.24.(e)  The Department of Public Instruction shall provide an interim report on the Program to the Joint Legislative Education Oversight Committee by September 15, 2018, with a final report on the Program by September 15, 2019. The final report shall include the final results of the Program and recommendations regarding effective program models, standards, and performance measures based on student performance, leveraging of community‑based resources to expand student access to learning activities, academic and behavioral support services, and potential opportunities for the State to invest in proven models for future grants programs.

 

Life Changing Experiences School Pilot Program

SECTION 7.25.(a)  Of the funds appropriated by this act for the At‑Risk Student Services Alternative School Allotment for the 2017‑2019 fiscal biennium, the Department of Public Instruction shall use up to three hundred sixty thousand dollars ($360,000) in nonrecurring funds for the 2017‑2018 fiscal year and up to three hundred sixty thousand dollars ($360,000) in nonrecurring funds for the 2018‑2019 fiscal year to contract with the Children and Parent Resource Group, Inc., to design, implement, and evaluate a two‑year Life Changing Experiences School Pilot Program (Project), beginning with the 2017‑2018 school year and ending with the 2018‑2019 school year. The Project shall be operated and administered for students in grades six through 11 in the following local school administrative units: Mitchell County Schools, Pitt County Schools, Wayne County Schools, and Winston‑Salem/Forsyth County Schools. These contract funds shall not be used for any purpose other than to implement the Project in the local school administrative units, which consists of traveling three‑dimensional, interactive, holistic, and evidence‑based multimedia education in‑school programs. The Project includes theme‑specific programs screened as school assemblies and additional follow‑up applications that address dangerous life and community threatening activities that negatively impact teenagers, including alcohol and other drugs, dangerous driving, violence, and bullying. The goal of these programs is to increase positive intentions and behavioral outcomes by teaching students the techniques and skills that empower them to reach meaningful life goals, employ positive behaviors, and start businesses and social enterprises.

SECTION 7.25.(b)  The Children and Parent Resource Group, Inc., in consultation with the Department of Public Instruction, shall submit an initial report on the Project authorized by subsection (a) of this section by March 1, 2018, and a final report by March 1, 2019, to the Joint Legislative Education Oversight Committee and the Fiscal Research Division. The report shall include an accounting of expenditures and student outcome data related to the operation of the Project.

 

School Performance Grades/ESSA Compliance

SECTION 7.26.(a)  G.S. 115C‑12(9)c1. reads as rewritten:

"c1.      To issue an annual "report card" for the State and for each local school administrative unit, assessing each unit's efforts to improve student performance based on the growth in performance of the students in each school and taking into account progress over the previous years' level of performance and the State's performance in comparison with other states. This assessment shall take into account factors that have been shown to affect student performance and that the State Board considers relevant to assess the State's efforts to improve student performance. As a part of theThe annual "report card" for each local school administrative unit,unit shall include the following:

1.         theThe State Board shall award, in accordance with G.S. 115C‑83.15, an overall numerical school achievement, growth, and performance score on a scale of zero to 100 and a corresponding performance letter grade of A, B, C, D, or F earned by each school within the local school administrative unit. The school performance score and grade shall reflect student performance on annual subject‑specific assessments, college and workplace readiness measures, and graduation rates.rates, promotion rates, and student progress in achieving English language proficiency. In addition, the State Board shall award separate performance scores and grades for the following:

I.          School performance of certain subgroups of students as provided in G.S. 115C‑83.15.

II.        For schools serving students in any grade from kindergarten to eighth grade, separate performance scores and grades shall also be awarded based on theschool performance in reading and mathematics respectively.

2.         The annual "report card" forFor schools serving students in third grade also shall includegrade, the number and percentage of third grade students who (i) take and pass the alternative assessment of reading comprehension; (ii) were retained in third grade for not demonstrating reading proficiency as indicated in G.S. 115C‑83.7(a); and (iii) were exempt from mandatory third grade retention by category of exemption as listed in G.S. 115C‑83.7(b).

3.         The annual "report card" forFor high schools shall also includeschools, measures of Advanced Placement course participation and International Baccalaureate Diploma Programme participation and Advanced Placement and International Baccalaureate examination participation and performance."

SECTION 7.26.(b)  G.S. 115C‑47(58) reads as rewritten:

"(58)    To Inform the Public About the North Carolina School Report Cards Issued by the State Board of Education. – Each local board of education shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or is otherwise provided to the public. Each local board of education shall ensure that the overall school performance score and grade earned by each school in the local school administrative unit for the current and previous four school years is prominently displayed on the Web site of the local school administrative unit. If any school in the local school administrative unit is awarded aan overall school performance grade of D or F, the local board of education shall provide notice of the grade in writing to the parent or guardian of all students enrolled in that school."

SECTION 7.26.(c)  G.S. 115C‑83.15 reads as rewritten:

"§ 115C‑83.15.  School achievement, growth, performance scores, and grades.

(a)        School Scores and Grades. – The State Board of Education shall award school achievement, growth, and performance scores and an associated performance grade as required by G.S. 115C‑12(9)c1., and calculated as provided in this section. The State Board of Education shall enter all necessary data into the Education Value‑Added Assessment System (EVAAS) in order to calculate school performance scores and grades.

(b)        Calculation of the School Achievement Score.Score as a Measure of Academic Achievement. – In calculating the overall school achievement score earned by schools,schools as a measure of academic achievement, the State Board of Education shall total the sum of points earned by a school as follows:

(1)        For schools serving any students in kindergarten through eighth grade, the State Board shall assign points on all of the following indicators that are measured for that school:

(1)a.     One point for each percent of students who score at or above proficient on annual assessments for mathematics in grades three through eight.

(2)b.     One point for each percent of students who score at or above proficient on annual assessments for reading in grades three through eight.

(3)c.     One point for each percent of students who score at or above proficient on annual assessments for science in grades five and eight.

d.         One point for each percent of students who progress in achieving English language proficiency on annual assessments in grades three through eight.

e.         One point for each percent of students who are promoted from the third grade to the fourth grade within four years of a student entering kindergarten.

f.          One point for each percent of students who are promoted from the eighth grade to the ninth grade within three years of a student entering sixth grade.

(2)        For schools serving any students in ninth through 12th grade, the State Board shall assign points on all of the following indicators that are measured for that school:

(4)a.     One point for each percent of students who score at or above proficient on the Algebra I or Integrated Math I end‑of‑course test.

(5)b.     One point for each percent of students who score at or above proficient on the English II end‑of‑course test.

(6)c.     One point for each percent of students who score at or above proficient on the Biology end‑of‑course test.

(7)d.    One point for each percent of students who complete Algebra II or Integrated Math III with a passing grade.

(8)e.     One point for each percent of students who achieve the minimum score required for admission into a constituent institution of The University of North Carolina on a nationally normed test of college readiness.

(9)f.     One point for each percent of students enrolled in Career and Technical Education courses who meet the standard when scoring at Silver, Gold, or Platinum levels on a nationally normed test of workplace readiness.

(10)g.   One point for each percent of students who graduate within four years of entering high school.

h.         One point for each percent of students who progress in achieving English language proficiency.

In calculating the overall school achievement score earned by schools, the State Board of Education shall (i) use a composite approach to weigh the achievement elements based on the number of students measured by any given achievement element and (ii) proportionally adjust the scale to account for the absence of a school achievement element for award of scores to a school that does not have a measure of one of the school achievement elements annually assessed for the grades taught at that school. The overall school achievement score shall be translated to a 100‑point scale and used for school reporting purposes as provided in G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(c)        Calculation of the School Growth Score.Score as a Measure of School Quality and Student Success. – Using EVAAS, the State Board shall calculate the overall growth score earned by schools.schools as a measure of school quality and student success. In calculating the total growth score earned by schools, the State Board of Education shall weight student growth on the achievement indicators as provided in subsection (b) of this section that have available growth values. The numerical values used to determine whether a school has met, exceeded, or has not met expected growth shall be translated to a 100‑point scale and used for school reporting purposes as provided in G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(d)       Calculation of the Overall School Performance Scores and Grades. – The State Board of Education shall use EVAAS to calculate the overall school performance score by adding the school achievement score, as provided in subsection (b) of this section, and the school growth score, as provided in subsection (c) of this section, earned by a school. The school achievement score shall account for eighty percent (80%), and the school growth score shall account for twenty percent (20%) of the total sum. If a school has met expected growth and inclusion of the school's growth score reduces the school's performance score and grade, a school may choose to use the school achievement score solely to calculate the performance score and grade. For all schools, the total school performance score shall be converted to a 100‑point scale and used to determine a an overall school performance grade based on the following scale:

(1)        A school performance score of at least 90 is equivalent to an overall school performance grade of A.

(2)        A school performance score of at least 80 is equivalent to an overall school performance grade of B.

(3)        A school performance score of at least 70 is equivalent to an overall school performance grade of C.

(4)        A school performance score of at least 60 is equivalent to an overall school performance grade of D.

(5)        A school performance score of less than 60 points is equivalent to an overall school performance grade of F.

(d1)     Calculation of the School Performance Scores and Grades for Certain Subgroups of Students Served by a School. – In addition to the overall school performance scores and grades awarded under this section, for each school that serves a minimum number of students in a subgroup of students listed in this subsection, the State Board of Education shall use EVAAS to calculate school performance scores and shall determine a corresponding school performance grade for each subgroup using the same method as set forth in subsection (d) of this section. School performance scores for subgroups of students shall not be included in the calculation of the overall school performance scores and grades under subsection (d) of this section.

The State Board shall establish the minimum number of students in a subgroup served by a school that is necessary to disaggregate information on student performance and to determine a school performance grade for that subgroup. The school performance scores and grades shall be reported separately on the annual school report card provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8 for the following subgroups of students:

(1)        Economically disadvantaged students.

(2)        Students from major racial and ethnic groups.

(3)        Children with disabilities.

(4)        English learners.

(e)        Elementary and Middle School Reading and Math Achievement Scores. – For schools serving students in kindergarten through eighth grade, the school achievement scores in reading and mathematics, respectively, shall be reported separately on the annual school report card provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(f)        Indication of Growth. – In addition to awarding the overall school scores for achievement, growth, and performance and the performance grade, using EVAAS, the State Board shall designate that a school has met, exceeded, or has not met expected growth. The designation of student growth shall be clearly displayed in the annual school report card provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(g)        Access to Annual Report Card Information on the Department's Web Site. – Beginning with data collected in the 2017‑2018 school year, the State Board of Education shall provide user‑friendly access to the public on the annual report cards issued for local school administrative units and individual schools pursuant to G.S. 115C‑12(9)c1. through the Department of Public Instruction's Web site. The information provided for the annual report card shall be designed and organized to provide at least the following:

(1)        A summary for each local school administrative unit and for each individual school of the school performance grades, whether the school has met, exceeded, or has not met expected growth, and any other information required to be provided as part of the annual report card.

(2)        The percentage of schools receiving an overall school performance letter grade of A, B, C, D, or F earned by each school located within a local school administrative unit and statewide.

(3)        The number of schools that have met, exceeded, or have not met expected growth by each school located within a local school administrative unit and statewide.

(4)        A Web page for each individual school that prominently displays the school's performance grades, whether the school has met, exceeded, or has not met expected growth, and the school's performance and growth scores in a way that is easy for the user to read.

(5)        The ability to easily compare annual report card information, including school performance grades and whether schools have met, exceeded, or have not met expected growth, for local school administrative units and for individual schools for a time span of at least three years."

SECTION 7.26.(d)  Part 1B of Article 8 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑83.16.  School performance indicators for the purpose of compliance with federal law.

The State Board of Education shall use the school performance scores and grades as calculated under G.S. 115C‑83.15 to satisfy the federal requirement under the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act, P.L. 114‑95, to meaningfully differentiate the performance of schools on an annual basis. For the purpose of compliance with federal law, the indicators shall be defined as follows:

(1)        For schools serving any students in kindergarten through eighth grade, the State Board shall define the indicators as follows:

a.         Measures of Academic Achievement. –

1.         The academic achievement indicator shall include the following measures:

I.          Proficiency on annual assessments for mathematics in grades three through eight.

II.        Proficiency on annual assessments for reading in grades three through eight.

2.         The other academic indicator shall include the following measures:

I.          Proficiency on annual assessments for science in grade five.

II.        Proficiency on annual assessments for science in grade eight.

III.       The rate of promotion from the third grade to the fourth grade within four years of a student entering kindergarten.

IV.       The rate of promotion from the eighth grade to the ninth grade within three years of a student entering sixth grade.

3.         The English language proficiency indicator shall be the percentage of students who progress in achieving English language proficiency on annual assessments in grades three through eight.

b.         The measure of school quality and student success shall be the growth score earned by schools.

(2)        For schools serving any students in ninth through 12th grade, the State Board shall define the indicators as follows:

a.         Measures of Academic Achievement. –

1.         The academic achievement indicator shall include the following measures:

a.         Proficiency on the Algebra I or Integrated Math I end‑of‑course test.

b.         Proficiency on the English II end‑of‑course test.

2.         The other academic indicator shall include the following measures:

a.         Proficiency on the Biology end‑of‑course test.

b.         The percentage of students who achieve the minimum score required for admission into a constituent institution of The University of North Carolina on a nationally normed test of college readiness.

c.         The percentage of students enrolled in Career and Technical Education courses who meet the standard when scoring at Silver, Gold, or Platinum levels on a nationally normed test of workplace readiness.

3.         The graduation rate indicator shall be the percentage of students who graduate within four years of entering high school.

4.         The English language proficiency indicator shall be the percentage of students who progress in achieving English language proficiency.

b.         The measure of school quality and student success shall be the growth score earned by schools."

SECTION 7.26.(e)  G.S. 115C‑75.5(5) reads as rewritten:

"(5)      Qualifying school. – A low‑performing school, as defined in G.S. 115C‑105.37, that meets one of the following criteria:

a.         The school received aan overall school performance score in the lowest five percent (5%) of all schools in the prior school year that meet all of the following requirements:

1.         The school includes all or part of grades kindergarten through fifth.

2.         The school did not exceed growth in at least one of the prior three school years and did not meet growth in at least one of the prior three school years.

3.         One of the models established in G.S. 115C‑105.37B for continually low‑performing schools had not been adopted for that school for the immediately prior school year."

SECTION 7.26.(f)  G.S. 115C‑105.37 reads as rewritten:

"§ 115C‑105.37.  Identification of low‑performing schools.

(a)        Identification of Low‑Performing Schools. – The State Board of Education shall identify low‑performing schools on an annual basis. Low‑performing schools are those that receive aan overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" as defined by G.S. 115C‑83.15.

(b)        Parental Notice of Low‑Performing School Status. – Each school that the State Board identifies as low‑performing shall provide written notification to the parents and guardians of students attending that school within 30 days of the identification that includes the following information:

(1)        A statement that the State Board of Education has found that the school has "received aan overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and has been identified as a low‑performing school as defined by G.S. 115C‑105.37." The statement shall include an explanation of the school performance grades and growth scores.

(2)        The school performance grade and growth score received.

(3)        Information about the preliminary plan developed under subsection (a1) of this section and the availability of the final plan on the local school administrative unit's Web site.

(4)        The meeting date for when the preliminary plan will be considered by the local board of education.

(5)        A description of any additional steps the school is taking to improve student performance."

SECTION 7.26.(g)  G.S. 115C‑105.39A reads as rewritten:

"§ 115C‑105.39A.  Identification of low‑performing local school administrative units.

(a)        Identification of Low‑Performing Local School Administrative Units. – The State Board of Education shall identify low‑performing local school administrative units on an annual basis. A low‑performing local school administrative unit is a unit in which the majority of the schools in that unit that received aan overall school performance grade and school growth score as provided in G.S. 115C‑83.15 have been identified as low‑performing schools, as provided in G.S. 115C‑105.37.

(c)        Parental Notice of Low‑Performing Local School Administrative Unit Status. – Each local school administrative unit that the State Board identifies as low‑performing shall provide written notification to the parents and guardians of all students attending any school in the local school administrative unit within 30 days of the identification that includes the following information:

(1)        A statement that the State Board of Education has found that a majority of the schools in the local school administrative unit have "received aan overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and have been identified as low‑performing schools as defined by G.S. 115C‑105.37." The statement shall also include an explanation of the school performance grades and school growth scores.

(2)        The percentage of schools identified as low‑performing.

(3)        Information about the preliminary plan developed under subsection (b) of this section and the availability of the final plan on the local school administrative unit's Web site.

(4)        The meeting date for when the preliminary plan will be considered by the local board of education.

(5)        A description of any additional steps the local school administrative unit and schools are taking to improve student performance.

(6)        For notifications sent to parents and guardians of students attending a school that is identified as low‑performing under G.S. 115C‑105.37, a statement that the State Board of Education has found that the school has "received a an overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and has been identified as a low‑performing school as defined by G.S. 115C‑105.37." This notification also shall include the overall school performance grade and school growth score the school received and an explanation of the school performance grades and school growth scores."

SECTION 7.26.(h)  G.S. 115C‑218.65 reads as rewritten:

"§ 115C‑218.65.  North Carolina School Report Cards.

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

SECTION 7.26.(i)  G.S. 115C‑218.94(a) reads as rewritten:

"(a)      Identification of Low‑Performing Charter Schools. – The State Board of Education shall identify low‑performing charter schools on an annual basis. Low‑performing charter schools are those that receive aan overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" as defined by G.S. 115C‑83.15."

SECTION 7.26.(j)  G.S. 115C‑238.66(11) reads as rewritten:

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

SECTION 7.26.(k)  G.S. 116‑239.8(14) reads as rewritten:

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

SECTION 7.26.(l)  This section applies beginning with the 2017‑2018 school year.

 

Read to Achieve Diagnostic Changes

SECTION 7.27.(a)  G.S. 115C‑83.6 reads as rewritten:

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

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

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

…."

SECTION 7.27.(b)  G.S. 115C‑174.11 reads as rewritten:

"§ 115C‑174.11.  Components of the testing program.

(a)        Assessment Instruments for Kindergarten, First, Second, and Third Grades. – The State Board of Education shall develop, adopt, and provide to the local school administrative units developmentally appropriate individualized assessment instruments consistent with the Basic Education Program and Part 1A of Article 8 of this Chapter for the kindergarten, first, second, and third grades. The State Board shall provide one or more valid, reliable, formative, and diagnostic reading assessment instruments for selection by local school administrative units, in accordance with the following:

(1)        The Department of Public Instruction, under the direction of the State Superintendent of Public Instruction, shall evaluate and certify any vendor that provides diagnostic reading assessment instruments before the instruments are provided by the State Board for selection by local school administrative units.

(2)        In order to certify a vendor, the Department shall evaluate the vendor to ensure that the diagnostic reading assessment instruments offered by the vendor meet the following criteria:

a.         Yield data that can be used with the Education Value‑Added Assessment System (EVAAS).

b.         Demonstrate close alignment with student performance on State assessments, including all assessments required in kindergarten through third grade by Part 2 of Article 10A of Chapter 115C of the General Statutes.

c.         Demonstrate high rates of predictability as to student performance on State assessments, including all assessments required in kindergarten through third grade by Part 2 of Article 10A of Chapter 115C of the General Statutes.

(3)        Within 60 days of certifying a new vendor to provide reading assessment instruments pursuant to this subsection, the Department of Public Instruction shall provide written notice of the certification to the General Assembly in accordance with G.S. 120‑29.5 and to the Joint Legislative Education Oversight Committee.

(a1)      Each local school administrative unit shall select one valid, reliable, formative, and diagnostic reading assessment from the assessment instrument or instruments approved by the State Board under subsection (a) of this section. Local school administrative units shall use these the assessment instruments provided to them by the State Board for kindergarten, first, second, and third grade students to assess progress, diagnose difficulties, and inform instruction and remediation needs. Local school administrative units shall not use standardized tests for summative assessment of kindergarten, first, and second grade students except as required as a condition of receiving federal grants.

…."

SECTION 7.27.(c)  This section applies beginning with the 2018‑2019 school year.

 

Reimburse Initial Teacher Licensure Fee for Certain NC Teaching Graduates

SECTION 7.28.(a)  G.S. 115C‑296 is amended by adding a new subsection to read:

"(a4)    Notwithstanding subsection (a2) of this section, the State Board of Education shall reimburse the initial teacher licensure application fee for the first time an applicant submits an application for teacher licensure, if the applicant meets all of the following requirements:

(1)        The applicant is a graduate of an approved educator preparation program located in North Carolina.

(2)        The applicant has successfully earned an initial teaching license in North Carolina.

The State Board shall issue reimbursement to the applicant within 30 days of the date the applicant successfully earns an initial teaching license in North Carolina."

SECTION 7.28.(b)  This section applies to applications for licensure received on or after July 1, 2017.

 

Revise Teacher Bonus Programs

SECTION 7.29.(a)  Section 8.8 of S.L. 2016‑94 reads as rewritten:

"ADVANCED PLACEMENT/INTERNATIONAL BACCALAUREATE TEACHER BONUS PILOT PROGRAM

"SECTION 8.8.(a)  The State Board of Education shall establish the Advanced Placement/International Baccalaureate Pilot Program (pilot program)(program) to reward advanced course teacher performance and to encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay for two school years through the end of the 2017‑2019 fiscal biennium to licensed teachers of advanced courses, courses in public schools, including charter schools, beginning with data from the 2015‑2016 school year, in accordance with the following:

(1)        A bonus in the amount of fifty dollars ($50.00) for each student taught by an advanced course teacher in each advanced course who receives the following score:

a.         For Advanced Placement courses, a score of three or higher on the College Board Advanced Placement Examination.

b.         For International Baccalaureate Diploma Programme courses, a score of four or higher on the International Baccalaureate course examination.

(2)        No teacher shall be awarded a bonus pursuant to this subsection that exceeds two thousand dollars ($2,000) in any given school year. The bonus awarded to a teacher pursuant to this subsection shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(3)        For advanced course scores collected from the 2015‑2016 school year and the 2016‑2017 school year, bonuses Bonuses awarded pursuant to this subsection are payable in January 2017 and January 2018, respectively,January, based on data from the previous school year, to qualifying advanced course teachers who remain employed teaching advanced courses in the same local school administrative unit school at least from the school year the data is collected until the corresponding school year that the bonus is paid.

"SECTION 8.8.(b)  For the purposes of this section, an "advanced course" shall mean an Advanced Placement or International Baccalaureate Diploma Programme course.

"SECTION 8.8.(c)  Notwithstanding G.S. 135‑1(7a), the compensation bonuses awarded under this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

"SECTION 8.8.(d)  The State Board of Education shall report on and study the pilot program as follows:

(1)        The State Board shallstudy the effect of the program on advanced course teacher performance and retention. The State Board shall report the results of its findings and report on the amount of bonuses awarded to advanced course teachers, including the amount awarded for Advanced Placement courses and the amount awarded for International Baccalaureate Diploma Programme courses, to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2017, and again by March 15, 2018.15 of each year bonuses are awarded.

(2)        The State Board shall study the effect of the pilot program on advanced course teacher performance and retention. The State Board shall report the results of its findings to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee by March 15, 2018.

"SECTION 8.8.(e)  For the 2017‑2018 fiscal year only, the Director of the Budget shall also include in the base budget, as defined by G.S. 143C‑1‑1(d)(1c), the amount of nonrecurring funds needed to support the pilot program.

"SECTION 8.8.(f)  This section expires June 30, 2018."

SECTION 7.29.(b)  Section 8.9 of S.L. 2016‑94 reads as rewritten:

"INDUSTRY CERTIFICATIONS AND CREDENTIALS TEACHER BONUS PILOT PROGRAM

"SECTION 8.9.(a)  The State Board of Education, in collaboration with the Department of Commerce, shall establish the Industry Certifications and Credentials Teacher Bonus Pilot Program (pilot program)(program) to reward the performance of teachers in public schools, including charter schools, who teach students earning approved industry certifications or credentials consistent with G.S. 115C‑156.2 and to encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay through the end of the 2017‑2019 fiscal bienniumfor two school years to teachers in public schools, including charter schools, who teach students earning approved industry certifications or credentials, beginning with data from the 2015‑2016 school year, in accordance with the following:

(1)        For teachers who provide direct instruction to students, bonuses shall be provided in the following amounts:

a.         A bonus in the amount of twenty‑five dollars ($25.00) for each student taught by a teacher who provided instruction in a course that led to the attainment of an industry certification or credential with a twenty‑five‑dollar ($25.00) value ranking as determined under subdivision (3) of this subsection.

b.         A bonus in the amount of fifty dollars ($50.00) for each student taught by a teacher who provided instruction in a course that led to the attainment of an industry certification or credential with a fifty‑dollar ($50.00) value ranking as determined under subdivision (3) of this subsection.

(2)        No teacher shall be awarded a bonus pursuant to this subsection that exceeds two thousand dollars ($2,000) in any given school year. The bonus awarded to a teacher pursuant to this subsection shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(3)        The Department of Commerce, in consultation with the State Board, shall assign a value ranking for each industry certification and credential based on academic rigor and employment value in accordance with this subdivision. Fifty percent (50%) of the ranking shall be based on academic rigor and the remaining fifty percent (50%) on employment value. Academic rigor and employment value shall be based on the following elements:

a.         Academic rigor shall be based on the number of instructional hours, including work experience or internship hours, required to earn the industry certification or credential, with extra weight given for coursework that also provides community college credit.

b.         Employment value shall be based on the entry wage, growth rate in employment for each occupational category, and average annual openings for the primary occupation linked with the industry certification or credential.

(4)        For data on courses leading to student attainment of industry certifications and credentials collected from the 2015‑2016 school year and the 2016‑2017 school year, bonusesBonuses awarded pursuant to this subsection are payable in January 2017 and January 2018, respectively, to qualifying teachers who remain employed teaching students earning approved industry certifications or credentials in the same local school administrative unit school at least from the school year the data is collected until the corresponding school year that the bonus is paid.

"SECTION 8.9.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonuses awarded under this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

"SECTION 8.9.(c)  The State Board of Education shall report on and study the pilot program as follows:

(1)        The State Board shall study the effect of the program on teacher performance and retention. The State Board shall report the results of its findings, on the amount of bonuses awarded to teachers who teach students earning approved industry certifications or credentials credentials, and the type of industry certifications and credentials earned by their students to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2017, and again by March 15, 2018.15 of each year bonuses are awarded.

(2)        The State Board shall study the effect of the pilot program on teacher performance and retention. The State Board shall report the results of its findings to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee by March 15, 2018.

"SECTION 8.9.(d)  For the 2017‑2018 fiscal year only, the Director of the Budget shall also include in the base budget, as defined by G.S. 143C‑1‑1(d)(1c), the amount of nonrecurring funds needed to support the pilot program.

"SECTION 8.9.(e)  This section expires June 30, 2018."

SECTION 7.29.(c)  Section 9.7 of S.L. 2016‑94 reads as rewritten:

"THIRD GRADE READING TEACHER PERFORMANCE PILOT PROGRAM

"SECTION 9.7.(a)  The State Board of Education shall establish the Third Grade Reading Teacher Performance Pilot Program (program) to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay to licensed third grade teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for third grade reading from the previous school year, beginning with the data from the 2015‑2016 school year, as follows:

(1)        Of the funds appropriated for this the program, five million dollars ($5,000,000) shall be allocated for bonuses to licensed third grade teachers who are in the top twenty‑five percent (25%) of teachers in the State according to the EVAAS student growth index score for third grade reading from the previous year. These funds shall be allocated equally among qualifying teachers.

(2)        Of the funds appropriated for this the program, five million dollars ($5,000,000) shall be allocated to pay bonuses to licensed third grade teachers who are in the top twenty‑five percent (25%) of teachers in their respective local school administrative units according to the EVAAS student growth index score for third grade reading from the previous year. These funds shall be split proportionally based on average daily membership for each local school administrative unit and then distributed equally among qualifying teachers in each local school administrative unit, subject to the following conditions:

a.         Teachers employed in charter schools and regional schools are not eligible to receive a bonus under this subdivision.

b.         Any teacher working in a local school administrative unit that employs three or fewer third grade teachers shall receive a bonus under this subdivision if that teacher has an EVAAS student growth index score for third grade reading from the previous school year that exceeds expected growth.

(3)        For EVAAS student growth index score data collected during the 2015‑2016 school year and the 2016‑2017 school year, bonuses awarded pursuant to subdivisions (1) and (2) of this subsection are payable in January of 2017 and January of 2018, respectively, to qualifying third grade teachers who remain employed teaching third grade in the same local school administrative unit school at least from the school year the data is collected until the corresponding school year that the bonus is paid.

(4)        A teacher who is eligible to receive a bonus under both subdivisions (1) and (2) of this subsection shall receive both bonuses. The bonus or bonuses awarded to a teacher pursuant to this subsection shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

"SECTION 9.7.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonuses awarded by this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

"SECTION 9.7.(c)  The State Board of Education shall report on and study the Third Grade Reading Teacher Performance Pilot Program (Program) as follows:

(1)        The State Board of Education shallstudy the effect of the program on teacher performance and retention. The State Board shall report the results of its findings, report on the distribution of statewide bonuses as among local school administrative units units, and the distribution of bonuses within local school administrative units as among individual schools to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division on March 1, 2017, and again on March 1, 2018.15 of each year bonuses are awarded.

(2)        The State Board of Education shall study the effect of the Program on teacher performance and retention. The State Board of Education shall report the results of its findings to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee no later than March 1, 2018.

"SECTION 9.7.(d)  For the 2017‑2018 fiscal year only, the Director of the Budget shall also include in the Base Budget, as defined by G.S. 143C‑1‑1(d)(1c), the amount of nonrecurring funds needed to support the Program.program.

"SECTION 9.7.(e)  This section expires June 30, 2018."

SECTION 7.29.(d)  In addition to the bonuses payable in January 2018 pursuant to Sections 8.8(a), 8.9(a), 9.7(a)(1), and 9.7(a)(2) of S.L. 2016‑94, as amended by this section, the Department of Public Instruction shall make payable no later than October 31, 2017, bonuses earned by qualifying teachers pursuant to data from the 2015‑2016 school year, as follows:

(1)        Bonuses earned pursuant to Section 8.8 or 8.9 of S.L. 2016‑94, as amended by this section, that were not paid in January of 2017 because the teacher taught in a charter school.

(2)        Bonuses earned pursuant to Section 8.8, 8.9, 9.7(a)(1), or 9.7(a)(2) of S.L. 2016‑94, as amended by this section, that were not paid in January of 2017 because the teacher did not continue teaching the same subject or grade level.

SECTION 7.29.(e)  Notwithstanding subsections (a), (b), and (c) of this section, the following limitations shall apply to this section:

(1)        Every teacher who received a bonus pursuant to Section 8.8, 8.9, or 9.7 of S.L. 2016‑94 in January of 2017 shall keep his or her bonus.

(2)        Any teacher who would receive a bonus in January of 2018 pursuant to unamended Section 8.8, 8.9, or 9.7 of S.L. 2016‑94 shall receive that bonus.

 

School Boards Can't Sue Counties

SECTION 7.30.(a)  G.S. 115C‑431 reads as rewritten:

"§ 115C‑431.  Procedure for resolution of dispute between board of education and board of county commissioners.

(a)        If the board of education determines that the amount of money appropriated to the local current expense fund, or the capital outlay fund, or both, by the board of county commissioners is not sufficient to support a system of free public schools, the chairman of the board of education and the chairman of the board of county commissioners shall arrange a joint meeting of the two boards to be held within seven days after the day of the county commissioners' decision on the school appropriations.

Prior to the joint meeting, the Senior Resident Superior Court Judge shall appoint a mediator unless the boards agree to jointly select a mediator. The mediator shall preside at the joint meeting and shall act as a neutral facilitator of disclosures of factual information, statements of positions and contentions, and efforts to negotiate an agreement settling the boards' differences.

At the joint meeting, the entire school budget shall be considered carefully and judiciously, and the two boards shall make a good‑faith attempt to resolve the differences that have arisen between them.

(b)        If no agreement is reached at the joint meeting of the two boards, the mediator shall, at the request of either board, commence a mediation immediately or within a reasonable period of time. The mediation shall be held in accordance with rules and standards of conduct adopted under Chapter 7A of the General Statutes governing mediated settlement conferences but modified as appropriate and suitable to the resolution of the particular issues in disagreement.the decision of the county commissioners is final. The local board of education shall not file any legal action challenging the sufficiency of the funds appropriated by the board of county commissioners to the local current expense fund, the capital outlay fund, or both.

Unless otherwise agreed upon by both boards, the following individuals shall constitute the two working groups empowered to represent their respective boards during the mediation:

(1)        The chair of each board or the chair's designee;

(2)        The superintendent of the local school administrative unit and the county manager or either's designee;

(3)        The finance officer of each board; and

(4)        The attorney for each board.

Members of both boards, their chairs, and representatives shall cooperate with and respond to all reasonable requests of the mediator to participate in the mediation. Notwithstanding Article 33C of Chapter 143 of the General Statutes, the mediation proceedings involving the two working groups shall be conducted in private. Evidence of statements made and conduct occurring in a mediation are not subject to discovery and are inadmissible in any court action. However, no evidence otherwise discoverable is inadmissible merely because it is presented or discussed in a mediation. The mediator shall not be compelled to testify or produce evidence concerning statements made and conduct occurring in a mediation in any civil proceeding for any purpose, except disciplinary hearings before the State Bar or any agency established to enforce standards of conduct for mediators. Reports by members of either working group to their respective boards shall be made in compliance with Article 33C of Chapter 143 of the General Statutes.

Unless both boards agree otherwise, or unless the boards have already resolved their dispute, the mediation shall end no later than August 1. The mediator shall have the authority to determine that an impasse exists and to discontinue the mediation. The mediation may continue beyond August 1 provided both boards agree. If both boards agree to continue the mediation beyond August 1, the board of county commissioners shall appropriate to the local school administrative unit for deposit in the local current expense fund a sum of money sufficient to equal the local contribution to this fund for the previous year.

If the working groups reach a proposed agreement, the terms and conditions must be approved by each board. If no agreement is reached, the mediator shall announce that fact to the chairs of both boards, the Senior Resident Superior Court Judge, and the public. The mediator shall not disclose any other information about the mediation. The mediator shall not make any recommendations or public statement of findings or conclusions.

The local board of education and the board of county commissioners shall share equally the mediator's compensation and expenses. The mediator's compensation shall be determined according to rules adopted under Chapter 7A of the General Statutes.

(c)        Within five days after an announcement of no agreement by the mediator, the local board of education may file an action in the superior court division of the General Court of Justice. Either board has the right to have the issues of fact tried by a jury. When a jury trial is demanded, the cause shall be set for the first succeeding term of the superior court in the county, and shall take precedence over all other business of the court. However, if the judge presiding certifies to the Chief Justice of the Supreme Court, either before or during the term, that because of the accumulation of other business, the public interest will be best served by not trying the cause at the term next succeeding the filing of the action, the Chief Justice shall immediately call a special term of the superior court for the county, to convene as soon as possible, and assign a judge of the superior court or an emergency judge to hold the court, and the cause shall be tried at this special term. The judge shall find, or if the issue is submitted to the jury, the jury shall find the facts as to the following in order to maintain a system of free public schools as defined by State law and State Board of Education policy: (i) the amount of money legally necessary from all sources and (ii) the amount of money legally necessary from the board of county commissioners. In making the finding, the judge or the jury shall consider the educational goals and policies of the State and the local board of education, the budgetary request of the local board of education, the financial resources of the county and the local board of education, and the fiscal policies of the board of county commissioners and the local board of education.

All findings of fact in the superior court, whether found by the judge or a jury, shall be conclusive. When the facts have been found, the court shall give judgment ordering the board of county commissioners to appropriate a sum certain to the local school administrative unit, and to levy such taxes on property as may be necessary to make up this sum when added to other revenues available for the purpose.

(d)       An appeal may be taken to the appellate division of the General Court of Justice, and notice of appeal shall be given in writing within 10 days after entry of the judgment. All papers and records relating to the case shall be considered a part of the record on appeal. The conclusion of the school or fiscal year shall not be deemed to resolve the question in controversy between the parties while an appeal is still pending. Any final judgment shall be legally binding on the parties at the conclusion of the appellate process. The payment of any final judgment by the county in favor of the local school administrative unit shall not be considered, or used in any manner, to deny or reduce appropriations to the local school administrative unit by the county in fiscal years subsequent to the one at issue to offset such payment of a final judgment.

(e)        If, in an action filed under this section, the final judgment of the General Court of Justice is rendered after the due date prescribed by law for property taxes, the board of county commissioners is authorized to levy such supplementary taxes as may be required by the judgment, notwithstanding any other provisions of law with respect to the time for doing acts necessary to a property tax levy. Upon making a supplementary levy under this subsection, the board of county commissioners shall designate the person who is to compute and prepare the supplementary tax receipts and records for all such taxes. Upon delivering the supplementary tax receipts to the tax collector, the board of county commissioners shall proceed as provided in G.S. 105‑321.

The due date of supplementary taxes levied under this subsection is the date of the levy, and the taxes may be paid at par or face amount at any time before the one hundred and twentieth day after the due date. On or after the one hundred and twentieth day and before the one hundred and fiftieth day from the due date there shall be added to the taxes interest at the rate of two percent (2%). On or after the one hundred and fiftieth day from the due date, there shall be added to the taxes, in addition to the two percent (2%) provided above, interest at the rate of three‑fourths of one percent (3/4 of 1%) per 30 days or fraction thereof until the taxes plus interest have been paid. No discounts for prepayment of supplementary taxes levied under this subsection shall be allowed."

SECTION 7.30.(b)  G.S. 115C‑432(a) reads as rewritten:

"(a)      After the board of county commissioners has made its appropriations to the local school administrative unit, or after the appeal procedure set out in G.S. 115C‑431 has been concluded, the board of education shall adopt a budget resolution making appropriations for the budget year in such sums as the board may deem sufficient and proper. The budget resolution shall conform to the uniform budget format established by the State Board of Education."

SECTION 7.30.(c)  This section applies beginning with budget ordinances adopted on or after the date this act becomes law.

 

PART VIII. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES

 

TEACHER SALARY SCHEDULE

SECTION 8.1.(a)  The following monthly teacher salary schedule shall apply for the 2017‑2018 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.

2017‑2018 Teacher Monthly Salary Schedule

Years of Experience                                                              "A" Teachers

0                                                                                         $3,500

1                                                                                         $3,584

2                                                                                         $3,635

3                                                                                         $3,688

4                                                                                         $3,756

5                                                                                         $3,823

6                                                                                         $3,907

7                                                                                         $3,976

8                                                                                         $4,043

9                                                                                         $4,111

10                                                                                       $4,195

11                                                                                       $4,280

12                                                                                       $4,364

13                                                                                       $4,448

14                                                                                       $4,532

15‑19                                                                                 $4,693

20‑24                                                                                 $4,871

25+                                                                                    $5,100.

SECTION 8.1.(b)  Salary Supplements for Teachers Paid on This Salary Schedule. –

(1)        Licensed teachers who have NBPTS certification shall receive a salary supplement each month of twelve percent (12%) of their monthly salary on the "A" salary schedule.

(2)        Licensed teachers who are classified as "M" teachers shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.

(3)        Licensed teachers with licensure based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the supplement provided to them as "M" teachers.

(4)        Licensed teachers with licensure based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the supplement provided to them as "M" teachers.

(5)        Certified school nurses shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.

SECTION 8.1.(c)  The first step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be equivalent to the sixth step of the "A" salary schedule. These employees shall receive a salary supplement each month of ten percent (10%) of their monthly salary and are eligible to receive salary supplements equivalent to those of teachers for academic preparation at the six‑year degree level or the doctoral degree level.

SECTION 8.1.(d)  The twenty‑sixth step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be seven and one‑half percent (7.5%) higher than the salary received by these same employees on the twenty‑fifth step of the salary schedule.

SECTION 8.1.(e)  Beginning with the 2014‑2015 fiscal year, in lieu of providing annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those longevity payments are included in the monthly amounts under the teacher salary schedule.

SECTION 8.1.(f)  A teacher compensated in accordance with this salary schedule for the 2017‑2018 school year shall receive an amount equal to the greater of the following:

(1)        The applicable amount on the salary schedule for the applicable school year.

(2)        For teachers who were eligible for longevity for the 2013‑2014 school year, the sum of the following:

a.         The teacher's salary provided in Section 35.11 of S.L. 2013‑360.

b.         The longevity that the teacher would have received under the longevity system in effect for the 2013‑2014 school year provided in Section 35.11 of S.L. 2013‑360 based on the teacher's current years of service.

c.         The annual bonus provided in Section 9.1(e) of S.L. 2014‑100.

(3)        For teachers who were not eligible for longevity for the 2013‑2014 school year, the sum of the teacher's salary and annual bonus provided in Section 9.1 of S.L. 2014‑100.

SECTION 8.1.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.

 

Support Highly Qualified NC Teaching Graduates

SECTION 8.2.(a)  For purposes of this section, a "highly qualified graduate" is an individual entering the teaching profession who has graduated from an approved educator preparation program located in North Carolina (i) with a grade point average of 3.75 or higher on a 4.0 scale, or its equivalent, and (ii) with a score of 48 or higher on the edTPA assessment or an equivalent score on the nationally normed and valid pedagogy assessment used to determine clinical practice performance. Notwithstanding Section 8.1(a) of this act, a highly qualified graduate shall be paid pursuant to the "A" Teachers salary schedule at the highest level for which that person qualifies, as follows:

(1)        A highly qualified graduate licensed and employed to teach by a local board of education who accepts initial employment at a school identified as low‑performing by the State Board of Education pursuant to G.S. 115C‑105.37 shall be paid as though that person has three years of experience on the "A" Teachers salary schedule during that person's first four years of employment as a teacher, without a break in service, as long as that person remains teaching (i) at the same school or (ii) accepts subsequent employment at another low‑performing school or local school administrative unit identified as low‑performing.

(2)        A highly qualified graduate licensed and employed to teach in the areas of special education, science, technology, engineering, or mathematics shall be paid as though that person has two years of experience on the "A" Teachers salary schedule during that person's first three years of employment as a teacher, without a break in service, as long as that person continues teaching in one of those areas.

(3)        A highly qualified graduate licensed and employed to teach by a local board of education shall be paid as though that person has one year of experience on the "A" Teachers salary schedule during that person's first two years of employment as a teacher without a break in service.

SECTION 8.2.(b)  This section applies for teachers entering the profession in the 2017‑2018 fiscal year.

 

Principal Salary Schedule

SECTION 8.3.(a)  The following annual salary schedule for principals shall apply for the 2017‑2018 fiscal year, beginning July 1, 2017.

2017‑2018 Principal Annual Salary Schedule

Avg. Daily Membership              Base                      Met Growth         Exceeded Growth

0‑400                                       $61,751                 $67,926                 $74,101

401‑700                                   $64,839                 $71,322                 $77,806

701‑1,000                                $67,926                 $74,719                 $81,511

1,001‑1,300                             $71,014                 $78,115                 $85,216

1,301+                                     $74,101                 $81,511                 $88,921.

A principal's placement on the salary schedule shall be determined according to the average daily membership of the school supervised by the principal in the current school year and the school growth scores, calculated pursuant to G.S. 115C‑83.15(c), for each school the principal supervised for two of the last three school years, regardless of a break in service, and provided the principal supervised each school as a principal for at least a majority of the school year, as follows:

(1)        A principal shall be paid at the "Exceeded Growth" level of the schedule if the school growth scores show the school or schools exceeded expected growth in at least two of the last three school years.

(2)        A principal shall be paid at the "Met Growth" level of the schedule if either of the following apply:

a.         The school growth scores show the school or schools met expected growth in at least two of the last three school years.

b.         The school growth scores show the school or schools met expected growth in at least one of the last three school years and exceeded expected growth in one of the last three school years.

(3)        A principal shall be paid at the "Base" salary level of the schedule if subdivision (1) or (2) of this subsection is not applicable or if the principal has not supervised a school as a principal in at least two of the last three school years.

SECTION 8.3.(b)  Beginning with the 2017‑2018 fiscal year, in lieu of providing annual longevity payments to principals paid on the principal salary schedule, the amounts of those longevity payments are included in the annual amounts under the principal salary schedule.

SECTION 8.3.(c)  A principal compensated in accordance with this section for the 2017‑2018 fiscal year shall receive an amount equal to the greater of the following:

(1)        The applicable amount determined pursuant to subsection (a) of this section.

(2)        For principals who were eligible for longevity in the 2016‑2017 school year, the sum of the following:

a.         The principal's salary as provided in Section 9.2 of S.L. 2016‑94.

b.         The longevity that the principal would have received as provided for State employees under the North Carolina Human Resources Act for the 2016‑2017 school year based on the principal's current years of service.

(3)        For principals who were not eligible for longevity in the 2016‑2017 school year, the principal's salary as provided in Section 9.2 of S.L. 2016‑94.

 

Principal Bonuses

SECTION 8.4.(a)  The Department of Public Instruction shall administer a bonus in the 2017‑2018 fiscal year to any principal who supervised a school as a principal for a majority of the previous school year if that school was in the top fifty percent (50%) of school growth in the State during the previous school year, calculated by the State Board pursuant to G.S. 115C‑83.15(c), as follows:

2017‑2018 Principal Bonus Schedule

Statewide Growth Percentage                                             Bonus

Top 5%                                                                        $5,000

Top 10%                                                                      $4,000

Top 15%                                                                      $3,000

Top 20%                                                                      $2,000

Top 50%                                                                      $1,000.

A principal shall receive no more than one bonus pursuant to this subsection. The bonus shall be paid at the highest amount for which the principal qualifies.

SECTION 8.4.(b)  In addition to the bonuses provided pursuant to subsection (a) of this section, the Department shall administer a bonus in the 2017‑2018 fiscal year to any principal who supervised the same school as a principal for a majority of the 2015‑2016 school year and the 2016‑2017 school year if the school was designated by the State Board of Education pursuant to G.S. 115C‑83.15(f) as having met expected growth or as having not met expected growth in the 2015‑2016 school year and was designated by the State Board as having exceeded expected growth in the 2016‑2017 school year. The bonus shall be the greater of the following:

(1)        Five thousand dollars ($5,000).

(2)        Ten thousand dollars ($10,000) for any principal who supervised a school during the 2015‑2016 school year with a school performance grade of D or F, as calculated by the State Board pursuant to G.S. 115C‑83.15(d).

SECTION 8.4.(c)  No principal shall receive more than two bonuses pursuant to this section. The bonus or bonuses awarded to a principal pursuant to this section shall be in addition to any regular wage or other bonus the principal receives or is scheduled to receive.

SECTION 8.4.(d)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded in accordance with this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

SECTION 8.4.(e)  The bonuses awarded in accordance with this section do not apply to principals no longer employed as a principal due to resignation, dismissal, reduction in force, death, or retirement or whose last workday is prior to July 1, 2017.

SECTION 8.4.(f)  It is the intent of the General Assembly that funds provided to local school administrative units pursuant to this section will supplement principal compensation and not supplant local funds.

SECTION 8.4.(g)  The bonuses related to these funds shall be paid no later than October 31, 2017.

 

Assistant Principal Salaries

SECTION 8.5.(a)  For the 2017‑2018 fiscal year, commencing July 1, 2017, assistant principals shall receive a monthly salary based on the salary schedule for teachers who are classified as "A" teachers plus an additional thirteen percent (13%). Years of experience for an assistant principal on the salary schedule shall be measured by the total number of years the assistant principal has spent as a teacher, an assistant principal, or both. For purposes of this section, an administrator with a one‑year provisional assistant principal's certificate shall be considered equivalent to an assistant principal.

SECTION 8.5.(b)  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 8.5.(c)  Participants in an approved full‑time master's in‑school administration program shall receive up to a 10‑month stipend at the beginning salary of an assistant principal during the internship period of the master's program. The stipend shall not exceed the difference between the beginning salary of an assistant principal plus the cost of tuition, fees, and books and any fellowship funds received by the intern as a full‑time student, including awards of the Principal Fellows Program. The Principal Fellows Program or the school of education where the intern participates in a full‑time master's in‑school administration program shall supply the Department of Public Instruction with certification of eligible full‑time interns.

SECTION 8.5.(d)  Beginning with the 2017‑2018 fiscal year, in lieu of providing annual longevity payments to assistant principals on the assistant principal salary schedule, the amounts of those longevity payments are included in the monthly amounts provided to assistant principals pursuant subsection (a) of this section.

SECTION 8.5.(e)  An assistant principal compensated in accordance with this section for the 2017‑2018 school year shall receive an amount equal to the greater of the following:

(1)        The applicable amount determined pursuant to subsections (a) through (c) of this section.

(2)        For assistant principals who were eligible for longevity in the 2016‑2017 school year, the sum of the following:

a.         The assistant principal salary as provided in Section 9.2 of S.L. 2016‑94.

b.         The longevity that the assistant principal would have received as provided for State employees under the North Carolina Human Resources Act for the 2016‑2017 school year based on the assistant principal's current years of service.

(3)        For assistant principals who were not eligible for longevity in the 2016‑2017 school year, the assistant principal's salary as provided in Section 9.2 of S.L. 2016‑94.

 

Central Office Salaries

SECTION 8.6.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2017‑2019 fiscal biennium, beginning July 1, 2017:

                                                       Minimum                   Maximum

School Administrator I                        $3,505           to           $6,514

School Administrator II                       $3,709           to           $6,907

School Administrator III                     $3,931           to           $7,325

School Administrator IV                     $4,084           to           $7,615

School Administrator V                       $4,245           to           $7,921

School Administrator VI                     $4,501           to           $8,397

School Administrator VII                    $4,679           to           $8,734.

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 8.6.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2017‑2019 fiscal biennium, beginning July 1, 2017:

                                                       Minimum                   Maximum

Superintendent I                                  $4,964           to           $9,263

Superintendent II                                 $5,268           to           $9,820

Superintendent III                               $5,586           to         $10,415

Superintendent IV                               $5,926           to         $11,045

Superintendent V                                 $6,287           to         $11,716.

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 8.6.(c)  Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the North Carolina Human Resources Act.

SECTION 8.6.(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 8.6.(e)  The State Board of Education shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.

 

NONCERTIFIED PERSONNEL SALARIES

SECTION 8.7.(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 seven hundred fifty dollars ($750.00) or one and one‑half percent (1.5%), whichever is greater, commencing July 1, 2017.

SECTION 8.7.(b)  Local boards of education shall increase the rates of pay for such employees who were employed for all or part of fiscal year 2016‑2017 and who continue their employment for fiscal year 2017‑2018 by providing an annual salary increase for employees of seven hundred fifty dollars ($750.00) or one and one‑half percent (1.5%), whichever is greater.

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

SECTION 8.7.(c)  The State Board of Education may adopt salary ranges for noncertified personnel to support increases of seven hundred fifty dollars ($750.00) or one and one‑half percent (1.5%), whichever is greater, for the 2017‑2018 fiscal year.

 

School Boards Create Minimum Salary Schedule for Occupational Therapists and Physical Therapists

SECTION 8.8.  G.S. 115C‑316 is amended by adding a new subsection to read:

"(b1)    Every local board of education shall adopt a minimum salary schedule for occupational therapists and physical therapists employed in full‑time, permanent positions. The minimum salary schedule shall apply to positions paid from State, local, or federal funds. In accordance with the noncertified salary grades and ranges adopted by the State Board of Education, the minimum salary schedule shall differentiate salaries based on years of experience, but experience‑based intervals shall be no greater than five years. Local boards of education may compensate occupational therapists and physical therapists above the minimum salary schedule provided all State‑funded salaries are within the noncertified salary grades and ranges adopted by the State Board of Education."

 

Third Grade reading Teacher Bonus Program for 2018‑2019

SECTION 8.9.(a)  It is the intent of the State to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer the Third Grade Reading Teacher Bonus Program (program) for the 2018‑2019 fiscal year to qualifying teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for third grade reading from the previous school year, as follows:

(1)        For purposes of this section, the following definitions shall apply:

a.         Eligible Teacher. – A teacher who remains teaching in the same school at least from the school year the data for the EVAAS student growth index score for third grade reading is collected until the school year a bonus provided under this subsection is paid.

b.         Qualifying Teacher. – An eligible teacher who meets one or both of the following criteria:

1.         Is in the top twenty‑five percent (25%) of teachers in the State according to the EVAAS student growth index score for third grade reading from the previous school year.

2.         Is in the top twenty‑five percent (25%) of teachers in the teacher's respective local school administrative unit according to the EVAAS student growth index score for third grade reading from the previous school year.

(2)        Of the funds appropriated for this program, five million dollars ($5,000,000) shall be allocated for bonuses to qualifying teachers under subdivision (1)b.1. of this subsection. Funds appropriated for this purpose shall be distributed equally among qualifying teachers.

(3)        Of the funds appropriated for this program, five million dollars ($5,000,000) shall be allocated for bonuses to qualifying teachers under subdivision (1)b.2. of this subsection. Funds allocated for this bonus shall be divided proportionally based on average daily membership in third grade for each local school administrative unit and then distributed equally among qualifying teachers in each local school administrative unit, subject to the following conditions:

a.         Teachers employed in charter schools, regional schools, and University of North Carolina laboratory schools are not eligible to receive a bonus under this subdivision.

b.         Any teacher working in a local school administrative unit that employs three or fewer third grade teachers shall receive a bonus under this subdivision if that teacher has an EVAAS student growth index score for third grade reading from the previous school year that exceeds expected growth.

(4)        Bonuses awarded pursuant to subdivisions (2) and (3) of this subsection are payable in January to qualifying teachers based on EVAAS student growth index score data from the previous school year.

(5)        A qualifying teacher may receive a bonus under both subdivisions (2) and (3) of this subsection.

(6)        The bonus or bonuses awarded to a qualifying teacher pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

SECTION 8.9.(b)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded by this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

SECTION 8.9.(c)  The State Board of Education shall study the effect of the bonuses awarded pursuant to this section on teacher performance and retention. The State Board shall report the results of its findings, the distribution of statewide bonuses as among local school administrative units, and the distribution of bonuses within local school administrative units as among individual schools to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2019.

 

PART IX. COMMUNITY COLLEGES

 

Reorganization of the Community Colleges System Office

SECTION 9.1.(a)  Notwithstanding any other provision of law and consistent with the authority established in G.S. 115D‑3, the President of the North Carolina Community College System may reorganize the System Office in accordance with recommendations and plans submitted to and approved by the State Board of Community Colleges.

SECTION 9.1.(b)  This section expires June 30, 2018.

 

CARRYFORWARD OF COLLEGE INFORMATION SYSTEM FUNDS

SECTION 9.2.  Of the funds appropriated to the Community Colleges System Office for the 2017‑2019 fiscal biennium for the College Information System, up to one million two hundred fifty thousand dollars ($1,250,000) shall not revert at the end of each fiscal year but shall remain available until expended. These funds may be used only to purchase periodic system upgrades and modernize the North Carolina Community College System's enterprise resource planning (ERP) system.

 

Community College Workforce Study

SECTION 9.3.(a)  The State Board of Community Colleges shall study the costs of workforce training and academic instruction delivered by the community colleges. The study shall assess, at minimum, the various factors that affect instructional costs in these courses, including specialized equipment requirements, faculty salaries, and space requirements.

SECTION 9.3.(b)  By September 1, 2018, the State Board shall submit a report to the Office of State Budget and Management, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the results of the study, including any recommendations on the calculation of tiered funding rates and the classification of courses by tier.

 

Budget Alignment for Bionetwork Grants and CC Specialized Centers and Programs

SECTION 9.4.  Of the funds reduced by this act for the Bionetwork Grants and the Specialized Centers and Programs to align budgeted funds with actual expenditures for the 2017‑2019 fiscal biennium, the Community Colleges System Office shall, to the extent practicable, hold harmless for the 2017‑2019 biennium those community colleges that expended all of the funds allocated to them through the affected programs in the 2016‑2017 fiscal year.

 

Start‑Up Funds for High‑Cost Workforce Curriculum Courses

SECTION 9.5.(a)  The State Board of Community Colleges shall establish the Community College High‑Cost Workforce Program Grant to allocate funds to community colleges to establish new high‑cost workforce Tier 1A and Tier 1B courses that require significant start‑up funds. The State Board shall adopt an application process for community colleges to apply for the award of funds to establish new courses beginning with the 2018‑2019 fiscal year. To be eligible to receive the funds, community colleges shall submit to the State Board a completed application, which shall include at least the following information:

(1)        A description of the proposed program of study.

(2)        An impact assessment of implementing the proposed course on existing programs at contiguous colleges.

(3)        Documentation of student interest in the course.

(4)        Alignment of the course with the future employment needs within the area served by the community college and the State.

SECTION 9.5.(b)  The State Board of Community Colleges shall submit a report to the Joint Legislative Education Oversight Committee by November 1 of each year of the program on the implementation of the new high‑cost workforce Tier 1A and Tier 1B courses, including at least the following information:

(1)        The use of funds by community colleges participating in the grant program, including:

a.         Start‑up costs to establish new courses.

b.         Costs associated with student instruction, including faculty salaries, instructional supplies, and related instructional equipment.

(2)        Evaluation of the success of the community college courses, including:

a.         Student enrollment numbers.

b.         Student outcomes, including job attainment and placement data and completion of any certification, diploma, or associate degree programs.

 

CC Board of Trustees Training

SECTION 9.6.(a)  Article 2 of Chapter 115D of the General Statutes is amended by adding a new section to read:

"§ 115D‑18.5.  Training of board of trustees members.

All members of a board of trustees shall participate in, within six months of appointment, an orientation session provided by the Community Colleges System Office. Members shall also participate in an education session provided by the System Office every two years thereafter while serving on the board of trustees. The System Office shall develop orientation and education session content in consultation with community college representatives, including community college presidents and members of boards of trustees. The State Board of Community Colleges shall adopt rules to implement this section."

SECTION 9.6.(b)  G.S. 115D‑19(b) reads as rewritten:

"(b)      A board of trustees may declare vacant the office of a member who does not attend three consecutive, scheduled meetings without justifiable excuse. A board of trustees may also declare vacant the office of a member who, without justifiable excuse, does not participate within six months of appointment in a trustee orientation and education session sponsored by the North Carolina Association of Community College Trustees.in the board of trustees training required pursuant to G.S. 115D‑18.5. The board of trustees shall notify the appropriate appointing authority of any vacancy."

SECTION 9.6.(c)  The Community Colleges System Office shall make the orientation session required by G.S. 115D‑18.5, as enacted by this section, available no later than January 1, 2018. Members of boards of trustees appointed between the date this act becomes law and January 1, 2018, shall have until June 30, 2018, to participate in an orientation session. Members of boards of trustees who were appointed prior to the date this act becomes law shall participate in an initial education session pursuant to G.S. 115D‑18.5 by December 31, 2018.

SECTION 9.6.(d)  Subsection (b) of this section becomes effective January 1, 2019.

 

Selection of Local Community College Presidents/Consultant Contracts

SECTION 9.7.(a)  G.S. 115D‑20(1) reads as rewritten:

"(1)      To elect a president or chief administrative officer of the institution for such term and under such conditions as the trustees may fix, such fix. If the board of trustees chooses to use a search consultant to assist with the election process, the board of trustees shall select the search consultant through a competitive request for proposals process. A contract with a search consultant pursuant to this subdivision shall not be subject to Article 3C of Chapter 143 of the General Statutes. The election to of a president or chief administrative officer shall be subject to the approval of the State Board of Community Colleges."

SECTION 9.7.(b)  This section applies to consultant contracts entered into on or after the date this act becomes law.

 

Clarify Youth Apprenticeship Program

SECTION 9.8.(a)  G.S. 115D‑5(b)(16) reads as rewritten:

"(16)    Courses provided to students who are participating in an a pre‑apprenticeship or apprenticeship program that meets all of the following criteria:

a.         Meets one of the following:

1.         Is a registered apprenticeship program recognized by the United States Department of Labor.

2.         Is a pre‑apprenticeship program recognized and approved by the State agency administering the statewide apprenticeship program.

b.         Has a documented plan of study with courses relating to a job‑specific occupational or technical skill.

c.         Requires the participants in the program to be high school students when entering the program."

SECTION 9.8.(b)  This section applies retroactively beginning with the 2016 fall academic term.

 

Catawba Valley CC/Manufacturing Center

SECTION 9.9.  Chapter 115D of the General Statutes is amended by adding a new Article to read:

"Article 5B.

"Manufacturing Solutions Center at Catawba Valley Community College.

"§ 115D‑67.10.  Purpose of the Center.

The purpose of the Manufacturing Solutions Center at Catawba Valley Community College is to create and maintain jobs in North Carolina through support of traditional and emerging industries. The Center's services include training, testing, market development, entrepreneur support, product sourcing, prototyping, applied research, and managing a manufacturing business incubator.

"§ 115D‑67.11.  Director and other Center personnel.

The president of the Catawba Valley Community College shall appoint an individual to serve as the executive director of the Manufacturing Solutions Center. The executive director shall select other personnel of the Center, subject to the approval by the president of the Catawba Valley Community College. The executive director and other personnel of the Center are employees of Catawba Valley Community College and are subject to the personnel policies of the community college.

"§ 115D‑67.12.  Fees collected by the Center; use of Center funds.

Notwithstanding any other provision of law, all fees collected by the Manufacturing Solutions Center for services to industry, except for regular curriculum and continuing education tuition receipts, shall be retained by the Center and used for the operations of the Center. Purchases made by the Center using these funds are not subject to the provisions of Article 3 of Chapter 143 of the General Statutes. However, the Center shall (i) notify the Secretary of the Department of Administration or the Secretary's designee of the intent to enter into a contract for supplies, materials, printing, equipment, and contractual services that exceeds one million dollars ($1,000,000) as provided in G.S. 114‑8.3 and (ii) include in all agreements or contracts to be awarded by the Center under this section a standard clause which provides that the State Auditor and internal auditors of the Center may audit the records of the contractor during and after the term of the contract to verify accounts and data affecting fees and performance. The Center shall not award a cost plus percentage of cost agreement or contract for any purpose."

 

PART X. UNIVERSITIES

 

Full‑Time Staff For Board of Governors/10 Days prior notice for votes on Board of Governors agenda items

SECTION 10.1.(a)  Establish Full‑Time Staff Positions. – The Board of Governors of The University of North Carolina may hire up to three full‑time staff members who shall report directly to the Board of Governors. The Board of Governors shall determine the job titles, responsibilities, and salaries for staff members by December 31, 2017. Salaries for staff hired pursuant to this section shall be competitive with other positions of similar level and authority within The University of North Carolina System.

SECTION 10.1.(b)  Prior Notice for Votes on Agenda Items. – In order to allow proper time to evaluate important items for consideration by the Board of Governors, votes will be allowed only on agenda items that Board of Governors members have had in their possession for at least 10 business days prior to the vote.

SECTION 10.1.(c)  Funding for Staff Positions. – Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2017‑2019 fiscal biennium, the sum of up to three hundred thousand dollars ($300,000) in recurring funds may be used by the Board of Governors each fiscal year of the biennium to support the staff positions for the Board of Governors created pursuant to this section.

SECTION 10.1.(d)  Reporting Requirement. – The Board of Governors shall report to the Joint Legislative Education Oversight Committee no later than December 31, 2017, regarding the staff positions authorized by this section. The report shall include the job titles, responsibilities, and salaries for staff members hired pursuant to this section.

 

Elizabeth City State University Budget Stabilization Funds Report

SECTION 10.2.  The President of The University of North Carolina shall report each quarter of the 2017‑2019 fiscal biennium to the Office of State Budget and Management and the Fiscal Research Division of the General Assembly on the status of budget stabilization funds appropriated to Elizabeth City State University by this act for the purpose of supporting temporary faculty, aviation science programs, and student success initiatives. The reports shall provide detailed descriptions of the scope of work that has been completed to date, anticipated activities for the next quarter, and a plan with time lines to complete the full scope of work. The reports shall also include outcomes achieved from improvements implemented using these funds. The first quarterly report required by this section shall be made no later than January 1, 2018.

 

Increase number of medical student  slots

SECTION 10.3.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2017‑2018 fiscal year, a sum of at least three million dollars ($3,000,000) shall be used to increase the number of available medical student slots at the School of Medicine.

 

Extend Challenge Grant for Collaboratory at unc‑chapel hill

SECTION 10.4.(a)  Section 27.5 of S.L. 2016‑94 reads as rewritten:

"SECTION 27.5. Of the funds appropriated in this act to the Office of State Budget and Management, Special Appropriations, up to the sum of three million five hundred thousand dollars ($3,500,000) in nonrecurring funds for the 2016‑2017 fiscal year shall be allocated to the Board of Trustees of the University of North Carolina at Chapel Hill for operation of the North Carolina Policy Collaboratory. Allocations made pursuant to this section shall be matched by the Board of Trustees on the basis of one dollar ($1.00) in allocated funds for every one dollar ($1.00) in non‑State funds that the Board of Trustees raises by June 30, 2017, 2018, for the purposes of operating the Collaboratory. These funds shall be in addition to any other funds appropriated in this act for the North Carolina Policy Collaboratory at the University of North Carolina at Chapel Hill. These funds shall not revert but shall continue to be available as matching funds as provided by this section."

SECTION 10.4.(b)  This section becomes effective June 30, 2017.

 

Western School of Engineering and technology Funds

SECTION 10.5.(a)  Funds appropriated for project management and curriculum development at the Western School of Engineering and Technology which was funded in the Connect NC Bond for the 2016‑2017 fiscal year shall not revert and shall remain available for the 2017‑2019 fiscal biennium for the purpose of project management and curriculum development.

SECTION 10.5.(b)  This section becomes effective June 30, 2017.

 

Enhance UNC Data Systems To Improve Institutional Performance And Student Success

SECTION 10.6.(a)  The Board of Governors of The University of North Carolina shall use funds appropriated by this act to modernize business processes, increase standardization, and maximize State resources. The investment will enable better financial management of The University of North Carolina and should yield, at a minimum, but not limited to, cost‑per‑unit analysis, predictive modeling, and more timely access to actionable information. Funds shall also be used to enhance data systems for the following purposes: integrating financial, human resource, and student account systems across The University of North Carolina System; developing new data collections systems that track faculty and staff retention rates and post‑graduation student outcomes; expanding "Know Before You Go" data reporting; and implementing a Web‑based student advising tool as part of a pilot program to be known as "Finish in Four."

SECTION 10.6.(b)  The President of The University of North Carolina shall report on implementation of this section to the Joint Legislative Education Oversight Committee on or before March 1 of each fiscal year of the 2017‑2019 fiscal biennium. The report shall identify specific improvements to data access, analytics, and transparency available to the public and legislative and executive branch decision‑makers resulting from this project.

 

UNC/Escheats Fund For Student Financial Aid Programs

SECTION 10.7.(a)  The funds appropriated by this act from the Escheat Fund for the 2017‑2019 fiscal biennium for student financial aid shall be allocated in accordance with G.S. 116B‑7. Notwithstanding any other provision of Chapter 116B of the General Statutes, if the interest income generated from the Escheat Fund is less than the amounts referenced in this act, the difference may be taken from the Escheat Fund principal to reach the appropriations referenced in this act; however, under no circumstances shall the Escheat Fund principal be reduced below the sum required in G.S. 116B‑6(f). If any funds appropriated from the Escheat Fund by this act for student financial aid remain uncommitted aid as of the end of a fiscal year, the funds shall be returned to the Escheat Fund, but only to the extent the funds exceed the amount of the Escheat Fund income for that fiscal year.

SECTION 10.7.(b)  The State Education Assistance Authority (SEAA) shall conduct periodic evaluations of expenditures of the student financial aid programs administered by SEAA to determine if allocations are utilized to ensure access to institutions of higher learning and to meet the goals of the respective programs. The SEAA may make recommendations for redistribution of funds to the President of The University of North Carolina and the President of the Community College System regarding their respective student financial aid programs, who then may authorize redistribution of unutilized funds for a particular fiscal year.

 

UNC Management Flexibility Reduction

SECTION 10.8.(a)  The management flexibility reduction for The University of North Carolina shall not be allocated by the Board of Governors to the constituent institutions and affiliated entities using an across‑the‑board method but shall be done in a manner that recognizes the importance of the academic missions and differences among The University of North Carolina entities.

Before taking reductions in instructional budgets, the Board of Governors and the campuses of the constituent institutions shall consider all of the following:

(1)        Reducing State funding for centers and institutes, speaker series, and other nonacademic activities.

(2)        Faculty workload adjustments.

(3)        Restructuring of research activities.

(4)        Implementing cost‑saving span of control measures.

(5)        Reducing the number of senior and middle management positions.

(6)        Eliminating low‑performing, redundant, or low‑enrollment programs.

(7)        Using alternative funding sources.

(8)        Protecting direct classroom services.

The Board of Governors and the campuses of the constituent institutions also shall review the institutional trust funds and the special funds held by or on behalf of The University of North Carolina and its constituent institutions to determine whether there are monies available in those funds that can be used to assist with operating costs. In addition, the campuses of the constituent institutions also shall require their faculty to have a teaching workload equal to the national average in their Carnegie classification.

SECTION 10.8.(b)  In allocating the management flexibility reduction, no reduction in State funds shall be allocated in either fiscal year of the 2017‑2019 fiscal biennium to any of the following:

(1)        UNC Need‑Based Financial Aid.

(2)        North Carolina Need‑Based Scholarship.

(3)        Elizabeth City State University.

(4)        Fayetteville State University.

(5)        NC School of Science and Mathematics.

(6)        University of North Carolina at Wilmington.

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

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

(9)        Special Education Scholarships for Children with Disabilities.

(10)      University of North Carolina laboratory schools.

(11)      North Carolina Personal Education Savings Accounts Program.

(12)      Teaching Fellows Program.

(13)      Opportunity Scholarship Program.

(14)      Future Teachers of North Carolina.

(15)      North Carolina Policy Collaboratory.

(16)      NCSU Cooperative Extension.

(17)      NCSU Agricultural Research.

SECTION 10.8.(c)  The University of North Carolina shall report on the implementation of the management flexibility reduction in subsection (a) of this section for the 2017‑2018 fiscal year to the Office of State Budget and Management and the Fiscal Research Division no later than April 1, 2018, and shall report on the implementation of the management flexibility reduction in subsection (a) of this section for the 2018‑2019 fiscal year to the Office of State Budget and Management and the Fiscal Research Division no later than April 1, 2019.

The reports shall identify both of the following by campus:

(1)        The total number of positions eliminated by type (faculty/nonfaculty).

(2)        The low‑performing, redundant, and low‑enrollment programs that were eliminated.

 

Future Teachers of North Carolina

SECTION 10.9.(a)  Article 1 of Chapter 116 of the General Statutes is amended by adding a new Part to read:

"Part 4B. Future Teachers of North Carolina.

"§ 116‑41.30.  Establishment of Future Teachers of North Carolina.

(a)        Purpose. – Future Teachers of North Carolina, hereinafter FTNC, is established to encourage high‑achieving high school students with strong academic, interpersonal, and leadership skills to consider teaching as a career.

(b)        Program. – FTNC shall be a program providing professional development and curricula for courses that provide a challenging introduction to teaching as a profession for high school students through courses offered by participating high schools in conjunction with college partners. FTNC courses shall include both content on pedagogy and the profession of teaching and field experiences for high school students.

"§ 116‑41.31.  Oversight of Future Teachers of North Carolina.

(a)        FTNC General Administration. – FTNC shall be administratively located in The University of North Carolina General Administration. The President shall select three constituent institutions with highly successful schools of education located in the western, central, and eastern regions of the State, respectively, to collaborate on development of curricula for FTNC and to provide professional development to high school teachers who will teach FTNC courses. The three constituent institutions shall also work with other constituent institutions and other institutions of higher education in the State to seek input in the development of curricula and professional development for FTNC and to create a network of college faculty to provide support to high schools offering FTNC courses.

(b)        FTNC Site Applications. – All high schools in the State are encouraged to offer FTNC courses to students. A high school shall apply to offer FTNC courses with the geographically appropriate constituent institution overseeing FTNC and shall ensure that all teachers teaching FTNC courses have received appropriate training. High schools shall also seek a partner institution of higher education to provide support from college faculty. High schools participating in the FTNC program shall report demographic, survey, and other available outcome data to The University of North Carolina General Administration as necessary for completion of the FTNC annual report required by G.S. 116‑41.32.

(c)        FTNC Institution of Higher Education Partners. – Constituent institutions that partner with high schools shall offer dual credit for high school students who successfully complete the FTNC course with a grade of "B" or higher. Other institutions of higher education that partner with high schools are encouraged to offer dual credit for high school students who successfully complete the FTNC course with a grade of "B" or higher. Constituent institutions shall provide annually to The University of North Carolina General Administration data on students who have received dual credit for completion of an FTNC course and students who applied for admission into an educator preparation program at a constituent institution who indicated in the application for admission that the student completed an FTNC course. Other institutions of higher education are encouraged to provide annually to The University of North Carolina General Administration data on students who have received dual credit for completion of an FTNC course and students who applied for admission into an educator preparation program at the institution of higher education who indicated in the application for admission that the student completed an FTNC course.

"§ 116‑41.32.  Future Teachers of North Carolina reporting.

The University of North Carolina General Administration shall report annually, beginning October 15, 2019, on the following:

(1)        Total number and names of local school administrative units with high schools participating in FTNC, total number and names of high schools offering FTNC, partner institution of higher education for each high school, and number of sections of the course being offered at each high school.

(2)        Demographic information of students enrolled in FTNC courses.

(3)        Percentage of students who, after completing the course, reported the following:

a.         The student plans to choose teaching as a profession.

b.         The course was very or somewhat effective in helping the student formulate a positive perception of the education profession.

c.         The coursework and activities increased the student's knowledge of the teaching profession and other careers in education.

d.         The field experience helped the student understand the many factors that contribute to effective teaching.

(4)        Percentage of students who completed an FTNC course who received dual credit for successful completion of the course, by institution.

(5)        Percentage of students who completed an FTNC course who applied for admission into an educator preparation program, by institution.

(6)        Number of teachers provided professional development for FTNC."

SECTION 10.9.(b)  The University of North Carolina General Administration shall report by October 15, 2018, on the number of site applications received, number of teachers provided professional development, number of local school administrative units and high schools offering FTNC, and number of sections of the course being offered for the 2018‑2019 school year.

SECTION 10.9.(c)  This section becomes effective July 1, 2017. The selected constituent institutions shall make available site applications and provide professional development to high school teachers no later than February 1, 2018.

 

UNC Enrollment Funding/OSBM Reserve Account

SECTION 10.10.  Funds appropriated by this act for enrollment adjustments, including funds for the NC Promise Tuition Plan, shall be certified to a reserve account in the Office of State Budget and Management. The appropriation is made on an annual basis and shall be held in reserve until actual enrollment can be verified following the fall semester census. Funds for the spring semester shall be allocated using the actual enrollment from the fall semester and applying the three‑year average fall‑to‑spring retention of fundable credit hours. After verification, the Board of Governors, subject to the approval of the Director of the Budget, shall allocate the funds for the fiscal year to the constituent institutions based on the criteria set out in this section.

Upon authorization by the Director of the Budget, funds may be advanced to constituent institutions whose tuition receipts are insufficient to maintain operations until enrollment is verified. Any institutions receiving funds in advance shall report to the Office of State Budget and Management at the close of the semester to reconcile any differences between funding received for enrollment and actual enrollment. An allocation made pursuant to this section may result in an allocation to a constituent institution that is greater than or less than the amount originally requested for enrollment change funding at that institution. Pursuant to G.S. 116‑11(9)d., the Director of the Budget may, on recommendation of the Board, authorize transfer of appropriated funds from one institution to another to provide additional adjustments for over or under enrollment or may make any other adjustments among institutions that would provide for the orderly and efficient operation of institutions.

 

In‑State Tuition For Veterans/Compliance with Federal Law

SECTION 10.11.  G.S. 116‑143.3A reads as rewritten:

"§ 116‑143.3A.  Waiver of 12‑month residency requirement for certain veterans and other individuals entitled to federal education benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33.

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

(1)        Abode. – Has the same meaning as G.S. 116‑143.3(a)(1).

(2)        Armed Forces. – Has the same meaning as G.S. 116‑143.3(a)(2).

(3)        Veteran. – A person who served active duty for not less than 90 days in the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration and who was discharged or released from such service.

(b)        Waiver of 12‑Month Residency Requirement for Veteran. – Any veteran who qualifies for admission to an institution of higher education as defined in G.S. 116‑143.1(a)(3) is eligible to be charged the in‑State tuition rate and applicable mandatory fees for enrollment without satisfying the 12‑month residency requirement under G.S. 116‑143.1, provided the veteran meets all of the following criteria:

(1)        The veteran applies for admission to the institution of higher education and enrolls within three years of the veteran's discharge or release from the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration.

(2)        The veteran qualifies for and uses educational benefits pursuant to 38 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance Program) or 38 U.S.C. Chapter 33 (Post‑9/11 Educational Assistance), as administered by the U.S. Department of Veterans Affairs.

(3)        The veteran's abode is North Carolina.

(4)        The veteran provides the institution of higher education at which the veteran intends to enroll a letter of intent to establish residence in North Carolina.

(c)        Eligibility of Other Individuals Entitled to Federal Educational Benefits Under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33. – Any person who is entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 is also eligible to be charged the in‑State tuition rate and applicable mandatory fees for enrollment without satisfying the 12‑month residency requirement under G.S. 116‑143.1, if the person meets all of the following criteria:

(1)        The person qualifies for admission to the institution of higher education as defined in G.S. 116‑143.1(a)(3) and and, with the exception of individuals described in subsections (c1) and (c2) of this section, enrolls in the institution of higher education within three years of the veteran's discharge or release from the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration.

(2)        The person is the recipient of federal educational benefits pursuant to 38 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance Program) or 38 U.S.C. Chapter 33 (Post‑9/11 Educational Assistance), as administered by the U.S. Department of Veterans Affairs.

(3)        The person's abode is North Carolina.

(4)        The person provides the institution of higher education at which the person intends to enroll a letter of intent to establish residence in North Carolina.

(c1)      Recipients using transferred Post‑9/11 GI Bill benefits (38 U.S.C. § 3319) while the transferor is on active duty in the Armed Forces, the commissioned corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration are eligible for the in‑State tuition rate, provided the recipient's abode is in North Carolina and the recipient provides the institution of higher education a letter of intent to establish residency in North Carolina.

(c2)      Recipients of the Marine Gunnery Sergeant John David Fry Scholarship (38 U.S.C. § 3311(b)(9)), whose parent or spouse died in the line of duty, without regard as to whether the death in the line of duty followed a period of active duty service of 90 days or more, are eligible to receive in‑State tuition under this section, provided the recipient's abode is in North Carolina and the recipient provides the institution of higher education a letter of intent to establish residency in North Carolina.

(d)       After the expiration of the three‑year period following discharge or death as described in 38 U.S.C. § 3679(c), any enrolled veteran entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 and any other enrolled individual described in subsection (c) of this section entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 who is eligible for in‑State tuition under this section shall continue to be eligible for the in‑State tuition rate so long as the covered individual remains continuously enrolled (other than during regularly scheduled breaks between courses, quarters, terms, or semesters) at that institution of higher education."

 

Senior Citizens May Audit Courses At UNC and Community Colleges

SECTION 10.12.(a)  Chapter 115B of the General Statutes is amended by adding a new section to read:

"§ 115B‑2B.  Senior citizens may audit classes.

Any person who is at least 65 years old may audit courses offered at the constituent institutions of The University of North Carolina and the Community Colleges as defined in G.S. 115D‑2(2) without payment of any required registration or enrollment fee for the audit provided the audit is approved by the instructor of the class and there is no cost to the State. A person shall be allowed to audit a class under this section only on a space available basis. Persons auditing classes under this section shall not be counted in the computation of enrollment for funding purposes."

SECTION 10.12.(b)  G.S. 115B‑4 reads as rewritten:

"§ 115B‑4.  Enrollment computation for funding purposes.

Persons Except as provided in G.S. 115B‑2B, persons attending classes under the provisions of this Chapter, without payment of tuition, shall be counted in the computation of enrollment for funding purposes."

SECTION 10.12.(c)  This section becomes effective July 1, 2017, and applies beginning with the 2017 Fall academic semester.

 

study/UNC Equal Opportunity Compliance Officers

SECTION 10.13.(a)  The Board of Governors of The University of North Carolina shall study the equal opportunity policies, which include the policies related to diversity and nondiscrimination, adopted by each constituent institution, the implementation of those policies on each campus, and the services provided on each campus. In conducting the study, the Board of Governors shall review and evaluate the equal opportunity policies with a particular focus on transparency and effectiveness of the policies.

As part of the study, the Board of Governors shall direct each constituent institution to identify all staff positions on campus that include as part of the job duties any responsibility for the implementation, administration, or enforcement of policies intended to promote equal opportunity, diversity, or inclusiveness; indicate how those staff positions and the services offered through those positions fit within the organizational structure of the constituent institution; and indicate the direct and indirect costs related to those staff positions and services provided by those staff positions. This information shall include the number of part‑time and full‑time employees in these staff positions by each individual campus, descriptions of job duties of each of these employees, and the total costs of the positions.

The study shall also consider the feasibility of developing equal opportunity plans at each constituent institution that consolidate all equal opportunity services offered at each constituent institution into a single office headed by an equal employment officer designated by the Chancellor in order to promote effectiveness and efficiency.

SECTION 10.13.(b)  The Board of Governors of The University of North Carolina shall submit a report that includes its findings, recommendations, and policy changes to the Joint Legislative Education Oversight Committee by January 1, 2018. The Board of Governors shall approve the report prior to the submission to the Joint Legislative Education Oversight Committee.

 

Board of Governors Study/Establish School of Allied Health Sciences and Health Care At UNC‑Pembroke

SECTION 10.14.(a)  The Board of Governors of The University of North Carolina shall study the feasibility of establishing a School of Allied Health Sciences and Health Care at the University of North Carolina at Pembroke. In its study the Board of Governors shall consider the health care needs of the region and what allied health science and health care programs would best serve the region and meet its health care needs. The Board of Governors shall also consider the costs and financial benefits of establishing a School of Allied Health Sciences and Health Care.

The Board of Governors shall submit a report on the study, including its findings and recommendations, by May 1, 2018, to the members of the Senate and the House of Representatives, by filing a copy of the report with the Office of the President Pro Tempore of the Senate, the Office of the Speaker of the House of Representatives, and the Legislative Library.

SECTION 10.14.(b)  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2017‑2018 fiscal year, the Board may use up to one hundred thousand dollars ($100,000) to cover the costs of the study required by this section.

 

UNC To Fund North Carolina Research Campus

SECTION 10.15.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina, the Board of Governors shall use twenty‑nine million dollars ($29,000,000) for the 2017‑2018 fiscal year and twenty‑nine million dollars ($29,000,000) for the 2018‑2019 fiscal year to support UNC‑related activities at the North Carolina Research Campus at Kannapolis.

 

Establish legislative School for leadership and public service/Governor's School Funds

SECTION 10.16.(a)  The General Assembly finds that it is important to recognize students who have talent and potential as leaders and to provide opportunities and training for students to develop and explore their leadership skills. The General Assembly further finds it is important to prepare students who display leadership skills to lead in responsible, positive ways and to provide a variety of settings for students to practice and strengthen leadership talents. The General Assembly also recognizes that the community involvement and public services performed by students seeking to fulfill their leadership potential provides an invaluable benefit to the State and its citizens.

SECTION 10.16.(b)  The Legislative School for Leadership and Public Service is established within The University of North Carolina General Administration. The School shall be a summer residential program for academically gifted high school students that offers a course of study on leadership development and public service that is academically excellent and that also provides an outstanding and unique educational experience.

The Board of Governors shall determine which constituent institution shall be the site and sponsor of the program and, in consultation and collaboration with the constituent institution, shall design and implement an application and nomination process for students interested in attending the program and the criteria and process to be used to determine admissions to the program. The curriculum for the program shall be designed by the constituent institution based on criteria established by the Board of Governors and is subject to the approval of the Board of Governors.

The constituent institution shall administer the Legislative School for Leadership and Public Service in consultation and collaboration with The University of North Carolina Office of General Administration.

SECTION 10.16.(c)  G.S. 11611 is amended by adding a new subdivision to read:

"(13b)  The Board of Governors may authorize the constituent institution selected by the Board as the site and sponsor for the Legislative School for Leadership and Public Service to implement a tuition charge for students attending the School to cover the costs of the School."

SECTION 10.16.(d)  Part 3 of Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:

"§ 11633.3.  Tuition for Legislative School for Leadership and Public Service.

The Board of Trustees of any constituent institution selected by the Board of Governors as the site and sponsor for the Legislative School for Leadership and Public Service may, with the approval of the Board of Governors, implement a tuition charge for students attending the School to cover the costs of the School."

SECTION 10.16.(e)  Of the funds appropriated by this act to the Board of Governors for the 2018‑2019 fiscal year, the sum of two hundred thousand dollars ($200,000) shall be used to support the Summer Ventures Program. The funds shall be allocated equally among the constituent institutions that offer the Summer Ventures Program.

SECTION 10.16.(f)  The Legislative School for Leadership and Public Service created by this act shall be offered beginning on or after July 1, 2018, and shall be offered each subsequent summer semester.

 

SUBPART X‑A. UNIVERSITY/STATE EDUCATION ASSISTANCE AUTHORITY

 

Software for Administration of the Opportunity Scholarship and Special Education Scholarship Programs

SECTION 10A.1.(a)  The North Carolina State Education Assistance Authority (Authority) shall purchase software necessary to support the administration of the Opportunity Scholarship Grant Program and the Special Education Scholarships for Children with Disabilities Program. The funds appropriated by this act for this purpose may also be used for customization of the software, development of interfaces with other internal systems, conversion of data, and training for staff on the new software system.

SECTION 10A.1.(b)  The Authority shall report by October 1 of each year, beginning October 1, 2017, and ending October 1, 2019, to the Fiscal Research Division and the Joint Legislative Education Oversight Committee on the acquisition of software for administration of the program and all aspects of implementation of the software system and the expenditure of funds.

 

Eliminate School Site Scholarship Endorsement Requirement

SECTION 10A.2.(a)  G.S. 115C‑112.6(b1)(1)a. reads as rewritten:

"a.        Scholarship endorsement for tuition. – The Authority shall remit, at least two times each school year, scholarship funds awarded to eligible students for endorsement by at least one of the student's parents or guardians for tuition to attend a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter as identified by the Department of Administration, Division of Nonpublic Education, is deemed eligible by the Division, and is subject to the requirements of G.S. 115C‑562.5. The parent or guardian shall restrictively endorse the scholarship funds awarded to the eligible student to the school for deposit into the account of the school.nonpublic school to the credit of the eligible student. The parent or guardian shall not designate any entity or individual associated with the school as the parent's attorney‑in‑fact to endorse the scholarship funds but shall endorse the scholarship funds in person at the site of the school.funds. A parent's or guardian's failure to comply with this section shall result in forfeiture of the scholarship funds. A scholarship forfeited for failure to comply with this section shall be returned to the Authority to be awarded to another student."

SECTION 10A.2.(b)  G.S. 115C‑562.6 reads as rewritten:

"§ 115C‑562.6.  Scholarship endorsement.

The Authority shall remit, at least two times each school year, scholarship grant funds awarded to eligible students to the nonpublic school for endorsement by at least one of the student's parents or guardians. The parent or guardian shall restrictively endorse the scholarship grant funds awarded to the eligible student to the nonpublic school for deposit into the account of the nonpublic school.school to the credit of the eligible student. The parent or guardian shall not designate any entity or individual associated with the nonpublic school as the parent's attorney‑in‑fact to endorse the scholarship grant funds but shall endorse the scholarship grant funds in person at the site of the nonpublic school.funds. A parent's or guardian's failure to comply with this section shall result in forfeit of the scholarship grant. A scholarship grant forfeited for failure to comply with this section shall be returned to the Authority to be awarded to another student."

SECTION 10A.2.(c)  This section applies to scholarship funds awarded beginning with the 2017‑2018 school year.

 

North Carolina Teaching Fellows

SECTION 10A.3.(a)  Article 23 of Chapter 116 of the General Statutes is amended by adding a new Part to read:

"Part 3. North Carolina Teaching Fellows Program.

"§ 116‑209.60.  Definitions.

The following definitions apply in this Part:

(1)        Commission. – The North Carolina Teaching Fellows Commission.

(2)        Director. – The Director of the North Carolina Teaching Fellows Program.

(3)        Forgivable loan. – A forgivable loan made under the Program.

(4)        Program. – The North Carolina Teaching Fellows Program.

(5)        Public school. – An elementary or secondary school located in North Carolina that is governed by a local board of education, charter school board of directors, regional school board of directors, or University of North Carolina laboratory school board of trustees.

(6)        STEM. – Science, technology, engineering, and mathematics.

(7)        Trust Fund. – The North Carolina Teaching Fellows Program Trust Fund.

"§ 116‑209.61.  North Carolina Teaching Fellows Commission established; membership.

(a)        Commission Established. – There is established the North Carolina Teaching Fellows Commission. The Commission shall determine program and forgivable loan recipient selection criteria and selection procedures and shall select the recipients to receive forgivable loans under the North Carolina Teaching Fellows Program in accordance with the requirements of this Part. The Director of the North Carolina Teaching Fellows Program shall appoint staff to the Commission.

(b)        Membership. – The Commission shall consist of 14 members who shall be appointed or serve as ex officio members as follows:

(1)        The Board of Governors of The University of North Carolina shall appoint seven members to the Commission as follows:

a.         Two deans of approved schools of education at postsecondary constituent institutions of The University of North Carolina.

b.         The president of a North Carolina community college.

c.         A teacher who graduated from an approved educator preparation program located in the State within three years of appointment to serve on the Commission.

d.         A principal who graduated from an approved educator preparation program located in the State.

e.         A local board of education member.

f.          A member to represent business and industry in North Carolina.

(2)        The General Assembly shall appoint two members to the Commission in accordance with G.S. 120‑121 as follows:

a.         One dean of an approved school of education at a private postsecondary institution operating in the State upon the recommendation of the Speaker of the House of Representatives.

b.         One dean of an approved school of education at a private postsecondary institution operating in the State upon the recommendation of the President Pro Tempore of the Senate.

(3)        The following five members shall serve as ex officio members to the Commission:

a.         The North Carolina Teacher of the Year.

b.         The North Carolina Principal of the Year.

c.         The North Carolina Superintendent of the Year.

d.         The chair of the Board of the State Education Assistance Authority.

e.         The Director of the North Carolina Teaching Fellows Program.

(c)        Terms of Office. – Appointments to the Commission shall be for two‑year terms, expiring on July 1 in odd‑numbered years. Members serving ex officio, other than the chair of the Board of the State Education Assistance Authority and Director of the North Carolina Teaching Fellows Program, who have otherwise completed their term of service, shall continue to serve on the Commission until July 1, annually.

(d)       Vacancies. – Except as otherwise provided, if a vacancy occurs in the membership of the Commission, the appointing authority shall appoint another person meeting the same qualifications to serve for the balance of the unexpired term.

(e)        Chair; Meetings. – The Director of the Program shall call the first meeting of the Commission. The Commission members shall elect a chair and a vice‑chair from the membership of the Commission to serve one‑year terms. The Commission shall meet regularly at times and places deemed necessary by the chair or, in the absence of the chair, by the vice‑chair.

(f)        Conflict of Interest. – A member of the Commission shall abstain from voting on the selection of an educator preparation program of a postsecondary constituent institution of The University of North Carolina or a private postsecondary institution operating in the State under G.S. 116‑209.62(f) if the member is an officer or employee of the institution or sits as a member of the institution's board of directors.

(g)        Expenses. – Commission members shall receive per diem, subsistence, and travel allowances in accordance with G.S. 138‑5 or G.S. 138‑6, as appropriate.

"§ 116‑209.62.  North Carolina Teaching Fellows Program established; administration.

(a)        Program. – There is established the North Carolina Teaching Fellows Program to be administered by the General Administration of The University of North Carolina, in conjunction with the Authority and the Commission. The purpose of the Program is to recruit, prepare, and support students residing in or attending institutions of higher education located in North Carolina for preparation as highly effective STEM or special education teachers in the State's public schools. The Program shall be used to provide a forgivable loan to individuals interested in preparing to teach in the public schools of the State in STEM or special education licensure areas.

(b)        Trust Fund. – There is established the North Carolina Teaching Fellows Program Trust Fund to be administered by the Authority, in conjunction with the General Administration of The University of North Carolina. All funds (i) appropriated to, or otherwise received by, the Program for forgivable loans, (ii) received as repayment of forgivable loans, and (iii) earned as interest on these funds shall be placed in the Trust Fund. The purpose of the Trust Fund is to provide financial assistance to qualified students for completion of teacher education and licensure programs to fill STEM or special education licensure areas in the public schools of the State.

(c)        Uses of Monies in the Trust Fund. – The monies in the Trust Fund may be used only for (i) forgivable loans granted under the Program, (ii) administrative costs associated with the Program, including recruitment and recovery of funds advanced under the Program, and (iii) extracurricular enhancement activities of the Program. The Authority may use up to six hundred thousand dollars ($600,000) from the Trust Fund in each fiscal year for its administrative costs, the salary of the Director of the Program, expenses of the Commission, and to provide the Commission with funds to use for the extracurricular enhancement activities of the Program.

(d)       Director of the Program. – The Board of Governors of The University of North Carolina shall appoint a Director of the Program. The Director shall appoint staff to the Commission and shall be responsible for recruitment and coordination of the Program, including proactive, aggressive, and strategic recruitment of potential recipients. Recruitment activities shall include (i) targeting regions of the State with the highest teacher attrition rates and teacher recruitment challenges, (ii) actively engaging with educators, business leaders, experts in human resources, elected officials, and other community leaders throughout the State, and (iii) attracting candidates in STEM and special education licensure areas to the Program. The Director shall report to the President of The University of North Carolina. The Authority shall provide office space and clerical support staff, as necessary, to the Director for the Program.

(e)        Student Selection Criteria for Forgivable Loans. – The Commission shall adopt stringent standards for awarding forgivable loans based on multiple measures to ensure that only the strongest applicants receive them, including the following:

(1)        Grade point averages.

(2)        Performance on relevant career and college readiness assessments.

(3)        Experience, accomplishments, and other criteria demonstrating qualities positively correlated with highly effective teachers, including excellent verbal and communication skills.

(4)        Demonstrated commitment to serve in a STEM or special education licensure area in North Carolina public schools.

(f)        Program Selection Criteria. – The Authority shall administer the Program in cooperation with five institutions of higher education with approved educator preparation programs selected by the Commission that represent both postsecondary constituent institutions of The University of North Carolina and private postsecondary institutions operating in the State. The Commission shall adopt stringent standards for selection of the most effective educator preparation programs, including the following:

(1)        Demonstrates high rates of educator effectiveness on value‑added models and teacher evaluations, including using performance‑based, subject‑specific assessment and support systems, such as edTPA or other metrics of evaluating candidate effectiveness that have predictive validity.

(2)        Demonstrates measurable impact of prior graduates on student learning, including impact of graduates teaching in STEM or special education licensure areas.

(3)        Demonstrates high rates of graduates passing exams required for teacher licensure.

(4)        Provides curricular and co‑curricular enhancements in leadership, facilitates learning for diverse learners, and promotes community engagement, classroom management, and reflection and assessment.

(5)        Requires at least a minor concentration of study in the subject area that the candidate may teach.

(6)        Provides early and frequent internship or practical experiences, including the opportunity for participants to perform practicums in diverse school environments.

(7)        Is approved by the State Board of Education as an educator preparation program.

(g)        Awards of Forgivable Loans. – The Program shall provide forgivable loans to selected students to be used at the five selected institutions for completion of a program leading to teacher licensure as follows:

(1)        North Carolina high school seniors. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to four years.

(2)        Students applying for transfer to a selected educator preparation program at an institution of higher education. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to three years.

(3)        Individuals currently holding a bachelor's degree seeking preparation for teacher licensure. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to two years.

(4)        Students matriculating at institutions of higher education who are changing to enrollment in a selected educator preparation program. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to two years.

Forgivable loans may be used for tuition, fees, and the cost of books.

(h)        Identification of STEM and Special Education Licensure Areas. – The Superintendent of Public Instruction shall identify and provide to the Commission and the Authority a list of STEM and special education licensure areas and shall annually provide to the Commission the number of available positions in each licensure area relative to the number of current and anticipated teachers in that area of licensure. The Commission shall make the list of STEM and special education licensure areas readily available to applicants.

(i)         Administration of Forgivable Loan Awards. – Upon the naming of recipients of the forgivable loans by the Commission, the Commission shall transfer to the Authority its decisions. The Authority, in coordination with the Director, shall perform all of the administrative functions necessary to implement this Part, which functions shall include rule making, disseminating information, acting as a liaison with participating institutions of higher education, implementing forgivable loan agreements, loan monitoring, loan cancelling through service and collection, determining the acceptability of service repayment agreements, enforcing the agreements, and all other functions necessary for the execution, payment, and enforcement of promissory notes required under this Part.

(j)         Annual Report. – The Commission, in coordination with the Authority, shall report no later than January 1, 2019, and annually thereafter, to the Joint Legislative Education Oversight Committee regarding the following:

(1)        Forgivable loans awarded from the Trust Fund, including the following:

a.         Demographic information regarding recipients.

b.         Number of recipients by institution of higher education and program.

c.         Information on number of recipients by anticipated STEM and special education licensure area.

(2)        Placement and repayment rates, including the following:

a.         Number of graduates who have been employed in a STEM or special education licensure area within two years of program completion.

b.         Number of graduates who accepted employment at a low‑performing school identified under G.S. 115C‑105.37 as part of their years of service.

c.         Number of graduates who have elected to do loan repayment and their years of service, if any, prior to beginning loan repayment.

d.         Number of graduates employed in a STEM or special education licensure area who have received an overall rating of at least accomplished and have met expected growth on applicable standards of the teacher evaluation instrument.

e.         Aggregate information on student growth and proficiency in courses taught by graduates who have fulfilled service requirements through employment in a STEM or special education licensure area.

(3)        Selected school outcomes by program, including the following:

a.         Turnover rate for forgivable loan graduates.

b.         Aggregate information on student growth and proficiency as provided annually by the State Board of Education to the Commission in courses taught by forgivable loan graduates.

c.         Fulfillment rate of forgivable loan graduates.

"§ 116‑209.63.  Terms of forgivable loans; receipt and disbursement of funds.

(a)        Notes. – All forgivable loans shall be evidenced by notes made payable to the Authority that bear interest at a rate not to exceed ten percent (10%) per year as set by the Authority and beginning on the first day of September after the completion of the program leading to teacher licensure or 90 days after termination of the forgivable loan, whichever is earlier. The forgivable loan may be terminated upon the recipient's withdrawal from school or by the recipient's failure to meet the standards set by the Commission.

(b)        Forgiveness. – The Authority shall forgive the loan and any interest accrued on the loan if, within 10 years after graduation from a program leading to teacher licensure, exclusive of any authorized deferment for extenuating circumstances, the recipient serves as a teacher in a STEM or special education licensure area, as provided in G.S. 116‑209.62(h), for every year the teacher was awarded the forgivable loan, in any combination of the following:

(1)        One year at a North Carolina public school identified as low‑performing under G.S. 115C‑105.37 at the time the teacher accepts employment at the school or, if the teacher changes employment during this period, at another school identified as low‑performing.

(2)        Two years at a North Carolina public school not identified as low‑performing under G.S. 115C‑105.37.

The Authority shall also forgive the loan if it finds that it is impossible for the recipient to work for up to eight years, within 10 years after completion of the program leading to teacher licensure, at a North Carolina public school because of the death or permanent disability of the recipient. If the recipient repays the forgivable loan by cash payments, all indebtedness shall be repaid within 10 years after completion of the program leading to teacher licensure supported by the forgivable loan. If the recipient completes a program leading to teacher licensure, payment of principal and interest shall begin no later than the first day of September after the completion of the program. Should a recipient present extenuating circumstances, the Authority may extend the period to repay the loan in cash to no more than a total of 12 years."

SECTION 10A.3.(b)  Initial appointments to the North Carolina Teaching Fellows Commission shall be made no later than August 15, 2017. Initial appointments to the Commission shall expire July 1, 2019.

SECTION 10A.3.(c)  The Commission shall establish initial selection criteria for recipients and select the five institutions of higher education with approved educator preparation programs at which a recipient may use a forgivable loan no later than November 15, 2017, and shall make available applications to prospective students no later than December 31, 2017.

SECTION 10A.3.(d)  The Superintendent of Public Instruction shall establish the list of STEM and special education licensure areas and provide that information to the Commission and Authority no later than October 1, 2017.

SECTION 10A.3.(e)  The Commission shall select recipients and award the initial forgivable loans for the 2018‑2019 academic year no later than April 1, 2018.

SECTION 10A.3.(f)  G.S. 115C‑472.16(b) reads as rewritten:

"(b)      The General Assembly shall only appropriate moneys in the North Carolina Education Endowment Fund for teacher compensation that is related directly to improving student academic outcomes in the public schools of the State.the forgivable loans for the North Carolina Teaching Fellows Program and administration of the North Carolina Teaching Fellows Program under Part 3 of Article 23 of Chapter 116 of the General Statutes."

SECTION 10A.3.(g)  G.S. 116‑209.27(a) reads as rewritten:

"(a)      The Authority shall, as of March 1, 2015, administer all outstanding scholarship loans previously awarded by the former North Carolina Teaching Fellows Commission and subject to repayment under the former Teaching Fellows Program.Program administered pursuant to Part 2 of Article 24C of Chapter 115C of the General Statutes."

SECTION 10A.3.(h)  For the 2017‑2018 fiscal year, the Department of Public Instruction shall transfer the sum of four hundred fifty thousand dollars ($450,000) in nonrecurring funds from the North Carolina Education Endowment Fund to the Board of Governors of The University of North Carolina to allocate to the Authority to be used to implement the North Carolina Teaching Fellows Program (Program), as established by this section. Beginning with the 2018‑2019 fiscal year, the Department of Public Instruction shall transfer the sum of six million dollars ($6,000,000) in recurring funds from the North Carolina Education Endowment Fund to the Board of Governors to be allocated to the Authority for the operation of the Program and for the award of forgivable loans to selected recipients beginning with the 2018‑2019 academic year.

 

Personal Education Savings Account Program

SECTION 10A.4.(a)  Chapter 115C of the General Statutes is amended by adding a new Article to read:

"Article 39A.

"Personal Education Savings Accounts.

"§ 115C‑567.5.  North Carolina Personal Education Savings Account Program established.

There is established the North Carolina Personal Education Savings Accounts Program to provide the option for a parent to better meet the individual educational needs of the parent's child.

"§ 115C‑567.6.  Definitions.

The following definitions apply in this Article:

(1)        Authority. – The North Carolina State Education Assistance Authority.

(2)        Division. – The Division of Nonpublic Education, Department of Administration.

(3)        Eligible student. – A student residing in North Carolina who has not yet received a high school diploma and who meets all of the following requirements:

a.         Meets one of the following criteria:

1.         Was a full‑time student (i) assigned to and attending a public school pursuant to G.S. 115C‑366 or (ii) enrolled in a Department of Defense Elementary and Secondary School, established pursuant to 10 U.S.C. § 2164 and located in North Carolina, during the previous semester.

2.         Received scholarship funds for a personal education savings account during the previous school year.

3.         Is entering either kindergarten or the first grade.

4.         Is a child in foster care, as defined in G.S. 131D‑10.2(9).

5.         Is a child whose adoption decree was entered not more than one year prior to submission of the scholarship application.

6.         Is a child whose parent or legal guardian is on full‑time duty status in the active uniformed service of the United States, including members of the National Guard and Reserve on active duty orders pursuant to 10 U.S.C. § 12301, et seq., and 10 U.S.C. § 12401, et seq.

7.         Is a child enrolled part‑time in a public school and part‑time in a nonpublic school that exclusively provides services for children with disabilities.

b.         Has not enrolled in a postsecondary institution in a matriculated status eligible for enrollment for 12 hours of academic credit.

c.         Is a child with a disability, as defined in G.S. 115C‑106.3(1), including, for example, intellectual disability, hearing impairment, speech or language impairment, visual impairment, serious emotional disturbance, orthopedic impairment, autism, traumatic brain injury, other health impairments, specific learning disability, or disability as may be required to be included under IDEA.

(4)        Nonpublic school. – A school that meets the requirements of Part 1, 2, or 3 of Article 39 of this Chapter, as identified by the Division.

(5)        Parent. – A parent, legal guardian, or legal custodian of an eligible student.

(6)        Personal Education Savings Account or PESA. – A bank account provided to a parent for the purpose of holding scholarship funds awarded by the Authority for an eligible student to be used for qualifying education expenses under G.S. 115C‑567.10.

"§ 115C‑567.7.  Award of scholarship funds for a personal education savings account.

(a)        Application Selection. – The Authority shall make available no later than February 1 of each year applications to eligible students for the award of scholarship funds for a personal education savings account to be used for qualifying education expenses to attend a nonpublic school. Information about scholarship funds and the application process shall be made available on the Authority's Web site. Applications shall be submitted electronically. Beginning March 15, the Authority shall begin selecting recipients for scholarships according to the following criteria:

(1)        First priority shall be given to eligible students who were awarded scholarship funds for a PESA during the previous school year if those students have applied by March 1.

(2)        After funds have been awarded to prior recipients as provided in subdivision (1) of this subsection, any remaining funds shall be used to award scholarship funds for a PESA for all other eligible students.

(b)        Scholarship Awards. – Scholarships shall be awarded each year for an amount not to exceed nine thousand dollars ($9,000) per eligible student for the fiscal year in which the application is received. Recipients shall receive scholarship funds deposited in equal amounts to a PESA in each quarter of the fiscal year. The first deposit of funds to a PESA shall be subject to the execution of the parental agreement required by G.S. 115C‑567.10. The parent shall then receive a debit card with the prepaid funds loaded on the card at the beginning of the fiscal year. After the initial disbursement of funds, each subsequent, quarterly disbursement of funds shall be subject to the submission by the parent of an expense report. The expense report shall be submitted electronically and shall include documentation that the student received an education, as described in G.S. 115C‑567.10(a)(1), for no less than 35 days of the applicable quarter. The debit card shall be renewed upon the receipt of the parental agreement under G.S. 115C‑567.10 for recipients awarded scholarship funds in subsequent fiscal years. Any funds remaining on the card at the end of the fiscal year may be carried forward to the next fiscal year if the card is renewed. Any funds remaining on the card if an agreement is not renewed shall be returned to the Authority.

(c)        Eligibility for Other Scholarships. – Eligibility for the other scholarship programs is provided for as follows:

(1)        An eligible student under this Article may receive, in addition to a PESA, a scholarship under Part 2A of Article 39 of this Chapter.

(2)        An eligible student under this Article may receive, in addition to a PESA and a scholarship under Part 2A of Article 39 of this Chapter, a scholarship under the special education scholarship program for children with disabilities pursuant to Part 1H of Article 9 of this Chapter, only if that student has one or more of the following disabilities:

a.         Autism.

b.         Developmental disability.

c.         Hearing impairment.

d.         Moderate or severe intellectual disability.

e.         Multiple, permanent orthopedic impairments.

f.          Visual impairment.

(d)       Applications Not Public Records. – Applications for scholarship funds and personally identifiable information related to eligible students receiving funds shall not be a public record under Chapter 132 of the General Statutes. For the purposes of this section, personally identifiable information means any information directly related to a student or members of a student's household, including the name, birthdate, address, Social Security number, telephone number, e‑mail address, or any other information or identification number that would provide information about a specific student or members of a specific student's household.

"§ 115C‑567.8.  Student continuing eligibility.

After the initial disbursement of funds, the Authority shall ensure that the student's continuing eligibility is assessed at least every three years by one of the following:

(1)        The local education agency. – The local education agency shall assess if the student continues to be a child with a disability and verify the outcome on a form to be provided to the Authority.

(2)        A licensed psychologist with a school psychology focus or a psychiatrist. –The psychologist or psychiatrist shall assess, after review of appropriate medical and educational records, if the education and related services received by the student in the nonpublic school setting have improved the child's educational performance and if the student would continue to benefit from placement in the nonpublic school setting. The psychologist or psychiatrist shall verify the outcome of the assessment on a form to be provided to the Authority.

"§ 115C‑567.9.  Verification of eligibility.

(a)        Verification of Information. – The Authority may seek verification of information on any application for the award of scholarship funds for a personal education savings account. The Authority shall select and verify six percent (6%) of applications annually, including those with apparent errors on the face of the application. The Authority shall establish rules for the verification process. If a household fails to cooperate with verification efforts, the Authority shall revoke the award of scholarship funds for a PESA for the eligible student.

(b)        Access to Information. – Household members of applicants for the award of scholarship funds for a PESA shall authorize the Authority to access information needed for verification efforts held by other State agencies, including the Department of Health and Human Services and the Department of Public Instruction.

"§ 115C‑567.10.  Parental agreement; use of funds.

(a)        Parental Agreement. – The Authority shall provide the parent of a scholarship recipient with a written agreement, applicable for each year the eligible student receives scholarship funds under this Article, to be signed and returned to the Authority prior to receiving the scholarship funds. The agreement shall be submitted to the Authority electronically. The parent shall not designate any entity or individual to execute the agreement on the parent's behalf. A parent or eligible student's failure to comply with this section shall result in a forfeit of scholarship funds and those funds may be awarded to another eligible student. The parent shall agree to the following conditions in order to receive scholarship funds under this Article:

(1)        Use at least a portion of the scholarship funds to provide an education to the eligible student in, at a minimum, the subjects of English language arts, mathematics, social studies, and science.

(2)        Unless the student is an eligible student pursuant to G.S. 115C‑567.6(3)a.7., release a local education agency in which the student is eligible to attend under G.S. 115C‑366 of all obligations to educate the eligible student while the eligible student is receiving scholarship funds under this Article. A parent of a student, other than a student who is an eligible student pursuant to G.S. 115C‑567.6(3)a.7., who decides to enroll the student into the local education agency or other North Carolina public school during the term of the agreement shall notify the Authority to request a release from the agreement and shall return any unexpended funds to the Authority.

(3)        Use the scholarship funds deposited into a personal education savings account only for the following qualifying education expenses of the eligible student:

a.         Tuition and fees for a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter and is subject to the requirements of G.S. 115C‑562.5.

b.         Textbooks required by a nonpublic school.

c.         Tutoring and teaching services provided by an individual or facility accredited by a State, regional, or national accrediting organization.

d.         Curricula.

e.         Fees for nationally standardized norm‑referenced achievement tests, advanced placement tests, or nationally recognized college entrance exams.

f.          Fees charged to the account holder for the management of the PESA.

g.         Fees for services provided by a public school, including individual classes and extracurricular programs.

h.         Premiums charged to the account holder for any insurance or surety bonds required by the Authority.

i.          Educational therapies from a licensed or accredited practitioner or provider.

j.          Educational technology defined by the Authority as approved for use pursuant to Part 1H of Article 9 of this Chapter.

k.         Student transportation, pursuant to a contract with an entity that regularly provides student transportation, to and from (i) a provider of education or related services or (ii) an education activity.

(4)        Not use scholarship funds for any of the following purposes:

a.         Computer hardware or other technological devices not defined by the Authority as educational technology approved for use pursuant to Part 1H of Article 9 of this Chapter.

b.         Consumable educational supplies, including paper, pen, or markers.

c.         Tuition and fees at an institution of higher education, as defined in G.S. 116‑143.1, or a private postsecondary institution.

d.         Tuition and fees for a nonpublic school that meets the requirements of Part 3 of Article 39 of this Chapter.

(b)        No Refunds to an Account Holder. – A nonpublic school or a provider of services purchased under subsection (a) of this section shall not refund or rebate any scholarship funds to a parent or eligible student in any manner. The parent shall notify the Authority if such a refund is required.

(c)        Funds in the PESA Not Taxable. – Funds received pursuant to this Article do not constitute taxable income to the parent, legal guardian, or legal custodian of an eligible student or to the eligible student.

"§ 115C‑567.11.  Identification of nonpublic schools and distribution of personal education savings account information.

(a)        List of Nonpublic Schools. – The Division shall provide annually by February 1 to the Authority a list of all nonpublic schools operating in the State that meet the requirements of Part 1, 2, or 3 of Article 39 of this Chapter.

(b)        Information on PESAs to the Division. – The Authority shall provide information about personal education savings accounts to the Division. The Division shall provide information about PESAs to all qualified nonpublic schools on an annual basis.

"§ 115C‑567.12.  Administration.

(a)        Rules and Regulations. – The Authority shall establish rules and regulations for the administration of the program, including the following:

(1)        The administration and awarding of scholarship funds, including a lottery process for the selection of recipients within the criteria established by G.S. 115C‑567.7(a), if necessary.

(2)        Requiring a surety bond or insurance to be held by account holders.

(3)        Use of the funds and the reporting of expenditures.

(4)        Monitoring and control of spending scholarship funds deposited in a personal education savings account.

(b)        Contract for Management of PESAs. – The Authority may contract with a private financial management firm or institution to manage PESAs in accordance with this Article.

(c)        Annual Audits. – The Authority shall conduct annual audits of PESAs and may audit a random sampling of PESAs as needed to ensure compliance with the requirements of this Article. The Authority may contract with an independent entity to conduct these audits. The Authority may remove a parent or eligible student from the program and close a personal education savings account for failure to comply with the terms of the parental agreement, for failure to comply with applicable laws, or because the student is no longer an eligible student.

(d)       Administration Costs. – Of the funds allocated to the Authority to award scholarship funds under this Article, the Authority may retain up to two hundred fifty thousand dollars ($250,000) each fiscal year for administrative costs associated with the program, including contracting with non‑State entities for administration of certain components of the program.

"§ 115C‑567.13.  Reporting requirements.

The Authority shall report annually, no later than September 1, to the Joint Legislative Education Oversight Committee on the following:

(1)        Total number, grade level, race, ethnicity, and sex of eligible students receiving scholarship funds.

(2)        Total amount of scholarship funding awarded.

(3)        Number of students previously enrolled in public schools in the prior semester by the previously attended local education agency.

(4)        Nonpublic schools in which scholarship recipients are enrolled, including numbers of scholarship recipients at each nonpublic school.

(5)        The number of substantiated cases of fraud by recipients and the number of parents or students removed from the program for noncompliance with the provisions of this Article."

SECTION 10A.4.(b)  G.S. 105‑153.5(b) is amended by adding a new subdivision to read:

"(12)    The amount deposited during the taxable year to a personal education savings account under Article 39A of Chapter 115C of the General Statutes."

SECTION 10A.4.(c)  G.S. 115C‑555 reads as rewritten:

"§ 115C‑555.  Qualification of nonpublic schools.

The provisions of this Part shall apply to any nonpublic school which has one or more of the following characteristics:

(4)        It receives no funding from the State of North Carolina. For the purposes of this Article, scholarship grant funds awarded pursuant to Part 2A of this Article Article, Article 39A of this Chapter, or Part 1H of Article 9 of this Chapter to eligible students attending a nonpublic school shall not be considered funding from the State of North Carolina."

SECTION 10A.4.(d)  Of the funds appropriated by this act for the Personal Education Savings Account Program in the 2017‑2018 fiscal year, the sum of four hundred fifty thousand dollars ($450,000) shall be allocated to the Authority to establish the Program. Of the funds appropriated by this act for the Personal Education Savings Account Program in the 2018‑2019 fiscal year, the sum of one million dollars ($1,000,000) shall be allocated to the Authority to award scholarship funds to eligible students in accordance with this section.

SECTION 10A.4.(e)  Subsection (a) of this section applies beginning with the 2018‑2019 school year. Subsection (b) of this section is effective for taxable years beginning on or after January 1, 2018.

 

PART XI. DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

SUBPART XI‑A. CENTRAL MANAGEMENT AND SUPPORT

 

Health Information Technology

SECTION 11A.1.  Article 3 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B‑139.4D.  Department of Health and Human Services; coordination of health information technology.

(a)        The Department of Health and Human Services, in cooperation with the State Chief Information Officer, shall coordinate health information technology policies and programs within the State of North Carolina. The goal of the Chief Information Officer of the Department of Health and Human Services in coordinating State health information technology policy and programs shall be to avoid duplication of efforts and to ensure that each State agency, public entity, and private entity that undertakes health information technology activities does so within the area of its greatest expertise and technical capability and in a manner that supports coordinated State and national goals, which shall include at least all of the following:

(1)        Ensuring that patient health information is secure and protected, in accordance with applicable law.

(2)        Improving health care quality, reducing medical errors, reducing health disparities, and advancing the delivery of patient‑centered medical care.

(3)        Providing appropriate information to guide medical decisions at the time and place of care.

(4)        Ensuring meaningful public input into health information technology infrastructure development.

(5)        Improving the coordination of information among hospitals, laboratories, physicians' offices, and other entities through an effective infrastructure for the secure and authorized exchange of health care information.

(6)        Improving public health services and facilitating early identification and rapid response to public health threats and emergencies, including bioterrorist events and infectious disease outbreaks.

(7)        Facilitating health and clinical research.

(8)        Promoting early detection, prevention, and management of chronic diseases.

(b)        The Department, in cooperation with the Department of Information Technology, shall establish and direct a health information technology management structure that is efficient and transparent and that is compatible with the Office of the National Health Coordinator for Information Technology (National Coordinator) governance mechanism. The health information technology management structure shall be responsible for all of the following:

(1)        Developing a State Plan for implementing and ensuring compliance with national health information technology standards and for the most efficient, effective, and widespread adoption of health information technology.

(2)        Ensuring that (i) specific populations are effectively integrated into the State Plan, including aging populations, populations requiring mental health services, and populations utilizing the public health system, and (ii) unserved and underserved populations receive priority consideration for health information technology support.

(3)        Identifying all health information technology stakeholders and soliciting feedback and participation from each stakeholder in the development of the State Plan.

(4)        Ensuring that existing health information technology capabilities are considered and incorporated into the State Plan.

(5)        Identifying and eliminating conflicting health information technology efforts where necessary.

(6)        Identifying available resources for the implementation, operation, and maintenance of health information technology, including identifying resources and available opportunities for North Carolina institutions of higher education.

(7)        Ensuring that potential State Plan participants are aware of health information technology policies and programs and the opportunity for improved health information technology.

(8)        Monitoring health information technology efforts and initiatives in other states and replicating successful efforts and initiatives in North Carolina.

(9)        Monitoring the development of the National Coordinator's strategic plan and ensuring that all stakeholders are aware of and in compliance with its requirements.

(10)      Monitoring the progress and recommendations of the Health Information Technology Policy and Standards Committee and ensuring that all stakeholders remain informed of the Committee's recommendations.

(11)      Monitoring all studies and reports provided to the United States Congress and reporting to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the impact of report recommendations on State efforts to implement coordinated health information technology."

 

Funds for Medicaid Management Information System/Analytics Reprocurement

SECTION 11A.2.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of one hundred forty‑two thousand seven hundred dollars ($142,700) in prior year earned revenues for the 2017‑2018 fiscal year and the sum of two hundred forty‑three thousand nine hundred sixty‑seven dollars ($243,967) in prior year earned revenues for the 2018‑2019 fiscal year shall be used to match federal funds to (i) enhance the Medicaid Management Information System (MMIS) to align with federal Medicaid Information Technology Architecture standards, system modularity, and reporting analytics and (ii) prepare for the procurement of a take‑over vendor for the MMIS and the Reporting and Analytics contract, all as required by the federal Centers for Medicare and Medicaid Services. This project shall not proceed until the business case has been approved by the Office of State Budget and Management and the State Chief Information Officer in the Enterprise Project Management Office Touchdown System. Upon such approval, funds may be budgeted and the Department may create up to 10 full‑time equivalent time‑limited positions dedicated to the project for the 2018‑2019 fiscal year.

SECTION 11A.2.(b)  Departmental receipts appropriated in this act in the sum of one million two hundred eighty‑four thousand three hundred dollars ($1,284,300) for the 2017‑2018 fiscal year and in the sum of two million one hundred ninety‑five thousand seven hundred three dollars ($2,195,703) for the 2018‑2019 fiscal year shall be used for the purposes described in subsection (a) of this section.

 

Funds for North Carolina Families Accessing Services Through Technology (NC FAST)

SECTION 11A.3.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of eight million nine hundred thousand dollars ($8,900,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of eleven million one hundred nine thousand dollars ($11,109,000) in nonrecurring funds for the 2018‑2019 fiscal year, along with prior year earned revenue in the amount of eleven million nine hundred thousand dollars ($11,900,000) for each year of the 2017‑2019 fiscal biennium and the cash balance in Budget Code 24410 Fund 2411 shall be used to match federal funds to expedite the development and implementation of Child Services Case Management, additional Medicaid eligibility requirements, Enterprise Program Integrity, and Identity Proofing Feasibility components of the North Carolina Families Accessing Services through Technology (NC FAST) project. The Department shall report any changes in approved federal funding or federal match rates within 30 days after the change to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division. Departmental receipts appropriated in this act in the sum of one hundred three million four hundred fifty thousand dollars ($103,450,000) for the 2017‑2018 fiscal year and in the sum of seventy‑five million five hundred ninety‑one thousand dollars ($75,591,000) for the 2018‑2019 fiscal year shall be used to implement the components of the NC FAST project described in this subsection.

SECTION 11A.3.(b)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of one million nine hundred thousand dollars ($1,900,000) in recurring funds for the 2017‑2018 fiscal year and seven million seven hundred thousand dollars ($7,700,000) in recurring funds for the 2018‑2019 fiscal year shall be used to provide ongoing maintenance and operations for the NC FAST system, including the creation of 32 full‑time equivalent positions for the 2017‑2018 fiscal year and 54 full‑time equivalent positions for the 2018‑2019 fiscal year. Departmental receipts appropriated in this act in the sum of ten million five hundred thousand dollars ($10,500,000) for the 2017‑2018 fiscal year and in the sum of fifteen million dollars ($15,000,000) for the 2018‑2019 fiscal year shall be used for the purposes specified in this subsection.

 

Health Analytics Pilot Program

SECTION 11A.4.  The Department of Health and Human Services shall continue to coordinate with the Government Data Analytics Center (GDAC) to further develop and fully operationalize the Health Analytics Pilot Program for Medicaid claims analytics and population health management authorized by Section 12A.17 of S.L. 2015‑241, as amended by Section 12A.7 of S.L. 2016‑94. The purpose of the Health Analytics Program is to apply analytics to data available to the Department through the GDAC in a manner that maximizes health care savings and efficiencies to the State, optimizes positive impacts on health outcomes, and assists in the transition to, and management of, the transformed North Carolina Medicaid and North Carolina Health Choice programs as described in S.L. 2015‑245, as amended by Section 2 of S.L. 2016‑121.

 

Health Information Exchange

SECTION 11A.5.(a)  Section 12A.5(a)(1) of S.L. 2015‑241 reads as rewritten:

"(1)      Establish a successor HIE Network to which (i) all Medicaid providers shall be connected by February 1, 2018, and (ii) all other entities that receive State funds for the provision of health services, including local management entities/managed care organizations, shall be connected by June 1, 2018.the following providers shall establish connectivity and commence submission of demographic and clinical data or encounter and claims data, as appropriate, in accordance with the following time line:

a.         The following providers of Medicaid services that have an electronic health record system, by June 1, 2018:

1.         Hospitals as defined in G.S. 131E‑176(3).

2.         Physicians licensed to practice under Article 1 of Chapter 90 of the General Statutes.

3.         Physician assistants as defined in 21 NCAC 32S .0201.

4.         Nurse practitioners as defined in 21 NCAC 36 .0801.

b.         Prepaid Health Plans, as defined in S.L. 2015‑245, by the commencement date of a capitated contract with the Division of Health Benefits for the delivery of Medicaid and NC Health Choice services as specified in S.L. 2015‑245.

c.         All other providers of Medicaid and State‑funded services, including local management entities/managed care organizations, by June 1, 2019."

SECTION 11A.5.(b)  G.S. 90‑414.4 reads as rewritten:

"§ 90‑414.4.  Required participation in HIE Network for some providers.

(a)        Findings. – The General Assembly makes the following findings:

(1)        That controlling escalating health care costs of the Medicaid program and other State‑funded health services is of significant importance to the State, its taxpayers, its Medicaid recipients, and other recipients of State‑funded health services.

(2)        That the State needs timely access to certain demographic and clinical information pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds in order to assess performance, improve health care outcomes, pinpoint medical expense trends, identify beneficiary health risks, and evaluate how the State is spending money on Medicaid and other State‑funded health services.

(3)        That making demographic and clinical information available to the State by secure electronic means as set forth in subsection (b) of this section will, with respect to Medicaid and other State‑funded health care programs, improve care coordination within and across health systems, increase care quality for such beneficiaries, enable more effective population health management, reduce duplication of medical services, augment syndromic surveillance, allow more accurate measurement of care services and outcomes, increase strategic knowledge about the health of the population, and facilitate health care cost containment.

(a1)      Mandatory Connectivity to HIE Network. – Notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2, the following providers shall establish connectivity to the HIE Network and commence submission of demographic and clinical data or encounter and claims data, as appropriate under subsections (b) and (c) of this section, by the following dates:

(1)        The following providers of Medicaid services that have an electronic health record system, by June 1, 2018:

a.         Hospitals as defined in G.S. 131E‑176(13).

b.         Physicians licensed to practice under Article 1 of Chapter 90 of the General Statutes.

c.         Physician assistants as defined in 21 NCAC 32S .0201.

d.         Nurse practitioners as defined in 21 NCAC 36 .0801.

(2)        Prepaid Health Plans, as defined in S.L. 2015‑245, by the commencement date of a capitated contract with the Division of Health Benefits for the delivery of Medicaid and NC Health Choice services as specified in S.L. 2015‑245.

(3)        All other providers of Medicaid and State‑funded services, including local management entities/managed care organizations, by June 1, 2019.

(a2)      Extensions of Time for Establishing Connectivity. – The Authority and the Department may establish a process to grant limited extensions of the time for providers to establish connectivity to the HIE Network and commence data submission as required under this section upon the request of a provider that demonstrates an ongoing good‑faith effort to take necessary steps to establish such connectivity. The process for granting an extension of time must include a presentation by the provider to the Authority and the Department of the expected time line for establishing connectivity to the HIE Network and commencing data submission as required by this section. Neither the Authority nor the Department shall grant an extension of time (i) to any provider that fails to provide this information to the Authority and the Department or (ii) that would result in the provider establishing connectivity to the HIE Network and commencing data submission as required by this section later than June 1, 2020.

(b)        Mandatory Submission of Demographic and Clinical Data. – Notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2 and except as otherwise provided in subsection (d) of this section, as a condition of receiving State funds, including Medicaid funds, the following entities shall submit at least twice daily, through the HIE network, demographic and clinical information pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds, solely for the purposes set forth in subsection (a) of this section:

(1)        Each hospital, as defined in G.S. 131E‑76(3), G.S. 131E‑176(13) that has an electronic health record system.

(2)        Each Medicaid provider.

(3)        Each provider that receives State funds for the provision of health services.

(4)        Each local management entity/managed care organization, as defined in G.S. 122C‑3.

This subsection does not apply to the entities listed in subsection (c) of this section.

(c)        Mandatory Submission of Encounter and Claims Data. – Notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2 and except as otherwise provided in subsection (d) of this section, beginning June 1, 2019, the following entities shall submit, through the HIE network, encounter and claims data pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds as a condition of receiving State funds:

(1)        Providers of respiratory, developmental, rehabilitative, or restorative services, or a combination of these services.

(2)        Facilities that provide respite care.

(3)        Providers of speech, language, or hearing services, or a combination of these services.

(4)        Providers of transportation services.

(5)        Suppliers of durable medical equipment.

(d)       Exemption for Certain Records. – Providers with patient records that are subject to the disclosure restrictions of 42 C.F.R. § 2 are exempt from the requirements of subsections (b) and (c) of this section, but only with respect to the patient records subject to these disclosure restrictions. Providers shall comply with the requirements of subsections (b) and (c) of this section with respect to all other patient records.

(e)        Method of Data Submissions. – The daily data submissions required under this subsection section shall be by connection to the HIE Network periodic asynchronous secure structured file transfer or any other secure electronic means commonly used in the industry and consistent with document exchange and data submission standards established by the Office of the National Coordinator for Information Technology within the U.S. Department of Health and Human Services."

SECTION 11A.5.(c)  G.S. 90‑414.10(e) is repealed.

SECTION 11A.5.(d)  The Department of Health and Human Services shall include as one of the terms and conditions of any contract it enters into on or after the effective date of this section with a local management entity/managed care organization or Prepaid Health Plan (PHP), as defined in S.L. 2015‑245, a requirement that the local management entity/managed care organization or PHP comply with the provisions of G.S. 90‑414.4, as amended by this section.

SECTION 11A.5.(e)  Funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2017‑2018 fiscal year for the Health Information Exchange Network shall be used as follows:

(1)        The sum of three million dollars ($3,000,000) in nonrecurring funds shall be transferred by November 1, 2017, to the Department of Information Technology, Government Data Analytics Center, and shall be used to support all activities related to upgrading the data exchange technical environment.

(2)        The sum of one million dollars ($1,000,000) in recurring funds shall be used to provide ongoing maintenance and operations of the new data exchange technical environment.

 

Controlled Substances Reporting System Improvements

SECTION 11A.6.(a)  It is the intent of the General Assembly to improve the security, functionality, and security capabilities of the Controlled Substances Reporting System (CSRS) in order to provide additional value to practitioners and dispensers within their current clinical workflows. Toward that end, funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for each year of the 2017‑2019 fiscal biennium for the CSRS shall be used to pay for contractual hours to develop and implement software via existing public‑private partnerships with the Government Data and Analytics Center (GDAC) for the performance of advanced analytics within the CSRS. These hours shall be used to achieve the purposes specified in G.S. 90‑113.71 and, more specifically, to accomplish at least all of the following:

(1)        To enhance and automate reports authorized under G.S. 90‑113.74.

(2)        To enhance the Department's ability to provide data to persons or entities authorized to receive information under G.S. 90‑113.74. In improving the CSRS as specified in this subdivision, the Department shall utilize subject matter expertise and technology available through existing GDAC public‑private partnerships. Upon development and implementation of the advanced analytics software for the CSRS, the Division of Central Management and Support shall coordinate with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the Division of Public Health, and any other appropriate division within the Department of Health and Human Services to ensure that advanced analytics are developed and utilized in a manner that achieves the purposes specified in G.S. 90‑113.71.

(3)        To aggregate relevant data sources, including those available through the GDAC.

(4)        To enhance the Department's ability to generate and deploy advanced analytics in order to improve opioid prescribing practices, identify unusual prescribing patterns, and detect behavior indicative of misuse, addiction, or criminal activity.

SECTION 11A.6.(b)  By December 1, 2017, the Department of Health and Human Services shall execute any contractual agreements and interagency data sharing agreements necessary to complete the improvements to the CSRS described in subdivisions (1) through (4) of subsection (a) of this section.

SECTION 11A.6.(c)  To the extent allowable under federal and State laws and regulations, the Department of Information Technology shall coordinate with the Division of Central Management and Support and the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to develop an interface between the CSRS and the Health Information Exchange (HIE) Network and leverage the interfaces already developed between the HIE Network and health care entities as a method of providing CSRS data, reports, and analytic outputs to health care practitioners and dispensers.

SECTION 11A.6.(d)  This section is effective when this act becomes law.

 

Data Analytics & Performance Enhancements

SECTION 11A.7.  Any enhancement of the State's data analytics capabilities utilizing funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for each year of the 2017‑2019 fiscal biennium shall be subject to applicable State laws requiring that these analytics be developed and implemented in collaboration with the Government Data Analytics Center.

 

Community Health Grant Program Changes

SECTION 11A.8.(a)  Funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, for each year of the 2017‑2019 fiscal biennium for Community Health Grants shall be used to award grants on a competitive basis to free clinics, federally qualified health centers, State‑designated rural health centers, local health departments, school‑based health centers, and other nonprofit organizations (i) with at least an eighty percent (80%) patient population comprised of uninsured patients or any combination of patients who are uninsured or recipients of Medicare, Medicaid, or the Children's Health Insurance Program; (ii) that provide primary care and preventative health services to low‑income populations across the State, including individuals who are uninsured or underinsured and recipients of Medicaid and Medicare; and (iii) that serve as a medical home to these vulnerable populations, in order to accomplish any of the following purposes:

(1)        Increase access to primary care and preventative health services for these vulnerable populations in existing primary care locations.

(2)        Establish primary care and preventative health services in counties where no such services exist to serve these vulnerable populations.

(3)        Create new services, sustain existing service levels, or augment existing services provided to these vulnerable populations, including primary care and preventative health services and including dental, pharmacy, and behavioral health services when integrated into the medical home.

(4)        Increase primary care capacity to serve these vulnerable populations, including enhancing or replacing facilities, equipment, or technologies necessary to participate in the exchange of data and tools to monitor and improve the quality of care provided.

SECTION 11A.8.(b)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, for Community Health Grants, not more than two hundred thousand dollars ($200,000) in recurring funds for each year of the 2017‑2019 fiscal biennium shall be used for administrative purposes.

SECTION 11A.8.(c)  The Office of Rural Health shall work with the North Carolina Community Health Center Association, the North Carolina Association of Local Health Directors, the North Carolina Association of Free and Charitable Clinics, the North Carolina School‑Based Health Alliance, and other organizations representing eligible grant recipients to establish a Primary Care Advisory Committee to develop an objective and equitable process for grading applications for grants funded by this section and making recommendations to the Office of Rural Health for the award of grants funded by this section.

The Office of Rural Health shall make the final decision about awarding grants funded by this section, but no single grant award shall exceed one hundred fifty thousand dollars ($150,000) during the fiscal year. In awarding grants, the Office of Rural Health shall give preference to applicants located in areas of the State with the highest incidences of poverty or that serve the highest percentage of indigent clients.

SECTION 11A.8.(d)  Grant recipients shall not use these funds to do any of the following:

(1)        Enhance or increase compensation or other benefits of personnel, administrators, directors, consultants, or any other persons receiving funds for program administration.

(2)        Supplant existing funds, including federal funds traditionally received by federally qualified community health centers. However, grant funds may be used to supplement existing programs that serve the purposes described in subsection (a) of this section.

(3)        Finance or satisfy any existing debt.

SECTION 11A.8.(e)  The Office of Rural Health shall develop a standardized method for grant recipients to report objective, measurable quality health outcomes and shall require grant recipients to report these quality health outcomes to the Department. Beginning recipients of grant funds shall annually provide to the Office of Rural Health a written report detailing the number of patients that are cared for, the types of services that were provided, quality measures and outcomes, and any other information requested by the Office of Rural Health as necessary for evaluating the success of the Community Health Grant Program.

SECTION 11A.8.(f)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, for the Community Health Grant Program, the sum of up to one hundred fifty thousand dollars ($150,000) in recurring funds for each year of the 2017‑2019 fiscal biennium shall be used to match federal funds to provide to safety net providers eligible to participate in the Community Health Grant Program, through the Rural Health Technology Team, ongoing training and technical assistance with respect to health information technology, the adoption of electronic health records, and the establishment of connectivity to the State's health information exchange network known as NC HealthConnex.

 

Rural Health Loan Repayment Programs

SECTION 11A.9.  Article 3 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B‑139.4C.  Office of Rural Health; administration of loan repayment programs.

(a)        The Department of Health and Human Services, Office of Rural Health, shall use funds appropriated to the Department for loan repayment to medical, dental, and psychiatric providers practicing in State hospitals or in rural or medically underserved communities in this State to combine the following loan repayment programs in order to achieve efficient and effective management of these programs:

(1)        The Physician Loan Repayment Program.

(2)        The Psychiatric Loan Repayment Program.

(3)        The Loan Repayment Initiative at State Facilities.

(b)        These funds may be used for the following additional purposes:

(1)        Continued funding of the State Loan Repayment Program for primary care providers and expansion of State incentives to general surgeons practicing in Critical Access Hospitals located across the State.

(2)        Expansion of the State Loan Repayment Program to include eligible providers residing in North Carolina who use telemedicine in rural and underserved areas."

 

Reduction of Funds for Purchased Services

SECTION 11A.10.  The Department of Health and Human Services, Division of Central Management and Support, shall achieve the required reduction in purchased services by reducing Fund Code 1910 by the sum of three million two hundred thousand dollars ($3,200,000) in recurring funds for the 2017‑2018 fiscal year and by the sum of three million two hundred thousand dollars ($3,200,000) in recurring funds for the 2018‑2019 fiscal year. In making the reductions required by this section, the Department may implement department‑wide reductions in purchased services but shall not reduce any funds used to support (i) direct services contracts or (ii) the 2012 settlement agreement entered into between the United States Department of Justice and the State of North Carolina to ensure that the State will willingly meet the requirements of the Americans with Disabilities Act of 1990, Section 504 of the Rehabilitation Act of 1973, and the United States Supreme Court decision in Olmstead v. L.C., 527 U.S. 581 (1999).

 

Office of Program Evaluation Reporting and Accountability

SECTION 11A.11.(a)  The Department of Health and Human Services shall not use any funds appropriated in this act for the Office of Program Evaluation Reporting and Accountability for any purpose other than to establish and administer that Office and to implement the provisions of Part 31A of Article 3 of Chapter 143B of the General Statutes.

SECTION 11A.11.(b)  By December 1, 2017, the Department of Health and Human Services shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the establishment and operation of the Office of Program Evaluation Reporting and Accountability. The report shall include at least all of the following:

(1)        A breakdown of all expenditures from the funds appropriated to the Department since the 2015‑2016 fiscal year for the establishment and administration of the Office.

(2)        All steps taken by the Department to establish the Office pursuant to Part 31A of Article 3 of Chapter 143B of the General Statutes.

(3)        An organizational chart of the Office that includes all employees.

(4)        A list of all assessments and evaluations conducted or in progress by the Office.

(5)        An explanation of any obstacles to establishment and operation of the Office or fulfillment by the Office of any of the duties prescribed in G.S. 143B‑216.56.

 

Contracting Specialist and Certification Program

SECTION 11A.12.(a)  By September 1, 2017, the Department of Health and Human Services shall submit to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the proposal prepared pursuant to Section 12A.4 of S.L. 2016‑94 by the School of Government at the University of North Carolina at Chapel Hill, in collaboration with the Director of Procurement, Contracts and Grants for the Department of Health and Human Services, for the implementation and administration of a contracting specialist training program for management level personnel within the Department. The proposal shall include a detailed description of the proposed program curriculum along with budget estimates for program implementation and administration based on the requirements of the program design.

SECTION 11A.12.(b)  This section is effective when this act becomes law.

 

Graduate Medical Education Funding/Cape Fear Valley Medical Center

SECTION 11A.13.(a)  Calculation of Nonrecurring Payment of Funds. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2017‑2018 fiscal year for Graduate Medical Education, the sum of up to three million dollars ($3,000,000) in nonrecurring funds shall be allocated to Cape Fear Valley Medical Center (the Center) to support the establishment of residency programs affiliated with Campbell University School of Medicine. Subject to fulfillment of the conditions specified in subsection (b) of this section, the nonrecurring amount of funds allocated to the Center pursuant to this section shall be equal to the total amount of actual lost Medicare payments for admissions to the Center prior to October 1, 2017, attributed to the Center's reclassification by the federal Centers for Medicare and Medicaid Services (CMS) as a rural hospital or rural referral center or any other change approved by CMS, up to a maximum of three million dollars ($3,000,000).

SECTION 11A.13.(b)  Conditions for Payment of Funds. – No funds shall be paid to the Center pursuant to the calculation specified in subsection (a) of this section until the Office of State Budget and Management (OSBM) certifies, in writing, all of the following:

(1)        The amount of actual lost Medicare payments for admissions to the Center prior to October 1, 2017, attributed to the Center's reclassification by the federal Centers for Medicare and Medicaid Services (CMS) as a rural hospital or rural referral center or any other change approved by CMS.

(2)        That the Center has maintained approval from CMS for reclassification as a rural hospital or rural referral center.

(3)        That the Center has maintained approval from the Accreditation Council for Graduate Medical Education or the American Osteopathic Association for residency programs with a minimum of 130 additional residency slots.

SECTION 11A.13.(c)  Report on Use of Funds. – The Center shall report on or before April 1, 2018, to the House Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division regarding its progress in establishing any residency programs funded by State appropriations.

SECTION 11A.13.(d)  Any funds not obligated or encumbered for the purposes specified in this section by June 30, 2018, shall revert to the General Fund.

SECTION 11A.13.(e)  Section 12A.8 of S.L. 2016‑94, as amended by Section 5.1 of S.L. 2016‑123, is repealed.

 

Competitive Grants/Nonprofit Organizations

SECTION 11A.14.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of ten million six hundred fifty‑three thousand nine hundred eleven dollars ($10,653,911) for each year of the 2017‑2019 fiscal biennium, the sum of four million five hundred eight thousand seven hundred fifty‑four dollars ($4,508,754) for the 2017‑2018 fiscal year and the sum of four million four hundred seventy‑six thousand six hundred twenty dollars ($4,476,620) for the 2018‑2019 fiscal year appropriated in Section 11L.1(p) of this act in Social Services Block Grant funds, and the sum of one million six hundred thousand dollars ($1,600,000) for each year of 2017‑2019 fiscal biennium in Section 11L.1 of this act in Substance Abuse Prevention and Treatment Block Grant funds shall be used to allocate funds for nonprofit organizations.

SECTION 11A.14.(b)  The Department shall continue administering a competitive grants process for nonprofit funding. The Department shall administer a plan that, at a minimum, includes each of the following:

(1)        A request for application (RFA) process to allow nonprofits to apply for and receive State funds on a competitive basis. The Department shall require nonprofits to include in the application a plan to evaluate the effectiveness, including measurable impact or outcomes, of the activities, services, and programs for which the funds are being requested.

(2)        A requirement that nonprofits match a minimum of fifteen percent (15%) of the total amount of the grant award.

(3)        A requirement that the Secretary prioritize grant awards to those nonprofits that are able to leverage non‑State funds in addition to the grant award.

(4)        A process that awards grants to nonprofits that have the capacity to provide services on a statewide basis and that support any of the following State health and wellness initiatives:

a.         A program targeting advocacy, support, education, or residential services for persons diagnosed with autism.

b.         A system of residential supports for those afflicted with substance abuse addiction.

c.         A program of advocacy and supports for individuals with intellectual and developmental disabilities or severe and persistent mental illness, substance abusers, or the elderly.

d.         Supports and services to children and adults with developmental disabilities or mental health diagnoses.

e.         A food distribution system for needy individuals.

f.          The provision and coordination of services for the homeless.

g.         The provision of services for individuals aging out of foster care.

h.         Programs promoting wellness, physical activity, and health education programming for North Carolinians.

i.          The provision of services and screening for blindness.

j.          A provision for the delivery of after‑school services for apprenticeships or mentoring at‑risk youth.

k.         The provision of direct services for amyotrophic lateral sclerosis (ALS) and those diagnosed with the disease.

l.          A comprehensive smoking prevention and cessation program that screens and treats tobacco use in pregnant women and postpartum mothers.

m.        A program providing short‑term or long‑term residential substance abuse services. For purposes of this sub‑subdivision, "long‑term" means a minimum of 12 months.

n.         A program that provides year‑round sports training and athletic competition for children and adults with disabilities.

It is the intent of the General Assembly that annually the Secretary evaluate and prioritize the categories of health and wellness initiatives described under this subdivision to determine the best use of these funds in making grant awards, exclusive of direct allocations made by the General Assembly.

(5)        A process that ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for health and wellness programs and initiatives.

(6)        A process that allows grants to be awarded to nonprofits for up to two years.

(7)        A requirement that initial disbursement of the grants be awarded no later than 30 days after certification of the State budget for the respective fiscal year.

SECTION 11A.14.(c)  No later than July 1 of each year, as applicable, the Secretary shall announce the recipients of the competitive grant awards and allocate funds to the grant recipients for the respective grant period pursuant to the amounts designated under subsection (a) of this section. After awards have been granted, by September 1 of each year, the Secretary shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services on the grant awards that includes at least all of the following:

(1)        The identity and a brief description of each grantee and each program or initiative offered by the grantee.

(2)        The amount of funding awarded to each grantee.

(3)        The number of persons served by each grantee, broken down by program or initiative.

SECTION 11A.14.(d)  No later than December 1 of each fiscal year, each nonprofit organization receiving funding pursuant to this subsection in the respective fiscal year shall submit to the Division of Central Management and Support a written report of all activities funded by State appropriations. The report shall include the following information about the fiscal year preceding the year in which the report is due:

a.         The entity's mission, purpose, and governance structure.

b.         A description of the types of programs, services, and activities funded by State appropriations.

c.         Statistical and demographical information on the number of persons served by these programs, services, and activities, including the counties in which services are provided.

d.         Outcome measures that demonstrate the impact and effectiveness of the programs, services, and activities.

e.         A detailed program budget and list of expenditures, including all positions funded, matching expenditures, and funding sources.

SECTION 11A.14.(e)  For the 2017‑2019 fiscal biennium only, from the funds identified in subsection (a) of this section, the Department shall make allocations as follows:

(1)        The sum of three hundred fifty thousand dollars ($350,000) in each year of the 2017‑2019 fiscal biennium to provide grants to Big Brothers Big Sisters. Big Brothers Big Sisters shall be required to seek future funding through the competitive grants process in accordance with subsection (b) of this section.

(2)        The sum of one million six hundred twenty‑five thousand dollars ($1,625,000) for each year of the 2017‑2019 fiscal biennium and the sum of one million six hundred thousand dollars ($1,600,000) in Section 11L.1 of this act in Substance Abuse Prevention and Treatment Block Grant funds in each year of the 2017‑2019 fiscal biennium to Triangle Residential Options for Substance Abusers, Inc., (TROSA) for the purpose of assisting individuals with substance abuse addiction. TROSA shall be required to seek future funding through the competitive grants process in accordance with subsection (b) of this section.

SECTION 11A.14.(f)  Funds appropriated pursuant to this section that have been awarded but not yet disbursed or encumbered at the end of each fiscal year shall not revert but shall remain available for expenditure.

SECTION 11A.14.(g)  G.S. 143B‑139.2A is repealed.

 

SUBPART XI‑B. DIVISION OF CHILD DEVELOPMENT AND EARLY EDUCATION

 

NC Pre‑K Program/Standards for Four‑ and Five‑Star Rated Facilities

SECTION 11B.1.(a)  Eligibility. – The Department of Health and Human Services, Division of Child Development and Early Education, shall continue implementing the prekindergarten program (NC Pre‑K). The NC Pre‑K program shall serve children who are four years of age on or before August 31 of the program year. In determining eligibility, the Division shall establish income eligibility requirements for the program not to exceed seventy‑five percent (75%) of the State median income. Up to twenty percent (20%) of children enrolled may have family incomes in excess of seventy‑five percent (75%) of median income if those children have other designated risk factors. Furthermore, any age‑eligible child who is a child of either of the following shall be eligible for the program: (i) an active duty member of the Armed Forces of the United States, including the North Carolina National Guard, State military forces, or a reserve component of the Armed Forces who was ordered to active duty by the proper authority within the last 18 months or is expected to be ordered within the next 18 months, or (ii) a member of the Armed Forces of the United States, including the North Carolina National Guard, State military forces, or a reserve component of the Armed Forces who was injured or killed while serving on active duty. Eligibility determinations for NC Pre‑K participants may continue through local education agencies and local North Carolina Partnership for Children, Inc., partnerships.

Other than developmental disabilities or other chronic health issues, the Division shall not consider the health of a child as a factor in determining eligibility for participation in the NC Pre‑K program.

SECTION 11B.1.(b)  Multiyear Contracts. – The Division of Child Development and Early Education shall require the NC Pre‑K contractor to issue multiyear contracts for licensed private child care centers providing NC Pre‑K classrooms.

SECTION 11B.1.(b1)  Building Standards. – Notwithstanding G.S. 110‑91(4), private child care facilities and public schools operating NC Pre‑K classrooms shall meet the building standards for preschool students as provided in G.S. 115C‑521.1.

SECTION 11B.1.(c)  Programmatic Standards. – Except as provided in subsection (b1) of this section, entities operating NC Pre‑K classrooms shall adhere to all of the policies prescribed by the Division of Child Development and Early Education regarding programmatic standards and classroom requirements.

SECTION 11B.1.(d)  NC Pre‑K Committees. – Local NC Pre‑K committees shall use the standard decision‑making process developed by the Division of Child Development and Early Education in awarding NC Pre‑K classroom slots and student selection.

SECTION 11B.1.(e)  Reporting. – The Division of Child Development and Early Education shall submit an annual report no later than March 15 of each year to the Joint Legislative Oversight Committee on Health and Human Services, the Office of State Budget and Management, and the Fiscal Research Division. The report shall include the following:

(1)        The number of children participating in the NC Pre‑K program by county.

(2)        The number of children participating in the NC Pre‑K program who have never been served in other early education programs such as child care, public or private preschool, Head Start, Early Head Start, or early intervention programs.

(3)        The expected NC Pre‑K expenditures for the programs and the source of the local contributions.

(4)        The results of an annual evaluation of the NC Pre‑K program.

SECTION 11B.1.(f)  Audits. – The administration of the NC Pre‑K program by local partnerships shall be subject to the financial and compliance audits authorized under G.S. 143B‑168.14(b).

 

State Agency Continued Collaboration on Early Childhood Education/Transition from Preschool to Kindergarten

SECTION 11B.2.(a)  The Department of Health and Human Services, in consultation with the Department of Public Instruction and any other agencies or organizations that administer, support, or study early education in this State, and within resources currently available, shall continue to collaborate on an ongoing basis in the development and implementation of a statewide vision for early childhood education. In collaborating in this effort, the agencies shall continue developing a comprehensive approach to early childhood education, birth through third grade, including creating cross agency accountability with a comprehensive set of data indicators, including consideration of the NC Pathways to Grade‑Level Reading, to monitor and measure success of the early childhood education systems.

SECTION 11B.2.(b)  The Department of Health and Human Services, the Department of Public Instruction, and any other agencies or organizations that administer, support, or study early education programs in this State shall submit a follow‑up report of their findings and recommendations, including any legislative proposals, on the statewide vision for early childhood education pursuant to subsection (a) of this section to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Education Oversight Committee on or before January 1, 2018, and may make any subsequent reports, annually, on or before January 1, as needed to those same committees.

SECTION 11B.2.(c)  The Department of Health and Human Services, in consultation with the Department of Public Instruction, shall continue developing a standardized program to transition children from preschool to kindergarten. In developing this standardized transition program, the Department of Health and Human Services shall identify, at a minimum:

(1)        Methods to standardize student transition information such that it is quantifiable.

(2)        Recommendations for sharing data contained in a student's transition plan between preschool teachers and either kindergarten teachers or the schools that receive the incoming kindergarten students.

(3)        Recommendations for sharing data contained in a student's transition plan between preschool teachers and the parents or guardians of the child who is transitioning to kindergarten.

(4)        Recommendations for preschool teacher training and continuing education to support their role in completing transition plans for preschool children.

(5)        Recommendations for baseline information that should be compiled in transition plans for students transitioning to kindergarten.

(6)        Procedures for the management of transition plan documents, including recommendations for the length of records retention, provisions for confidentiality, and proper disposal.

(7)        Any other components the Department deems appropriate in the provision of information between preschools, students' families, and kindergartens.

SECTION 11B.2.(d)  The Department of Health and Human Services shall report on the development of the standardized transition program required pursuant to subsection (c) of this section, including any findings and recommendations and any legislative proposals, to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Education Oversight Committee on or before January 1, 2018.

 

Child Care Subsidy Rates

SECTION 11B.3.(a)  The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be determined based on a percentage of the federal poverty level as follows:

AGE                                                              INCOME PERCENTAGE LEVEL

0 – 5                                                                                        200%

6 – 12                                                                                      133%

The eligibility for any child with special needs, including a child who is 13 years of age or older, shall be two hundred percent (200%) of the federal poverty level.

SECTION 11B.3.(b)  Fees for families who are required to share in the cost of care are established based on ten percent (10%) of gross family income. When care is received at the blended rate, the co‑payment shall be eighty‑three percent (83%) of the full‑time co‑payment. Co‑payments for part‑time care shall be seventy‑five percent (75%) of the full‑time co‑payment.

SECTION 11B.3.(c)  Payments for the purchase of child care services for low‑income children shall be in accordance with the following requirements:

(1)        Religious sponsored child care facilities operating pursuant to G.S. 110‑106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the one‑star county market rate or the rate they charge privately paying parents, whichever is lower, unless prohibited by subsection (f) of this section.

(2)        Licensed child care centers and homes with two or more stars shall receive the market rate for that rated license level for that age group or the rate they charge privately paying parents, whichever is lower, unless prohibited by subsection (g) of this section.

(3)        Nonlicensed homes shall receive fifty percent (50%) of the county market rate or the rate they charge privately paying parents, whichever is lower.

(4)        No payments shall be made for transportation services or registration fees charged by child care facilities.

(5)        Payments for subsidized child care services for postsecondary education shall be limited to a maximum of 20 months of enrollment.

(6)        The Department of Health and Human Services shall implement necessary rule changes to restructure services, including, but not limited to, targeting benefits to employment.

SECTION 11B.3.(d)  Provisions of payment rates for child care providers in counties that do not have at least 50 children in each age group for center‑based and home‑based care are as follows:

(1)        Except as applicable in subdivision (2) of this subsection, payment rates shall be set at the statewide or regional market rate for licensed child care centers and homes.

(2)        If it can be demonstrated that the application of the statewide or regional market rate to a county with fewer than 50 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low‑income children, then the county market rate may be applied.

SECTION 11B.3.(e)  A market rate shall be calculated for child care centers and homes at each rated license level for each county and for each age group or age category of enrollees and shall be representative of fees charged to parents for each age group of enrollees within the county. The Division of Child Development and Early Education shall also calculate a statewide rate and regional market rate for each rated license level for each age category.

SECTION 11B.3.(f)  The Division of Child Development and Early Education shall continue implementing policies that improve the quality of child care for subsidized children, including a policy in which child care subsidies are paid, to the extent possible, for child care in the higher quality centers and homes only. The Division shall define higher quality, and subsidy funds shall not be paid for one‑ or two‑star rated facilities. For those counties with an inadequate number of four‑ and five‑star rated facilities, the Division shall continue a transition period that allows the facilities to continue to receive subsidy funds while the facilities work on the increased star ratings. The Division may allow exemptions in counties where there is an inadequate number of four‑ and five‑star rated facilities for non‑star rated programs, such as religious programs.

SECTION 11B.3.(g)  Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes and facilities operated pursuant to G.S. 110‑106 may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families. Except as authorized by subsection (f) of this section, no separate licensing requirements shall be used to select facilities to participate. In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations. Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.

County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.

SECTION 11B.3.(h)  Payment for subsidized child care services provided with Temporary Assistance for Needy Families Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development and Early Education for the subsidized child care program.

SECTION 11B.3.(i)  Noncitizen families who reside in this State legally shall be eligible for child care subsidies if all other conditions of eligibility are met. If all other conditions of eligibility are met, noncitizen families who reside in this State illegally shall be eligible for child care subsidies only if at least one of the following conditions is met:

(1)        The child for whom a child care subsidy is sought is receiving child protective services or foster care services.

(2)        The child for whom a child care subsidy is sought is developmentally delayed or at risk of being developmentally delayed.

(3)        The child for whom a child care subsidy is sought is a citizen of the United States.

SECTION 11B.3.(j)  The Department of Health and Human Services, Division of Child Development and Early Education, shall require all county departments of social services to include on any forms used to determine eligibility for child care subsidy whether the family waiting for subsidy is receiving assistance through the NC Pre‑K Program or Head Start.

SECTION 11B.3.(k)  Department of Defense‑certified child care facilities licensed pursuant to G.S. 110‑106.2 may participate in the State‑subsidized child care program that provides for the purchase of care in child care facilities for minor children in needy families, provided that funds allocated from the State‑subsidized child care program to Department of Defense‑certified child care facilities shall supplement and not supplant funds allocated in accordance with G.S. 143B‑168.15(g). Payment rates and fees for military families who choose Department of Defense‑certified child care facilities and who are eligible to receive subsidized child care shall be as set forth in this section.

 

Child Care Subsidy Market Rate Increases/Certain Age Groups and Counties

SECTION 11B.4.(a)  Beginning October 1, 2017, the Department of Health and Human Services, Division of Child Development and Early Education (Division), shall increase the child care subsidy market rates to the rates recommended by the 2015 Child Care Market Rate Study for school‑aged children in three‑, four‑, and five‑star‑rated child care centers and homes in tier one and tier two counties.

SECTION 11B.4.(b)  Beginning October 1, 2017, the Division shall increase the child care subsidy market rates by seventy percent (70%) of the difference between the current market rates and the rates recommended by the 2015 Child Care Market Rate Study for children birth through two years of age in three‑, four‑, and five‑star‑rated child care centers and homes in tier three counties.

SECTION 11B.4.(c)  Beginning July 1, 2018, the Division shall increase the child care subsidy market rates to the rates recommended by the 2015 Child Care Market Rate Study for children birth through two years of age in three‑, four‑, and five‑star‑rated child care centers and homes in tier three counties.

SECTION 11B.4.(d)  For purposes of this section, tier one, tier two, and tier three counties shall have the same designations as those established by the N.C. Department of Commerce's 2015 County Tier Designations.

 

Child Care Allocation Formula

SECTION 11B.5.(a)  The Department of Health and Human Services, Division of Child Development and Early Education (Division), shall allocate child care subsidy voucher funds to pay the costs of necessary child care for minor children of needy families. The mandatory thirty percent (30%) North Carolina Partnership for Children, Inc., subsidy allocation under G.S. 143B‑168.15(g) shall constitute the base amount for each county's child care subsidy allocation. The Department of Health and Human Services shall use the following method when allocating federal and State child care funds, not including the aggregate mandatory thirty percent (30%) North Carolina Partnership for Children, Inc., subsidy allocation:

(1)        Funds shall be allocated to a county based upon the projected cost of serving children under age 11 in families with all parents working who earn less than the applicable federal poverty level percentage set forth in Section 11B.3(a) of this act.

(2)        The Division may withhold up to two percent (2%) of available funds from the allocation formula for (i) preventing termination of services throughout the fiscal year and (ii) repayment of any federal funds identified by counties as overpayments, including overpayments due to fraud. The Division shall allocate to counties any funds withheld before the end of the fiscal year when the Division determines the funds are not needed for the purposes described in this subdivision.

(3)        The Division shall set aside four percent (4%) of child care subsidy allocations for vulnerable populations, which include a child identified as having special needs and a child whose application for assistance indicates that the child and the child's family is experiencing homelessness or is in a temporary living situation. A child identified by this subdivision shall be given priority for receiving services until such time as set‑aside allocations for vulnerable populations are exhausted.

SECTION 11B.5.(b)  The Division may reallocate unused child care subsidy voucher funds in order to meet the child care needs of low‑income families. Any reallocation of funds shall be based upon the expenditures of all child care subsidy voucher funding, including North Carolina Partnership for Children, Inc., funds within a county. Counties shall manage service levels within the funds allocated to the counties. A county with a spending coefficient over one hundred percent (100%) shall submit a plan to the Division for managing the county's allocation before receiving any reallocated funds.

SECTION 11B.5.(c)  When implementing the formula under subsection (a) of this section, the Division shall include the market rate increase in the formula process, rather than calculating the increases outside of the formula process. Additionally, the Department shall do the following:

(1)        Implement the final one‑third change in a county's allocation beginning fiscal year 2018‑2019. A county's initial allocation shall be the county's expenditure in the previous fiscal year. With the exception of market rate increases consistent with any increases approved by the General Assembly, a county whose spending coefficient is less than ninety‑five percent (95%) in the previous fiscal year shall receive its prior year's expenditure as its allocation and shall not receive an increase in its allocation in the following year. A county whose spending coefficient is at least ninety‑five percent (95%) in the previous fiscal year shall receive, at a minimum, the amount it expended in the previous fiscal year and may receive additional funding, if available. The Division may waive this requirement and allow an increase if the spending coefficient is below ninety‑five percent (95%) due to extraordinary circumstances, such as a State or federal disaster declaration in the affected county. However, effective for the 2018‑2019 fiscal year, "extraordinary circumstances" shall only include a State or federal disaster declaration in the affected county or a State directive restricting the expenditure of funds that prohibits the county from meeting the ninety‑five percent (95%) spending coefficient. By October 1 of each year, the Division shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the counties that received a waiver pursuant to this subdivision and the reasons for the waiver.

(2)        Effective immediately following the next new decennial census data release, implement (i) one‑third of the change in a county's allocation in the year following the data release, (ii) an additional one‑third of the change in a county's allocation beginning two years after the initial change under this subdivision, and (iii) the final one‑third change in a county's allocation beginning the following two years thereafter.

 

Codify Certain Child Care Subsidy Provisions

SECTION 11B.6.  Article 3 of Chapter 143B of the General Statutes is amended by adding a new Part to read:

"Part 10C. Child Care Subsidy.

"§ 143B‑168.25.  Child care funds matching requirements.

No local matching funds may be required by the Department of Health and Human Services as a condition of any locality's receiving its initial allocation of child care funds appropriated by this act unless federal law requires a match. If the Department reallocates additional funds above twenty‑five thousand dollars ($25,000) to local purchasing agencies beyond their initial allocation, local purchasing agencies must provide a twenty percent (20%) local match to receive the reallocated funds. Matching requirements shall not apply when funds are allocated because of an emergency as defined in G.S. 166A‑19.3(6).

"§ 143B‑168.26.  Child care revolving loan.

Notwithstanding any law to the contrary, funds budgeted for the Child Care Revolving Loan Fund may be transferred to and invested by the financial institution contracted to operate the Fund. The principal and any income to the Fund may be used to make loans, reduce loan interest to borrowers, serve as collateral for borrowers, pay the contractor's cost of operating the Fund, or pay the Department's cost of administering the program.

"§ 143B‑168.27.  Administrative allowance for county departments of social services; use of subsidy funds for fraud detection.

(a)        The Department of Health and Human Services, Division of Child Development and Early Education (Division), shall fund the allowance that county departments of social services may use for administrative costs at four percent (4%) of the county's total child care subsidy funds allocated in the Child Care and Development Fund Block Grant plan or eighty thousand dollars ($80,000), whichever is greater.

(b)        Each county department of social services may use up to two percent (2%) of child care subsidy funds allocated to the county for fraud detection and investigation initiatives.

(c)        The Division may adjust the allocations in the Child Care and Development Fund Block Grant according to (i) the final allocations for local departments of social services under subsection (a) of this section and (ii) the funds allocated for fraud detection and investigation initiatives under subsection (b) of this section. The Division shall submit a report on the final adjustments to the allocations of the four percent (4%) administrative costs to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than September 30 of each year."

 

Child Care Subsidy Recipients to Cooperate With Child Support Services

SECTION 11B.7.(a)  Beginning January 1, 2018, the Department of Health and Human Services, the Division of Child Development and Early Education (DCDEE) and the Division of Social Services (DSS), shall implement the plan developed pursuant to S.L. 2015‑51 requiring a custodial parent or other relative or person with primary custody of the child who is receiving child care subsidy payments to cooperate with the county child support services program as a condition of receiving child care subsidy payments. DCDEE and DSS shall implement the plan, which shall include, at a minimum, the components described in Section 1(a) of S.L. 2015‑51, as well as any criteria DCDEE and DSS identified in its report on the plan as submitted to the Joint Legislative Oversight Committee on Health and Human Services dated February 1, 2016.

SECTION 11B.7.(b)  The Division of Child Development and Early Education and the Division of Social Services shall report on the implementation of the plan to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than October 1, 2018.

 

Smart Start Initiatives

SECTION 11B.8.(a)  Policies. – The North Carolina Partnership for Children, Inc., and its Board shall ensure policies focus on the North Carolina Partnership for Children, Inc.'s mission of improving child care quality in North Carolina for children from birth to five years of age. North Carolina Partnership for Children, Inc.‑funded activities shall include assisting child care facilities with (i) improving quality, including helping one‑, two‑, and three‑star‑rated facilities increase their star ratings, and (ii) implementing prekindergarten programs. State funding for local partnerships shall also be used for evidence‑based or evidence‑informed programs for children from birth to five years of age that do the following:

(1)        Increase children's literacy.

(2)        Increase the parents' ability to raise healthy, successful children.

(3)        Improve children's health.

(4)        Assist four‑ and five‑star‑rated facilities in improving and maintaining quality.

SECTION 11B.8.(b)  Administration. – Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships. For purposes of this subsection, administrative costs shall include costs associated with partnership oversight, business and financial management, general accounting, human resources, budgeting, purchasing, contracting, and information systems management. The North Carolina Partnership for Children, Inc., shall continue using a single statewide contract management system that incorporates features of the required standard fiscal accountability plan described in G.S. 143B‑168.12(a)(4). All local partnerships are required to participate in the contract management system and, directed by the North Carolina Partnership for Children, Inc., to collaborate, to the fullest extent possible, with other local partnerships to increase efficiency and effectiveness.

SECTION 11B.8.(c)  Salaries. – The salary schedule developed and implemented by the North Carolina Partnership for Children, Inc., shall set the maximum amount of State funds that may be used for the salary of the Executive Director of the North Carolina Partnership for Children, Inc., and the directors of the local partnerships. The North Carolina Partnership for Children, Inc., shall base the schedule on the following criteria:

(1)        The population of the area serviced by a local partnership.

(2)        The amount of State funds administered.

(3)        The amount of total funds administered.

(4)        The professional experience of the individual to be compensated.

(5)        Any other relevant factors pertaining to salary, as determined by the North Carolina Partnership for Children, Inc.

The salary schedule shall be used only to determine the maximum amount of State funds that may be used for compensation. Nothing in this subsection shall be construed to prohibit a local partnership from using non‑State funds to supplement an individual's salary in excess of the amount set by the salary schedule established under this subsection.

SECTION 11B.8.(d)  Match Requirements. – The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match one hundred percent (100%) of the total amount budgeted for the program in each fiscal year of the 2017‑2019 biennium. Of the funds the North Carolina Partnership for Children, Inc., and the local partnerships are required to match, contributions of cash shall be equal to at least thirteen percent (13%) and in‑kind donated resources shall be equal to no more than six percent (6%) for a total match requirement of nineteen percent (19%) for each year of the 2017‑2019 fiscal biennium. The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of the required match for a fiscal year in order to meet the match requirement of the succeeding fiscal year. Only in‑kind contributions that are quantifiable shall be applied to the in‑kind match requirement. Volunteer services may be treated as an in‑kind contribution for the purpose of the match requirement of this subsection. Volunteer services that qualify as professional services shall be valued at the fair market value of those services. All other volunteer service hours shall be valued at the statewide average wage rate as calculated from data compiled by the Division of Employment Security of the Department of Commerce in the Employment and Wages in North Carolina Annual Report for the most recent period for which data are available. Expenses, including both those paid by cash and in‑kind contributions, incurred by other participating non‑State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:

(1)        Be verifiable from the contractor's records.

(2)        If in‑kind, other than volunteer services, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations.

(3)        Not include expenses funded by State funds.

(4)        Be supplemental to and not supplant preexisting resources for related program activities.

(5)        Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives.

(6)        Be otherwise allowable under federal or State law.

(7)        Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership.

(8)        Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.

Failure to obtain a nineteen‑percent (19%) match by June 30 of each year of the 2017‑2019 fiscal biennium shall result in a dollar‑for‑dollar reduction in the appropriation for the Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in‑kind contributions into a report that is submitted to the Joint Legislative Oversight Committee on Health and Human Services in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly.

SECTION 11B.8.(e)  Bidding. – The North Carolina Partnership for Children, Inc., and all local partnerships shall use competitive bidding practices in contracting for goods and services on contract amounts as follows:

(1)        For amounts of five thousand dollars ($5,000) or less, the procedures specified by a written policy as developed by the Board of Directors of the North Carolina Partnership for Children, Inc.

(2)        For amounts greater than five thousand dollars ($5,000), but less than fifteen thousand dollars ($15,000), three written quotes.

(3)        For amounts of fifteen thousand dollars ($15,000) or more, but less than forty thousand dollars ($40,000), a request for proposal process.

(4)        For amounts of forty thousand dollars ($40,000) or more, a request for proposal process and advertising in a major newspaper.

SECTION 11B.8.(f)  Allocations. – The North Carolina Partnership for Children, Inc., shall not reduce the allocation for counties with less than 35,000 in population below the 2012‑2013 funding level.

SECTION 11B.8.(g)  Performance‑Based Evaluation. – The Department of Health and Human Services shall continue to implement the performance‑based evaluation system.

SECTION 11B.8.(h)  Expenditure Restrictions. – The Department of Health and Human Services and the North Carolina Partnership for Children, Inc., shall ensure that the allocation of funds for Early Childhood Education and Development Initiatives for the 2017‑2019 fiscal biennium shall be administered and distributed in the following manner:

(1)        Capital expenditures are prohibited for the 2017‑2019 fiscal biennium. For the purposes of this section, "capital expenditures" means expenditures for capital improvements as defined in G.S. 143C‑1‑1(d)(5).

(2)        Expenditures of State funds for advertising and promotional activities are prohibited for the 2017‑2019 fiscal biennium.

For the 2017‑2019 fiscal biennium, local partnerships shall not spend any State funds on marketing campaigns, advertising, or any associated materials. Local partnerships may spend any private funds the local partnerships receive on those activities.

 

Smart Start Early Literacy Initiative/Dolly Parton's Imagination Library

SECTION 11B.9.(a)  Funds allocated to the North Carolina Partnership for Children, Inc., from the Department of Health and Human Services, shall be used to increase access to Dolly Parton's Imagination Library, an early literacy program that mails age‑appropriate books on a monthly basis to children registered for the program, with the intent that, upon full implementation, access to the program shall be statewide.

SECTION 11B.9.(b)  The North Carolina Partnership for Children, Inc., may use up to two percent (2%) of the funds for program evaluation. Funds appropriated under this section shall not be subject to administrative costs requirements under Section 11B.8(b) of this act, nor shall these funds be subject to the child care services funding requirements under G.S. 143B‑168.15(b), child care subsidy expansion requirements under G.S. 143B‑168.15(g), or the match requirements under Section 11B.8(d) of this act.

SECTION 11B.9.(c)  The North Carolina Partnership for Children, Inc., shall report on the success of the early literacy initiative, including any recommendations, to the Joint Legislative Oversight Committee on Health and Human Services by March 1, 2018. The report shall include participation rates for Dolly Parton's Imagination Library.

 

SUBPART XI‑C. DIVISION OF SOCIAL SERVICES

 

TANF Benefit Implementation

SECTION 11C.1.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2016‑2019," prepared by the Department of Health and Human Services and presented to the General Assembly. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2016, through September 30, 2019. The Department shall submit the State Plan, as revised in accordance with subsection (b) of this section, to the United States Department of Health and Human Services.

SECTION 11C.1.(b)  The counties approved as Electing Counties in the North Carolina Temporary Assistance for Needy Families State Plan FY 2016‑2019, as approved by this section, are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson.

SECTION 11C.1.(c)  Counties that submitted the letter of intent to remain as an Electing County or to be redesignated as an Electing County and the accompanying county plan for years 2016 through 2019, pursuant to G.S. 108A‑27(e), shall operate under the Electing County budget requirements effective July 1, 2017. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2019.

SECTION 11C.1.(d)  For each year of the 2017‑2019 fiscal biennium, Electing Counties shall be held harmless to their Work First Family Assistance allocations for the 2015‑2016 fiscal year, provided that remaining funds allocated for Work First Family Assistance and Work First Diversion Assistance are sufficient for payments made by the Department on behalf of Standard Counties pursuant to G.S. 108A‑27.11(b).

SECTION 11C.1.(e)  In the event that departmental projections of Work First Family Assistance and Work First Diversion Assistance for the 2017‑2018 fiscal year or the 2018‑2019 fiscal year indicate that remaining funds are insufficient for Work First Family Assistance and Work First Diversion Assistance payments to be made on behalf of Standard Counties, the Department is authorized to deallocate funds, of those allocated to Electing Counties for Work First Family Assistance in excess of the sums set forth in G.S. 108A‑27.11, up to the requisite amount for payments in Standard Counties. Prior to deallocation, the Department shall obtain approval by the Office of State Budget and Management. If the Department adjusts the allocation set forth in subsection (d) of this section, then a report shall be made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

 

Intensive Family Preservation Services Funding and Performance Enhancements

SECTION 11C.2.(a)  Notwithstanding the provisions of G.S. 143B‑150.6, the Intensive Family Preservation Services (IFPS) Program shall provide intensive services to children and families in cases of abuse, neglect, and dependency where a child is at imminent risk of removal from the home and to children and families in cases of abuse where a child is not at imminent risk of removal. The Program shall be developed and implemented statewide on a regional basis. The IFPS shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out‑of‑home placement.

SECTION 11C.2.(b)  The Department of Health and Human Services shall require that any program or entity that receives State, federal, or other funding for the purpose of IFPS shall provide information and data that allows for the following:

(1)        An established follow‑up system with a minimum of six months of follow‑up services.

(2)        Detailed information on the specific interventions applied, including utilization indicators and performance measurement.

(3)        Cost‑benefit data.

(4)        Data on long‑term benefits associated with IFPS. This data shall be obtained by tracking families through the intervention process.

(5)        The number of families remaining intact and the associated interventions while in IFPS and 12 months thereafter.

(6)        The number and percentage, by race, of children who received IFPS compared to the ratio of their distribution in the general population involved with Child Protective Services.

SECTION 11C.2.(c)  The Department shall establish a performance‑based funding protocol and shall only provide funding to those programs and entities providing the required information specified in subsection (b) of this section. The amount of funding shall be based on the individual performance of each program.

 

Child Caring Institutions

SECTION 11C.3.  Until the Social Services Commission adopts rules setting standardized rates for child caring institutions as authorized under G.S. 143B‑153(8), the maximum reimbursement for child caring institutions shall not exceed the rate established for the specific child caring institution by the Department of Health and Human Services, Office of the Controller. In determining the maximum reimbursement, the State shall include county and IV‑E reimbursements.

 

Use of Foster Care Budget for Guardianship Assistance Program

SECTION 11C.4.  Of the funds available for the provision of foster care services, the Department of Health and Human Services, Division of Social Services, may continue to provide for the financial support of children who are deemed to be (i) in a permanent family placement setting, (ii) eligible for legal guardianship, and (iii) otherwise unlikely to receive permanency. No additional expenses shall be incurred beyond the funds budgeted for foster care for the Guardianship Assistance Program (GAP). The Guardianship Assistance Program (GAP) shall include provisions for extending guardianship services for individuals who have attained the age of 18 years and opt to continue to receive guardianship services until reaching 21 years of age if the individual is (i) completing secondary education or a program leading to an equivalent credential, (ii) enrolled in an institution that provides postsecondary or vocational education, (iii) participating in a program or activity designed to promote, or remove barriers to, employment, (iv) employed for at least 80 hours per month, or (v) incapable of completing the educational or employment requirements of this section due to a medical condition or disability. The Guardianship Assistance Program rates shall reimburse the legal guardian for room and board and be set at the same rate as the foster care room and board rates in accordance with rates established under G.S. 108A‑49.1.

 

Child Welfare PostSecondary Support Program (NC REACH)

SECTION 11C.5.(a)  Funds appropriated from the General Fund to the Department of Health and Human Services for the child welfare postsecondary support program shall be used to continue providing assistance with the "cost of attendance" as that term is defined in 20 U.S.C. § 108711 for the educational needs of foster youth aging out of the foster care system and special needs children adopted from foster care after age 12. These funds shall be allocated by the State Education Assistance Authority.

SECTION 11C.5.(b)  Of the funds appropriated from the General Fund to the Department of Health and Human Services, the sum of fifty thousand dollars ($50,000) for the 2017‑2018 fiscal year and the sum of fifty thousand dollars ($50,000) for the 2018‑2019 fiscal year shall be allocated to the North Carolina State Education Assistance Authority (SEAA). The SEAA shall use these funds only to perform administrative functions necessary to manage and distribute scholarship funds under the child welfare postsecondary support program.

SECTION 11C.5.(c)  Of the funds appropriated from the General Fund to the Department of Health and Human Services, the sum of three hundred thirty‑nine thousand four hundred ninety‑three dollars ($339,493) for the 2017‑2018 fiscal year and the sum of three hundred thirty‑nine thousand four hundred ninety‑three dollars ($339,493) for the 2018‑2019 fiscal year shall be used to contract with an entity to administer the child welfare postsecondary support program described under subsection (a) of this section, which administration shall include the performance of case management services.

SECTION 11C.5.(d)  Funds appropriated to the Department of Health and Human Services for the child welfare postsecondary support program shall be used only for students attending public institutions of higher education in this State.

 

Federal Child Support Incentive Payments

SECTION 11C.6.(a)  Centralized Services. – The North Carolina Child Support Services Section (NCCSS) of the Department of Health and Human Services, Division of Social Services, shall retain up to fifteen percent (15%) of the annual federal incentive payments it receives from the federal government to enhance centralized child support services. To accomplish this requirement, NCCSS shall do the following:

(1)        In consultation with representatives from county child support services programs, identify how federal incentive funding could improve centralized services.

(2)        Use federal incentive funds to improve the effectiveness of the State's centralized child support services by supplementing and not supplanting State expenditures for those services.

(3)        Develop and implement rules that explain the State process for calculating and distributing federal incentive funding to county child support services programs.

SECTION 11C.6.(b)  County Child Support Services Programs. – NCCSS shall allocate no less than eighty‑five percent (85%) of the annual federal incentive payments it receives from the federal government to county child support services programs to improve effectiveness and efficiency using the federal performance measures. To that end, NCCSS shall do the following:

(1)        In consultation with representatives from county child support services programs, examine the current methodology for distributing federal incentive funding to the county programs and determine whether an alternative formula would be appropriate. NCCSS shall use its current formula for distributing federal incentive funding until an alternative formula is adopted.

(2)        Upon adopting an alternative formula, develop a process to phase in the alternative formula for distributing federal incentive funding over a four‑year period.

SECTION 11C.6.(c)  Reporting by County Child Support Services Programs. – NCCSS shall continue implementing guidelines that identify appropriate uses for federal incentive funding. To ensure those guidelines are properly followed, NCCSS shall require county child support services programs to comply with each of the following:

(1)        Submit an annual plan describing how federal incentive funding would improve program effectiveness and efficiency as a condition of receiving federal incentive funding.

(2)        Report annually on the following: (i) how federal incentive funding has improved program effectiveness and efficiency and been reinvested into their programs, (ii) provide documentation that the funds were spent according to their annual plans, and (iii) explain any deviations from their plans.

SECTION 11C.6.(d)  Reporting by NCCSS. – NCCSS shall submit a report on federal child support incentive funding to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1 of each year. The report shall describe how federal incentive funds enhanced centralized child support services to benefit county child support services programs and improved the effectiveness and efficiency of county child support services programs. The report shall further include any changes to the State process the NCCSS used in calculating and distributing federal incentive funding to county child support services programs and any recommendations for further changes.

 

Child Welfare System Changes

SECTION 11C.7.(a)  Federal Improvement Plan Implementation. – The Department of Health and Human Services, Division of Social Services, shall continue implementing the requirements of the federal Program Improvement Plan to bring our State into compliance with national standards for child welfare policy and practices. The Division shall collaborate with county departments of social services to develop a model of oversight that supports program outcomes and a county's ability to meet performance standards as outlined in the Program Improvement Plan. Oversight may include support for continuous quality improvement, staff training, and data analysis.

The Division shall report on the implementation and outcomes of the Program Improvement Plan to the Joint Legislative Oversight Committee on Health and Human Services. The report shall be submitted semiannually on February 1 and August 1 of each year, with a final report on February 1, 2019.

SECTION 11C.7.(b)  Child Welfare/NC FAST. – The Department of Health and Human Services, Division of Social Services, shall continue toward completion of the child welfare component of the North Carolina Families Accessing Services Through Technology (NC FAST) system to (i) bring the State into compliance with the Statewide Information System systematic factor of the Child and Family Services Review (CFSR) and (ii) ensure that data quality meets federal standards and adequate information is collected and available to counties to assist in tracking children and outcomes across counties.

It is the intent of the General Assembly that the child welfare component of the NC FAST system be operational by December 31, 2017. To that end, the Department of Health and Human Services, Division of Social Services, shall report on the development, implementation, and outcomes of the child welfare component of the NC FAST system to the Joint Legislative Oversight Committee on Health and Human Services quarterly through February 1, 2018. The report shall include, at a minimum, each of the following:

(1)        The current time line for development and implementation of the child welfare component to NC FAST.

(2)        Any adjustments and justifications for adjustments to the time line.

(3)        Progress on the development and implementation of the system.

(4)        Address any identified issues in developing or implementing the child welfare component to NC FAST and solutions to address those issues.

(5)        The level of county participation and involvement in each phase of the project.

(6)        Any budget and expenditure reports, including overall project budget and expenditures, and current fiscal year budget and expenditures.

 

Increase Access to Public Benefits for Older Dual Eligible Seniors

SECTION 11C.8.(a)  The Department of Health and Human Services, Division of Social Services (Division), shall continue implementing an evidence‑based pilot program to increase access to public benefits for seniors aged 65 and older who are dually enrolled in Medicare and Medicaid to (i) improve the health and independence of seniors and (ii) reduce health care costs. The Division shall continue to partner with a not‑for‑profit firm for the purposes of engaging in a data‑driven campaign to help seniors aged 65 and older who are dually enrolled in Medicare and Medicaid meet their basic social needs. The not‑for‑profit firm shall have demonstrated experience in assisting with these types of services and the partnership shall accomplish each of the following:

(1)        Identify, through data sharing, dual eligible seniors aged 65 and older who qualify for the Supplemental Nutrition and Assistance Program (SNAP) but are not currently enrolled.

(2)        Conduct an outreach program toward those seniors for the purpose of enrolling them into SNAP.

(3)        Provide comprehensive application assistance through outreach specialists to complete public benefits application processes.

(4)        Evaluate project effectiveness and explore how data can be utilized to achieve optimal outcomes.

(5)        Make recommendations regarding policy options available to the State to streamline access to benefits.

SECTION 11C.8.(b)  The Division shall report to the Office of the Governor and the Joint Legislative Oversight Committee on Health and Human Services on its progress in the pilot program by February 1 following each year the pilot program is in place. The report shall, at a minimum, include the following:

(1)        The number of seniors age 65 and older who are dual eligibles but are not enrolled in SNAP.

(2)        The number of those identified that would be included in the sample population.

(3)        Methods of outreach toward those seniors in the sample population.

(4)        Number of to date enrollments in SNAP as a direct result of outreach during the pilot program.

(5)        Participation rate to date in SNAP of those seniors in the sample population.

(6)        Any other findings the Division deems relevant.

SECTION 11C.8.(c)  Any nonrecurring funds remaining in the 2016‑2017 fiscal year from implementation of the pilot program under this section shall not revert, but shall remain available for continued implementation of the pilot program, along with any private or nonprofit funding provided to the Division for use in the pilot program. If funding and capacity exist, the Division of Social Services may expand the pilot program to include other public benefits programs.

 

Successful Transition/Foster Care Youth/Permanency Innovation Initiative Technical Change

SECTION 11C.9.(a)  There is created the Foster Care Transitional Living Initiative Fund to fund and support transitional living services that demonstrate positive outcomes for youth, attract significant private sector funding, and lead to the development of evidence‑based programs to serve the at‑risk population described in this section. The Fund shall support a demonstration project with services provided by Youth Villages to (i) improve outcomes for youth ages 17‑21 years who transition from foster care through implementation of outcome‑based Transitional Living Services, (ii) identify cost‑savings in social services and juvenile and adult correction services associated with the provision of Transitional Living Services to youth aging out of foster care, and (iii) take necessary steps to establish an evidence‑based transitional living program available to all youth aging out of foster care. In implementing these goals, the Foster Care Transitional Living Initiative Fund shall support the following strategies:

(1)        Transitional Living Services, which is an outcome‑based program that follows the Youth Villages Transitional Living Model. Outcomes on more than 7,000 participants have been tracked since the program's inception. The program has been evaluated through an independent Randomized Controlled Trial. Results indicate that Youth Villages Transitional Living Model had positive impacts in a variety of areas, including housing stability, earnings, economic hardship, mental health, and intimate partner violence in comparison to the control population.

(2)        Public‑Private Partnership, which is a commitment by private‑sector funding partners to match one hundred percent (100%) of the funds appropriated to the Foster Care Transitional Living Initiative Fund for the 2017‑2019 fiscal biennium for the purposes of providing Transitional Living Services through the Youth Villages Transitional Living Model to youth aging out of foster care.

(3)        Impact Measurement and Evaluation, which are services funded through private partners to provide independent measurement and evaluation of the impact the Youth Villages Transitional Living Model has on the youth served, the foster care system, and on other programs and services provided by the State which are utilized by former foster care youth.

(4)        Advancement of Evidence‑Based Process, which is the implementation and ongoing evaluation of the Youth Villages Transitional Living Model for the purposes of establishing the first evidence‑based transitional living program in the nation. To establish the evidence‑based program, additional randomized controlled trials may be conducted to advance the model.

SECTION 11C.9.(b)  G.S. 131D‑10.9A(c) reads as rewritten:

"(c)      Purpose and Powers. – The Committee shall:

(1)        Design and implement a data tracking methodology to collect and analyze information to gauge the success of the initiative established under this section as well as an initiativeany initiatives for foster care youth transitioning to adulthood in accordance with Part 3 of this Article.adulthood.

(2)        Develop a methodology to identify short‑ and long‑term cost‑savings in the provision of foster care and foster care transitional living services and any potential reinvestment strategies.

(3)        Oversee program implementation to ensure fidelity to the program models identified under subdivisions (1) and (2) of G.S. 131D‑10.9B(a) and under subdivisions (1) through (4) of G.S. 131D‑10.9G(a).G.S. 131D‑10.9B(a).

(4)        Study, review, and recommend other policies and services that may positively impact permanency, well‑being outcomes, and youth aging out of the foster care system."

 

Final Report/Eastern Band of Cherokee Indians Assumption of Services

SECTION 11C.10.(a)  The Department of Health and Human Services, Division of Social Services, shall submit a final report to the Joint Legislative Oversight Committee on Health and Human Services on the assumption of certain services by the Eastern Band of Cherokee Indians as implemented pursuant to Section 12C.10 of S.L. 2015‑241, as amended by Section 12C.2 of S.L. 2016‑94, when implementation is complete.

SECTION 11C.10.(b)  Section 12C.10(h) of S.L. 2015‑241 is repealed.

 

Eligibility Reform/Supplemental Nutrition Assistance Program (SNAP)

SECTION 11C.11.  G.S. 108A‑52 reads as rewritten:

"§ 108A‑52.  Determination of eligibility.eligibility; cooperation with child support program as a condition of eligibility; limitation on categorical eligibility.

(a)        Any person who believes that he or another person is eligible to receive electronic food and nutrition benefits may apply for such assistance to the county department of social services in the county in which the applicant resides. The application shall be made in such form and shall contain such information as the Social Services Commission may require. Upon receipt of an application for electronic food and nutrition benefits, the county department of social services shall make a prompt evaluation or investigation of the facts alleged in the application in order to determine the applicant's eligibility for such assistance and to obtain such other information as the Department may require. Upon the completion of such investigation, the county department of social services shall, within a reasonable period of time, determine eligibility.

(b)        The Department shall require applicants for electronic food and nutrition benefits to cooperate with the Child Support Enforcement Program in accordance with Article 9 of Chapter 110 of the General Statutes as a condition of eligibility for food and nutrition benefits pursuant to 7 C.F.R. § 273.11(o) and (p).

(c)        Notwithstanding any provision of law to the contrary, the Department shall not grant a person categorical eligibility under 7 U.S.C. § 2014(a) for the food and nutrition services program based on noncash, in‑kind, or other benefit unless expressly required by federal law."

 

Family and Child Protection and Accountability Act

 

REGIONAL SOCIAL SERVICES DEPARTMENTS; WORKING GROUP

SECTION 11C.12.(a)  Transition to Regional Social Services Departments. – The Department of Health and Human Services (Department) shall develop a plan for regional organization, administration, and governance of the social services system in North Carolina. The plan shall recommend a system of public authorities that includes no more than 30 regions and is operational no later than January 1, 2022. The plan will have the effect of transforming North Carolina's State‑supervised, county‑administered system into a State‑supervised, regionally administered system. It is essential that the plan reflect the interests of all stakeholders involved with the current system. The Department shall develop a preliminary plan and a final plan as follows:

(1)        Preliminary plan. – The Department shall prepare a preliminary plan that incorporates recommendations submitted to the Department by the Social Services Regionalization Working Group created under subsection (b) of this section. In developing the preliminary plan, the Department shall implement a process for soliciting stakeholder input on the plan. The Department shall submit the preliminary plan to the Joint Legislative Oversight Committee on Health and Human Services by January 15, 2019.

(2)        Final plan. – The Department shall revise the preliminary plan to incorporate changes based on information it receives from stakeholders. The Department's plan shall include a proposed time line for completing the transition to a regional social services system by January 1, 2022. The Department shall submit the Department's plan for consideration to the Joint Legislative Oversight Committee on Health and Human Services (Committee) by March 31, 2019. However, the Department shall not implement the final plan without an act by the General Assembly.

SECTION 11C.12.(b)  Social Services Regionalization Working Group. – The School of Government at the University of North Carolina at Chapel Hill (SOG) shall convene a Social Services Regionalization Working Group (Working Group) to make recommendations to the Department regarding the preliminary plan for regionalization.

SECTION 11C.12.(c)  Composition. – The Working Group shall consist of the following members:

(1)        Three members of the Senate appointed by the President Pro Tempore of the Senate, one of whom shall be designated as a cochair.

(2)        Three members of the House of Representatives appointed by the Speaker of the House of Representatives, one of whom shall be designated as a cochair.

(3)        Three representatives from the Department of Health and Human Services appointed by the Secretary of Health and Human Services or the Secretary's designee.

(4)        One designee of the Chief Justice of the North Carolina Supreme Court, appointed by the Chief Justice.

(5)        Four county commissioners representing the North Carolina Association of County Commissioners (NCACC), each of whom shall represent different regions of the State, appointed by the Director of the NCACC.

(6)        Two representatives from the North Carolina Association of County Directors of Social Services (NCACDSS), appointed by the Director of the NCACDSS.

(7)        One representative from the North Carolina Association of Social Services Attorneys (NCASSA), appointed by the Director of the NCASSA.

SECTION 11C.12.(d)  Ad Hoc Subcommittees. – The cochairs may, at their discretion, establish ad hoc subcommittees involving experts and representatives of stakeholder organizations to provide information and offer recommendations related to their areas of expertise and interest. Experts and organizations may include:

(1)        Social Services Commission.

(2)        North Carolina Association of County Boards of Social Services.

(3)        Guardian ad Litem program.

(4)        Office of Indigent Defense Services.

(5)        North Carolina Partnership for Children, Inc.

(6)        Disability Rights of North Carolina.

(7)        Benchmarks NC.

(8)        North Carolina Association of Local Health Directors.

(9)        North Carolina Council of Community Programs.

(10)      North Carolina Emergency Management Association.

(11)      North Carolina Child Support Council.

(12)      North Carolina Pediatric Society.

(13)      AARP North Carolina.

(14)      County commissioners representing jurisdictions that have diverse geographic, socioeconomic, and demographic characteristics.

(15)      Directors and administrators of consolidated human services agencies.

(16)      Other experts or stakeholders identified by the cochairs.

SECTION 11C.12.(e)  Duties. – The Working Group shall develop recommendations for the regionalization plan required by subsection (a) of this section. At a minimum, the recommendations shall:

(1)        Focus on the need to improve service delivery, enhance the quality of services provided, increase efficiency and accuracy, and promote uniformity of service availability and delivery across the State.

(2)        Specify the services a regional agency would be required and authorized to provide and the functions it would be required and authorized to perform.

(3)        Identify factors to consider when establishing the size of the regions, including (i) the need to ensure that the size of the region allows the region to maintain a direct, local connection with the jurisdictions it serves and (ii) the cultural differences and similarities between regions.

(4)        Propose a regional system that provides for centralized administrative operations that are geographically located in one county but preserves a physical presence for delivery of social services in every county served by the region.

(5)        Strive to align the new regions with both county borders and judicial districts in order to ensure seamless connections between child welfare, adult protective services, child support enforcement, and the judicial system.

(6)        Consider the implications of making the regional agencies public authorities, as defined in G.S. 159‑7(b)(10), and identify policy and administrative issues that would need to be addressed in legislation when creating the authorities.

(7)        Identify one or more options for maintaining county contributions to social services programs at appropriate levels to ensure adequate services are available throughout the region and each county in a region is financially accountable for the proportion of services provided in that county.

(8)        Propose a governance structure for the regional agencies that, at a minimum, requires a governing board, outlines the process for appointing board members, and requires at least one county commissioner from each county within the region to serve on a governing board.

(9)        Propose powers and duties of the governing board, which shall include the authority to hire and supervise the director of the regional agency.

(10)      Consider the leadership needs for the regional agencies, including the minimum qualifications for the agency director as well as the necessary powers and duties of the director.

(11)      Propose safeguards to ensure that the regional agencies maintain effective working relationships with the other human services agencies and stakeholders serving the same counties.

(12)      Consider the implications of having personnel of the regional agencies exempt from or subject to Chapter 126 of the General Statutes.

(13)      Consider the implications of regionalization of social services for counties that have established consolidated human services agencies pursuant to G.S. 153A‑77 and explore options for integrating regionalized administration into the framework of consolidated agencies, granting exemptions to regionalization for consolidated agencies, authorizing regional consolidated human services agencies, and reversing consolidations.

SECTION 11C.12.(f)  Report. – The Working Group shall submit an interim report to the Joint Legislative Oversight Committee on Health and Human Services (Committee) no later than June 30, 2018. After receiving the interim report, the Committee may terminate the Working Group if it concludes that the Working Group is not making sufficient progress. The Working Group shall submit a final report, including its recommendations in accordance with subsection (d) of this section, to the Committee and the Department of Health and Human Services by December 1, 2018.

SECTION 11C.12.(g)  Role of the School of Government. – The School of Government at the University of North Carolina at Chapel Hill shall assist the Working Group as follows:

(1)        Convene and facilitate meetings.

(2)        Provide necessary clerical and administrative support.

(3)        Prepare the Working Group's preliminary and final reports.

(4)        Provide technical assistance, as appropriate.

SECTION 11C.12.(h)  SOG Funds. – Of the funds appropriated in this act to the Department of Health and Human Services, the sum of forty‑eight thousand four hundred dollars ($48,400) for the 2017‑2018 fiscal year and the sum of twenty‑five thousand seven hundred dollars ($25,700) for the 2018‑2019 fiscal year shall be allocated to the School of Government at the University of North Carolina at Chapel Hill for its role in assisting in developing the regionalization plan under this section.

SECTION 11C.12.(i)  Working Group Funds. – Of the funds appropriated in this act to the Department of Health and Human Services, the sum of thirty‑eight thousand thirty‑nine dollars ($38,039) for the 2017‑2018 fiscal year and the sum of sixteen thousand three hundred three dollars ($16,303) for the 2018‑2019 fiscal year for reimbursement costs associated with duties of the Working Group.

 

REFORMING STATE SUPERVISION AND ACCOUNTABILITY OF THE STATE'S CHILD WELFARE SYSTEM

SECTION 11C.12.(j)  The Office of State Budget and Management, in consultation with the Department of Health and Human Services, shall develop and issue a request for proposal (RFP) no later than January 15, 2018, to contract with a third‑party organization to evaluate the State's child welfare system, develop a plan for reforming the system in order to improve outcomes for children and enhance State supervision of local administration, and provide ongoing evaluation and oversight of the agency's implementation of child welfare reform. In developing the implementation plan, the organization shall engage the services of national technical advisors with broad expertise and experience in implementing large‑scale, systemic child welfare reform. The organization, along with national technical advisors, shall undertake a comprehensive, diagnostic assessment of the State's child welfare system, including its points of contact with other child‑serving State systems, and develop a plan for reforming the system to include, at a minimum, the following child welfare activities:

(1)        Child Protective Services (CPS), including receiving reports and investigating allegations of child abuse, neglect, or dependency.

(2)        Preventive and in‑home services that provide struggling families with needed supports and treatment to prevent removal of the children from the home.

(3)        Child fatality oversight, including a review of the existing structure, communication, and effectiveness of the Community Child Protection Teams, the Child Fatality Prevention Team, and use of Citizen Review Panels. Oversight shall also include identification of systemic problems in the child welfare system that may increase risk of harm or death to a child and implementation of timely and appropriate systemic reforms following a child fatality.

(4)        Placement of children in foster care and other out‑of‑home settings.

(5)        Services provided to children, youth, and parents involved with child welfare to achieve reunification of families.

(6)        Efforts to achieve permanency for children either through reunification with family, legal guardianship or custody, or adoption.

(7)        Provision of health care, mental health, and educational services to children and families involved with the child welfare system.

(8)        Services provided to older youth in foster care and to those who have aged out of foster care.

SECTION 11C.12.(k)  In addition to the requirements under subsection (j) of this section, the child welfare reform plan shall propose critical changes, as needed, to the major structural components of the State's child welfare system, including each of the following:

(1)        Visioning and an overarching strategic direction for the Department of Health and Human Services, Division of Social Services.

(2)        Collection, analysis, and effective use of data.

(3)        Leadership and governance at the State level.

(4)        Changes necessary to ensure well‑trained and adequately compensated staff to improve performance and reduce turnover.

(5)        Practice and implementation, including:

a.         Ensuring a statewide, trauma‑informed, culturally competent, family‑centered practice framework.

b.         Incorporating more evidence‑based practices, including evidence‑informed prevention services designed to reduce the number of children entering foster care.

c.         Specifying expectations regarding professional development, training, and performance standards.

d.         Eliminating unnecessary barriers to licensing foster care and therapeutic foster care families to ensure an adequate supply of qualified families.

e.         Improving provider and foster parent feedback loops. For purposes of this sub‑subdivision, "feedback loops" refers to a situation in which a portion of the output of a situation is used for new input.

f.          Performing time use and salary surveys for Division of Social Services staff.

g.         Promoting relationship‑building across agencies and providers.

h.         Implementing family supports for adoptions, which includes (i) collecting data on the incidence of disrupted adoptions and unlawful transference of children in North Carolina, (ii) the outcomes for children and families associated with disrupted adoptions, and (iii) the provision of supports needed to assist families at risk of disruption in order to keep those families together.

i.          Maintaining sibling groups, in accordance with the "Fostering Connections to Success and Increasing Adoptions Act of 2008."

j.          Developing a statewide, standardized functional assessment to be used for case planning, service referrals, and enhancing executive‑level decision making around resource allocation and other system reform efforts.

(6)        Consistent, standardized continuous quality improvement (CQI) at the State and county levels.

(7)        Analysis and alignment of policies and procedures to support and accelerate system reform, focusing on sustainable change that will improve outcomes for children and families.

SECTION 11C.12.(l)  In developing the child welfare reform plan pursuant to this section, the organization shall do each of the following:

(1)        Ensure the plan complies with the requirements of the federal Child and Family Services Review Program Improvement Plan effective January 1, 2017.

(2)        Consult with the Social Service Regionalization Working Group on the development of the regionalization plan and offer recommendations appropriate to align the regionalization plan with the child welfare reform plan.

(3)        Review the program for corrective action under G.S. 108A‑74, as amended by subsection (p) of this section, and offer any recommendations necessary to align the corrective action program with the child welfare reform plan.

SECTION 11C.12.(m)  The child welfare system reform effort described in this section shall also include the creation of a Child Welfare System Transparency and Wellness Dashboard (Dashboard) that will collect data from the North Carolina Families Accessing Services through Technology (NC FAST) system. The Dashboard shall serve as a report card and include regular reports of the components described under subsection (k) of this section and be continuously updated to allow for monitoring by State leadership, staff and families involved in the child welfare system, and the general public to ensure maximum accountability and transparency and the effective and efficient use of child welfare services and funds. Specifically, the Dashboard shall address the data issues highlighted in the Child and Family Services Review (CFSR) and the North Carolina Statewide Child Protective Services Evaluation of the State's Child Protective Services system dated March 1, 2016, to ensure the provision of accurate federal reporting and improved case management, continuous quality improvement (CQI), and overall improved outcomes for children and families. The Division of Social Services shall post data from a department of social services' report card on the Division's Web site, and the data shall be updated to ensure accurate reporting. For purposes of this subsection, the term "Dashboard" means a standard set of performance and outcome metrics that indicate how effectively the child welfare system is working.

SECTION 11C.12.(n)  The following reporting and implementation requirements shall occur:

(1)        The Office of State Budget and Management (OSBM) shall report to the Joint Legislative Oversight Committee on Health and Human Services (Committee) upon hiring an organization to develop the child welfare reform plan pursuant to this section.

(2)        OSBM shall include in the contract clear direction that time is of the essence and failure to perform within the required time line constitutes breach of contract. OSBM shall also include a provision in the contract authorizing it to terminate the contract without financial penalty to the State if OSBM, in consultation with the Committee, determines that progress on development of the child welfare reform plan is unsatisfactory.

(3)        The organization shall submit a preliminary report to the Committee no later than 180 days after the contract is finalized. The preliminary report shall set forth the organization's vision for developing the child welfare reform plan. After that report is submitted, the organization shall submit bimonthly reports to the Committee on the progress of development and implementation of the child welfare reform plan.

(4)        The Department shall collaborate with the organization to implement the child welfare reform plan. The Department shall submit a report to the Committee no later than September 15, 2019. The report shall describe progress made on implementation to date, implementation plans and time lines for the subsequent 24 months, and a summary of significant challenges encountered during implementation.

(5)        The Department shall conduct a comprehensive review of every policy published by the Department related to child welfare. The Department shall revise existing policies and adopt new policies as necessary to align departmental guidance with the law as well as the systemic, policy, and practice changes resulting from both regionalization of the social services system and child welfare reform. The Department shall consult with agency attorneys and the School of Government at the University of North Carolina at Chapel Hill to confirm that each policy is authorized by statute or regulation. Prior to finalizing each policy, the Department shall provide the policy to the outside organization for review. The outside organization shall monitor the implementation of the policy review and revision process and submit bimonthly reports to the Committee beginning no later than September 15, 2019.

SECTION 11C.12.(o)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of three million one hundred thousand dollars ($3,100,000) in nonrecurring funds for the 2018‑2019 fiscal year shall be used for reforming State supervision and accountability of the State's child welfare system as provided in this section.

 

LOCAL DSS; CORRECTIVE ACTION

SECTION 11C.12.(p)  G.S. 108A‑74 reads as rewritten:

"§ 108A‑74.  County Local department failure to provide services; meet required standards in child welfare; corrective action; State intervention in or control of service delivery.

(a)        Notwithstanding any other provision of law to the contrary, the Secretary of Health and Human Services may take action in accordance with this section to ensure the delivery of child welfare services in accordance with State laws and applicable rules. As used in this section, the terms:following definitions shall apply:

(1)        "County department of social services" also means the Department of social services. – The department responsible for administration of the social services and public assistance programs in a county. It includes a county department of social services, a consolidated human services agency, or a regional social services department, whichever applies;applies.

(2)        "County director of social services" also means the Director of social services. – The person responsible for managing and administering the department of social services, including a county social services director, a regional social services director, or a human services director, whichever applies; andapplies.

(3)        "County board of social services" also means the Board of social services. – The governing body responsible for oversight of the department of social services, including a regional board of social services, a consolidated human services board, or a board of county commissioners that has assumed the powers and duties of a social services governing board pursuant to G.S. 153A‑77(a), whichever applies.

(4)        Child welfare program. – Protective services related to juveniles alleged to be abused, neglected, or dependent as required by Chapter 7B of the General Statutes.

(a1)      The Secretary shall develop a standard set of performance and outcome metrics for child welfare services. Departments of social services shall satisfy mandated performance requirements that are based on those metrics.

(a2)      If a department of social services fails to meet the performance requirements for three consecutive months or for five months within any consecutive 12‑month period, the Secretary and the department of social services shall enter into a joint corrective action plan within 60 working days. The plan shall specifically identify each of the following components:

(1)        The duration of the joint corrective action plan, not to exceed 12 months. If the Secretary determines that the department of social services has not shown measurable progress within six months, the Secretary may summarily conclude that the department of social services has failed to successfully complete a joint corrective plan and may proceed with steps necessary to temporarily assume administrative responsibilities of the department of social services. If the Secretary determines the department of social services has shown measurable progress within six months, the Secretary may extend the joint corrective action plan by six months, but in no case shall a joint corrective action plan exceed 18 months.

(2)        The performance requirements for the department of social services that constitute successful completion of the joint corrective action plan.

(3)        An acknowledgement that failure to successfully complete the joint corrective action plan shall result in temporary assumption of all or part of the department of social services' child welfare program administration.

(b)        If the Secretary of Health and Human Services determines that a county department of social services is not providing child protective services, foster care services, or adoption services in accordance with State law and with applicable rules adopted by the Social Services Commission, or fails to demonstrate reasonable efforts to do so, has failed to successfully complete the joint corrective action plan, then the Secretary, after providing written notification of intent to the county director of social services, to the chair of the county board of commissioners, and to the chair of the county board of social services, and after providing them with an opportunity to be heard, may intervene in the particular service or services in question. Intervention includes, but is not limited to, the following activities:Secretary shall give the board of county commissioners, the department of social services, the county manager, and the board of social services at least 30 days' notice that the Secretary intends to temporarily assume all or part of the department's child welfare program administration in accordance with subsection (c) of this section. In a regional department of social services, notice shall be provided to boards of county commissioners and county managers for all counties served by the region.

(1)        Sending staff of the Department of Health and Human Services to the county department of social services to provide technical assistance and to monitor the services being provided;

(2)        Establishing a corrective plan of action to correct inappropriate policies and procedures; and

(3)        Advising county personnel as to appropriate policies and procedures.

If within 60 days of completion of the intervention activities, the Secretary finds that the county department of social services is not providing in accordance with State laws and applicable rules the particular service or services for which intervention was initiated, or has not demonstrated reasonable efforts to do so, the Secretary shall withhold State and federal child welfare services administrative funds until the particular service or services are provided in accordance with State laws and applicable rules.

(c)        If the Secretary determines that a county department of social services is not providing child protective, foster care, or adoption services in accordance with State law and with applicable rules adopted by the Social Services Commission, or fails to demonstrate reasonable efforts to do so, and the failure to provide the services poses a substantial threat to the safety and welfare of children in the county who receive or are eligible to receive the services, then the Secretary, after providing written notification of intent to the chair of the county board of commissioners, to the chair of the county board of social services, and to the county director of social services, and after providing them with an opportunity to be heard, shall withhold funding for the particular service or services in question and shall ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of Health and Human Services.Notwithstanding any provision of law to the contrary, if a department of social services fails to successfully complete its joint corrective action plan, the Secretary shall, within 30 calendar days, temporarily assume all or part of the department's child welfare program administration upon giving notice as required by subsection (b) of this section. During the period the Secretary assumes administration of the child welfare program, the following shall occur:

(1)        The Secretary shall administer the child welfare program in a county or region. Administration by the Secretary may include direct operation by the Department, including supervision of child welfare program staff or contracts for operation, to the extent permitted by federal law.

(2)        The department of social services shall be divested of administrative authority for any component of the child welfare program the Secretary assumes.

(3)        The director of social services shall be divested of all service delivery powers conferred upon the director by G.S. 108A‑14 and other applicable State law as it pertains to the services in question. The Secretary may assign any of the powers and duties of the director of social services to the Director of the Division of Social Services of the Department or a contractor, as the Secretary deems necessary and appropriate to continue the provision of services in the county. If the director delegates any authority to staff pursuant to G.S. 108A‑14(b), delegated authority shall remain in effect until the Secretary, or the Secretary's designee, specifically revokes the delegation.

(4)        The Secretary shall direct and oversee the expenditure of all funding for the administration of the components of the child welfare program assumed by the Secretary.

(5)        The department of social services shall not withdraw funds previously obligated or appropriated for child welfare program administration and services. The department of social services shall continue to pay the county or region's nonfederal share for the child welfare program services and administration.

(6)        The Secretary shall work with the department of social services to develop a plan for the department to resume child welfare program administration.

(7)        The Secretary shall inform the appropriate board or boards of county commissioners, the county manager or managers, the director of social services, and the board of social services of key activities and ongoing concerns during the temporary assumption of child welfare administration.

(c1)      Upon the Secretary's determination that the department of social services is able to meet performance requirements for child welfare programs and that program administration responsibilities should be restored to the department of social services, the Secretary shall notify the board of county commissioners, the department of social services, the county manager, and the board of social services that the temporary assumption of child welfare program administration will be terminated and the effective date of the termination. Upon termination, the department of social services shall resume its full authority to administer the child welfare program.

(d)       In the event that the Secretary assumes control of service delivery pursuant to subsection (c) of this section, the county director of social services shall be divested of all service delivery powers conferred upon the director by G.S. 108A‑14 and other applicable State law as the powers pertain to the services in question. Upon assumption of control of service delivery, the Secretary may assign any of the powers and duties of the county director of social services to the Director of the Division of Social Services of the Department of Health and Human Services or to a contractor as the Secretary deems necessary and appropriate to continue the provision of the services in the county.

(e)        In the event the Secretary takes action under this section, the Department of Health and Human Services shall, in conjunction with the county board of commissioners, the county board of social services, and the county director of social services develop and implement a corrective plan of action. The Department of Health and Human Services shall also keep the chair of the county board of commissioners, the chair of the county board of social services, and the county director of social services informed of any ongoing concerns or problems with the delivery of the services in question.

(f)        Upon the Secretary taking action pursuant to subsection (c) of this section, county funding of the services in question shall continue and at no time during the period of time that the Secretary is taking action shall a county withdraw funds previously obligated or appropriated for the services. Upon the Secretary's assumption of the control of service delivery, the county shall also pay the nonfederal share of any additional cost that may be incurred to operate the services in question at the level necessary to comply fully with State law and Social Services Commission rules.

(g)        During the period of time that the Secretary is taking action pursuant to subsection (c) of this section, the Department of Health and Human Services shall work with the county board of commissioners, the county board of social services, and the county director of social services, to enable service delivery to be returned to the county if and when the Secretary has determined that services can be provided by the county in accordance with State law and applicable rules."

SECTION 11C.12.(q)  Subsection (p) of this section becomes effective six months after all 100 counties in the State have implemented the child welfare component to the North Carolina Families Accessing Services through Technology (NC FAST) system.

 

CHILD WELL‑BEING TRANSFORMATION COUNCIL

SECTION 11C.12.(r)  Chapter 143 of the General Statutes is amended by adding a new Article to read:

"Article 82.

"Child Well‑Being Transformation Council.

"§ 143‑775.  Child Well‑Being Transformation Council established; membership; qualifications; vacancies.

(a)        Purpose; Findings. – The welfare of North Carolina's children is a priority. There are many public and private agencies and organizations across the State that are involved with promoting the welfare of children and protecting them from harm, such as those involving child care, schools, health care providers, social services agencies, and juvenile justice programs. Though these agencies and organizations provide important services, they often fail to collaborate, coordinate, and communicate about those services. A more systematic and coordinated approach to services will help ensure that the State achieves the best possible outcomes for children. Therefore, the General Assembly finds that it is essential that a single body serve as a means for coordination, collaboration, and communication among agencies and organizations involved in providing public services to children.

(b)        Creation and Membership. – There is established the North Carolina Child Well‑Being Transformation Council (Council). The Council shall be located administratively in the General Assembly. The Council shall consist of 17 members serving staggered terms. In making appointments, each appointing authority shall select members who have appropriate experience and knowledge of the issues to be examined by the Council and shall strive to ensure members are appointed who represent the geographical, political, gender, and racial diversity of this State. The initial Council members shall be appointed on or after July 1, 2018, as follows:

(1)        Four members shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate. Of the members appointed under this subdivision, one shall be a member of the Senate who shall serve for a term of two years, one shall be a representative from the Administrative Office of the Courts who shall serve for a term of three years, one shall be a representative from a child welfare private provider organization who shall serve for a term of two years, and one shall be a representative from the North Carolina Pediatric Society who shall serve a one‑year term.

(2)        Four members shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives. Of the members appointed under this subdivision, one shall be a member of the House of Representatives who shall serve for a term of two years, one shall be a representative from the Department of Public Instruction who shall serve for a term of three years, one shall be a representative from Indigent Defense Services who shall serve for a term of two years, and one shall be a representative of the Hospital Association who shall serve a one‑year term.

(3)        Nine members shall be appointed by the Governor. Of the members appointed under this subdivision, one shall be a representative from the Department of Health and Human Services, Division of Child Development and Early Education, who shall serve for a term of three years, one shall be a representative from the Department of Health and Human Services, Division of Social Services, who shall serve for a term of three years, one shall be a representative from the Department of Public Safety, Division of Juvenile Justice, who shall serve for a term of two years, one shall be a representative from the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, who shall serve for a term of three years, one shall be a representative from the Guardian ad Litem program who shall serve a term of two years, one shall be a representative from Disability Rights NC who shall serve a one‑year term, one shall be a representative from a local management entity/managed care organization (LME/MCO) who shall serve a one‑year term, one shall be a representative from the Department of Health and Human Services, Division of Public Health, with expertise in substance abuse disorders who shall serve for a term of two years, and one shall be a director of a county department of social services who shall serve a one‑year term.

(c)        Terms; Vacancies. – Upon the expiration of the terms of the initial Council members, each member shall be appointed for a term of four years and shall serve until a successor is appointed. No member may serve more than two consecutive full terms. A vacancy shall be filled within 30 days by the authority making the initial appointment.

(d)       Organization. – The Council shall elect from its membership a chair and vice‑chair to each serve one‑year terms. The Council shall meet on a quarterly basis each year upon the call of the chair. A quorum of the Council is nine members. No action may be taken except by a majority vote at a meeting at which a quorum is present. The Open Meetings Law pursuant to Article 33C of Chapter 143 of the General Statutes and the Public Records Act under Chapter 132 of the General Statutes shall apply to the Council.

(e)        Funding. – From funds available to the General Assembly, the Legislative Services Commission shall allocate monies to fund the work of the Committee. Members of the Committee shall receive subsistence and travel expenses as provided in G.S. 120‑3.1 and G.S. 138‑5.

(f)        Staff. – The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Council in its work. Upon the direction of the Legislative Services Commission, the Director of Legislative Assistants of the Senate and of the House of Representatives shall assign clerical staff to the Council. The expenses for clerical employees shall be borne by the Council.

"§ 143‑776.  Powers and duties.

(a)        Upon its establishment, the Council shall direct its initial focus on the following initiatives:

(1)        Mapping the network of child‑serving agencies and organizations in the State.

(2)        Cataloging examples of failures in coordination, collaboration, and communication in the context of child protective services.

(3)        Reviewing the work of bodies similar to the Council operating in other states to identify promising practices and focus areas for the Council's work.

(b)        Beginning July 1, 2020, the Council shall focus on promoting coordination, collaboration, and communication of child‑serving agencies involved with the child protective services system. In addition, the Council shall do the following:

(1)        Monitor the process of regionalization.

(2)        Monitor the process of child welfare reform.

(3)        Recommend changes in law, policy, or practice necessary to remedy gaps in coordination, collaboration, and communication between the new regional social services departments and other agencies and organizations involved with the same populations.

(c)        By 2022, and thereafter, the Council shall expand the scope of its work to encompass evaluation of child‑centered programs and services beyond the child protective services system. The Council shall take appropriate steps to identify gaps in coordination, collaboration, and communication and recommend changes in law, policy, or practice necessary to remedy remaining gaps. The Council's authority extends to any publicly funded program that serves children.

(d)       The Council shall submit a report to the chairs of the Senate Appropriations Committee on Health and Human Services, the chairs of the House of Representatives Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division by June 30 of each year. The report shall include a summary of the Council's work for the previous year, any findings and recommendations for change, and a work plan for the upcoming year.

(e)        The Council is authorized to accept gifts or grants from other sources to support administration of the Council."

SECTION 11C.12.(s)  Of the funds appropriated in this act to the Department of Health and Human Services, the sum of twelve thousand six hundred ninety‑two dollars ($12,692) in nonrecurring funds for the 2018‑2019 fiscal year shall be allocated to the Legislative Services Commission for purposes of assisting the Child Well‑Being Transformation Council established pursuant to subsection (r) of this section.

 

DRIVERS LICENSE PILOT PROJECT

SECTION 11C.12.(t)  The General Assembly recognizes that not having a drivers license is a barrier to education, employment, health care, and other community‑based activities for older youth in foster care, as defined in G.S. 131D‑10.2(9), working toward independence. One of the biggest barriers to accessing a drivers license for such youth is the ability to obtain insurance. Therefore, to assist in this effort, the Department of Health and Human Services, Division of Social Services, shall establish a two‑year pilot program that shall reimburse, on a first‑come, first‑served basis, youth and caregivers' costs associated with drivers license education, drivers license fees, insurance costs, and any other costs associated with obtaining a drivers license. The Division shall take appropriate steps to ensure proper advertising of the pilot program.

The Division of Social Services shall report on the pilot project to the Joint Legislative Oversight Committee on Health and Human Services by March 1, 2018.

SECTION 11C.12.(u)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of seventy‑five thousand dollars ($75,000) for the 2017‑2018 fiscal year and the sum of seventy‑five thousand dollars ($75,000) for the 2018‑2019 fiscal year shall be used to conduct the pilot project established pursuant to subsection (t) of this section.

 

PILOT WAIVER FOR IAFT FOSTER PARENTS

SECTION 11C.12.(v)  The General Assembly has determined that in an effort to maximize funding, local management entities/managed care organizations (LME/MCOs) are utilizing Intensive Alternative Family Treatment (IAFT), which is a means of cost‑effective, specialized foster care treatment service that is being used for many youth who would have previously been treated in Medicaid congregate care, such as psychiatric residential treatment facilities. The General Assembly finds that these higher‑need youth are often (i) suspended or expelled from school or day programs and (ii) require multiple appointments on a weekly basis to address needs, such as therapy, medication management, and school individual education plans (IEPs). Further, in accordance with rules, foster parents are required to maintain outside employment while providing foster care, but the constant demands of meeting the needs of these foster youth often lead to disruption in placement as the foster parent is unable to meet those needs while maintaining the parent's employment obligations.

SECTION 11C.12.(w)  To that end, the Department of Health and Human Services, Division of Social Services (Division), shall establish a pilot program that will allow the Division to waive the employment requirement for foster parents with children utilizing the Intensive Alternative Family Treatment (IAFT). The Division shall solicit participation in the pilot program from interested local management entities/managed care organizations (LME/MCOs). The participating LME/MCOs shall conduct comparison measures between existing IAFT outcomes and those of pilots to determine any impact the waiver may have on outside employment. LME/MCOs shall measure progress of the pilot waivers based on the expectation of meeting the following outcomes:

(1)        Improved placement stability with less than twenty percent (20%) of moves of youth occurring due to therapeutic foster parent request.

(2)        Seventy‑five percent (75%) of youth and families meeting their treatment goals within the projected time frame.

(3)        No more than a ten percent (10%) increase in higher‑level hospital bed days.

SECTION 11C.12.(x)  LME/MCOs participating in the IAFT pilot waiver program shall provide a report on the outcomes of the pilots, along with any recommendations, to the Division. The Division shall then submit a report on the pilot waiver program to the Joint Legislative Oversight Committee on Health and Human Services by December 1, 2018.

 

TERMINATION OF PARENTAL RIGHTS/APPEALS

SECTION 11C.12.(y)  G.S. 7B‑1001, as amended by Section 4 of S.L. 2017‑7, reads as rewritten:

"§ 7B‑1001.  Right to appeal.

(a)        In a juvenile matter under this Subchapter, appeal of a final order of the court in a juvenile matter shall be made directly to the Court of Appeals unless otherwise specified.Appeals. Only the following juvenile matters may be appealed:

(5)        An order entered under G.S. 7B‑906.2(b) with rights to appeal properly preserved, as follows:

a.         The Court of Appeals shall review the order eliminating reunification as a permanent plan if all of the following apply:

1.         A motion or petition to terminate the parent's rights is heard and granted.

2.         The order terminating parental rights is appealed in a proper and timely manner.

3.         The order eliminating reunification as a permanent plan is identified as an issue in the record on appeal of the termination of parental rights.

b.         A party who is a parent shall have the right to appeal the order if no termination of parental rights petition or motion is filed within 180 days of the order.

c.         A party who is a custodian or guardian shall have the right to immediately appeal the order.

An order entered under G.S. 7B‑906.2(b) eliminating reunification, as defined by G.S. 7B‑101(18b), as a permanent plan by either of the following:

a.         A parent who is a party and:

1.         Has preserved the right to appeal the order in writing within 30 days after entry and service of the order.

2.         A termination of parental rights petition or motion has not been filed within 65 days of entry and service of the order.

3.         A notice of appeal of the order eliminating reunification is filed within 30 days after entry and service of the expiration of the 65 days.

b.         A party who is a guardian or custodian with whom reunification is not a permanent plan.

(6)        Any order that terminates parental rights or denies a petition or motion to terminate parental rights shall be made directly to the Supreme Court.

(a1)      In a juvenile matter under this Subchapter, appeal of a final order of the court shall be made directly to the Supreme Court in the following juvenile matters:

(1)        Any order that terminates parental rights or denies a petition or motion to terminate parental rights.

(2)        An order eliminating reunification as a permanent plan under G.S. 7B‑906.2(b), if all of the following conditions are satisfied:

a.         The right to appeal the order eliminating reunification has been preserved in writing within 30 days of entry and service of the order.

b.         A motion or petition to terminate the parent's rights is filed within 65 days of entry and service of the order eliminating reunification and both of the following occur:

1.         The motion or petition to terminate rights is heard and granted.

2.         The order terminating parental rights is appealed in a proper and timely manner.

c.         A separate notice of appeal of the order eliminating reunification is filed within 30 days after entry and service of a termination of parental rights order.

(a2)      In an appeal filed pursuant to subdivision (a1)(2) of this section, the Supreme Court shall review the order eliminating reunification together with an appeal of the order terminating parental rights. If the order eliminating reunification is vacated or reversed, the order terminating parental rights shall be vacated.

(b)        Notice of appeal and notice to preserve the right to appeal shall be given in writing by a proper party as defined in G.S. 7B‑1002 and shall be made within 30 days after entry and service of the order in accordance with G.S. 1A‑1, Rule 58.

(c)        Notice of appeal shall be signed by both the appealing party and counsel for the appealing party, if any. In the case of an appeal by a juvenile, notice of appeal shall be signed by the guardian ad litem attorney advocate."

 

TIME FRAME FOR LICENSURE APPROVAL/FOSTER CARE

SECTION 11C.12.(z)  G.S. 131D‑10.3 is amended by adding a new subsection to read:

"§ 131D‑10.3.  Licensure required.

(d1)     Notwithstanding any other provision of law, the Department shall grant or deny a license to provide foster care or therapeutic foster care within three months from the date of application.

…."

SECTION 11C.12.(aa)  The Department of Health and Human Services, Division of Social Services, shall further examine the existing time frames for processing foster care and therapeutic foster care applications and determine methods to further reduce the time frames for approving or denying applications for licensure.

 

Temporary Financial Assistance for Facilities Licensed to Accept State‑County Special Assistance

SECTION 11C.13.(a)  The following definitions apply in this section:

(1)        Facility licensed to accept State‑County Special Assistance payments or facility. – Any residential care facility that is (i) licensed by the Department of Health and Human Services and (ii) authorized to accept State‑County Special Assistance payments from its residents.

(2)        State‑County Special Assistance. – The program authorized by G.S. 108A‑40.

SECTION 11C.13.(b)  Nonrecurring funds appropriated in this act to the Department of Health and Human Services, Division of Social Services (DSS), for each year of the 2017‑2019 fiscal biennium for facilities licensed to accept State‑County Special Assistance payments shall be used to provide temporary financial assistance in the form of a monthly payment to these facilities on behalf of each resident who is a recipient of State‑County Special Assistance. The counties shall pay to the State fifty percent (50%) of the cost of providing these monthly payments to these facilities. The monthly payments provided by DSS to these facilities shall be subject to all of the following requirements and limitations:

(1)        The amount of the monthly payments authorized by this section is equal to thirty‑four dollars ($34.00) per month for each resident of the facility as of the first day of the month who is a recipient of State‑County Special Assistance.

(2)        A facility that receives the monthly payments authorized by this section shall not, under any circumstances, use these payments for any purpose other than to offset the cost of serving residents who are recipients of State‑County Special Assistance.

(3)        The DSS shall make monthly payments authorized by this section to a facility on behalf of a resident only for the period commencing July 1, 2017, and ending June 30, 2019.

(4)        The DSS shall make monthly payments authorized by this section only to the extent sufficient State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal biennium are available for this purpose.

(5)        The DSS shall not make monthly payments authorized by this section to a facility on behalf of a resident whose eligibility determination for State‑County Special Assistance is pending.

(6)        The DSS shall terminate all monthly payments pursuant to this section on the earlier of the following:

a.         June 30, 2019.

b.         Upon depletion of the State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal year for this purpose.

SECTION 11C.13.(c)  Notwithstanding any provision of this act or any other provision of law to the contrary, the DSS shall not be required to provide any temporary financial assistance to facilities beyond June 30, 2019, or upon depletion of the State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal biennium for this purpose, whichever is earlier.

SECTION 11C.13.(d)  If possible, the DSS shall use an existing mechanism to administer these funds in the least restrictive manner that ensures compliance with this section and timely and accurate payments to facilities. The DSS shall not, under any circumstances, use any portion of the State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal biennium for the purpose of this section for any other purpose.

SECTION 11C.13.(e)  Nothing in this section shall be construed as an obligation by the General Assembly to appropriate funds for the purpose of this section, or as an entitlement by any facility, resident of a facility, or other person to receive temporary financial assistance under this section.

SECTION 11C.13.(f)  Of the funds appropriated in this act to the DSS for each year of the 2017‑2019 fiscal biennium for facilities licensed to accept State‑County Special Assistance payments, the DSS shall not use more than two hundred fifty thousand dollars ($250,000) in nonrecurring funds for each year of the 2017‑2019 fiscal biennium for administrative purposes.

SECTION 11C.13.(g)  This section expires on June 30, 2019.

 

SUBPART XI‑D. DIVISION OF AGING AND ADULT SERVICES

 

State‑County Special Assistance

SECTION 11D.1.(a)  For each year of the 2017‑2019 fiscal biennium, the maximum monthly rate for residents in adult care home facilities shall be one thousand one hundred eighty‑two dollars ($1,182) per month per resident.

SECTION 11D.1.(b)  For each year of the 2017‑2019 fiscal biennium, the maximum monthly rate for residents in Alzheimer's/Dementia special care units shall be one thousand five hundred fifteen dollars ($1,515) per month per resident.

 

Alignment of State & Federal Aging Plan Reporting Deadlines

SECTION 11D.2.  G.S. 143B‑181.1A reads as rewritten:

"§ 143B‑181.1A.  Plan for serving older adults; inventory of existing data; cooperation by State agencies.

(a)        The Division of Aging,Aging and Adult Services of the Department of Health and Human Services shall submit a regularly updated plan to the General Assembly by March 1July 1 of every other odd‑numbered year, beginning March 1, 1995. This plan shall include:

(1)        A detailed analysis of the needs of older adults in North Carolina, based on existing available data, including demographic, geographic, health, social, economical,economic, and other pertinent indicators;indicators.

(2)        A clear statement of the goals of the State's long‑term public policy on aging;aging.

(3)        An analysis of services currently provided and an analysis of additional services needed; andneeded.

(4)        Specific implementation recommendations on expansion and funding of current and additional services and services service levels.

(b)        The Division of Aging,Aging and Adult Services of the Department of Health and Human Services,Services shall maintain an inventory of existing data sets regarding the elderly in North Carolina, in order to ensure that adequate demographic, geographic, health, social, economic, and other pertinent indicators are available to generate its regularly updated Plan for Serving Older Adults.

Upon request, the Division of Aging and Adult Services shall make information on these data sets available within a reasonable time.

All State agencies and entities that possess data relating to the elderly, including the Department of Health and Human Services' Division of Health Services, the Division of Administration and the Divisions of Public Health, Health Service Regulation, and the Division of Social Services, and the Department of Administration,Social Services of the Department of Health and Human Services, shall cooperate, upon request, with the Division of Aging and Adult Services in implementing this subsection."

 

SUBPART XI‑E. DIVISION OF PUBLIC HEALTH

 

Funds for School Nurses

SECTION 11E.1.  Part 1 of Article 1 of Chapter 130A of the General Statutes is amended by adding a new section to read:

"§ 130A‑4.3.  State funds for school nurses.

(a)        The Department shall use State funds appropriated for the School Nurse Funding Initiative to supplement and not supplant other State, local, or federal funds appropriated or allocated for this purpose. The Department shall ensure that communities maintain their current level of effort and funding for school nurses. These funds shall not be used to fund nurses for State agencies. These funds shall be distributed to local health departments according to a formula that includes all of the following:

(1)        School nurse‑to‑student ratio.

(2)        Percentage of students eligible for free or reduced‑price meals.

(3)        Percentage of children in poverty.

(4)        Per capita income.

(5)        Eligibility as a low‑wealth county.

(6)        Mortality rates for children between one and 19 years of age.

(7)        Percentage of students with chronic illnesses.

(8)        Percentage of county population consisting of minority persons.

(b)        The Division of Public Health shall ensure that school nurses funded with State funds (i) do not assist in any instructional or administrative duties associated with a school's curriculum and (ii) perform all of the following with respect to school health programs:

(1)        Serve as the coordinator of the health services program and provide nursing care.

(2)        Provide health education to students, staff, and parents.

(3)        Identify health and safety concerns in the school environment and promote a nurturing school environment.

(4)        Support healthy food services programs.

(5)        Promote healthy physical education, sports policies, and practices.

(6)        Provide health counseling, assess mental health needs, provide interventions, and refer students to appropriate school staff or community agencies.

(7)        Promote community involvement in assuring a healthy school and serve as school liaison to a health advisory committee.

(8)        Provide health education and counseling and promote healthy activities and a healthy environment for school staff.

(9)        Be available to assist the county health department during a public health emergency."

 

Strategies for Addressing Structural Budget Deficit in State Laboratory of Public Health

SECTION 11E.2.(a)  By March 1, 2018, the Department of Health and Human Services, Division of Public Health, shall review the current fee schedule for medical and environmental services provided by the State Laboratory of Public Health (SLPH) and report any recommended strategies for addressing its structural budget deficit. The report must include at least all of the following:

(1)        Recommendations on all of the following:

a.         Any service the SLPH currently provides at no cost for which it should begin charging a fee, along with recommendations for the amount of each new fee sufficient to cover both the direct and indirect costs of the service.

b.         Implementation of a billing system for services provided by the SLPH.

c.         Strategies to improve billing accuracy in order to increase the SLPH's Medicaid reimbursement rate.

d.         The feasibility of modifying the Medicaid State Plan to allow the SLPH to engage in cost settlement, similar to the approaches used by local health departments.

(2)        Identification of measures to ensure that local health departments collect and report all data needed to ensure accurate and timely billing of SLPH services.

(3)        Proposals on alternative funding options to support the operating costs of the SLPH.

SECTION 11E.2.(b)  This section is effective when this act becomes law.

 

Local Health Departments/Competitive Grant Process to Improve Maternal AND Child Health

SECTION 11E.3.(a)  Funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, for each year of the 2017‑2019 fiscal biennium to award competitive grants to local health departments for the improvement of maternal and child health shall be used to continue administering a competitive grant process for local health departments based on maternal and infant health indicators and the county's detailed proposal to invest in evidence‑based programs to achieve the following goals:

(1)        Improve North Carolina's birth outcomes.

(2)        Improve the overall health status of children in this State from birth to age five.

(3)        Lower the State's infant mortality rate.

SECTION 11E.3.(b)  The plan for administering the competitive grant process shall include at least all of the following components:

(1)        A request for application (RFA) process to allow local health departments to apply for and receive State funds on a competitive basis. The Department shall require local health departments to include in the application a plan to evaluate the effectiveness, including measurable impact or outcomes, of the activities, services, and programs for which the funds are being requested.

(2)        A requirement that the Secretary prioritize grant awards to those local health departments that are able to leverage non‑State funds in addition to the grant award.

(3)        Ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for maternal and child health initiatives.

(4)        Allows grants to be awarded to local health departments for up to two years.

SECTION 11E.3.(c)  No later than July 1 of each year, as applicable, the Secretary shall announce the recipients of the competitive grant awards and allocate funds to the grant recipients for the respective grant period pursuant to the amounts designated under subsection (a) of this section. After awards have been granted, the Secretary shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services on the grant awards that includes at least all of the following:

(1)        The identity and a brief description of each grantee and each program or initiative offered by the grantee.

(2)        The amount of funding awarded to each grantee.

(3)        The number of persons served by each grantee, broken down by program or initiative.

SECTION 11E.3.(d)  No later than December 1 of each fiscal year, each local health department receiving funding pursuant to this section in the respective fiscal year shall submit to the Division of Central Management and Support a written report of all activities funded by State appropriations. The report shall include the following information about the fiscal year preceding the year in which the report is due:

(1)        A description of the types of programs, services, and activities funded by State appropriations.

(2)        Statistical and demographical information on the number of persons served by these programs, services, and activities, including the counties in which services are provided.

(3)        Outcome measures that demonstrate the impact and effectiveness of the programs, services, and activities based on the evaluation protocols developed by the Division, in collaboration with the University of North Carolina Gillings School of Global Public Health, pursuant to Section 12E.11(e) of S.L. 2015‑241, and reported to the Joint Legislative Oversight Committee on Health and Human Services on April 1, 2016.

(4)        A detailed program budget and list of expenditures, including all positions funded, matching expenditures, and funding sources.

 

Limitation on Use of State Funds

SECTION 11E.4.  Of the funds appropriated in this act to the Department of Health and Human Services for the 2017‑2019 fiscal biennium, no State funds shall be allocated to any provider that performs abortions. This section shall not be construed to prevent the Department from paying any State Health Plan provider or Medicaid provider for services authorized under the State Health Plan or the State Medicaid Program.

 

Evidence‑Based Diabetes Prevention Program to Eliminate Health Disparities

SECTION 11E.5.(a)  The Department of Health and Human Services, Division of Public Health, Office of Minority Health, shall continue to administer, in consultation with the Chronic Disease and Injury Prevention Section, an evidence‑based Diabetes Prevention Program modeled after the program recommended by the National Institute of Diabetes and Digestive and Kidney Diseases, targeting minority populations.

SECTION 11E.5.(b)  By December 1, 2017, and annually thereafter, the Department of Health and Human Services shall report to the Joint Legislative Oversight Committee on Health and Human Services on the status, participant demographics, cost, and outcomes of the Diabetes Prevention Program authorized by subsection (a) of this section.

 

Implement the Federal Elevated Blood Level Standard in North Carolina

SECTION 11E.6.(a)  It is the intent of the State to protect young children from being exposed to high levels of lead that can cause substantial harm to their normal neurological development and to ensure important intervention services, including required remediation of lead hazards, will be provided to children whose health is threatened by lead exposure.

SECTION 11E.6.(b)  G.S. 130A‑131.7 reads as rewritten:

"§ 130A‑131.7.  Definitions.

The following definitions apply in this Part:

(3)        "Confirmed lead poisoning" means a blood lead concentration of 20 10 micrograms per deciliter or greater determined by the lower of two consecutive blood tests within a six‑month12‑month period.

(5)        "Elevated blood lead level" means a blood lead concentration of 10 five micrograms per deciliter or greater determined by the lower of two consecutive blood tests within a six‑month12‑month period.

…."

SECTION 11E.6.(c)  G.S. 130A‑131.9C(a) reads as rewritten:

"(a)      Upon determination that a child less than six years of age has a confirmed lead poisoning of 20 10 micrograms per deciliter or greater and that child resides in a residential housing unit containing lead poisoning hazards, the Department shall require remediation of the lead poisoning hazards. The Department shall also require remediation of the lead poisoning hazards identified at the supplemental addresses of a child less than six years of age with a confirmed lead poisoning of 20 10 micrograms per deciliter or greater."

SECTION 11E.6.(d)  G.S. 130A‑131.9G reads as rewritten:

"§ 130A‑131.9G.  Resident responsibilities.

In any residential housing unit occupied by a child less than six years of age who has an elevated blood lead level of 10 five micrograms per deciliter or greater, the Department shall advise, in writing, the owner or managing agent and the child's parents or legal guardian of the importance of carrying out routine cleaning activities in the units they occupy, own, or manage. The cleaning activities shall include all of the following:

(1)        Wiping clean all windowsills with a damp cloth or sponge at least weekly.

(2)        Regularly washing all surfaces accessible to children.

(3)        In the case of a leased residential housing unit, identifying any deteriorated paint in the unit and notifying the owner or managing agent of the conditions within 72 hours of discovery.

(4)        Identifying and understanding potential lead poisoning hazards in the environment of each child less than six years of age in the unit (including toys, vinyl miniblinds, playground equipment, drinking water, soil, and painted surfaces), and taking steps to prevent children from ingesting lead such as encouraging children to wash their faces and hands frequently and especially after playing outdoors."

 

AIDS Drug Assistance Program

SECTION 11E.7.  Part 1 of Article 1 of Chapter 130A of the General Statutes is amended by adding a new section to read:

"§ 130A‑4.4.  Funds for AIDS Drug Assistance Program.

The Department shall work with the Department of Public Safety to use Department of Public Safety funds to purchase pharmaceuticals for the treatment of individuals in the custody of the Department of Public Safety who have been diagnosed with Human Immunodeficiency Virus or Acquired Immune Deficiency Syndrome (HIV/AIDS) in a manner that allows these funds to be accounted for as State matching funds in the Department of Health and Human Services drawdown of federal Ryan White funds earmarked for the AIDS Drug Assistance Program also known as ADAP."

 

Study Use of AIDS Drug Assistance Program (ADAP) Funds to Purchase Health Insurance

SECTION 11E.8.(a)  The Department of Health and Human Services, Division of Public Health, shall study the feasibility of creating within the North Carolina AIDS Drug Assistance Program (ADAP) a health insurance premium assistance program that utilizes federal funds from Part B of the Ryan White HIV/AIDS Program and ADAP funds to provide, on a case‑by‑case basis, premium and cost‑sharing assistance for the purchase or maintenance of private health insurance coverage, including premiums, co‑payments, and deductibles to eligible beneficiaries with the highest out‑of‑pocket costs for health insurance premiums, co‑payments, and deductibles. In determining the feasibility of creating such a program, the Department shall plan for full compliance with federal Health Resources and Services Administration (HRSA) guidance, including the methodology used to do all of the following:

(1)        Assess and compare the cost of providing prescription drugs to eligible beneficiaries through the health insurance premium assistance program created pursuant to this section versus the existing ADAP program.

(2)        Ensure that insurance premium assistance program funds are used solely to pay for premium and cost‑sharing assistance for the purchase or maintenance of private health insurance coverage that provides, at a minimum, prescription coverage equivalent to the formulary available under Part B of the Ryan White HIV/AIDS Program.

(3)        Limit the total annual amount of funds expended for the health insurance premium assistance program authorized by this section to no more than the total annual cost of maintaining the same individuals on the existing ADAP program.

SECTION 11E.8.(b)  By March 1, 2018, the Department shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the feasibility and cost of operating the program described in subsection (a) of this section, including any obstacles to implementation.

 

Use of Modified Adjusted Gross Income (MAGI) for AIDS Drug Assistance Program (ADAP) Eligibility Determinations

SECTION 11E.9.  Beginning January 1, 2018, the Department of Health and Human Services shall implement the use of the Modified Adjusted Gross Income formula in the calculation of income for the purpose of determining eligibility for the AIDS Drug Assistance Program in order to ensure consistency in the Department's methods of determining eligibility for other benefit programs.

 

Transfer of On‑Site Water Protection Branch to Department of Environmental Quality & Modification of Board of Environmental Health Specialist Examiners

SECTION 11E.10.(a)  The On‑Site Water Protection Branch of the Environmental Health Section of the Division of Public Health within the Department of Health and Human Services is transferred to the Division of Water Resources within the Department of Environmental Quality, by a Type I transfer, as defined in G.S. 143A‑6, where it will be known as the On‑Site Water Protection Section.

SECTION 11E.10.(b)  G.S. 90A‑51 reads as rewritten:

"§ 90A‑51.  Definitions.

The words and phrases defined below shall when used in this Article have the following meaning unless the context clearly indicates otherwise:

(2a)      "Environmental health practice" means the provision of environmental health services, including administration, organization, management, education, enforcement, and consultation regarding environmental health services provided to or for the public. These services are offered to prevent environmental hazards and promote and protect the health of the public in the following areas: food, lodging, and institutional sanitation; on‑site wastewater treatment and disposal; public swimming pool sanitation; childhood lead poisoning prevention; well permitting and inspection; tattoo parlor sanitation; and all other areas of environmental health requiring the delegation of authority by the Division of Public Health of the Department of Health and Human Services or the On‑Site Water Protection Section of the Division of Water Resources of the Department of Environmental Quality to State and local environmental health professionals to enforce rules adopted by the Commission for Public Health.Health or the Environmental Management Commission. The definition also includes local environmental health professionals enforcing rules of local boards of health for on‑site wastewater systems and wells.

…."

SECTION 11E.10.(c)  G.S. 90A‑55 reads as rewritten:

"§ 90A‑55.  State Board of Environmental Health Specialist Examiners; appointment and term of office.

(a)        Board Membership. – The Board shall consist of 12 nine members who shall serve staggered terms: the Secretary of Health and Human Services, Environmental Quality or the Secretary's duly authorized representative, one public‑spirited citizen, one environmental sanitation educator from an accredited college or university, one local health director, a one representative of the Division of Public Health of the Department of Health and Human Services, and seven six practicing environmental health specialists specialists, including one environmental sanitation educator from an accredited college or university and one local health director, who qualify by education and experience for registration under this Article, six of whom Article. The six members who are practicing environmental health specialists shall represent the Western, Piedmont, and Eastern Regions of the State as described more specifically in the rules adopted by the Board.

(b)        Term of Office. – Each member of the State Board of Environmental Health Specialist Examiners shall be appointed by the Governor for a term of four years. As the term of each current member expires, the Governor shall appoint a successor in accordance with the provisions of this section. If a vacancy occurs on the Board for any other reason than the expiration of a member's term, the Governor shall appoint a successor for the remainder of the unexpired term. No person shall serve as a member of the Board for more than two consecutive four‑year terms.

(c)        The Environmental Health Section of the North Carolina Public Health Association, Inc., shall submit a recommended list of Board member candidates to the Governor for the Governor's consideration in appointments, except for the two representatives representative of the Department of Environmental Quality recommended by the Secretary of Environmental Quality, the representative of the Division of Public Health of the Department of Health and Human Services recommended by the Secretary of Health and Human Services Services, and the local health director recommended by the North Carolina Local Health Directors Association.

(d)       The Governor may remove an appointee member for misconduct in office, incompetency, neglect of duty, or other sufficient cause."

SECTION 11E.10.(d)  The terms of all members of the Board of Environmental Health Specialist Examiners shall expire on July 31, 2017. A new Board of nine members shall be appointed consistent with the requirements specified in G.S. 90A‑55(a), as amended by subsection (c) of this section. Notwithstanding G.S. 90A‑55(b), the initial term for the following persons appointed to the Board of Environmental Health Specialist Examiners shall be two years:

(1)        One public‑spirited citizen.

(2)        One representative of the Division of Public Health of the Department of Health and Human Services.

(3)        Three practicing environmental health specialists.

At the end of these initial two‑year appointments, the term for their successors shall be four years. The remaining members of the Board shall be appointed for an initial term of four years, and the term for their successors shall be four years. Initial terms shall begin on August 1, 2017, and expire on July 31 of the year of expiration as set forth in this subsection.

SECTION 11E.10.(e)  G.S. 90A‑71 reads as rewritten:

"§ 90A‑71.  Definitions.

The following definitions apply in this Article:

(4)        "Department" means the Department of Health and Human Services.Environmental Quality.

…."

SECTION 11E.10.(f)  G.S. 90A‑81(b) reads as rewritten:

"(b)      Arbitration. – The Board may establish a voluntary arbitration procedure to resolve complaints concerning a certified contractor or inspector or any work performed by a certified contractor or inspector, or conflicts involving any certified contractor or inspector and the Division of Public Health of the Department or a local health department."

SECTION 11E.10.(g)  The following statutes are amended by deleting the language "Articles 9 and 10" wherever it appears and substituting "Articles 9, 10, and 11": G.S. 130A‑4(c), 130A‑17(b), 130A‑18(b), 130A‑19(b), 130A‑20(b), and 130A‑23(e).

SECTION 11E.10.(h)  G.S. 130A‑22(c) reads as rewritten:

"(c)      The Secretary of Environmental Quality may impose an administrative penalty on a person who willfully violates Article 11 of this Chapter, rules adopted by the Commission pursuant to Article 11 or any condition imposed upon a permit issued under Article 11. An administrative penalty may not be imposed upon a person who establishes that neither the site nor the system may be improved or a new system installed so as to comply with Article 11 of this Chapter. Each day of a continuing violation shall constitute a separate violation. The penalty shall not exceed fifty dollars ($50.00) per day in the case of a wastewater collection, treatment and disposal system with a design daily flow of no more than 480 gallons or in the case of any system serving a single one‑family dwelling. The penalty shall not exceed three hundred dollars ($300.00) per day in the case of a wastewater collection, treatment and disposal system with a design daily flow of more than 480 gallons which does not serve a single one‑family dwelling."

SECTION 11E.10.(i)  G.S. 130A‑24(e) reads as rewritten:

"(e)      The appeals procedures enumerated in this section shall apply to appeals concerning the enforcement of rules, the imposition of administrative penalties, or any other action taken by the Department of Environmental Quality pursuant to Articles 8, 9, 10, 11, and 12 Articles 9, 10, and 11 of this Chapter."

SECTION 11E.10.(j)  G.S. 130A‑34.1(a) reads as rewritten:

"(a)      The Local Health Department Accreditation Board is established within the North Carolina Institute for Public Health. The Board shall be composed of 17 members appointed by the Secretary of the Department of Health and Human Services as follows:

(1)        Four shall be county commissioners recommended by the North Carolina Association of County Commissioners, and four shall be members of a local board of health as recommended by the Association of North Carolina Boards of Health.

(2)        Three local health directors.

(3)        Three Two staff members from the Division of Public Health, Health of the Department of Health and Human Services.

(3a)      One staff member from the Environmental Health Section of the Division of Public Health of the Department of Health and Human Services, recommended by the Secretary of Environmental Quality.

(4)        Repealed by Session Laws 2011‑145, s. 13.3(zz), effective July 1, 2011.

(5)        Three at large."

SECTION 11E.10.(k)  G.S. 130A‑334 reads as rewritten:

"§ 130A‑334.  Definitions.

The following definitions shall apply throughout this Article:

(1c)      "Commission" means the Environmental Management Commission.

(1c)(1d)     "Construction" means any work at the site of placement done for the purpose of preparing a residence, place of business or place of public assembly for initial occupancy, or subsequent additions or modifications which increase sewage flow.

(1d)(1e)     "Construction observation" means the visual observation of the construction and installation of the wastewater system for general conformance with the construction documents prepared by the professional engineer who designed the wastewater system. Construction observation that is conducted by the professional engineer who designed the wastewater system does not include or waive the requirement to conduct special inspections.

(1e)(1f)      "Conventional wastewater system" has the same meaning as in G.S. 130A‑343.

(1f)(1g)      "Department" means the Department of Health and Human Services.Environmental Quality.

(1g)(1h)     "Engineered option permit" means an on‑site wastewater system that is permitted pursuant to the rules adopted by the Commission in accordance with this Article, meets the criteria established by G.S. 130A‑336.1, and is designed by a professional engineer who is licensed under Chapter 89C of the General Statutes who has expertise in the design of on‑site wastewater systems.

(1h)(1i)      "Ground absorption system" means a system of tanks, treatment units, nitrification fields, and appurtenances for wastewater collection, treatment, and subsurface disposal.

(10a)    "Secretary" means the Secretary of Health and Human Services.Environmental Quality.

…."

SECTION 11E.10.(l)  G.S. 130A‑335(b) reads as rewritten:

"(b)      All wastewater Wastewater systems including all of the following shall either (i) be regulated by the Department under rules adopted by the Commission or (ii) conform with the engineered option permit criteria set forth in G.S. 130A‑336.1 and under rules adopted by the Commission except for the following wastewater systems that shall be regulated by the Department under rules adopted by the Environmental Management Commission:

(1)        Wastewater collection, treatment, and disposal systems designed to discharge effluent to the land surface or surface waters.

(2)        Wastewater systems designed for groundwater remediation, groundwater injection, or landfill leachate collection and disposal.

(3)        Wastewater systems designed for the complete recycle or reuse of industrial process wastewater.

(4)        Gray water systems as defined in G.S. 143‑350."

SECTION 11E.10.(m)  G.S. 130A‑335(h) reads as rewritten:

"(h)      Except as provided in this subsection, a chemical or portable toilet may be placed at any location where the chemical or portable toilet can be operated and maintained under sanitary conditions. A chemical or portable toilet shall not be used as a replacement or substitute for a water closet or urinal where a water closet or urinal connected to a permanent wastewater treatment system is required by the North Carolina State Building Code, except that a chemical or portable toilet may be used to supplement a water closet or urinal during periods of peak use. A chemical or portable toilet shall not be used as an alternative to the repair of a water closet, urinal, or wastewater treatment system. It shall be unlawful to discharge sewage or other waste from a chemical or portable toilet used for human waste except into a wastewater system that has been approved by the Department under rules adopted by the Commission or by the Environmental Management Commission or at a site that is permitted by the Department under G.S. 130A‑291.1."

SECTION 11E.10.(n)  G.S. 130A‑336(d) reads as rewritten:

"(d)      If a local health department repeatedly fails to issue or deny improvement permits for conventional or accepted septic tank systems within 60 days, or within 90 days for provisional or innovative systems, after receiving completed applications for the permits, then the Department of Health and Human Services may withhold public health funding from that local health department."

SECTION 11E.10.(o)  G.S. 130A‑336.1(r) reads as rewritten:

"(r)       Reports. – The Department shall report to the Environmental Review Commission and the Joint Legislative Oversight Committee on Health and Human Services Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources on or before January 1, 2017, and annually thereafter, on the implementation and effectiveness of this section. For the report due on or before January 1, 2017, the Department shall specifically study (i) whether the engineered option permit resulted in a reduction in the length of time improvement permits or authorizations to construct are pending; (ii) whether the engineered option permit resulted in increased system failures or other adverse impacts; (iii) if the engineered option permit resulted in new or increased environmental or public health impacts; (iv) an amount of errors and omissions insurance or other liability sufficient for covering professional engineers, licensed soil scientists, licensed geologists, and contractors who employ the engineered option permit; and (v) the fees charged by local health departments to administer the engineered option permit pursuant to subsection (n) of this section. The Department may include recommendations, including any legislative proposals, in its reports to the Commission and Committee."

 

SUBPART XI‑F. DIVISION OF MH/DD/SAS AND STATE OPERATED HEALTHCARE FACILITIES

 

Funds for the North Carolina Child Treatment Program

SECTION 11F.1.(a)  The title to Part 4 of Article 3 of Chapter 143B of the General Statutes reads as rewritten:

"Part 4. Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services."

SECTION 11F.1.(b)  Part 4 of Article 3 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B‑150.1.  Use of funds for North Carolina Child Treatment Program.

(a)        State funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the North Carolina Child Treatment Program shall be used exclusively for the following purposes:

(1)        To continue to provide clinical training and coaching to licensed clinicians on an array of evidence‑based treatments and to provide a statewide platform to assure accountability and measurable outcomes.

(2)        To maintain and manage a public roster of program graduates, linking high‑quality clinicians with children, families, and professionals.

(3)        To partner with leadership within the State, local management entities/managed care organizations as defined in G.S. 122C‑3, and the private sector to bring effective mental health treatment to children in juvenile justice and mental health facilities.

(b)        All data, including any entered or stored in the State‑funded secure database developed for the North Carolina Child Treatment Program to track individual‑level and aggregate‑level data with interface capability to work with existing networks within State agencies, is and remains the sole property of the State."

 

Single‑Stream Funding for MH/DD/SAS Community Services

SECTION 11F.2.(a)  For the purpose of mitigating cash flow problems that many local management entities/managed care organizations (LME/MCOs) experience at the beginning of each fiscal year relative to single‑stream funding, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMH/DD/SAS), shall distribute not less than one‑twelfth of each LME/MCO's base budget allocation at the beginning of the fiscal year and subtract the amount of that distribution from the LME/MCO's total reimbursements for the fiscal year. For each month of the fiscal year after July, the DMH/DD/SAS shall distribute, on the third working day of the month, one‑eleventh of the amount of each LME/MCO's single‑stream allocation that remains after subtracting the amount of the distribution that was made to the LME/MCO in July of the fiscal year.

SECTION 11F.2.(b)  The DMH/DD/SAS is directed to reduce its allocation for single‑stream funding by thirty‑six million seven hundred eighty‑five thousand nine hundred thirty‑one dollars ($36,785,931) in recurring funds and by thirty‑two million six hundred fifty‑seven thousand nine hundred seventy‑seven dollars ($32,657,977) in nonrecurring funds for the 2017‑2018 fiscal year and by sixty‑seven million seven hundred thirteen thousand nine hundred sixty‑six dollars ($67,713,966) in recurring funds and thirty‑three million seven hundred sixty‑six thousand six hundred fifty‑five dollars ($33,766,655) in nonrecurring funds for the 2018‑2019 fiscal year.

The DMH/DD/SAS shall allocate these recurring and nonrecurring reductions for single‑stream funding among the LME/MCOs as follows:

 

                                                                                                  FY 2017‑2018         FY 2018‑2019

Alliance Behavioral Healthcare

      Recurring                                                                               ($9,997,565)           ($18,403,089)

      Nonrecurring                                                                          ($5,245,815)             ($5,423,901)

 

Cardinal Innovations Healthcare

      Recurring                                                                               ($9,137,138)           ($16,819,252)

      Nonrecurring                                                                          ($8,409,102)             ($8,694,575)

 

Eastpointe

      Recurring                                                                               ($2,870,008)             ($5,282,988)

      Nonrecurring                                                                          ($3,357,933)             ($3,471,929)

 

Partners Behavioral Health Management

      Recurring                                                                               ($2,519,629)             ($4,638,025)  Nonrecurring      ($3,895,112)                                                                          ($4,027,344)

 

Sandhills Center

      Recurring                                                                               ($9,117,470)           ($16,783,049)  Nonrecurring      ($5,238,820)                                                                          ($5,416,668)

 

Trillium Health Resources

      Recurring                                                                               ($1,449,436)             ($2,668,060)

      Nonrecurring                                                                          ($3,152,839)             ($3,259,872)

 

Vaya Health

      Recurring                                                                               ($1,694,685)             ($3,119,503)  Nonrecurring      ($3,358,356)                                                                          ($3,472,366)

TOTALS

      Recurring                                                                           ($36,785,931)           ($67,713,966)

      Nonrecurring                                                                     ($32,657,977)           ($33,766,655)

 

By March 1, 2018, the Secretary of Health and Human Services shall submit to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division a proposal for any adjustments to the specified recurring reductions among the LME/MCOs for future fiscal years. The proposal must include a detailed explanation supporting any proposed changes.

During each year of the 2017‑2019 fiscal biennium, each LME/MCO shall offer at least the same level of service utilization as during the 2014‑2015 fiscal year.

SECTION 11F.2.(c)  The Department of Health and Human Services shall continue to use the monthly reporting package submitted by the LME/MCOs to the Department, as modified pursuant to Section 12F.2(c) of S.L. 2015‑241, to include revenues and expenditures for the State funding sources for single‑stream, intellectual and developmental disability, and substance abuse services on Schedule D2. Additionally, the Department shall continue to use appropriate schedules in the LME/MCO monthly reporting package, as modified pursuant to Section 12F.2(c) of S.L. 2015‑241, to include unduplicated recipients and encounters in the same level of detail included in each D schedule for each source of funding for the reporting for the current and previous year's month and year‑to‑date periods. The Department shall continue to submit these reports to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by the third Monday of each month.

SECTION 11F.2.(d)  If, on or after June 1, 2018, the Office of State Budget and Management (OSBM) certifies a Medicaid budget surplus in funds 1310 and 1311 and sufficient cash in Budget Code 14445 to meet total obligations for the 2017‑2018 fiscal year, then the Department of Health and Human Services, Division of Medical Assistance (DMA), may transfer to the DMH/DD/SAS funds not to exceed the amount of the certified surplus or thirty million dollars ($30,000,000), whichever is less, to offset the reduction in single‑stream funding required by this section.

If, on or after June 1, 2019, the OSBM certifies a Medicaid budget surplus in funds 1310 and 1311 and sufficient cash in Budget Code 14445 to meet total obligations for fiscal year 2018‑2019, then the DMA may transfer to the DMH/DD/SAS funds not to exceed the amount of the certified surplus or thirty million dollars ($30,000,000), whichever is less, to offset the reduction in single‑stream funding required by this section.

The DMH/DD/SAS shall allocate funds transferred pursuant to this subsection among the LME/MCOs based on the individual LME/MCO's percentage of nonrecurring reductions in single‑stream funding for the fiscal year, as required by subsection (b) of this section. These funds shall be allocated as prescribed by June 30 of each State fiscal year.

SECTION 11F.2.(e)  The Department of Health and Human Services shall develop a maintenance of effort (MOE) spending requirement for all mental health and substance abuse services which must be maintained using nonfederal, State appropriations on an annual basis in order to meet MOE requirements for federal block grant awards. LME/MCOs shall ensure the MOE spending requirement is met using State appropriations.

SECTION 11F.2.(f)  Beginning July 1, 2017, and quarterly thereafter, the Secretary of Health and Human Services shall evaluate the financial position of each LME/MCO relative to the solvency standards to be developed by the Department and included in the statewide Strategic Plan for Behavioral Health Services pursuant to Section 12F.10(b)(4) of S.L. 2016‑94 (approved solvency standards).

If, at any time, the Secretary determines an LME/MCO is at risk of failing financially in the ensuing two‑year period, based on the approved solvency standards, the Secretary shall immediately meet with that LME/MCO for the purpose of evaluating the reasons for the LME/MCO's vulnerable financial position, including reasons attributable to trends in performance management and utilization of services. Within 30 days after meeting with an LME/MCO pursuant to this section, the Secretary shall submit a written report of its evaluation to the LME/MCO. By October 1, 2017, the Secretary shall submit an initial report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on each LME/MCO determined to be at risk of failing financially, identifying the reasons for each LME/MCO's vulnerable financial position.

Within 45 days after receiving the Secretary's report, the LME/MCO shall develop and submit to the Secretary, in writing, a proposed plan of corrective action with specific initiatives and actions to be implemented by the LME/MCO in order to bring its financial position into compliance with the approved solvency standards, along with a projected time line for completing each identified initiative or action and a deadline for achieving full compliance with the approved solvency standards. At a minimum, the proposed plan of corrective action shall address (i) rates paid to the LME/MCO and its providers for services, contracts, and administrative costs; (ii) utilization of services; (iii) management of the operations of the LME/MCO; and (iv) financial risk to the State.

Within 14 days after receiving the LME/MCO's proposed plan of corrective action, the Secretary shall make any changes to the proposed plan of corrective action it deems necessary for the LME/MCO to bring its financial position into compliance with the approved solvency standards and submit a final, Secretary‑approved plan of corrective action to the LME/MCO, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division.

The LME/MCO shall submit monthly reports to the Secretary on its progress under the final, Secretary‑approved plan of corrective action. The Secretary shall submit monthly reports to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division evaluating the LME/MCO's progress under the final, Secretary‑approved plan of corrective action, identifying any variance from the corrective plan of action that could be an obstacle to the LME/MCO achieving full compliance with the approved solvency standards by the deadline included in the final, Secretary‑approved corrective plan of action.

 

Funds for Local Inpatient Psychiatric Beds or Bed Days

SECTION 11F.3.(a)  Use of Funds. – Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for crisis services, the sum of thirty‑eight million eight hundred fifty‑one thousand six hundred forty‑four dollars ($38,851,644) in recurring funds and two million five hundred thousand dollars ($2,500,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of thirty‑eight million eight hundred fifty‑one thousand six hundred forty‑four dollars ($38,851,644) in recurring funds and two million five hundred thousand dollars ($2,500,000) in nonrecurring funds for the 2018‑2019 fiscal year shall be used to purchase additional new or existing local inpatient psychiatric beds or bed days not currently funded by or though LME/MCOs. The Department shall continue to implement a two‑tiered system of payment for purchasing these local inpatient psychiatric beds or bed days based on acuity level with an enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels, as defined by the Department. The enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels shall not exceed the lowest average cost per patient bed day among the State psychiatric hospitals. In addition, at the discretion of the Secretary of Health and Human Services, existing funds allocated to LME/MCOs for community‑based mental health, developmental disabilities, and substance abuse services may be used to purchase additional local inpatient psychiatric beds or bed days. Funds designated in this subsection for the purchase of local inpatient psychiatric beds or bed days shall not be used to supplant other funds appropriated or otherwise available to the Department for the purchase of inpatient psychiatric services through contracts with local hospitals.

SECTION 11F.3.(b)  Distribution and Management of Beds or Bed Days. – Except as provided in this subsection, the Department shall work to ensure that any local inpatient psychiatric beds or bed days purchased in accordance with this section are utilized solely for individuals who are medically indigent, as defined in this subsection. In addition, the Department shall work to ensure that any local inpatient psychiatric beds or bed days purchased in accordance with this section are distributed across the State in LME/MCO catchment areas and according to need as determined by the Department. The Department shall ensure that beds or bed days for individuals with higher acuity levels are distributed across the State in LME catchment areas, including any catchment areas served by managed care organizations, and according to greatest need based on hospital bed utilization data. The Department shall enter into contracts with LME/MCOs and local hospitals for the management of these beds or bed days. The Department shall work to ensure that these contracts are awarded equitably around all regions of the State. LME/MCOs shall manage and control these local inpatient psychiatric beds or bed days, including the determination of the specific local hospital or State psychiatric hospital to which an individual should be admitted pursuant to an involuntary commitment order.

The Department may use up to ten percent (10%) of the funds allocated in this section for each year of the 2017‑2019 fiscal biennium to pay for facility‑based crisis services and non‑hospital detoxification services for individuals in need of these services, regardless if the individuals are medically indigent, defined as uninsured persons who (i) are financially unable to obtain private insurance coverage as determined by the Department and (ii) are not eligible for government‑funded health coverage such as Medicare or Medicaid.

SECTION 11F.3.(c)  Funds to Be Held in Statewide Reserve. – Funds appropriated to the Department for the purchase of local inpatient psychiatric beds or bed days shall not be allocated to LME/MCOs but shall be held in a statewide reserve at the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to pay for services authorized by the LME/MCOs and billed by the hospitals through the LME/MCOs. LME/MCOs shall remit claims for payment to the Department within 15 working days after receipt of a clean claim from the hospital and shall pay the hospital within 30 working days after receipt of payment from the Department.

SECTION 11F.3.(d)  Ineffective LME/MCO Management of Beds or Bed Days. – If the Department determines that (i) an LME/MCO is not effectively managing the beds or bed days for which it has responsibility, as evidenced by beds or bed days in the local hospital not being utilized while demand for services at the State psychiatric hospitals has not decreased, or (ii) the LME/MCO has failed to comply with the prompt payment provisions of subsection (c) of this section, the Department may contract with another LME/MCO to manage the beds or bed days or, notwithstanding any other provision of law to the contrary, may pay the hospital directly.

SECTION 11F.3.(e)  Reporting by LME/MCOs. – The Department shall establish reporting requirements for LME/MCOs regarding the utilization of these beds or bed days.

SECTION 11F.3.(f)  Reporting by Department. – By no later than December 1, 2018, and by no later than December 1, 2019, the Department shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on all of the following:

(1)        A uniform system for beds or bed days purchased during the preceding fiscal year from (i) funds appropriated in this act that are designated for this purpose in subsection (a) of this section, (ii) existing State appropriations, and (iii) local funds.

(2)        An explanation of the process used by the Department to ensure that, except as otherwise provided in subsection (a) of this section, local inpatient psychiatric beds or bed days purchased in accordance with this section are utilized solely for individuals who are medically indigent, along with the number of medically indigent individuals served by the purchase of these beds or bed days.

(3)        The amount of funds used to pay for facility‑based crisis services, along with the number of individuals who received these services and the outcomes for each individual.

(4)        The amount of funds used to pay for non‑hospital detoxification services, along with the number of individuals who received these services and the outcomes for each individual.

(5)        Other Department initiatives funded by State appropriations to reduce State psychiatric hospital use.

 

Use of Funds to Purchase Inpatient Alcohol AND Substance Use Disorder Treatment Services

SECTION 11F.4.  Section 12F.12(b) of S.L. 2015‑241 reads as rewritten:

"SECTION 12F.12.(b)  From funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, to be allocated to LME/MCOs for the purchase of inpatient alcohol and substance abuse treatment services, the LME/MCOs shall use their respective fund allocations for individuals within their respective catchment areas as follows:

(1)        During the 2015‑2016 fiscal year, a minimum of one hundred percent (100%) of the allocation shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs.

(2)        During the 2016‑2017 fiscal year, a minimum of ninety percent (90%) of the allocation shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs. The LME/MCOs shall use the remaining ten percent (10%) of their respective allocations to purchase inpatient alcohol and substance abuse treatment services from any qualified provider.

(2a)      During the 2017‑2018 fiscal year, a minimum of eighty‑six percent (86%) of the allocation shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs in order to increase the availability of services through the ADATCs to individuals in need of inpatient opioid treatment. The LME/MCOs shall use any remaining allocations to purchase inpatient alcohol and substance abuse treatment services from any qualified provider.

(3)        In subsequent fiscal years, the minimum required percentage of the allocation that shall be used exclusively to purchase inpatient alcohol and substance abuse treatment services from the ADATCs shall decrease by ten percentage points each fiscal year after the 2016‑20172017‑2018 fiscal year until it reaches zero percent (0%). The minimum required percentage of the allocation remaining that shall be used to purchase inpatient alcohol and substance abuse treatment services from any qualified provider shall increase by ten percentage points each fiscal year after the 2016‑20172017‑2018 fiscal year until it reaches one hundred percent (100%). As used in this subdivision, the "minimum required percentage" means the percentage calculated pursuant to this subsection and not a percentage based on the actual amount of funds expended by the Department during that fiscal year."

 

Purchase of Additional Psychiatric and Facility‑Based Crisis Beds with Dorothea Dix Hospital Property Funds

SECTION 11F.5.(a)  It is the intent of the General Assembly to increase inpatient behavioral health bed capacity in rural areas of the State with the highest need. Toward that end, of the funds appropriated from the Dorothea Dix Hospital Property Fund established under G.S. 143C‑9‑2(b1) to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2017‑2018 fiscal year:

(1)        The sum of up to one million eight hundred thousand dollars ($1,800,000) in nonrecurring funds shall be used to pay for any renovation or building costs associated with the construction of new licensed inpatient behavioral health beds at the Dix Crisis Intervention Center in Onslow County.

(2)        The remaining sum of at least six million two hundred thousand dollars ($6,200,000) in nonrecurring funds shall be used to pay for any renovation or building costs associated with the following:

a.         The construction of new licensed inpatient behavioral health beds.

b.         The conversion of existing inpatient acute care beds into licensed inpatient behavioral health beds.

c.         A combination of subdivision (1) of this subsection and this subdivision.

SECTION 11F.5.(b)  The Secretary shall select hospitals in the three State regions for institutional services (Eastern Region, Central Region, and Western Region) to receive funds allocated under subdivision (2) of subsection (a) of this section for the construction, conversion, or both of inpatient behavioral health beds in rural areas of the State. Notwithstanding the State Medical Facilities Plan, Article 9 of Chapter 131E of the General Statutes, or any other provision of law to the contrary, each facility that receives funds allocated under subsection (a) of this section shall be allowed to construct new or convert unused acute care beds into licensed, inpatient behavioral health beds without undergoing certificate of need review by the Division of Health Service Regulation. All newly constructed or converted beds shall be subject to existing licensure laws and requirements. As a condition of receiving these funds, each selected rural hospital shall reserve at least fifty percent (50%) of the constructed or converted beds for (i) purchase by the Department under the State‑administered, three‑way contract and (ii) referrals by local management entities/managed care organizations (LME/MCOs) of individuals who are indigent or Medicaid recipients. Any hospital unit or other location with inpatient behavioral health beds constructed or converted with funds allocated under subsection (a) of this section shall be named in honor of Dorothea Dix.

SECTION 11F.5.(c)  Beginning November 1, 2018, the Department of Health and Human Services shall annually report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the number and location of additional licensed inpatient behavioral health beds brought into operation with funds allocated under subsection (a) of this section. By December 1, 2020, the Department shall submit a report that includes a proposal for funding the recurring operating costs of these additional beds from a source or sources other than the Dorothea Dix Hospital Property Funds, including the identification of potential new funding sources.

SECTION 11F.5.(d)  It is the intent of the General Assembly to continue to increase the number of facility‑based crisis centers in North Carolina for children and adolescents. Toward that end, of the funds appropriated from the Dorothea Dix Hospital Property Fund established under G.S. 143C‑9‑2(b1) to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2017‑2018 fiscal year, the sum of two million dollars ($2,000,000) in nonrecurring funds shall be used to award grants on a competitive basis for the establishment of up to two new facility‑based crisis centers in the State for children and adolescents. The Department shall establish a process for applying for these grants, criteria for evaluating applications, and a process for allocating grants.

SECTION 11F.5.(e)  Any funds allocated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, from the Dorothea Dix Hospital Property Fund established under G.S. 143C‑9‑2(b1) pursuant to Section 12F.4 of S.L. 2016‑94 for the 2016‑2017 fiscal year that are not expended or encumbered as of June 30, 2017, shall remain in the Dorothea Dix Hospital and Property Fund.

SECTION 11F.5.(f)  Any funds allocated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, from the Dorothea Dix Hospital Property Fund established under G.S. 143C‑9‑2(b1) pursuant to this section for the 2017‑2018 fiscal year that are not expended or encumbered as of June 30, 2019, shall remain in the Dorothea Dix Hospital Property Fund.

 

Additions to the Strategic Plan for Improvement of Behavioral Health Services

SECTION 11F.6.(a)  Section 12F.10(b) of S.L. 2016‑94 reads as rewritten:

"SECTION 12F.10.(b)  By January 1, 2018, the Department of Health and Human Services shall develop and submit to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Medicaid and NC Health Choice, and the Fiscal Research Division a strategic statewide plan to improve the efficiency and effectiveness of State‑funded behavioral health services. In developing the plan, the Department shall review and consider its past and current studies, and associated reports, relating to behavioral health services in the State. The plan shall include at least all of the following:

(5)        Any other componentcomponent, study, or report that the Department deems necessary to achieve the goal of improving the effective and efficient delivery and coordination of publicly funded behavioral health services across the State."

SECTION 11F.6.(b)  Section 12F.10 of S.L. 2016‑94 is amended by adding a new subsection to read:

"SECTION 12F.10.(b1)  In the development of the strategic statewide plan, required under subsection (b) of this section, the Department of Health and Human Services shall consider policy issues pertaining to the delivery of services for people with intellectual and developmental disabilities. Consideration shall be given to all of the following:

(1)        The causes and potential solutions for the growing waitlist for NC Innovations Waiver slots. Potential solutions to be studied include the following:

a.         Increasing the funding for the 1915(c) Innovations Waiver to result in more individuals served.

b.         Creating new support waiver slots as recommended in the March 2015 "Study Additional 1915(c) Waiver" report from the Department of Health and Human Services, Division of Medical Assistance, to the Joint Legislative Oversight Committee on Health and Human Services.

c.         Utilizing a 1915(i) waiver option and exploring how the 1115 waiver required for Medicaid transformation may assist in addressing current waitlist for services.

(2)        Issues surrounding single‑stream funding and how single‑stream funding is used to support services for people with intellectual and developmental disabilities.

(3)        Multiple federal mandates that will directly impact current services and supports for people with intellectual and developmental disabilities, including Home and Community‑Based Services changes, the Work Force Innovations and Opportunities Act, and changes under section 14(c) of the federal Fair Labor Standards Act.

(4)        The coverage of services for the treatment of autism, including any State Plan amendment needed to address guidance issued by the Centers for Medicare and Medicaid Services."

 

Mental Health/Substance Use Disorder Central Assessment AND Navigation System Pilot Program

SECTION 11F.7.(a)  Pilot Program Creation. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of two hundred fifty thousand dollars ($250,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of two hundred fifty thousand dollars ($250,000) in nonrecurring funds for the 2018‑2019 fiscal year shall be used to oversee, in consultation with the local management entity/managed care organization (LME/MCO) responsible for the management and provision of mental health, developmental disabilities, and substance use disorder services in New Hanover County under the 1915(b)/(c) Medicaid Waiver, the establishment of a two‑year pilot program to focus on assessing and navigating individuals seeking mental health or substance use disorder services, or both, to appropriate community‑based services or other community resources in order to reduce the utilization of hospital emergency department services for mental health and substance use disorder services.

SECTION 11F.7.(b)  Program Design and Location. – The pilot program shall be conducted at New Hanover Regional Medical Center (NHRMC) and at Wellness City, operated by Recovery Innovations, Inc., by a three‑person centralized team. The three‑person team shall consist of the following individuals:

(1)        A master's level, fully licensed clinician to perform comprehensive clinical assessments of NHRMC patients and other New Hanover County residents exhibiting symptoms of mental illness or substance use disorder who are referred to the pilot program.

(2)        A qualified professional to assist patients, particularly those with a completed comprehensive clinical assessment, with identifying and accessing appropriate community‑based services or other community resources.

(3)        A North Carolina certified peer support specialist, with specialized training and personal experience in successfully managing his or her own serious mental illness or substance use disorder, to provide peer support services, including encouraging patients to take personal responsibility for managing their condition, assisting patients in establishing meaningful roles in society, and providing patients with transportation to and from appointments.

SECTION 11F.7.(c)  Reports. – By July 1, 2018, the LME/MCO responsible for the management and provision of mental health, developmental disabilities, and substance abuse services in New Hanover County, in collaboration with New Hanover Regional Medical Center and Recovery Innovations, Inc., shall submit an interim report on the effectiveness of the pilot program to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (Division).  By October 1, 2018, the Division shall submit an interim report on the effectiveness of the program and the costs associated with administering the program to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

By July 1, 2019, the LME/MCO responsible for the management and provision of mental health, developmental disabilities, and substance abuse services in New Hanover County, in collaboration with New Hanover Regional Medical Center and Recovery Innovations, Inc., shall submit a final report of the program to the Division. By October 1, 2019, the Division shall then submit a final report of the program to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. The report shall include the Division's recommendations with respect to sustaining or expanding the program.

 

Traumatic Brain Injury Funding

SECTION 11F.8.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of two million three hundred seventy‑three thousand eighty‑six dollars ($2,373,086) for the 2017‑2018 fiscal year and the sum of two million three hundred seventy‑three thousand eighty‑six dollars ($2,373,086) for the 2018‑2019 fiscal year shall be used exclusively to support traumatic brain injury (TBI) services as follows:

(1)        The sum of three hundred fifty‑nine thousand two hundred eighteen dollars ($359,218) shall be used to fund contracts with the Brain Injury Association of North Carolina, Carolinas Rehabilitation, or other appropriate service providers.

(2)        The sum of seven hundred ninety‑six thousand nine hundred thirty‑four dollars ($796,934) shall be used to support residential programs across the State that are specifically designed to serve individuals with TBI.

(3)        The sum of one million two hundred sixteen thousand nine hundred thirty‑four dollars ($1,216,934) shall be used to support requests submitted by individual consumers for assistance with residential support services, home modifications, transportation, and other requests deemed necessary by the consumer's local management entity and primary care physician.

 

Adult AND Pediatric Traumatic Brain Injury Pilot Program

SECTION 11F.9.(a)  Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of one hundred fifty thousand dollars ($150,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of three hundred thousand dollars ($300,000) in nonrecurring funds for the 2018‑2019 fiscal year shall be used to develop and implement an adult and pediatric traumatic brain injury pilot program. The purpose of the pilot program is to increase compliance with internationally approved evidence‑based treatment guidelines for severe adult and pediatric traumatic brain injury in order to reduce patient mortality, improve patient level of recovery, and reduce long‑term care costs.

SECTION 11F.9.(b)  The Department of Health and Human Services shall establish up to three program sites to implement the adult and pediatric traumatic brain injury pilot program authorized by this section, all of which shall be trauma hospitals. Each program site shall be awarded up to one hundred thousand dollars ($100,000) for the development and implementation of an interactive quality assessment and quality assurance clinical decision support tool to provide real‑time, evidence‑based medical care guidance for intensive care unit patients with severe adult or pediatric traumatic brain injury.

SECTION 11F.9.(c)  The Department of Health and Human Services shall contract with a private entity to assist participating trauma hospitals in implementing the tool described in subsection (b) of this section. In providing such implementation assistance, the private entity shall utilize the treatment guidelines and practice recommendations that have been peer reviewed and approved by the American Association of Neurological Surgeons and are recognized as the current standard of care for individuals with severe traumatic brain injury.

SECTION 11F.9.(d)  By February 1, 2018, the Department of Health and Human Services shall submit a progress report on the development and implementation of the pilot program authorized by this section to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

SECTION 11F.9.(e)  By January 7, 2019, the Department of Health and Human Services shall submit a final report of the pilot program authorized by this section to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. At a minimum, the final report shall include all of the following:

(1)        The number and outcome of patients served at each program site, broken down by patient age and county of origin.

(2)        A breakdown of expenditures at each program site by type of service.

(2)        An estimate of the cost to expand the program incrementally and statewide.

(3)        An estimate of any potential savings of State funds associated with expansion of the program.

(4)        If expansion of the program is recommended, a time line for expanding the program.

 

Expansion and Renaming of Prescription Drug Abuse Advisory Committee

SECTION 11F.10.  Subsections (m) through (q) of Section 12F.16 of S.L. 2015‑241 are codified as G.S. 90‑113.75A and read as rewritten:

"§ 90‑113.75A.  Opioid and Prescription Drug Abuse Advisory Committee; statewide strategic plan.

(a)        There is hereby created the Opioid and Prescription Drug Abuse Advisory Committee, to be housed in and staffed by the Department of Health and Human Services (DHHS).Department. The Committee shall develop and, through its members, implement a statewide strategic plan to combat the problem of opioid and prescription drug abuse. The Committee shall include representatives from the following, as well as any other persons designated by the Secretary of Health and Human Services:

(1)        The Department's Division of Medical Assistance, DHHS.Assistance.

(2)        The Department's Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, DHHS.Services.

(3)        The Department's Division of Public Health, DHHS.Health.

(4)        The Rural Health Section of the Department's Division of Public Health, DHHS.Health.

(4a)      The Divisions of Adult Correction and Juvenile Justice of the Department of Public Safety.

(5)        The State Bureau of Investigation.

(6)        The Attorney General's Office.

(7)        The following health care regulatory boards with oversight of prescribers and dispensers of opioids and other prescription drugs:

a.         North Carolina Board of Dental Examiners.

b.         North Carolina Board of Nursing.

c.         North Carolina Board of Podiatry Examiners.

d.         North Carolina Medical Board.

e.         North Carolina Board of Pharmacy.

(8)        The UNC Injury Prevention Research Center.

(9)        The substance abuse treatment community.

(10)      Governor's Institute on Substance Abuse, Inc.

(11)      The Department of Insurance's drug take‑back program.

After developing the strategic plan, the Committee shall be the State's steering committee to monitor achievement of strategic objectives and receive regular reports on progress made toward reducing opioid and prescription drug abuse in North Carolina.

(b)        In developing the statewide strategic plan to combat the problem of opioid and prescription drug abuse, the Opioid and Prescription Drug Abuse Advisory Committee shall, at a minimum, complete the following steps:

(1)        Identify a mission and vision for North Carolina's system to reduce and prevent opioid and prescription drug abuse.

(2)        Scan the internal and external environment for the system's strengths, weaknesses, opportunities, and challenges (a SWOC analysis).

(3)        Compare threats and opportunities to the system's ability to meet challenges and seize opportunities (a GAP analysis).

(4)        Identify strategic issues based on SWOC and GAP analyses.

(5)        Formulate strategies and resources for addressing these issues.

(c)        The strategic plan for reducing opioid and prescription drug abuse shall include three to five strategic goals that are outcome‑oriented and measureable. Each goal must be connected with objectives supported by the following five mechanisms of the system:

(1)        Oversight and regulation of prescribers and dispensers by State health care regulatory boards.

(2)        Operation of the Controlled Substances Reporting System.

(3)        Operation of the Medicaid lock‑in program to review behavior of patients with high use of prescribed controlled substances.

(4)        Enforcement of State laws for the misuse and diversion of controlled substances.

(5)        Any other appropriate mechanism identified by the Committee.

(d)       DHHS, The Department, in consultation with the Opioid and Prescription Drug Abuse Advisory Committee, shall develop and implement a formalized performance management system that connects the goals and objectives identified in the statewide strategic plan to operations of the Controlled Substances Reporting System and Medicaid lock‑in program, law enforcement activities, and oversight of prescribers and dispensers. The performance management system must be designed to monitor progress toward achieving goals and objectives and must recommend actions to be taken when performance falls short.

(e)        Beginning on December 1, 2016, and annually thereafter, DHHS the Department shall submit an annual report on the performance of North Carolina's system for monitoring opioid and prescription drug abuse to the Joint Legislative Oversight Committee on Health and Human Services and Services, the Joint Legislative Oversight Committee on Justice and Public Safety.Safety, and the Fiscal Research Division."

 

Study Continuing Education for Health Care Providers Licensed to Prescribe Controlled Substances

SECTION 11F.11.(a)  By December 1, 2017, the North Carolina Area Health Education Centers Program is encouraged to report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the feasibility of providing a continuing education course for health care providers licensed to prescribe controlled substances in this State. The course shall include instruction on at least all of the following:

(1)        Controlled substance prescribing practices.

(2)        Controlled substance prescribing for chronic pain management.

(3)        Misuse and abuse of controlled substances.

SECTION 11F.11.(b)  This section is effective when this act becomes law.

 

Closure of Wright School

SECTION 11F.12.(a)  The Department of Health and Human Services shall not allow any new admissions or readmissions to the Wright School after June 30, 2017. The Department shall, in consultation with local management entities/managed care organizations, develop a plan to transition all students enrolled at the Wright School to other appropriate educational and treatment settings.

SECTION 11F.12.(b)  By September 30, 2017, the Department shall permanently cease operations at the Wright School.

SECTION 11F.12.(c)  G.S. 122C‑181(a)(5)b. is repealed effective October 1, 2017.

 

Broughton Hospital Litigation Costs Related to Construction Delays

SECTION 11F.13.  Funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for Broughton Hospital, in the sum of three million five hundred thousand dollars ($3,500,000) in nonrecurring funds for each year of the 2017‑2019 fiscal biennium shall be used to offset the following costs arising from delays in the construction of the new Broughton Hospital:

(1)        Litigation costs resulting from anticipated or pending litigation against private third parties. The Secretary of the Department of Health and Human Services may retain private legal counsel to represent the interest of the State in such litigation, as provided in G.S. 147‑17(c1), as amended by this act, and G.S. 114‑2.3(d), as amended by this act.

(2)        Costs related to design changes, technology changes, continued use of the existing hospital, staffing, and other costs directly related to the delays in construction.

(3)        Costs to equip the new hospital.

(4)        Administrative costs.

 

SUBPART XI‑G. DIVISION OF HEALTH SERVICE REGULATION

 

Funds to Continue New Hanover Regional Emergency Medical Services Community Paramedicine Pilot Program

SECTION 11G.1.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Health Service Regulation, the sum of two hundred ten thousand dollars ($210,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of two hundred ten thousand dollars ($210,000) in nonrecurring funds for the 2018‑2019 fiscal year shall be used to continue the community paramedicine pilot program site at New Hanover Regional Emergency Medical Services. The focus of this community paramedicine pilot program site shall continue to be expansion of the role of paramedics to allow for community‑based initiatives that result in providing care that avoids nonemergency use of emergency rooms and 911 services and avoidance of unnecessary admissions into health care facilities.

SECTION 11G.1.(b)  The participation requirements, objectives, standards, and required outcomes for the New Hanover Regional Emergency Medical Services pilot program site shall remain the same as established pursuant to Section 12A.12 of S.L. 2015‑241, as amended by Section 12A.3 of S.L. 2016‑94.

SECTION 11G.1.(c)  By November 1, 2019, the Department of Health and Human Services shall submit an updated report of the New Hanover Regional Emergency Medical Services community paramedicine pilot program site to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

 

Facilities Included Under Single Hospital License

SECTION 11G.2.(a)  G.S. 131E‑77(e1) reads as rewritten:

"(e1)    Any license issued by the Department shall include only facilities, premises, buildings, outpatient clinics, and other locations facilities (i) operated by the hospital within a single county and (ii) operated by the hospital in an immediately adjoining county; provided, however, that facilities, premises, buildings, outpatient clinics, and other locations facilities operated by a hospital in an immediately adjoining county shall only be included within the same hospital license if the applicant hospital demonstrates all of the following to the satisfaction of the Department:

(1)        There was previously only one hospital licensed by the Department and providing inpatient services in the immediately adjoining county.

(2)        The licensed inpatient hospital in the immediately adjoining county described in subdivision (1) of this subsection closed or otherwise ceased providing hospital services to patients no more than three years prior to the date the applicant hospital first applied to license a facility, premises, building, outpatient clinic, or location facility in such immediately adjoining county.

If the Department approves an applicant a hospital's initial request to include within its hospital licensure an initial facility, premises, building, outpatient clinic, or other location license a facility in an immediately adjoining county, then any other designated facilities, premises, buildings, outpatient clinics, or other locations hospital services thereafter developed and operated by the applicant in such immediately adjoining county in accordance with applicable law may also be included within and covered by the license issued to the applicant by the Department."

SECTION 11G.2.(b)  This section is effective when this act becomes law.

 

Moratorium on Special Care Unit Licenses

SECTION 11G.3.(a)  For the period beginning July 1, 2017, and ending June 30, 2019, the Department of Health and Human Services, Division of Health Service Regulation, shall not issue any licenses for special care units as defined in G.S. 131D‑4.6 and G.S. 131E‑114. This prohibition shall not restrict the Department of Health and Human Services from doing any of the following:

(1)        Issuing a license to a facility that is acquiring an existing special care unit.

(2)        Issuing a license for a special care unit in any area of the State upon a determination by the Secretary of the Department of Health and Human Services that increased access to this type of care is necessary in that area during the moratorium imposed by this section.

(3)        Processing all completed applications for special care unit licenses received by the Division of Health Service Regulation along with the applicable license fee prior to June 1, 2013.

(4)        Issuing a license to a facility that was in possession of a certificate of need as of July 31, 2013, that included authorization to operate special care unit beds.

SECTION 11G.3.(b)  The Department of Health and Human Services shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by March 1, 2019, containing at least the following information:

(1)        The number of licensed special care units in the State.

(2)        The capacity of the currently licensed special care units to serve people in need of their services.

(3)        The anticipated growth in the number of people who will need the services of a licensed special care unit.

(4)        The number of applications received from special care units seeking licensure as permitted by this section and the number of those applications that were not approved.

SECTION 11G.3.(c)  This section becomes effective July 1, 2017.

 

Certificate of Need Exemptions

SECTION 11G.4.(a)  G.S. 131E‑175 is amended by adding new subdivisions to read:

"(13)    That ophthalmologists providing ocular surgical procedures in unlicensed settings should be given an opportunity to obtain a license to provide those services to ensure the safety of patients and the provision of quality care.

(14)      That demand for ocular surgical procedures is increasing due to the growth of the elderly population and scientific and technological advancements that have increased the safety and efficacy of these procedures."

SECTION 11G.4.(b)  G.S. 131E‑176 reads as rewritten:

"§ 131E‑176.  Definitions.

As used in this Article, unless the context clearly requires otherwise, the following terms have the meanings specified:

(2)        "Bed capacity" means space used exclusively for inpatient care, including space designed or remodeled for licensed inpatient beds even though temporarily not used for such purposes. The number of beds to be counted in any patient room shall be the maximum number for which adequate square footage is provided as established by rules of the Department except that single beds in single rooms are counted even if the room contains inadequate square footage. The term "bed capacity" also refers to the number of dialysis stations in kidney disease treatment centers, including freestanding dialysis units. The term "bed capacity" does not include space used as a psychiatric facility or hospice inpatient facility.

(9b)      "Health service facility" means a hospital; long‑term care hospital; psychiatric facility; rehabilitation facility; nursing home facility; adult care home; kidney disease treatment center, including freestanding hemodialysis units; intermediate care facility for the mentally retarded; home health agency office; chemical dependency treatment facility; diagnostic center; hospice office, hospice inpatient facility, hospice office or hospice residential care facility; and ambulatory surgical facility.

(9c)      "Health service facility bed" means a bed licensed for use in a health service facility in the categories of (i) acute care beds; (ii) psychiatric beds; (iii) rehabilitation beds; (iv)(iii) nursing home beds; (v)(iv) intermediate care beds for the mentally retarded; (vi)(v) chemical dependency treatment beds; (vii) hospice inpatient facility beds; (viii) (vi) hospice residential care facility beds; (ix)(vii) adult care home beds; and (x)(viii) long‑term care hospital beds.

(13b)    "Hospice inpatient facility" means a freestanding licensed hospice facility or a designated inpatient unit in an existing health service facility which provides palliative and supportive medical and other health services to meet the physical, psychological, social, spiritual, and special needs of terminally ill patients and their families in an inpatient setting. For purposes of this Article only, a hospital which has a contractual agreement with a licensed hospice to provide inpatient services to a hospice patient as defined in G.S. 131E‑201(4) and provides those services in a licensed acute care bed is not a hospice inpatient facility and is not subject to the requirements in G.S. 131E‑176(5)(ii) for hospice inpatient beds.

(16)      "New institutional health services" means any of the following:

n.         The construction, development or other establishment of a hospice, hospice inpatient facility, hospice or hospice residential care facility;

o.         The opening of an additional office by an existing home health agency or hospice hospice, not including a hospice inpatient facility, within its service area as defined by rules adopted by the Department; or the opening of any office by an existing home health agency or hospice hospice, not including a hospice inpatient facility, outside its service area as defined by rules adopted by the Department.

(17c)    "Ocular surgical procedure" means a surgical procedure performed by an ophthalmologist licensed to practice in this State on the eye or its adnexa, including refractive surgery, cataract surgery, and glaucoma surgery.

(17d)   "Ocular surgical procedure room" means a room used by an ophthalmologist licensed to practice in this State for the performance of an ocular surgical procedure that (i) requires local, regional, or general anesthesia and a period of less than 24 hours of post‑operative observation for diagnostic or therapeutic purposes and (ii) does not constitute an ambulatory surgical program as defined in subdivision (1c) of this section.

…."

SECTION 11G.4.(c)  G.S. 131E‑178 reads as rewritten:

"§ 131E‑178.  Activities requiring certificate of need.need; limited exemption for gastrointestinal endoscopy procedures and ocular surgical procedures.

(a)        No person shall offer or develop a new institutional health service without first obtaining a certificate of need from the Department; provided, however, no Department, except as provided in subsections (a1) and (a2) of this section.

(a1)      No person who provides gastrointestinal endoscopy procedures in one or more gastrointestinal endoscopy rooms located in a nonlicensed setting, shall be required to obtain a certificate of need to license that setting as an ambulatory surgical facility with the existing number of gastrointestinal endoscopy rooms, provided that:that the person meets all of the following criteria:

(1)        The license application is postmarked for delivery to the Division of Health Service Regulation by December 31, 2006;2006.

(2)        The applicant verifies, by affidavit submitted to the Division of Health Service Regulation within 60 days of the effective date of this act, that the facility is in operation as of the effective date of this act or that the completed application for the building permit for the facility was submitted by the effective date of this act;act.

(3)        The facility has been accredited by The Accreditation Association for Ambulatory Health Care, The Joint Commission on Accreditation of Healthcare Organizations, or The American Association for Accreditation of Ambulatory Surgical Facilities by the time the license application is postmarked for delivery to the Division of Health Service Regulation of the Department; andDepartment.

(4)        The license application includes a commitment and plan for serving indigent and medically underserved populations.

All other persons proposing to obtain a license to establish an ambulatory surgical facility for the provision of gastrointestinal endoscopy procedures shall be required to obtain a certificate of need. The annual State Medical Facilities Plan shall not include policies or need determinations that limit the number of gastrointestinal endoscopy rooms that may be approved.

(a2)      No ophthalmologist who provides ocular surgical procedures in one or more ocular surgical procedure rooms located in a nonlicensed setting shall be required to obtain a certificate of need to license that setting as an ambulatory surgical facility with the existing number of ocular surgical procedure rooms, provided that the ophthalmologist meets all of the following criteria:

(1)        The license application is postmarked for delivery to the Division of Health Service Regulation by December 31, 2017.

(2)        The applicant verifies, by affidavit submitted to the Division of Health Service Regulation within 60 days after the effective date of this act, that the facility is in operation as of the effective date of this act or that the completed application for the building permit for the facility was submitted by the effective date of this act.

(3)        The facility has been accredited by the Accreditation Association for Ambulatory Health Care, the Joint Commission on Accreditation of Healthcare Organizations, or the American Association for Accreditation of Ambulatory Surgical Facilities by the time the license application is postmarked for delivery to the Division of Health Service Regulation of the Department.

(4)        The license application includes a commitment to and plan for serving indigent and medically underserved populations.

All other persons proposing to obtain a license to establish an ambulatory surgical facility for the provision of ocular surgical procedures shall be required to obtain a certificate of need. The annual State Medical Facilities Plan shall not include policies or need determinations that limit the number of ocular surgical procedure rooms that may be approved.

…."

SECTION 11G.4.(d)  G.S. 131E‑184 is amended by adding new subsections to read:

"(i)       The Department shall exempt from certificate of need review the construction, development, acquisition, or establishment of an ambulatory surgical facility, provided all of the following criteria are met:

(1)        If the applicant seeking this exemption is a physician or group of physicians licensed to practice in this State under Chapter 90 of the General Statutes, the applicant shall make every effort to enter into a joint venture for the construction, development, acquisition, or establishment of the ambulatory surgical facility with an acute care or critical access hospital licensed under Chapter 131E of the General Statutes that is nearest in proximity to the proposed ambulatory surgical facility. If the physician or group of physicians and the nearest acute care or critical access hospital are unable to reach agreement on a joint venture for the construction, development, or establishment of an ambulatory surgical facility, then the physician or group of physicians shall provide written notification of this inability to reach agreement to the Department on forms and in the manner prescribed by the Department. Upon receipt of written confirmation from the Department that the exemption authorized by this section applies, the applicant may proceed with constructing, developing, acquiring, or establishing the ambulatory surgical facility.

(2)        The ambulatory surgical facility must have an agreement with a hospital within a reasonable distance from the facility, or the medical staff at the ambulatory surgical facility must have hospital privileges or other documented arrangements with a hospital that are deemed sufficient by the Department to ensure that inpatient hospital services will be available to address any medical complications that require a patient of the ambulatory surgical facility to be admitted to a hospital for inpatient care.

(3)        The ambulatory surgical facility must have the capability to immediately transfer a patient to a hospital with adequate emergency room services and that is within a reasonable distance from the facility.

(4)        The ambulatory surgical facility must comply with all requirements of the Ambulatory Surgical Facility Licensure Act set forth in Part 4 of Article 6 of Chapter 131E of the General Statutes, including the licensure requirements specified in G.S. 131E‑147.

(j)         The Department shall exempt from certificate of need review the following activities by a community hospital with 200 acute care beds or fewer as of December 31, 2016:

(1)        The development of a new institutional health service.

(2)        The construction, development, or other establishment of a new health service facility, or a portion thereof.

(3)        The acquisition of major medical equipment, magnetic resonance imaging equipment, a lithotripter, or a linear accelerator."

SECTION 11G.4.(e)  This section becomes effective October 1, 2017. Any psychiatric facility or hospice inpatient facility which had operated under a certificate of need prior to the effective date of this act shall be exempt from certificate of need review after the effective date of this act.

 

Repeal of Certificate of Need Laws

SECTION 11G.5.(a)  G.S. 6‑19.1(a) reads as rewritten:

"(a)      In any civil action, other than an adjudication for the purpose of establishing or fixing a rate, or a disciplinary action by a licensing board, brought by the State or brought by a party who is contesting State action pursuant to G.S. 150B‑43 or any other appropriate provisions of law, unless the prevailing party is the State, the court may, in its discretion, allow the prevailing party to recover reasonable attorney's fees, including attorney's fees applicable to the administrative review portion of the case, in contested cases arising under Article 3 of Chapter 150B, to be taxed as court costs against the appropriate agency if:

(1)        The court finds that the agency acted without substantial justification in pressing its claim against the party; and

(2)        The court finds that there are no special circumstances that would make the award of attorney's fees unjust. The party shall petition for the attorney's fees within 30 days following final disposition of the case. The petition shall be supported by an affidavit setting forth the basis for the request.

Nothing in this section shall be deemed to authorize the assessment of attorney's fees for the administrative review portion of the case in contested cases arising under Article 9 of Chapter 131E of the General Statutes.

Nothing in this section grants permission to bring an action against an agency otherwise immune from suit or gives a right to bring an action to a party who otherwise lacks standing to bring the action.

Any attorney's fees assessed against an agency under this section shall be charged against the operating expenses of the agency and shall not be reimbursed from any other source."

SECTION 11G.5.(b)  Subsection (a) of this section applies to contested cases arising on or after January 1, 2025.

SECTION 11G.5.(c)  G.S. 58‑50‑61(a) reads as rewritten:

"(a)      Definitions. – As used in this section, in G.S. 58‑50‑62, and in Part 4 of this Article, the term:

(8)        "Health care provider" means any person who is licensed, registered, or certified under Chapter 90 of the General Statutes or the laws of another state to provide health care services in the ordinary care of business or practice or a profession or in an approved education or training program; a health care facility as defined in G.S. 131E‑176(9b) this section or the laws of another state to operate as a health care facility; or a pharmacy.

(9a)      "Health service facility" means a hospital; long‑term care hospital; psychiatric facility; rehabilitation facility; nursing home facility; adult care home; kidney disease treatment center, including freestanding hemodialysis units; intermediate care facility for the mentally retarded; home health agency office; chemical dependency treatment facility; diagnostic center; hospice office, hospice inpatient facility, and hospice residential care facility; and ambulatory surgical facility.

…."

SECTION 11G.5.(d)  G.S. 58‑55‑35(a) reads as rewritten:

"(a)      Whenever long‑term care insurance provides coverage for the facilities, services, or physical or mental conditions listed below, unless otherwise defined in the policy and certificate, and approved by the Commissioner, such facilities, services, or conditions are defined as follows:

(10)      "Hospice" shall be defined in accordance with the terms of G.S. 131E‑176(13a).means any coordinated program of home care with provision for inpatient care for terminally ill patients and their families. This care is provided by a medically directed interdisciplinary team directly or through an agreement under the direction of an identifiable hospice administration. A hospice program of care provides palliative and supportive medical and other health services to meet the physical, psychological, social, spiritual, and special needs of patients and their families, which are experienced during the final stages of terminal illness and during dying and bereavement.

(11)      "Intermediate care facility for the mentally retarded" shall be defined in accordance with the terms of G.S. 131E‑176(14a).means facilities licensed pursuant to Article 2 of Chapter 122C of the General Statutes for the purpose of providing health and habilitative services based on the developmental model and principles of normalization for persons with mental retardation, autism, cerebral palsy, epilepsy, or related conditions.

…."

SECTION 11G.5.(e)  G.S. 113A‑12(3)e. reads as rewritten:

"e.        A health care facility financed pursuant to Chapter 131A of the General Statutes or receiving a certificate of need under Article 9 of Chapter 131E of the General Statutes."

SECTION 11G.5.(f)  G.S. 122C‑23.1(e) reads as rewritten:

"(e)      As used in this section, "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.Chapter."

SECTION 11G.5.(g)  G.S. 131E‑13(a)(1) reads as rewritten:

"(1)      The corporation shall continue to provide the same or similar clinical hospital services to its patients in medical‑surgery, obstetrics, pediatrics, outpatient and emergency treatment, including emergency services for the indigent, that the hospital facility provided prior to the lease, sale, or conveyance. These services may be terminated only as prescribed by Certificate of Need Law prescribed in Article 9 of Chapter 131E of the General Statutes, or, if Certificate of Need Law is inapplicable, by review procedure designed to guarantee public participation pursuant to rules adopted by the Secretary of the Department of Health and Human Services."

SECTION 11G.5.(h)  G.S. 131E‑136(4) reads as rewritten:

"(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.basis."

SECTION 11G.5.(i)  G.S. 148‑19.1 reads as rewritten:

"§ 148‑19.1.  Exemption from licensure and certificate of need.licensure.

(a)        Inpatient chemical dependency or substance abuse facilities that provide services exclusively to inmates of the Division of Adult Correction of the Department of Public Safety shall be exempt from licensure by the Department of Health and Human Services under Chapter 122C of the General Statutes. If an inpatient chemical dependency or substance abuse facility provides services both to inmates of the Division of Adult Correction of the Department of Public Safety and to members of the general public, the portion of the facility that serves inmates shall be exempt from licensure.

(b)        Any person who contracts to provide inpatient chemical dependency or substance abuse services to inmates of the Division of Adult Correction of the Department of Public Safety may construct and operate a new chemical dependency or substance abuse facility for that purpose without first obtaining a certificate of need from the Department of Health and Human Services pursuant to Article 9 of Chapter 131E of the General Statutes. However, a new facility or addition developed for that purpose without a certificate of need shall not be licensed pursuant to Chapter 122C of the General Statutes and shall not admit anyone other than inmates unless the owner or operator first obtains a certificate of need."

SECTION 11G.5.(j)  Article 9 of Chapter 131E of the General Statutes, G.S. 130A‑45.02(i), 143B‑1292, 150B‑2(8a)k., and 150B‑21.1(6) are repealed.

SECTION 11G.5.(k)  By April 1, 2018, the Department of Health and Human Services, Division of Health Service Regulation, shall identify and report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division any health service facilities or activities that should be exempt from certificate of need review under Article 9 of Chapter 131E of the General Statutes prior to January 1, 2025.

SECTION 11G.5.(l)  Subsection (k) of this section becomes effective when this act becomes law. The remainder of this section becomes effective January 1, 2025.

 

SUBPART XI‑H. DIVISION OF MEDICAL ASSISTANCE (MEDICAID)

 

Medicaid Eligibility

SECTION 11H.1.(a)  Families and children who are categorically and medically needy are eligible for Medicaid, subject to the following annual income levels:

                                                        Categorically                        Medically

                           Family                       Needy                                 Needy

                              Size                    Income Level                     Income Level

                                1                          $ 5,208                                $ 2,904

                                2                             6,828                                   3,804

                                3                             8,004                                   4,404

                                4                             8,928                                   4,800

                                5                             9,888                                   5,196

                                6                           10,812                                   5,604

                                7                           11,700                                   6,000

                                8                           12,432                                   6,300

The Department of Health and Human Services shall provide Medicaid coverage to 19‑ and 20‑year‑olds under this subsection in accordance with federal rules and regulations. Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.

SECTION 11H.1.(b)  For the following Medicaid eligibility classifications for which the federal poverty guidelines are used as income limits for eligibility determinations, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines. The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to the following:

(1)        All elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines.

(2)        Pregnant women with incomes equal to or less than one hundred ninety‑six percent (196%) of the federal poverty guidelines and without regard to resources. Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy.

(3)        Infants under the age of one with family incomes equal to or less than two hundred ten percent (210%) of the federal poverty guidelines and without regard to resources.

(4)        Children aged one through five with family incomes equal to or less than two hundred ten percent (210%) of the federal poverty guidelines and without regard to resources.

(5)        Children aged six through 18 with family incomes equal to or less than one hundred thirty‑three percent (133%) of the federal poverty guidelines and without regard to resources.

The Department of Health and Human Services, Division of Medical Assistance, shall also provide family planning services to men and women of childbearing age with family incomes equal to or less than one hundred ninety‑five percent (195%) of the federal poverty guidelines and without regard to resources.

SECTION 11H.1.(c)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to adoptive children with special or rehabilitative needs, regardless of the adoptive family's income.

SECTION 11H.1.(d)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to "independent foster care adolescents," ages 18, 19, and 20, as defined in section 1905(w)(1) of the Social Security Act (42 U.S.C. § 1396d(w)(1)), without regard to the adolescent's assets, resources, or income levels.

SECTION 11H.1.(e)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to women who need treatment for breast or cervical cancer and who are defined in 42 U.S.C. § 1396a(a)(10)(A)(ii)(XVIII).

 

Medicaid Annual Report

SECTION 11H.2.  The Department of Health and Human Services, Division of Medical Assistance (Division), shall continue the publication of the Medicaid Annual Report and accompanying tables. The Division shall publish the report and tables on its Web site no later than December 31 following each State fiscal year.

 

Provider Application and Recredentialing Fee

SECTION 11H.3.  Chapter 108C of the General Statutes is amended by adding a new section to read:

"§ 108C‑2.1.  Provider application and recredentialing fee.

(a)        Each provider that submits an application to enroll in the Medicaid program shall submit an application fee. The application fee shall be the sum of the amount federally required and one hundred dollars ($100.00).

(b)        The fee required under subsection (a) of this section shall be charged to all providers at recredentialing every five years."

 

Administrative Hearings Funding

SECTION 11H.4.  Of the funds appropriated to the Department of Health and Human Services, Division of Medical Assistance, for administrative contracts and interagency transfers, the Department of Health and Human Services (Department) shall transfer the sum of one million dollars ($1,000,000) for the 2017‑2018 fiscal year and the sum of one million dollars ($1,000,000) for the 2018‑2019 fiscal year to the Office of Administrative Hearings (OAH). These funds shall be allocated by the OAH for mediation services provided for Medicaid applicant and recipient appeals and to contract for other services necessary to conduct the appeals process. The OAH shall continue the Memorandum of Agreement (MOA) with the Department for mediation services provided for Medicaid recipient appeals and contracted services necessary to conduct the appeals process. The MOA will facilitate the Department's ability to draw down federal Medicaid funds to support this administrative function. Upon receipt of invoices from the OAH for covered services rendered in accordance with the MOA, the Department shall transfer the federal share of Medicaid funds drawn down for this purpose.

 

Accounting for Medicaid Receivables as Nontax Revenue

SECTION 11H.5.(a)  Receivables reserved at the end of the 2017‑2018 and 2018‑2019 fiscal years shall, when received, be accounted for as nontax revenue for each of those fiscal years.

SECTION 11H.5.(b)  For the 2017‑2018 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred sixty‑four million seven hundred thousand dollars ($164,700,000) with the Department of State Treasurer to be accounted for as nontax revenue. For the 2018‑2019 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred forty‑nine million six hundred thousand dollars ($149,600,000) with the Department of State Treasurer to be accounted for as nontax revenue. These deposits shall represent the return of General Fund appropriations, nonfederal revenue, fund balances, or other resources from State‑owned and State‑operated hospitals that are used to provide indigent and nonindigent care services. The return from State‑owned and State‑operated hospitals to DHHS will be made from nonfederal resources in an amount equal to the amount of the payments from the Division of Medical Assistance for uncompensated care. The treatment of any revenue derived from federal programs shall be in accordance with the requirements specified in the Code of Federal Regulations, Title 2, Part 225.

 

Volume Purchase Plans and Single Source Procurement

SECTION 11H.6.  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.

 

Annual Issuance of Medicaid Identification Cards

SECTION 11H.7.  The Department of Health and Human Services (Department) shall issue Medicaid identification cards to recipients on an annual basis with updates as needed. The Department shall adopt rules, or amend any current rules relating to Medicaid identification cards, to implement this section.

 

LME/MCO Out‑of‑Network Agreements

SECTION 11H.8.(a)  The Department of Health and Human Services (Department) shall continue to ensure that local management entities/managed care organizations (LME/MCOs) utilize an out‑of‑network agreement that contains standardized elements developed in consultation with LME/MCOs. The out‑of‑network agreement shall be a streamlined agreement between a single provider of behavioral health or intellectual/developmental disability (IDD) services and an LME/MCO to ensure access to care in accordance with 42 C.F.R. § 438.206(b)(4), reduce administrative burden on the provider, and comply with all requirements of State and federal laws and regulations. LME/MCOs shall use the out‑of‑network agreement in lieu of a comprehensive provider contract when all of the following conditions are met:

(1)        The services requested are medically necessary and cannot be provided by an in‑network provider.

(2)        The behavioral health or IDD provider's site of service delivery is located outside of the geographical catchment area of the LME/MCO, and the LME/MCO is not accepting applications or the provider does not wish to apply for membership in the LME/MCO closed network.

(3)        The behavioral health or IDD provider is not excluded from participation in the Medicaid program, the NC Health Choice program, or other State or federal health care program.

(4)        The behavioral health or IDD provider is serving no more than two enrollees of the LME/MCO, unless the agreement is for inpatient hospitalization, in which case the LME/MCO may, but shall not be required to, enter into more than five such out‑of‑network agreements with a single hospital or health system in any 12‑month period.

SECTION 11H.8.(b)  Medicaid providers providing services pursuant to an out‑of‑network agreement shall be considered a network provider for purposes of Chapter 108D of the General Statutes only as it relates to enrollee grievances and appeals.

 

Medicaid Contingency Reserve

SECTION 11H.9.(a)  Funds in the Medicaid Contingency Reserve established by Section 12H.38 of S.L. 2014‑100 shall be used only for budget shortfalls in the Medicaid Program. These funds shall be available for expenditure only upon an appropriation by act of the General Assembly. It is the intent of the General Assembly to appropriate funds from the Medicaid Contingency Reserve only if:

(1)        The Director of the Budget, after the State Controller has verified that receipts are being used appropriately, has found that additional funds are needed to cover a shortfall in the Medicaid budget for the State fiscal year.

(2)        The Director of the Budget has reported immediately to the Fiscal Research Division on the amount of the shortfall found in accordance with subdivision (1) of this subsection. This report shall include an analysis of the causes of the shortfall, such as (i) unanticipated enrollment and mix of enrollment, (ii) unanticipated growth or utilization within particular service areas, (iii) errors in the data or analysis used to project the Medicaid budget, (iv) the failure of the program to achieve budgeted savings, (v) other factors and market trends that have impacted the price of or spending for services, (vi) variations in receipts from prior years or from assumptions used to prepare the Medicaid budget for the current fiscal year, or (vii) other factors. The report shall also include data in an electronic format that is adequate for the Fiscal Research Division to confirm the amount of the shortfall and its causes.

SECTION 11H.9.(b)  Nothing in this section shall be construed to limit the authority of the Governor to carry out his duties under the Constitution.

 

LME/MCO Intergovernmental Transfers

SECTION 11H.10.  The local management entities/managed care organizations (LME/MCOs) shall make intergovernmental transfers to the Department of Health and Human Services, Division of Medical Assistance (DMA), in an aggregate amount of seventeen million seven hundred thirty‑six thousand nine hundred eighty‑five dollars ($17,736,985) in the 2017‑2018 fiscal year and in an aggregate amount of eighteen million twenty‑eight thousand two hundred seventeen dollars ($18,028,217) for the 2018‑2019 fiscal year. The amount of the intergovernmental transfer that each individual LME/MCO is required to make in each fiscal year shall be as follows:

                                                                                    2017‑2018                   2018‑2019

Alliance Behavioral Healthcare                                  $2,994,703                  $3,043,874

Cardinal Innovations Healthcare                                $4,118,912                  $4,186,543

Eastpointe                                                                   $2,011,858                  $2,044,892

Partners Behavioral Health Management                   $1,913,793                  $1,945,216

Sandhills Center                                                          $1,924,822                  $1,956,427

Trillium Health Resources                                           $2,457,426                  $2,497,775

Vaya Health                                                                $2,315,471                  $2,353,490

In the event that any county disengages from an LME/MCO and realigns with another LME/MCO during the 2017‑2019 fiscal biennium, DMA shall have the authority to reallocate the amount of the intergovernmental transfer that each affected LME/MCO is required to make, taking into consideration the change in catchment area and covered population, provided that the aggregate amount of the transfers received from all LME/MCOs in each year of the fiscal biennium are achieved.

 

Expand North Carolina Innovations Waiver Slots

SECTION 11H.11.  The Department of Health and Human Services, Division of Medical Assistance, shall amend the North Carolina Innovations waiver to increase the number of slots available under the waiver by 250 slots. These additional slots shall be made available on January 1, 2018.

 

Increase Personal Care Services Rate

SECTION 11H.12.  Beginning January 1, 2018, the Department of Health and Human Services, Division of Medical Assistance, shall increase to three dollars and ninety‑four cents ($3.94) the rate paid per 15‑minute billing unit for personal care services provided pursuant to Clinical Coverage Policy 3L.

 

Graduate Medical Education Medicaid Reimbursement

SECTION 11H.13.(a)  Beginning July 1, 2017, the Department of Health and Human Services, Division of Medical Assistance, shall no longer be required to implement the prohibitions on reimbursement for Graduate Medical Education payments required by Section 12H.23 of S.L. 2015‑241, as amended by Section 88 of S.L. 2015‑264.

SECTION 11H.13.(b)  No later than January 1, 2018, the Department of Health and Human Services, Division of Medicaid Assistance (DMA), shall report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice and the Fiscal Research Division on both the actual and forecasted total requirements less receipts of payments made for the GME add‑on to the DRG Unit Value (Base) rate. To the extent the total requirements less receipts for these payments exceeds the ten million dollars ($10,000,000) appropriated for this purpose in each year of the 2017‑2019 fiscal biennium, the Department shall identify the reductions that are being implemented to cover any excess costs.

 

Plan to Implement Coverage for Home Visits for Pregnant Women and Families with Young Children

SECTION 11H.14.(a)  It is the intent of the General Assembly to provide Medicaid and NC Health Choice coverage for evidence‑based home visits for pregnant women and families with young children designed to improve maternal and child health, prevent child abuse and neglect, encourage positive parenting, and promote child development and school readiness that are consistent with the model used by Nurse‑Family Partnership. No later than July 1, 2018, the Department of Health and Human Services, Division of Medical Assistance (Department), shall begin providing Medicaid and NC Health Choice coverage for home visits statewide or through a pilot program.

The Department shall develop a plan to implement changes necessary to provide Medicaid and NC Health Choice coverage for home visits statewide or through a pilot program; however, consistent with G.S. 108A‑54(e)(4), the Department is not authorized to make any changes to eligibility for the Medicaid or NC Health Choice programs. The plan shall detail the design and scope of coverage for the home visits for pregnant women and families with young children and include the identification of any State Plan Amendments or waivers that may be necessary to submit to the Centers for Medicare and Medicaid Services.

SECTION 11H.14.(b)  No later than November 1, 2017, the Department shall submit to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice and the Fiscal Research Division a report containing the following information:

(1)        As required by subsection (a) of this section, a copy of the plan to provide, no later than July 1, 2018, Medicaid and NC Health Choice coverage for home visits statewide or through a pilot program.

(2)        A detailed description of the coverage to be provided, including the proposed service definition, the home visit schedule, the scope of the covered service, and the anticipated reimbursement rate to be paid.

(3)        An analysis of the total fiscal impact of adding Medicaid and NC Health Choice coverage for the home visits for pregnant women and families with young children. This shall include an outline of both costs and savings to the Medicaid and NC Health Choice programs, as well as any savings to other programs provided by the State.

(4)        A description of how the Department intends to leverage any private funding that may be currently utilized to provide coverage for evidence‑based home visits for pregnant women and families with young children.

(5)        Whether the Department intends to add this coverage pursuant to its authority under G.S. 108A‑54(e) or whether additional appropriations are required.

(6)        Any plans to include pay‑for‑success initiatives as part of the Medicaid and NC Health Choice funding for the covered service.

(7)        An anticipated time line for the implementation of the Department's plan and the submission of any necessary State Plan Amendments or waivers to the Centers for Medicare and Medicaid Services.

 

NC TRACKS Enhancements to Prevent and Detect Fraud, Waste, and Abuse

SECTION 11H.15.  The Department of Health and Human Services (Department) shall enhance the capability of the NC Tracks Medicaid Management Information System (MMIS) to include the ability to detect and prevent fraud, waste, and abuse prior to the payment of claims. Program changes shall be made to MMIS to prevent claims payment to providers when fraud, waste, or abuse is identified. The new capability required by this subsection shall utilize publicly available data regarding Medicaid providers and recipients. For this new capability, the Department shall establish criteria for the identification of suspicious claims, suspicious patterns of activity, or both without preselecting providers or recipients for review. Claims or patterns of activity identified by this new capability shall be evaluated utilizing a combination of automated and manual processes to determine the validity of the suspected fraud, waste, or abuse prior to the issuance of any payment to the provider for the suspicious claims.

The new capability required by this subsection shall be implemented utilizing existing MMIS contracts no later than 120 days after this section becomes law. Nothing in this section shall be construed to change or limit any current laws or rules regarding prompt payment to providers or provider prepayment claims review.

 

Duration of Medicaid and NC Health Choice Program Modifications

SECTION 11H.16.  Except for eligibility categories and income thresholds and except for statutory changes, the Department of Health and Human Services shall not be required to maintain, after June 30, 2019, any modifications to the Medicaid and NC Health Choice programs required by this Subpart.

 

Medicaid Transformation Technical and Clarifying Changes

SECTION 11H.17.(a)  Section 4 of S.L. 2015‑245, as amended by Section 2(b) of S.L. 2016‑121, reads as rewritten:

"SECTION 4. Structure of Delivery System. – The transformed Medicaid and NC Health Choice programs described in Section 1 of this act shall be organized according to the following principles and parameters:

(4)        Services covered by PHPs. – Capitated PHP contracts shall cover all Medicaid and NC Health Choice services, including physical health services, prescription drugs, long‑term services and supports, and behavioral health services for NC Health Choice recipients, except as otherwise provided in this subdivision. The capitated contracts required by this subdivision shall not cover:

d.         Audiology, speech therapy, occupational therapy, physical therapy, nursing, and psychological services prescribedServices documented in an Individualized Education Program (IEP) and performed by schools or individuals contracted withprovided or billed by Local Education Agencies.

e.         Services provided directlyand billed by a Children's Developmental Services Agency (CDSA) or by a provider under contract with a CDSA if the service is authorized through the CDSA and isthat are included on the child's Individualized Family Service Plan.

…."

SECTION 11H.17.(b)  G.S. 143B‑216.80(b)(1) reads as rewritten:

"(1)      Employees of the Division of Health Benefits shall not be subject to the North Carolina Human Resources Act, except as provided in G.S. 126‑5(c1)(31).G.S. 126‑5(c1)(33)."

 

Notice of Program Reimbursement as Basis for Recoupment of Overpayments

SECTION 11H.18.(a)  G.S. 108C‑2 is amended by adding a new subdivision to read:

"(8a)    Notice of program reimbursement. – The written notice reflecting the Department's final determination of the total amount of reimbursement, if any, due to either the provider or the Department following receipt of a provider's annual Medicaid or Health Choice cost report or amended Medicaid or Health Choice cost report where permitted or required."

SECTION 11H.18.(b)  G.S. 108C‑5 reads as rewritten:

"§ 108C‑5.  Payment suspension and audits utilizing extrapolation.

(a)        The Department may suspend payments to a provider in accordance with the requirements and procedures set forth in 42 C.F.R. § 455.23.

(b)        In addition to the procedures for suspending payment set forth at 42 C.F.R. § 455.23, the Department may also suspend payment to any provider that (i) owes a final overpayment, assessment, or fine to the Department and has not entered into an approved payment plan with the Department or Department; (ii) owes the Department an amount identified on a notice of program reimbursement, regardless of whether the amount owed is a final overpayment, whether the provider's appeal rights have been exhausted, or whether any review of the amount owed is pending; or (iii) has had its participation in the Medicaid or Health Choice programs suspended or terminated by the Department. For purposes of this section, a suspension or termination of participation does not become final until all administrative appeal rights have been exhausted and shall not include any agency decision that is being contested at the Department or the Office of Administrative Hearings or in Superior Court provided that the Superior Court has entered a stay pursuant to the provisions of G.S. 150B‑48.

(c)        For providers who owe a final overpayment, assessment, or fine to the Department, the payment suspension shall begin the thirty‑first day after the overpayment, assessment, or fine becomes final. The payment suspension shall not exceed the amount owed to the Department, including any applicable penalty and interest charges.

(c1)      Notwithstanding subsection (c) of this section, for providers who owe the Department an amount identified on a notice of program reimbursement, the Department shall suspend payments to the provider immediately upon issuance of the notice of program reimbursement. Payments shall be suspended as required by this subsection regardless of whether the amount owed is a final overpayment, whether the provider's appeal rights have been exhausted, or whether any review of the amount owed is pending. The payment suspension shall not exceed the amount owed to the Department, including any applicable penalty and interest charges.

(d)       Providers whose participation in the Medicaid or Health Choice programs has been suspended or terminated shall have all payments suspended beginning on the thirty‑first day after the suspension or termination becomes final.

(e)        The Department shall consult with the N.C. Departments of Treasury and Revenue Department of State Treasurer, the Department of Revenue, and other State departments and agencies to determine if a provider owes debts or fines to the State. The Department may collect any of these debts owed to the State subsequent to consideration by the Department of the financial impact upon the provider and the impact upon access to the services provided by the provider.

(f)        When issuing payment suspensions in accordance with this Chapter, the Department may suspend payment to all providers which that share the same IRS Employee Identification Number or corporate parent as the provider or provider site location which that owes the final overpayment, assessment, or fine.fine, or that owes the amount identified on the notice of program reimbursement. The Department shall give 30 days advance written notice to all providers which that share the same IRS Employee Identification Number or corporate parent as the provider or provider site location of the intention of the Department to implement a payment suspension.

(g)        The Department is authorized to approve a payment plan for a provider to pay a final overpayment, assessment, or fine including interest and any penalty. The payment plan can may include a term of up to 24 months. The Department shall establish in rule the conditions of such provider payment plans. Nothing in this subsection shall prevent the provider and the Department from mutually agreeing to modifications of a payment plan.

(h)        All payments suspended in accordance with this Chapter shall be applied toward any final overpayment, assessment, or fine owed to the Department.Department and any amount owed to the Department that was identified on a notice of program reimbursement.

…."

SECTION 11H.18.(c)  This section becomes effective October 1, 2017, and applies to notices of program reimbursement issued on or after that date.

 

Prepayment Claims Review Modifications

SECTION 11H.19.(a)  G.S. 108C‑7 reads as rewritten:

"§ 108C‑7.  Prepayment claims review.

(a)        In order to ensure that claims presented by a provider for payment by the Department meet the requirements of federal and State laws and regulations and medical necessity criteria, a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or investigations, data analysis performed by the Department Department, the failure of the provider to timely respond to a request for documentation made by the Department or one of its authorized representatives, or other grounds as defined by the Department in rule.

(b)        Providers shall not be entitled to payment prior to claims review by the Department. The Department shall notify the provider in writing of the decision and the process for submitting claims for prepayment claims review no less than 20 calendar days prior to instituting prepayment claims review. The written notice shall be deposited, first‑class postage prepaid, in the United States mail and addressed to the most recent address given by the provider to the Department. The prepayment claims review shall be instituted no less than 20 calendar days from the date of the mailing of written notification. The notice shall contain all of the following:

(4)        A specific list of all supporting documentation that the provider will need to submit contemporaneously with the to the prepayment review vendor for all claims that will be are subject to the prepayment claims review.

(d)       The Department shall process all clean claims submitted for prepayment review within 20 calendar days of submission by the provider receipt of the supporting documentation for each claim by the prepayment review vendor. To be considered by the Department, the documentation submitted must be complete, legible, and clearly identify the provider to which the documentation applies. If the provider failed to provide any of the specifically requested supporting documentation necessary to process a claim pursuant to this section, the Department shall send to the provider written notification of the lacking or deficient documentation within 15 calendar days of receipt of such claim the due date of requested supporting documentation. The Department shall have an additional 20 days to process a claim upon receipt of the documentation.

(e)        The provider shall remain subject to the prepayment claims review process until the provider achieves three consecutive months with a minimum seventy percent (70%) clean claims raterate, provided that the number of claims submitted per month is no less than fifty percent (50%) of the provider's average monthly submission of Medicaid claims for the three‑month period prior to the provider's placement on prepayment review. If a provider does not submit any claims following placement on prepayment review in any given month, then the claims accuracy rating shall be zero percent (0%) for each month in which no claims were submitted. If the provider does not meet this standard the seventy percent (70%) clean claims rate minimum requirement for three consecutive months within six months of being placed on prepayment claims review, the Department may implement sanctions, including termination of the applicable Medicaid Administrative Participation Agreement, or continuation of prepayment review for an additional six‑month period.review. The Department shall give adequate advance notice of any modification, suspension, or termination of the Medicaid Administrative Participation Agreement. In no instance shall prepayment claims review continue longer than 12 months.

Prepayment claims review shall not continue longer than 24 consecutive months unless the Department has initiated the termination or other sanction of the provider and the provider has appealed that termination or sanction. If the Department has initiated the termination or other sanction of the provider and the provider has appealed that termination or sanction, then the provider shall remain on prepayment review until the final disposition of the Department's termination or other sanction of the provider.

(e1)      Failure of a provider to meet the seventy percent (70%) clean claims rate minimum requirement may result in a termination action. A termination action taken shall reflect the failure of the provider to meet the seventy percent (70%) clean claims rate minimum requirement and shall result in exclusion of the provider from future participation in the Medicaid program. If a provider fails to meet the seventy percent (70%) clean claims rate minimum requirement and subsequently requests a voluntary termination, the termination shall reflect the provider's failure to successfully complete prepayment claims review and shall result in exclusion of the provider from future participation in the Medicaid program.

(e2)      A provider shall not withhold claims to avoid the claims review process. Any claims for services provided during the period of prepayment review may still be subject to review prior to payment regardless of the date the claims are submitted and regardless of whether the provider has been taken off of prepayment review for any reason, including attaining a minimum of seventy percent (70%) clean claims rate for three consecutive months, the expiration of the 24‑month time limit, or the termination of the provider.

(f)        The decision to place or maintain a provider on prepayment claims review does not constitute a contested case under Chapter 150B of the General Statutes. A provider may not appeal or otherwise contest a decision of the Department to place or maintain a provider on prepayment review.

(g)        If a provider elects to appeal the Department's decision to impose sanctions on the provider as a result of the prepayment review process to the Office of Administrative Hearings, then the provider shall have 45 days from the date that the appeal is filed to submit any documentation or records that address or challenge the findings of the prepayment review. The Department shall not review, and the administrative law judge shall not admit into evidence, any documentation or records submitted by the provider after the 45‑day deadline. In order for a provider to meet its burden of proof under G.S. 108C‑12(d) that a prior claim denial should be overturned, the provider must prove that (i) all required documentation was provided at the time the claim was submitted and was available for review by the prepayment review vendor and (ii) the claim should not have been denied at the time of the vendor's initial review."

SECTION 11H.19.(b)  This section becomes effective October 1, 2017, and applies to providers who are placed on prepayment review on or after that date and written notices provided to providers on or after that date.

 

Medicaid Eligibility Monitoring

SECTION 11H.20.(a)  Article 2 of Chapter 108A of the General Statutes is amended by adding a new section to read:

"§ 108A‑55.5.  Eligibility monitoring for medical assistance.

(a)        On at least a quarterly basis, the Department shall review information concerning changes in circumstances that may affect medical assistance beneficiaries' eligibility to receive medical assistance benefits. The Department shall share the information directly with, or make the information available to, the county department of social services that determined the beneficiary's eligibility.

(b)        The information reviewed by the Department shall include all of the following:

(1)        Earned and unearned income.

(2)        Employment status and changes in employment.

(3)        Residency status.

(4)        Enrollment status in other State‑administered public assistance programs.

(5)        Financial resources.

(6)        Incarceration status.

(7)        Death records.

(8)        Lottery winnings.

(9)        Enrollment status in public assistance programs outside of this State.

(c)        A county department of social services shall promptly review the information provided or made available by the Department in accordance with subsection (a) of this section to determine if the information indicates a change in circumstances that may affect a medical assistance beneficiary's eligibility to receive medical assistance benefits and take one of the following actions:

(1)        If a review of the information does not result in the county department of social services finding a discrepancy or change in a beneficiary's circumstances that may affect that beneficiary's eligibility to receive medical assistance benefits, the county department of social services shall take no further action.

(2)        If a review of the information does result in the county department of social services finding a discrepancy or change in a beneficiary's circumstances that may affect that beneficiary's eligibility for medical assistance benefits, the county department of social services shall provide written notice to the beneficiary that describes in sufficient detail the circumstances of the discrepancy or change in circumstances that would affect the beneficiary's eligibility for medical assistance benefits. The notice must include the following information:

a.         The beneficiary will have 10 business days from the time of mailing to respond.

b.         A response from the beneficiary must be in writing.

c.         Self‑declarations made by the beneficiary will not be accepted as verification of information in the response.

d.         The consequences of taking no action.

(d)       After the expiration of 10 business days from the time of mailing the notice required under subsection (c) of this section, the county department of social services shall take one of the following actions:

(1)        If a beneficiary did not respond to the notice, the county department of social services shall redetermine the beneficiary's eligibility for medical assistance benefits and provide the beneficiary with proper notice under G.S. 108A‑79.

(2)        If a beneficiary responds to the notice and disagrees with the information in the notice, the county department of social services shall reinvestigate the matter and take one of the following actions:

a.         If the county department of social services determines that there has been an error and the beneficiary's eligibility to receive medical assistance benefits is not affected, then no further action shall be taken.

b.         If the county department of social services determines that there is no error, the county department of social services shall redetermine the beneficiary's eligibility for medical assistance benefits and provide the beneficiary with proper notice under G.S. 108A‑79.

(3)        If a beneficiary responds to the notice and confirms the information in the notice is correct, then the county department of social services shall redetermine the beneficiary's eligibility for medical assistance benefits and provide the beneficiary with proper notice under G.S. 108A‑79.

If, at any time after receiving a beneficiary's response to the notice, the county department of social services determines that there is a risk of fraud or misrepresentation or inadequate documentation, then the county department of social services may request additional documentation from the beneficiary.

(e)        Nothing in this section shall preclude the Department or any county department of social services from receiving or reviewing additional information related to a beneficiary's eligibility for medical assistance benefits that is obtained in a manner other than that provided for under this section."

SECTION 11H.20.(b)  The Department of Health and Human Services may sign a memorandum of understanding with any department, agency, or division of the State to obtain information concerning individuals enrolled in Medicaid that indicates a change in circumstances that may affect the individuals' eligibility to receive Medicaid benefits under G.S. 108A‑55.5(a).

SECTION 11H.20.(c)  The Department of Health and Human Services may contract with one or more vendors to provide information concerning individuals enrolled in Medicaid that indicates a change in circumstances that may affect the individuals' eligibility to receive Medicaid benefits under G.S. 108A‑55.5(a). The quarterly cost, net of receipts, of a contract entered into under this subsection must be less than the cost of claims, net of receipts, for the preceding quarter for individuals identified.

SECTION 11H.20.(d)  The Department of Health and Human Services (Department) shall consider joining any multistate cooperative to identify individuals who are also enrolled in public assistance programs outside of this State, including the National Accuracy Clearinghouse. No later than October 1, 2017, the Department shall report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice findings that explain the reasons for joining or not joining any multistate cooperative, and, if a determination has been made to join the multistate cooperative, a date when membership is expected.

SECTION 11H.20.(e)  Subsection (a) of this section becomes effective January 1, 2018. The remainder of this section is effective when this act becomes law.

 

Medicaid Eligibility Determination Timeliness Reporting

SECTION 11H.21.  Part 10 of Article 2 of Chapter 108A of the General Statutes is amended by adding a new section to read:

"§ 108A‑70.43.  Reporting.

No later than March 1 of each year, the Department shall submit a report for the prior calendar year to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division containing the following information:

(1)        The annual statewide percentage of Medicaid applications processed in a timely manner for the fiscal year.

(2)        The statewide average number of days to process Medicaid applications for each month in the fiscal year.

(3)        The annual percentage of Medicaid applications processed in a timely manner by each county department of social services for the fiscal year.

(4)        The average number of days to process Medicaid applications for each month for each county department of social services.

(5)        The number of months during the fiscal year that each county department of social services met the timely processing standards under G.S. 108A‑70.38.

(6)        The number of months during the fiscal year that each county department of social services failed to meet the timely processing standards under G.S. 108A‑70.38.

(7)        A description of all corrective action activities conducted by the Department and county departments of social services in accordance with G.S. 108A‑70.36.

(8)        A description of how the Department plans to assist county departments of social services in meeting timely processing standards for Medicaid applications, for every county in which the performance metrics for processing Medicaid applications in a timely manner do not show significant improvement compared to the previous fiscal year."

 

Support Improvement in the Accuracy of Medicaid Eligibility Determinations

SECTION 11H.22.(a)  G.S. 108A‑25(b) reads as rewritten:

"(b)      The program of medical assistance is established as a program of public assistance and shall be administered by the Department of Health and Human Services in accordance with G.S. 108A‑54. Medicaid eligibility administration may be delegated to the county departments of social services under rules adopted by the Department of Health and Human Services."

SECTION 11H.22.(b)  No later than November 1, 2017, the Department of Health and Human Services (Department) shall report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice on progress made regarding the accuracy of county Medicaid eligibility determinations in response to the State Auditor's January 2017 Performance Audit entitled "North Carolina Medicaid Program Recipient Eligibility Determination." The Department's report shall include the following information:

(1)        An identification of stakeholders, including the county departments of social services, the Department has engaged to address issues surrounding the accuracy of Medicaid eligibility determinations by county departments of social services.

(2)        Opportunities identified by the Department and stakeholders to address accuracy in Medicaid determinations.

(3)        Any steps the Department has taken, or plans to take, to assist county departments of social services with improving accuracy in Medicaid eligibility determinations, including a time line for implementation of each planned action.

(4)        Any changes to legislation or needs for funding identified by the Department to assist with improving accuracy in Medicaid determinations.

SECTION 11H.22.(c)  Article 2 of Chapter 108A of the General Statutes is amended by adding a new Part to read:

"Part 11. Medicaid Eligibility Determinations Accuracy and Quality Assurance.

"§ 108A‑70.45.  Applicability.

If a federally recognized Native American tribe within the State has assumed responsibility for the Medicaid program pursuant to G.S. 108A‑25(e), then this Part applies to the tribe in the same manner as it applies to county departments of social services.

"§ 108A‑70.46.  Audit of county Medicaid determinations.

Beginning January 1, 2019, the Department of Health and Human Services, Division of Central Management and Support, shall, on an annual basis, audit all county departments of social services for compliance with the accuracy standards adopted under G.S. 108A‑70.47 for Medicaid eligibility determinations made within a 12‑month period. This annual audit shall also include an evaluation of compliance with the quality assurance standards under G.S. 108A‑70.48 by the county department of social services. Audits shall be conducted for initial Medicaid eligibility determination applications as well as Medicaid reenrollment determinations.

"§ 108A‑70.47.  Medicaid eligibility determination processing accuracy standards.

(a)        The Department shall require county departments of social services to comply with accuracy standards set forth in rule for the processing of Medicaid eligibility determinations. The Department shall set the following standards:

(1)        Accuracy standards with regards to errors that caused an ineligible Medicaid recipient to be approved for Medicaid benefits.

(2)        Accuracy standards with regards to errors that caused the denial of benefits to an applicant that should have been approved for Medicaid benefits.

(3)        Accuracy standards with regards to errors made during the eligibility determination process that did not change the outcome of the eligibility determination.

(b)        Standards under this section shall be developed by the Department in consultation with the State Auditor.

"§ 108A‑70.48.  Quality assurance.

The Department shall require county departments of social services to comply with quality assurance minimum standards set forth in rule. The quality assurance standards shall be based upon best practices and shall be developed by the Department in consultation with the State Auditor.

"§ 108A‑70.49.  Corrective action.

(a)        If the Department's annual audit under G.S. 108A‑70.46 results in a determination that a county department of social services fails to meet any of the standards adopted under G.S. 108A‑70.47 or G.S. 108A‑70.48, the Department and the county department of social services shall enter into a joint corrective action plan to improve the accurate processing of applications.

(b)        A joint corrective action plan entered into pursuant to this section shall specifically identify the following components:

(1)        The duration of the joint corrective action plan, not to exceed 24 months. If a county department of social services shows measurable progress in meeting the performance requirements in the joint corrective action plan, then the duration of the joint corrective action plan may be extended by six months, but in no case shall a joint corrective action plan exceed 36 months.

(2)        A plan for improving the accurate processing of applications that specifically describes the actions to be taken by the county department of social services and the Department.

(3)        The performance requirements for the county department of social services that constitute successful completion of the joint corrective action plan.

(4)        Acknowledgment that failure to successfully complete the joint corrective action plan will result in temporary assumption of Medicaid eligibility administration by the Department, in accordance with G.S. 108A‑70.50.

"§ 108A‑70.50.  Temporary assumption of Medicaid eligibility administration.

(a)        If a county department of social services fails to successfully complete its joint corrective action plan, the Department shall give the county department of social services, the county manager, and the board of social services or the consolidated human services board, created pursuant to G.S. 153A‑77(b), at least 90 days' notice that the Department intends to temporarily assume Medicaid eligibility administration, in accordance with subsection (b) of this section. The notice shall include the following information:

(1)        The date on which the Department intends to temporarily assume administration of Medicaid eligibility determinations.

(2)        The performance requirements in the joint corrective action plan that the county department of social services failed to meet.

(3)        Notice of the county department of social services' right to appeal the decision to the Office of Administrative Hearings, pursuant to Article 3 of Chapter 150B of the General Statutes.

(b)        Notwithstanding any provision of law to the contrary, if a county department of social services fails to successfully complete its joint corrective action plan, the Department shall temporarily assume Medicaid eligibility administration for the county upon giving notice as required by subsection (a) of this section. During a period of temporary assumption of Medicaid eligibility administration, the following shall occur:

(1)        The Department shall administer the Medicaid eligibility function in the county. Administration by the Department may include direct operation by the Department, including supervision of county Medicaid eligibility workers or contracts for operation to the extent permitted by federal law and regulations.

(2)        The county department of social services is divested of the authority to administer Medicaid eligibility determinations.

(3)        The Department shall direct and oversee the expenditure of all funding for the administration of Medicaid eligibility in the county.

(4)        The county shall continue to pay the nonfederal share of the cost of Medicaid eligibility administration and shall not withdraw funds previously obligated or appropriated for Medicaid eligibility administration.

(5)        The county shall pay the nonfederal share of additional costs incurred to ensure compliance with the accuracy and quality assurance standards required by this Part.

(6)        The Department shall work with the county department of social services to develop a plan for the county department of social services to resume Medicaid eligibility administration and perform Medicaid eligibility determinations more accurately.

(7)        The Department shall inform the county board of commissioners, the county manager, the county director of social services, and the board of social services or the consolidated human services board, created pursuant to G.S. 153A‑77(b), of key activities and any ongoing concerns during the temporary assumption of Medicaid eligibility administration.

(c)        Upon the Department's determination that Medicaid eligibility determinations can be performed accurately and with proper quality assurance by the county department of social services based on the standards adopted under G.S. 108A‑70.47 and G.S. 108A‑70.48, the Department shall notify the county department of social services, the county manager, and the board of social services or the consolidated human services board, created pursuant to G.S. 153A‑77(b), that temporary assumption of Medicaid eligibility administration will be terminated and the effective date of termination. Upon termination, the county department of social services resumes its full authority to administer Medicaid eligibility determinations.

"§ 108A‑70.51.  Reporting.

Beginning with the calendar year 2020, no later than March 1 of each year, the Department shall submit a report to the Joint Legislative Committee on Medicaid and NC Health Choice, the Fiscal Research Division, and the State Auditor that contains the following information about the prior calendar year:

(1)        The annual statewide percentage of county departments of social services that met the accuracy standards adopted under G.S. 108A‑70.47 in the prior fiscal year.

(2)        The annual statewide percentage of county departments of social services that met the quality assurance standards adopted under G.S. 108A‑70.48 in the prior fiscal year.

(3)        The annual audit result for each standard adopted under G.S. 108A‑70.47 for each county of department services.

(4)        The number of years in the preceding five‑year period that each county department of social services failed to meet the standards in G.S. 108A‑70.47 or G.S. 108A‑70.48.

(5)        A description of all corrective action activities conducted by the Department and county departments of social services in accordance with G.S. 108A‑70.49.

(6)        For every county in which the performance metrics for processing Medicaid applications in an accurate manner do not show significant improvement compared to the previous fiscal year, a description of how the Department plans to assist county departments of social services in accuracy and quality assurance standards for Medicaid applications."

SECTION 11H.22.(d)  G.S. 150B‑23(a5) reads as rewritten:

"(a5)    A county that appeals a decision of the Department of Health and Human Services to temporarily assume Medicaid eligibility administration in accordance with G.S. 108A‑70.37G.S. 108A‑70.42 or G.S. 108A‑70.50 may commence a contested case under this Article in the same manner as any other petitioner. The case shall be conducted in the same manner as other contested cases under this Article."

SECTION 11H.22.(e)  The Department of Health and Human Services, Division of Central Management and Support (Department), shall collaborate with the State Auditor to develop a plan of implementation of the annual audits under this section. The plan must include the following information:

(1)        Accuracy standards and quality assurance standards to be implemented.

(2)        The audit schedule that includes all counties.

(3)        The audit methodology to be utilized, including any information that may vary based upon county size or other factors.

(4)        Details illustrating that the audit methodology is statistically sound, including the statistically significant number of cases to be reviewed in each county.

(5)        Anticipated costs of implementing the plan.

(6)        A certification from the State Auditor that the Department's plan for the annual audits has the approval of the State Auditor.

No later than March 1, 2018, the Department shall submit a copy of the plan to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice with any proposed recommendations, suggested legislation, or funding requests.

SECTION 11H.22.(f)  Article 2 of Chapter 108A of the General Statutes is amended by adding a new section to read:

"§ 108A‑25.1A.  Responsibility for errors.

(a)        A county department of social services shall be financially responsible for the erroneous issuance of Medicaid benefits and Medicaid claims payments resulting when the county department of social services takes any action that requires payment of Medicaid claims for an ineligible individual, for ineligible dates, or in an amount that includes a recipient's liability and for which the State cannot claim federal participation.

(b)        Notwithstanding subsection (a) of this section, a county department of social services shall not be financially responsible for the erroneous issuance of Medicaid benefits and Medicaid claims payments resulting from a failure or error attributable solely to the State.

(c)        The amounts to be charged back to a county department of social services for erroneous payments of claims shall be the State and federal shares of all erroneous payments, not to exceed the lesser of the amount of actual error or claims payment."

SECTION 11H.22.(g)  The Department of Health and Human Services (Department) shall design and implement a training and certification program for caseworkers utilizing North Carolina Families Accessing Services Through Technology (NC FAST). The training and certification program shall be available on a statewide basis, and the Department shall provide training to caseworkers at county departments of social services at a location within reasonable travel distance from the county departments of social services multiples times per year. No later than 18 months after the Department has implemented the training and certification program, the Department shall require all caseworkers inputting data or making determinations for eligibility for State programs through NC FAST to be certified. A certification may last no longer than three years before an individual is required to be recertified. The Department may adopt and amend rules to implement this training and certification program.

SECTION 11H.22.(h)  No later than 18 months after the Department has implemented the training and certification program under subsection (g) of this section, the Department shall include in its audits required under G.S. 108A‑70.46 a verification that all county departments of social services are in compliance with the certification program requirements for individuals involved in the Medicaid eligibility determination process.

SECTION 11H.22.(i)  No later than March 1, 2018, the Department shall submit to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Medicaid and NC Health Choice, and the Fiscal Research Division a report on the implementation of the training and certification program required under this section. The report shall include the following:

(1)        A detailed outline of what the training and certification program will entail, including how many hours of training will be required for certification, how frequently recertification will be required, and how often training will be provided by the Department to the county departments of social services.

(2)        A plan of implementation of the training and certification program, including a specific time line of implementation.

(3)        Anticipated costs to the Department, as well as any costs to the county department of social services, of implementing the training and certification program. This should include an identification of any additional resources required by the Department or a county department of social services in order to implement the training and certification program.

(4)        Any other information the Department is able to provide regarding the training and certification program development.

SECTION 11H.22.(j)  The Department of Health and Human Services may adopt and amend rules to implement this section.

SECTION 11H.22.(k)  Subsection (f) of this section is effective when it becomes law and applies to errors identified on or after that date. The remainder of this section is effective when it becomes law.

 

Medicaid Subrogation Rights Conforming Changes

SECTION 11H.23.  If Section 202(b) of the Bipartisan Budget Act of 2013, P.L. 113‑67, takes effect on October 1, 2017, as provided in Section 202(c) of that act, as amended by Section 211 of the Protecting Access to Medicare Act of 2014, P.L. 113‑93, and Section 220 of the Medicare Access and CHIP Reauthorization Act of 2015, P.L. 114‑10, then G.S. 108A‑57 reads as rewritten:

"§ 108A‑57.  Subrogation rights; withholding of information a misdemeanor.

(a)        As used in this section, the term "beneficiary" means (i) the beneficiary of medical assistance, including a minor beneficiary, (ii) the medical assistance beneficiary's parent, legal guardian, or personal representative, (iii) the medical assistance beneficiary's heirs, and (iv) the administrator or the executor of the medical assistance beneficiary's estate.

Notwithstanding any other provisions of the law, to the extent of payments under this Part, the State shall be subrogated to all rights of recovery, contractual or otherwise, of the a beneficiary of this assistance, or of the beneficiary's personal representative, heirs, or the administrator or executor of the estate, against any person. A personal injury or wrongful death claim brought by a medical assistance beneficiary against a third party shall include a claim for all medical assistance payments for health care items or services furnished to the medical assistance beneficiary as a result of the injury, hereinafter referred to as the "Medicaid claim." Any personal injury or wrongful death claim brought by a medical assistance beneficiary against a third party that does not state the Medicaid claim shall be deemed to include the Medicaid claim.

(a1)      If the amount of the Medicaid claim does not exceed one‑third of the medical assistance beneficiary's gross recovery, it is presumed that the gross recovery includes compensation for the full amount of the Medicaid claim. If the amount of the Medicaid claim exceeds one‑third of the medical assistance beneficiary's gross recovery, it is presumed that one‑third of the gross recovery represents compensation for the Medicaid claim.The Medicaid claim shall be a lien upon any recovery that a beneficiary obtains. The amount of the lien shall be equal to the total amount of the Medicaid claim but shall not exceed one‑third of the gross amount of the recovery obtained.

If a beneficiary has claims against more than one third party related to the same injury, then the payment of the Medicaid lien on any individual recovery shall reduce the total balance of the Medicaid claim. The remaining balance of the Medicaid claim shall be applied as a lien on any subsequent recovery, provided that the lien on each recovery shall not exceed one‑third of the gross amount of each recovery obtained.

(a2)      A medical assistance beneficiary may dispute the presumptions established in subsection (a1) of this section by applying to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction, for a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim. An application under this subsection shall be filed with the court and served on the Department pursuant to the Rules of Civil Procedure no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court, or in cases in which judgment has been entered, no later than 30 days after the date of entry of judgment. The court shall hold an evidentiary hearing no sooner than 30 days after the date the action was filed. All of the following shall apply to the court's determination under this subsection:

(1)        The medical assistance beneficiary has the burden of proving by clear and convincing evidence that the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim is less than the portion presumed under subsection (a1) of this section.

(2)        The presumption arising under subsection (a1) of this section is not rebutted solely by the fact that the medical assistance beneficiary was not able to recover the full amount of all claims.

(3)        If the beneficiary meets its burden of rebutting the presumption arising under subsection (a1) of this section, then the court shall determine the portion of the recovery that represents compensation for the Medicaid claim and shall order the beneficiary to pay the amount so determined to the Department in accordance with subsection (a5) of this section. In making this determination, the court may consider any factors that it deems just and reasonable.

(4)        If the beneficiary fails to rebut the presumption arising under subsection (a1) of this section, then the court shall order the beneficiary to pay the amount presumed pursuant to subsection (a1) of this section to the Department in accordance with subsection (a5) of this section.

(a3)      Notwithstanding the presumption arising pursuant to subsection (a1) of this section, the medical assistance beneficiary and the Department may reach an agreement on the portion of the recovery that represents compensation for the Medicaid claim. If such an agreement is reached after an application has been filed pursuant to subsection (a2) of this section, a stipulation of dismissal of the application signed by both parties shall be filed with the court.

(a4)      Within 30 days of receipt of the proceeds of a settlement or judgment related to a claim described in subsection (a) of this section, the medical assistance beneficiary or any attorney retained by the beneficiary shall notify the Department of the receipt of the proceeds.

(a5)      The medical assistance Within 30 days of receipt of the proceeds of a settlement or judgment related to a claim described in subsection (a) of this section, a beneficiary or any attorney retained by the beneficiary shall, out of the proceeds obtained by or on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of injury or death, shall distribute to the Department the amount due pursuant to this section as follows:an amount sufficient to fully satisfy the Department's Medicaid lien as provided in subsection (a1) of this section. The Department's right to payment under this subsection shall be a right to first recovery and shall not be prorated with or otherwise reduced by the claims of any other persons or entities having medical subrogation or medical liens against the amount received or recovered by the beneficiary.

(1)        If, upon the expiration of the time for filing an application pursuant subsection (a2) of this section, no application has been filed, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the beneficiary's receipt of the proceeds, in the absence of an agreement pursuant to subsection (a3) of this section.

(2)        If an application has been filed pursuant to subsection (a2) of this section and no agreement has been reached pursuant to subsection (a3) of this section, then the Department shall be paid as follows:

a.         If the beneficiary rebuts the presumption arising under subsection (a1) of this section, then the amount determined by the court pursuant to subsection (a2) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order.

b.         If the beneficiary fails to rebut the presumption arising under subsection (a1) of this section, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order.

(3)        If an agreement has been reached pursuant to subsection (a3) of this section, then the agreed amount, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the execution of the agreement by the medical assistance beneficiary and the Department.

(a6)      The United States and the State of North Carolina shall be entitled to shares in each net recovery by the Department under this section. Their shares shall be promptly paid under this section and their proportionate parts of such sum shall be determined in accordance with the matching formulas in use during the period for which assistance was paid to the recipient.

(b)        It is a Class 1 misdemeanor for any person seeking or having obtained assistance under this Part Part, for himself himself or herself or another for another, to willfully fail to disclose to the county department of social services or its attorney and to the Department the identity of any person or organization against whom the recipient of assistance has a right of recovery, contractual or otherwise.

(c)        This section applies to the administration of and claims payments made by the Department of Health and Human Services under the NC Health Choice Program established under Part 8 of this Article.

(d)       As required to ensure compliance with this section, the Department may apply to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a superior court of competent jurisdiction for enforcement of this section."

 

SUBPART XI‑I. DIVISION OF HEALTH BENEFITS

 

Division of Health Benefits Federal Funds

SECTION 11I.1.  It is anticipated that the Division of Health Benefits (DHB) will be eligible to draw down federal matching funds on Medicaid transformation project expenditures. To the extent that federal funds are received as federal match for the DHB's Medicaid transformation project expenditures, those funds are appropriated to the DHB for Medicaid transformation project activities.

 

SUBPART XI‑J. MISCELLANEOUS

 

Greater Transparency in Health Care Services Billing

SECTION 11J.1.(a)  G.S. 58‑3‑200 reads as rewritten:

"§ 58‑3‑200.  Miscellaneous insurance and managed care coverage and network provisions.

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

(1)        Clinical laboratory. – An entity in which services are performed to provide information or materials for use in the diagnosis, prevention, or treatment of disease or assessment of a medical or physical condition.

(2)        "Health benefit plan" means any Health benefit plan. – Any of the following if written by an insurer: an accident and health insurance policy or certificate; a nonprofit hospital or medical service corporation contract; a health maintenance organization subscriber contract; or a plan provided by a multiple employer welfare arrangement. "Health benefit plan" does not mean any plan implemented or administered through the Department of Health and Human Services or its representatives. "Health benefit plan" also does not mean any of the following kinds of insurance:

a.         Accident.

b.         Credit.

c.         Disability income.

d.         Long‑term or nursing home care.

e.         Medicare supplement.

f.          Specified disease.

g.         Dental or vision.

h.         Coverage issued as a supplement to liability insurance.

i.          Workers' compensation.

j.          Medical payments under automobile or homeowners insurance.

k.         Hospital income or indemnity.

l.          Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability policy or equivalent self‑insurance.

(3)        Health care provider. – Any health care services facility or any person who is licensed, registered, or certified under Chapter 90 or Chapter 90B of the General Statutes, or under the laws of another state, to provide health care services in the ordinary care of business or practice, or as a profession, or in an approved education or training program, except that this term shall not include a pharmacy.

(4)        Health services facility. – A hospital; long‑term care hospital; psychiatric facility; rehabilitation facility; nursing home facility; adult care home; kidney disease treatment center, including freestanding hemodialysis units; intermediate care facility; home health agency office; chemical dependency treatment facility; diagnostic center; hospice office; hospice inpatient facility; hospice residential care facility; ambulatory surgical facility; urgent care facility; freestanding emergency facility; and clinical laboratory.

(2)(5)   "Insurer" means an Insurer. – An entity that writes a health benefit plan and that is an insurance company subject to this Chapter, a service corporation under Article 65 of this Chapter, a health maintenance organization under Article 67 of this Chapter, or a multiple employer welfare arrangement under Article 49 of this Chapter.

(d)       Services Outside Provider Networks. – No insurer shall penalize an insured or subject an insured to the out‑of‑network benefit levels offered under the insured's approved health benefit plan, including an insured receiving an extended or standing referral under G.S. 58‑3‑223, unless contracting health care providers able to meet health needs of the insured are reasonably available to the insured without unreasonable delay. Upon notice from the insured, the insurer shall determine whether a health care provider able to meet the health care needs of the insured is reasonably available to the insured without unreasonable delay by reference to the insured's location and the specific medical needs of the insured.

…."

SECTION 11J.1.(b)  Chapter 131E of the General Statutes is amended by adding a new Article to read:

"Article 11C.

"Transparency in Health Services Billing Practices.

"§ 131E‑214.25.  Definitions.

The following definitions apply in this section:

(1)        Health care provider. – As defined in G.S. 58‑3‑200(a).

(2)        Health services facility. – As defined in G.S. 58‑3‑200(a).

(3)        Insurer. – As defined in G.S. 58‑3‑200(a).

(4)        Provider. – A health care provider.

"§ 131E‑214.26.  Fair notice requirements.

(a)        Services Provided at Participating Health Services Facilities. – At the time a health services facility participating in an insurer's health care provider network (i) admits to receive emergency services, (ii) schedules a procedure for nonemergency services for, or (iii) seeks prior authorization from an insurer for the provision of nonemergency services to an insured individual, the health services facility shall provide the insured individual with a written disclosure containing the following information:

(1)        Services may be provided at the health services facility by the health services facility itself as well as by other health care providers who may separately bill the insured.

(2)        Certain health care providers may be called upon to render care to the insured during the course of treatment and may not have contracts with the insured's insurer and are therefore considered to be nonparticipating health care providers. The nonparticipating health care providers shall be identified in the written disclosure.

(3)        Certain consumer protections available to the insured when services are rendered by a health care provider participating in the insurer's health care provider network may not be applicable when services are rendered by a nonparticipating health care provider.

(b)        Emergency Services Provided at Nonparticipating Health Services Facilities. – At the time a health services facility admits an insured individual to receive emergency services, but the facility does not have a contract with the individual's insurer, the health services facility shall provide the insured individual with a written disclosure that contains the following information:

(1)        The health care facility does not have a contract with the insured's insurer and is considered to be a nonparticipating health care provider.

(2)        Certain consumer protections available to the insured individual when services are rendered by a provider participating in the insurer's provider network may not be applicable when services are rendered by a nonparticipating provider."

SECTION 11J.1.(c)  This section becomes effective October 1, 2017, and applies to health care services provided on or after that date.

 

Joint Oversight Subcommittees on Medical Education Programs AND Medical Residency Programs

SECTION 11J.2.(a)  The Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Education Oversight Committee shall each appoint a subcommittee to jointly examine the use of State funds to support medical education and medical residency programs. In conducting the study, the subcommittees shall examine at least all of the following:

(1)        The health care needs of the State's residents and the State's goals in meeting those health care needs through the support and funding of medical education and medical residency programs located within the State.

(2)        The short‑term and long‑term benefits to the State for allocating State funds to medical education and medical residency programs located within the State.

(3)        Recommended changes and improvements to the State's current policies with respect to allocating State funds and providing other support to medical education programs and medical residency programs located within the State.

(4)        Development of an evaluation protocol to be used by the State in determining (i) the particular medical education programs and medical residency programs to support with State funds and (ii) the amount of State funds to allocate to these programs.

(5)        Any other relevant issues the subcommittees deem appropriate.

SECTION 11J.2.(b)  The subcommittees may seek input from other states, stakeholders, and national experts on medical education programs, medical residency programs, and health care as it deems necessary.

SECTION 11J.2.(c)  By February 1, 2018, the Department of Health and Human Services and The University of North Carolina shall provide the subcommittees the following information regarding State funds and other support provided by the State to medical education programs and medical residency programs located in North Carolina:

(1)        The identity, location, and number of positions available in these medical education programs and medical residency programs, broken down by geographic area.

(2)        The specific amount of State funds or the nature of any other support provided by the State to medical education programs and medical residency programs, broken down by program.

(3)        The number of graduates of medical education programs and medical residency programs who are currently practicing in North Carolina, broken down by the following specialty areas:

a.         Surgery.

b.         Psychiatry.

c.         Primary care.

(4)        The number of program graduates who practiced in North Carolina for at least five years after graduation.

(5)        Any other information requested by the subcommittees.

SECTION 11J.2.(d)  The subcommittees shall jointly develop a proposal for a statewide plan to support medical education programs and medical residency programs within North Carolina in a manner that maximizes the State's financial and other support of these programs and addresses the short‑term and long‑term health care needs of the State's residents. Each subcommittee shall submit a report to its respective Oversight Committee on or before March 15, 2018, at which time each subcommittee shall terminate.

SECTION 11J.2.(e)  This section is effective when this act becomes law.

 

Authorization for Chiropractic Preceptorships

SECTION 11J.3.(a)  Article 8 of Chapter 90 of the General Statutes is amended by adding a new section to read:

"§ 90‑142.1.  Supervised training programs authorized.

(a)        As used in this section, "preceptorship program" means a clinical program of an approved chiropractic college in which a student of chiropractic, under the supervision of a licensed chiropractor, observes the licensed chiropractor and may perform the duties of a certified chiropractic clinical assistant as specified in G.S. 90‑143.4.

(b)        Each student enrolled in a chiropractic college that meets the accreditation requirements of G.S. 90‑143 may participate in a preceptorship program."

SECTION 11J.3.(b)  G.S. 90‑143.4(b) reads as rewritten:

"(b)      Any person employed as a chiropractic clinical assistant shall obtain a certificate of competency from the State Board of Chiropractic Examiners (Board) within 180 days after the person begins employment. Certification shall not be required for employees whose duties are limited to administrative activities of a nonclinical nature. Except as otherwise provided in G.S. 90‑142.1 and this section, it shall be unlawful for any person to practice as a chiropractic clinical assistant unless duly certified by the Board."

SECTION 11J.3.(c)  The section is effective when this act becomes law.

 

SUBPART XI‑K. DIVISIONs OF VOCATIONAL REHABILITATION, SERVICES FOR THE BLIND, AND SERVICES FOR THE DEAF AND HARD OF HEARING [RESERVED]

 

SUBPART XI‑L. DHHS BLOCK GRANTS

 

DHHS Block Grants

SECTION 11L.1.(a)  Except as otherwise provided, appropriations from federal block grant funds are made for each year of the fiscal biennium ending June 30, 2019, according to the following schedule:

 

TEMPORARY ASSISTANCE FOR NEEDY                   FY 2017‑2018         FY 2018‑2019

FAMILIES (TANF) FUNDS

 

Local Program Expenditures

 

      Division of Social Services

 

      01. Work First Family Assistance                                         $49,479,444             $49,479,444

 

      02. Work First County Block Grants                                      80,093,566               80,093,566

 

      03. Work First Electing Counties                                             2,378,213                 2,378,213

 

      04. Adoption Services – Special Children

            Adoption Fund                                                                   2,026,877                 2,026,877

 

      05. Child Protective Services – Child Welfare

            Workers for Local DSS                                                      9,412,391                 9,412,391

 

      06. Child Welfare Program Improvement Plan                           775,176                    775,176

 

      07. Child Welfare Collaborative                                                  400,000                    400,000

 

      08. Child Welfare Initiatives                                                    1,400,000                 1,400,000

 

Division of Child Development and Early Education

 

      09. Subsidized Child Care Program                                       53,605,680               58,112,735

 

      10. NC Pre‑K Services                                                              6,000,000               12,200,000

 

Division of Public Health

 

      11. Teen Pregnancy Prevention Initiatives                               2,950,000                 2,950,000

 

DHHS Administration

 

      12. Division of Social Services                                                 2,482,260                 2,482,260

 

      13. Office of the Secretary                                                            34,042                      34,042

 

      14. Eligibility Systems – Operations and

            Maintenance                                                                        2,908,598                 2,765,192

 

      15. NC FAST Implementation                                                      48,495                    875,264

 

Transfers to Other Block Grants

 

Division of Child Development and Early Education

 

      16. Transfer to the Child Care and

            Development Fund                                                           71,773,001               71,773,001

 

Division of Social Services

 

      17. Transfer to Social Services Block

            Grant for Child Protective Services –

            Training                                                                               1,300,000                 1,300,000

 

      18. Transfer to Social Services Block

            Grant for Child Protective Services                                    5,040,000                 5,040,000

 

      19. Transfer to Social Services Block

            Grant for County Departments of

            Social Services for Children's Services                               7,500,000                 7,500,000

 

      20. Transfer to Social Services Block

            Grant – Foster Care Services                                              1,385,152                 1,385,152

 

TOTAL TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES (TANF) FUNDS                                 $300,992,895           $312,383,313

 

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)

EMERGENCY CONTINGENCY FUNDS

 

Local Program Expenditures

 

Division of Child Development and Early Education

 

      01. Subsidized Child Care                                                    $28,600,000             $28,600,000

 

TOTAL TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES (TANF) EMERGENCY

CONTINGENCY FUNDS                                                      $28,600,000             $28,600,000

 

SOCIAL SERVICES BLOCK GRANT

 

Local Program Expenditures

 

Divisions of Social Services and Aging and Adult Services

 

      01. County Departments of Social Services

            (Transfer From TANF $7,500,000)                                $32,971,498             $33,003,632

 

      02. EBCI Tribal Public Health and Human Services                   244,740                    244,740

 

      03. Child Protective Services

            (Transfer From TANF)                                                       5,040,000                 5,040,000

 

      04. State In‑Home Services Fund                                             1,943,950                 1,943,950

 

      05. Adult Protective Services                                                   1,245,363                 1,245,363

 

      06. State Adult Day Care Fund                                                1,994,084                 1,994,084

 

      07. Child Protective Services/CPS

            Investigative Services – Child Medical

            Evaluation Program                                                               901,868                    901,868

 

      08. Special Children Adoption Incentive Fund                           462,600                    462,600

 

      09. Child Protective Services – Child

            Welfare Training for Counties

            (Transfer From TANF)                                                       1,300,000                 1,300,000

 

      10. Child Protective Services – Child

            Welfare Training for Counties                                               737,067                    737,067

 

      11. Home and Community Care Block

            Grant (HCCBG)                                                                 1,696,888                 1,696,888

 

      12. Child Advocacy Centers                                                       582,000                    582,000

 

      13. Guardianship – Division of Social Services                           815,362                    815,362

 

      14. Foster Care Services

            (Transfer From TANF)                                                       1,385,152                 1,385,152

 

Division of Central Management and Support

 

      15. DHHS Competitive Block Grants

            for Nonprofits                                                                     4,508,754                 4,476,620

 

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

 

      16. Mental Health Services – Adult and

            Child/Developmental Disabilities Program/

            Substance Abuse Services – Adult                                     4,030,730                 4,030,730

 

DHHS Program Expenditures

 

Division of Services for the Blind

 

      17. Independent Living Program                                              3,361,323                 3,361,323

 

Division of Health Service Regulation

 

      18. Adult Care Licensure Program                                              381,087                    381,087

 

      19. Mental Health Licensure and

            Certification Program                                                            190,284                    190,284

 

Division of Aging and Adult Services

 

      20. Guardianship                                                                       3,992,213                 3,992,213

 

DHHS Administration

 

      21. Division of Aging and Adult Services                                  577,745                    577,745

 

      22. Division of Social Services                                                    634,680                    634,680

 

      23. Office of the Secretary/Controller's Office                           127,731                    127,731

 

      24. Legislative Increases/Fringe Benefits                                    236,278                    236,278

 

      25. Division of Child Development and

            Early Education                                                                       13,878                      13,878

 

      26. Division of Mental Health, Developmental

            Disabilities, and Substance Abuse Services                             27,446                      27,446

 

      27. Division of Health Service Regulation                                  118,946                    118,946

 

TOTAL SOCIAL SERVICES BLOCK GRANT                $69,521,667             $69,521,667

 

LOW‑INCOME ENERGY ASSISTANCE BLOCK GRANT

 

Local Program Expenditures

 

Division of Social Services

 

      01. Low‑Income Energy Assistance

            Program (LIEAP)                                                           $36,402,610             $35,419,272

 

      02. Crisis Intervention Program (CIP)                                    36,402,610               35,419,272

 

Local Administration

 

Division of Social Services

 

      03. County DSS Administration                                              5,978,512                 5,817,014

 

DHHS Administration

 

Division of Central Management and Support

 

      04. Division of Social Services                                                      10,000                      10,000

 

      05. Office of the Secretary/DIRM                                              252,603                    128,954

 

      06. Office of the Secretary/Controller's Office                             18,378                      18,378

 

      07. NC FAST Development                                                        139,991                 2,468,390

 

      08. NC FAST Operations and Maintenance                             2,135,701                 2,539,033

 

Transfers to Other State Agencies

 

Department of Environmental Quality

 

      09. Weatherization Program                                                   10,716,043               10,426,573

 

      10. Heating Air Repair and Replacement

            Program (HARRP)                                                             5,701,752                 5,547,732

 

      11. Local Residential Energy Efficiency Service

            Providers – Weatherization                                                    439,982                    428,097

 

      12. Local Residential Energy Efficiency Service

            Providers – HARRP                                                              234,105                    227,781

 

      13. DENR – Weatherization Administration                              439,982                    428,097

 

      14. DENR – HARRP Administration                                         234,105                    227,781

 

Department of Administration

 

      15. N.C. Commission on Indian Affairs                                        87,736                      87,736

 

TOTAL LOW‑INCOME ENERGY

      ASSISTANCE BLOCK GRANT                                     $99,194,110             $99,194,110

 

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

 

Local Program Expenditures

 

Division of Child Development and Early Education

 

      01. Child Care Services

            (Smart Start $7,000,000)                                              $152,923,849           $152,416,794

 

      02. Transfer from TANF Block Grant

            for Child Care Subsidies                                                   71,773,001               71,773,001

 

      03. Quality and Availability Initiatives

            (TEACH Program $3,800,000)                                         45,761,678               45,761,678

 

DHHS Administration

 

Division of Child Development and Early Education

 

      04. DCDEE Administrative Expenses                                     9,042,159                 9,042,159

 

Division of Social Services

 

      05. Local Subsidized Child Care

            Services Support                                                               16,436,361               16,436,361

 

      06. Direct Deposit for Child Care Payments                               505,100                    505,100

 

Division of Central Management and Support

 

      07. NC FAST Development                                                          24,237                    427,865

 

      08. NC FAST Operations and Maintenance                             2,758,389                 2,468,390

 

      09. DHHS Central Administration – DIRM

            Technical Services                                                                  645,162                    645,162

 

      10. Central Regional Maintenance                                               287,854                    287,854

 

      11. DHHS Central Administration                                                  7,346                        7,346

 

Division of Public Health

 

      12. Child Care Health Consultation Contracts                              62,205                      62,205

 

TOTAL CHILD CARE AND DEVELOPMENT

      FUND BLOCK GRANT                                                 $300,227,341           $299,833,915

 

MENTAL HEALTH SERVICES BLOCK GRANT

 

Local Program Expenditures

 

      01. Mental Health Services – Child                                        $3,619,833               $3,619,833

 

      02. Mental Health Services – Adult/Child                             10,967,792               10,967,792

 

      03. Crisis Solutions Initiative – Critical

            Time Intervention                                                                  750,000                    750,000

 

      04. Mental Health Services – First

            Psychotic Symptom Treatment                                           1,430,851                 1,430,851

 

DHHS Administration

 

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

 

      05. Administration                                                                       200,000                    200,000

 

TOTAL MENTAL HEALTH SERVICES

      BLOCK GRANT                                                               $16,968,476             $16,968,476

 

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

 

Local Program Expenditures

 

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

 

      01. Substance Abuse – HIV and IV Drug                             $3,919,723               $3,919,723

 

      02. Substance Abuse Prevention                                              8,998,382                 8,998,382

 

      03. Substance Abuse Services – Treatment for

            Children/Adults

            (Medication‑Assisted Opioid Use Disorder

            Treatment Pilot Program $500,000;

            First Step Farm of WNC, Inc. $100,000)                         27,722,717               27,621,286

 

      04. Crisis Solutions Initiatives – Walk‑In

            Crisis Centers                                                                         420,000                    420,000

 

      05. Crisis Solutions Initiatives – Collegiate

            Wellness/Addiction Recovery                                            1,085,000                 1,085,000

 

      06. Crisis Solutions Initiatives – Community

            Paramedic Mobile Crisis Management                                    60,000                      60,000

 

      07. Crisis Solutions Initiatives – Innovative

            Technologies                                                                            41,000                      41,000

 

DHHS Program Expenditures

 

Division of Central Management and Support

 

      08. Competitive Block Grant                                                    1,600,000                 1,600,000

 

DHHS Administration

 

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

 

      09. Administration                                                                       454,000                    454,000

 

      10. Controlled Substance Reporting System

            Enhancement                                                                         326,224                    427,655

 

Division of Public Health

 

      11. HIV Testing for Individuals in Substance

            Abuse Treatment                                                                    965,949                    965,949

 

Transfers to Other State Agencies

 

Department of Military and Veterans Affairs

 

      12. Crisis Solutions Initiative – Veteran's Crisis                          250,000                    250,000

 

TOTAL SUBSTANCE ABUSE PREVENTION

      AND TREATMENT BLOCK GRANT                          $45,842,995             $45,842,995

 

MATERNAL AND CHILD HEALTH BLOCK GRANT

 

Local Program Expenditures

 

Division of Public Health

 

      01. Women and Children's Health Services

            (Safe Sleep Campaign $45,000;

            Prevent Blindness $575,000;

            March of Dimes $350,000; Teen Pregnancy

            Prevention Initiatives $650,000;

            17P Project $52,000; Nurse‑Family

            Partnership $550,000; Carolina Pregnancy

            Care Fellowship $400,000; Perinatal & Neonatal

            Outreach Coordinator Contracts $440,000)                   $14,002,435             $14,002,435

 

      02. Oral Health                                                                              48,227                      48,227

 

      03. Evidence‑Based Programs in Counties

            With Highest Infant Mortality Rates                                  1,575,000                 1,575,000

 

DHHS Program Expenditures

 

      04. Children's Health Services                                                  1,427,323                 1,427,323

 

      05. Women's Health – Maternal Health                                       169,864                    169,864

 

      06. Women and Children's Health – Perinatal

            Strategic Plan Support Position                                               68,245                      68,245

 

      07. State Center for Health Statistics                                          158,583                    158,583

 

      08. Health Promotion – Injury and

            Violence Prevention                                                                 87,271                      87,271

 

DHHS Administration

 

      09. Division of Public Health Administration                             552,571                    552,571

 

TOTAL MATERNAL AND CHILD

      HEALTH BLOCK GRANT                                             $18,089,519             $18,089,519

 

PREVENTIVE HEALTH SERVICES BLOCK GRANT

 

Local Program Expenditures

 

      01. Physical Activity and Prevention                                     $3,545,093               $3,545,093

 

      02. Injury and Violence Prevention

            (Services to Rape Victims – Set‑Aside)                                180,778                    180,778

 

DHHS Program Expenditures

 

Division of Public Health

 

      03. HIV/STD Prevention and

            Community Planning                                                             145,819                    145,819

 

      04. Oral Health Preventive Services                                            451,809                    451,809

 

      05. Laboratory Services – Testing,

            Training, and Consultation                                                      21,012                      21,012

 

      06. Injury and Violence Prevention

            (Services to Rape Victims – Set‑Aside)                                192,315                    192,315

 

      07. State Laboratory Services – Testing,

            Training, and Consultation                                                    199,634                    199,634

 

      08. Performance Improvement and

            Accountability                                                                    1,104,455                 1,104,455

 

      09. State Center for Health Statistics                                          107,291                    107,291

 

DHHS Administration

 

Division of Public Health

 

      10. Division of Public Health                                                      172,820                    172,820

 

TOTAL PREVENTIVE HEALTH

SERVICES BLOCK GRANT                                                  $6,121,026               $6,121,026

 

COMMUNITY SERVICES BLOCK GRANT

 

      01. Community Action Agencies                                         $24,187,142             $24,187,142

 

      02. Limited Purpose Agencies                                                  1,343,730                 1,343,730

 

      03. Office of Economic Opportunity                                       1,343,730                 1,343,730

 

TOTAL COMMUNITY SERVICES

      BLOCK GRANT                                                               $26,874,602             $26,874,602

 

GENERAL PROVISIONS

SECTION 11L.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 11L.1.(c)  Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall allocate the increase proportionally across the program and activity appropriations identified for that Block Grant in this section. In allocating an increase in federal fund availability, the Office of State Budget and Management shall not approve funding for new programs or activities not appropriated in this section.

If the Congress of the United States decreases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall develop a plan to adjust the Block Grants based on reduced federal funding.

Notwithstanding the provisions of this subsection, for fiscal years 2017‑2018 and 2018‑2019, increases in the federal fund availability for the Temporary Assistance to Needy Families (TANF) Block Grant shall be used only for the North Carolina Child Care Subsidy program to pay for child care in four‑ or five‑star rated facilities for four‑year‑old children and shall not be used to supplant State funds.

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

SECTION 11L.1.(d)  Except as otherwise provided, appropriations from federal Block Grant funds are made for each year of the fiscal biennium ending June 30, 2019, according to the schedule enacted for State fiscal years 2017‑2018 and 2018‑2019 or until a new schedule is enacted by the General Assembly.

SECTION 11L.1.(e)  All changes to the budgeted allocations to the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services that are not specifically addressed in this section shall be approved by the Office of State Budget and Management, and the Office of State Budget and Management shall consult with the Joint Legislative Oversight Committee on Health and Human Services for review prior to implementing the changes. The report shall include an itemized listing of affected programs, including associated changes in budgeted allocations. All changes to the budgeted allocations to the Block Grants shall be reported immediately to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. This subsection does not apply to Block Grant changes caused by legislative salary increases and benefit adjustments.

SECTION 11L.1.(f)  Except as otherwise provided, the Department of Health and Human Services shall have flexibility to transfer funding between the Temporary Assistance for Needy Families (TANF) Block Grant and the TANF Emergency Contingency Funds Block Grant so long as the total allocation for the line items within those block grants remains the same.

 

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS

SECTION 11L.1.(g)  The sum of eighty million ninety‑three thousand five hundred sixty‑six dollars ($80,093,566) for each year of the 2017‑2019 fiscal biennium appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, shall be used for Work First County Block Grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures. The Division shall also have the authority to realign appropriated funds from Work First Family Assistance for electing counties to the Work First County Block Grant for electing counties based on current year expenditures so long as the electing counties meet Maintenance of Effort requirements.

SECTION 11L.1.(h)  The sum of nine million four hundred twelve thousand three hundred ninety‑one dollars ($9,412,391) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in TANF funds for each fiscal year of the 2017‑2019 fiscal biennium for child welfare improvements shall be allocated to the county departments of social services for hiring or contracting staff to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post‑adoption services for eligible families.

Counties shall maintain their level of expenditures in local funds for Child Protective Services workers. Of the Block Grant funds appropriated for Child Protective Services workers, the total expenditures from State and local funds for fiscal years 2017‑2018 and 2018‑2019 shall not be less than the total expended from State and local funds for the 2012‑2013 fiscal year.

SECTION 11L.1.(i)  The sum of two million twenty‑six thousand eight hundred seventy‑seven dollars ($2,026,877) appropriated in this section in TANF funds to the Department of Health and Human Services, Special Children Adoption Fund, for each fiscal year of the 2017‑2019 fiscal biennium shall be used in accordance with G.S. 108A‑50.2. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A‑50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.

SECTION 11L.1.(j)  The sum of one million four hundred thousand dollars ($1,400,000) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for each fiscal year of the 2017‑2019 fiscal biennium shall be used for child welfare initiatives to (i) enhance the skills of social workers to improve the outcomes for families and children involved in child welfare and (ii) enhance the provision of services to families in their homes in the least restrictive setting.

 

SOCIAL SERVICES BLOCK GRANT

SECTION 11L.1.(k)  The sum of thirty‑two million nine hundred seventy‑one thousand four hundred ninety‑eight dollars ($32,971,498) for the 2017‑2018 fiscal year and the sum of thirty‑three million three thousand six hundred thirty‑two dollars ($33,003,632) for the 2018‑2019 fiscal year appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used for county block grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds, as well as State Social Services Block Grant funds, among the State‑level services based on current year actual expenditures.

Of the funds appropriated in this subsection for each year of the 2017‑2019 fiscal biennium for county block grants, three million dollars ($3,000,000) shall be used to assist counties in the implementation of Project 4, Child Services, in North Carolina Families Accessing Services Through Technology (NC FAST). These funds shall be available in each fiscal year of the fiscal biennium for this purpose.

SECTION 11L.1.(l)  The sum of one million three hundred thousand dollars ($1,300,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for each fiscal year of the 2017‑2019 fiscal biennium shall be used to support various child welfare training projects as follows:

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

(2)        Provide training for residential child caring facilities.

(3)        Provide for various other ch