H966: 2019 Appropriations Act. Latest Version

Session: 2019 - 2020

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

4 The General Assembly of North Carolina enacts:
5
6 PART I. TITLE AND INTRODUCTION
7
8 TITLE OF ACT
9 SECTION 1.1. This act shall be known as the Current Operations Appropriations

10 Act of 2019.
11
12 INTRODUCTION
13 SECTION 1.2. The appropriations made in this act are for maximum amounts
14 necessary to provide the services and accomplish the purposes described in the budget in
15 accordance with the State Budget Act. Savings shall be effected where the total amounts
16 appropriated are not required to perform these services and accomplish these purposes, and the

17 savings shall revert to the appropriate fund at the end of each fiscal year, except as otherwise
18 provided by law.
19
20 PART II. CURRENT OPERATIONS AND EXPANSION/GENERAL FUND
21
22 GENERAL FUND APPROPRIATIONS
23 SECTION 2.1.(a) Appropriations from the General Fund for the budgets of the State

24 departments, institutions, and agencies, and for other purposes as enumerated, are made for each
25 year of the 2019-2021 fiscal biennium, according to the following schedule:
26
27 Current Operations – General Fund FY 2019-2020 FY 2020-2021
28

*H966-PCCS30485-LRxr-3* General Assembly Of North Carolina Session 2019

1 EDUCATION
2 Community College System
3 Requirements 1,607,034,198 1,640,309,029
4 Less: Receipts 380,447,392 380,212,392
5 Net Appropriation 1,226,586,806 1,260,096,637
6
7 Public Instruction

8 Requirements 12,127,985,122 12,407,998,762
9 Less: Receipts 2,270,466,432 2,230,466,432
10 Net Appropriation 9,857,518,690 10,177,532,330
11
12 University of North Carolina
13 NC A&T University
14 Requirements 188,744,165 188,744,165

15 Less: Receipts 87,002,310 87,002,310
16 Net Appropriation 101,741,855 101,741,855
17
18 NC School of Science and Mathematics
19 Requirements 25,847,831 28,616,238
20 Less: Receipts 1,796,561 1,796,561

21 Net Appropriation 24,051,270 26,819,677
22
23 NC State University-Academic Affairs
24 Requirements 844,422,995 844,422,995
25 Less: Receipts 422,169,898 422,169,898
26 Net Appropriation 422,253,097 422,253,097
27

28 NC State University-Agric. Research
29 Requirements 72,742,781 72,742,781
30 Less: Receipts 17,721,640 17,721,640
31 Net Appropriation 55,021,141 55,021,141
32
33 NC State University-Coop. Extension
34 Requirements 55,654,168 55,529,168

35 Less: Receipts 14,833,163 14,833,163
36 Net Appropriation 40,821,005 40,696,005
37
38 North Carolina Central University
39 Requirements 139,655,404 136,655,404
40 Less: Receipts 51,822,380 51,822,380

41 Net Appropriation 87,833,024 84,833,024
42
43 UNC at Asheville
44 Requirements 61,661,158 61,661,158
45 Less: Receipts 21,876,242 21,876,242
46 Net Appropriation 39,784,916 39,784,916
47

48 UNC at Chapel Hill-Academic Affairs
49 Requirements 650,356,478 649,356,478
50 Less: Receipts 371,403,527 371,403,527
51 Net Appropriation 278,952,951 277,952,951

Page 2 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 UNC at Chapel Hill-Area Health Education
2 Requirements 54,864,072 53,864,072
3 Less: Receipts 0 0
4 Net Appropriation 54,864,072 53,864,072
5
6 UNC at Chapel Hill-Health Affairs
7 Requirements 326,923,444 326,923,444

8 Less: Receipts 122,612,306 122,612,306
9 Net Appropriation 204,311,138 204,311,138
10
11 UNC at Charlotte
12 Requirements 420,146,272 420,146,272
13 Less: Receipts 164,780,562 164,780,562
14 Net Appropriation 255,365,710 255,365,710

15
16 UNC at Greensboro
17 Requirements 287,718,420 287,718,420
18 Less: Receipts 109,591,257 109,591,257
19 Net Appropriation 178,127,163 178,127,163
20

21 UNC at Pembroke
22 Requirements 91,161,357 91,165,578
23 Less: Receipts 13,264,333 13,264,333
24 Net Appropriation 77,897,024 77,901,245
25
26 UNC at Wilmington
27 Requirements 244,393,982 244,118,982

28 Less: Receipts 98,550,341 98,550,341
29 Net Appropriation 145,843,641 145,568,641
30
31 UNC Board of Governors
32 Requirements 42,592,385 42,592,385
33 Less: Receipts 46,899 46,899
34 Net Appropriation 42,545,486 42,545,486

35
36 UNC BOG – Institutional Programs
37 Requirements 94,323,722 166,475,681
38 Less: Receipts 0 0
39 Net Appropriation 94,323,722 166,475,681
40

41 UNC BOG – Related Educational Programs
42 Requirements 165,500,476 165,500,476
43 Less: Receipts 54,031,975 54,031,975
44 Net Appropriation 111,468,501 111,468,501
45
46 UNC General Administration
47 Requirements 184,156,617 195,392,239

48 Less: Receipts 0 0
49 Net Appropriation 184,156,617 195,392,239
50
51 UNC School of the Arts

H966-PCCS30485-LRxr-3 House Bill 966 Page 3 General Assembly Of North Carolina Session 2019

1 Requirements 49,623,526 49,623,526
2 Less: Receipts 16,359,089 16,359,089
3 Net Appropriation 33,264,437 33,264,437
4
5 Western Carolina University
6 Requirements 159,162,027 159,195,028
7 Less: Receipts 27,714,804 27,714,804

8 Net Appropriation 131,447,223 131,480,224
9
10 Winston-Salem State University
11 Requirements 86,145,805 86,145,805
12 Less: Receipts 22,495,553 22,495,553
13 Net Appropriation 63,650,252 63,650,252
14

15 East Carolina Univ-Academic Affairs
16 Requirements 414,348,327 414,348,327
17 Less: Receipts 182,150,292 182,150,292
18 Net Appropriation 232,198,035 232,198,035
19
20 East Carolina Univ-Health Affairs

21 Requirements 90,335,813 90,335,813
22 Less: Receipts 12,400,019 12,400,019
23 Net Appropriation 77,935,794 77,935,794
24
25 Elizabeth City State University
26 Requirements 38,867,498 38,867,498
27 Less: Receipts 3,564,271 3,564,271

28 Net Appropriation 35,303,227 35,303,227
29
30 Appalachian State University
31 Requirements 261,386,484 261,386,484
32 Less: Receipts 113,583,731 113,583,731
33 Net Appropriation 147,802,753 147,802,753
34

35 Fayetteville State University
36 Requirements 75,646,019 75,646,019
37 Less: Receipts 21,734,797 21,734,797
38 Net Appropriation 53,911,222 53,911,222
39
40 HEALTH AND HUMAN SERVICES

41 Aging and Adult Services
42 Requirements 119,927,423 122,093,373
43 Less: Receipts 70,686,937 70,927,539
44 Net Appropriation 49,240,486 51,165,834
45
46 Central Management and Support
47 Requirements 245,126,742 246,525,017

48 Less: Receipts 110,129,920 113,720,906
49 Net Appropriation 134,996,822 132,804,111
50
51 Child Development and Early Education

Page 4 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Requirements 803,544,280 812,854,407
2 Less: Receipts 569,112,706 578,312,706
3 Net Appropriation 234,431,574 234,541,701
4
5 Health Benefits (Medicaid and Health Choice)
6 Requirements 15,432,924,419 15,769,952,509
7 Less: Receipts 11,481,899,973 11,630,359,937

8 Net Appropriation 3,951,024,446 4,139,592,572
9
10 Health Service Regulation
11 Requirements 72,994,947 73,437,570
12 Less: Receipts 52,638,449 52,638,449
13 Net Appropriation 20,356,498 20,799,121
14

15 Mental Hlth/Dev. Disabl./Subs. Abuse Serv.
16 Requirements 1,546,567,201 1,559,164,451
17 Less: Receipts 789,783,534 790,494,793
18 Net Appropriation 756,783,667 768,669,658
19
20 Public Health

21 Requirements 905,537,928 907,913,830
22 Less: Receipts 741,811,193 740,167,484
23 Net Appropriation 163,726,735 167,746,346
24
25 Services for the Blind/Deaf/Hard of Hearing
26 Requirements 47,209,829 47,376,378
27 Less: Receipts 38,354,656 38,371,368

28 Net Appropriation 8,855,173 9,005,010
29
30 Social Services
31 Requirements 1,926,785,102 1,936,850,760
32 Less: Receipts 1,715,761,220 1,723,512,324
33 Net Appropriation 211,023,882 213,338,436
34

35 Vocational Rehabilitation Services
36 Requirements 152,331,038 152,734,376
37 Less: Receipts 111,563,062 111,587,923
38 Net Appropriation 40,767,976 41,146,453
39
40 AGRICULTURE, NATURAL, AND ECONOMIC RESOURCES

41 Agriculture and Consumer Services
42 Requirements 200,742,525 203,934,811
43 Less: Receipts 62,829,628 59,329,628
44 Net Appropriation 137,912,897 144,605,183
45
46 Commerce
47 Requirements 324,484,588 322,016,547

48 Less: Receipts 138,910,386 138,910,386
49 Net Appropriation 185,574,202 183,106,161
50
51 Environmental Quality

H966-PCCS30485-LRxr-3 House Bill 966 Page 5 General Assembly Of North Carolina Session 2019

1 Requirements 212,354,766 209,687,752
2 Less: Receipts 114,944,950 114,782,705
3 Net Appropriation 97,409,816 94,905,047
4
5 Labor
6 Requirements 37,735,943 38,433,283
7 Less: Receipts 18,968,296 18,968,296

8 Net Appropriation 18,767,647 19,464,987
9
10 Natural and Cultural Resources
11 Requirements 253,638,843 249,211,008
12 Less: Receipts 65,987,651 51,487,651
13 Net Appropriation 187,651,192 197,723,357
14

15 Wildlife Resources Commission
16 Requirements 76,692,957 76,349,240
17 Less: Receipts 64,486,379 64,486,379
18 Net Appropriation 12,206,578 11,862,861
19
20 JUSTICE AND PUBLIC SAFETY

21 Administrative Office of the Courts
22 Requirements 609,745,757 605,903,805
23 Less: Receipts 1,136,462 1,136,462
24 Net Appropriation 608,609,295 604,767,343
25
26 Indigent Defense Services
27 Requirements 139,152,986 142,202,806

28 Less: Receipts 11,182,323 12,182,323
29 Net Appropriation 127,970,663 130,020,483
30
31 Justice
32 Requirements 95,169,031 96,896,307
33 Less: Receipts 40,867,546 41,253,512
34 Net Appropriation 54,301,485 55,642,795

35
36 Public Safety
37 Requirements 2,458,988,625 2,520,250,523
38 Less: Receipts 258,232,388 258,157,358
39 Net Appropriation 2,200,756,237 2,262,093,165
40

41 GENERAL GOVERNMENT
42 Administration
43 Requirements 76,843,349 77,002,006
44 Less: Receipts 15,717,700 12,711,332
45 Net Appropriation 61,125,649 64,290,674
46
47 Administrative Hearings

48 Requirements 7,996,277 8,221,255
49 Less: Receipts 1,684,910 1,684,910
50 Net Appropriation 6,311,367 6,536,345
51

Page 6 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Auditor
2 Requirements 20,609,783 21,130,279
3 Less: Receipts 6,199,884 6,199,884
4 Net Appropriation 14,409,899 14,930,395
5
6 Budget and Management
7 Requirements 8,400,596 8,979,065

8 Less: Receipts 0 0
9 Net Appropriation 8,400,596 8,979,065
10
11 Budget and Management – Special Approp.
12 Requirements 19,109,405 4,875,000
13 Less: Receipts 375,000 50,000
14 Net Appropriation 18,734,405 4,825,000

15
16 Controller
17 Requirements 25,773,690 26,423,125
18 Less: Receipts 3,046,028 3,046,028
19 Net Appropriation 22,727,662 23,377,097
20

21 Elections
22 Requirements 8,328,561 7,484,369
23 Less: Receipts 102,000 102,000
24 Net Appropriation 8,226,561 7,382,369
25
26 General Assembly
27 Requirements 74,400,736 75,365,441

28 Less: Receipts 2,409,327 861,000
29 Net Appropriation 71,991,409 74,504,441
30
31 Governor
32 Requirements 6,191,909 6,365,426
33 Less: Receipts 898,760 898,760
34 Net Appropriation 5,293,149 5,466,666

35
36 Housing Finance Agency
37 Requirements 30,660,000 10,660,000
38 Less: Receipts 0 0
39 Net Appropriation 30,660,000 10,660,000
40

41 Insurance
42 Requirements 51,532,134 52,063,380
43 Less: Receipts 9,378,222 8,455,565
44 Net Appropriation 42,153,912 43,607,815
45
46 Insurance – Industrial Commission
47 Requirements 22,528,576 22,714,864

48 Less: Receipts 13,053,262 13,053,262
49 Net Appropriation 9,475,314 9,661,602
50
51 Lieutenant Governor

H966-PCCS30485-LRxr-3 House Bill 966 Page 7 General Assembly Of North Carolina Session 2019

1 Requirements 2,402,035 933,582
2 Less: Receipts 0 0
3 Net Appropriation 2,402,035 933,582
4
5 Military and Veterans Affairs
6 Requirements 64,061,697 62,706,176
7 Less: Receipts 52,421,264 52,421,264

8 Net Appropriation 11,640,433 10,284,912
9
10 Revenue
11 Requirements 164,848,925 155,157,856
12 Less: Receipts 75,636,207 63,168,852
13 Net Appropriation 89,212,718 91,989,004
14

15 Secretary of State
16 Requirements 14,734,359 15,183,472
17 Less: Receipts 291,456 291,456
18 Net Appropriation 14,442,903 14,892,016
19
20 Treasurer

21 Requirements 61,978,549 62,029,160
22 Less: Receipts 57,152,760 57,154,152
23 Net Appropriation 4,825,789 4,875,008
24
25 Treasurer – Additional Retirement Systems
26 Requirements 31,905,423 32,255,423
27 Less: Receipts 0 0

28 Net Appropriation 31,905,423 32,255,423
29
30 INFORMATION TECHNOLOGY
31 Department of Information Technology
32 Requirements 68,250,302 70,255,466
33 Less: Receipts 395,579 395,579
34 Net Appropriation 67,854,723 69,859,887

35
36 RESERVES, DEBT, AND OTHER BUDGETS
37 General Debt Service
38 Requirements 733,241,991 751,029,593
39 Less: Receipts 733,241,991 751,029,593
40 Net Appropriation 0 0

41
42 Federal Debt Service
43 Requirements 1,616,380 1,616,380
44 Less: Receipts 1,616,380 1,616,380
45 Net Appropriation 0 0
46
47 Statewide Enterprise Resource Planning

48 Requirements 7,636,694 42,363,306
49 Less: Receipts 0 0
50 Net Appropriation 7,636,694 42,363,306
51

Page 8 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Statewide Reserves
2 Requirements 15,297,000 81,603,000
3 Less: Receipts 0 0
4 Net Appropriation 15,297,000 81,603,000
5
6 OSHR Minimum of Market Adjustment
7 Requirements 424,316 424,316

8 Less: Receipts 0 0
9 Net Appropriation 424,316 424,316
10
11 Total Requirements 46,041,828,163 46,946,112,920
12 Less: Total Receipts 22,035,328,163 22,146,112,920
13 Total Net Appropriation 24,006,500,000 24,800,000,000
14

15 SECTION 2.1.(b) For purposes of this act and the Committee Report described in
16 Section 42.2 of this act, the requirements set forth in this section represent the total amount of
17 funds, including agency receipts, appropriated to an agency, department, or institution.
18
19 GENERAL FUND AVAILABILITY
20 SECTION 2.2.(a) The General Fund availability derived from State tax revenue,

21 nontax revenue, and other adjustments used in developing the budget for each year of the
22 2019-2021 fiscal biennium is as follows:
23
24 FY 2019-2020 FY 2020-2021
25 Unappropriated Balance 645,592,678 752,937,335
26 Anticipated Reversions 275,000,000 200,000,000
27 Projected Over Collections 643,300,000 -

28 Highway Fund Recovery Act (S605) (120,000,000) -
29 Total, Prior Year-End Fund Balance 1,443,892,678 952,937,335
30
31 Statutory Earmark, State Capital and Infrastructure Fun(360,973,170) (238,234,334)
32 Beginning Unreserved Fund Balance 1,082,919,508 714,703,001
33
34 Tax Revenues

35 Personal Income 12,974,900,000 13,596,800,000
36 Sales and Use 8,086,300,000 8,464,000,000
37 Corporate Income 753,500,000 792,400,000
38 Franchise 738,700,000 757,200,000
39 Insurance 566,400,000 581,700,000
40 Alcoholic Beverage 408,700,000 422,900,000

41 Tobacco Products 258,000,000 257,400,000
42 Other Tax Revenues 132,600,000 136,300,000
43 Subtotal, Tax Revenues 23,919,100,000 25,008,700,000
44 Non-tax Revenues
45 Judicial Fees 230,500,000 227,700,000
46 Investment Income 182,200,000 193,300,000
47 Disproportionate Share 165,300,000 130,000,000

48 Master Settlement Agreement 136,200,000 131,800,000
49 Insurance 84,100,000 85,400,000
50 Other Non-tax Revenues 202,900,000 203,900,000
51 Subtotal, Non-tax Revenues 1,001,200,000 972,100,000

H966-PCCS30485-LRxr-3 House Bill 966 Page 9 General Assembly Of North Carolina Session 2019

1
2 Total, Net Revenues 24,920,300,000 25,980,800,000
3
4 Adjustments to Tax Revenues: 2019 Session
5 Corporate Income and Franchise Tax Changes (107,600,000) (255,200,000)
6 Personal Income Tax Changes (1,000,000) (53,000,000)
7 Sales and Use Tax Changes 94,600,000 132,200,000

8 Historic Rehabilitation Tax Credit Extension - (4,500,000)
9 Gross Premiums Tax/Prepaid Health Plans 12,000,000 187,000,000
10 Dry Cleaning Solvent Tax Extension - (8,000,000)
11 Subtotal, Adjustments to Tax Revenue (2,000,000) (1,500,000)
12
13 Statutory Reservations of Tax Revenues
14 Savings Reserve (46,965,000) (163,515,000)

15 State Capital and Infrastructure Fund (956,684,000) (1,000,288,000)
16 Subtotal, Statutory Reservations Tax Revenue (1,003,649,000) (1,163,803,000)
17
18 Other Adjustments to Availability
19 Additional Transfer to the Savings Reserve (40,000,000) (460,000,000)
20 Additional Transfer to the State Capital and Infrastructure Fund(200,000,000)(100,000,000)

21 Judicial Fee Increases 724,418 1,448,835
22 Adjustment to Transfer from Department of Insurance 1,181,724 2,632,604
23 Adjustment to Transfer from State Treasurer (39,315) 9,904
24 Subtotal, Other Adjustments (238,133,173) (555,908,657)
25
26 Total, Adjustments and Reservations (1,243,782,173) (1,721,211,657)
27

28 Revised Total Net General Fund Availability 24,759,437,335 24,974,291,344
29
30 Less General Fund Net Appropriations (24,006,500,000) (24,800,000,000)
31
32 Unappropriated Balance Remaining 752,937,335 174,291,344
33
34 SECTION2.2.(b) Funds thatarein theRepairsandRenovations Reserveestablished

35 pursuant to G.S. 143C-4-3 as of June 30, 2019, shall be transferred on July 1, 2019, to the State
36 Capital and Infrastructure Fund established under G.S. 143C-4-3.1. Funds transferred pursuant
37 to this subsection shall be used in accordance with the requirements of G.S. 143C-4-3.1.
38 SECTION 2.2.(c) In addition to the amount required under G.S. 143C-4-3.1, the
39 State Controller shall transfer to the State Capital and Infrastructure Fund established under
40 G.S. 143C-4-3.1 the sum of two hundred million dollars ($200,000,000) in the 2019-2020 fiscal

41 year and the sum of one hundred million dollars ($100,000,000) in the 2020-2021 fiscal year.
42 SECTION 2.2.(d) In addition to the amount required under G.S. 143C-4-2, the State
43 Controller shall transfer to the Savings Reserve the sum of forty million dollars ($40,000,000) in
44 the 2019-2020 fiscal year and the sum of four hundred sixty million dollars ($460,000,000) in
45 the 2020-2021 fiscal year. This transfer is not an appropriation made by law, as that phrase is
46 used in Section 7(1) of Article V of the North Carolina Constitution.
47 SECTION 2.2.(e) The State Controller shall transfer the sum of two hundred

48 forty-two million dollars ($242,000,000) for the 2019-2020 fiscal year and the sum of fifty-six
49 million dollars ($56,000,000) for the 2020-2021 fiscal year from funds available in the Medicaid
50 Transformation Reserve in the General Fund to the Medicaid Transformation Fund established
51 under Section 12H.29 of S.L. 2015-241.

Page 10 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 SECTION 2.2.(f) Funds reserved in the Medicaid Contingency Reserve described
2 in G.S. 143C-4-11 do not constitute an appropriation made by law, as that phrase is used in
3 Section 7(1) of Article V of the North Carolina Constitution.
4
5 PART III. HIGHWAY FUND AND HIGHWAY TRUST FUND
6
7 CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

8 SECTION 3.1. Appropriations from the State Highway Fund for the maintenance
9 and operation of the Department of Transportation and for other purposes as enumerated are
10 made for the fiscal biennium ending June 30, 2021, according to the following schedule:
11
12 Current Operations – Highway Fund FY 2019-2020 FY 2020-2021
13
14 Department of Transportation

15 Administration $89,090,615 $89,105,965
16
17 Division of Highways
18 Administration 40,700,089 40,700,089
19 Construction 46,643,869 36,100,000
20 Maintenance 1,450,263,015 1,540,896,422

21 Governor's Highway Safety Program 267,914 267,914
22 OSHA Program 358,030 358,030
23
24 State Aid to Municipalities 147,500,000 154,875,000
25
26 Intermodal Divisions
27 Ferry 50,379,026 50,879,026

28 Public Transportation, Bicycle, and Pedestrian 95,154,993 95,154,993
29 Aviation 142,846,918 140,946,918
30 Rail 48,122,269 48,347,269
31 Division of Motor Vehicles 142,771,770 143,396,106
32
33 Compensation, Benefits,
34 Reserves, Transfers, and Other 41,000,270 54,364,768

35
36 Capital Improvements 8,201,222 7,707,500
37
38
39 HIGHWAY FUND AVAILABILITY
40 SECTION 3.2. The Highway Fund availability used in developing the 2019-2021

41 fiscal biennial budget is shown below:
42
43 Highway Fund Availability FY 2019-2020 FY 2020-2021
44 Motor Fuels Tax $1,520,100,000 $1,569,500,000
45 Highway Short-Term Lease 10,000,000 10,000,000
46 Licenses and Fees 772,200,000 828,000,000
47 Investment Income 1,000,000 1,000,000

48 NCRR Dividend Payment 4,100,000 4,200,000
49 Aviation Fuel Tax Adjustment 0 (5,400,000)
50 Repeal Dividend Payment (4,100,000) (4,200,000)
51

H966-PCCS30485-LRxr-3 House Bill 966 Page 11 General Assembly Of North Carolina Session 2019

1 Total Highway Fund Availability $2,303,300,000 $2,403,100,000
2
3 HIGHWAY TRUST FUND APPROPRIATIONS
4 SECTION 3.3. Appropriations from the State Highway Trust Fund for the
5 maintenance and operation of the Department of Transportation and for other purposes as
6 enumerated are made for the fiscal biennium ending June 30, 2021, according to the following
7 schedule:

8
9 Current Operations – Highway Trust Fund FY 2019-2020 FY 2020-2021
10
11 Program Administration $35,626,560 $35,626,560
12 Bonds 88,334,015 56,824,500
13 Turnpike Authority 49,000,000 49,000,000
14 State Ports Authority 45,000,000 45,000,000

15 FHWA State Match 4,640,000 4,640,000
16 Strategic Prioritization Funding Plan for
17 Transportation Investments 1,376,699,425 1,465,308,940
18 Transfer to Visitor Center 400,000 400,000
19
20 Total Highway Trust Fund Appropriations $1,599,700,000 $1,656,800,000

21
22 HIGHWAY TRUST FUND AVAILABILITY
23 SECTION 3.4. The Highway Trust Fund availability used in developing the
24 2019-2021 fiscal biennial budget is shown below:
25 Highway Trust Fund Availability FY 2019-2020 FY 2020-2021
26
27 Highway Use Tax $833,900,000 $855,500,000

28 Motor Fuels Tax 618,500,000 636,400,000
29 Fees 145,300,000 162,900,000
30 Investment Income 2,000,000 2,000,000
31
32 Total Highway Trust Fund Availability $1,599,700,000 $1,656,800,000
33
34 PART IV. OTHER AVAILABILITY AND APPROPRIATIONS

35
36 OTHER APPROPRIATIONS
37 SECTION 4.1.(a) State funds, as defined in G.S. 143C-1-1(d)(25), are appropriated
38 for each year of the 2019-2021 fiscal biennium, as follows:
39 (1) All budget codes listed in the Governor's Recommended Base Budget for the
40 2019-2021 fiscal biennium, submitted pursuant to G.S. 143C-3-5, are

41 appropriated up to the amounts specified, as adjusted by the General
42 Assembly in this act and as delineated in the Committee Report described in
43 Section 42.2 of this act, or in another act of the General Assembly.
44 (2) Agency receipts up to the amounts needed to implement the legislatively
45 mandated salaryincreases and employee benefit increases provided in this act
46 for each year of the 2019-2021 fiscal biennium.
47 SECTION 4.1.(b) Receipts collected in a fiscal year in excess of the amounts

48 appropriated by this section shall remain unexpended and unencumbered until appropriated by
49 the General Assembly, unless the expenditure of overrealized receipts in the fiscal year in which
50 the receipts were collected is authorized by G.S. 143C-6-4. Overrealized receipts are
51 appropriated in the amounts necessary to implement this subsection.

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1 SECTION 4.1.(c) Funds may be expended only for the specified programs,
2 purposes, objects, and line items or as otherwise authorized by the General Assembly.
3
4 OTHER RECEIPTS FROM PENDING AWARD GRANTS
5 SECTION 4.2.(a) Notwithstanding G.S. 143C-6-4, State agencies may, with
6 approval of the Director of the Budget, spend funds received from grants awarded subsequent to
7 the enactment of this act for grant awards that are for less than two million five hundred thousand

8 dollars ($2,500,000), do not require State matching funds, and will not be used for a capital
9 project. State agencies shall report to the Joint Legislative Commission on Governmental
10 Operations within 30 days of receipt of such funds.
11 State agencies may spend all other funds from grants awarded after the enactment of
12 this act only with approval of the Director of the Budget and after consultation with the Joint
13 Legislative Commission on Governmental Operations.
14 SECTION 4.2.(b) The Office of State Budget and Management shall work with the

15 recipient Stateagenciesto budget grant awardsaccordingto theannual program needs andwithin
16 the parameters of the respective granting entities. Depending on the nature of the award,
17 additional State personnel may be employed on a time-limited basis. Funds received from such
18 grants are hereby appropriated and shall be incorporated into the authorized budget of the
19 recipient State agency.
20 SECTION 4.2.(c) Notwithstanding the provisions of this section, no State agency

21 may accept a grant not anticipated in this act if acceptance of the grant would obligate the State
22 to make future expenditures relating to the program receiving the grant or would otherwise result
23 in a financial obligation as a consequence of accepting the grant funds.
24
25 EDUCATION LOTTERY FUNDS
26 SECTION 4.3.(a) The allocations made from the Education Lottery Fund for the
27 2019-2021 fiscal biennium are as follows:

28 FY 2019-2020 FY 2020-2021
29
30 Noninstructional Support Personnel $385,914,455 $385,914,455
31 Prekindergarten Program 78,252,110 78,252,110
32 Public School Building Capital Fund 100,000,000 100,000,000
33 Needs-Based Public School Capital Fund 67,452,612 81,352,612
34 Scholarships for Needy Students 30,450,000 30,450,000

35 UNC Need-Based Financial Aid 10,744,733 10,744,733
36 LEA Transportation 21,386,090 21,386,090
37 TOTAL APPROPRIATION $694,200,000 $708,100,000
38 SECTION 4.3.(b) G.S. 18C-164(b1) reads as rewritten:
39 (b1) Net revenues credited to the Education Lottery Fund shall be appropriated in an
40 amount equal to the amount appropriated from the Education Lottery Fund in the most recently

41 enacted Current Operations and Capital Improvements Appropriations Act of 2017.Act.
42
43 INDIAN GAMING EDUCATION REVENUE FUND APPROPRIATION
44 SECTION 4.4. Notwithstanding G.S. 143C-9-7, there is allocated from the Indian
45 Gaming Education Revenue Fund to the Department of Public Instruction, Textbooks, and
46 Digital Resources Allotment, the sum of eleven million one hundred thousand dollars
47 ($11,100,000) in the 2019-2020 fiscal year and the sum of ten million dollars ($10,000,000) in

48 the 2020-2021 fiscal year.
49
50 CIVIL PENALTY AND FORFEITURE FUND

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1 SECTION 4.5.(a) Allocations are made from the Civil Penalty and Forfeiture Fund
2 for the fiscal biennium ending June 30, 2021, as follows:
3 FY 2019-2020 FY 2020-2021
4 School Technology Fund $18,000,000 $18,000,000
5 Drivers Education 27,393,768 27,393,768
6 State Public School Fund 217,941,640 177,941,640
7 Total Appropriation $263,335,408 $223,335,408

8 SECTION 4.5.(b) Excess receipts realized in the Civil Penalty and Forfeiture Fund
9 in each year of the 2019-2021 fiscal biennium shall be allocated to the School Technology Fund.
10
11 2019 DISASTER RECOVERY
12 SECTION 4.6.(a) Transfer from Hurricane Florence Disaster Recovery Reserve. –
13 NotwithstandingG.S. 143C-4-2, theState Controllershall transfer thesum ofninety-fourmillion
14 one hundred three thousand dollars ($94,103,000) in nonrecurring funds for the 2019-2020 fiscal

15 year from the Hurricane Florence Disaster Recovery Reserve in the General Fund to the
16 Hurricane Florence Disaster Recovery Fund created in S.L. 2018-134, and these funds are
17 appropriated within the Fund and shall be allocated as provided in the Committee Report
18 described in Section 42.2 of this act.
19 SECTION 4.6.(b) Reversion of Composting Reimbursement Funds. –
20 Notwithstanding any other provision of law, the sum of seventeen million dollars ($17,000,000)

21 received by the Department of Agriculture and Consumer Services as reimbursement for
22 composting programs necessitated by damage to livestock caused by Hurricane Florence shall
23 revert to the Hurricane Florence Disaster Recovery Fund created in S.L. 2018-134 and is
24 appropriated within the Fund for the 2019-2020 fiscal year and shall be allocated as provided in
25 the Committee Report described in Section 42.2 of this act.
26 SECTION 4.6.(c) Reallocation of Funds; Community College Enrollment
27 Calculation. –

28 (1) Notwithstanding any provision of S.L. 2018-136 or the Committee Report
29 described in Section 6.1 of that act to the contrary, of the funds allocated to
30 the North Carolina Community College System Office for repair and
31 renovation of local community college facilities damaged by Hurricane
32 Florence, the sum of one million five hundred thousand dollars ($1,500,000)
33 is reallocated to offset the receipts shortfall at affected community colleges
34 due to enrollment declines caused by Hurricane Florence.

35 (2) When calculating the enrollment growth budget request for the 2020-2021
36 fiscal year, the North Carolina CommunityCollege System Office shall adjust
37 the FTE to reflect the FTE lost due to Hurricane Florence.
38 SECTION 4.6.(d) Disaster Relief for Future Events. – The funds allocated to the
39 State Emergency Response and Disaster Relief Fund as provided in the Committee Report
40 described in Section 42.2 of this act shall be used to ensure that sufficient funds are available to

41 provide relief and assistance as authorized by G.S. 166A-19.42 for future emergencies and not
42 including Hurricane Florence or Hurricane Michael. The limitations contained in subsection (n)
43 of this section do not apply to this subsection.
44 SECTION 4.6.(e) Golden L.E.A.F. Hurricane Florence Allocations. –
45 (1) The funds allocated to the Office of State Budget and Management for Golden
46 L.E.A.F. (Long-Term Economic Advancement Foundation), Inc., shall be
47 usedtoprovidegrantstogovernmentalentitiesandorganizationsexemptfrom

48 federal income tax under section 501(c)(3) of the Internal Revenue Code. The
49 funds may be used to repair, replace, construct, or improve infrastructure or
50 equipment damaged as a result of Hurricane Florence as well as to construct
51 or improve infrastructure to support hazard mitigation. For the purposes of

Page 14 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 this program, infrastructure includes nonresidential buildings that serve the
2 public, water, sewer, stormwater, and other publicly owned assets. Golden
3 L.E.A.F. may also provide grants to 501(c)(3) nonprofit organizations and
4 established religious organizations to repair or replace places of worship
5 damaged or destroyed by Hurricane Florence.
6 (2) Notwithstanding any provision of S.L. 2018-136 or the Committee Report
7 described in Section 6.1 of that act to the contrary, the funds allocated to the

8 Office of State Budget and Management for Golden L.E.A.F. for
9 infrastructure may be used for the purposes authorized in subdivision (1) of
10 this subsection.
11 (3) The funds allocated to Golden L.E.A.F. pursuant to the Committee Report
12 described in Section 42.2 of this act are not subject to G.S. 143C-6-23(d).
13 SECTION 4.6.(f) Clarify Volunteer Fire Department Assistance. – Notwithstanding
14 any provision of S.L. 2018-136 or the Committee Report described in Section 6.1 of that act to

15 the contrary, the funds allocated to the Department of Insurance, Office of State Fire Marshal,
16 for financial assistance to volunteer fire departments is available to be used to repair damages
17 not covered by insurance policy proceeds.
18 SECTION 4.6.(g) No Match; Dredging Pelletier Creek. – Funds allocated as
19 provided in the Committee Report described in Section 42.2 of this act for a directed grant to the
20 Town of Morehead City for the renovation and dredging of Pelletier Creek shall not be subject

21 to the requirements of G.S. 143-215.73F(c).
22 SECTION 4.6.(h) North Carolina Policy Collaboratory. –
23 (1) The North Carolina Policy Collaboratory (Collaboratory) shall report the
24 flooding and resiliency implementation plan required by the Committee
25 Reportdescribedin Section42.2ofthis act to theJoint Legislative Emergency
26 Management Oversight Committee no later than December 1, 2020.
27 Notwithstanding Section 3.1(c) of S.L. 2018-134, funds allocated to the

28 Collaboratory as provided in the Committee Report described in Section 42.2
29 of this act for the report and implementation plan shall revert on December
30 30, 2020.
31 (2) The University of North Carolina shall not charge indirect facilities and
32 administrative costs against the funding provided for the Collaboratory from
33 the Hurricane Florence Disaster Recovery Fund.
34 SECTION4.6.(i) ExpandDACS Farmer Assistance. – Notwithstandingthe deadline

35 set forth in Section 5.11(e) of S.L. 2018-136, as amended by S.L. 2018-141, a person who
36 experienced a verifiable loss of agricultural commodities as a result of excessive rain and
37 flooding that occurred during May 15, 2018, through December 31, 2018, and whose farm is
38 located in a North Carolina county that, between January 31, 2019, and February 15, 2019, was
39 included in a Secretarial Disaster Declaration, either as a primary county or as a contiguous
40 county, as a result of excessive rain and flooding that occurred during May 15, 2018, through

41 December 31, 2018, issued by the United States Secretary of Agriculture, is eligible for financial
42 assistance for losses of agricultural commodities pursuant to Section 5.11 of S.L. 2018-136. This
43 subsection is effective when this act becomes law. The Department shall accept completed
44 applications from persons eligible for financial assistance pursuant to this subsection for no more
45 than 10 consecutive business days on which the federal government is not partially or fully shut
46 down, beginning on the effective date of this subsection. This subsection shall expire on the date
47 the Department has processed all applications validly received during this period.

48 SECTION 4.6.(j) Abandoned and Derelict Vessel Removal. – Notwithstanding any
49 provision of law in Chapter 75A of the General Statutes, the Wildlife Resources Commission
50 (WRC) is authorized to use the funds provided in the Committee Report described in Section
51 42.2 of this act to inspect, investigate, and remove abandoned and derelict vessels. As used in

H966-PCCS30485-LRxr-3 House Bill 966 Page 15 General Assembly Of North Carolina Session 2019

1 this subsection, the phrase abandoned and derelict vessel means a water-going craft located in
2 a canal or the Intracoastal Waterway that has been damaged or destroyed by weather-related
3 events and that is impeding water traffic. The phrase does not apply to a vessel that is moored to
4 a dock or otherwise not located in an area of normal water traffic. WRC may also remove and
5 dispose of vessels identified by the Marine Patrol of the Division of Marine Fisheries.
6 SECTION 4.6.(k) Flood Insurance Pilot Program. – The funds allocated to the
7 Department of Public Safety, Division of Emergency Management (Division), for a flood

8 insurance pilot program as provided in the Committee Report described in Section 42.2 of this
9 act shall be used to help payfor the cost of up to two years' flood insurance for eligible applicants
10 and eligible properties. In order to be eligible for funds under the pilot program, all of the
11 following shall apply:
12 (1) The applicant earned no more than eighty percent (80%) of the subject area
13 median income during the preceding calendar year and has not received flood
14 insurance for the subject property from any federal program, including by the

15 Community Development Block Grant–Disaster Recovery or the Federal
16 Emergency Management Agency (FEMA) Housing Assistance Program.
17 (2) The subject propertyis the applicant's primary residence, is insurable, and has
18 experienced a repetitive loss as that term is defined by FEMA.
19 In awarding funds, the Division shall give priorityto applicants and subject properties
20 in the most impacted and distressed counties as determined by the United States Department of

21 Housing and Urban Development for Hurricane Matthew, Hurricane Florence, or both.
22 In addition to any reporting requirement contained in S.L. 2018-134, S.L. 2018-136,
23 or S.L. 2018-138, the Division shall report to the chairs of the Senate Committee on
24 Appropriations/Base Budget, the chairs of the House Committee on Appropriations, and the
25 Fiscal Research Division by March 31, 2020, and March 31, 2021, regarding the implementation
26 of this subsection.
27 SECTION 4.6.(l) Coastal Storm Damage Mitigation Grants. – Funds allocated as

28 provided in the Committee Report described in Section 42.2 of this act to the Department of
29 Environmental Quality for the Coastal Storm Damage Mitigation Fund shall be used to provide
30 grants in an amount not to exceed two million five hundred thousand dollars ($2,500,000) for
31 each unit of local government during the 2019-2021 fiscal biennium. Notwithstanding
32 G.S. 143-215.73M, no cost-share shall be required for these grants.
33 SECTION 4.6.(m) CAMA Emergency General Permit Extension. –
34 Notwithstanding the time lines set forth in 15A NCAC 07H .2502 or other applicable law to the

35 contrary, Coastal Area Management Act Emergency General Permits authorized in response to
36 Hurricanes Florence and Michael and activated by the Secretary of the Department of
37 Environmental Quality in a September 20, 2018, statement, as amended on October 12, 2018,
38 shall be subject to the following schedule:
39 (1) All emergency general permits must be issued by October 12, 2019.
40 (2) All work authorized by the emergency general permits must be completed by

41 October 12, 2020.
42 SECTION 4.6.(n) Applicability. – Unless otherwise provided in this section or the
43 Committee Report described in Section 42.2 of this act, this section applies to the North Carolina
44 counties designated underamajordisasterdeclarationbythePresident oftheUnitedStates under
45 the Stafford Act (P.L. 93-288) as a result of Hurricane Florence. Section 3.1 of S.L. 2018-134,
46 as amended, applies to this section and is incorporated by reference, except Section 3.1(b) of that
47 section shall not apply to any directed grants or funds provided to a State agency for future

48 disaster studies as provided in the Committee Report described in Section 42.2 of this act.
49 Sections 4.2, 4.3, 5.21, 5.22, 5.23, and 5.24 of S.L. 2018-136 apply to this section and are
50 incorporated by reference.
51

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1 PART V. GENERAL PROVISIONS
2
3 ESTABLISHING OR INCREASING FEES
4 SECTION 5.1.(a) Notwithstanding G.S. 12-3.1, an agency is not required to consult
5 with the Joint Legislative Commission on Governmental Operations prior to establishing or
6 increasing a fee to the level authorized or anticipated in this act.
7 SECTION 5.1.(b) Notwithstanding G.S. 150B-21.1A(a), an agency may adopt an

8 emergency rule in accordance with G.S. 150B-21.1A to establish or increase a fee as authorized
9 by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter
10 150B of the General Statutes.
11
12 STATE FUNDS/REQUIRE DEPOSIT IN STATE TREASURY
13 SECTION 5.2.(a) Article 6 of Chapter 147 of the General Statutes is amended by
14 adding a new section to read:

15 § 147-76.1. Require deposit into the State treasury of funds received by the State.
16 (a) Definition. – For purposes of this section, the term cash gift or donation means any
17 fundsprovided,withoutvaluableconsideration,totheState,forusebytheState,orforthebenefit
18 of the State.
19 (b) Requirement. – Except as otherwise specifically provided by law, all funds received
20 bytheState,includingcashgiftsanddonations,shallbedepositedintotheStatetreasury.Nothing

21 in this subsection shall be construed as exempting from the requirement set forth in this
22 subsection funds received by a State officer or employee acting on behalf of the State.
23 (c) Terms Binding. – Except as otherwise provided by subsection (b) of this section, the
24 terms of an instrument evidencing a cash gift or donation are a binding obligation of the State.
25 Nothing in this section shall be construed to supersede, or authorize a deviation from the terms
26 of an instrument evidencing a gift or donation setting forth the purpose for which the funds may
27 be used.

28 SECTION 5.2.(b) G.S. 147-83 reads as rewritten:
29 § 147-83. Receipts from federal government and gifts not affected.
30 General Statutes 147-77, 147-78, 147-80, 147-81, 147-82, 147-83 and 147-84 shall not be
31 held or construed to affect or interfere with the receipts and disbursements of any funds received
32 by any institution or department of this State from the federal government or any gift or donation
33 to any institution or department of the State or commission or agency thereof when either in the
34 act of Congress, relating to such funds received from the federal government, or in the instrument

35 evidencing the said private donation or gift, a contrary disposition or handling is prescribed or
36 required, and the said sections shall not apply to any moneys paid to any department, institution
37 oragency,orundertakingoftheStateofNorth Carolina,as apartofanylegislativeappropriation,
38 or allotment from any contingent fund, as provided by law, after the same has been paid out of
39 the State treasury.
40 SECTION 5.2.(c) This section becomes effective July 1, 2019, and applies to funds

41 received on or after that date.
42
43 DIRECTED GRANTS TO NON-STATE ENTITIES
44 SECTION 5.3.(a) Definitions. – For purposes of this act and the Committee Report
45 described in Section 42.2 of this act, the following definitions apply:
46 (1) Directed grant. – Nonrecurring funds allocated by a State agency to a
47 non-State entity as directed by an act of the General Assembly.

48 (2) Non-State entity. – As defined in G.S. 143C-1-1.
49 SECTION 5.3.(b) Requirements. – Nonrecurring funds appropriated in this act as
50 directed grants are subject to all of the following requirements:

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1 (1) Directed grants are subject to the provisions of subsections (b) through (k) of
2 G.S. 143C-6-23.
3 (2) Directed grants of one hundred thousand dollars ($100,000) or less may be
4 made in a single annual payment in the discretion of the Director of the
5 Budget. Directed grants of more than one hundred thousand dollars
6 ($100,000) shall be made in quarterly or monthly payments in the discretion
7 of the Director of the Budget. A State agency administering a directed grant

8 shall begin disbursement of funds to a non-State entity that meets all
9 applicable requirements as soon as practicable,but nolaterthan100days after
10 the date this act becomes law.
11 (3) Beginning on the first day of a quarter following the deadline provided in
12 subdivision (2) of this subsection and quarterly thereafter, State agencies
13 administering directed grants shall report to the Fiscal Research Division on
14 the status of funds disbursed for each directed grant until all funds are fully

15 disbursed. At a minimum, the report required under this subdivision shall
16 include updates on (i) the date of the initial contact, (ii) the date the contract
17 was sent to the entity receiving the funds, (iii) the date the disbursing agency
18 received the fully executed contract back from the entity, (iv) the contract
19 execution date, and (v) the payment date.
20 (4) Notwithstanding any provision of G.S. 143C-1-2(b) to the contrary,

21 nonrecurring funds appropriated in this act as directed grants shall not revert
22 until June 30, 2021.
23 (5) Directed grants to nonprofit organizations are for nonsectarian, nonreligious
24 purposes only.
25 SECTION 5.3.(c) This section expires on June 30, 2021.
26
27 DEPARTMENTAL POSITION TRANSFERS SUBJECT TO STATE BUDGET ACT

28 SECTION 5.4. G.S. 143B-10(c) reads as rewritten:
29 (c) Department Staffs. – The head of each principal State department may establish
30 necessarysubordinatepositions within his thedepartment, make appointments to thosepositions,
31 and remove persons appointed to those positions, all within the limitations of appropriations and
32 subject to the State Budget Act and the North Carolina Human Resources Act. All employees
33 within a principal State department shall be under the supervision, direction, and control of the
34 head of that department. The head of each principal State department may establish or abolish

35 positions, transfer officers and employees between positions, and change the duties, titles, and
36 compensation of existing offices and positions as he the head of the department deems necessary
37 for the efficient functioning of the department, subject to the State Budget Act and the North
38 Carolina Human Resources Act and the limitations of available appropriations. For the purposes
39 of the foregoing provisions, a member of a board, commission, council, committee, or other
40 citizen group shall not be considered an employee within a principal department. Nothing in this

41 subsection shall be construed as authorizing the transfer of officers and employees between
42 departments without express authorization of the General Assembly.
43
44 STATE BUDGET ACT AMENDMENTS
45 SECTION 5.5.(a) G.S. 143C-1-3(a) reads as rewritten:
46 (a) Types. – The Controller shall account for State resources through use of the fund
47 types listed in this subsection. The Controller may not establish a fund type that differs from the

48 listed fund types unless the Governmental Accounting Standards Board has approved the use of
49 the different fund type.
50 The fund types are described as follows, except that where a conflict exists between a
51 description used in this section and the definition of the corresponding fund type issued by the

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1 Governmental Accounting Standards Board, it is presumed that the definition issued by the
2 Governmental Accounting Standards Board shall prevail.
3 Governmental Funds.
4 (1) Capital Projects Funds. – Accounts for financial resources to be used for the
5 acquisition or construction of major capital facilities other than those financed
6 by proprietary funds or in trust funds for individuals, private organizations, or
7 other governments. fiduciary funds. Capital outlays financed from general

8 obligation bond proceeds should be accounted for through a capital projects
9 fund.
10 (2) Debt Service Funds. – Accounts for the accumulation of resources for, and the
11 payment of, general long-term debt principal and interest.
12 (3) General Fund. – Accounts for all financial resources except those required to
13 be reported in another fund.
14 (4) Special Revenue Funds. – Accounts for the proceeds of specific revenue

15 sources, other than trusts for individuals, private organizations, or other
16 governments debt service or for major capital projects, that are legally
17 restricted to expenditure for specified purposes.
18 (5) Permanent Funds. – Accounts for resources that are legally restricted to the
19 extent that only earnings, and not principal, may be used for purposes that
20 support the reporting government's programs.

21 Proprietary Funds.
22 (6) Enterprise Funds. – Accounts for any activity for which a fee is charged to
23 external users for goods or services. Activities are required to be reported as
24 enterprise funds if any one of the following criteria is met. Each of these
25 criteria should be applied in the context of the activity's principal revenue
26 sources.
27 a. The activity is financed with debt that is secured solely by a pledge of

28 the net revenues from fees and charges of the activity.
29 b. Laws or regulations require that the activity's costs of providing
30 services, including capital costs, be recovered with fees and charges
31 rather than with taxes or similar revenues.
32 c. The pricing policies of the activityestablish fees and charges designed
33 to recover its costs, including capital costs.
34 (7) Internal Service Funds. – Accounts for any activity that provides goods or

35 services to other funds, departments, or agencies of the primary government
36 and its component units, or to other governments, on a cost-reimbursement
37 basis. Internal service funds should be used only if the reporting government
38 is the predominant participant in the activity. Otherwise, the activity should
39 be reported as an enterprise fund.
40 Agency and Trust Fiduciary Funds.

41 (8) Agency Custodial Funds. – Accounts for resources held by the reporting
42 government in a purely custodial capacity. Agency funds typically involve
43 only the receipt, temporary investment, and remittance of fiduciary resources
44 to individuals, private organizations, or other governments.capacity.
45 Custodial funds are fiduciary activities that are not required to be reported in
46 investment trust funds, pensions and other employee benefit trust funds, and
47 private-purpose trust funds, as described in this section.

48 (9) Investment Trust Funds. – Accounts for the external portion of investment
49 pools reported by the sponsoring government.
50 (10) Pension and Other Employee Benefit Trust Funds. – Accounts for resources
51 that are required to be held in trust for the members and beneficiaries of

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1 defined benefit pension plans, defined contribution plans, other
2 postemployment benefit plans, or other employee benefit plans.pension plans,
3 other postemployment benefit plans, and other employee benefit plans that
4 meet certain Governmental Accounting Standards Board (GASB) criteria.
5 (11) Private-Purpose Trust Funds. – Accounts for all other trust arrangements
6 under which principal and income benefit individuals, private organizations,
7 or other governments.that are not required to be reported in investment trust

8 funds and pension and other employee benefit trust funds.
9 SECTION 5.5.(b) G.S. 143C-3-5 reads as rewritten:
10 § 143C-3-5. Budget recommendations and budget message.
11 (a) Budget Proposals. – The Governor shall present budget recommendations, consistent
12 with G.S. 143C-3-1, 143C-3-2, and 143C-3-3 to each regular session of the General Assembly
13 at a mutually agreeable time to be fixed by joint resolution.
14 (b) Odd-Numbered Years. – In odd-numbered years the budget recommendations shall

15 include the following components:
16 (1) ARecommended State Budget setting forth goals forimprovingtheState with
17 recommended expenditure requirements, funding sources, and performance
18 information for each State government program and for each proposed capital
19 improvement. The Recommended State Budget may be presented in a format
20 chosen by the Director, except that the Recommended State Budget shall

21 clearly distinguish program base budget requirements, program reductions,
22 program eliminations, program expansions, and new programs, and shall
23 explain all proposed capital improvements in the context of the Six-Year
24 Capital Improvements Plan and as required by G.S. 143C-8-6.
25 (1a) The Governor's Recommended State Budget shall include a base budget,
26 which shall be presented in the budget support document pursuant to
27 subdivision (2) of this subsection.

28 (2) A Budget Support Document Recommended Base Budget showing, for each
29 budget code and purpose or program in State government, accounting detail
30 corresponding to the Recommended State Budget.
31 a. The Budget Support Document Recommended Base Budget shall
32 employ the North Carolina Accounting System Uniform Chart of
33 Accounts adopted by the State Controller to show both uses and
34 sources of funds and shall display in separate parallel columns all of

35 the following: (i) actual expenditures and receipts for the most recent
36 fiscal year for which actual information is available, (ii) the certified
37 budget for the preceding fiscal year, (iii) the currently authorized
38 budget for the preceding fiscal year, (iv) program base budget
39 requirements for each fiscal year of the biennium, (v) proposed
40 expenditures and receipts for each fiscal year of the biennium, and (vi)

41 proposed increases and decreases.
42 b. The Budget Support Document Recommended Base Budget shall
43 include detailed information on recommended expenditures for capital
44 improvements as required by G.S. 143C-8-6.
45 c. The Budget Support Document Recommended Base Budget shall
46 include accurate projections of receipts, expenditures, and fund
47 balances. Estimated receipts, including tuition collected by university

48 or community college institutions, shall be adjusted to reflect actual
49 collections from the previous fiscal year, unless the Director
50 recommends a change that will result in collections in the budget year
51 thatdifferfromprior yearactuals,ortheDirectorotherwisedetermines

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1 there is a more reasonable basis upon which to accurately project
2 receipts. Revenue and expenditure detail provided in the Budget
3 Support Document shall be no less detailed than the two-digit level in
4 the North Carolina Accounting System Uniform Chart of Accounts as
5 prescribed by the State Controller.
6 d. The Budget Support Document Recommended Base Budget shall
7 clearly identify all proposed expenditures supported by existing or

8 proposed appropriations, including statutory appropriations.
9 (3) A recommended Current Operations Appropriations Act that makes
10 appropriations foreach fiscal yearofthe upcomingbiennium for theoperating
11 and capital expenses of all State agencies as contained in the Recommended
12 State Budget.
13 (4) The biennial State Information Technology Plan as outlined in Part 2 of
14 Article 15 of Chapter 143B of the General Statutes to be consistent in

15 facilitating the goals outlined in the Recommended State Budget.
16 (5) A list of budget adjustments made during the prior fiscal year pursuant to
17 G.S. 143C-6-4 that are included in the proposed base budget for the upcoming
18 fiscal year. The list of budget adjustments shall identify the revision number,
19 revision type, revision title, the purpose or programs affected, and the amount
20 of funds moving between the purpose or programs.

21 (6) The Governor's Recommended State Budget shall include a transfer to the
22 Savings Reserve of fifteen percent (15%) of the estimated growth in State tax
23 revenues that are deposited in the General Fund for each fiscal year of the
24 upcoming biennium. This subdivision applies only if, and to the extent that,
25 the balance of the Savings Reserve remains below the recommended Savings
26 Reserve balance developed pursuant to G.S. 143C-4-2(f).
27 (7) The Governor's Recommended State Budget shall include a transfer to the

28 State Capital and Infrastructure Fund of four percent (4%) of the estimated net
29 State tax revenues that are deposited in the General Fund for each fiscal year
30 of the upcoming biennium.
31 (c) Even-Numbered Years. – In even-numbered years, the Governor may recommend
32 changes in the enacted budget for the second year of the biennium. These recommendations shall
33 be presented as amendments to the enacted budget and shall be incorporated in a recommended
34 Current Operations Appropriations Act. Any recommended changes shall clearly distinguish

35 program reductions, program eliminations, program expansions, and new programs, and shall
36 explain all proposed capital improvements in the context of the Six-Year Capital Improvements
37 Plan and as required by G.S. 143C-8-6. The Governor shall provide sufficient supporting
38 documentation and accounting detail, consistent with that required by G.S. 143C-3-5(b),
39 corresponding to the recommended amendments to the enacted budget.
40 (d) Funds Included in Budget. – Consistent with requirements of the North Carolina

41 Constitution, Article 5, Section 7(1), the Governor's Recommended State Budget, together with
42 the Recommended Base Budget and Recommended Capital Improvements Budget Support
43 Document, shall include recommended expenditures of State funds from all Governmental and
44 Proprietary Funds, as those funds are described in G.S. 143C-1-3, and all funds established for
45 The University of North Carolina and its constituent institutions that are subject to this Chapter.
46 Except where provided otherwise by federal law, funds received from the federal government
47 become State funds when deposited in the State treasury and shall be classified and accounted

48 for in the Governor's budget recommendations no differently than funds from other sources.
49 (e) Availability Estimates. – The recommended Current Operations Appropriations Act
50 shall contain a statement showing the estimates of General Fund availability, Highway Fund

H966-PCCS30485-LRxr-3 House Bill 966 Page 21 General Assembly Of North Carolina Session 2019

1 availability, and Highway Trust Fund availability upon which the Recommended State Budget
2 is based.
3 (f) Budget Message. – The Governor's budget recommendations shall be accompanied
4 by a written budget message that does all of the following:
5 (1) Explains the goals embodied in the recommended budget.
6 (2) Explains important features of the activities anticipated in the budget.
7 (3) Explains the assumptions underlying the statement of revenue availability.

8 (4) Sets forth the reasons for changes from the previous biennium or fiscal year,
9 as appropriate, in terms of programs, program goals, appropriation levels, and
10 revenue yields.
11 (5) Identifies anticipated sources of funding for major spending initiatives.
12 (6) Prepares a fiscal analysis that addresses the State's budget outlook for the
13 upcoming five-year period. This fiscal analysis shall include detailed
14 estimates forfive yearsforanyproposals to create neworsignificantlyexpand

15 programs and for proposals to create new or change existing law.
16 (g) Different Gubernatorial Administrations. – For years in which there will be a change
17 in gubernatorial administrations, the incumbent Governor shall complete the budget
18 recommendations and budget message by December 15 and deliver them to the Governor-elect.
19 SECTION 5.5.(c) G.S. 143C-8-6 reads as rewritten:
20 § 143C-8-6. Recommendations for capital improvements set forth in the Recommended

21 State Budget.
22 (a) Budget Director's Recommendations. – The Director of the Budget shall recommend
23 expenditures for repairs and renovations of existing facilities, and real property acquisition, new
24 construction, or rehabilitation of existing facilities in the Recommended State Budget in
25 accordance with G.S. 143C-3-5.
26 (b) Repairs and Renovations in the Recommended State Budget. – The Recommended
27 State Budget shall contain for repairs and renovations of existing facilities: (i) the amount

28 recommended for each State agency, (ii) a summaryof the recommendations byproject type, and
29 (iii) the means of financing.
30 (c) Repairs and Renovations in the Recommended Capital Improvements Budget
31 Support Document. – TheRecommendedCapital Improvements Budget Support Documentshall
32 contain for each repair and renovation project recommended in accordance with subsection (b)
33 of this section: (i) a project description and justification, (ii) a detailed cost estimate, (iii) an
34 estimated schedule for the completion of the project, and (iv) an explanation of the means of

35 financing.
36 (d) Other Capital Projects in the Recommended State Budget. – The Recommended State
37 Budget shall contain for each capital project involving real property acquisition, new
38 construction, building area (sq. ft.) expansions, or the rehabilitation of existing facilities to
39 accommodate new or expanded uses: (i) a project description and statement of need, (ii) an
40 estimate of acquisition and construction or rehabilitation costs, and (iii) a means of financing the

41 project.
42 (e) Other Capital Projects in the Capital Improvements Budget Support Document. – The
43 Capital Improvements Budget Support Document shall contain for each capital project
44 recommended in accordance with subsection (d) of this section: (i) a detailed project description
45 and justification, (ii) a detailed estimate of acquisition, planning, design, site development,
46 construction, contingency and other related costs, (iii) an estimated schedule of cash flow
47 requirements over the life of the project, (iv) an estimated schedule for the completion of the

48 project, (v) an estimate of revenues, if any, likely to be derived from the project, covering the
49 first five years of operation, and (vi) an explanation of the means of financing.
50 (f) All Recommended Capital Projects. – The Director of the Budget shall ensure that
51 recommendations in the Recommended State Budget for repairs and renovations of existing

Page 22 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 facilities, real property acquisition, new construction, or rehabilitation of existing facilities
2 include all of the following information:
3 (1) An estimate of maintenance and operating costs, including personnel, for the
4 project, covering the first five years of operation. If no increase in these
5 expenditures is anticipated because the recommended project would replace
6 an existing facility, then the level of expenditures for the previous five years
7 of operation shall be included instead.

8 (2) A recommended funding source for the operating costs identified pursuant to
9 subdivision (1) of this subsection.
10
11 CAP STATE FUNDED PORTION OF NONPROFIT SALARIES
12 SECTION 5.8. No more than one hundred twenty thousand dollars ($120,000) in
13 Statefunds,includinganyinterestearnings accruingfromthosefunds,maybeusedfortheannual
14 salary of any individual employee of a nonprofit organization.

15
16 WEB SITE POSTING OF REPORTS
17 SECTION 5.9.(a) G.S. 120-29.5 reads as rewritten:
18 § 120-29.5. State agency reports to the General Assembly.
19 (a) Submission. – Whenever a report is directed by law or resolution to be made to the
20 General Assembly, the State agency preparing the report shall deliver one copy of the report to

21 each of the following officers: the Speaker of the House of Representatives, the President Pro
22 Temporeof theSenate, theHousePrincipal Clerk, andtheSenate Principal Clerk; and twocopies
23 of the report to the Legislative Library. The State agency is encouraged to inform members of
24 the General Assembly that an electronic copy is available. This section does not affect any
25 responsibilities for depositing documents with the State Library or the State Publications
26 Clearinghouse under Chapter 125 of the General Statutes.
27 (b) Publication. – A State agency submitting a report pursuant to subsection (a) of this

28 section or a report directed by law or resolution to be made to a committee or subcommittee of
29 the General Assembly shall publish the report on a public Internet Web site maintained by the
30 State agency.
31 SECTION 5.9.(b) This section becomes effective January 1, 2020, and applies to
32 reports submitted on or after that date.
33
34 STATE BUDGET ACT/CLARIFY WHAT CONSTITUTES AN APPROPRIATION

35 SECTION 5.11. G.S. 143C-1-2(a) reads as rewritten:
36 (a) Appropriation Required to Withdraw State Funds From the State Treasury. – In
37 accordance with Section 7 of Article V of the North Carolina Constitution, no money shall be
38 drawn from the State treasury but in consequence of appropriations made by law. A law enacted
39 by the General Assembly that authorizes the expenditure of money expressly appropriates funds
40 from the State treasuryis an appropriation; however, an enactment bythe General Assemblythat

41 authorizes, specifies, or otherwise provides that funds may be used for a particular describes the
42 purpose of a fund, authorizes the use of funds, allows the use of funds, or specifies how funds
43 may be expended, is not an appropriation.
44
45 EXTRA SESSION ON ACCESS TO HEALTH CARE
46 SECTION 5.12. The General Assembly encourages the Governor to convene an
47 extra session pursuant to Section 5(7) of Article III of the North Carolina Constitution. The

48 purpose of the extra session would be to consider access to health care across North Carolina,
49 including issues pertaining to health insurance, association health plans, Medicaid, and Medicaid
50 expansion.
51

H966-PCCS30485-LRxr-3 House Bill 966 Page 23 General Assembly Of North Carolina Session 2019

1 PART VI. COMMUNITY COLLEGE SYSTEM
2
3 CODIFY REORGANIZATION AUTHORITY OF CC SYSTEM OFFICE
4 SECTION 6.1. G.S. 115D-3 reads as rewritten:
5 § 115D-3. Community Colleges System Office; staff.staff; reorganization authority.
6 (a) The Community Colleges System Office shall be a principal administrative
7 department of State government under the direction of the State Board of Community Colleges,

8 and shall be separate from the free public school system of the State, the State Board of
9 Education, and the Department of Public Instruction. The State Board has authority to adopt and
10 administer all policies, regulations, and standards which it deems necessary for the operation of
11 the System Office.
12 The State Board shall elect a President of the North Carolina System of CommunityColleges
13 who shall serve as chief administrative officer of the Community Colleges System Office. The
14 compensation of this position shall be fixed by the State Board from funds provided by the

15 General Assembly in the Current Operations Appropriations Act.
16 The President shall be assisted by such professional staff members as may be deemed
17 necessary to carry out the provisions of this Chapter, who shall be elected by the State Board on
18 nomination of the President. The compensation of the staff members elected by the Board shall
19 be fixed by the State Board of Community Colleges, upon recommendation of the President of
20 the Community College System, from funds provided in the Current Operations Appropriations

21 Act. Thesestaffmembers shall includesuchofficers as maybedeemed desirablebythePresident
22 and State Board. Provision shall be made for persons of high competence and strong professional
23 experience in such areas as academic affairs, public service programs, business and financial
24 affairs, institutional studies and long-range planning, student affairs, research, legal affairs,
25 health affairs and institutional development, and for State and federal programs administered by
26 the State Board. In addition, the President shall be assisted by such other employees as may be
27 needed to carry out the provisions of this Chapter, who shall be subject to the provisions of

28 Chapter126oftheGeneralStatutes.ThestaffcomplementshallbeestablishedbytheStateBoard
29 on recommendation of the President to insure that there are persons on the staff who have the
30 professional competence and experience to carry out the duties assigned and to insure that there
31 are persons on the staff who are familiar with the problems and capabilities of all of the principal
32 types of institutions represented in the system. The State Board of Community Colleges shall
33 have all other powers, duties, and responsibilities delegated to the State Board of Education
34 affecting the Community Colleges System Office not otherwise stated in this Chapter.

35 (b) Notwithstanding anyother provision of law, the President mayreorganize the System
36 Office in accordance with recommendations and plans submitted to and approved by the State
37 Board of Community Colleges. If a reorganization is implemented pursuant to this subsection,
38 including any movement of positions and funds between fund codes on a recurring basis, the
39 President shall report by June 30 of the fiscal year in which the reorganization occurred to the
40 Joint Legislative Education Oversight Committee and the Fiscal Research Division of the

41 General Assembly.
42
43 CC TUITION WAIVER/CAMPUS POLICE OF PRIVATE INSTITUTIONS OF
44 HIGHER EDUCATION
45 SECTION 6.2.(a) G.S. 115D-5(b) reads as rewritten:
46 (b) In order to make instruction as accessible as possible to all citizens, the teaching of
47 curricular courses and of noncurricular extension courses at convenient locations away from

48 institution campuses as well as on campuses is authorized and shall be encouraged. A pro rata
49 portion of the established regular tuition rate charged a full-time student shall be charged a
50 part-time student taking any curriculum course. In lieu of any tuition charge, the State Board of
51 Community Colleges shall establish a uniform registration fee, or a schedule of uniform

Page 24 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 registration fees, to be charged students enrolling in extension courses for which instruction is
2 financed primarily from State funds. The State Board of Community Colleges may provide by
3 general and uniform regulations for waiver of tuition and registration fees for the following:
4 (1) Persons not enrolled in elementary or secondary schools taking courses
5 leading to a high school diploma or equivalent certificate.
6 (2) Courses requested by the following entities that support the organizations'
7 training needs and are on a specialized course list approved bythe State Board

8 of Community Colleges:
9 a. Volunteer fire departments.
10 b. Municipal, county, or State fire departments.
11 c. Volunteer EMS or rescue and lifesaving departments.
12 d. Municipal,county,orStateEMS orrescueandlifesavingdepartments.
13 d1. Law enforcement, fire, EMS or rescue and lifesaving entities serving
14 a lake authority that was created by a county board of commissioners

15 prior to July 1, 2012.
16 e. Radio Emergency Associated Communications Teams (REACT)
17 under contract to a county as an emergency response agency.
18 f. Municipal, county, or State law enforcement agencies.
19 f1. Campus police agencies of private institutions of higher education
20 certified by the Attorney General pursuant to Chapter 74G of the

21 General Statutes.
22 g. The Division of Adult Correction and Juvenile Justice of the
23 Department of Public Safety for the training of full-time custodial
24 employees and employees of the Division required to be certified
25 under Article 1 of Chapter 17C of the General Statutes and the rules
26 of the Criminal Justice and Training Standards Commission.
27 h. Repealed bySession Laws 2017-186, s. 2(hhhhh), effective December

28 1, 2017.
29 i. The Eastern Band of Cherokee Indians law enforcement, fire, EMS or
30 rescue and lifesaving tribal government departments or programs.
31 j. The Criminal Justice Standards Division of the Department of Justice
32 for the training of criminal justice professionals, as defined in
33 G.S. 17C-20(6), who are required to be certified under (i) Article 1 of
34 Chapter 17C of the General Statutes and the rules of the North

35 Carolina Criminal Justice Education and Training Standards
36 Commission or (ii) Chapter 17E of the General Statutes and the rules
37 of the North Carolina Sheriffs' Education and Training Standards
38 Commission. The waivers provided for in this sub-subdivision apply
39 to participants and recent graduates of the North Carolina Criminal
40 Justice Fellows Program to obtain certifications for eligible criminal

41 justice professions as defined in G.S. 17C-20(6).
42 ….
43 SECTION6.2.(b) This sectionapplies beginningwith the2019-2020 academic year.
44
45 NC CAREER COACHES/LOCAL MATCHING FUNDS
46 SECTION 6.3. G.S. 115D-21.5(c) reads as rewritten:
47 (c) Application for NC Career Coach Program Funding. – The board of trustees of a

48 communitycollege and a local board of education of a local school administrative unit within the
49 service area of the communitycollege jointlymayapplyfor available funds for NC Career Coach
50 Program funding from the State Board of Community Colleges. The State Board of Community
51 Colleges shall establish a process for award of funds as follows:

H966-PCCS30485-LRxr-3 House Bill 966 Page 25 General Assembly Of North Carolina Session 2019

1 (1) Advisory committee. – Establishment of an advisory committee, which shall
2 include representatives from the NC Community College System, the
3 Department of Public Instruction, the Department of Commerce, and at least
4 three representatives of the business community, to review applications and
5 make recommendations for funding awards to the State Board.
6 (2) Application submission requirements. – The State Board of Community
7 Colleges shall require at least the following:

8 a. Evidence of a signed memorandum of understanding that meets, at a
9 minimum, the requirements of this section.
10 b. Evidence that the funding request will be matched dollar-for-dollar
11 with local funds.funds in accordance with the following:
12 1. Matching funds may come from public or private sources.
13 2. The match amount shall be determined based on the
14 development tier designation of the county in which the local

15 school administrative unit is located where the career coach is
16 assigned on the date of the award of funds by the State Board
17 of Community Colleges according to the following:
18 I. If located in a tier one county as defined in
19 G.S. 143B-437.08, no local match shall be required.
20 II. If located in a tier two county as defined in

21 G.S. 143B-437.08, one dollar ($1.00) of local funds for
22 every two dollars ($2.00) in State funds shall be
23 required.
24 III. If located in a tier three county as defined in
25 G.S. 143B-437.08, one dollar ($1.00) of local funds for
26 every one dollar ($1.00) in State funds shall be
27 required.

28 (3) Awards criteria. – The State Board of Community Colleges shall develop
29 criteria for consideration in determining the award of funds that shall include
30 the following:
31 a. Consideration of the workforce needs of business and industry in the
32 region.
33 b. Targeting of resources to enhance ongoing economic activity within
34 the community college service area and surrounding counties.

35 c. Geographic diversity of awards.
36
37 ALLOW CCS TO EARN FTE FOR INSTRUCTION IN LOCAL JAILS
38 SECTION 6.4.(a) Section 8.3(b) of S.L. 2010-31 reads as rewritten:
39 SECTION 8.3.(b) Courses in federal prisons or local jails shall not earn regular budget
40 full-time equivalents, but may be offered on a self-supporting basis.

41 SECTION 6.4.(b) G.S. 115D-5 reads as rewritten:
42 § 115D-5. Administration of institutions by State Board of Community Colleges;
43 personnel exempt from North Carolina Human Resources Act; extension
44 courses; tuition waiver; in-plant training; contracting, etc., for establishment
45 and operation of extension units of the community college system; use of existing
46 public school facilities.
47 …

48 (c) No course of instruction shall be offered by any community college at State expense
49 or partial State expense to any captive or co-opted group of students, as defined by the State
50 Board of Community Colleges, without prior approval of the State Board of Community
51 Colleges. All course offerings approved for State prison inmates or prisoners in local jails must

Page 26 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 be tied to clearly identified job skills, transition needs, or both. Approval by the State Board of
2 Community Colleges shall be presumed to constitute approval of both the course and the group
3 served bythat institution. The State Board of CommunityColleges may delegate to the President
4 the power to make an initial approval, with final approval to be made by the State Board of
5 Community Colleges. A course taught without such approval will not yield any full-time
6 equivalent students, as defined by the State Board of Community Colleges.
7 (c1) Community colleges shall report full-time equivalent (FTE) student hours for

8 correction education programs on the basis of contact hours rather than student membership
9 hours. No community college shall operate a multi-entry/multi-exit class or program in a prison
10 facility, except for a literacy class or program.
11 The State Board shall work with the Division of Adult Correction and Juvenile Justice of the
12 Department of Public Safety on offering classes and programs that match the average length of
13 stay of an inmate in a prison facility.
14 ….

15 SECTION 6.4.(c) Beginning with the 2019-2020 academic year, communitycollege
16 courses offered in local jails shall earn regular budget full-time equivalents.
17
18 WAIVE TUITION/DEPENDENTS OF FALLEN CORRECTIONAL OFFICERS
19 SECTION 6.5.(a) G.S. 115B-1 reads as rewritten:
20 § 115B-1. Definitions.

21 The following definitions apply in this Chapter:
22 (1) Correctional officer. – An employee of an employer who is certified as a State
23 correctional officer under the provisions of Article 1 of Chapter 17C of the
24 General Statutes.
25 (1)(1a) Employer. – The State of North Carolina and its departments, agencies, and
26 institutions; or a county, city, town, or other political subdivision of the State.
27 …

28 (4) Permanently and totally disabled as a direct result of a traumatic injury
29 sustained in the line of duty. – A person: (i) who as a law enforcement officer,
30 correctional officer, firefighter, volunteer firefighter, or rescue squad worker
31 sufferedadisablinginjurywhilein activeserviceortrainingforactiveservice,
32 (ii) who at the time of active service or training was a North Carolina resident,
33 and (iii) who has been determined to be permanently and totally disabled for
34 compensation purposes by the North Carolina Industrial Commission.

35 …
36 (6) Survivor. – Any person whose parent, legal guardian, legal custodian, or
37 spouse: (i) was a law enforcement officer, a correctional officer, a firefighter,
38 a volunteer firefighter, or a rescue squad worker, (ii) was killed while in active
39 service or training for active service or died as a result of a service-connected
40 disability, and (iii) at the time of active service or training was a North

41 Carolina resident. The term does not include the widow or widower of a law
42 enforcement officer, correctional officer, firefighter, volunteer firefighter, or
43 a rescue squad worker if the widow or widower has remarried.
44 ….
45 SECTION 6.5.(b) G.S. 115B-2(a) reads as rewritten:
46 (a) The constituent institutions of The University of North Carolina and the community
47 colleges as defined in G.S. 115D-2(2) shall permit the following persons to attend classes for

48 credit or noncredit purposes without the required payment of tuition:
49 …

H966-PCCS30485-LRxr-3 House Bill 966 Page 27 General Assembly Of North Carolina Session 2019

1 (2) Any person who is the survivor of a law enforcement officer, correctional
2 officer, firefighter, volunteer firefighter, or rescue squad worker killed as a
3 direct result of a traumatic injury sustained in the line of duty.
4 (3) The spouse of a law enforcement officer, correctional officer, firefighter,
5 volunteer firefighter, or rescue squad worker who is permanently and totally
6 disabled as a direct result of a traumatic injury sustained in the line of duty.
7 (4) Any child, if the child is at least 17 years old but not yet 24 years old, whose

8 parent, legal guardian, or legal custodian is a law enforcement officer,
9 correctional officer, firefighter, volunteer firefighter, or rescue squad worker
10 who is permanently and totally disabled as a direct result of a traumatic injury
11 sustained in the line of duty. However, a child's eligibility for a waiver of
12 tuition under this Chapter shall not exceed: (i) 54 months, if the child is
13 seeking a baccalaureate degree, or (ii) if the child is not seeking a
14 baccalaureate degree, the number of months required to complete the

15 educational program to which the child is applying.
16 ….
17 SECTION 6.5.(c) G.S. 115B-5(b)(3) reads as rewritten:
18 (3) The cause of death of the law enforcement officer, correctional officer,
19 firefighter, volunteer firefighter, or rescue squad worker shall be verified by
20 certification from the records of the Department of State Treasurer, the

21 appropriate city or county law enforcement agency that employed the
22 deceased, the administrative agency for the fire department or fire protection
23 district recognized for funding under the Department of State Auditor, or the
24 administrative agency having jurisdiction over any paid firefighters of all
25 counties and cities.
26 SECTION6.5.(d) This sectionapplies beginningwith the2019-2020 academic year.
27

28 AUTHORIZE COMMUNITY COLLEGE USE OF INSURANCE IN LIEU OF A BOND
29 SECTION 6.7. G.S. 115D-58.10 reads as rewritten:
30 § 115D-58.10. Surety bonds.bonds and related insurance.
31 The State Board of Community Colleges shall determine what State employees and
32 employees of institutions shall give bonds or be insured for the protection of State funds and
33 property and the State Board is authorized to place the bonds bonds, determine adequate
34 insurance coverage, and pay the premiums thereon from State funds.

35 The board of trustees of each institution shall require all institutional employees authorized
36 to draw or approve checks or vouchers drawn on local funds, and all persons authorized or
37 permitted to receive institutional funds from whatever source, and all persons responsible for or
38 authorized to handle institutional property, to be bonded by a surety company authorized to do
39 business with the State in such amount as the board of trustees deems sufficient for the protection
40 of such property and funds. In lieu of a bond, the board of trustees may obtain and maintain

41 adequate insurance coverage sufficient for the protection of institutional funds and property. The
42 tax-levying authority of each institution shall provide the funds necessary for the payment of the
43 premiums of such bonds.the bonds or for insurance coverage.
44
45 PIEDMONT COMMUNITY COLLEGE CENTER FOR EDUCATIONAL AND
46 AGRICULTURAL DEVELOPMENT/MATCHING FUNDS
47 SECTION 6.9. The funds appropriated by this act to the Community Colleges

48 System Office for the 2019-2020 fiscal year for the Center for Educational and Agricultural
49 Development at Piedmont Community College shall be matched by the Board of Trustees of
50 Piedmont Community College on the basis of two dollars ($2.00) in allocated State funds for
51 every one dollar ($1.00) in non-State funds. The Community Colleges System Office shall only

Page 28 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 allocate the funds upon the Board of Trustees providing the required match of non-State funds
2 for the total amount of State funds. These matching funds shall not revert at the end of each fiscal
3 year to the General Fund, but shall remain available until June 30, 2023. If the Community
4 Colleges System Office has not allocated these funds to Piedmont Community College by the
5 end of the 2022-2023 fiscal year, the funds shall then revert to the General Fund.
6
7 PART VII. PUBLIC INSTRUCTION

8
9 FUNDS FOR CHILDREN WITH DISABILITIES
10 SECTION 7.1. The State Board of Education shall allocate additional funds for
11 children with disabilities on the basis of four thousand four hundred fifty-five dollars and
12 ninety-nine cents ($4,455.99) per child for fiscal years 2019-2020 and 2020-2021. Each local
13 school administrative unit shall receive funds for the lesser of (i) all children who are identified
14 as children with disabilities or (ii) twelve and seventy-five hundredths percent (12.75%) of its

15 2019-2020 allocated averagedailymembership in thelocal school administrativeunit. Thedollar
16 amounts allocated under this section for children with disabilities shall also be adjusted in
17 accordance with legislative salary increments, retirement rate adjustments, and health benefit
18 adjustments for personnel who serve children with disabilities.
19
20 FUNDS FOR ACADEMICALLY GIFTED CHILDREN

21 SECTION 7.2. The State Board of Education shall allocate additional funds for
22 academically or intellectually gifted children on the basis of one thousand three hundred forty
23 dollars and ninety-seven cents ($1,340.97) per child for fiscal years 2019-2020 and 2020-2021.
24 A local school administrative unit shall receive funds for a maximum of four percent (4%) of its
25 2019-2020 allocated average daily membership, regardless of the number of children identified
26 asacademicallyorintellectuallygiftedintheunit.Thedollaramountsallocatedunderthissection
27 for academically or intellectually gifted children shall also be adjusted in accordance with

28 legislative salary increments, retirement rate adjustments, and health benefit adjustments for
29 personnel who serve academically or intellectually gifted children.
30
31 SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES
32 SECTION 7.3.(a) Use of Funds for Supplemental Funding. – All funds received
33 pursuant to this section shall be used only (i) to provide instructional positions, instructional
34 support positions, teacher assistant positions, clerical positions, school computer technicians,

35 instructional supplies and equipment, staff development, and textbooks and digital resources and
36 (ii) for salary supplements for instructional personnel and instructional support personnel. Local
37 boards of education are encouraged to use at least twenty-five percent (25%) of the funds
38 received pursuant to this section to improve the academic performance of children who are
39 performing at Level I or II on either reading or mathematics end-of-grade tests in grades three
40 through eight.

41 SECTION 7.3.(b) Definitions. – As used in this section, the following definitions
42 apply:
43 (1) Anticipated county property tax revenue availability. – The county-adjusted
44 property tax base multiplied by the effective State average tax rate.
45 (2) Anticipated total county revenue availability. – The sum of the following:
46 a. Anticipated county property tax revenue availability.
47 b. Local sales and use taxes received by the county that are levied under

48 Chapter 1096 of the 1967 Session Laws or under Subchapter VIII of
49 Chapter 105 of the General Statutes.
50 c. Fines and forfeitures deposited in the county school fund for the most
51 recent year for which data are available.

H966-PCCS30485-LRxr-3 House Bill 966 Page 29 General Assembly Of North Carolina Session 2019

1 (3) Anticipated total county revenue availability per student. – The anticipated
2 total county revenue availability for the county divided by the average daily
3 membership of the county.
4 (4) Anticipated State average revenue availability per student. – The sum of all
5 anticipated total county revenue availability divided by the average daily
6 membership for the State.
7 (5) Average daily membership. – Average daily membership as defined in the

8 North Carolina Public Schools Allotment Policy Manual adopted by the State
9 Board of Education. If a county contains only part of a local school
10 administrative unit, the average daily membership of that county includes all
11 students who reside within the county and attend that local school
12 administrative unit.
13 (6) County-adjusted property tax base. – Computed as follows:
14 a. Subtract the present-use value of agricultural land, horticultural land,

15 and forestland in the county, as defined in G.S. 105-277.2, from the
16 total assessed real property valuation of the county.
17 b. Adjust the resulting amount by multiplying by a weighted average of
18 the three most recent annual sales assessment ratio studies.
19 c. Add to the resulting amount the following:
20 1. Present-use value of agricultural land, horticultural land, and

21 forestland, as defined in G.S. 105-277.2.
22 2. Value of property of public service companies, determined in
23 accordance with Article 23 of Chapter 105 of the General
24 Statutes.
25 3. Personal property value for the county.
26 (7) County-adjusted property tax base per square mile. – The county-adjusted
27 property tax base divided by the number of square miles of land area in the

28 county.
29 (8) County wealth as a percentage of State average wealth. – Computed as
30 follows:
31 a. Compute the percentage that the county per capita income is of the
32 State per capita income and weight the resulting percentage bya factor
33 of five-tenths.
34 b. Compute the percentage that the anticipated total county revenue

35 availability per student is of the anticipated State average revenue
36 availabilityper student and weight the resulting percentage by a factor
37 of four-tenths.
38 c. Compute the percentage that the county-adjusted propertytax base per
39 square mile is of the State-adjusted property tax base per square mile
40 and weight the resulting percentage by a factor of one-tenth.

41 d. Add the three weighted percentages to derive the county wealth as a
42 percentage of the State average wealth.
43 (9) Effectivecountytaxrate. –Theactualcountytaxratemultipliedbyaweighted
44 average of the three most recent annual sales assessment ratio studies.
45 (10) Effective State average tax rate. – The average of effective county tax rates
46 for all counties.
47 (11) Local current expense funds. – The most recent county current expense

48 appropriations to public schools, as reported by local boards of education in
49 the audit report filed with the Secretaryof the Local Government Commission
50 pursuant to G.S. 115C-447.

Page 30 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (12) Per capita income. – The average for the most recent three years for which
2 data are available of the per capita income according to the most recent report
3 oftheUnitedStates Department ofCommerce,Bureauof EconomicAnalysis,
4 including any reported modifications for prior years as outlined in the most
5 recent report.
6 (13) Sales assessment ratio studies. – Sales assessment ratio studies performed by
7 the Department of Revenue under G.S. 105-289(h).

8 (14) State average adjusted property tax base per square mile. – The sum of the
9 county-adjusted property tax bases for all counties divided by the number of
10 square miles of land area in the State.
11 (15) State average current expense appropriations per student. – The most recent
12 State total of county current expense appropriations to public schools, as
13 reported by local boards of education in the audit report filed with the
14 Secretary of the Local Government Commission pursuant to G.S. 115C-447.

15 (16) Supplant. – To decrease local per student current expense appropriations from
16 one fiscal year to the next fiscal year.
17 (17) Weighted average of the three most recent annual sales assessment ratio
18 studies. – The weighted average of the three most recent annual sales
19 assessment ratio studies in the most recent years for which county current
20 expense appropriations and adjusted property tax valuations are available. If

21 real property in a county has been revalued one year prior to the most recent
22 sales assessment ratio study, a weighted average of the two most recent sales
23 assessment ratios shall be used. If property has been revalued the year of the
24 mostrecent salesassessmentratiostudy,thesalesassessmentratioforthe year
25 of revaluation shall be used.
26 SECTION 7.3.(c) Eligibility for Funds. – Except as provided in subsection (g) of
27 this section, the State Board of Education shall allocate these funds to local school administrative

28 units located in whole or in part in counties in which the county wealth as a percentage of the
29 State average wealth is less than one hundred percent (100%).
30 SECTION 7.3.(d) Allocation of Funds. – Except as provided in subsection (f) of this
31 section, the amount received per average daily membership for a county shall be the difference
32 between the State average current expense appropriations per student and the current expense
33 appropriations perstudent that thecountycould providegiven the county's wealth and an average
34 effort to fund public schools. To derive the current expense appropriations per student that the

35 county could be able to provide given the county's wealth and an average effort to fund public
36 schools, multiplythecounty's wealthas apercentage ofState average wealth bytheState average
37 current expense appropriations per student. The funds for the local school administrative units
38 located in whole or in part in the county shall be allocated to each local school administrative
39 unit located in whole or in part in the county based on the average daily membership of the
40 county's students in the school units. If the funds appropriated for supplemental funding are not

41 adequate to fund the formula fully, each local school administrative unit shall receive a pro rata
42 share of the funds appropriated for supplemental funding.
43 SECTION 7.3.(e) Formula for Distribution of Supplemental Funding Pursuant to
44 this Section Only. – The formula in this section is solely a basis for distribution of supplemental
45 funding for low-wealth counties and is not intended to reflect any measure of the adequacy of
46 the educational program or funding for public schools. The formula is also not intended to reflect
47 any commitment by the General Assembly to appropriate any additional supplemental funds for

48 low-wealth counties.
49 SECTION 7.3.(f) Minimum Effort Required. – A county shall receive full funding
50 under this section if the county (i) maintains an effective county tax rate that is at least one
51 hundred percent (100%) of the effective State average tax rate in the most recent year for which

H966-PCCS30485-LRxr-3 House Bill 966 Page 31 General Assembly Of North Carolina Session 2019

1 data are available or (ii) maintains a county appropriation per student to the school local current
2 expense fund of at least one hundred percent (100%) of the current expense appropriations per
3 student to the school local current expense fund that the county could provide given the county's
4 wealth and an average effort to fund public schools. A county that maintains a county
5 appropriation per student to the school local current expense fund of less than one hundred
6 percent (100%) of the current expense appropriations per student to the school local current
7 expense fund that the county could provide given the county's wealth and an average effort to

8 fund public schools shall receive funding under this section at the same percentage that the
9 county's appropriation per student to the school local current expense fund is of the current
10 expense appropriations per student to the school local current expense fund that the county could
11 provide given the county's wealth and an average effort to fund public schools.
12 SECTION 7.3.(g) Nonsupplant Requirement. – A county in which a local school
13 administrative unit receives funds under this section shall use the funds to supplement local
14 current expense funds and shall not supplant local current expense funds. For the 2019-2021

15 fiscal biennium, the State Board of Education shall not allocate funds under this section to a
16 county found to have used these funds to supplant local per student current expense funds. The
17 State Board of Education shall make a finding that a county has used these funds to supplant
18 local current expense funds in the prior year, or the year for which the most recent data are
19 available, if all of the following criteria apply:
20 (1) The current expense appropriations per student of the county for the current

21 year is less than ninety-five percent (95%) of the average of local current
22 expense appropriations per student for the three prior fiscal years.
23 (2) The county cannot show (i) that it has remedied the deficiency in funding or
24 (ii) that extraordinary circumstances caused the county to supplant local
25 current expense funds with funds allocated under this section.
26 The State Board of Education shall adopt rules to implement the requirements of this
27 subsection.

28 SECTION 7.3.(h) Counties Containing a Base of the Armed Forces. –
29 Notwithstanding any other provision of this section, for the 2019-2021 fiscal biennium, counties
30 containing a base of the Armed Forces of the United States that have an average daily
31 membership of more than 17,000 students shall receive whichever is the higher amount in each
32 fiscal year as follows: either the amount of supplemental funding the county received as a
33 low-wealthcountyinthe2012-2013fiscal yearortheamountofsupplementalfundingthecounty
34 is eligible to receive as a low-wealth county pursuant to the formula for distribution of

35 supplemental funding under the other provisions of this section.
36 SECTION 7.3.(i) Funds for EVAAS Data. – Notwithstanding the requirements of
37 subsection (a) of this section, local school administrative units may utilize funds allocated under
38 this section to purchase services that allow for extraction of data from the Education
39 Value-Added Assessment System (EVAAS).
40 SECTION 7.3.(j) Reports. – For the 2019-2021 fiscal biennium, the State Board of

41 Education shall report to the Fiscal Research Division prior to May 15 of each year if it
42 determines that counties have supplanted funds.
43 SECTION 7.3.(k) Department of Revenue Reports. – The Department of Revenue
44 shall provide to the Department of Public Instruction a preliminary report for the current fiscal
45 year of the assessed value of the property tax base for each county prior to March 1 of each year
46 and afinal reportpriorto May1 of each year.The reports shall includefor each countythe annual
47 sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real

48 property represented by the present-use value of agricultural land, horticultural land, and
49 forestland, as defined in G.S. 105-277.2, (iii) property of public service companies determined
50 in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.
51

Page 32 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 SMALL COUNTY SCHOOL SYSTEM SUPPLEMENTAL FUNDING
2 SECTION 7.4.(a) Allotment Schedule for the 2019-2021 Fiscal Biennium. – Except
3 as otherwise provided in subsection (d) of this section, each eligible countyschool administrative
4 unit shall receive a dollar allotment according to the following schedule:
5 Allotted ADM Small County Allotment
6 0-1,300 $1,820,000
7 1,301-1,700 $1,548,700

8 1,701-2,000 $1,600,000
9 2,001-2,300 $1,560,000
10 2,301-2,600 $1,470,000
11 2,601-2,800 $1,498,000
12 2,801-3,300 $1,548,000.
13 SECTION 7.4.(b) Phase-Out Provision for the 2019-2020 Fiscal Year. – If a local
14 school administrative unit becomes ineligible for funding under the schedule in subsection (a) of

15 this section in the 2019-2020 fiscal year, funding for that unit shall be phased out over a five-year
16 period. Funding for such local school administrative units shall be reduced in equal increments
17 in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth
18 fiscal year after the local school administrative unit becomes ineligible.
19 Allotments for eligible local school administrative units under this subsection shall
20 not be reduced by more than twenty percent (20%) of the amount received in fiscal year

21 2018-2019 in any fiscal year. A local school administrative unit shall not become ineligible for
22 funding if either the highest of the first two months' total projected average dailymembership for
23 the current year or the higher of the first two months' total prior year average daily membership
24 would otherwise have made the unit eligible for funds under the schedule in subsection (a) of this
25 section.
26 SECTION 7.4.(c) Phase-Out Provision for the 2020-2021 Fiscal Year. – If a local
27 school administrative unit becomes ineligible for funding under the schedule in subsection (a) of

28 this section in the 2020-2021 fiscal year, funding for that unit shall be phased out over a five-year
29 period. Funding for such local school administrative units shall be reduced in equal increments
30 in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth
31 fiscal year after the local administrative unit becomes ineligible.
32 Allotments for eligible local school administrative units under this subsection shall
33 not be reduced by more than twenty percent (20%) of the amount received in fiscal year
34 2019-2020 in any fiscal year. A local school administrative unit shall not become ineligible for

35 funding if either the highest of the first two months' total projected average dailymembership for
36 the current year or the higher of the first two months' total prior year average daily membership
37 would otherwise have made the unit eligible for funds under the schedule in subsection (a) of this
38 section.
39 SECTION 7.4.(d) Nonsupplant Requirement for the 2019-2021 Fiscal Biennium. –
40 A county in which a local school administrative unit receives funds under this section shall use

41 the funds to supplement local current expense funds and shall not supplant local current expense
42 funds. For the 2019-2021 fiscal biennium, the State Board of Education shall not allocate funds
43 under this section to a countyfound to have used these funds to supplant local per student current
44 expense funds. The State Board of Education shall make a finding that a county has used these
45 funds to supplant local current expense funds in the prior year or the year for which the most
46 recent data are available, if all of the following criteria apply:
47 (1) The current expense appropriation per student of the county for the current

48 year is less than ninety-five percent (95%) of the average of local current
49 expense appropriation per student for the three prior fiscal years.

H966-PCCS30485-LRxr-3 House Bill 966 Page 33 General Assembly Of North Carolina Session 2019

1 (2) The county cannot show (i) that it has remedied the deficiency in funding or
2 (ii) that extraordinary circumstances caused the county to supplant local
3 current expense funds with funds allocated under this section.
4 The State Board of Education shall adopt rules to implement the requirements of this
5 subsection.
6 SECTION 7.4.(e) Reports. – For the 2019-2021 fiscal biennium, the State Board of
7 Education shall report to the Fiscal Research Division prior to May 15 of each fiscal year if it

8 determines that counties have supplanted funds.
9 SECTION 7.4.(f) Use of Funds. – Local boards of education are encouraged to use
10 at least twenty percent (20%) of the funds they receive pursuant to this section to improve the
11 academic performance of children who are performing at Level I or II on either reading or
12 mathematics end-of-grade tests in grades three through eight.
13 Local school administrative units may also utilize funds allocated under this section
14 to purchase services that allow for extraction of data from the Education Value-Added

15 Assessment System (EVAAS).
16
17 DISADVANTAGED STUDENT SUPPLEMENTAL FUNDING (DSSF)
18 SECTION 7.5.(a) Funds appropriated in this act for disadvantaged student
19 supplemental funding shall be used, consistent with the policies and procedures adopted by the
20 State Board of Education, only to do the following:

21 (1) Provide instructional positions or instructional support positions.
22 (2) Provide professional development.
23 (3) Provide intensive in-school or after-school remediation, or both.
24 (4) Purchase diagnostic software and progress-monitoring tools.
25 (5) Provide funds for teacher bonuses and supplements. The State Board of
26 Education shall set a maximum percentage of the funds that may be used for
27 this purpose.

28 The State Board of Education may require local school administrative units receiving
29 funding under the Disadvantaged Student Supplemental Fund to purchase the Education
30 Value-Added Assessment System (EVAAS) in order to provide in-depth analysis of student
31 performance and help identify strategies for improving student achievement. This data shall be
32 used exclusively for instructional and curriculum decisions made in the best interest of children
33 and for professional development for their teachers and administrators.
34 SECTION 7.5.(b) Disadvantaged student supplemental funding (DSSF) shall be

35 allotted to a local school administrative unit based on (i) the unit's eligible DSSF population and
36 (ii) the difference between a teacher-to-student ratio of 1:21 and the following teacher-to-student
37 ratios:
38 (1) For counties with wealth greater than ninety percent (90%) of the statewide
39 average, a ratio of 1:19.9.
40 (2) For counties with wealth not less than eighty percent (80%) and not greater

41 than ninety percent (90%) of the statewide average, a ratio of 1:19.4.
42 (3) For counties with wealth less than eighty percent (80%) of the statewide
43 average, a ratio of 1:19.1.
44 (4) For local school administrative units that received DSSF funds in fiscal year
45 2005-2006, a ratio of 1:16. These local school administrative units shall
46 receive no less than the DSSF amount allotted in fiscal year 2006-2007.
47 For the purpose of this subsection, wealth shall be calculated under the low-wealth

48 supplemental formula as provided for in this act.
49 SECTION 7.5.(c) If a local school administrative unit's wealth increases to a level
50 that adversely affects the unit's disadvantaged student supplemental funding (DSSF) allotment

Page 34 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 ratio,theDSSFallotmentforthatunitshallbemaintainedattheprior yearlevelforoneadditional
2 fiscal year.
3
4 DEPARTMENT OF PUBLIC INSTRUCTION REORGANIZATION AUTHORITY
5 SECTION 7.6.(a) Notwithstanding G.S. 143C-6-4, for the 2019-2021 fiscal
6 biennium, the Department of Public Instruction may, after consultation with the Office of State
7 Budget and Management and the Fiscal Research Division, reorganize the Department, realign

8 fund structures, or both, if necessary, to implement (i) the reorganization authorized in Section
9 7.7 of S.L. 2017-57, as amended by Section 7.5 of S.L. 2018-5, (ii) recommendations resulting
10 from the audit required pursuant to Section 7.23L of S.L. 2017-57, and (iii) other changes
11 necessary to improve the efficiency of the Department. Consultation shall occur prior to
12 requesting budgetary and personnel changes through the budget revision process. The
13 Department of Public Instruction shall provide (i) a current organization chart and a list of
14 affected funds and (ii) the proposed organization chart and a list of affected funds clearly

15 identifying the changes for the Department in the consultation process and shall report to the
16 Joint Legislative Commission on Governmental Operations on any reorganization, including any
17 movement of positions and funds between fund codes on a recurring basis.
18 SECTION 7.6.(b) In implementing (i) the reorganization authorized in Section 7.7
19 of S.L. 2017-57, as amended by Section 7.5 of S.L. 2018-5, (ii) recommendations resulting from
20 the audit required pursuant to Section 7.23L of S.L. 2017-57, and (iii) other changes necessary

21 to improve the efficiency of the Department of Public Instruction, the Department of Public
22 Instruction shall make no reduction to funding for (i) the State Public School Fund, including for
23 the following residential schools: Eastern North Carolina School for the Deaf, the North Carolina
24 School for the Deaf, and the Governor Morehead School, and (ii) any budget expansion item
25 funded by an appropriation to the Department of Public Instruction by this act for the 2019-2021
26 fiscal biennium. The Department shall also make no transfers from or reduction to funding or
27 positions for any of the following:

28 (1) Communities in Schools of North Carolina, Inc.
29 (2) Teach For America, Inc.
30 (3) Beginnings for Parents of Children Who are Deaf or Hard of Hearing, Inc.
31 (4) The Excellent Public Schools Act, Read to Achieve Program, initially
32 established under Section 7A.1 of S.L. 2012-142.
33 (5) The North Carolina School Connectivity Program.
34 (6) The North Carolina Center for the Advancement of Teaching.

35 (7) The North Carolina Innovative School District.
36 (8) Eastern North Carolina STEM.
37
38 CONTINUE EXPANSION OF SCHOOL CONNECTIVITY
39 INITIATIVE/CYBERSECURITY AND RISK MANAGEMENT
40 SECTION 7.8.(a) The State Board of Education and the Department of Public

41 Instruction, in collaboration with the Friday Institute at North Carolina State University, shall
42 continue the expansion of the School Connectivity Initiative client network engineering to
43 include cybersecurity and risk management services supporting local school administrative units
44 and charter schools. The expansion shall include the following:
45 (1) Continuous monitoring and risk assessment. – Cloud-based solutions to
46 discover assets, assess their security posture, and recommend corrective
47 actions based on real-world risk reduction.

48 (2) Securityadvisoryandconsultingservices. – Five regional securityconsultants
49 working with schools to assess security posture and develop and implement
50 improvement plans. The plans shall include security policy, building security

H966-PCCS30485-LRxr-3 House Bill 966 Page 35 General Assembly Of North Carolina Session 2019

1 programs, implementing effective security controls, and ongoing support for
2 operating security governance.
3 (3) Securitytraining and education services. – Security training and education for
4 teachers, staff, and administrators.
5 SECTION 7.8.(b) Funds appropriated to the Department by this act for the
6 2019-2021 fiscal biennium for the School Connectivity Initiative and cybersecurity shall be used
7 to develop and implement the above cybersecurity and risk management services to support

8 public school cybersecurity and risk management service operations.
9
10 ADVANCED TEACHING ROLES CHANGES
11 SECTION 7.9.(a) Effective June 30, 2020, the following session laws are repealed:
12 (1) Section 8.7 of S.L. 2016-94.
13 (2) Section 7.11(a) of S.L. 2017-57.
14 (3) Section 7.15(b) of S.L. 2017-57.

15 (4) Section 7.9 of S.L. 2018-5.
16 (5) Section 2.6 of S.L. 2018-97.
17 SECTION 7.9.(b) Article 20 of Chapter 115C is amended by adding a new section
18 to read:
19 § 115C-311. Teacher compensation models and advanced teaching roles.
20 (a) Purpose. – The State Board of Education shall establish a program (program) to

21 develop advanced teaching roles and organizational models that link teacher performance and
22 professional growth to salary increases for classroom teachers in selected local school
23 administrative units. For the purposes of this section, a classroom teacher is a teacher who works
24 in the classroom providing instruction at least seventy percent (70%) of the instructional day and
25 who is not instructional support personnel. The purpose of the program shall be to do the
26 following:
27 (1) Allow highly effective classroom teachers to teach an increased number of

28 students by assuming accountability for additional students, by becoming a
29 lead classroom teacher accountable for the student performance of all of the
30 students taught by teachers on that lead classroom teacher's team, or by
31 leading a larger effort in the school to implement new instructional models to
32 improve school-wide performance.
33 (2) Enable local school administrative units to provide salary supplements to
34 classroom teachers in advanced teaching roles. Selection of an advanced

35 teaching role classroom teacher and award of related salary supplements shall
36 be made on the basis of demonstrated effectiveness and additional
37 responsibilities.
38 (3) Enable local school administrative units to create innovative compensation
39 models that focus on classroom teacher professional growth that lead to
40 measurable improvements in student outcomes.

41 (4) Utilize local plans to establish organizational changes related to compensation
42 in order to sustain evidence-based teaching practices that have the capacity to
43 be replicated throughout the State.
44 (b) Request for Proposal. – By September 15, 2019, and annually thereafter, the State
45 Board of Education shall issue a Request for Proposal (RFP) for the program. Local boards of
46 education shall submit their proposals by October 15. The RFP shall require that proposals
47 include the following information at a minimum:

48 (1) Description of the program structure, including both of the following:
49 a. The process for teacher advancement based on performance,
50 professional growth, or the specific teacher roles assumed by the
51 teacher.

Page 36 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 b. Plans for how the local school administrative unit will utilize and train
2 classroom teachers in advanced teaching roles. These plans shall draw
3 a direct correlation between the proposed use and training of
4 classroom teachers in advanced teaching roles and improved student
5 outcomes.
6 (2) Descriptions of the advanced teaching roles, including minimum
7 qualifications for the positions that shall include at least two of the following:

8 a. Advanced certifications, such as National Board for Professional
9 Teaching Standards Certification, or a master's degree in the area in
10 which the classroom teacher is licensed and teaching.
11 b. A rating of at least accomplished on each of the Teacher Evaluation
12 Standards 1-5 on the North Carolina Teacher Evaluation instrument.
13 c. Evidence that the teacher has an average Education Value-Added
14 Assessment System (EVAAS) student growth index score from the

15 threeprevious school years of1.5or greaterand no individualEVAAS
16 student growth index score below zero.
17 d. Equivalent demonstrated mastery of teaching skills as required by the
18 new local compensation model.
19 (3) Job responsibilities that include at least one of the following:
20 a. Teaching an increased number of students and being accountable for

21 their performance as the teacher of record for those students.
22 b. Becoming a lead classroom teacher among a group of teachers and
23 participating in EVAAS according to a model developed by the
24 Department of Public Instruction. The model shall be published and
25 explained on the Department's Web site no later than August 1, 2019,
26 and, thereafter, within 30 days of any change made to the model.
27 c. Leading a school-wide effort to implement data-driven instructional

28 models that include blended learning environments, utilizing digital
29 learning and resources, and focusing on methods of improvement for
30 school-wide performance issues.
31 d. Providing in-house professional development or functioning as an
32 instructional content area coach or a coach in another professional
33 development area following the completion of certification training.
34 The training shall ensure that the professional development or

35 coaching the teacher provides is faithfully implemented in the
36 classroom.
37 (4) Description of how the local school administrative unit will inform all
38 employees and the public on the criteria and selection for the advanced
39 teaching roles, the continued eligibility requirements for the advanced
40 teaching roles, and how the individuals selected for the advanced teaching

41 roles will be evaluated.
42 (5) Description of how the local school administrative unit will inform all
43 employees and the public on the criteria for movement on the proposed new
44 local compensation model.
45 (6) The process for the voluntary relinquishment of an advanced teaching role,
46 including the associated additional duties. Voluntary relinquishment of the
47 advanced teaching role shall not be considered a demotion under Part 3 of

48 Article 22 of Chapter 115C of the General Statutes.
49 (7) Salary supplement information including the following:

H966-PCCS30485-LRxr-3 House Bill 966 Page 37 General Assembly Of North Carolina Session 2019

1 a. The amount of the salary supplements that will be provided to those
2 selected for the advanced teaching roles. The supplements may be up
3 to thirty percent (30%) of the State teacher salary schedule.
4 b. A statement by the local school administrative unit that the salary
5 supplements will be paid as a supplement to the classroom teacher's
6 regular salary and not be included in the average salary calculation
7 used for budgeting State allotments.

8 c. A statement by the local school administrative unit that if a classroom
9 teacher in an advanced teaching role (i) fails to maintain the minimum
10 criteria established for the position, (ii) is not successfully performing
11 theadditionaldutiesassociatedwiththeadvancedteachingrole,or(iii)
12 voluntarily relinquishes the advanced teaching role, the teacher shall
13 onlybepaidthesalaryapplicabletothatindividualontheStateteacher
14 salary schedule and any other local supplements that would otherwise

15 apply to the classroom teacher's compensation.
16 d. Loss of an advanced teaching role shall not be considered a demotion
17 under Part 3 of Article 22 of Chapter 115C of the General Statutes.
18 e. The amount of the salarysupplements at all levels of the proposed new
19 compensation model in relation to the State teacher salary schedule.
20 (8) The implementation plan, including the number of schools in the local school

21 administrative unit that will have advanced teaching roles and any new
22 proposed compensation model, the number of advanced teaching roles at each
23 of those schools, the number of students whose teacher of record will be a
24 teacher in an advanced teaching role, and the number of teachers overall who
25 would be eligible for the proposed new compensation model.
26 (9) Plans for long-term financial sustainability once any grant money that may be
27 awarded to the local school administrative unit is no longer available. This

28 plan shall include a description of how the unit intends to provide
29 supplemental compensation for teachers in an advanced teaching role without
30 grant money.
31 (10) A description of how the local school administrative unit could partner with
32 local educator preparation programs, institutions of higher education, or
33 community colleges to improve teacher effectiveness and student outcomes.
34 (c) Selection by State Board of Education. – By December 15, 2019, and annually

35 thereafter, the State Board of Education shall review proposals and select local school
36 administrative units to participate in the program, beginning in the subsequent school year, in
37 accordance with the following criteria:
38 (1) Selected local school administrative units must meet minimum criteria
39 established by the State Board of Education consistent with this section.
40 (2) The State Board shall prioritize the award of available State funds for the

41 following categories of local school administrative units:
42 a. Up to five units with an average daily membership from the previous
43 school year of 4,000 or fewer students.
44 b. Up to five units with an average daily membership from the previous
45 school year of between 4,001 and 20,000 students.
46 c. Up to five units with an average daily membership from the previous
47 school year of 20,001 or more students.

48 (3) The State Board shall approve the proposal of any local school administrative
49 unit that is submitted by October 15, 2019, if the following criteria are met:

Page 38 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 a. The local school administrative unit is participating in an approved
2 advanced teaching roles program pursuant to Section 8.7 of S.L.
3 2016-94 in the 2019-2020 school year.
4 b. The application of a local school administrative unit is not inconsistent
5 with this section.
6 (d) Advanced Teaching Roles Designation. – Any local board of education that is
7 selected to participate in the program pursuant to subsection (c) of this section shall designate

8 participating schools within the unit as Advanced Teaching Roles schools. Every Advanced
9 Teaching Roles school shall receive class size flexibilitypursuant to subsection (i) of this section
10 and budget flexibility pursuant to subsection (j) of this section.
11 (e) Material Revisions of Plans. – Material revisions of a plan submitted to the State
12 Board of Education by a local board of education with at least one Advanced Teaching Roles
13 school shall be made only upon the approval of the State Board of Education.
14 (f) Renewal and Termination. – The initial selected local school administrative units

15 shall implement theirapproved plansbeginningwith the 2020-2021 school year.Everyfive years
16 afteralocalschooladministrativeunitbeginsimplementingitsplan,theStateBoardofEducation
17 shall review the unit to ensure it is complying with its approved plan. After the review, the State
18 Board may, in its discretion, renew or terminate the plan of any local school administrative unit
19 that fails to meet criteria established by the State Board in accordance with this section and the
20 Advanced Teaching Roles designation of any school within that unit. Throughout the program,

21 a local school administrative unit shall provide any information or access requested by (i) the
22 StateBoardofEducation or(ii)theindependent researchorganizationselectedbytheStateBoard
23 of Education to evaluate the program pursuant to this section.
24 (g) Term; Use of Grant Funds. – Any funds awarded to a local school administrative unit
25 pursuant to this section shall be subject to availabilityand awarded for a term of up to three years,
26 in the discretion of the State Board. A local school administrative unit shall not be eligible to
27 receive funding for more than one term. Funds awarded to local school administrative units shall

28 be used for any of the following:
29 (1) Development of advanced teaching role plans.
30 (2) Development of professional development courses for teachers in advanced
31 teaching roles that lead to improved student outcomes.
32 (3) Transition costs associated with designing and implementing advanced
33 teaching role models. Transition costs may include employing staff members
34 or contractors to assist with design and implementation of the plan.

35 (4) Development of the design and implementation of compensation plans that
36 focus on teacher professional growth and student outcomes and the transition
37 costs associated with designing and implementing new compensation plans,
38 including employing staff members or contractors to assist with design and
39 implementation of the plan.
40 (h) Program Evaluation. – The State Board of Education shall evaluate how the advanced

41 teaching roles and new compensation plans have accomplished, at a minimum, the following:
42 (1) Improvement in the quality of classroom instruction and increases in
43 school-wide growth or the growth of teachers who are mentored or impacted
44 by a teacher in an advanced teaching role.
45 (2) An increase in the attractiveness of teaching.
46 (3) Recognition, impact, and retention of high-quality classroom teachers.
47 (4) Assistance to and retention of beginning classroom teachers.

48 (5) Improvement in and expansion of the use of technology and digital learning.
49 (6) Improvement in school culture based on school climate survey results.
50 The State Board shall contract with an independent research organization to perform this
51 evaluation in the first two years of the program and provide reports on October 15, 2020, and

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1 October 15, 2021. Beginning October 15, 2022, and annually thereafter, the State Board shall
2 perform the evaluation and provide the report. The State Board shall provide any report required
3 in accordance with this subsection to the offices of the President Pro Tempore of the Senate and
4 theSpeakerofthe House ofRepresentatives,theSenateAppropriations/Base Budget Committee,
5 the House Committee on Appropriations, the Senate Appropriations Committee on
6 Education/Higher Education, the House Appropriations Committee on Education, the Fiscal
7 Research Division, and the Joint Legislative Education Oversight Committee.

8 (i) Class Size Flexibility. – Notwithstanding G.S. 115C-301, with the approval of the
9 State Board of Education, Advanced Teaching Roles schools selected to participate in the
10 program may exceed the maximum class size requirements for kindergarten through third grade.
11 (j) Budget Flexibility. – Subject to the budget flexibility limitations identified in
12 G.S. 115C-105.25(b), the State Board of Education shall authorize local boards of education
13 participating in the program to use any available State funds to provide salary supplements to
14 classroom teachers in an advanced teaching role as long as the local school administrative unit

15 complies with policies of the State Board of Education, federal law, and any State programs with
16 specific restrictions on the use of funds, including bonus and grant programs.
17 SECTION 7.9.(c) G.S. 115C-105.25(e) reads as rewritten:
18 (e) No later than December 1 of each year, the Department of Public Instruction shall
19 collect the information reported by local school administrative units pursuant to subsection (c)
20 of this section and report the aggregated information, including available data from the two

21 previous fiscal years, to the Joint Legislative Education Oversight Committee and the Fiscal
22 Research Division. The report shall also include information on the use of the budget flexibility
23 provided to Advanced Teaching Roles schools pursuant to G.S. 115C-311(j).
24 SECTION 7.9.(d) Funds appropriated to the Department of Public Instruction by
25 this act for the 2019-2020 fiscal year shall be used to (i) support teacher compensation models
26 and advanced teaching roles pursuant to Section 8.7 of S.L. 2016-94, as amended bySection 7.11
27 ofS.L. 2017-57 and Section 7.9 ofS.L. 2018-5,and(ii)develop implementationplansforteacher

28 compensation models and advanced teaching roles pursuant to G.S. 115C-311, as enacted bythis
29 act. These funds shall not revert at the end of the fiscal year but shall remain available until
30 expended.
31 SECTION7.9.(e) Funds appropriatedto the Department ofPublic Instructionbythis
32 act for the 2020-2021 fiscal year shall be used to support teacher compensation models and
33 advanced teaching roles and to develop implementation plans for teacher compensation models
34 and advanced teaching roles pursuant to G.S. 115C-311, as enacted by this act. Beginning in the

35 2020-2021fiscal year,fundsappropriatedtotheDepartmentofPublicInstructionfortheprogram
36 and for the evaluation of the program shall not revert at the end of the fiscal year but shall remain
37 available until expended.
38 SECTION 7.9.(f) Beginning in the 2019-2020 fiscal year, of the funds appropriated
39 to the Department of Public Instruction by this act to support teacher compensation models and
40 advanced teaching roles and to develop associated implementation plans, the Department may

41 useup to fourpercent (4%)each fiscal yearto evaluatetheprogram, contract with anindependent
42 research organization to evaluate the program, or continue any preexisting contract with an
43 independent research organization formed pursuant to Section 8.7 of S.L. 2016-94. Any
44 remaining funds maybe awarded to selected local school administrative units in accordance with
45 this act to support teacher compensation models and advanced teaching roles and to develop
46 associated implementation plans.
47

48 CREATE DEFINITION FOR PUBLIC SCHOOLS/SCHOOL RESOURCE OFFICERS
49 REPORT
50 SECTION 7.13.(a) G.S. 115C-5 is amended by adding a new subdivision to read:
51 (11) Public school unit. – Any of the following:

Page 40 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 a. A local school administrative unit.
2 b. A charter school.
3 c. A regional school.
4 d. A school providing elementary or secondary instruction operated by
5 one of the following:
6 1. The State Board of Education, including schools operated
7 under Article 7A and Article 9C of this Chapter.

8 2. The University of North Carolina, including schools operated
9 under Articles 4, 29, and 29A of Chapter 116 of the General
10 Statutes.
11 SECTION 7.13.(b) G.S. 115C-105.57 reads as rewritten:
12 § 115C-105.57. Center for Safer Schools.
13 (a) Center for Safer Schools Established. – There is established the Center for Safer
14 Schools. The Center for Safer Schools shall be administratively located in the Department of

15 Public Instruction. The Center for Safer Schools shall consist of an executive director appointed
16 bytheSuperintendentofPublicInstructionandsuchotherprofessional,administrative,technical,
17 and clerical personnel as may be necessary to assist the Center for Safer Schools in carrying out
18 its powers and duties.
19 (b) Executive Director. – The Executive Director shall report to and serve at the pleasure
20 of the Superintendent of Public Instruction at a salary established by the Superintendent within

21 the funds appropriated for this purpose.
22 (c) Powers and Duties. – The Center for Safer Schools shall have all powers and duties
23 provided in this Article.
24 (d) Agency Cooperation. – All State agencies and departments shall cooperate with the
25 Center for Safer Schools in carrying out its powers and duties, as necessary, in accordance with
26 this Article.
27 (e) Annual Census of School Resource Officers. – The Center for Safer Schools shall

28 conduct an annual census of school resource officers located in each public school unit. The
29 Center shall submit a report based on this census to the Joint Legislative Education Oversight
30 Committee and the State Board of Education by March 1 of each year. At a minimum, the report
31 shall include all of the following information:
32 (1) The total number of school resource officers in the State and in each public
33 school unit.
34 (2) Data regarding school resources officers' education levels, years as sworn law

35 enforcement officers, and years as school resource officers.
36 (3) Training required of school resource officers and training actually completed
37 by school resource officers, including training specific to the position of
38 school resource officer and other advanced or additional training.
39 (4) The funding source for all school resource officers.
40 (5) The location of school resource officers, differentiated by grade levels and

41 type of public school unit.
42 (6) The percentage of school resource officers assigned to more than one school.
43 (7) The law enforcement affiliation of school resource officers.
44
45 TEACH FOR AMERICA REPORTING REQUIREMENT
46 SECTION 7.14.(a) G.S. 120-70.84 reads as rewritten:
47 § 120-70.84. Reports to the Committee.

48 ByMarch 1, 2014, and byJanuary1, 2015, and annuallythereafter, TFA [Teach for America,
49 Inc.] Teach for America, Inc. (TFA) shall report to the offices of the President Pro Tempore of
50 the Senate and the Speaker of the House of Representatives, the Senate Appropriations/Base
51 Budget Committee, the House Appropriations Committee, the Senate Appropriations Committee

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1 on Education/Higher Education, the House Appropriations Committee on Education, the Joint
2 Legislative Education Oversight Committee Committee, and the Fiscal Research Division on the
3 operation of its programs under subsection (a) of Section 8.21 of S.L. 2013-360, including at
4 least all of the following information:
5 (1) The total number of applications received nationally from candidates seeking
6 participation in the program.
7 (2) The total number of applications received from candidates who are residents

8 ofNorth Carolinaandinformation onthesourceofthesecandidates, including
9 the number of (i) recent college graduates and the higher institution the
10 candidates attended, (ii) mid-career level and lateral entry industry
11 professionals, and (iii) veterans of the United States Armed Forces.
12 (3) The total number of North Carolina candidates accepted by TFA.
13 (4) The total number of accepted candidates placed in North Carolina, including
14 the number of accepted candidates who are residents of North Carolina.

15 (5) The regions in which accepted candidates have been placed, the number of
16 candidates in each region, and the number of students impacted by placement
17 in those regions.
18 (6) Success of recruitment efforts, including the Teach Back Home program and
19 targeting of candidates who are (i) working in areas related to STEM
20 education, (ii) mid-career level and lateral entry industry professionals, and

21 (iii) veterans of the United States Armed Forces.
22 (7) Success of retention efforts, including the Teach Beyond Two and Make it
23 Home programs, and the percentage of accepted candidates working in their
24 placement communities beyond the initial TFA two-year commitment period
25 and the number of years those candidates teach beyond the initial
26 commitment.
27 (7a) The percentage of candidates who are residents of North Carolina and become

28 principals in a North Carolina public school following the initial TFA
29 two-year commitment period.
30 (8) A financial accounting of how the State funds appropriated to TFA were
31 expended in the previous year, including at least the following information:
32 a. Funds expended by region of the State.
33 b. Details on program costs, including at least the following:
34 1. Recruitment, candidate selection, and placement.

35 2. Preservice training and preparation costs.
36 3. Operational and administrative costs, including development
37 and fundraising, alumni support, management costs, and
38 marketing and outreach.
39 c. Funds received through private fundraising, specifically by sources in
40 each region of the State.

41 SECTION 7.14.(b) Section 8.21(e) of S.L. 2013-360 is repealed.
42
43 BROADEN CERTAIN CHARTER SCHOOL ENROLLMENT PRIORITIES
44 SECTION 7.15.(a) G.S. 115C-218.45(f) reads as rewritten:
45 (f) The charter school may give enrollment priority to any of the following:
46 (1) Siblingsofcurrentlyenrolledstudentswhowereadmittedtothecharterschool
47 in a previous year. For the purposes of this section, the term siblings

48 includes any of the following who reside in the same household: half siblings,
49 stepsiblings, and children residing in a family foster home.

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1 (1a) Siblings who apply to the charter school for admission beginning in the same
2 school year, such as when a sibling was not initially admitted due to grade
3 level capacity.
4 (2) Siblings of students who have completed the highest grade level offered by
5 that school and who were enrolled in at least four grade levels offered by the
6 charter school or, if less than four grades are offered, in the maximum number
7 of grades offered by the charter school.

8 (2a) A student who was enrolled in a preschool program operated by the charter
9 school in the prior year.
10 (3) Limited to no more than fifteen percent (15%) of the school's total enrollment,
11 unless granted a waiver by the State Board of Education, the following:
12 a. Children of the school's full-time employees.persons (i) employed full
13 time by the charter school or (ii) working full time in the daily
14 operation of the charter school, including children of persons

15 employed by an education management organization or charter
16 management organization for the charter school.
17 b. Children of the charter school's board of directors.
18 (4) A student who was enrolled in the charter school within the two previous
19 school years but left the school (i) to participate in an academic study abroad
20 program or a competitive admission residential program or (ii) because of the

21 vocational opportunities of the student's parent.
22 (5) A student who was enrolled in another charter school in the State in the
23 previous school year that does not offer the student's next grade level.
24 (6) A student who was enrolled in another charter school in the State in the
25 previous school year that does not offer the student's next grade level and both
26 of the charter schools have an enrollment articulation agreement to accept
27 students or are governed by the same board of directors.

28 (7) A student who was enrolled in another charter school in the State in the
29 previous school year.
30 SECTION 7.15.(b) This section is effective when it becomes law and applies
31 beginning with the 2019-2020 school year.
32
33 RENEWAL SCHOOLS
34 SECTION 7.17. Section 6(l) of S.L. 2018-32 reads as rewritten:

35 SECTION 6.(l) Available State Funds. – Beginning with the 2018-2019 2019-2020 fiscal
36 year, the Department of Public Instruction shall calculate the amount of State funds to be
37 allocated to the local school administrative unit operating under a renewal school system plan on
38 the same basis as other local school administrative units and shall distribute those funds to the
39 unit. The Department shall use statewide average salaryfigures for the purpose of calculating the
40 dollar equivalent of guaranteed positions as necessary. The funds allocated to the local school

41 administrative unit shall be subject to any restrictions as to use imposed by federal law, the
42 conditions of federal or State grants, or as provided through anyrules that the State Board adopts
43 to ensure compliance with federal regulations. Use of these funds shall otherwise be unrestricted
44 except as provided in this section.
45 In no event shall the local school administrative unit receive a total amount of State funds in
46 the 2018-2019 fiscal year under the disbursement method described in this subsection that is less
47 thanthetotalamountofStatefundsthelocalschooladministrativeunitreceivedinthe2017-2018

48 fiscal year.
49
50 ECONOMICS AND FINANCIAL LITERACY
51 SECTION 7.18.(a) G.S. 115C-81.65 reads as rewritten:

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1 § 115C-81.65. Financial literacy.
2 (a) Instruction shall be provided in personal financial literacy for all students. In addition
3 to the requirements in subsection (b) of this section, the State Board of Education shall determine
4 the other components of personal financial literacy that will be covered in the curriculum. The
5 State Board shall also review the high school standard course of study to determine into which
6 courses and grade levels personal financial literacy shall be integrated.
7 (b) Each student shall receive personal financial literacy instruction that shall include:

8 The State Board of Education shall require during the high school years the teaching of a full
9 credit course focused solely on Economics and Personal Finance (EPF). A passing grade in the
10 course shall be required for graduation from high school. The content of the course shall, at a
11 minimum, include the standards established by the second edition of the Voluntary National
12 Content Standards in Economics and the 2013 National Standards for Financial Literacy, as
13 developed by the Council for Economic Education. The EPF course shall provide instruction on
14 economic principles and shall provide personal financial literacy instruction that shall include, at

15 a minimum, the following:
16 (1) The true cost of credit.
17 (2) Choosing and managing a credit card.
18 (3) Borrowing money for an automobile or other large purchase.
19 (4) Home mortgages.
20 (5) Credit scoring and credit reports.

21 (5a) Planning and paying for postsecondary education.
22 (6) Other relevant financial literacy issues.
23 (c) The State Board of Education shall require that EPF teachers receive the professional
24 development necessary to ensure that the intent and provisions of this section are carried out. To
25 the extent funds are made available for this purpose, the State Board of Education shall require
26 the employing entity to make available to EPF teachers and prospective EPF teachers the EPF
27 professional development course provided by the North Carolina Council on Economic

28 Education (NCCEE). When practicable, teachers shall complete the EPF professional
29 development course prior to teaching the EPF course in public schools. If necessary, teachers
30 maybeginteachingtheEPFcourseinpublicschoolswhileawaitingthenextpossibleopportunity
31 to complete a session of the EPF professional development course. To the extent possible, the
32 EPF professional development course shall be taken at the NCCEE-approved location most
33 conveniently located to the local school administrative unit.
34 SECTION 7.18.(b) The requirements of G.S. 115C-81.65(b), as amended by

35 subsection (a) of this section, shall applyto all students entering the ninth grade in the 2020-2021
36 school year.
37 SECTION 7.18.(c) G.S. 115C-81.45 reads as rewritten:
38 § 115C-81.45. Classes conducted in English; citizenship; and civic literacy.
39 …
40 (c) Democratic Process and Citizenship Education.Education for Middle School Social

41 Studies. –
42 (1) The State Board of Education shall include instruction in civic and citizenship
43 education in the standard course of study for high school social studies. The
44 State Board of Education is stronglyencouraged to include, at a minimum, the
45 following components in the high school civic and citizenship education
46 standard course of study:
47 a. That students write to a local, State, or federal elected official about

48 an issue that is important to them.
49 b. Instruction on the importance of voting and otherwise participating in
50 the democratic process, including instruction on voter registration.
51 c. Information about current events and governmental structure.

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1 d. Information about the democratic process and how laws are made.
2 (2) The State Board of Education shall include instruction in civic and citizenship
3 education in the standard course of studyfor middle school social studies. The
4 State Board of Education is stronglyencouraged to include, at a minimum, the
5 following components in the middle school civic and citizenship education
6 standard course of study:
7 a.(1) A tour of representative local government facilities, such as the local jail, the

8 courthouse, or a town hall, to help students understand the way their
9 community is governed.
10 b.(2) Allowing students to choose and analyze a community problem and offer
11 public policy recommendations on the problem to local officials.
12 c.(3) Information about getting involved in community groups.
13 (d) Founding Principles of the United States of America and North Carolina: Civic
14 Literacy. –

15 (1) The State Board of Education shall require during the high school years
16 instruction in civic and citizenship education in the standard course of study
17 for high school social studies through the teaching of a semester full credit
18 course on the that shall be called Founding Principles of the United States of
19 America and the State of North Carolina. North Carolina: Civic Literacy. A
20 passing grade in the course shall be required for graduation from high school,

21 and the school.
22 (1a) The course required by subdivision (1) of this subsection shall be solely
23 focused on civics and citizenship education, and shall include at least the
24 following subjects:
25 a. The Creator-endowed inalienable rights of the people.
26 b. Structure of government, separation of powers with checks and
27 balances.

28 c. Frequent and free elections in a representative government.
29 d. Rule of law.
30 e. Equal justice under the law.
31 f. Private property rights.
32 g. Federalism.
33 h. Due process.
34 i. Individual rights as set forth in the Bill of Rights.

35 j. Individual responsibility.
36 k. Constitutional limitations on government power to tax and spend, and
37 prompt payment of public debt.
38 l. Strong defense and supremacy of civil authority over military.
39 m. Peace, commerce, and honest friendship with all nations, entangling
40 alliances with none.

41 (1b) The State Board of Education is strongly encouraged to include the following
42 components in the course required by subdivision (1) of this subsection:
43 a. That students write to a local, State, or federal elected official about
44 an issue that is important to them.
45 b. Instruction on the importance of voting and otherwise participating in
46 the democratic process, including instruction on voter registration.
47 c. Information about current events and governmental structure.

48 d. Information about the democratic process and how laws are made.
49 (2) The State Board of Education shall require that any high school level
50 curriculum-based tests for the course required in subdivision (1) of this
51 subsection developed and administered statewide beginning with the

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1 2016-2017 academic year include questions related to the philosophical
2 foundations of our form of government and the principles underlying the
3 Declaration of Independence, the United States Constitution and its
4 amendments, and the most important of the Federalist Papers.
5 (3) The Department of Public Instruction and the local boards of education, as
6 appropriate, shall provide or cause to be provided curriculum content for the
7 semester course required in subdivision(1) of this subsection and professional

8 development to ensure that the intent and provisions of this subsection are
9 carried out. The curriculum content established shall include a review of the
10 contributions made by Americans of all races.
11 (4) The Department of Public Instruction shall submit a biennial report by
12 October 15 of each odd-numbered year to the Joint Legislative Education
13 Oversight Committee covering the implementation of this subsection.
14 SECTION 7.18.(d) The requirements of G.S. 115C-81.45(d), as amended by

15 subsection (c) of this section, shall applyto all students entering the ninth grade in the 2021-2022
16 school year.
17 SECTION 7.18.(e) G.S. 115C-218.85(a) is amended byadding a new subdivision to
18 read:
19 (5) A charter school shall provide financial literacy instruction as required by the
20 State Board of Education pursuant to G.S. 115C-81.65, including required

21 professional development for teachers of the EPF course.
22 SECTION 7.18.(f) G.S. 115C-238.66(1) is amended by adding a new
23 sub-subdivision to read:
24 e. The board of directors shall ensure that financial literacy instruction is
25 provided as required by the State Board of Education pursuant to
26 G.S. 115C-81.65, including required professional development for
27 teachers of the EPF course.

28 SECTION 7.18.(g) G.S. 116-239.8(b)(2) is amended by adding a new
29 sub-subdivision to read:
30 d. The chancellor shall ensure that financial literacy instruction is
31 provided as required by the State Board of Education pursuant to
32 G.S. 115C-81.65, including required professional development for
33 teachers of the EPF course.
34 SECTION 7.18.(h) Section 6(d) of S.L. 2018-32 is amended by adding a new

35 subdivision to read:
36 (4a) G.S. 115C-81.65, Financial literacy.
37 SECTION 7.18.(i) The State Board of Education shall begin the process for review
38 and revision of the standard course of study for social studies in grades kindergarten through 12
39 in the 2019-2020 school year, and shall revise the high school standard course of study in
40 accordance with the requirements of this section for the EPF course and the Founding Principles

41 of America and North Carolina: Civic Literacy course. The State Board shall review the high
42 school standard course of study to determine the high school grade level during which the EPF
43 course and the Founding Principles of America and North Carolina: Civic Literacy course may
44 be completed. The State Board of Education shall not require more than four full course credits
45 in social studies for high school graduation.
46 SECTION7.18.(j) Ofthefundsappropriatedto theDepartment ofPublic Instruction
47 forthe2019-2020fiscal yeartobemadeavailableasadirectedgranttothenonprofitorganization

48 known as The North Carolina Council on Economic Education (NCCEE), NCCEE shall provide
49 all of the following:
50 (1) The EPF professional development course, including administration of the
51 Test of Economic Literacy and the Working in Support of Education personal

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1 finance test, and the provision of a certificate of completion to qualified
2 teachers.
3 (2) A stipend in the amount of five hundred dollars ($500.00), upon completion
4 of the Test of Economic Literacy and the Working in Support of Education
5 personal finance test, to either the public school teacher, if the teacher attends
6 the course on weekends or during a time outside the teacher's school year, or,
7 to the teacher's public school employer, if the teacher attends the course on

8 school days during the teacher's school year.
9 By September 1, 2020, and by September 1 of the year following any fiscal year that
10 NCCEE uses State funds thereafter, NCCEE, in consultation with the Department of Public
11 Instruction, shall submit a report to the Joint Legislative Education Oversight Committee and the
12 Fiscal Research Division on the activities described by this section and the expenditure of State
13 funds.
14

15 INNOVATIVE SCHOOL DISTRICT/USE OF INNOVATION ZONE FUNDS
16 SECTION7.21. FromthefundsappropriatedtotheDepartmentofPublicInstruction
17 for the 2019-2021 fiscal biennium for the award of innovation zone model grants, for each year
18 of the 2019-2021 fiscal biennium only, the Department of Public Instruction may also use these
19 funds to cover the administrative costs of the Innovative School District during each year of the
20 2019-2021 fiscal biennium.

21
22 15-POINT SCALE FOR SCHOOL PERFORMANCE GRADES
23 SECTION 7.23.(a) G.S. 115C-83.15(d) reads as rewritten:
24 (d) Calculation of the Overall School Performance Scores and Grades. – The State Board
25 of Education shall calculate the overall school performance score by adding the school
26 achievement score, as provided in subsection (b) of this section, and the school growth score, as
27 determined using EVAAS as provided in subsection (c) of this section, earned by a school. The

28 school achievement score shall account for eighty percent (80%), and the school growth score
29 shall account for twenty percent (20%) of the total sum. For all schools, the total school
30 performancescoreshall beconvertedto a100-point scaleandused to determinean overall school
31 performance grade. The overall school performance grade shall be based on the following scale
32 and shall not be modified to add any other designation related to other performance measures,
33 such as a plus or minus:
34 (1) A school performance score of at least 90 85 is equivalent to an overall school

35 performance grade of A.
36 (2) A school performance score of at least 80 70 is equivalent to an overall school
37 performance grade of B.
38 (3) A school performance score of at least 70 55 is equivalent to an overall school
39 performance grade of C.
40 (4) A school performance score of at least 60 40 is equivalent to an overall school

41 performance grade of D.
42 (5) A school performance score of less than 60 points 40 is equivalent to an
43 overall school performance grade of F.
44 SECTION 7.23.(b) This section applies beginning with the 2019-2020 school year.
45
46 ARTS EDUCATION GRADUATION REQUIREMENT
47 SECTION 7.24.(a) The State Board of Education shall modify the State graduation

48 requirements to include one required credit in arts education to be completed by each student at
49 any time in grades six through 12.
50 The State Board of Education shall implement the arts education graduation
51 requirement beginning with students entering the sixth grade in 2022. The State Board shall

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1 include an exemption from the arts education graduation requirement for students transferring
2 into a North Carolina public school beginning in the ninth grade or later, if such requirement
3 would prevent a student from graduating with the graduation cohort to which the student was
4 assigned when transferring.
5 SECTION 7.24.(b) The State Board of Education shall do the following:
6 (1) Establish procedures and atimelinefora phased-in implementation ofthearts
7 education graduation requirement.

8 (2) Establish the minimum criteria to meet the arts education graduation
9 requirement.
10 (3) By December 15, 2022, report to the Joint Legislative Education Oversight
11 Committee on the following:
12 a. The statewide implementation of the three interdependent components
13 of comprehensive arts education (arts education, arts integration, and
14 arts exposure).

15 b. The graduation requirement set forth in subsection (a) of this section.
16
17 ELIMINATE REPORT TO SUPERINTENDENT ON THE ADOPTED SCHEDULE OF
18 FEES
19 SECTION 7.25.(a) G.S. 115C-47(6) reads as rewritten:
20 (6) ToRegulateFees,ChargesandSolicitations. – Localboardsofeducationshall

21 adopt rules and regulations governing solicitations of, sales to, and
22 fund-raising activities conducted by, the students and faculty members in
23 schools under their jurisdiction, and no fees, charges, or costs shall be
24 collected from students and school personnel without approval of the board of
25 education as recorded in the minutes of said board; provided, this subdivision
26 shall not applyto such textbooks fees as are determined and established bythe
27 State Board of Education. All schedules of fees, charges and solicitations

28 approved by local boards of education shall be reported to the Superintendent
29 of Public Instruction.The local board of education shall publish a schedule of
30 fees, charges, and solicitations approved bythe local board on the local school
31 administrative unit's Web site by October 15 of each school year and, if the
32 schedule is subsequently revised, within 30 days following the revision.
33 SECTION 7.25.(b) This section applies beginning with the 2019-2020 school year.
34

35 AUTHORIZESTATEBOARDOFEDUCATIONAPPOINTMENTAUTHORITYOVER
36 ADDITIONAL POSITIONS
37 SECTION 7.26. G.S. 115C-11(j) reads as rewritten:
38 (j) Certain Personnel Appointed bythe State Board. – The State Board may appoint only
39 the following personnel positions to support the operations of the State Board of Education
40 through the Department of Public Instruction:

41 Position number Title
42 (1) 65023576 Attorney I.
43 (2) 60009384 Attorney II.
44 (3) 65003194 Paralegal II.
45 (4) 60095070 Administrative Assistant I.
46 (5) 60009394 Legislative and Community Affairs Director.
47 (6) 60009391 Director of State Board Operations.

48
49 COOPERATIVE INNOVATIVE HIGH SCHOOLS/CAP ON NUMBER OF NEW
50 SCHOOLS
51 SECTION 7.27.(a) G.S. 115C-238.51A reads as rewritten:

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1 § 115C-238.51A. Approval process.
2 (a) Joint Advisory Committee. – The State Board of Education and the applicable
3 governing Board of the local board of trustees shall appoint a joint advisory committee to review
4 the applications and to recommend approval for those applications that meet the requirements of
5 this Part and achieve purposes set out in G.S. 115C-238.50. The recommendation shall indicate
6 whether additional funds were requested in the application.
7 (a1) Limitation on Approvals. – The State Board may only conditionally approve up to

8 four applications for cooperative innovative high schools that request additional funds under
9 subsection (c) of this section to open in a school year. If an application requesting additional
10 funds is not approved due to this limitation, a revised application may be submitted under
11 subsection (b)ofthis section. TheStateBoardmayprioritize conditional approval ofapplications
12 for cooperative innovative high schools located in local school administrative units that do not
13 already operate a school pursuant to this Part.
14 (b) No Additional Funds. – For applications which have not requested additional funds,

15 the State Board of Education and the applicable governing Board may approve cooperative
16 innovative high schools. In granting approval, consideration shall be given to the proposed
17 budget and demonstration of sources of sustainable funding for the operation of the cooperative
18 innovative high school. Approvals shall be made by June 30 of each year. No additional State
19 funds,position allotments, earningofbudget full-timeequivalent students, orpayments of tuition
20 shall be provided to cooperative innovative high schools approved under this subsection.

21 (c) Additional Funds. – For applications which have requested additional funds, the State
22 Board of Education and the applicable governing Board may approve cooperative innovative
23 high schools contingent upon appropriation of the additional funds by the General Assembly.
24 Contingent approval shall be made by April 1 of each year. The contingent approval shall expire
25 if no appropriation is made bythe General Assemblyfor the additional funds within one calendar
26 year. No cooperative innovative high school shall open prior to the appropriation by the General
27 Assemblyof the full amount of the additional funds as requested in the application for that school

28 under G.S. 115C-238.51 for the upcoming fiscal year or fiscal biennium, as appropriate. If no
29 appropriation is made by the General Assembly, a revised application may be submitted under
30 subsection (b) of this section.
31 SECTION7.27.(b) Subsection(a)ofthissectionappliesbeginningwithapplications
32 to open a cooperative innovative high school for the 2020-2021 school year and for subsequent
33 school years.
34

35 AUTHORIZE THE NC CTE EDUCATION FOUNDATION TO ADMINISTER
36 CERTAIN GRANTS
37 SECTION 7.28.(a) G.S. 115C-64.15 reads as rewritten:
38 § 115C-64.15. North Carolina Education and Workforce Innovation Commission.
39 …
40 (d) The Commission shall develop and administer the Education and Workforce

41 Innovation Program, as established under G.S. 115C-64.16, in collaboration with the North
42 Carolina Career and Technical Education Foundation, Inc., and make awards of grants under the
43 Program.
44 (d1) The Commission shall develop and administer, in coordination with the State Board
45 of Education and the Superintendent of Public Instruction, and in collaboration with the North
46 Carolina Career and Technical Education Foundation, Inc., the Career and Technical Education
47 Grade Expansion Program, as established under G.S. 115C-64.17, and shall make awards of

48 grants under the Program.
49 (d2) The North Carolina Career and Technical Education Foundation, Inc., shall serve as
50 a grant administrator by providing assistance and support to grantees for initiating, expanding,
51 improving, and promoting career and technical education initiatives.

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1 (e) The Commission Commission, in consultation with the North Carolina Career and
2 Technical Education Foundation, Inc., shall publish a report on the Education and Workforce
3 Innovation Program and the Career and Technical Education Grade Expansion Program on or
4 before April 30 of each year. The report shall be submitted to the Joint Legislative Education
5 Oversight Committee, the State Board of Education, the State Board of Community Colleges,
6 and the Board of Governors of The Universityof North Carolina. The report shall include at least
7 all of the following information:

8 (1) An accounting of how funds and personnel resources were utilized for each
9 program and their impact on student achievement, retention, and
10 employability.
11 (2) Recommended statutory and policy changes.
12 (3) Recommendations for improvement of each program.
13 (4) For the Career and Technical Education Grade Expansion Program,
14 recommendations on increasing availability of grants after the first two years

15 of the program to include additional local school administrative units or
16 providing additional grants to prior recipients.
17 SECTION 7.28.(b) G.S. 115C-64.17(c) reads as rewritten:
18 (c) Selection of Recipients. – For the 2017-2018 fiscal year, the Commission shall accept
19 applications for a grant until November 30, 2017. For subsequent fiscal years that funds are made
20 available for the Program, the Commission shall accept applications for a grant until August 1 of

21 each year. The Commission shall consult with the North Carolina Career and Technical
22 Education Foundation, Inc., to select recipients in a manner that considers diversity among the
23 pool of applicants, including geographic location, location of industries in the area in which a
24 local school administrative unit is located, and the size of the student population served by the
25 unit, in order to award funds to the extent possible to grant recipients that represent different
26 regions and characteristics of the State. The Commission shall recommend recipients of the
27 grants to the State Board of Education. The State Board, upon consultation with the

28 Superintendent of Public Instruction, shall approve the recipients of grant awards.
29 SECTION 7.28.(c) This section shall apply to the administration of grant programs
30 on or after the date this act becomes law.
31
32 DDC/CRC GRANT PROGRAM
33 SECTION 7.29.(a) Any unexpended and unencumbered funds at the end of each
34 fiscal year available from (i) the funds appropriated to the Department of Public Instruction for

35 the Exceptional Children Allotment to be allocated to local school administrative units for
36 Community Residential Center Funds (CRCF) grants and Developmental Day Centers (DDC)
37 and (ii) the Special State Reserve Fund (SSRF) for children with disabilities shall not revert to
38 the General Fund but shall be transferred by the Department to a reserve to establish a grant
39 program for community residential centers (CRCs) and DDCs administered in accordance with
40 subsection (b) of this section.

41 SECTION 7.29.(b) Beginning with the 2019-2020 fiscal year, when the balance of
42 the reserve provided for in subsection (a) of this section reaches the sum of at least fiftythousand
43 dollars ($50,000) in a fiscal year, then the Department of Public Instruction shall solicit
44 applications from licensed, community-based DDCs and CRCs approved by the Department of
45 Public Instruction, Exceptional Children Division, for grants to assist the DDCs and CRCs with
46 capital and equipment needs fortheirfacilities.Thegrant application shall requiredocumentation
47 of the expenditures for which the grant is being requested and any other information requested

48 by the Department. Local school administrative units shall not be eligible for the receipt of grant
49 fundsunderthis section.Anyunexpended fundsin thereserveshall becarriedforwardeachfiscal
50 year to be used for the purposes of this section.

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1 SECTION 7.29.(c) By March 15 of each fiscal year in which grants are awarded
2 pursuant to subsection (b) of this section, the Department of Public Instruction shall report to the
3 chairs of the Senate Appropriations Committee on Education/Higher Education, the chairs of the
4 House of Representatives Appropriations Committee on Education, and the Fiscal Research
5 Division on the award of grants and the balance of the reserve, including the number of grant
6 recipients, the amount of grants, and the type of expenditure covered by the grant.
7 SECTION 7.29.(d) Subsection (a) of this section becomes effective June 30, 2019.

8
9 CLASSROOM SUPPLIES TO TEACHERS
10 SECTION 7.31.(a) Establishment of the Program. – Notwithstanding any other
11 provision of law, beginning with the 2019-2020 fiscal year, funds appropriated from the General
12 Fund to the Department of Public Instruction each fiscal year for the Classroom
13 Materials/Instructional Supplies/Equipment allotment shall be used for the North Carolina
14 Classroom Supply Program (Program) established in accordance with this section. The Program

15 shall provide for electronic access to funds for eligible classroom teachers to purchase supplies
16 for their classrooms on behalf of public school units participating in the Program to support
17 educational needs of the public school students assigned to those classroom teachers.
18 SECTION 7.31.(b) Definitions. – For purposes of this section, the following
19 definitions apply:
20 (1) Eligible classroom teacher. – Any school-based classroom teacher, including

21 teachers for special student populations, such as exceptional children, reading
22 resource, English language learners, and program enhancement courses,
23 employed by a public school unit to teach students in grades kindergarten
24 through twelfth grade. School personnel in central office positions,
25 instructional support personnel, and school-based administrators shall not be
26 deemed eligible. A classroom teacher must be employed as of August 31 of
27 each fiscal year from any funds available to the public school unit to be

28 eligible under this section. The public school unit may include classroom
29 teachers employed after August 31 within funds available.
30 (2) Public school unit. – A local school administrative unit, a charter school, a
31 regional school, and a school providing elementary or secondary instruction
32 operated by the State Board of Education, including schools operated under
33 Article 7A and Article 9C of Chapter 115C of the General Statutes, or by The
34 University of North Carolina, including schools operated under Article 4,

35 Article 29, and Article 29A of Chapter 116 of the General Statutes.
36 SECTION7.31.(c) AllotmentofFundsforthe2019-2020FiscalYear.– Ofthefunds
37 allocated to local school administrative units from the Classroom Materials/Instructional
38 Supplies/Equipment allotment by the Department of Public Instruction for the 2019-2020 fiscal
39 year, each local school administrative unit shall transfer the sum of one hundred fifty dollars
40 ($150.00) per eligible classroom teacher to a program report code for a classroom teacher

41 electronic account administered pursuant to subsection (e) of this section no later than January
42 15, 2020. A public school unit, other than a local school administrative unit, may opt in to the
43 Program by December 1, 2019, using funds available to that public school unit. The local school
44 administrative unit operating a renewal school system plan pursuant to Section 6 of S.L. 2018-32
45 may also opt in to the Program using funds available in accordance with this subsection.
46 SECTION 7.31.(d) Allotment of Funds for the 2020-2021 Fiscal Year and
47 Subsequent Years. – Of the funds allocated to local school administrative units from the

48 Classroom Materials/Instructional Supplies/Equipment allotment by the Department of Public
49 Instruction each fiscal year, beginning with the 2020-2021 fiscal year, each local school
50 administrative unit shall transfer the sum of two hundred dollars ($200.00) per eligible classroom
51 teacher as of August 31 each year to a program report code for a classroom teacher electronic

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1 account administered pursuant to subsection (e) of this section. A public school unit, other than
2 a local school administrative unit, may opt in to the Program by August 1 of the fiscal year using
3 funds available to that public school unit. The local school administrative unit operating a
4 renewal school system plan pursuant to Section 6 of S.L. 2018-32 may also opt in to the Program
5 using funds available in accordance with this subsection.
6 SECTION7.31.(e) Program Administration. –TheDepartment ofPublic Instruction
7 shall utilize the same administrative system used by the North Carolina State Education

8 Assistance Authority (Authority) to manage funds for the Personal Education Savings Account
9 Program pursuant to G.S. 115C-597 and shall model its contract in a manner that meets the
10 requirements of this section and includes capabilities for at least the following:
11 (1) The ability to restrict purchases, which may include an automated prior
12 authorization process for allowable purchases or reimbursement of allowable
13 purchases.
14 (2) Automation for the capture of purchase receipts, which shall be required for

15 the Department of Public Instruction and the teacher to store electronicallyfor
16 a total of four years for reporting and audit purposes, and transparent
17 transactions, making accountability and tracking simple.
18 (3) Ability for teachers to crowd-fund for certain products.
19 SECTION 7.31.(f) Alternative Vendor. – In the event that the vendor contracted
20 with the Authority described under subsection (e) of this section is unable to meet the

21 requirements of the Program, then the Department shall contract with a vendor that provides a
22 virtual e-wallets platform and an e-commerce marketplace that enables teachers to receive and
23 spend funds online and includes the capabilities described in subsection (e) of this section.
24 SECTION 7.31.(g) Use of Funds for the Program. – The funds appropriated for the
25 Program shall be used to supplement the materials and supplies otherwise available to classroom
26 teachers. A public school unit shall not mandate, direct, or encourage eligible classroom teachers
27 to purchase specific materials and supplies or categories of materials and supplies. Classroom

28 supply funds made available under the Program shall not be used to purchase electronic devices
29 such as computers or software and shall not be expended for administrative purposes. Eligible
30 classroomteachersshall utilizethesefundsinamannerthataddressesindividualclassroomneeds
31 and supports the overall goals of the school regarding supplies and instructional materials. Any
32 supplies purchased by teachers through the Program shall be the property of the public school
33 unit. Supplies not consumed during the school year shall be made available to the teacher for the
34 following school year or for other eligible classroom teachers as appropriate. Any unexpended

35 funds in the classroom teacher accounts established in subsections (c) and (d) of this section shall
36 revert to the General Fund at the end of each fiscal year.
37 SECTION 7.31.(h) Report. – The Department of Public Instruction shall establish
38 categories of purchases made through the Program that can be compared to purchases made
39 through the Classroom Materials/Instructional Supplies/Equipment allotment. The
40 Superintendent of Public Instruction shall report to the Joint Legislative Education Oversight

41 Committee, the Fiscal Research Division, the House Appropriations Education Committee, and
42 the Senate Appropriations on Education/Higher Education Committee by May 15, 2020, on
43 purchases made through both the Program and the Classroom Materials/Instructional
44 Supplies/Equipment allotment, including comparisons by categories of purchases from the
45 Program and the allotment by each public school unit.
46
47 ROBOTICS PROGRAM FOR STUDENTS WITH AUTISM

48 SECTION 7.32. The Department of Public Instruction may use available funds for
49 the 2019-2021 fiscal biennium, except for funds in the State Public School Fund, in an amount
50 of up to three hundred thousand dollars ($300,000) for each fiscal year of the 2019-2021 fiscal
51 biennium to implement a program for students with autism that uses interactive facially

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1 expressive humanoid robotics for social and behavioral skills development for the advanced
2 treatment of autism. If implemented by the Department, the program shall have (i) a
3 research-based curriculum with imbedded evidence-based practices, (ii) existing installations
4 within North Carolina local school administrative units or charter schools, and (iii) a
5 comprehensive facilitator and activitymanual forlearnerswith autism. TheDepartment ofPublic
6 Instruction shall select public schools for participation in the program and may begin
7 implementation of the program for the 2019-2020 school year. The Department shall ensure that

8 the program uses resources efficiently to provide interactive humanoid robotics for social and
9 behavioral skills development in theadvancedtreatment ofautism forlocal school administrative
10 units or charter schools that are in need of the program.
11
12 REAL SCHOOL GARDENS, DOING BUSINESS AS OUT TEACH/PILOT PROGRAM
13 SECTION 7.33.(a) Of the funds appropriated to the Department of Public
14 Instruction for the 2019-2020 fiscal year for REAL School Gardens, Carolinas Region, the

15 Department of Public Instruction shall provide a directed grant to the nonprofit organization
16 known as REAL School Gardens, doing business as Out Teach, for the 2019-2020 school year
17 to establish a pilot program. The purpose of the pilot program is to transform teaching practices
18 and create outdoor learning laboratories on school campuses, based on the national model
19 developed byOut Teach, in 10 rural elementaryschools operating a school-wide Title Iprogram.
20 Qualifying schools shall be selected at the discretion of the State Superintendent of Public

21 Instruction. The pilot program shall concentrate on improving student academic performance,
22 teacher effectiveness, student engagement, and improving health and behavioral issues of
23 students. State funds shall only be used to operate and administer the pilot program and may be
24 used for teacher training utilizing Out Teach project-based, experiential learning curriculum,
25 which is aligned to NC Essential Standards for science, math, and literacy skills and the Whole
26 School, Whole Community, Whole Child model for nutrition education.
27 SECTION 7.33.(b) As used in this section, a school-wide Title I program is a

28 program at a school identified under Part A of Title Iof the Elementaryand SecondaryEducation
29 Act of 1965, as amended.
30 SECTION 7.33.(c) The funds provided in accordance with subsection (a) of this
31 section shall not revertat theend ofthe each fiscal year but shall remain availablefor expenditure
32 until the end of the 2020-2021 fiscal year.
33 SECTION 7.33.(d) By October 1, 2020, and by October 1 of any year thereafter in
34 which Out Teach spends State funds, Out Teach shall submit to the Joint Legislative Education

35 Oversight Committeeand theFiscal Research DivisionoftheGeneral Assemblyan annual report
36 on the progress of the pilot program, an accounting of expenditures, and student outcome and
37 teacher effectiveness data related to the operation of the pilot program.
38
39 COMPETENCY-BASED MATH PILOT
40 SECTION 7.34.(a) Purpose. – There is established the Competency-Based

41 Mathematics Education Pilot Program (Pilot) within the Department of Public Instruction to be
42 administered for a period of five years. The purpose of the Pilot is to allow students to advance
43 to higher levels of mathematics courses contingent upon the masteryof concepts and skills rather
44 than upon the awarding of course credits. Participating schools and students attending those
45 schools will be exempt from the requirements of the standard course of study in the core subject
46 of mathematics.
47 SECTION 7.34.(b) Application. – The State Superintendent of Public Instruction

48 and the Department of Public Instruction shall develop guidelines for the selection of certain
49 local boards of education for participation in the Pilot. No later than October 31, 2019, the State
50 Superintendent shall disseminate the selection guidelines, along with an application form to be

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1 used by local boards of education that wish to apply for participation in the Pilot. The application
2 form must require, at a minimum, the following:
3 (1) The list of schools that will participate in the Pilot.
4 (2) A clear, detailed explanation of rigorous and results-driven curricula and
5 personalized learning tools to be used during the Pilot.
6 (3) A plan for student progression based on the mastery of content, including
7 mechanisms that determine and ensure that a student has satisfied the

8 requirements for credit promotion.
9 (4) The scope and time lines for professional development for mathematics
10 teachers and other relevant school personnel.
11 (5) A plan for communicating with and receiving feedback from parents and
12 community stakeholders regarding implementation of the Pilot.
13 SECTION 7.34.(c) Exercise of Flexibility. – Notwithstanding anyprovision of State
14 law or policy to the contrary, local school administrative units participating in the Pilot may

15 exercise flexibility as necessary relating to student progression and the awarding of credits in
16 order to comply with the purposes of this section, subject to the limitations included in this
17 section. Schools participating in the Pilot are not exempt from testing required bythe State Board
18 of Education as part of the statewide annual testing program. The State Superintendent may
19 approve up to five local school administrative units for participation in the Pilot. Approved local
20 school administrative units shall implement the plans presented in their applications beginning

21 with the 2020-2021 school year.
22 SECTION7.34.(d) Appropriation. –Funds appropriatedto theDepartment ofPublic
23 Instruction for the 2019-2020 fiscal year for the administration and evaluation of the Pilot shall
24 not revert but shall remain available for expenditure until the conclusion of the Pilot.
25 SECTION 7.34.(e) Participating local school administrative units shall be selected
26 during the 2019-2020 school year for implementation of the Pilot beginning with the 2020-2021
27 school year.

28
29 LIFE CHANGING EXPERIENCES SCHOOL PILOT PROGRAM
30 SECTION 7.35.(a) Of the funds appropriated to the Department of Public
31 Instruction bythis act for the LifeChangingExperiences School Pilot Program forthe2019-2021
32 fiscal biennium, the Department shall contract with the Children and Parent Resource Group,
33 Inc., to design, implement, and evaluate a two-year Life Changing Experiences School Pilot
34 Program (Project), beginning with the 2019-2020 school year and ending with the 2020-2021

35 school year. The Project shall be operated and administered for students in grades six through 11
36 in at least the following local school administrative units: Cleveland County Schools, Greene
37 County Schools, Lenoir County Public Schools, Lincoln County Schools, McDowell County
38 Schools, Mitchell County Schools, and Pitt County Schools. The Department may select one or
39 more additional local school administrative units to participate in the Project if the funds are
40 sufficient to support additional units. These contract fundsshall not be used foranypurposeother

41 than to implement the Project in the local school administrative units, which consists of traveling
42 three-dimensional, interactive, holistic, and evidence-based multimedia education in-school
43 programs. The Project shall include theme-specific programs screened at school assemblies and
44 additional follow-up applications that address dangerous life- and community-threatening
45 activities that negativelyimpact teenagers, including alcohol and other drugs, dangerous driving,
46 violence, and bullying. The goal of these programs is to increase positive intentions and
47 behavioral outcomes by teaching students the techniques and skills that empower them to reach

48 meaningful life goals, employ positive behaviors, and start businesses and social enterprises.
49 SECTION 7.35.(b) The Children and Parent Resource Group, Inc., in consultation
50 with the Department of Public Instruction, shall submit an initial report on the Project authorized
51 by subsection (a) of this section by March 1, 2020, and a final report by March 1, 2021, to the

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1 Joint Legislative Education Oversight Committee and the Fiscal Research Division. The reports
2 shall include an accounting of expenditures and student outcome data related to the operation of
3 the Project.
4
5 SCHOOL SAFETY GRANTS PROGRAMS
6 SECTION 7.36.(a) Article 8C of Chapter 115C of the General Statutes is amended
7 by adding a new section to read:

8 § 115C-105.60. School resource officer grants.
9 (a) Definition. – For purposes of this section, the term qualifying public school unit
10 refers to a local school administrative unit, regional school, innovative school, laboratoryschool,
11 or charter school.
12 (b) Program; Purpose. – The Superintendent of Public Instruction shall establish the
13 School Resource Officer Grants Program (Program). To the extent funds are made available for
14 the Program, its purpose shall be to improve safetyin qualifying public school units by providing

15 grants for school resource officers.
16 (c) Grant Applications. – A qualifying public school unit may submit an application to
17 the Superintendent of Public Instruction for one or more grants pursuant to this section. The
18 application shall include an assessment, to be performed in conjunction with a local law
19 enforcement agency, of the need for improving school safety within the qualifying public school
20 unit that would receive the funding. The application shall identify current and ongoing needs and

21 estimated costs associated with those needs.
22 (d) Criteria and Guidelines. – ByAugust 1, 2019, and each year thereafter in which funds
23 aremadeavailablefortheProgram,theSuperintendentofPublicInstructionshalldevelopcriteria
24 and guidelines for the administration and use of the grants pursuant to this section, including any
25 documentation required to be submitted by applicants. In assessing grant applications, the
26 Superintendent of Public Instruction shall consider at least all of the following factors:
27 (1) Thelevel of resources availableto the qualifyingpublicschool unit thatwould

28 receive the funding.
29 (2) Whether the qualifying public school unit has received other grants for school
30 safety.
31 (3) The overall impact on student safety in the qualifying public school unit if the
32 identified needs are funded.
33 (e) Award of Funds. – From funds made available for grants for school resource officers,
34 the Superintendent of Public Instruction shall award grants to qualifying public school units for

35 school resource officers in elementary and middle schools, as follows:
36 (1) Grants shall be matched on the basis of two dollars ($2.00) in State funds for
37 every one dollar ($1.00) in non-State funds.
38 (2) Qualifying public school units mayuse these funds to employschool resource
39 officers in elementary and middle schools, to train them, or both.
40 (3) Training shall be provided, in partnership with the qualifying public school

41 unit, by a community college, a local law enforcement agency, or the North
42 Carolina Justice Academy. Any training shall include instruction on research
43 into the social and cognitive development of elementary school and middle
44 school children.
45 (f) Supplement Not Supplant. – Grants provided to qualifying public school units
46 pursuant to the Program shall be used to supplement and not to supplant State or non-State funds
47 already provided for these services.

48 (g) Report. – No later than April 1, 2020, and each year thereafter in which funds are
49 made available for the Program, the Superintendent of Public Instruction shall report on the
50 Program to the Joint Legislative Education Oversight Committee, the Joint Legislative Oversight
51 Committee on Health and Human Services, the Joint Legislative Oversight Committee on Justice

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1 and Public Safety, the Joint Legislative Commission on Governmental Operations, and the Fiscal
2 Research Division. The report shall include the identity of each entity that received a grant
3 through the Program, the amount of funding provided to each entitythat received a grant, the use
4 of funds by each entity that received a grant, and recommendations for the implementation of
5 additional effective school safety measures.
6 SECTION 7.36.(b) For the 2019-2020 fiscal year, the Department of Public
7 Instruction shall administer the following school safety grants:

8 (1) Definitions. – For purposes of this subsection, the following definitions shall
9 apply:
10 a. Community partner. – A public or private entity, including, but not
11 limited to, a nonprofit corporation or a local management
12 entity/managed care organization (LME/MCO), that partners with a
13 qualifying public school unit to provide services or pay for the
14 provision of services for the unit.

15 b. Qualifying public school unit. – A local school administrative unit,
16 regional school, innovative school, laboratory school, or charter
17 school.
18 (2) Program; purpose. – The Superintendent of Public Instruction shall establish
19 the 2019 School Safety Grants Program (Program). The purpose of the
20 Program shall be to improve safety in qualifying public school units by

21 providing grants for (i) services for students in crisis, (ii) school safety
22 training, and (iii) safety equipment in schools.
23 (3) Grant applications. – A qualifying public school unit may submit an
24 application to the Superintendent of Public Instruction for one or more grants
25 pursuant to this section. The application shall include an assessment, to be
26 performed in conjunction with a local law enforcement agency, of the need
27 for improving school safety within the qualifying public school unit that

28 would receive the funding or services. The application shall identify current
29 and ongoing needs and estimated costs associated with those needs.
30 (4) Criteria and guidelines. – By August 1, 2019, the Superintendent of Public
31 Instruction shall develop criteria and guidelines for the administration and use
32 of the grants pursuant to this subsection, including any documentation
33 required to be submitted by applicants. In assessing grant applications, the
34 Superintendent of Public Instruction shall consider at least all of the following

35 factors:
36 a. The level of resources available to the qualifying public school unit
37 that would receive the funding.
38 b. Whether the qualifyingpublic school unit has received other grants for
39 school safety.
40 c. The overall impact on student safety in the qualifying public school

41 unit if the identified needs are funded.
42 (5) Grants for students in crisis. – Of the funds appropriated to the Department of
43 Public Instruction by this act for students in crisis, the Superintendent of
44 Public Instruction, in consultation with the Department of Health and Human
45 Services, shall award grants to qualifying public school units to contract with
46 communitypartnersto provideorpayfortheprovision ofanyof thefollowing
47 crisis services:

48 a. Crisis respite services for parents or guardians of an individual student
49 to prevent more intensive or costly levels of care.
50 b. Trainingandexpandedservicesfortherapeuticfostercarefamiliesand
51 licensed child placement agencies that provide services to students

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1 who (i) need support to manage their health, welfare, and safety and
2 (ii) have any of the following:
3 1. Cognitive or behavioral problems.
4 2. Developmental delays.
5 3. Aggressive behavior.
6 c. Evidence-based therapy services aligned with targeted training for
7 students andtheir parents or guardians, includinganyofthe following:

8 1. Parent-child interaction therapy.
9 2. Trauma-focused cognitive behavioral therapy.
10 3. Dialectical behavior therapy.
11 4. Child-parent psychotherapy.
12 d. Any other crisis service, including peer-to-peer mentoring, that is
13 likely to increase school safety. Of the funds allocated to the
14 Superintendent for grants pursuant to this subdivision, the

15 Superintendent shall not use more than ten percent (10%) for the
16 services identified in this sub-subdivision.
17 (6) Grants for training to increase school safety. – Of the funds appropriated to
18 the Department of Public Instruction bythis act for training to increase school
19 safety, the Superintendent of Public Instruction, in consultation with the
20 Department of Health and Human Services, shall award grants to qualifying

21 public school units to contract with community partners to address school
22 safety by providing training to help students develop healthy responses to
23 trauma and stress. The training shall be targeted and evidence-based and shall
24 include any of the following services:
25 a. Counseling on Access to Lethal Means (CALM) training for school
26 mental health support personnel, local first responders, and teachers
27 on the topics of suicide prevention and reducing access by students to

28 lethal means.
29 b. Trainingforschool mental healthsupportpersonnel oncomprehensive
30 and evidence-based clinical treatments for students and their parents
31 or guardians, including any of the following:
32 1. Parent-child interaction therapy.
33 2. Trauma-focused cognitive behavioral therapy.
34 3. Behavioral therapy.

35 4. Dialectical behavior therapy.
36 5. Child-parent psychotherapy.
37 c. Training for students and school employees on community resilience
38 models to improve understanding and responses to trauma and
39 significant stress.
40 d. Training for school mental health support personnel on Modular

41 Approach to Therapy for Children with Anxiety, Depression, Trauma,
42 or Conduct problems (MATCH-ADTC), including any of the
43 following components:
44 1. Trauma-focused cognitive behavioral therapy.
45 2. Parent and student coping skills.
46 3. Problem solving.
47 4. Safety planning.

48 e. Any other training, including the training on the facilitation of
49 peer-to-peer mentoring, that is likely to increase school safety. Of the
50 funds allocated to the Superintendent for grants pursuant to this

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1 subdivision, the Superintendent shall not use more than ten percent
2 (10%) for the services identified in this sub-subdivision.
3 (7) Grants for safety equipment. – Of the funds appropriated to the Department
4 of Public Instruction by this section for grants for school safety equipment,
5 the Superintendent of Public Instruction shall award grants to qualifying
6 public school units for (i) the purchase of safety equipment for school
7 buildings and (ii) training associated with the use of safety equipment

8 purchased pursuant to this subsection. Notwithstanding
9 G.S. 115C-218.105(b), charter schools may receive grants for school safety
10 equipment pursuant to this subsection.
11 (8) Supplement not supplant. – Grants provided to qualifying public school units
12 or community partners pursuant to the Program shall be used to supplement
13 and not to supplant State or non-State funds already provided for these
14 services.

15 (9) Administrative costs. – Of the funds appropriated to the Department of Public
16 Instruction by this act for the grants provided in this subsection, the
17 Superintendent of Public Instruction may retain a total of up to one hundred
18 thousand dollars ($100,000) for administrative costs associated with the
19 Program.
20 (10) Report. – No later than April 1, 2020, the Superintendent of Public Instruction

21 shall report on the program to the Joint Legislative Education Oversight
22 Committee, the Joint Legislative Oversight Committee on Health and Human
23 Services, the Joint Legislative Oversight Committee on Justice and Public
24 Safety, the Joint Legislative Commission on Governmental Operations, and
25 the Fiscal Research Division. The report shall include the identity of each
26 entity that received a grant through the Program, the amount of funding
27 provided to each entity that received a grant, the use of funds by each entity

28 that received a grant, and recommendations for the implementation of
29 additional effective school safety measures.
30 SECTION 7.36.(c) Section 7.27 of S.L. 2018-5 is repealed.
31
32 EXPAND SCHOOLS THAT LEAD PILOT PROGRAM
33 SECTION 7.37. Section 7.25(a) of S.L. 2018-5 reads as rewritten:
34 SECTION 7.25.(a) Program; Purpose. – Of the funds appropriated to the Department of

35 Public Instruction bythis act for the Schools That Lead Pilot Program (Program), the Department
36 shall contract with Schools That Lead, Inc., to provide professional development to teachers and
37 principals in up to 60 75 schools, beginning with the 2018-2019 school year and ending in the
38 2020-2021 school year. The selected schools shall be charter schools or schools under the
39 authorityofalocal school administrativeunit.Professional development services shall beoffered
40 to teachers and principals in grades K-12. The Superintendent of Public Instruction, in

41 consultation with Schools That Lead, Inc., shall determine which schools are eligible to
42 participate in the Program. At a minimum, the Program shall offer services to three cohorts of
43 schools, as follows:
44 (1) High schools working to increase on-time graduation.
45 (2) Middle schools working to prepare students to succeed in high school by
46 reducing the likelihood of retention in the ninth grade for multiple school
47 years.

48 (3) Elementary schools working to reduce the number of students with early
49 warning indicators of course failures, absences, and discipline.
50

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1 EXTENDED LEARNING AND INTEGRATED STUDENT SUPPORTS COMPETITIVE
2 GRANT PROGRAM
3 SECTION 7.38.(a) Of the funds appropriated by this act for the At-Risk Student
4 Services Alternative School Allotment for the 2019-2021 fiscal biennium, the Department of
5 Public Instruction shall use up to six million dollars ($6,000,000) for the 2019-2020 fiscal year
6 anduptosix milliondollars($6,000,000)forthe2020-2021fiscal yearfortheExtendedLearning
7 and Integrated Student Supports Competitive Grant Program (Program). Of these funds, the

8 Department of Public Instruction may use up to two hundred thousand dollars ($200,000) for
9 each fiscal year to administer the Program.
10 SECTION 7.38.(b) The purpose of the Program is to fund high-quality,
11 independently validated extended learning and integrated student support service programs for
12 at-risk students that raise standards for student academic outcomes by focusing on the following:
13 (1) Use of an evidence-based model with a proven track record of success.
14 (2) Inclusion of rigorous, quantitative performance measures to confirm

15 effectiveness of the program.
16 (3) Deployment of multiple tiered supports in schools to address student barriers
17 to achievement, such as strategies to improve chronic absenteeism, antisocial
18 behaviors, academic growth, and enhancement of parent and family
19 engagement.
20 (4) Alignment with State performance measures, student academic goals, and the

21 North Carolina Standard Course of Study.
22 (5) Prioritization in programs to integrate clear academic content, in particular,
23 science, technology, engineering, and mathematics (STEM) learning
24 opportunities or reading development and proficiency instruction.
25 (6) Minimization of student class size when providing instruction or instructional
26 supports and interventions.
27 (7) Expansion of student access to high-quality learning activities and academic

28 support that strengthen student engagement and leverage community-based
29 resources, which may include organizations that provide mentoring services
30 and private-sector employer involvement.
31 (8) Utilization of digital content to expand learning time, when appropriate.
32 SECTION 7.38.(c) Grants shall be used to award funds for new or existing eligible
33 programs for at-risk students operated by (i) nonprofit corporations and (ii) nonprofit
34 corporations working in collaboration with local school administrative units. Grant participants

35 are eligible to receive grants for up to two years in an amount of up to five hundred thousand
36 dollars ($500,000) each year. Programs should focus on serving (i) at-risk students not
37 performing at grade level as demonstrated by statewide assessments, (ii) students at risk of
38 dropout, and (iii) students at risk of school displacement due to suspension or expulsion as a
39 result of antisocial behaviors. Priority consideration shall be given to applications demonstrating
40 models that focus services and programs in schools that are identified as low-performing,

41 pursuant to G.S. 115C-105.37.
42 A grant participant shall provide certification to the Department of Public Instruction
43 that the grants received under the program shall be matched on the basis of three dollars ($3.00)
44 in grant funds for every one dollar ($1.00) in nongrant funds. Matching funds shall not include
45 other State funds. The Department shall also give priority consideration to an applicant that is a
46 nonprofit corporation working in partnership with a local school administrative unit resulting in
47 amatch utilizingfederal fundsunderPartAofTitleIoftheElementaryand SecondaryEducation

48 Act of 1965, as amended, or Title IV of the Higher Education Act of 1965, as amended, and other
49 federal or local funds. Matching funds may include in-kind contributions for up to fifty percent
50 (50%) of the required match.

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1 SECTION 7.38.(d) A nonprofit corporation may act as its own fiscal agent for the
2 purposes of this Program. Grant recipients shall report to the Department of Public Instruction
3 for the year in which grant funds were expended on the progress of the Program, including
4 alignment with State academic standards, data collection for reporting student progress, the
5 source and amount of matching funds, and other measures, before receiving funding for the next
6 fiscal year. Grant recipients shall also submit a final report on key performance data, including
7 statewide test results, attendance rates, graduation rates, and promotion rates, and financial

8 sustainability of the program.
9 SECTION 7.38.(e) The Department of Public Instruction shall provide an interim
10 report on the Program to the Joint Legislative Education Oversight Committee by September 15,
11 2020, with a final report on the Program by September 15, 2021. The final report shall include
12 the final results of the Program and recommendations regarding effective program models,
13 standards, and performance measures based on student performance, leveraging of
14 community-based resources to expand student access to learning activities, academic and

15 behavioral support services, and potential opportunities for the State to invest in proven models
16 for future grants programs.
17
18 PERMIT USE OF SPECIAL STATE RESERVE FUND FOR
19 TRANSPORTATION/ESTABLISH TRANSPORTATION RESERVE FUND FOR
20 HOMELESS AND FOSTER CHILDREN

21 SECTION 7.41.(a) Notwithstanding any other provision of law or policy to the
22 contrary, in addition to the purposes for which funds in the Special State Reserve Fund (SSRF)
23 for children with disabilities are used, the SSRF may also be used to cover extraordinary
24 transportation costs for high-needs children with disabilities. The Department of Public
25 Instruction shall provide an application for local school administrative units and charter schools
26 to apply for extraordinary transportation funds and may provide additional eligibility guidelines
27 not inconsistent with this section. SSRF transportation funds shall be awarded to qualifying local

28 school administrative units or charter schools consistent with the following:
29 (1) In determining extraordinary transportation cost, the Department shall
30 consider total prior-year transportation expenditures for high-needs children
31 withdisabilities,includingexpendituresfromlocal fundsandallotherfunding
32 sources, as a proportion of total expenditures.
33 (2) Applicants with highest extraordinary transportation costs shall receive
34 highest priority in the award of grant funds.

35 (3) Funds may be awarded during the initial year of a high-needs student's
36 enrollment in the local school administrative unit or charter school or in
37 subsequent years of the student's enrollment.
38 SECTION 7.41.(b) There is established the Transportation Reserve Fund for
39 Homeless and Foster Children to provide for a grant program to cover extraordinary school
40 transportation costs for homeless and foster children. The Department of Public Instruction shall

41 provide an application process for local school administrative units and charter schools to apply
42 for funds to cover extraordinary transportation costs for qualifying students. The Department
43 shall establish eligibility guidelines and shall award funds consistent with the following
44 requirements:
45 (1) In determining extraordinary transportation cost, the Department shall
46 consider total prior-year transportation expenditures for homeless and foster
47 children, including expenditures from local funds and all other funding

48 sources, as a proportion of total expenditures.
49 (2) Priority shall be given to applicants in proportion to the extent that their
50 applications and prior-year expenditures demonstrate use of available federal
51 funds to cover the cost of transporting homeless and foster children.

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1 (3) Awards shall not exceed fifty percent (50%) of extraordinary transportation
2 cost as determined pursuant to this subsection.
3 For the purposes of this subsection, homeless is defined in accordance with the
4 definition in the federal McKinney-Vento Homeless Assistance Act.
5
6 READ TO ACHIEVE READING CAMP CURRICULUM PILOT PROGRAM
7 SECTION7.42.(a) Purpose. –Ofthefunds appropriatedto theDepartment ofPublic

8 Instruction for the 2019-2020 fiscal year for the Read to Achieve Reading Camp Pilot, the
9 Department shall acquire Imagine Learning and Failure Free Reading reading camp curriculums
10 for the purpose of conducting a Reading Camp Curriculum Pilot Program (Pilot). The purpose
11 of the Pilot is to determine the effectiveness of specific reading camp curriculums for furthering
12 reading proficiency.
13 SECTION 7.42.(b) Participation. – For each curriculum acquired pursuant to this
14 section, the Department of Public Instruction shall select one or more local school administrative

15 units to utilize the curriculum in its reading camp. Selected local school administrative units shall
16 represent the geographic, economic, and social diversity of the State. Each selected local school
17 administrative unit shall participate in the Pilot for the 2019-2020 school year.
18 SECTION 7.42.(c) Reporting Requirement. – By November 15, 2020, the
19 Department of Public Instruction shall report to the Joint Legislative Education Oversight
20 Committee on the results of the Pilot in each participating local school administrative unit,

21 including the following:
22 (1) The number and percentage of third grade students who did not demonstrate
23 proficiency upon entering reading camp and who became proficient after
24 completing reading camp.
25 (2) For each grade level, the number and percentage of first and second grade
26 students who demonstrated reading comprehension below grade level upon
27 entering camp and who demonstrated reading comprehension at or above

28 grade level after completing reading camp.
29
30 STUDENT MEAL DEBT REPORT AND REDUCED-PRICE LUNCH CO-PAYS
31 SECTION 7.43.(a) No later than March 15, 2020, the State Board of Education shall
32 report to the Joint Legislative Education Oversight Committee on unpaid meal charges in local
33 school administrative units. At a minimum, the report shall include the following information:
34 (1) The percentage of students of all grade levels in each local school

35 administrative unit who (i) qualify for and participate in reduced-price meals
36 and (ii) do not carry an unpaid meal charge.
37 (2) The total amount of debt carried by each local school administrative unit
38 related to unpaid meal charges.
39 (3) Summaries of approaches adopted by each local school administrative unit
40 regarding unpaid meal charges.

41 (4) Options for a statewide policy on the uniform administration of unpaid meal
42 charges in local school administrative units. Every option shall ensure that
43 students are not prevented from receiving nutritious meals because of an
44 unpaid meal charge.
45 SECTION 7.43.(b) Funds appropriated to the Department of Public Instruction by
46 this act for the 2019-2020 fiscal year for reduced-price lunch co-pays shall be used to provide
47 school lunches at no cost to students of all grade levels qualifying for reduced-price meals in all

48 schools participating in the National School Lunch Program in the 2019-2020 school year. If the
49 fundsareinsufficient to provideschool lunches at nocost to students qualifyingforreduced-price
50 meals, the Department of Public Instruction shall also use any excess funds appropriated for the
51 National School Breakfast Program for the purposes of this subsection.

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1
2 INNOVATIVE SIGNATURE CAREER ACADEMY PILOT
3 SECTION 7.44.(a) Establish; Purpose. – There is established the Innovative
4 Signature Career AcademyProgram (Program) as a pilot program to be implemented in Guilford
5 County Schools for the purpose of reforming its current career and technical education (CTE)
6 programtomoredeliberatelyprepareitsstudentsforhigh-wage,high-skillscareers.TheProgram
7 shall focus on hosting signature career academies at traditional high schools located in the local

8 school administrative unit that specialize in defined areas of career and technical education.
9 SECTION 7.44.(b) Components of the Program. – The Program shall include at
10 least the following key components in establishing a minimum of four but no more than six
11 signature career academies at high schools in the local school administrative unit:
12 (1) Oneschool-selected prioritycareerpathwaythatdoes not compete with career
13 pathways at other signature career academies in the local school
14 administrative unit in addition to CTE courses offered as elective options and

15 business and computer science courses.
16 (2) School and community stakeholder input on the development of the priority
17 career pathways and the phase-out of other CTE programs.
18 (3) Partnerships with higher education institutions and business and industry
19 entities for specific equipment needs and the design of clearly defined career
20 pathways.

21 (4) The option for eighth grade students to apply to attend a signature career
22 academy of their choice at a high school located in the local school
23 administrative unit.
24 (5) Reassignment of current CTE teachers to focus on an area of expertise for a
25 signature career academy and the creation of partnerships with higher
26 educationfacultyandemployeesofindustryandbusinesstovolunteertoserve
27 as co-teachers in the specialized areas.

28 SECTION 7.44.(c) Flexibility for Teachers. – Notwithstanding any other provision
29 of law, in addition to the authority provided to a local board of education to employ adjunct
30 instructors in career and technical education career clusters pursuant to G.S. 115C-157.1, the
31 local school administrative unit shall have the flexibility to contract with individuals who have
32 education and training related to the specific skills and career pathways that are the focus of a
33 signature career academy. Any individual who has direct contact with students pursuant to the
34 authority provided by this subsection shall be subject to a criminal history check to ensure that

35 the person has not been convicted of any crime listed in G.S. 115C-332.
36 SECTION 7.44.(d) Reporting. – By June 30 of the first school year of operation of
37 the Program, and every June 30 thereafter for the duration of the Program operated as a pilot,
38 Guilford County Schools shall report to the Department of Public Instruction on (i)
39 implementation and administration of the Program, including the use of additional resources
40 provided as an appropriation of State funds specifically for the Program, (ii) data from the

41 Program on student completion rates for career pathways and any other data requested by the
42 Department, and (iii) any recommendations on the modification of the Program or the potential
43 application of the Program in other local school administrative units.
44 By August 15 of the first year of reporting by Guilford County Schools under this
45 subsection, and every August 15 thereafter for the duration of the Program operated as a pilot,
46 the Department of Public Instruction shall report to the Joint Legislative Education Oversight
47 Committeeon theinformation submittedbyGuilfordCountySchools pursuant to thissubsection.

48 SECTION 7.44.(e) Term of the Program. – The Program may operate for up to six
49 school years as a pilot program, beginning with the 2019-2020 school year. Before the end of the
50 school year in which the Program will expire as a pilot, the Guilford County Board of Education
51 may apply to the State Board of Education for the Program to be included as an ongoing

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1 component of Guilford County Schools' career and technical education local plan submitted to
2 the State Board of Education pursuant to G.S. 115C-154.1. In operating the Program in
3 subsequent school years, Guilford County Schools shall continue to have flexibility in regard to
4 teachers as provided in subsection (c) of this section. The Guilford County Board of Education
5 mayrequest as part of the application that the General Assemblyappropriate additional resources
6 for the operation of the Program but may continue to operate the Program if other sources of
7 fundsareavailable.TheStateBoardshallconsiderthedatasubmittedtothe DepartmentofPublic

8 Instruction on the operation of the Program pursuant to subsection (d) of this section when
9 reviewing the Program to become a component of the career and technical education local plan.
10
11 TRANSFER OF FUNDS FOR BUSINESS SYSTEM MODERNIZATION PLAN
12 SECTION 7.46.(a) Of the funds appropriated to the Department of Public
13 Instruction by this act for the School Business System Modernization Plan for the 2019-2021
14 fiscal biennium, the Department shall transfer two million ninety thousand dollars ($2,090,000)

15 for the 2019-2020 fiscal year to the Government Data Analytics Center (GDAC) to leverage
16 existing public-private partnerships to incorporate annual school report card data for the State
17 into the School Finance page of the Department of Public Instruction Web site. Grade level and
18 subject level Education Value-Added Assessment System (EVAAS) growth data for local school
19 administrativeunits and individual schools shall also bemadepublic onthe School Financepage.
20 SECTION 7.46.(b) No later than October 1, 2019, GDAC shall execute any

21 contractual agreements and interagency data sharing agreements necessary to accomplish the
22 reporting system established pursuant to Section 7.16 of S.L. 2017-57, as amended by Section
23 7.6 of S.L. 2018-5. The Department and GDAC shall continue partnering to accomplish the
24 continued development, deployment, and ongoing provision of a data integration service that
25 consolidates data from financial, human resources, licensure, student information, and EVAAS.
26 Implementation shall also include development and deployment of a modern analytic platform
27 andreportingenvironment.Additionally,student projectiondataforfutureassessmentsincluding

28 State assessments, Advanced Placement exams, and college readiness assessments shall be made
29 available to local school administrative units and individual schools through the EVAAS page of
30 theDepartment ofPublic InstructionWebsiteand shall bemade availablein hard copyto parents
31 or guardians upon request.
32
33 SCHOOL MENTAL HEALTH CRISIS RESPONSE PROGRAM
34 SECTION 7.47.(a) For purposes of this section, the following definitions shall

35 apply:
36 (1) Participating unit. – A local school administrative unit that elects to transfer
37 school mental health personnel to a requesting unit for a temporary period of
38 time.
39 (2) Requesting unit. – A local school administrative unit requesting additional
40 school mental health support personnel for a temporary period of time.

41 (3) School mental health support personnel. – School nurses, school counselors,
42 school psychologists, and school social workers.
43 SECTION 7.47.(b) The Department of Public Instruction and the Center for Safer
44 Schools, in consultation with the Department of Health and Human Services and the Department
45 of Public Safety, Division of Emergency Management, shall develop a recommended program
46 for facilitating the temporary transfer of school mental health support personnel from a
47 participating unit to a requesting unit during or after a crisis. No later than March 15, 2020, the

48 DepartmentshallsubmitareportontherecommendedprogramtotheJointLegislativeEducation
49 Oversight Committee and the Joint Legislative Oversight Committee on Health and Human
50 Services. The report shall outline the recommended program and include, at a minimum, the
51 following information:

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1 (1) A suggested protocol for receiving and relaying requests for additional,
2 temporary school mental health support personnel.
3 (2) Anticipated costs associated with the temporary transfer of school mental
4 health support personnel during or after a crisis.
5 (3) Descriptions of and data from any similar programs existing in other states.
6 (4) Additional recommendations for improving the ability of local school
7 administrative units to share school mental health support personnel, when

8 necessary, and appropriate reporting metrics related to the recommended
9 program.
10
11 FUNDS FOR WORKFORCE DEVELOPMENT/HOSPITALITY
12 SECTION 7.49.(a) Of the funds appropriated to the Department of Public
13 Instruction by this act for the 2019-2021 fiscal biennium for the North Carolina Hospitality
14 Education Foundation (Education Foundation), the Department shall provide the funds as a

15 directed grant to the Education Foundation of the North Carolina Restaurant and Lodging
16 Association to be used to provide nationally certified programs in career and technical education
17 focused on developing critical skills necessary for students to succeed in the hospitality sector.
18 The purpose of the funds shall be to support instructor and student training and student testing to
19 increase the State's skilled workforce in the restaurant and lodging sectors. The Education
20 Foundation shall match State funds made available pursuant to this section on the basis of one

21 dollar ($1.00) in State funds for every one dollar ($1.00) in non-State funds.
22 SECTION 7.49.(b) The Education Foundation, in consultation with the Department
23 of Public Instruction, shall submit a report by April 1 of each year in which the Education
24 Foundation spends State funds made available pursuant to this act to the Joint Legislative
25 Education Oversight Committee and the Fiscal Research Division on the activities described by
26 this section and the use of those funds.
27

28 SCHOOL MENTAL HEALTH SUPPORT PERSONNEL REPORTS AND FUNDS
29 SECTION 7.50.(a) Article 21 of Chapter 115C of the General Statutes is amended
30 by adding a new section to read:
31 § 115C-316.2. School mental health support personnel reports.
32 (a) Definition. – For purposes of this section, the term school mental health support
33 personnel refers to school psychologists, school counselors, school nurses, and school social
34 workers.

35 (b) Local Report. – No later than February 15 of each year, the superintendent of each
36 local school administrative unit shall report the following information to the local board of
37 education of the unit:
38 (1) The total number of each category of school mental health support personnel
39 employed in the unit.
40 (2) The difference from the previous school year in the total number of each

41 category of school mental health personnel employed in the unit.
42 (c) State Report. – No later than March 15 of each year, the Superintendent of Public
43 Instruction shall report to the Joint Legislative Education Oversight Committee and the Fiscal
44 Research Division the difference from the previous school year in the total number of each
45 category of school mental health support personnel that are funded exclusively from the
46 instructional support allotment in each local school administrative unit.
47 SECTION 7.50.(b) For the 2019-2021 fiscal biennium, it is the intent of the General

48 Assembly that any additional funds provided to the instructional support allotment shall be used
49 to improve student mental health by increasing the number of school mental health support
50 personnel, as defined in G.S. 115C-316.2(a), in each local school administrative unit.
51

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1 EXTEND JOINT LEGISLATIVE TASK FORCE ON EDUCATION FINANCE
2 REFORM TO 2020
3 SECTION 7.51. Section 7.23D(f) of S.L. 2017-57, as amended by Section 7.10 of
4 S.L. 2018-5, reads as rewritten:
5 SECTION 7.23D.(f) Meetings of the Task Force shall begin no later than October 1, 2017.
6 The Task Force shall submit a final report on the results of its study and development, including
7 proposed legislation, to the Joint Legislative Education Oversight Committee on or before

8 October 1, 2019, March 31, 2020, by filing a copy of the report with the Office of the President
9 Pro Tempore of the Senate, the Office of the Speaker of the House of Representatives, the Joint
10 Legislative Education Oversight Committee, and the Legislative Library. The Task Force shall
11 terminate on October 1, 2019, March 31, 2020, or upon the filing of its final report, whichever
12 comes first.
13
14 RECOMMENDATIONS FOR STUDENTS WITH DISABILITIES FUNDING

15 SECTION 7.52. Of the funds appropriated by this act to the Department of Public
16 Instruction for the 2019-2020 fiscal year to contract with Augenblick, Palaich and Associates
17 Consulting (APA), APA shall make recommendations on how to categorize the allocation of
18 funding for students with disabilities and how to set funding levels for each category
19 recommended. APA shall expand on the findings and recommendations made in its 2010 report,
20 Recommendations to Strengthen North Carolina's School Funding System. In addition, APA

21 shall consider any findings and recommendations published since 2010 by the Department of
22 Public Instruction and by the Friday Institute for Educational Innovation at North Carolina State
23 University regarding funding needs for students with disabilities. In developing
24 recommendations, APA shall examine the following:
25 (1) For each school system, the percentage of students with disabilities and the
26 funding provided per student with disabilities.
27 (2) The potential benefit of allocating funding for students with disabilities based

28 on severity of disability type as compared to allocating funding based on
29 service level required.
30 (3) How other states provide fundingfor students with disabilities, with particular
31 emphasis on states that differentiate funding by student need.
32 (4) How to determine appropriate funding levels for each funding category
33 recommended.
34 APA shall submit its recommendations and supporting findings to the State Board of

35 Education and the Department of Public Instruction on or before November 1, 2019. The
36 Department of Public Instruction shall submit a final report on the recommendations and
37 findings, including any proposed legislation necessary for implementation, to the Joint
38 Legislative Education Oversight Committee and the General Assembly on or before December
39 15, 2019.
40

41 EDUCATION ON THE HOLOCAUST AND GENOCIDE/GIZELLA ABRAMSON
42 HOLOCAUST EDUCATION ACT
43 SECTION 7.53.(a) The General Assembly finds that knowledge of the Holocaust is
44 essential to provide students with the fundamental understanding of geography, history, and
45 political systems necessary to make informed choices on issues that affect individuals,
46 communities, states, and nations.
47 SECTION 7.53.(b) Part 1 of Article 8 of Chapter 115C of the General Statutes is

48 amended by adding a new section to read:
49 § 115C-81.57. Education on the Holocaust and genocide.
50 (a) TheStateBoardofEducation shall reviewthemiddleschool and high school standard
51 course of study and, in consultation and coordination with the North Carolina Council on the

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1 Holocaust and the North Carolina Center for the Advancement of Teaching, shall (i) integrate
2 into English, social studies courses, and other courses as appropriate, education on the Holocaust
3 and genocide and (ii) develop a curriculum for a Holocaust Studies elective that may be offered
4 in middle schools and high schools of local school administrative units.
5 (b) The Department of Public Instruction shall provide or cause to be provided
6 curriculum content, and local boards of education shall provide or cause to be provided
7 professional development to ensure that the intent and provisions of this section are effectively

8 implemented. The North Carolina Council on the Holocaust and the North Carolina Center for
9 the Advancement of Teaching may, in consultation with the Department of Public Instruction
10 and local boards of education, provide curriculum content and professional development.
11 SECTION 7.53.(c) Subsection (b) of this section applies beginning with the
12 2020-2021 school year.
13 SECTION 7.53.(d) Of the funds appropriated to the Department of Public
14 Instruction for the 2019-2020 fiscal year for Holocaust and genocide education, the Department

15 shall acquire curriculum content and implement professional development addressing the
16 Holocaust and genocide, in consultation with the State Board of Education, the North Carolina
17 Council on the Holocaust, and the North Carolina Center for the Advancement of Teaching.
18
19 PART VII-A. EXCELLENT PUBLIC SCHOOLS ACT OF 2019
20

21 TITLE
22 SECTION7A.1. This Partshall be known andmaybe cited as The Excellent Public
23 Schools Act of 2019.
24
25 ESTABLISH INDIVIDUAL READING PLANS AND A DIGITAL CHILDREN'S
26 READING INITIATIVE
27 SECTION 7A.2.(a) G.S. 115C-83.6(a) reads as rewritten:

28 (a) Kindergarten, first, second, and third grade students shall receive high-quality core
29 reading instruction and shall be assessed with valid, reliable, formative, and universal screening
30 measures for literacy, using valid and reliable formative and diagnostic reading assessments
31 made available to local school administrative units by the State Board of Education pursuant to
32 G.S. 115C-174.11(a). Difficulty with reading development identified through administration of
33 formative and diagnostic assessments shall be addressed with instructional supports and
34 services.services as follows:

35 (1) An Individual Reading Plan (IRP) shall be developed for any student
36 identified to be below grade level based on the results of either (i) the first
37 diagnostic or formative assessment of the school year or (ii) the first
38 diagnostic or formative assessment of the second semester of the school year.
39 The IRP shall be continually adjusted based on multiple data sources as
40 prescribed by the Department of Public Instruction indicating that the student

41 is not progressingtoward grade-level standards in one or more critical reading
42 skills. Based on the most recently collected data, the IRP shall include the
43 following information, specific to the identified student:
44 a. The specific reading skill deficiencies identified by assessment data.
45 b. Goals and benchmarks for growth.
46 c. The means by which progress will be monitored and evaluated.
47 d. The specific additional instructional services and interventions the

48 student will receive.
49 e. The evidence-based reading instructional programming the teacher
50 will implement to address oral language, phonological and phonemic
51 awareness, phonics, vocabulary, fluency, and comprehension.

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1 f. Anyadditionalservicestheteacherdeemsappropriatetoacceleratethe
2 student's reading skill and development.
3 (2) A student's parent or guardian shall be given notice that the student has been
4 identified to be in need of support due to a deficit in one or more critical
5 reading skills and that an IRP has been developed. The notice shall provide
6 the parent or guardian the following:
7 a. Specific strategies that can be easily understood and implemented to

8 assist the student in achieving reading competency.
9 b. Encouragement to select one or more strategies for use at home that
10 build on the student's interests and are most likely to engage the
11 student and result in reading improvement.
12 c. Direction to free online or hardcopy literacy resources that can be
13 accessed via a prominently displayed area on the homepage of the
14 primary Web site maintained by the Department of Public Instruction

15 and by the local school administrative unit.
16 Parents or guardians of first and second grade students demonstrating one or more deficits in
17 critical reading comprehension below grade level skills as identified through assessments
18 administered pursuant to this subsection shall be encouraged to enroll their student in a reading
19 campprovidedbythelocalschooladministrativeunit.Parentsorguardians ofastudentidentified
20 as demonstrating one or more deficits in critical reading comprehension below grade level skills

21 shall make the final decision regarding a student's reading camp attendance.
22 SECTION 7A.2.(b) The Department of Public Instruction shall develop a Digital
23 Children's Reading Initiative (Initiative) for the purpose of increasing the percentage of school
24 childrenthroughouttheStatewhoarereadingproficientlybytheendofthirdgrade.The Initiative
25 shall assist parents, guardians, and family members in cultivating confident, proficient, lifelong
26 readers by providing free tools and resources that can be easily incorporated into everyday life.
27 The Initiative may utilize existing third-party resources by providing selected links to

28 thoroughly vetted, high-quality resources. Links shall be specifically categorized by skill
29 deficiency and grade level so that parents, guardians, and family members can be quickly
30 connected to effective resources targeted to each student's needs. The Department of Public
31 Instruction shall frequently monitor all resources linked to the Initiative to ensure that all links
32 are up-to-date and that resources remain consistent with the purpose set out in this section. All
33 resources included in the Initiative shall be available to the public without required login
34 credentials and shall be accessible directly through a prominently displayed area on the

35 homepage of the Department's Web site. The Initiative shall make home activities, printables,
36 and games available on the following literacy skills, as appropriate for each grade level:
37 (1) Phonemic awareness.
38 (2) Phonics.
39 (3) Vocabulary.
40 (4) Fluency.

41 (5) Comprehension.
42 (6) Oral language.
43 NolaterthanJanuary15,2020,theDepartmentofPublicInstructionshalldisseminate
44 the fully developed Digital Children's Reading Initiative to all local school administrative units.
45 Each local school administrative unit shall make Initiative resources accessible directly through
46 a prominently displayed area on the homepage of the unit's Web site no later than July 1, 2020.
47 Local school administrative units may compile and add additional high-quality resources that

48 meet the requirements of this section to those provided to them by the Department of Public
49 Instruction. Printable activities shall be provided in hard copy by the local school administrative
50 unit to students who do not have digital access at home and may be provided to all students as a
51 supplement to digital resources.

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1 SECTION 7A.2.(c) This section applies beginning with the 2020-2021 school year.
2
3 COMPREHENSIVE PLAN TO IMPROVE THE DELIVERY OF LITERACY
4 INSTRUCTION IN THE NORTH CAROLINA PUBLIC SCHOOLS
5 SECTION 7A.3.(a) The Superintendent of Public Instruction shall convene a task
6 force with members of the Board of Governors of The University of North Carolina, the State
7 Board of Community Colleges, the North Carolina Independent Colleges and Universities, the

8 State Board of Education, and the Professional Educator Preparation and Standards Commission,
9 or their designees, which may include representatives from their respective agencies, to develop
10 a Comprehensive Plan to Improve Literacy Instruction (Plan) with clear goals to ensure that
11 literacy instruction provided in the North Carolina public schools is evidence-based, designed to
12 improve outcomes for children in gaining early literacy skills, and consistently delivered by
13 teachers. The Plan shall include strategies on using the latest research on evidence-based
14 instruction that leads to student learning in the public schools and the components essential to

15 early learning success and preparation for educators in literacy instruction. The Plan shall also
16 recommend (i) changes to existing State programs in early childhood education, elementary
17 education, educator preparation, and professional development for teachers and (ii) new
18 initiatives to facilitate the State reaching the goals set forth in the Plan. In developing the Plan,
19 the Superintendent, in consultation with the Board of Governors, the State Board of Community
20 Colleges, the North Carolina Independent Colleges and Universities, the State Board of

21 Education, and the Professional Educator Preparation and Standards Commission, shall consider
22 at least the following:
23 (1) Research on early childhood learning, including early literacy instruction, to
24 define skills and competencies for early learning and literacy educators to
25 improve educator preparation program design.
26 (2) Alignment of preservice educator preparation for early learning instruction
27 with actual classroom instruction, including clinical experiences, that reflect

28 well-designed, effective educator preparation programs for early learning
29 instruction.
30 (3) Evidence-based methods of trainingin educator preparation programs that use
31 individualized learning models, including Individual Reading Plans as
32 described in G.S. 115C-83.6, as amended by Section 7A.2 of this act, to
33 support literacy education for all students, including economically
34 disadvantaged students, English language learners, and children with

35 disabilities.
36 (4) The minimum number of credit hours in literacy instruction that an educator
37 preparation program shall include in its course of study.
38 (5) Professional development models that focus on training educator preparation
39 program faculty and teachers throughout their careers on evidence-based
40 instruction in literacy that is consistent with the most recent standards and

41 curriculum established by the State and well-designed, effective educator
42 preparation programs.
43 (6) The number and type of continuing education credits related to literacy that
44 the State should require for the renewal of a teacher license.
45 (7) Implementation by teachers and local school administrative units of the most
46 recent standards and curriculum for evidence-based literacy instruction and
47 resources provided by the Department of Public Instruction for individual

48 schools and local school administrative units.
49 (8) Literacy resources and programs for parents and families as part of the
50 delivery of literacy instruction by teachers in the public schools.

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1 (9) Best practices related to teachers using literacy assessment and diagnostic
2 toolsandtheuseofdatasystemsto monitorstudents'progress towardsliteracy
3 goals and identify students at risk of not meeting those goals.
4 (10) Best practices for literacy interventions for students in kindergarten through
5 third grade that focus on intentional instruction in foundational literacy skills,
6 includingphonemicawareness,phonics,vocabulary, fluency,comprehension,
7 and oral language.

8 (11) Implications for teacher licensure and other teaching credentials, including
9 potential incentives and compensation, related to changes to existing State
10 programs and new initiatives to facilitate the State reaching the goals set forth
11 in the Plan.
12 SECTION 7A.3.(b) The Superintendent shall report to the Joint Legislative
13 Education Oversight Committee by March 15, 2020, on the Plan developed in accordance with
14 this section and the legislative changes necessary to implement the Plan, including

15 recommendations on requirements for educator preparation programs on using evidence-based
16 literacy instruction in the course of study for the purposes of State Board of Education
17 authorization of programs and State support for well-designed professional development
18 programs in early learning and literacy instruction.
19 SECTION 7A.3.(c) G.S. 115C-83.4 reads as rewritten:
20 § 115C-83.4. Comprehensive plan for reading achievement.to improve literacy

21 instruction.
22 (a) The State Board of Education shall develop, implement, and continuously evaluate a
23 adopt the comprehensive plan to improve reading achievement literacy instruction in the public
24 schools. The plan shall be based on reading instructional practices with strong evidence of
25 effectiveness in current empirical research in reading development. The plan shall be developed
26 with the active involvement of teachers, college and university educators, parents and guardians
27 of students, and other interested parties. The plan shall, when appropriate to reflect research,

28 include revision of the standard course of study or other curricular standards, revision of teacher
29 licensure and renewal standards, and revision of teacher education program standards.schools, as
30 required by the Excellent Public Schools Act of 2019, developed by the task force convened by
31 the Superintendent of Public Instruction with members of the Board of Governors of The
32 University of North Carolina, the State Board of Community Colleges, the North Carolina
33 Independent Colleges and Universities, the State Board of Education, and the Professional
34 Educator Preparation and Standards Commission.

35 The Plan shall reflect the requirements of the Excellent Public Schools Act of 2019 and shall
36 include clear goals to ensure that literacy instruction provided in the North Carolina public
37 schools is evidence-based, designed to improve outcomes for children in gaining early literacy
38 skills, and consistentlydelivered byteachers. The Plan shall include strategies on using the latest
39 research on evidence-based instruction that leads to student learning in the public schools and
40 the components essential to early learning success and preparation for educators in literacy

41 instruction, including requirements that early literacy training be evidence-based, systemic and
42 explicit, based on the science of reading, and designed to improve outcomes for children in
43 gaining early literacy skills.
44 (b) The Superintendent of Public Instruction, in consultation with the State Board of
45 Education Education, shall report biennially to the Joint Legislative Education Oversight
46 Committee by October 15 of each even-numbered year on the implementation, evaluation, and
47 revisions to the comprehensive plan for reading achievement to improve literacy instruction and

48 shall include recommendations for legislative changes to enable implementation of current
49 empirical research in reading development.literacy instruction.
50

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1 PROFESSIONAL DEVELOPMENT IN LITERACY INSTRUCTION PROVIDED BY
2 NCCAT
3 SECTION 7A.4.(a) G.S. 115C-296.5 reads as rewritten:
4 § 115C-296.5. North Carolina Center for the Advancement of Teaching; powers and
5 duties of trustees; reporting requirement.
6 (a) The North Carolina Center for the Advancement of Teaching (hereinafter called
7 NCCAT), through itself or agencies with which it maycontract, shall:shall ensure that teachers

8 receive professional development programs in accordance with the following:
9 (1) Provide career NCCAT shall prioritize the delivery of early learning and
10 literacy instruction services through increasing the number of teachers
11 participating in their evidence-based professional development programs in
12 early learning and literacy instruction that meet the goals for literacy
13 instruction established in the State's Comprehensive Plan to Improve Literacy
14 Instruction, as defined in G.S. 115C-83.4.

15 (1a) NCCAT shall provide teachers with other opportunities to study advanced
16 topics in the sciences, arts, and humanities and to engage in informed
17 discourse, assisted by able mentors and outstanding leaders from all walks of
18 life; andlife.
19 (2) Offer NCCAT shall offer additional opportunities for teachers to engage in
20 scholarly pursuits through a center dedicated exclusively to the advancement

21 of teaching as an art and as a profession.
22 (b) Priority for admission to NCCAT opportunities shall be given to teachers with
23 teaching experience of 15 years or less.
24 (c) NCCAT may also provide training and support for beginning teachers to enhance
25 their skills and in support of the State's effort to recruit and retain beginning teachers.
26 (d) The Board of Trustees of the North Carolina Center for the Advancement of Teaching
27 shall hold all the powers and duties necessary or appropriate for the effective discharge of the

28 functions of NCCAT.
29 (e) The Executive Director shall submit a copy of the NCCAT annual report to the
30 Superintendent of Public Instruction and the Chair of the State Board of Education at the time of
31 issuance. The report shall include at least the following information:
32 (1) The number of teachers served by NCCAT's professional development
33 programs by the type of program offered, including the number of teachers
34 participating in the early learning and literacy instruction professional

35 development programs and the increase in the number of teachers served from
36 the prior year.
37 (2) Evaluation data on the programs offered by NCCAT, including the
38 satisfaction of the teachers and the local school administrative units with the
39 quality and effectiveness of those programs.
40 SECTION 7A.4.(b) The North Carolina Center for the Advancement of Teaching

41 (NCCAT) shall collaborate with the Department of Public Instruction and educator preparation
42 programs selected by The University of North Carolina System Office in designing professional
43 development programs to offer to North Carolina teachers that align with the most recent
44 standards and curriculum for literacy instruction in kindergarten through third grade. NCCAT
45 shall also meet the goals and recommendations set forth in the Comprehensive Plan to Improve
46 Literacy Instruction developed pursuant to Section 7A.3 of this act for the purposes of meeting
47 the requirements of G.S. 115C-296.5, as amended by this section.

48 SECTION 7A.4.(c) Subsection (a) of this section becomes effective July 1, 2020,
49 and applies to programs offered by NCCAT on or after that date.
50

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1 LITERACY TRAINING COURSEWORK FOR EDUCATOR PREPARATION
2 PROGRAM APPROVAL
3 SECTION 7A.5.(a) G.S. 115C-269.20(a) reads as rewritten:
4 (a) Content and Pedagogy Requirements. – To ensure that EPPs remain current and
5 reflect a rigorous course of study that is aligned to State and national standards, the State Board
6 shall require at least the following minimum requirements with demonstrated competencies in
7 its rules:

8 …
9 (2) EPPs providing training for elementary education teachers shall include the
10 following:
11 a. Adequate coursework in the teaching of reading, writing, and
12 mathematics.
13 a1. Coursework in the teaching of reading and writing that is approved by
14 the State Board of Education as high-quality, evidence-based training

15 for the preparation of educators that meets the goals for literacy
16 instruction established in the State's Comprehensive Plan to Improve
17 Literacy Instruction, as provided in G.S. 115C-83.4.
18 b. Assessment prior to licensure to determine if a student possesses the
19 requisite knowledge in scientifically based reading, writing, and
20 mathematics instruction that is aligned with the State Board's

21 expectations.
22 c. Instruction in application of formative and summative assessments
23 within the school and classroom setting through technology-based
24 assessment systems available in State schools thatmeasure and predict
25 expected student improvement.
26 (3) EPPs providing training for elementary and special education general
27 curriculum teachers shall ensure that students receive instruction in early

28 literacy intervention strategies and practices that are aligned with State and
29 national reading standards and the goals for literacy instruction established in
30 the State's Comprehensive Plan to Improve Literacy Instruction, as provided
31 in G.S. 115C-83.4, and shall include the following:
32 a. Instruction in the teaching of reading, including a substantive
33 understanding of reading as a process involving oral language,
34 phonological and phonemic awareness, phonics, fluency, vocabulary,

35 and comprehension. Instruction shall include appropriate application
36 of instructional supports and services and reading interventions to
37 ensure reading proficiency for all students.
38 b. Instruction in evidence-based assessment and diagnosis of specific
39 areas of difficulty with reading development and of reading
40 deficiencies.

41 c. Instruction in appropriate application of instructional supports and
42 services and readinginterventions to ensure readingproficiencyfor all
43 students.
44 ….
45 SECTION 7A.5.(b) This section applies to educator preparation programs applying
46 for approval or renewing approval on or after July 1, 2020.
47

48 ALIGN LITERACY CURRICULUM AND INSTRUCTION WITH READ TO ACHIEVE
49 SECTION 7A.6.(a) The State Board of Education and the Department of Public
50 Instruction shall develop or identify literacy curriculum and instruction standards to ensure that
51 methods throughout the State are consistent and closely aligned with the objectives of Part 1A of

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1 Article 8 of Chapter 115C of the General Statutes (Read to Achieve). Based on the goals and
2 recommendations of the Comprehensive Plan to Improve Literacy Instruction developed
3 pursuant to Section 7A.3 of this act, the State Board and the Department shall incorporate only
4 the most effective evidence-based literacy curriculum and instruction methods into the standards
5 developed. Nolaterthan June30, 2020,theState Board shall provideto local boards of education
6 (i) the standards developed, (ii) a model literacy curriculum that meets the standards developed,
7 and (iii) an example of a literacy curriculum that would not meet the standards developed and

8 explanatory guidance on why it would not meet the standards.
9 Each local school administrative unit shall evaluate its literacy curriculum and
10 instruction and shall modifyas necessaryto adhere to the standards developed bythe State Board
11 or adopt the model literacy curriculum model provided by the State Board. No later than
12 December15, 2020, and in aform prescribedbytheStateBoard,each local school administrative
13 unit shall submit to the State Board a concise explanation of its literacy curriculum and
14 instruction, as aligned with the standards developed by the State Board.

15 SECTION 7A.6.(b) Service Support Coordinators, or other appropriate staff as
16 determined by the Department of Public Instruction, shall work to ensure that the standards
17 developed by the State Board are implemented statewide by reviewing the curriculum of each
18 local school administrative unit in each service area and by consulting with each local school
19 administrative unit as needed to bring literacy instruction into compliance. Review and
20 modification of all literacy instruction statewide shall be complete no later than November 15,

21 2021. Modifications shall be implemented into curriculum and instruction as soon as possible,
22 and all curriculum and instruction as modified under this section shall be in place beginning with
23 the 2022-2023 school year.
24
25 APPROVE LOCAL READING CAMP PLANS
26 SECTION 7A.7.(a) The State Board of Education and the Department of Public
27 Instruction shall conduct an analysis of reading camps throughout the State in order to determine

28 which reading camp activities and instructional methods are most effective in furthering reading
29 development. Based on this analysis, the State Board and the Department shall develop reading
30 camp standards that incorporate the most effective activities and instructional methods. No later
31 thanDecember15, 2019,theStateBoardshall reportto theJoint Legislative EducationOversight
32 Committee on the standards developed in accordance with this section and any recommended
33 legislation to further improve the effectiveness of reading camps and shall publish the standards.
34 SECTION 7A.7.(b) Beginning with reading camps corresponding to the 2019-2020

35 school year, each local school administrative unit shall submit to the Department of Public
36 Instruction a plan for the operation of its reading camps no later than March 1, 2020. Each plan
37 shall include information about the local school administrative unit's efforts to staff reading
38 camps with the most qualified teachers possible, including the unit's efforts to attract teachers
39 associated with high growth in reading based on EVAAS data and teachers who have earned a
40 reading bonus. As part of their plans, local school administrative units are encouraged to partner

41 with other local school administrative units and with community organizations to enhance
42 reading camps.
43 The Department shall review each local school administrative unit's plan and provide
44 feedback as necessary to ensure that each reading camp throughout the State (i) provides
45 instruction that is closely aligned with the goals of Part 1A of Article 8 of Chapter 115C of the
46 General Statutes (Read to Achieve), (ii) meets the minimum requirements provided in
47 G.S. 115C-83.3(4a), as amended by subsection (c) of this section, and (iii) complies with the

48 readingcamp standardspublished bytheStateBoardofEducation.TheDepartment shall provide
49 feedback to local school administrative units, including feedback on efforts to attract highly
50 qualified teachers, no later than May 15, 2020. The Department may provide a form to local
51 school administrative units for the purpose of submitting their plans for review, and local school

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1 administrative units shall submit their plans on the form, if provided by the Department for this
2 purpose.
3 SECTION 7A.7.(c) G.S. 115C-83.3(4a) reads as rewritten:
4 (4a) Reading camp means an additional educational program outside of the
5 instructional calendar provided by the local school administrative unit to (i)
6 any third grade student who does not demonstrate reading proficiency and (ii)
7 any first or second grade student who demonstrates reading comprehension

8 below grade level as identified through administration of formative and
9 diagnostic assessments in accordance with G.S. 115C-83.6. Parents or
10 guardians of the student not demonstrating reading proficiency or
11 demonstrating reading comprehension below grade level shall make the final
12 decision regarding the student's reading camp attendance. Reading camps
13 shall (i) offer at least 72 hours of reading instruction to yield positive reading
14 outcomes for participants; (ii) be taught by compensated, licensed teachers

15 selected based on demonstrated student outcomes in reading proficiency or in
16 improvement of difficulties with reading development; and (iii) allow
17 volunteermentors to read with students at timesotherthanduringthe72hours
18 of reading instruction. The 72 hours of reading instruction shall be provided
19 over no less than three weeks for students in schools using calendars other
20 than year-round calendars.

21 SECTION 7A.7.(d) Article 8 of Chapter 115C of the General Statutes is amended
22 by adding a new section to read:
23 § 115C-83.6A. Approval of reading camp plans.
24 (a) Each local school administrative unit shall submit to the Department of Public
25 Instruction a plan for the operation of its reading camps no later than October 1. Each plan shall
26 include information about the local school administrative unit's efforts to staff reading camps
27 with the most qualified teachers possible, includingthe unit's efforts to attract teachers associated

28 with high growth in reading based on EVAAS data and teachers who have earned a reading
29 bonus. The plan shall incorporate any feedback received from the Department on the previous
30 year's plan. As part of their plans, local school administrative units are encouraged to partner
31 with other local school administrative units and with community organizations to enhance
32 reading camps.
33 (b) The Department of Public Instruction shall review each local school administrative
34 unit's plan and approve only those reading camps that (i) provide instruction that is closely

35 aligned with the goals in this Part, (ii) meet minimum requirements as provided in
36 G.S. 115C-83.3(4a), and (iii) comply with the reading camp standards published by the State
37 Board of Education. No later than February 15, the Department shall notify each local school
38 administrative unit of approval or denial of its plan and shall provide feedback if the plan is
39 denied. No later than March 15, if its plan was denied, a local school administrative unit may
40 submit an amended plan to the Department of Public Instruction. The Department shall notify

41 the local school administrative unit if the amended plan is approved or denied no later than April
42 15.
43 (c) State-provided reading camp funds shall not be released to any local school
44 administrative unit for which a reading camp plan has not been approved by the Department of
45 Public Instruction by April 15. Any local school administrative unit denied approval shall use
46 local funds to fulfill the requirement to provide a reading camp as provided in this Part.
47 SECTION 7A.7.(e) Subsection (d) of this section applies beginning with the

48 2020-2021 school year to reading camps corresponding to that school year.
49
50 PHASE OUT CERTAIN ALTERNATIVE ASSESSMENTS

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1 SECTION 7A.8. Based on data collected pursuant to G.S. 115C-83.10 and anyother
2 data useful for this purpose, the State Board of Education shall analyze the passage rates for
3 alternative assessments in order to determine the comparative utility of each alternative
4 assessment. No later than January 15, 2020, the State Board shall submit a report to the Joint
5 Legislative Education Oversight Committee on the results of its analysis, along with any
6 recommendations to eliminate certain alternative assessments.
7

8 ENHANCE DATA COLLECTION
9 SECTION 7A.9.(a) The Department of Public Instruction shall create a uniform
10 template for all data collected pursuant to Part 1A of Article 8 of Chapter 115C of the General
11 Statutes (Read to Achieve), beginning with data collected during the 2013-2014 school year and
12 for each school year thereafter. The template shall include clear designations for each data
13 component reported. A numerical value shall be provided for all data values pertaining to
14 school-wide measures, including those data values reporting fewer than 10 students. Where a

15 measure is disaggregated in a manner that may allow the identity of a student to be disclosed,
16 data values reporting 10 or fewer students may be suppressed to protect student privacy. Data
17 values that are suppressed for this purpose shall be denoted in a different manner than data values
18 left incomplete or unreported. Data values shall be compiled for each data component for each
19 school year, beginning with the 2013-2014 school year, and shall be provided to the Joint
20 Legislative Education Oversight Committee in the uniform template created pursuant to this

21 subsection no later than April 15, 2020.
22 SECTION 7A.9.(b) G.S. 115C-83.6(a2) reads as rewritten:
23 (a2) The Department of Public Instruction shall provide for EVAAS analysis all formative
24 and diagnostic assessment data collected pursuant to this section for kindergarten through third
25 grade. The Department shall use a uniform template for all data collected, and the template shall
26 be used each time data is provided. The template shall include clear designations for each data
27 component reported.

28 SECTION 7A.9.(c) This section applies beginning with the 2019-2020 school year
29 and shall include the reporting of required data from the 2018-2019 school year.
30
31 ALLOW CEUS AND RETIREES FOR READING CAMP INSTRUCTION
32 SECTION 7A.10.(a) A teacher who has earned a reading bonus and who provides
33 instruction throughout a full reading camp shall be deemed to have completed two continuing
34 education credits related to literacy, as required by G.S. 115C-270.30(b)(2).

35 SECTION 7A.10.(b) Notwithstanding G.S. 115C-83.3(4a), for reading camps
36 corresponding to the 2019-2020 school year, students attending reading camp may be taught by
37 retired classroom teachers of kindergarten through third grade, based on demonstrated outcomes
38 in reading proficiency or in improvement of difficulties with reading development. A retired
39 teacher may begin providing reading camp instruction at the conclusion of the six-month period
40 immediately following the effective date of retirement and shall be compensated at a rate of two

41 thousand dollars ($2,000) upon completion of the camp.
42
43 EXPAND WOLFPACK WORKS PROGRAM
44 SECTION 7A.11. From the funds appropriated to the Department of Public
45 Instruction for the 2019-2021 fiscal biennium for the Excellent Public Schools Act, Read to
46 Achieve Program, the Superintendent of Public Instruction shall contract with North Carolina
47 State University to continue the Wolfpack WORKS pilot program (Wolfpack WORKS) during

48 the 2019-2020 and 2020-2021 school years and may include in the contract expansion of
49 Wolfpack WORKS, in accordance with the best interests of the students of the State, as
50 determined by the Superintendent. The Superintendent of Public Instruction may also use funds
51 appropriated for the Excellent Public Schools Act, Read to Achieve Program, to expand

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1 Wolfpack WORKS by collaborating with any other constituent institutions of The University of
2 North Carolina, in accordance with the best interests of the students of the State, as determined
3 by the Superintendent.
4 Constituent institutions of The Universityof North Carolina participating in activities
5 under this section shall not charge indirect facilities and administrative costs against the funding
6 provided pursuant to this section.
7 By March 15 of each year that funds are used for the purposes described in this

8 section, the Department of Public Instruction shall submit a report to the Joint Legislative
9 Education Oversight Committee that includes the following:
10 (1) A list of the local school administrative units and the schools within each unit
11 that participated, along with the total number of local school administrative
12 units and schools participating.
13 (2) The total number of elementary school teachers that participated.
14 (3) A summary of activities completed.

15 (4) The results of any evaluations performed on the Wolfpack WORKS pilot
16 program.
17
18 EFFECTIVE DATES
19 SECTION 7A.12. Section 7A.11 of this Part becomes effective July 1, 2019. Except
20 as otherwise provided in this Part, the remainder of this Part is effective when this act becomes

21 law.
22
23 PART VII-B. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES
24
25 TEACHER SALARY SCHEDULE
26 SECTION 7B.1.(a) The following monthly teacher salary schedule shall apply for
27 the 2019-2020 fiscal year to licensed personnel of the public schools who are classified as

28 teachers. The salary schedule is based on years of teaching experience.
29 2019-2020 Teacher Monthly Salary Schedule
30 Years of Experience A Teachers
31 0 $3,500
32 1 $3,600
33 2 $3,700
34 3 $3,800

35 4 $3,900
36 5 $4,000
37 6 $4,100
38 7 $4,200
39 8 $4,300
40 9 $4,400

41 10 $4,500
42 11 $4,600
43 12 $4,700
44 13 $4,800
45 14 $4,900
46 15 $5,000
47 16-20 $5,050

48 21-24 $5,150
49 25+ $5,260.
50 SECTION 7B.1.(b) SalarySupplements for Teachers Paid on This Salary Schedule.
51 –

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1 (1) Licensed teachers who have NBPTS certification shall receive a salary
2 supplement each month of twelve percent (12%) of their monthly salary on
3 the A salary schedule.
4 (2) Licensed teachers who are classified as M teachers shall receive a salary
5 supplement each month of ten percent (10%) of their monthly salary on the
6 A salary schedule.
7 (3) Licensed teachers with licensure based on academic preparation at the

8 six-year degree level shall receive a salary supplement of one hundred
9 twenty-six dollars($126.00)permonthin addition to thesupplementprovided
10 to them as M teachers.
11 (4) Licensed teachers with licensure based on academic preparation at the
12 doctoral degree level shall receive a salary supplement of two hundred
13 fifty-three dollars ($253.00) per month in addition to the supplement provided
14 to them as M teachers.

15 (5) Certified school nurses shall receive a salary supplement each month of ten
16 percent (10%) of their monthly salary on the A salary schedule.
17 (6) Certified school counselors shall receive a salarysupplement of eightydollars
18 ($80.00) per month.
19 SECTION 7B.1.(c) The first step of the salary schedule for (i) school psychologists,
20 (ii) school speech pathologists who are licensed as speech pathologists at the master's degree

21 level or higher, and (iii) school audiologists who are licensed as audiologists at the master's
22 degree level or higher shall be equivalent to the sixth step of the A salary schedule. These
23 employees shall receive a salary supplement each month of ten percent (10%) of their monthly
24 salary and are eligible to receive salary supplements equivalent to those of teachers for academic
25 preparation at the six-year degree level or the doctoral degree level.
26 SECTION 7B.1.(d) The twenty-sixth step of the salary schedule for (i) school
27 psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the

28 master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at
29 the master's degree level or higher shall be seven and one-half percent (7.5%) higher than the
30 salary received by these same employees on the twenty-fifth step of the salary schedule.
31 SECTION 7B.1.(e) Beginning with the 2014-2015 fiscal year, in lieu of providing
32 annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those
33 longevity payments are included in the monthly amounts under the teacher salary schedule.
34 SECTION 7B.1.(f) A teacher compensated in accordance with this salary schedule

35 for the 2019-2020 school year shall receive an amount equal to the greater of the following:
36 (1) The applicable amount on the salary schedule for the applicable school year.
37 (2) For teachers who were eligible for longevity for the 2013-2014 school year,
38 the sum of the following:
39 a. The salary the teacher received in the 2013-2014 school year pursuant
40 to Section 35.11 of S.L. 2013-360.

41 b. Thelongevitythattheteacherwouldhavereceivedunderthelongevity
42 system in effect for the 2013-2014 school year provided in Section
43 35.11 of S.L. 2013-360 based on the teacher's current years of service.
44 c. The annual bonus provided in Section 9.1(e) of S.L. 2014-100.
45 (3) For teachers who were not eligible for longevity for the 2013-2014 school
46 year, the sum of the salary and annual bonus the teacher received in the
47 2014-2015 school year pursuant to Section 9.1 of S.L. 2014-100.

48 SECTION 7B.1.(g) As used in this section, the term teacher shall also include
49 instructional support personnel.
50 SECTION 7B.1.(h) It is the intent of the General Assembly to implement the
51 following base monthly teacher salary schedule for the 2020-2021 fiscal year to licensed

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1 personnel of the public schools who are classified as teachers. The salary schedule is based on
2 years of teaching experience.
3 2020-2021 Teacher Monthly Salary Schedule
4 Years of Experience A Teachers
5 0 $3,500
6 1 $3,600
7 2 $3,700

8 3 $3,800
9 4 $3,900
10 5 $4,000
11 6 $4,100
12 7 $4,200
13 8 $4,300
14 9 $4,400

15 10 $4,500
16 11 $4,600
17 12 $4,700
18 13 $4,800
19 14 $4,900
20 15 $5,000

21 16-20 $5,100
22 21-24 $5,200
23 25+ $5,310.
24
25 SUPPORT HIGHLY QUALIFIED NC TEACHING GRADUATES
26 SECTION 7B.3.(a) For purposes of this section, a highly qualified graduate or
27 graduate is an individual entering the teaching profession and hired on or after the effective

28 date of this section who has graduated from an approved educator preparation program located
29 in North Carolina with both of the following criteria:
30 (1) A grade point average of 3.75 or higher on a 4.0 scale, or its equivalent.
31 (2) A score of the following or higher on an edTPA assessment or an equivalent
32 score on a nationally normed and valid pedagogy assessment used to
33 determine clinical practice performance:
34 a. A score of 42 for the World Languages and Classical Languages

35 edTPA assessment.
36 b. A score of 57 for the Elementary Education edTPA assessment.
37 c. A score of 48 for all other edTPA assessments.
38 SECTION 7B.3.(b) Notwithstanding the teacher salary schedule, for the 2019-2021
39 fiscal biennium, a highly qualified graduate who is employed by a local board of education shall
40 receive a salary supplement each month at the highest level for which the graduate qualifies, as

41 follows:
42 (1) A graduate who accepts initial employment at a school identified as
43 low-performing by the State Board of Education pursuant to
44 G.S. 115C-105.37 shall receive a salarysupplement during the graduate's first
45 three years of employment as a teacher, without a break in service, equivalent
46 to the difference between the State-funded salary of the graduate and the
47 State-funded salary of a similarly situated teacher with three years of

48 experience on the A Teachers Salary Schedule, as long as the graduate (i)
49 remains teaching at the same school or (ii) accepts subsequent employment at
50 another low-performing school or local school administrative unit identified
51 as low-performing.

H966-PCCS30485-LRxr-3 House Bill 966 Page 77 General Assembly Of North Carolina Session 2019

1 (2) A graduate licensed and employed to teach in the areas of special education,
2 science, technology, engineering, or mathematics shall receive a salary
3 supplement during the graduate's first two years of employment as a teacher,
4 without a break in service, equivalent to the difference between the
5 State-funded salary of the graduate and the State-funded salary of a similarly
6 situated teacher with two years of experience on the A Teachers Salary
7 Schedule, as long as the graduate continues teaching in one of those areas.

8 (3) All other graduates shall receive a salary supplement during the graduate's
9 first year of employment as a teacher, without a break in service, equivalent
10 to the difference between the State-funded salary of the graduate and the
11 State-funded salary of a similarlysituated teacher with one year of experience
12 on the A Teachers Salary Schedule.
13 SECTION 7B.3.(c) This section applies to highly qualified graduates hired on or
14 after the effective date of this act and entering the teaching profession in the 2019-2021 fiscal

15 biennium.
16
17 VETERAN TEACHER BONUSES
18 SECTION 7B.3A.(a) No later than October 31, 2019, the Department of Public
19 Instruction shall administer a one-time, lump sum bonus of five hundred dollars ($500.00) for
20 anylicensed teacher ofthepublicschools who,as ofOctober1, 2019, (i) is employed as ateacher

21 and (ii) has 25 or more years of teaching experience.
22 SECTION 7B.3A.(b) The bonuses awarded pursuant to this section shall be in
23 addition to any regular wage or other bonus the teacher receives or is scheduled to receive.
24 SECTION 7B.3A.(c) Notwithstanding G.S. 135-1(7a), the bonuses awarded
25 pursuant to this section are not compensation under Article 1 of Chapter 135 of the General
26 Statutes, the Teachers' and State Employees' Retirement System.
27 SECTION 7B.3A.(d) As used in this section, the term teacher shall also include

28 instructional support personnel.
29 SECTION 7B.3A.(e) It is the intent of the General Assembly that, no later than
30 October 31, 2020, the Department of Public Instruction shall administer a one-time, lump sum
31 bonus of five hundred dollars ($500.00) for any licensed teacher of the public schools who, as of
32 October1, 2020, (i)is employed as ateacherand (ii)has 25 ormore yearsof teaching experience.
33
34 PRINCIPAL SALARY SCHEDULE

35 SECTION 7B.4.(a) The following annual salary schedule for principals shall apply
36 for the 2019-2020 fiscal year, beginning July 1, 2019.
37 2019-2020 Principal Annual Salary Schedule
38 Avg. Daily Membership Base Met Growth Exceeded Growth
39 0-200 $68,125 $74,938 $81,750
40 201-400 $71,531 $78,684 $85,837

41 401-700 $74,938 $82,432 $89,926
42 701-1,000 $78,344 $86,178 $94,013
43 1,001-1,600 $81,750 $89,925 $98,100
44 1,601+ $85,156 $93,672 $102,187.
45 A principal's placement on the salary schedule shall be determined according to the
46 average daily membership of the school supervised by the principal, as described in subsection
47 (b) of this section, and the school growth scores, calculated pursuant to G.S. 115C-83.15(c), for

48 each school the principal supervised in at least two of the prior three school years, as described
49 in subsection (c) of this section, regardless of a break in service, and provided the principal
50 supervised each school as a principal for at least a majority of the school year, as follows:

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1 (1) A principal shall be paid according to the Exceeded Growth column of the
2 schedule if the school growth scores show the school or schools exceeded
3 expected growth in at least two of the prior three school years.
4 (2) A principal shall be paid according to the Met Growth column of the schedule
5 if any of the following apply:
6 a. The school growth scores show the school or schools met expected
7 growth in at least two of the prior three school years.

8 b. The school growth scores show the school or schools met expected
9 growth in at least one of the prior three school years and exceeded
10 expected growth in one of the prior three school years.
11 c. The principal supervised a school in at least two of the prior three
12 school years that was not eligible to receive a school growth score.
13 (3) A principal shall be paid according to the Base column if either of the
14 following apply:

15 a. The school growth scores show the school or schools did not meet
16 expected growth in at least two of the prior three years.
17 b. The principal has not supervised any school as a principal for a
18 majority of the school year in at least two of the prior three school
19 years.
20 SECTION 7B.4.(b) For purposes of determining the average daily membership of a

21 principal's school, the following amounts shall be used during the following time periods:
22 (1) Between July1, 2019, and December 31, 2019, the average daily membership
23 for the school from the 2018-2019 school year. If the school did not have an
24 averagedailymembershipinthe2018-2019school year,theprojectedaverage
25 daily membership for the school for the 2019-2020 school year.
26 (2) Between January 1, 2020, and June 30, 2020, the average daily membership
27 for the school for the 2019-2020 school year.

28 SECTION 7B.4.(c) For purposes of determining the school growth scores for each
29 school theprincipal supervisedin at least twoofthe priorthree school years,thefollowingschool
30 growth scores shall be used during the following time periods:
31 (1) Between July1, 2019, and December 31, 2019, the school growth scores from
32 the 2015-2016, 2016-2017, and 2017-2018 school years. If a principal does
33 not have a school growth score from any of the school years identified in this
34 subdivision, the most recent available growth scores, up to the 2017-2018

35 school year, shall be used.
36 (2) Between January 1, 2020, and June 30, 2020, the school growth scores from
37 the 2016-2017, 2017-2018, and 2018-2019 school years. If a principal does
38 not have a school growth score from any of the school years identified in this
39 subdivision, the most recent available growth scores, up to the 2018-2019
40 school year, shall be used.

41 SECTION 7B.4.(d) Beginning with the 2017-2018 fiscal year, in lieu of providing
42 annual longevity payments to principals paid on the principal salary schedule, the amounts of
43 those longevitypayments are included in the annual amounts under the principal salaryschedule.
44 SECTION 7B.4.(e) A principal compensated in accordance with this section for the
45 2019-2020 fiscal year shall receive an amount equal to the greater of the following:
46 (1) The applicable amount determined pursuant to subsections (a) through (d) of
47 this section.

48 (2) For principals who were eligible for longevity in the 2016-2017 fiscal year,
49 the sum of the following:
50 a. The salarythe principal received in the 2016-2017 fiscal year pursuant
51 to Section 9.1 or Section 9.2 of S.L. 2016-94.

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1 b. The longevity that the principal would have received as provided for
2 State employees under the North Carolina Human Resources Act for
3 the 2016-2017 fiscal year based on the principal's current years of
4 service.
5 (3) For principals who were not eligible for longevity in the 2016-2017 fiscal
6 year, the salary the principal received in the 2016-2017 fiscal year pursuant to
7 Section 9.1 or Section 9.2 of S.L. 2016-94.

8 SECTION 7B.4.(f) G.S. 115C-105.25(b)(5c) reads as rewritten:
9 (5c) Funds allocated for school building administration may be converted for any
10 purpose authorized by the policies of the State Board of Education. For funds
11 related to principal positions, the salary transferred shall be based on the first
12 step of the Principal III Salary Schedule. the Base column of the Principal
13 Salary Schedule. For funds related to assistant principal months of
14 employment, the salary transferred shall be based on the first step of the

15 Assistant Principal Salary Schedule. A Teachers Salary Schedule at the
16 salary level for assistant principals. Certified position allotments shall not be
17 transferred to dollars to hire the same type of position.
18
19 PRINCIPAL BONUSES
20 SECTION 7B.5.(a) The Department of Public Instruction shall administer a bonus

21 in the 2019-2020 fiscal year to anyprincipal who supervised a school as a principal for a majority
22 of the previous school year if that school was in the top fifty percent (50%) of school growth in
23 the State during the previous school year, calculated by the State Board pursuant to
24 G.S. 115C-83.15(c), as follows:
25 2019-2020 Principal Bonus Schedule
26 Statewide Growth Percentage Bonus
27 Top 5% $15,000

28 Top 10% $10,000
29 Top 15% $ 5,000
30 Top 20% $ 2,500
31 Top 50% $ 1,000.
32 A principal shall receive no more than one bonus pursuant to this subsection. The
33 bonus shall be paid at the highest amount for which the principal qualifies.
34 SECTION 7B.5.(b) The bonus awarded pursuant to this section shall be in addition

35 to any regular wage or other bonus the principal receives or is scheduled to receive.
36 SECTION 7B.5.(c) Notwithstanding G.S. 135-1(7a), the bonus awarded pursuant to
37 this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the
38 Teachers' and State Employees' Retirement System.
39 SECTION 7B.5.(d) The bonus awarded pursuant to this section does not apply to
40 principals no longer employed as a principal due to resignation, dismissal, reduction in force,

41 death, or retirement or whose last workday is prior to October 1, 2019.
42 SECTION 7B.5.(e) It is the intent of the General Assembly that funds provided
43 pursuant to this section will supplement principal compensation and not supplant local funds.
44 SECTION 7B.5.(f) Thebonus provided pursuant to this section shall be paid no later
45 than October 31, 2019, to qualifying principals employed as of October 1, 2019.
46
47 PRINCIPAL RECRUITMENT SUPPLEMENT

48 SECTION 7B.5A. Article 19 of Chapter 115C of the General Statutes is amended
49 by adding a new section to read:
50 § 115C-285.1. Principal recruitment supplement.
51 (a) Definitions. – The following definitions shall apply in this section:

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1 (1) Eligibleemployer. – The governingboardofalocal school administrativeunit
2 with an eligible school.
3 (2) Eligible school. – A low-performing school, as defined in G.S. 115C-105.37,
4 that received an overall school performance score that placed it in the bottom
5 five percent (5%) of all schools in the State in the prior school year.
6 (3) Qualifying principal. – A principal who is paid on the Exceeded Growth
7 column of the Principal Salary Schedule.

8 (4) Qualifying school. – An eligible school selected by the Department to
9 participate in the Program.
10 (b) Program; Purpose. – The Department of Public Instruction shall establish the
11 Principal Recruitment Supplement Program (Program). To the extent funds are made available,
12 the purpose of the Program shall be to provide significant, time-limited salary supplements to
13 qualifying principals who accept employment as principals of qualifying schools.
14 (c) Salary Supplement. – A qualifying principal who accepts a position as a principal in

15 a qualifying school shall receive an annual salary supplement of thirty thousand dollars
16 ($30,000), paid on a monthly basis, as long as the principal is employed as the principal of that
17 school, up to a maximum period of 36 months, subject to the following:
18 (1) A qualifying principal who contracts with an eligible employer to receive the
19 salary supplement shall not be excluded in future years from contracting with
20 the same eligible employer or a different eligible employer for another salary

21 supplement, subject to the requirements of this section.
22 (2) A qualifying principal who accepts employment as a principal at a qualifying
23 school shall continue to receive the salary supplement during performance of
24 the contract, up to 36 months, even if one or more of the following occur:
25 a. The principal is no longer a qualifying principal.
26 b. The school is no longer an eligible school.
27 (3) NotwithstandingG.S. 135-1(7a),salarysupplements providedpursuant to this

28 section are not compensation under Article 1 of Chapter 135 of the General
29 Statutes, the Teachers' and State Employees' Retirement System.
30 (d) Time Line. – To the extent funds are made available for the Program, the following
31 time line shall apply:
32 (1) No later than October 1, 2019, and annually thereafter, the Department shall
33 notify an eligible employer with one or more eligible schools that the eligible
34 employer may be selected to participate in the Program.

35 (2) No later than November 1, 2019, and annually thereafter, each eligible
36 employer that seeks to participate in the Program shall notify the Department
37 of its intent.
38 (3) No later than November 15, 2019, and annually thereafter, the Department
39 shall notify any eligible employer with a qualifying school that the school
40 qualifies for the program, up to a statewide total of 40 schools. In making its

41 selections, the Department shall prioritize eligible schools with the lowest
42 overall school performance scores.
43 (4) No later than May 1, 2020, and annually thereafter, each eligible employer
44 with a qualifying school shall do all of the following:
45 a. Execute all applicable contracts with qualifying principals.
46 b. Notify the Department of the (i) identity of principals and schools in
47 the unit that will participate in the program, (ii) length of the contract

48 period between the eligible employer and each qualifying principal,
49 and (iii) length of time the qualifying principal will receive the salary
50 supplement.

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1 (5) No later than August 1, 2020, and annuallythereafter, all qualifying principals
2 identified pursuant to sub-subdivision (4)b. of this subsection shall begin
3 employment as a principal at the applicable qualifying school.
4 (e) Additional Funds. – In the event an eligible employer is unable to award funds for the
5 salary supplement because of resignation, dismissal, reduction in force, death, retirement, or
6 failure to execute a contract with a qualifying principal, the Department shall award the funds,
7 as soon as is practicable, to another eligible employer identified in subdivision (a)(2) of this

8 section.
9 (f) Supplement Not Supplant. – Salary supplements provided to qualifying principals
10 pursuant to this section shall be used to supplement and not supplant State and non-State funds
11 already provided for principal compensation.
12 (g) Report. – No later than March 15, 2021, and every year thereafter in which funds are
13 expended under the Program, the Department shall report to the Joint Legislative Education
14 Oversight Committeeand theFiscal ResearchDivision on theProgram, including, at aminimum,

15 the following information:
16 (1) The impact of the Program on school performance, including the performance
17 of (i) schools receiving a principal under the Program and (ii) schools that lost
18 a principal due to the Program.
19 (2) The number of principals participating in the Program.
20 (3) The identity of schools participating in the Program.

21 (4) The length and rate of retention of principals (i) within the Program and (ii) at
22 specific schools within the Program.
23
24 ASSISTANT PRINCIPAL SALARIES
25 SECTION 7B.6.(a) For the 2019-2020 fiscal year, beginning July 1, 2019, assistant
26 principals shall receive a monthly salary based on the salary schedule for teachers who are
27 classified as A teachers plus nineteen percent (19%). An assistant principal shall be placed on

28 the step on the salary schedule that reflects the total number of years of experience as a certified
29 employee of the public schools. For purposes of this section, an administrator with a one-year
30 provisional assistant principal's certificateshall beconsidered equivalent to an assistant principal.
31 SECTION 7B.6.(b) Assistant principals with certification based on academic
32 preparation at the six-year degree level shall be paid a salary supplement of one hundred
33 twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary
34 supplement of two hundred fifty-three dollars ($253.00) per month.

35 SECTION 7B.6.(c) Participants in an approved full-time master's in-school
36 administration program shall receive up to a 10-month stipend at the beginning salary of an
37 assistant principal during the internship period of the master's program. The stipend shall not
38 exceed the difference between the beginning salary of an assistant principal plus the cost of
39 tuition, fees, and books and any fellowship funds received by the intern as a full-time student,
40 including awards of the Principal Fellows Program. The Principal Fellows Program or the school

41 of education where the intern participates in a full-time master's in-school administration
42 program shall supply the Department of Public Instruction with certification of eligible full-time
43 interns.
44 SECTION 7B.6.(d) Beginning with the 2017-2018 fiscal year, in lieu of providing
45 annual longevity payments to assistant principals on the assistant principal salary schedule, the
46 amounts of those longevity payments are included in the monthly amounts provided to assistant
47 principals pursuant to subsection (a) of this section.

48 SECTION 7B.6.(e) An assistant principal compensated in accordance with this
49 sectionforthe2019-2020fiscal yearshallreceiveanamountequaltothegreaterofthefollowing:
50 (1) The applicable amount determined pursuant to subsections (a) through (d) of
51 this section.

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1 (2) Forassistantprincipalswhowereeligibleforlongevityinthe2016-2017fiscal
2 year, the sum of the following:
3 a. The salarythe assistant principal received in the 2016-2017 fiscal year
4 pursuant to Section 9.1 or Section 9.2 of S.L. 2016-94.
5 b. The longevity that the assistant principal would have received as
6 provided for State employees under the North Carolina Human
7 Resources Act for the 2016-2017 fiscal year based on the assistant

8 principal's current years of service.
9 (3) For assistant principals who were not eligible for longevity in the 2016-2017
10 fiscal year, the salary the assistant principal received in the 2016-2017 fiscal
11 year pursuant to Section 9.1 or Section 9.2 of S.L. 2016-94.
12
13 CENTRAL OFFICE SALARIES
14 SECTION 7B.7.(a) For the 2019-2020 fiscal year, beginning July 1, 2019, the

15 annual salary for superintendents, assistant superintendents, associate superintendents,
16 directors/coordinators, supervisors, and finance officers, whose salaries are supported from State
17 funds, shall be increased by one percent (1%).
18 SECTION 7B.7.(b) It is the intent of the General Assembly to increase the annual
19 salary for superintendents, assistant superintendents, associate superintendents,
20 directors/coordinators, supervisors, and finance officers, whose salaries are supported from State

21 funds, in the 2020-2021 fiscal year, beginning July 1, 2020, by one percent (1%).
22 SECTION 7B.7.(c) The monthly salary maximums that follow apply to assistant
23 superintendents, associate superintendents, directors/coordinators, supervisors, and finance
24 officers for the 2019-2020 fiscal year, beginning July 1, 2019:
25 2019-2020 Fiscal Year
26 Maximum
27 School Administrator I $6,697

28 School Administrator II $7,096
29 School Administrator III $7,520
30 School Administrator IV $7,814
31 School Administrator V $8,125
32 School Administrator VI $8,608
33 School Administrator VII $8,951.
34 The local board of education shall determine the appropriate category and placement

35 for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or
36 finance officer within the maximums and within funds appropriated by the General Assembly
37 for central office administrators and superintendents. The category in which an employee is
38 placed shall be included in the contract of any employee.
39 SECTION 7B.7.(d) The monthly salary maximums that follow apply to public
40 school superintendents for the 2019-2020 fiscal year, beginning July 1, 2019:

41 2019-2020 Fiscal Year
42 Maximum
43 Superintendent I $9,488
44 Superintendent II $10,054
45 Superintendent III $10,657
46 Superintendent IV $11,297
47 Superintendent V $11,978.

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

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1 SECTION 7B.7.(e) Longevity pay for superintendents, assistant superintendents,
2 associate superintendents, directors/coordinators, supervisors, and finance officers shall be as
3 provided for State employees under the North Carolina Human Resources Act.
4 SECTION 7B.7.(f) Superintendents, assistant superintendents, associate
5 superintendents, directors/coordinators, supervisors, and finance officers with certification based
6 on academic preparation at the six-year degree level shall receive a salary supplement of one
7 hundred twenty-six dollars ($126.00) per month in addition to the compensation provided

8 pursuant to this section. Superintendents, assistant superintendents, associate superintendents,
9 directors/coordinators, supervisors, and finance officers with certification based on academic
10 preparation at the doctoral degree level shall receive a salary supplement of two hundred
11 fifty-three dollars ($253.00) per month in addition to the compensation provided for under this
12 section.
13 SECTION 7B.7.(g) The State Board of Education shall not permit local school
14 administrative units to transfer State funds from other funding categories for salaries for public

15 school central office administrators.
16 SECTION 7B.7.(h) It is the intent of the General Assembly that the monthly salary
17 maximums that follow shall apply to assistant superintendents, associate superintendents,
18 directors/coordinators, supervisors, and finance officers for the 2020-2021 fiscal year, beginning
19 July 1, 2020:
20 2020-2021 Fiscal Year

21 Maximum
22 School Administrator I $6,764
23 School Administrator II $7,167
24 School Administrator III $7,596
25 School Administrator IV $7,893
26 School Administrator V $8,207
27 School Administrator VI $8,694

28 School Administrator VII $9,040.
29 SECTION 7B.7.(i) It is the intent of the General Assembly that the monthly salary
30 maximums that follow shall applyto public school superintendents for the 2020-2021 fiscal year,
31 beginning July 1, 2020:
32 2020-2021 Fiscal Year
33 Maximum
34 Superintendent I $9,583

35 Superintendent II $10,154
36 Superintendent III $10,763
37 Superintendent IV $11,410
38 Superintendent V $12,097.
39
40 NONCERTIFIED PERSONNEL SALARIES

41 SECTION 7B.8.(a) For the 2019-2020 fiscal year, beginning July 1, 2019, the
42 annual salary for noncertified public school employees whose salaries are supported from State
43 funds shall be increased as follows:
44 (1) For permanent, full-time employees on a 12-month contract, by one percent
45 (1%).
46 (2) For the followingemployees, bya prorated and equitable amount based on the
47 amount specified in subdivision (1) of this subsection:

48 a. Permanent, full-time employees on a contract for fewer than 12
49 months.
50 b. Permanent, part-time employees.
51 c. Temporary and permanent hourly employees.

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1 SECTION 7B.8.(b) It is the intent of the General Assembly to increase the annual
2 salary for noncertified public school employees whose salaries are supported from State funds in
3 the 2020-2021 fiscal year, beginning July 1, 2020, as follows:
4 (1) For permanent, full-time employees on a 12-month contract, by one percent
5 (1%).
6 (2) For the followingemployees, bya prorated and equitable amount based on the
7 amount specified in subdivision (1) of this subsection:

8 a. Permanent, full-time employees on a contract for fewer than 12
9 months.
10 b. Permanent, part-time employees.
11 c. Temporary and permanent hourly employees.
12
13 SMALL COUNTY SIGNING BONUS FOR TEACHERS
14 SECTION 7B.9.(a) Definitions. – For purposes of this section, the following

15 definitions shall apply:
16 (1) Eligible employee. – A person who meets all of the following criteria:
17 a. Accepts employment as a teacher with an eligible employer for the
18 2019-2020 school year.
19 b. Was not employed by the eligible employer identified in
20 sub-subdivision (1)a. of this subsection in the 2018-2019 fiscal year.

21 c. Is employed by the eligible employer identified in sub-subdivision
22 (1)a. of this subsection as of October 1, 2019.
23 (2) Eligibleemployer. – The governingboardofalocal school administrativeunit
24 that received small county school system supplemental funding in the
25 2018-2019 fiscal year.
26 (3) Local funds. – Matching funds provided by an eligible employer to enable an
27 eligible employee to qualifyfor the signing bonus program established bythis

28 section.
29 (4) Teacher. – Teachers and instructional support personnel.
30 SECTION7B.9.(b) SigningBonus Program. – TheDepartment ofPublic Instruction
31 shall administer a signing bonus program in the 2019-2020 fiscal year. Bonuses shall be provided
32 to eligible employees who are employed byan eligible employer and matched on the basis of one
33 dollar($1.00)inStatefundsforeveryonedollar($1.00)inlocalfunds,upto twothousanddollars
34 ($2,000) in State funds.

35 SECTION 7B.9.(c) Limited Exclusion from Future Signing Bonuses. – A teacher
36 who receives a signing bonus pursuant to this section is ineligible to receive another signing
37 bonus pursuant to this section or a similar enactment of the General Assembly until July 1, 2022,
38 at the earliest. This section shall not applyto legislative bonuses received by teachers that are not
39 signing bonuses.
40 SECTION 7B.9.(d) Bonuses as Additions. – The bonuses awarded pursuant to this

41 section shall be in addition to any regular wage or other bonus a teacher receives or is scheduled
42 to receive.
43 SECTION 7B.9.(e) Not for Retirement. – Notwithstanding G.S. 135-1(7a), the
44 bonuses awarded pursuant to this section are not compensation under Article 1 of Chapter 135
45 of the General Statutes, the Teachers' and State Employees' Retirement System.
46
47 CONSOLIDATE AND BROADEN QUALIFICATIONS FOR CERTAIN TEACHER

48 BONUSES
49 SECTION 7B.10.(a) Repeal Current Teacher Bonus Programs. – The following
50 session laws are repealed:
51 (1) Sections 8.8 and 8.9 of S.L. 2016-94.

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1 (2) Sections 8.8B, 8.8C, 8.8D, and 8.8E of S.L. 2017-57.
2 (3) Section 2.10 of S.L. 2017-197.
3 (4) Sections 8.10, 8.11, and 8.12 of S.L. 2018-5.
4 SECTION 7B.10.(b) Establish Consolidated Teacher Bonus Program. – The State
5 Board of Education shall establish a teacher bonus program for the 2019-2021 fiscal biennium
6 to reward teacher performance and encourage student learning and improvement. To attain this
7 goal, the Department of Public Instruction shall administer bonus pay to qualifying teachers in

8 qualifying public school units in accordance with this section.
9 SECTION 7B.10.(c) Definitions. – For purposes of this section, the following
10 definitions shall apply:
11 (1) Eligible advanced course teacher. – A teacher of Advanced Placement
12 courses, International Baccalaureate Diploma Programme courses, or the
13 Cambridge Advanced International Certificate of Education (AICE) program
14 who meets the following criteria:

15 a. Is employed by, or retired having last held a position at, one or more
16 of the following:
17 1. A qualifying public school unit.
18 2. The North Carolina Virtual Public School program.
19 b. Taught one or more students who received a score listed in subsection
20 (d) of this section.

21 (2) Eligible career and technical education teacher. – A teacher who meets the
22 following criteria:
23 a. Is employed by, or retired having last held a position at, a qualifying
24 public school unit.
25 b. Taught one or more students who attained approved industry
26 certifications or credentials consistent with G.S. 115C-156.2.
27 (3) Eligible EVAAS teacher. – A teacher who meets at least one of the following

28 criteria:
29 a. Is employed by, or retired having last held a position at, a qualifying
30 public school unit and meets one of the following criteria:
31 1. Is in the top twenty-five percent (25%) of teachers in the State
32 according to the EVAAS student growth index score for third
33 grade reading from the previous school year.
34 2. Is in the top twenty-five percent (25%) of teachers in the State

35 according to the EVAAS student growth index score for fourth
36 or fifth grade reading from the previous school year.
37 3. Is in the top twenty-five percent (25%) of teachers in the State
38 accordingtotheEVAAS studentgrowthindexscoreforfourth,
39 fifth, sixth, seventh, or eighth grade mathematics from the
40 previous school year.

41 b. Is employed by, or retired having last held a position at, a local school
42 administrative unit and meets one of the following criteria:
43 1. Is in the top twenty-five percent (25%) of teachers in the
44 teacher's respective local school administrative unit according
45 to the EVAAS student growth index score for third grade
46 reading from the previous school year.
47 2. Is in the top twenty-five percent (25%) of teachers in the

48 teacher's respective local school administrative unit according
49 to the EVAAS student growth index score for fourth or fifth
50 grade reading from the previous school year.

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1 3. Is in the top twenty-five percent (25%) of teachers in the
2 teacher's respective local school administrative unit according
3 to the EVAAS student growth index score for fourth, fifth,
4 sixth, seventh, or eighth grade mathematics from the previous
5 school year.
6 c. Was employed by a local school administrative unit that employed in
7 the previous school year three or fewer total teachers in that teacher's

8 grade level as long as the teacher has an EVAAS student growth index
9 score from the previous school year of exceeded expected growth in
10 one of the following subject areas:
11 1. Third grade reading.
12 2. Fourth or fifth grade reading.
13 3. Fourth, fifth, sixth, seventh, or eighth grade mathematics.
14 (4) Qualifying public school unit. – Any of the following:

15 a. A local school administrative unit.
16 b. A charter school.
17 c. A regional school.
18 d. A school providing elementary or secondary instruction operated by
19 the State Board of Education under Article 7A of Chapter 115C of the
20 General Statutes.

21 e. A school providing elementary or secondary instruction operated by
22 The Universityof North Carolina under Article 29A of Chapter 116 of
23 the General Statutes.
24 (5) Qualifying teacher. – An eligible advanced course teacher, eligible career and
25 technical education teacher, or eligible EVAAS teacher who meets one of the
26 following criteria:
27 a. Remains employed teaching in the same qualifying public school unit,

28 or, if an eligible advanced course teacher is only employed by the
29 North Carolina Virtual Public School program, remains employed
30 teaching in that program, at least from the school year the data is
31 collected until January 1 of the corresponding school year that the
32 bonus is paid.
33 b. Retired, between the last day of the school year in which the data is
34 collected and January 1 of the corresponding school year in which the

35 bonus is paid, after attaining one of the following:
36 1. The age of at least 65 with five years of creditable service.
37 2. The age of at least 60 with 25 years of creditable service.
38 3. Thirty years of creditable service.
39 SECTION 7B.10.(d) Advanced Course Bonuses. – A bonus in the amount of fifty
40 dollars ($50.00) shall be paid to qualifying advanced course teachers for each student taught in

41 each advanced course who receives the following score:
42 (1) For Advanced Placement courses, a score of three or higher on the College
43 Board Advanced Placement Examination.
44 (2) For International Baccalaureate Diploma Programme courses, a score of four
45 or higher on the International Baccalaureate course examination.
46 (3) For the Cambridge AICE program, a score of C or higher on the Cambridge
47 AICE program examinations.

48 SECTION 7B.10.(e) CTE Bonuses. – For qualifying career and technical education
49 teachers, bonuses shall be provided in the following amounts:
50 (1) A bonus in the amount of twenty-five dollars ($25.00) for each student taught
51 by a teacher who provided instruction in a course that led to the attainment of

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1 an industry certification or credential with a twenty-five dollar ($25.00) value
2 ranking as determined under subsection (f) of this section.
3 (2) A bonus in the amount of fifty dollars ($50.00) for each student taught by a
4 teacher who provided instruction in a course that led to the attainment of an
5 industry certification or credential with a fifty dollar ($50.00) value ranking
6 as determined under subsection (f) of this section.
7 SECTION 7B.10.(f) CTE Course Value Ranking. – The Department of Commerce,

8 in consultation with the State Board, shall assign a value ranking for each industry certification
9 andcredentialbasedonacademicrigorandemploymentvalueinaccordancewiththissubsection.
10 Fifty percent (50%) of the ranking shall be based on academic rigor and the remaining fifty
11 percent (50%) on employment value. Academic rigor and employment value shall be based on
12 the following elements:
13 (1) Academic rigor shall be based on the number of instructional hours, including
14 work experience orinternship hours,required to earntheindustrycertification

15 or credential, with extra weight given for coursework that also provides
16 community college credit.
17 (2) Employment value shall be based on the entry wage, growth rate in
18 employment for each occupational category, and average annual openings for
19 the primary occupation linked with the industry certification or credential.
20 SECTION 7B.10.(g) Statewide EVAAS Bonuses. – Of the funds appropriated for

21 this program, bonuses shall be provided to eligible EVAAS teachers under sub-subdivision
22 (c)(3)a. of this section, as follows:
23 (1) The sum of five million dollars ($5,000,000) shall be allocated for bonuses to
24 eligible EVAAS teachers under sub-sub-subdivision (c)(3)a.1. of this section.
25 These funds shall be distributed equally among qualifying teachers.
26 (2) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to
27 each qualifying teacher who is an eligible teacher under sub-sub-subdivision

28 (c)(3)a.2. of this section.
29 (3) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to
30 each qualifying teacher who is an eligible teacher under sub-sub-subdivision
31 (c)(3)a.3. of this section.
32 SECTION 7B.10.(h) Local EVAAS Bonuses. – Of the funds appropriated for this
33 program, bonuses shall be provided to eligible EVAAS teachers under sub-subdivisions (c)(3)b.
34 and (c)(3)c. of this section, as follows:

35 (1) The sum of five million dollars ($5,000,000) shall be allocated for bonuses to
36 eligible EVAAS teachers under sub-sub-subdivisions (c)(3)b.1. and (c)(3)c.1.
37 of this section. These funds shall be divided proportionally based on average
38 daily membership in third grade for each local school administrative unit and
39 then distributed equallyamong qualifying third grade readingteachers in each
40 local school administrative unit.

41 (2) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to
42 each qualifying teacher who is an eligible teacher under sub-sub-subdivisions
43 (c)(3)b.2. or (c)(3)c.2. of this section.
44 (3) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to
45 each qualifying teacher who is an eligible teacher under sub-sub-subdivisions
46 (c)(3)b.3. or (c)(3)c.3. of this section.
47 SECTION 7B.10.(i) Limitations and Other Criteria. – The following additional

48 limitations and other criteria shall apply to the program:
49 (1) Bonus funds awarded to a teacher pursuant to subsection (d), subsection (e),
50 subdivision (g)(1), or subdivision (h)(1) of this section shall not exceed three

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1 thousand five hundred dollars ($3,500) per subsection or subdivision in any
2 given school year.
3 (2) A qualifying teacher who is an eligible teacher under sub-sub-subdivisions
4 (c)(3)a.1., (c)(3)b.1., or (c)(3)c.1. of this section may receive a bonus under
5 both subdivision (g)(1) and subdivision (h)(1) of this section, but shall not
6 receive more than seven thousand dollars ($7,000) pursuant to subdivisions
7 (g)(1) and (h)(1) of this section in any given school year.

8 (3) A qualifying teacher who is an eligible teacher under sub-sub-subdivisions
9 (c)(3)a.2., (c)(3)b.2., or (c)(3)c.2. of this section may receive a bonus under
10 both subdivision (g)(2) and subdivision (h)(2) of this section, but shall not
11 receive more than two bonuses pursuant to subdivisions (g)(2) and (h)(2) of
12 this section in any given school year.
13 (4) A qualifying teacher who is an eligible teacher under sub-sub-subdivisions
14 (c)(3)a.3., (c)(3)b.3., or (c)(3)c.3. of this section may receive a bonus under

15 both subdivision (g)(3) and subdivision (h)(3) of this section, but shall not
16 receive more than two bonuses pursuant to subdivisions (g)(3) and (h)(3) of
17 this section in any given school year.
18 SECTION 7B.10.(j) Time Line. – Bonuses awarded pursuant to this section are
19 payable to qualifying teachers in January, based on data from the previous school year.
20 SECTION 7B.10.(k) Bonuses Not Compensation. – Bonuses awarded to a teacher

21 pursuanttothissectionshallbeinadditiontoanyregularwageorotherbonustheteacherreceives
22 or is scheduled to receive. Notwithstanding G.S. 135-1(7a), the bonuses awarded under this
23 sectionarenotcompensationunderArticle1ofChapter135oftheGeneralStatutes,theTeachers'
24 and State Employees' Retirement System.
25 SECTION 7B.10.(l) Study and Report. – The State Board of Education shall study
26 the effect of the program on teacher performance and retention. The State Board shall report the
27 results of its findings and the amount of bonuses awarded to the President Pro Tempore of the

28 Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight
29 Committee, and the Fiscal Research Division by March 15 of each year bonuses are awarded.
30 The report shall include, at a minimum, the following information:
31 (1) The amounts awarded pursuant to subsection (d) of this section for Advanced
32 Placement, International Baccalaureate Diploma Programme, and Cambridge
33 AICE program courses.
34 (2) The amounts awarded pursuant to subsection (e) of this section to teachers

35 who teach students earning approved industrycertifications or credentials and
36 the type of industry certifications and credentials earned by their students.
37 (3) The distribution of statewide and local bonuses awarded pursuant to
38 subsections (g) and (h) of this section, respectively, as among qualifying
39 public school units and, where applicable, schools within those units.
40 SECTION 7B.10.(m) Effective Date. – This section applies for bonuses awarded in

41 January 2020 and 2021, based on data from the 2018-2019 and 2019-2020 school years,
42 respectively.
43
44 SCHOOL PSYCHOLOGIST AND SCHOOL COUNSELOR POSITION STUDY
45 SECTION 7B.11.(a) The Department of Public Instruction shall study and report on
46 school psychologist and school counselor positions. The study and report shall include a review
47 of at least the following information:

48 (1) Thenumber ofschool psychologist and school counselorpositions in theState
49 and in each local school administrative unit.
50 (2) The allocation of school psychologists and school counselors in each local
51 school administrative unit among schools within those units.

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1 (3) The methodology each local school administrative unit uses to determine the
2 allocation of school psychologists and school counselors within the unit.
3 (4) The densityof school psychologists and school counselors in each geographic
4 region of the State.
5 (5) Thenumber, percentage, andaveragesalaryofschool psychologist andschool
6 counselor positions funded with State dollars and funded with non-State
7 dollars.

8 (6) The extent to which local school administrative units provide school
9 psychologists and school counselors with local salary supplements and the
10 amounts of those salary supplements.
11 (7) Job descriptions posted for school psychologist and school counselor
12 positions as compared to actual duties of school counselors.
13 SECTION 7B.11.(b) As part of its study, the Department shall promulgate a survey
14 to local school administrative units no later than October 1, 2019, on any topics identified in

15 subsection (a) of this section that can be answered by a local school administrative unit. Local
16 school administrative units shall respond to the survey by December 31, 2019. The Department
17 shall consolidate the information reported by the local school administrative units, provide
18 context and analysis, as necessary, and report the results of its study to the Joint Legislative
19 Education Oversight Committee and the Fiscal Research Division no later than March 1, 2020.
20

21 PART VIII. THE UNIVERSITY OF NORTH CAROLINA SYSTEM
22
23 UNC/ESCHEATS FUND FOR STUDENT FINANCIAL AID PROGRAMS
24 SECTION 8.1.(a) The funds appropriated by this act from the Escheat Fund for the
25 2019-2021 fiscal biennium for student financial aid shall be allocated in accordance with
26 G.S. 116B-7. Notwithstanding any other provision of Chapter 116B of the General Statutes, if
27 the interest income generated from the Escheat Fund is less than the amounts referenced in this

28 act, the difference may be taken from the Escheat Fund principal to reach the appropriations
29 referenced in this act; however, under no circumstances shall the Escheat Fund principal be
30 reduced below the sum required in G.S. 116B-6(f). If any funds appropriated from the Escheat
31 Fund by this act for student financial aid remain uncommitted aid as of the end of a fiscal year,
32 thefundsshallbereturnedtotheEscheat Fund,but onlytotheextentthefundsexceedtheamount
33 of the Escheat Fund income for that fiscal year.
34 SECTION 8.1.(b) The State Education Assistance Authority (Authority) shall

35 conduct periodic evaluations of expenditures of the student financial aid programs administered
36 by the Authority to determine if allocations are utilized to ensure access to institutions of higher
37 learning and to meet the goals of the respective programs. The Authority may make
38 recommendations for redistribution of funds to the President of The Universityof North Carolina
39 and the President of the Community College System regarding their respective student financial
40 aid programs, who then may authorize redistribution of unutilized funds for a particular fiscal

41 year.
42
43 CARRYFORWARD OF ENROLLMENT FUNDS FOR NC PROMISE
44 REQUIREMENTS
45 SECTION8.2.(a) ThefundsappropriatedbyS.L.2018-5forenrollmentadjustments
46 for The University of North Carolina, including funds for the NC Promise Tuition Plan, to a
47 reserve account in the Office of State Budget and Management for the 2018-2019 fiscal year

48 shall not revert at the end of the 2018-2019 fiscal year but shall remain available until the end of
49 the 2019-2020 fiscal year for the purpose of the buydown of anyfinancial obligations resulting
50 from the established tuition rate under G.S. 116-143.11 incurred by Elizabeth City State

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1 University, the University of North Carolina at Pembroke, and Western Carolina University or
2 for rapid growth at any of those constituent institutions.
3 SECTION 8.2.(b) This section becomes effective June 30, 2019.
4
5 NC PROMISE TUITION PLAN/FUTURE FUNDS
6 SECTION 8.2A. It is the intent of the General Assembly to appropriate from the
7 General Fund to the Board of Governors of The University of North Carolina the following

8 additional funds for the purpose of the buy down of any financial obligations incurred by
9 Elizabeth City State University, the University of North Carolina at Pembroke, and Western
10 Carolina University for the NC Promise Tuition Plan established pursuant to G.S. 116-143.11:
11 (1) For the 2021-2022 fiscal year, the sum of five million dollars ($5,000,000) in
12 recurring funds.
13 (2) For the 2022-2023 fiscal year, the sum of four million dollars ($4,000,000) in
14 recurring funds.

15 (3) For the 2023-2024 fiscal year, the sum of three million four hundred thousand
16 dollars ($3,400,000) in recurring funds.
17 (4) For the 2024-2025 fiscal year, the sum of three million dollars ($3,000,000)
18 in recurring funds.
19 For the 2024-2025 fiscal year and subsequent fiscal years, it is the intent of the
20 General Assembly that the net appropriation for the buy down of any financial obligations

21 incurred by Elizabeth City State University, the University of North Carolina at Pembroke, and
22 Western Carolina University for the NC Promise Tuition Plan established pursuant to
23 G.S. 116-143.11 shall not exceed the sum of eighty-one million four hundred thousand dollars
24 ($81,400,000) in recurring funds.
25
26 COLLEGE ADVISING CORPS/COLLEGE ADVISERS IN THE PUBLIC SCHOOLS
27 SECTION8.3.(a) PurposeoftheCollegeAdvisingCorpsProgram. –Fromthefunds

28 appropriated by this act for the 2019-2021 fiscal biennium to the Board of Governors of The
29 University of North Carolina for the College Advising Corps program, the Board of Governors
30 shall provide a directed grant to the National College Advising Corps, Inc. (CAC) to support an
31 expansion of the placement of college advisers in North Carolina public schools through their
32 program over a three-year period. CAC is a college access nonprofit organization with the
33 mission to increase the number of underrepresented, low-income, or first-generation
34 postsecondary degree or certificate students entering and completing their postsecondary

35 education at community colleges and universities. In furthering this mission, CAC operates an
36 innovative model of partnering with schools, communities, families, and postsecondary
37 institutions, including providing for a two-year service opportunity to recent college graduates
38 as near-peer college advisers working full-time in the public schools, with an emphasis on
39 engaging college advisers who have similar backgrounds to the students the program seeks to
40 serve. Near-peer college advisers perform various services for those students that are key

41 components to the proven success of the program, including (i) attending postsecondary campus
42 visits, fairs, and workshops with students, (ii) assisting with registering for college entrance
43 exams, (iii) assisting with Free Application for Federal Student Aid (FAFSA) registrations and
44 completions, (iv) identifying available scholarships, (v) assisting with postsecondary
45 applications, and (vi) engaging with parents.
46 SECTION 8.3.(b) Funds for the Third Year of the Program. – It is the intent of the
47 General Assembly to appropriate from the General Fund to the Board of Governors of The

48 University of North Carolina an additional sum of two hundred eighty-three thousand three
49 hundred thirty-three dollars ($283,333) in recurring funds for a net appropriation of two million
50 eight hundred thirty-three thousand three hundred thirty-three dollars ($2,833,333) in recurring
51 funds to be provided to CAC for the 2021-2022 fiscal year and subsequent fiscal years for the

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1 purpose of expanding the placement of college advisers to all 100 counties of the State in the
2 third year of the expansion of the CAC program.
3 SECTION 8.3.(c) Matching Funds. – Funds made available to CAC pursuant to this
4 section shall be matched by CAC on the basis of two dollars ($2.00) in non-State funds for every
5 one dollar ($1.00) in State funds. Availability of these matching funds shall not revert, but shall
6 continue to be available for the purposes set forth in this section.
7 SECTION 8.3.(d) Use of Funds. – CAC shall focus the first two years of the

8 expansion of its program using the funds provided to it under this section by placing college
9 advisers in counties designated as Tier 1 and Tier 2. For the third year of the expansion, CAC
10 shall use the funds provided to it to place college advisers in the remaining counties designated
11 as Tier 3 in order to achieve placement of college advisers in all 100 counties of the State. In
12 addition, CAC shall select at least three additional postsecondary institutions to partner with in
13 order to increase the number of recent graduates working as near-peer college advisers to meet
14 the needs of the program expansion. Once CAC has reached the goal of placement of college

15 advisers in 100 counties, the funds provided to it for the program shall be used to continue the
16 mission of the program to increase access for North Carolina public school students to
17 postsecondary degree or certificate attainment at community colleges and universities.
18 SECTION 8.3.(e) Reporting Requirements. – CAC shall submit a report by June 1
19 of each year in which CAC spends State funds made available to it pursuant to this section to the
20 Joint Legislative Education Oversight Committee and the Fiscal Research Division on the

21 progress of expanding the placement of college advisers, data on the effectiveness of the program
22 in increasing access for students to postsecondary education, and the use of State funds.
23
24 REPEAL BOG MANDATORY REVIEW OF CERTAIN UNC HUMAN RESOURCES
25 ACTIONS
26 SECTION 8.4. G.S. 116-17.3 is repealed.
27

28 UNC LABORATORY SCHOOL MODIFICATIONS/FUNDS
29 SECTION 8.5.(a) G.S. 116-239.5 is amended by adding a new subsection to read:
30 (e) In addition to all other immunities provided to them by applicable State law, the
31 Subcommittee, chancellor, the constituent institution, an advisoryboard, and a laboratoryschool,
32 and their members, employees, and agents shall be entitled to the specific immunities provided
33 for in Chapter 115C of the General Statutes applying to the State Board of Education,
34 Superintendent of Public Instruction, a local board of education, a local school administrative

35 unit, and their members and employees. Any such immunity to liability established by this
36 subsection shall not extend to gross negligence, wanton conduct, or intentional wrongdoing that
37 would otherwise be actionable. Immunity established by this subsection shall be deemed to be
38 waived to the extent of indemnification under Article 31A and Article 31B of Chapter 143 of the
39 General Statutes and to the extent sovereign immunity is waived under the Tort Claims Act, as
40 set forth in Article 31 of Chapter 143 of the General Statutes.

41 SECTION 8.5.(b) G.S. 116-239.7(b) reads as rewritten:
42 (b) Resolution by the Subcommittee to Approve a Laboratory School. – The
43 Subcommittee shall adopt a resolution upon the approval of each laboratory school, which shall
44 include the following:
45 (1) Name of the laboratory school.
46 (2) The local school administrative unit in which the laboratory school shall be
47 located.

48 (3) A term of operation for the laboratory school of five years from the date of
49 initial operation. At the end of the initial five years of operation, the
50 Subcommittee shall renew the term of operation for additional five-year
51 periods under the resolution if the laboratory school is still located in a local

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1 school administrative unit that has twenty-five percent (25%) or more of the
2 schools located in the unit identified as low-performing under
3 G.S. 115C-105.37, or if the Subcommittee renews a waiver of this
4 requirement under subsection (a2) of this section, the resolution may be
5 renewed by the Subcommittee at the end of the term for an additional five
6 years. section. If the laboratory school is no longer (i) located in a qualifying
7 local school administrative unit or (ii) meeting the purposes of this Article

8 under a waiver at the end of five years, the Subcommittee shall mayrenew the
9 term of operation for additional five-year periods under the resolution if the
10 Subcommittee finds the school is successfully meeting its mission to improve
11 student performance and provide valuable exposure and training for teachers
12 and principals in the constituent institution's educator preparation program.
13 The Subcommittee may terminate operation of any laboratory school during
14 the initial term of operation or during a five-year renewal period if the

15 Subcommittee finds it is failing to meet expected progress toward meeting the
16 mission of the school consistent with the requirements of this Article. The
17 Subcommittee shall notify the Board of Governors of the end of the term of
18 operation of a laboratory school and request designation of additional
19 constituent institutions with educator preparation programs to establish a
20 laboratory school in accordance with the provisions of this Article.

21 SECTION 8.5.(c) G.S. 116-239.8(b)(4) reads as rewritten:
22 (4) Food and transportation services. – The local school administrative unit in
23 which the laboratory school is located shall provide food services and
24 transportation to students attending who reside in the local school
25 administrative unit and attend the laboratory school. school, including any
26 students who are homeless and require assistance pursuant to 42 U.S.C. §
27 11301, et seq., the McKinney-Vento Homeless Assistance Act. The

28 requirement to provide transportation to students residing in the local school
29 administrative unit shall (i) apply regardless of where a laboratory school
30 student resides in the unit or how the unit's transportation policies and
31 practices areapplied to otherstudents and (ii)includeproviding transportation
32 of students and personnel for laboratory school extracurricular activities and
33 educational trips in thesamemanneras otherschools intheunit forthatschool
34 year. The local school administrative unit in which the laboratory school is

35 located shall administer administer, at its cost, the National School Lunch
36 Program for the laboratory school in accordance with G.S. 115C-264. The
37 chancellor shall arrange for the provision of these services from the local
38 school administrative unit.
39 SECTION 8.5.(d) G.S. 116-239.9 reads as rewritten:
40 § 116-239.9. Student admissions and assignment.

41 (a) A child shall be eligible to attend a laboratory school if the child resides in the local
42 school administrative unit in which a laboratory school is located and meets at least one of the
43 following criteria:
44 (1) Is assigned to a low-performing school, as defined byG.S. 115C-105.37 at the
45 time of the student's application.
46 (2) Did not meet expected growth in the prior school year based on one or more
47 indicators listed in subsection (c1) of this section.

48 (3) Is the sibling of a child who is eligible under subdivision (1) or (2) of this
49 subsection.
50 (4) Is the child of a laboratory school employee.

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1 (b) No local board of education shall require any student enrolled in the local school
2 administrative unit to attend a laboratory school.
3 (c) Duringeachperiodofenrollment,thelaboratoryschoolshallenrollaneligiblestudent
4 under subsection (a) of this section who submits a timely application, up to the capacity of a
5 program, class, grade level, or building, in the order in which applications are received. Once
6 enrolled, students are not required to reapply in subsequent enrollment periods. The laboratory
7 school may give enrollment priority to the sibling of an enrolled student who attended the

8 laboratory school in the prior school year.
9 (c1) For the purposes of this Article, any of the following shall serve as indicators that a
10 studentdidnotmeetexpectedstudent growthinthepriorschool year:(i)grades,(ii)observations,
11 (iii) diagnostic and formative assessments, (iv) State assessments, or (v) other factors, including
12 reading on grade level.
13 (c2) Notwithstanding the requirements of subsection (a) of this section, if a laboratory
14 school has not reached enrollment capacityin a program, class, grade level, or building byMarch

15 1, prior to the start of the next school year, the laboratory school may enroll children who reside
16 in the local school administrative unit in which the laboratory school is located but do not meet
17 one of the criteria set forth in subdivisions (1) through (4) of subsection (a) of this section for up
18 to twenty percent (20%) of the total capacity of the program, class, grade level, or building.
19 (d) Notwithstanding any law to the contrary, a laboratory school may refuse admission
20 to any student who has been expelled or suspended from a public school under G.S. 115C-390.5

21 through G.S. 115C-390.11 until the period of suspension or expulsion has expired.
22 (e) Within one year after a laboratoryschool begins operation, the laboratoryschool shall
23 make efforts for the population of the school to reasonably reflect the racial, ethnic, and
24 socioeconomic composition of the general population residing within the local school
25 administrative unit in which the school is located.
26 SECTION 8.5.(e) Section 11.6(d) of S.L. 2016-94, as amended by Section 4 of S.L.
27 2017-117, reads as rewritten:

28 SECTION11.6.(d) NotwithstandingG.S. 116-239.5, (i) at least ninesix laboratoryschools
29 shall be established pursuant to Article 29A of Chapter 116 of the General Statutes, as enacted
30 by this section, and in operation by the beginning of the 2019-2020 2020-2021 school year and
31 (ii) at least an additional three laboratory schools shall be established pursuant to Article 29A of
32 Chapter 116 of the General Statutes and in operation by the beginning of the 2022-2023 school
33 year.
34 SECTION 8.5.(f) The funds appropriated by this act to the Board of Governors of

35 The University of North Carolina for the 2019-2021 fiscal biennium to support the operation of
36 laboratory schools shall not be used to create new positions or to hire additional consultants for
37 The University of North Carolina System Office.
38 SECTION 8.5.(g) Subsection (a) of this section applies to an action or omission of
39 an action occurring on or after the date this act becomes law. Subsections (c) and (d) of this
40 section apply beginning with the 2019-2020 school year.

41
42 EXTEND REPORT DATE FOR UNC BOARD OF GOVERNORS PLANNING TASK
43 FORCE
44 SECTION 8.6. Section 36.6 of S.L. 2018-5 reads as rewritten:
45 SECTION 36.6.(a) There is created the UNC Board of Governors Planning Task Force.
46 The Task Force shall consist of four current Board members appointed by the Board of
47 Governors, one of whom shall be designated as chair. These appointments shall be made no later

48 than August 1, 2018.
49 SECTION 36.6.(b) The Task Force shall conduct a systemwide analysis of the capital
50 needs of the campuses of each constituent institution in relation to the Science Technology
51 Engineering and Mathematics (STEM) subject area, taking into account the strengths,

Page 94 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 weaknesses, opportunities, and needs of each constituent institution, and anyregional similarities
2 and differences. The Task Force shall also consider the impact of any relevant programmatic
3 planning elements being currently utilized that could be implemented as a best-practice among
4 other similar programmatic areas to encourage systemwide efficiencies. In particular, the Task
5 Force shall consider the capital needs relating to the Brody School of Medicine at East Carolina
6 University, the UNC Applied Physical Sciences and Institute for Convergent Science in Chapel
7 Hill, and other STEM projects to determine areas where capital funds may be used more

8 efficiently and effectively. The Task Force shall use the information gathered pursuant to this
9 subsection to compile a UNC System Plan.
10 SECTION 36.6.(c) The three million dollars ($3,000,000) appropriated to the Board of
11 Governors of The University of North Carolina in Section 36.2 of this act shall be used by the
12 Task Force in conducting the analysis described in subsection (b) of this section. On or before
13 April 1, 2019, February1, 2020, the Task Force shall submit a report containing the UNC System
14 Plan and any legislative recommendations to the Joint Legislative Capital Improvements

15 Oversight Committee and the Fiscal Research Division.
16
17 INCREASE OF UNC CARRYFORWARD PERCENTAGE FOR FOUR YEARS
18 SECTION 8.7.(a) G.S. 116-30.3 reads as rewritten:
19 § 116-30.3. Reversions.
20 (a) Of the General Fund current operations appropriations credit balance remainingat the

21 end of each fiscal year in each of the budget codes listed in this subsection, any amount of the
22 General Fund appropriation for that budget code for that fiscal year (i) may be carried forward
23 to the next fiscal year in that budget code, (ii) is appropriated in that budget code, and (iii) may
24 be used for any of the purposes set out in subsection (f) of this section. However, the amount
25 carried forward in each budget code under this subsection shall not exceed two and one-half five
26 percent (2.5%) (5%) of the General Fund appropriation in that budget code. The Director of the
27 Budget, under the authority set forth in G.S. 143C-6-2, shall establish the General Fund current

28 operations credit balance remaining in each budget code.
29 The budget codes that may carry forward a General Fund current operations appropriations
30 credit balance remaining at the end of each fiscal year pursuant to this section are the budget
31 codes for each of the following:
32 (1) Each special responsibility constituent institution.
33 (2) The Area Health Education Centers of the University of North Carolina at
34 Chapel Hill.

35 (3) University of North Carolina System Office Budget Code 16010.
36 …
37 (f) Funds carried forward pursuant to subsection (a) of this section may be used for
38 one-time expenditures, provided, however, that the expenditures including any funds carried
39 forward in a budget code in excess of two and one-half percent (2.5%) of the General Fund
40 appropriation for that budget code may be used for projects that are eligible to receive funds

41 under G.S. 143C-8-13(a). Expenditures authorized bythis subsection shall not impose additional
42 financial obligations on the State and shall not be used to support positions.
43 SECTION 8.7.(b) Effective July 1, 2023, G.S. 116-30.3, as amended by subsection
44 (a) of this section, reads as rewritten:
45 § 116-30.3. Reversions.
46 (a) Of the General Fund current operations appropriations credit balance remainingat the
47 end of each fiscal year in each of the budget codes listed in this subsection, any amount of the

48 General Fund appropriation for that budget code for that fiscal year (i) may be carried forward
49 to the next fiscal year in that budget code, (ii) is appropriated in that budget code, and (iii) may
50 be used for any of the purposes set out in subsection (f) of this section. However, the amount
51 carried forward in each budget code under this subsection shall not exceed five two and one-half

H966-PCCS30485-LRxr-3 House Bill 966 Page 95 General Assembly Of North Carolina Session 2019

1 percent (5%) (2.5%) of the General Fund appropriation in that budget code. The Director of the
2 Budget, under the authority set forth in G.S. 143C-6-2, shall establish the General Fund current
3 operations credit balance remaining in each budget code.
4 The budget codes that may carry forward a General Fund current operations appropriations
5 credit balance remaining at the end of each fiscal year pursuant to this section are the budget
6 codes for each of the following:
7 (1) Each special responsibility constituent institution.

8 (2) The Area Health Education Centers of the University of North Carolina at
9 Chapel Hill.
10 (3) University of North Carolina System Office Budget Code 16010.
11 …
12 (f) Funds carried forward pursuant to subsection (a) of this section may be used for
13 one-time expenditures, including any funds carried forward in a budget code in excess of two
14 and one-half percent (2.5%) of the General Fund appropriation for that budget code may be used

15 for projects that are eligible to receive funds under G.S. 143C-8-13(a). expenditures.
16 Expenditures authorized by this subsection shall not impose additional financial obligations on
17 the State and shall not be used to support positions.
18
19 NC PATRIOT STAR FAMILY SCHOLARSHIP PROGRAM
20 SECTION 8.8.(a) Establishment of the Scholarship Program. – From the funds

21 appropriated to the Board of Governors of The University of North Carolina for the 2019-2021
22 fiscal biennium for the North Carolina Patriot Star Family Scholarship Program (Program), the
23 Board of Governors shall provide those funds as directed grants to (i) the Patriot Foundation, a
24 nonprofit corporation, and (ii) the Marine Corps Scholarship Foundation, Inc., a nonprofit
25 corporation, for the purpose of establishing and administering scholarships in accordance with
26 the requirements of the Program. The Program shall provide for scholarships to eligible children
27 andeligiblespousesofcertainveteransandeligiblechildrenofcertaincurrentlyservingmembers

28 of the Armed Forces to attend eligible postsecondary institutions in accordance with the
29 requirements of this section.
30 SECTION 8.8.(b) Definitions. – For the purposes of this section, the following
31 definitions apply:
32 (1) Armed Forces. – A component of the United States Army, Navy, Marine
33 Corps, Air Force, and Coast Guard, including their reserve components.
34 (2) Eligible child or eligible children. – Any person (i) who is attending or has

35 been accepted to enroll in an eligible postsecondary institution, (ii) who is a
36 legal resident of North Carolina when scholarship documentation is
37 completed, provided that if a child is claimed as a dependent by the child's
38 parent, residency may be established based on a parent meeting
39 sub-sub-subdivision 4. of sub-subdivision a. of this subdivision, (iii) has
40 complied with the requirements of the Selective Service System, if applicable,

41 and (iv) whose parent is a veteran or a currentlyserving member of the Armed
42 Forces that meets the following:
43 a. Meets one of the following residency conditions:
44 1. Is a resident of North Carolina at the time of scholarship
45 documentation completion.
46 2. Was a resident of North Carolina at the time of entrance into
47 service in the Armed Forces.

48 3. Was permanentlystationed in North Carolina at the time of his
49 or her death.
50 4. Is an active duty service member permanently stationed in
51 North Carolina at the time of documentation completion.

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1 b. Meets one of the following service conditions:
2 1. Was a member of the Armed Forces who was killed in action
3 or in the line of duty, or died of wounds or other causes not due
4 to the service member's willful misconduct during a period of
5 war or national emergency.
6 2. Was a member of the Armed Forces who died of
7 service-connected injuries, wounds, illness, or other causes

8 incurred or aggravated while a member of the Armed Forces
9 during a period of war or national emergency. Standard
10 documentation of the parent's death, wounds, injury, or illness
11 must be supplied by a scholarship recipient at the time of
12 scholarship request.
13 3. Is a veteran of the Armed Forces who incurred traumatic
14 injuries or wounds or sustained a major illness while a member

15 of the Armed Forces during a period of war or national
16 emergency and is receiving compensation for a wartime
17 service-connected disability of at least fifty percent (50%) as
18 rated by the U.S. Department of Veterans Affairs.
19 4. Is a current member of the Armed Forces who incurred
20 traumatic injuries or wounds or sustained a major illness while

21 a member of the Armed Forces during a period of war or
22 national emergency. The parent's traumatic wounds, injury, or
23 major illness must be documented by the U.S. Department of
24 Defense.
25 (3) Eligible spouse. – Any person (i) who is attending or has been accepted to
26 enroll in an eligible postsecondary institution, (ii) who is a legal resident of
27 North Carolina when scholarship documentation is completed, (iii) has

28 complied with the requirements of the Selective Service System, if applicable,
29 and (iv) whose spouse was a member of the Armed Forces who was killed in
30 action or in the line of duty, or died of wounds or other causes not due to the
31 service member's willful misconduct during a period of war or national
32 emergency.
33 (4) Eligible postsecondary institution. – A school that is any of the following:
34 a. A constituent institution of The University of North Carolina.

35 b. A community college under the jurisdiction of the State Board of
36 Community Colleges.
37 c. A private educational institution as defined in G.S. 143B-1224.
38 d. An accredited, private vocational institution.
39 (5) Veteran.– AnindividualwhohasservedandisnolongerservingintheArmed
40 Forces of the United States. For the purposes of this section, the veteran must

41 have separated from the Armed Forces under honorable conditions or whose
42 death or disability of at least fifty percent (50%) or more was incurred as a
43 direct result of service in the line of duty.
44 SECTION 8.8.(c) Administration; Awards. – Within the funds made available for
45 the Program, the Patriot Foundation and the Marine Corps Scholarship Foundation shall each
46 separately administer and award scholarships to eligible children and eligible spouses in
47 accordancewiththerequirementsoftheNorthCarolinaPatriotStarFamilyScholarshipProgram.

48 In administering the Program, each nonprofit corporation shall be responsible for program
49 oversight for the scholarships awarded through its organization to ensure compliance with the
50 provisions of this section.

H966-PCCS30485-LRxr-3 House Bill 966 Page 97 General Assembly Of North Carolina Session 2019

1 Each nonprofit corporation shall, at a minimum, establish criteria and procedures
2 related to scholarship documentation completion, the amount of individual scholarships, the
3 permissible uses of scholarship funds, the period of eligibility for award of a scholarship, the
4 conditions for a revocation of a scholarship, and any other procedures it deems necessary for its
5 administration of the Program. A scholarship awarded to an eligible child or eligible spouse shall
6 not exceed the cost of attendance at the eligible postsecondary institution.
7 If an eligible child or eligible spouse receives a scholarship or other grant covering

8 the cost of attendance at an eligible postsecondary institution for which the scholarship is
9 awarded, then the amount of a scholarship awarded under this section shall be reduced so that
10 the sum of all grants and scholarships covering the cost of attendance received by the eligible
11 child oreligiblespousedoes not exceedthecost ofattendancefortheinstitution. Forthepurposes
12 of this subsection, cost of attendance shall be deemed to include monies for tuition, fees, books,
13 supplies, and equipment required for study at an eligible postsecondary institution, as well as
14 room and board as long as the scholarship recipient is enrolled as at least a half-time student at

15 the institution. Off-campus housing costs for room and board are also included to the extent the
16 eligible postsecondary institution includes it in its cost of attendance.
17 SECTION8.8.(d) Reporting. – ThePatriot Foundationshall submit areportbyApril
18 1 of each year in which the Patriot Foundation spends State funds made available for the Program
19 to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the
20 activities described by this section and the use of the State funds.

21 The Marine Corps Scholarship Foundation, Inc., shall submit a report by April 1 of
22 each year in which the Marine Corps Scholarship Foundation spends State funds made available
23 for the Program to the Joint Legislative Education Oversight Committee and the Fiscal Research
24 Division on the activities described by this section and the use of the State funds.
25
26 REPORT TO THE GA ON CHANGES TO UNC ENROLLMENT FUNDING FORMULA
27 SECTION 8.9.(a) Other than enrollment funding requests for the 2019-2020 and

28 2020-2021 academic years based on actual completed course credit hours, the Board of
29 Governors of The University of North Carolina (UNC) shall not adopt changes to the UNC
30 Enrollment Funding Formula or to the allocation of enrollment funds to constituent institutions
31 to become effective prior to July 1, 2020, without first reporting the proposed changes to the
32 2019 General Assembly and the Fiscal Research Division of the General Assembly at least 60
33 days prior to the effective date of any such adopted changes.
34 SECTION 8.9.(b) If the Board of Governors adopts changes to the UNC Enrollment

35 Funding Formula or to the allocation of enrollment funds to constituent institutions for the
36 2020-2021 academic year, other than enrollment funding requests based on actual completed
37 course credit hours, the adopted changes shall become effective on July1, 2020, unless a bill that
38 specifically disapproves the UNC Enrollment Funding Formula is introduced in either house of
39 the General Assembly before the thirty-first legislative day of the 2020 Regular Session of the
40 2019 General Assembly. The UNC Enrollment Funding Formula shall become effective on the

41 July 1 immediately following the earlier of either the day an unfavorable final action is taken on
42 the bill or the day that session of the General Assembly adjourns without ratifying a bill that
43 specificallydisapproves the UNC Enrollment Funding Formula. If the UNC Enrollment Funding
44 Formula is specifically disapproved by a bill enacted into law before it becomes effective, the
45 UNC Enrollment Funding Formula shall not become effective. For the purposes of this section,
46 a bill specifically disapproves the UNC Enrollment Funding Formula if it contains a provision
47 that refers to the UNC Enrollment Funding Formula and states that the UNC Enrollment Funding

48 Formula is disapproved. Notwithstanding any rule of either house of the General Assembly, a
49 bill maybe introduced as described bythis section during the first 30 legislative days of the 2020
50 Regular Session.
51

Page 98 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 FUNDS FOR UNC-ASHEVILLE WOODS RESIDENCE HALL
2 SECTION 8.10.(a) Notwithstanding Section 36.6(c) of S.L. 2018-5, as amended by
3 Section 8.6 of this act, of the funds appropriated to the Board of Governors of The University of
4 North Carolina for the UNC Board of Governors Planning Task Force for the 2018-2019 fiscal
5 year under Section 36.2 of S.L. 2018-5 that are unexpended and unencumbered at the end of the
6 2018-2019 fiscal year, the sum of up to seven hundred seventy-nine thousand dollars ($779,000)
7 shall not revert to the General Fund at the end of the fiscal year, but instead, shall be allocated

8 by the Board of Governors to the Universityof North Carolina at Asheville (UNC-Asheville) for
9 the 2019-2020 fiscal year to cover the expenses incurred by UNC-Asheville related to meeting
10 thebuildingrequirements imposedbytheDepartmentofInsuranceuponUNC-Ashevilletoallow
11 students to occupy the university's newly constructed Woods Residence Hall for the beginning
12 of the 2018-2019 academic year.
13 SECTION 8.10.(b) This section becomes effective June 30, 2019.
14

15 MODIFY FUTURE TEACHERS OF NORTH CAROLINA
16 SECTION 8.12.(a) G.S. 116-41.30(b) reads as rewritten:
17 (b) Program. – FTNC shall be a program providing professional development and
18 curricula for courses that provide selective, application-based symposium for high school juniors
19 and seniors, offering a challenging introduction to teaching as a profession for high school
20 students through courses offered by participating high schools in conjunction with college

21 partners. profession. FTNC courses shall include both content on pedagogy and the profession
22 ofteachingandfield experiences forhighschoolstudents.provideinstructiononpedagogy,ethics
23 and professionalism, child development, successful teaching strategies and classroom
24 management practices, effective lesson planning, assessment and intervention, and requirements
25 of teacher licensure. The FTNC Symposium should provide practical benefits to participating
26 students, which may include interaction with current educators, administrators, and educator
27 preparation program faculty members, a simulated student teaching experience, and information

28 about financial aid and scholarship opportunities.
29 SECTION 8.12.(b) G.S. 116-41.31 reads as rewritten:
30 § 116-41.31. Oversight of Future Teachers of North Carolina.
31 (a) FTNC General Administration. System Office. – FTNC shall be administratively
32 located in The University of North Carolina System Office. The President shall select three
33 constituent institutions with highly successful schools of education located in the western,
34 central, and eastern regions of the State, respectively, to collaborate on development of curricula

35 for FTNC and to provide professional development to high school teachers who will teach FTNC
36 courses. The three constituent institutions shall also work with other constituent institutions and
37 other institutions of higher education in the State to seek input in the development of curricula
38 and professional development for FTNC and to create a network of college faculty to provide
39 support to high schools offering FTNC courses.establish a Future Teachers of North Carolina
40 Advisory Council (FTNC Council) to oversee the FTNC program. At the President's discretion,

41 the FTNC Council shall coordinate with constituent institutions to utilize expertise from
42 administrators, faculty, and staff members of institutions of higher education in designing the
43 agenda and instructional content for the FTNC Symposium. The FTNC Council shall ensure
44 diverse representation of the educator preparation programs represented at the FTNC
45 Symposium. The FTNC Council shall also be responsible for creating an application process for
46 interested high school students, reviewing submitted applications, selecting students to attend,
47 and recruitment and outreach efforts.

48 (b) FTNC SiteApplications. –All highschools in theStateareencouraged to offerFTNC
49 courses to students. A high school shall apply to offer FTNC courses with the geographically
50 appropriate constituent institution overseeing FTNC and shall ensure that all teachers teaching
51 FTNC courses have received appropriate training. High schools shall also seek a partner

H966-PCCS30485-LRxr-3 House Bill 966 Page 99 General Assembly Of North Carolina Session 2019

1 institutionofhighereducationtoprovidesupportfromcollegefaculty.Highschoolsparticipating
2 in the FTNC program shall report demographic, survey, and other available outcome data to The
3 University of North Carolina System Office as necessary for completion of the FTNC annual
4 report required by G.S. 116-41.32.
5 (c) FTNC Institution of Higher Education Partners. – Constituent institutions that partner
6 with high schools shall offer dual credit for high school students who successfully complete the
7 FTNC course with a grade of B or higher. Other institutions of higher education that partner

8 with high schools are encouraged to offer dual credit for high school students who successfully
9 complete the FTNC course with a grade of B or higher. Constituent institutions shall provide
10 annually to The University of North Carolina System Office data on students who have received
11 dual credit for completion of an FTNC course and students who applied for admission into an
12 educator preparation program at a constituent institution who indicated in the application for
13 admission that the student completed an FTNC course. Other institutions of higher education are
14 encouraged to provide annually to The University of North Carolina System Office data on

15 students who have received dual credit for completion of an FTNC course and students who
16 applied for admission into an educator preparation program at the institution of higher education
17 who indicated in the application for admission that the student completed an FTNC course.
18 SECTION 8.12.(c) G.S. 116-41.32 reads as rewritten:
19 § 116-41.32. Future Teachers of North Carolina reporting.
20 The Universityof North Carolina System Office shall report annually, beginning October 15,

21 2019, 2020, on the following:
22 (1) Total number and names of local school administrative units with List of high
23 schools and local school administrative units represented by participating in
24 FTNC, total number and names of high schools offering FTNC, partner
25 institution of higher education for each high school, and number of sections
26 of the course being offered at each high school.students.
27 (1a) Number of students who submitted an application to attend the FTNC

28 Symposium.
29 (1b) Number of students attending the FTNC Symposium, including distribution
30 by region.
31 (2) Demographic information of students enrolled in FTNC courses.attending the
32 FTNC Symposium.
33 (2a) Description of the event agenda and content.
34 (3) Percentage of students who, after completing the course, attending the FTNC

35 Symposium, reported the following:
36 a. The student plans to choose teaching as a profession.
37 a1. The student plans to enroll in a community college, a constituent
38 institution, a private postsecondary institution located in North
39 Carolina, or a postsecondary institution located in another state.
40 b. The course FTNC Symposium was very or somewhat effective in

41 helping the student formulate a positive perception of the education
42 profession.
43 c. The coursework and activities FTNC Symposium increased the
44 student's knowledge of the teaching profession and other careers in
45 education.
46 d. The field experience helped the student understand the many factors
47 that contribute to effective teaching.

48 (4) Percentage of students who completed an FTNC course who received dual
49 credit for successful completion of the course, by institution.
50 (5) Percentage of students who completed an FTNC course who applied for
51 admission into an educator preparation program, by institution.

Page 100 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (6) Number of teachers provided professional development for FTNC.
2
3 MODIFY IN-STATE TUITION FOR CERTAIN VETERANS AND OTHER
4 INDIVIDUALS
5 SECTION 8.13.(a) G.S. 116-143.3A reads as rewritten:
6 § 116-143.3A. Waiver of 12-month residency requirement for certain veterans and other
7 individuals entitled to federal education benefits under 38 U.S.C. Chapter 30 or

8 38 U.S.C. Chapter 33.individuals.
9 (a) Definitions. – The following definitions apply in this section:
10 (1) Abode. – Has the same meaning as G.S. 116-143.3(a)(1).
11 (2) Armed Forces. – Has the same meaning as G.S. 116-143.3(a)(2).
12 (3) Veteran. – A person who served active duty for not less than 90 days in the
13 Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or
14 the National Oceanic and Atmospheric Administration and who was

15 discharged or released from such service.
16 (b) Waiver of 12-Month Residency Requirement for Veteran. Certain Individuals. – Any
17 veteran veteran, dependent of a veteran, or other individual who qualifies for admission to an
18 institution of higher education as defined in G.S. 116-143.1(a)(3) is eligible to be charged the
19 in-State tuition rate and applicable mandatory fees for enrollment enrollment, to the extent
20 required by Section 702 of the Veterans Access, Choice, and Accountability Act of 2014, as

21 amended, 38 U.S.C. § 3679, without satisfying the 12-month residency requirement under
22 G.S. 116-143.1, provided the veteran individual meets all of the following criteria:
23 (1) The veteran applies for admission to the institution of higher education and
24 enrolls within three years of the veteran's discharge or release from the Armed
25 Forces, the Commissioned Corps of the U.S. Public Health Service, or the
26 National Oceanic and Atmospheric Administration.
27 (2) The veteran qualifies for and uses educational benefits pursuant to 38 U.S.C.

28 Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance
29 Program) or 38 U.S.C. Chapter 33 (Post-9/11 Educational Assistance), as
30 administered by the U.S. Department of Veterans Affairs.
31 (3) The veteran's individual's abode is North Carolina.
32 (4) The veteran individual provides the institution of higher education at which
33 the veteran individual intends to enroll a letter of intent to establish residence
34 in North Carolina.

35 (5) The individual meets the definition of a covered individual under 38 U.S.C.
36 § 3679(c).
37 (c) Eligibility of Other Individuals Entitled to Federal Educational Benefits Under 38
38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33. – Any person who is entitled to federal educational
39 benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 is also eligible to be charged the
40 in-State tuition rate and applicable mandatory fees for enrollment without satisfying the

41 12-month residency requirement under G.S. 116-143.1, if the person meets all of the following
42 criteria:
43 (1) The person qualifies for admission to the institution of higher education as
44 defined in G.S. 116-143.1(a)(3) and, with the exception of individuals
45 described in subsections (c1) and (c2) of this section, enrolls in the institution
46 of higher education within three years of the veteran's discharge or release
47 from the Armed Forces, the Commissioned Corps of the U.S. Public Health

48 Service, or the National Oceanic and Atmospheric Administration.
49 (2) The person is the recipient of federal educational benefits pursuant to 38
50 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance

H966-PCCS30485-LRxr-3 House Bill 966 Page 101 General Assembly Of North Carolina Session 2019

1 Program) or 38 U.S.C. Chapter 33 (Post-9/11 Educational Assistance), as
2 administered by the U.S. Department of Veterans Affairs.
3 (3) The person's abode is North Carolina.
4 (4) The person provides the institution of higher education at which the person
5 intends to enroll a letter of intent to establish residence in North Carolina.
6 (c1) Recipients using transferred Post-9/11 GI Bill benefits (38 U.S.C. § 3319) while the
7 transferor is on active duty in the Armed Forces, the commissioned corps of the U.S. Public

8 Health Service, or the National Oceanic and Atmospheric Administration are eligible for the
9 in-Statetuition rate, provided the recipient's abodeis in North Carolina andtherecipient provides
10 the institution of higher education a letter of intent to establish residency in North Carolina.
11 (c2) Recipients of the Marine Gunnery Sergeant John David Fry Scholarship (38 U.S.C. §
12 3311(b)(9)), whose parent or spouse died in the line of duty, without regard as to whether the
13 death in the line of duty followed a period of active duty service of 90 days or more, are eligible
14 to receive in-State tuition under this section, provided the recipient's abode is in North Carolina

15 and the recipient provides the institution of higher education a letter of intent to establish
16 residency in North Carolina.
17 (d) After the expiration of the three-year period following discharge as described in 38
18 U.S.C. § 3679(c), any enrolled veteran entitled to federal educational benefits under 38 U.S.C.
19 Chapter 30 or 38 U.S.C. Chapter 33 and anyother enrolled individual described in subsection (c)
20 of this section entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C.

21 Chapter 33 who is eligible for in-State tuition under this section shall continue to be eligible for
22 the in-State tuition rate so long as the covered individual remains continuously enrolled (other
23 than during regularly scheduled breaks between courses, quarters, terms, or semesters) at that
24 institution of higher education.
25 (e) The individual applying for the benefit of this section has the burden of proving
26 entitlement to the benefit.
27 SECTION 8.13.(b) This section applies to qualifying veterans and other individuals

28 who are enrolled or who enroll in institutions of higher education for any academic quarter, term,
29 or semester that begins on or after the date this act becomes law.
30
31 UMSTEAD ACT EXEMPTION/NC A&T STATE UNIVERSITY
32 SECTION 8.14. G.S. 66-58(c) reads as rewritten:
33 (c) The provisions of subsection (a) shall not prohibit:
34 (1) The sale of products of experiment stations or test farms.

35 (1a) The sale of products raised or produced incident to the operation of a
36 community college or college viticulture/enology program as authorized by
37 G.S. 18B-1114.4 or the operation of a community college or college brewing,
38 distillation, or fermentation program as authorized by G.S. 18B-1114.6.
39 (1b) The sale by North Carolina State University at University-owned facilities of
40 dairy products, including ice cream, cheeses, milk-based beverages, and the

41 by-products of heavy cream, produced by the Dairy and Process Applications
42 Laboratory, so long as any profits are used to support the Department of Food
43 Science and College of Agriculture and Life Sciences at North Carolina State
44 University.
45 (1c) The sale by North Carolina Agricultural and Technical State University (NC
46 A&T State University) at University-owned facilities of dairy products,
47 including ice cream, cheeses, milk-based beverages, and the by-products of

48 heavy cream, produced by the University Farm at NC A&T State University,
49 so long as any profits are used to support the Agricultural Research Program
50 in the College of Agriculture and Environmental Sciences at NC A&T State
51 University.

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1 ….
2
3 UNC REPORT ON STATE BUDGET ALLOCATIONS AND POLICIES
4 SECTION 8.15. G.S. 116-11 is amended by adding the following new subdivision
5 to read:
6 (9b) The Board of Governors shall report by February 1 of each year to the Joint
7 Legislative Education Oversight Committee, the Senate Appropriations

8 Committee on Education/Higher Education, the House of Representatives
9 Appropriations SubcommitteeonEducation,and theFiscal Research Division
10 on the actions andadjustments necessaryto its budgetarypolicies,regulations,
11 and standards resulting from the Current Operations Appropriations Act for
12 the administration and operation of The University of North Carolina and the
13 distribution of State and federal funds to constituent institutions. The report
14 shall includeat least thefollowinginformation foreach constituent institution:

15 a. Guidelines related to State salaries of University of North Carolina
16 employees, including range, median, and mean of faculty salaries at
17 the institution.
18 b. Budget allocations and reductions, including for operating expenses
19 and specific programs.
20 c. Distribution of additional State allocations for enrollment funding.

21 d. Use of State funds and budget flexibility.
22 e. Availability of federal funds.
23 f. Tuition and fees.
24 g. Composition of the student population at the institution, including
25 headcount enrollment and full-time student enrollment for both
26 undergraduate and graduate students, and aggregate data on residency
27 status, median household income, gender, race, and ethnicity.

28 h. Student retention and graduation rates.
29 i. Postsecondary educational attainment rate at the institution, including
30 comparison to statewide data.
31 j. A comparison to prior fiscal year expenditures and appropriations.
32
33 UNC SYSTEM OFFICE/CREATE SEARCHABLE DATABASE OF MILITARY
34 CREDIT EQUIVALENCIES

35 SECTION 8.18. The University of North Carolina System Office, in collaboration
36 with the North Carolina Community College System through the Military Credit Advisory
37 Council, shall create a searchable database of military credit equivalencies to better serve
38 military-affiliated students and to complete the initial phase of military credit evaluations.
39
40 UNC ENROLLMENT FUNDING FOR COMPREHENSIVE TRANSITION

41 PROGRAMS
42 SECTION 8.19. For the purposes of allocating enrollment funding to constituent
43 institutions of The University of North Carolina, beginning with the 2019-2020 fiscal year, the
44 Board of Governors shall allocate funds each fiscal year to constituent institutions on the same
45 basis as full-time students enrolled in a curriculum program for up to 100 resident full-time
46 students enrolled in either a four-semester or eight-semester certificate accomplishment program
47 approved bythe United States Department of Education as a Comprehensive Transition Program

48 (CTP) pursuant to the Higher Education Opportunity Act of 2008, 20 U.S.C. §§ 1140f–1140i. If
49 more than 100 resident full-time students are enrolled in CTPs at constituent institutions in any
50 academic year, the Board ofGovernors shall allocatefunds to each eligible constituent institution
51 on a pro rata basis.

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1
2 PART VIII-A. UNIVERSITY/STATE EDUCATION ASSISTANCE AUTHORITY
3
4 NC SCHOOL OF SCIENCE AND MATHEMATICS TUITION GRANTS
5 SECTION 8A.2.(a) Article 23 of Chapter 116 of the General Statutes is amended by
6 adding a new Part to read:
7 Part 6. Tuition Grant for Graduates of the North Carolina School of Science and Mathematics.

8 § 116-209.90. Tuition grants for graduates to attend a constituent institution.
9 (a) Program Established. – There is established the Tuition Grant for Graduates of the
10 North Carolina School of Science and Mathematics Program (Program). Within the funds made
11 available for the Program, a State resident who graduates from the North Carolina School of
12 Science and Mathematics (NCSSM) in each school year, beginning with the 2019-2020 school
13 year, and who enrolls as a full-time student in a constituent institution of The Universityof North
14 Carolina in the next academic year after graduation shall be eligible for a tuition grant awarded

15 for that student's first academic year in accordance with this Part.
16 (b) Administration ofGrants. –TheAuthorityshall administerthetuitiongrants provided
17 for in this Part pursuant to guidelines and procedures established bythe Authorityconsistent with
18 its practices for administering State-funded financial aid. The guidelines and procedures shall
19 include an application process and schedule, notification and disbursement procedures, standards
20 for reporting, and standards for return of tuition grants when a student withdraws. The Authority

21 shall not approve any grant until it receives proper certification from the appropriate constituent
22 institution that the student applying for the grant is an eligible student. Upon receipt of the
23 certification, the Authority shall remit, at the times it prescribes, the tuition grant to the
24 constituent institution on behalf, and to the credit, of the student. In the event a student on whose
25 behalf a tuition grant has been paid is not enrolled and carrying a minimum academic load as of
26 the tenth classroom day following the beginning of the school term for which the tuition grant
27 was paid, the constituent institution shall refund the full amount of the tuition grant to the

28 Authority.
29 (c) Award of Grants. – Except as provided in subsections (d) and (e) of this section, the
30 amount of the grant awarded to a student shall be the full tuition cost at the constituent institution
31 in which the student is enrolled for the student's first academic year. No tuition grant awarded to
32 a student under this section shall exceed the cost of attendance at the constituent institution for
33 which the student is enrolled.
34 (d) Reduction of an Award Due to Other Aid. – If a student, who is eligible for a tuition

35 grant under this section, also receives a scholarship or other grant covering the cost of attendance
36 at the constituent institution for which the tuition grant is awarded, then the amount of the tuition
37 grant shall be reduced by an appropriate amount determined by the Authority so that the total
38 amount of scholarships and grants received by the student does not exceed the cost of attendance
39 for the institution. The cost of attendance shall be determined by the Authority for each
40 constituent institution.

41 (e) Pro Rata Amount. – In the event there are not sufficient funds available for the
42 Program to provide each eligible student with a full tuition grant as provided for by this Part,
43 each eligible student shall receive a pro rata share of funds available for that academic year.
44 § 116-209.91. North Carolina Tuition Grant Fund Reserve.
45 The North Carolina Tuition Grant Fund Reserve is established as a reserve to be administered
46 by the Authority. All funds appropriated to or otherwise received by the Authority to provide
47 tuition grants under this Part, all returned tuition grant monies, and all interest earned on these

48 funds shall be placed in the Fund. The Fund shall be used for (i) tuition grants for the academic
49 year that begins in the fiscal year following the fiscal year in which the appropriation is made to
50 the Reserve and (ii) the administrative costs of the Authority, provided that no more than five

Page 104 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 percent (5%) of the funds appropriated each fiscal year for tuition grants is expended for
2 administrative purposes.
3 SECTION 8A.2.(b) This section applies beginning with the award of tuition grants
4 to the North Carolina School of Science and Mathematics graduating class of the 2019-2020
5 school year for the 2020-2021 academic year.
6
7 WASHINGTON CENTER INTERNSHIP SCHOLARSHIP PROGRAM

8 SECTION8A.3.(a) Scholarship program established. – Fromthefunds appropriated
9 by this act for the 2019-2021 fiscal biennium to the Board of Governors of The University of
10 North Carolina to be allocated to the State Education Assistance Authority (Authority) for the
11 Washington Center Internship Scholarship Program, theAuthorityshall awardscholarship grants
12 to students who are residents of North Carolina and are enrolled in their second year or higher in
13 a constituent institution of The Universityof North Carolina to attend a semester or summer term
14 internship program at the Washington Center for Internships and Academic Seminars

15 (Washington Center) located in Washington, D.C. The Authorityshall administer the scholarship
16 program pursuant to guidelines and procedures established by the Authority consistent with its
17 practices for administering State-funded financial aid. The guidelines and procedures shall
18 include an application process and schedule, notification and disbursement procedures, standards
19 for reporting, and standards for return of funds when a student withdraws from the program. A
20 student who meets the eligibility criteria of the Washington Center to attend a semester or

21 summer term internship program may apply to the Authority for a grant to cover costs related to
22 the internship program in an amount of up to seven thousand dollars ($7,000). The Authority
23 shall award grants to students in the order in which applications are received.
24 SECTION 8A.3.(b) Limitations on grant amount. – If a student, who is eligible for
25 a grant pursuant to this section, also receives a scholarship or other grant covering the cost of
26 attendance for the program, then the amount of the State grant shall be reduced by an appropriate
27 amount determined by the Authority. The Authority shall reduce the amount of the grant so that

28 the sum of all grants and scholarship aid covering the cost of attendance shall not exceed the cost
29 of attendance for the program, including program fees, housing, and incidental costs. The cost of
30 attendance shall be established by the Authority in accordance with information provided to the
31 Authority by the Washington Center.
32 SECTION8A.3.(c) Internshipactivities. –Astudent participatingin theWashington
33 Center's program shall (i) intern four days a week with a nonprofit corporation, private company,
34 federal agency, or a member of the United States Congress, (ii) take an academic class taught by

35 the Washington Center's faculty, (iii) participate in academic seminars, (iv) participate in career
36 readiness training programs, and (v) be responsible for a final portfolio project outlining work
37 completed during the program. Students from all academic majors can participate and benefit
38 from the program.
39 SECTION8A.3.(d) Administrativecosts. –TheAuthoritymayuseup to onepercent
40 (1%) of the funds appropriated each fiscal year for the program for administrative costs.

41 SECTION 8A.3.(e) Reporting. – By March 1, 2021, the Authority, in consultation
42 withtheWashingtonCenter,shallreporttotheJoint LegislativeEducationOversightCommittee,
43 the chairs of the Senate Appropriations Committee on Education/Higher Education, and the
44 chairs of the House of Representatives Appropriations Committee on Education on the
45 implementation of the scholarship program, including the number of participating students and
46 the amount of awards for each semester or summer term by constituent institution.
47 SECTION 8A.3.(f) This section applies beginning with the award of scholarship

48 grants for the 2020 spring academic semester.
49
50 NEED-BASED SCHOLARSHIPS FOR PRIVATE INSTITUTIONS/DEPENDENTS OF
51 VETERANS AND ACTIVE DUTY MILITARY

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1 SECTION 8A.4.(a) G.S. 116-281(3) reads as rewritten:
2 (3) The student must meet at least one of the following:
3 a. Qualify as a legal resident of North Carolina and as a resident for
4 tuition purposes under the criteria set forth in G.S. 116-143.1 and in
5 accordance with definitions of residency that may from time to time
6 be adopted by the Board of Governors of The University of North
7 Carolina.

8 b. Be a veteran provided the veteran's abode is in North Carolina and the
9 veteran provides the eligible private postsecondary institution a letter
10 of intent to establish residency in North Carolina.
11 c. Be an active duty member of the Armed Forces provided the member
12 of the Armed Forces is abiding in this State incident to active military
13 duty in this State.
14 d. BethedependentrelativeofaveteranwhoisabidinginNorthCarolina

15 while sharing an abode with the veteran and the dependent relative
16 provides the eligible private postsecondary institution a letter of intent
17 to establish residency in North Carolina.
18 e. Be the dependent relative of an active duty member of the Armed
19 Forces who is abiding in North Carolina incident to active military
20 duty while sharing an abode with the active duty member.

21 SECTION 8A.4.(b) This section applies beginning with the award of scholarships
22 for the 2020-2021 academic year.
23
24 EDUCATION LOTTERY SCHOLARSHIP MODIFICATIONS
25 SECTION 8A.5.(a) G.S. 115C-499.2 reads as rewritten:
26 § 115C-499.2. Eligibility requirements for a scholarship.
27 In order to be eligible to receive a scholarship under this Article, a student seeking a degree,

28 diploma, or certificate at an eligible postsecondary institution must meet all of the following
29 requirements:
30 (1) Only needy North Carolina students are eligible to receive scholarships. For
31 purposes ofthis subsection, needyNorth Carolina studentsarethoseeligible
32 students whose expected family contribution under the federal methodology
33 does not exceed five six thousand dollars ($5,000).($6,000).
34 ….

35 SECTION 8A.5.(b) G.S. 115C-499.3(a) reads as rewritten:
36 (a) Subject to the amount of net income available under G.S. 18C-164(b)(2), a
37 scholarship awarded under this Article to a student at an eligible postsecondary institution shall
38 be based upon the enrollment status and expected family contribution of the student and shall not
39 exceed four five thousand one hundred dollars ($4,000) ($5,100) per academic year, including
40 any federal Pell Grant, to be used for the costs of attendance as defined for federal Title IV

41 programs.
42 SECTION 8A.5.(c) This section applies beginning with the award of scholarships
43 for the 2020-2021 academic year.
44
45 MODIFY NC TEACHING FELLOWS PROGRAM
46 SECTION 8A.6.(a) G.S. 116-209.62, as amended by subsections (b) and (c) of this
47 section, reads as rewritten:

48 § 116-209.62. North Carolina Teaching Fellows Program established; administration.
49 …
50 (f) Program Selection Criteria. – The Authority shall administer the Program in
51 cooperation with five up to eight institutions of higher education with approved educator

Page 106 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 preparation programs selected by the Commission that represent a diverse selection of both
2 postsecondary constituent institutions of The University of North Carolina and private
3 postsecondaryinstitutions operatingin theState.TheCommission shall adopt stringent standards
4 for selection of the most effective educator preparation programs, including the following:
5 (1) Demonstrates high rates of educator effectiveness on value-added models and
6 teacher evaluations, including using performance-based, subject-specific
7 assessment and support systems, such as edTPA or other metrics of evaluating

8 candidate effectiveness that have predictive validity.
9 (2) Demonstrates measurable impact of prior graduates on student learning,
10 including impact of graduates teaching in STEM or special education
11 licensure areas.
12 (3) Demonstrates high rates of graduates passing exams required for teacher
13 licensure.
14 (4) Provides curricular and co-curricular enhancements in leadership, facilitates

15 learning for diverse learners, and promotes community engagement,
16 classroom management, and reflection and assessment.
17 (5) Requires at least a minor concentration of study in the subject area that the
18 candidate may teach.
19 (6) Provides early and frequent internship or practical experiences, including the
20 opportunity for participants to perform practicums in diverse school

21 environments.
22 (7) Is approved by the State Board of Education as an educator preparation
23 program.
24 (g) AwardsofForgivable Loans.–TheProgramshall provideforgivableloanstoselected
25 students to beused at thefiveup to eight selectedinstitutions forcompletionofaprogram leading
26 to initial teacher licensure as follows:
27 ….

28 SECTION 8A.6.(b) G.S. 116-209.62(c)(3) reads as rewritten:
29 (3) The Authority shall provide the Commission with up to six hundred thousand
30 dollars ($600,000) from the Trust Fund in each fiscal year for the Commission
31 to provide mentoring and coaching support to forgivable loan recipients
32 through the North Carolina New Teacher Support Program as follows:
33 a. Up in an amount of up to two thousand two hundred dollars ($2,000)
34 ($2,200) for each Program recipient recipient. Funds shall be

35 prioritized for teachers serving as a teacher in a North Carolina public
36 school schools identified as low-performing under G.S. 115C-105.37.
37 b. Up to one thousand dollars ($1,000) for each Program recipient
38 serving as a teacher in a North Carolina public school not identified as
39 low-performing under G.S. 115C-105.37.
40 SECTION 8A.6.(c) G.S. 116-209.62(g)(4) reads as rewritten:

41 (4) Students matriculating at institutions of higher education who are changing to
42 enrollment in an approved program of studyat a selected educator preparation
43 program. – Forgivable loans of up to four thousand one hundred twenty-five
44 dollars ($4,125) per semester for up to four semesters.
45 SECTION 8A.6.(d) Subsection (a) of this section applies to the award of forgivable
46 loans beginning with the 2020-2021 academic year.
47

48 USE OF UNEXPENDED OPPORTUNITY SCHOLARSHIP FUNDS/INFORMATION
49 ON K-12 SCHOLARSHIP PROGRAMS
50 SECTION 8A.7.(a) G.S. 115C-562.8 reads as rewritten:
51 § 115C-562.8. The Opportunity Scholarship Grant Fund Reserve.

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1 (a) The Opportunity Scholarship Grant Fund Reserve is established as a reserve to be
2 administered by the Board of Governors of The University of North Carolina for the purpose of
3 allocating funds to the Authorityfor the award of scholarship grants in accordance with this Part.
4 The Reserve shall consist of monies appropriated from the General Fund to the Reserve by the
5 General Assembly and any interest accrued to it thereon. These funds shall be used to award
6 scholarship grants to eligible students for the school year that begins in the fiscal year following
7 the fiscal year in which the appropriation is made to the Reserve. The Board of Governors shall

8 only use monies in the Reserve in accordance with the purposes set forth in this section. Funds
9 appropriated in a particular fiscal year to be used for the award of scholarships in the following
10 fiscal year that are unexpended at the end of the fiscal year after the fiscal year in which the funds
11 were appropriated shall be carried forward for one fiscal year and may be used for the purposes
12 set forth in this section. The Authority shall not expend funds that are carried forward for a fiscal
13 year until the funds from the prior year appropriation to be used to award scholarships are
14 expended. Funds carried forward pursuant to this section that have not been spent within one

15 fiscal year shall revert to the General Fund.be used in accordance with subsection (d) of this
16 section.
17 …
18 (d) Any unexpended funds at the end of a fiscal year from the funds carried forward for
19 one fiscal year pursuant to subsection (a) of this section shall be used as follows:
20 (1) Up to five hundred thousand dollars ($500,000) shall be used bythe Authority

21 to contract with a nonprofit corporation representing parents and families, for
22 marketing, outreach, and scholarship application assistance for parents and
23 students pursuant to Part 5 of this Article.
24 (2) Any remaining funds shall revert to the General Fund.
25 SECTION 8A.7.(b) Article 39 of Chapter 115C of the General Statutes is amended
26 by adding a new Part to read:
27 Part 5. Information for Parents and Students on Nonpublic School Scholarship Programs.

28 § 115C-567.1. Outreach and assistance for parents and students.
29 (a) The State Education Assistance Authority, in its administration of scholarship
30 programs for eligible students pursuant to Part 2A of this Article, Article 41 of this Chapter, and
31 Part 1H of Article 9 of this Chapter, may contract with a nonprofit corporation representing
32 parents and families, for marketing, outreach, and scholarship application assistance for parents
33 and students. The Authority shall issue a request for proposals in order to enter into a contract
34 with a nonprofit corporation that meets the following requirements during the term of the

35 contract:
36 (1) Be a nonprofit corporation organized pursuant to Chapter 55A of the General
37 Statutes and complyat all times with the provisions of section 501(c)(3) of the
38 Internal Revenue Code.
39 (2) Employ sufficient staff who have demonstrated a capacity to market and
40 implement a scholarship grant program, including by doing the following:

41 a. Direct mail marketing.
42 b. Radio advertising.
43 c. Targeted digital advertising.
44 d. One-on-one parent and family engagement.
45 (3) Comply with the limitations on lobbying set forth in section 501(c)(3) of the
46 Internal Revenue Code.
47 (4) Have no State officer or employee serving on the board of the nonprofit.

48 (5) Conduct at least quarterly meetings of the board of directors of the nonprofit
49 at the call of its chair.
50 (b) The terms of the contract between the Authority and a nonprofit corporation shall
51 require that the nonprofit (i) maintain the confidentiality of any information provided by the

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1 Authority for parents and students as directed by the Authority and (ii) not disseminate
2 information to third parties without written parental consent. During the term of the contract
3 provided for in this section, the Authority shall include on scholarship applications a statement
4 for parents to indicate nonconsent for sharing information with a nonprofit corporation.
5 (c) Notwithstanding any other provision of law, during the term of the contract provided
6 for in this section, the Authority may share the name, address, e-mail, and telephone number of
7 the parent of any student applicant, unless the parent indicates that the information should not be

8 shared.
9 SECTION 8A.7.(c) Subsection (a) of this section becomes effective June 30, 2019.
10
11 EXPAND ELIGIBILITY FOR OPPORTUNITY SCHOLARSHIPS
12 SECTION 8A.8.(a) G.S. 115C-562.1(3) reads as rewritten:
13 (3) Eligible students. – A student residing in North Carolina who has not yet
14 received a high school diploma and who meets all of the following

15 requirements:
16 a. Meets one of the following criteria:
17 1. Was a full-time student (i) assigned to and attending a public
18 school pursuant to G.S. 115C-366 Article 25 of this Chapter or
19 (ii) enrolled in a Department of Defense Elementary and
20 Secondary School, established pursuant to 10 U.S.C. § 2164

21 and located in North Carolina, during the spring semester prior
22 to the school year for which the student is applying. A child
23 who is the age of four on or before April 16 is eligible to attend
24 the following school year if the principal, or equivalent, of the
25 school in which the child seeks to enroll finds that the student
26 meets the requirements of G.S. 115C-364(d) and those
27 findings are submitted to the Authority with the child's

28 application.
29 2. Received a scholarship grant for the school year prior to the
30 school year for which the student is applying.
31 3. Is entering either kindergarten or the first grade.
32 4. Is a child in foster care as defined in G.S. 131D-10.2(9).
33 5. Is a child whose adoption decree was entered not more than
34 one year prior to submission of the scholarship grant

35 application.
36 6. Is a child whose parent or legal guardian is on full-time duty
37 status in the active uniformed service of the United States,
38 including members of the National Guard and Reserve on
39 active duty orders pursuant to 10 U.S.C. § 12301, et seq., and
40 10 U.S.C. § 12401, et seq.

41 7. Is a child who meets both of the following:
42 I. Was enrolled in a nonpublic school that meets the
43 requirements of Part 1 and Part 2 of this Article during
44 the spring semester prior to the school year for which
45 the student is applying.
46 II. Was enrolled for the entire school year immediately
47 prior to the school year in which the student enrolled in

48 the nonpublic school in one of the following:
49 A. A North Carolina public school.

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1 B. A Department of Defense Elementary and
2 Secondary School, established pursuant to 10
3 U.S.C. § 2164 and located in North Carolina.
4 SECTION 8A.8.(b) G.S. 115C-562.7(b)(3) reads as rewritten:
5 (3) Number of students previouslyenrolled in local school administrative units or
6 charter schools in the prior semester or prior school year by the previously
7 attended local school administrative unit or charter school.

8 SECTION 8A.8.(c) This section applies beginning with the award of scholarship
9 grants for the 2020-2021 school year.
10
11 COMBINE K-12 SCHOLARSHIP PROGRAMS FOR CHILDREN WITH
12 DISABILITIES
13 SECTION 8A.9.(a) Article 41 of Chapter 115C of the General Statutes reads as
14 rewritten:

15 Article 41.
16 Personal Education Savings Accounts.Student Accounts for Children with Disabilities.
17 § 115C-590. North Carolina Personal Education Savings Account Student Accounts for
18 Children with Disabilities Program established.
19 There is established the North Carolina Personal Education Savings Student Accounts for
20 Children with Disabilities Program to provide the option for a parent to better meet the individual

21 educational needs of the parent's child.
22 § 115C-591. Definitions.
23 The following definitions apply in this Article:
24 (1) Authority. – Defined in G.S. 116-201.
25 (2) Division. – The Division of Nonpublic Education, Department of
26 Administration.
27 (2a) Educational technology. – As defined annually by the Authority, an item,

28 piece of equipment, material, product, or system which may be purchased
29 commerciallyoff the shelf, modified, or customized and that is used primarily
30 for educational purposes for a child with a disability.
31 (3) Eligible student. – A student residing in North Carolina who has not yet
32 received a high school diploma and who meets all of the following
33 requirements:
34 a. Is eligible to attend a North Carolina public school pursuant to

35 G.S. 115C-366.Article 25 of this Chapter. A child who is the age of
36 four on or before April 16 is eligible to attend the following school
37 year if the principal, or equivalent, of the school in which the child
38 seeks to enroll finds that the student meets the requirements of
39 G.S. 115C-364(d) and those findings are submitted to the Authority
40 with the child's application.

41 b. Has not been enrolled in a postsecondary institution in a matriculated
42 status eligible for enrollment for as a full-time student taking at least
43 12 hours of academic credit.
44 c. Is a child with a disability, as defined in G.S. 115C-106.3(1),
45 including, for example, intellectual disability, hearing impairment,
46 speech or language impairment, visual impairment, serious emotional
47 disturbance, orthopedic impairment, autism, traumatic brain injury,

48 other health impairments, specific learning disability, or disability as
49 may be required to be included under IDEA.G.S. 115C-106.3(1).
50 d. Has not been placed in a nonpublic school or facility by a public
51 agency at public expense.

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1 (4) Nonpublic school. – A school that meets the requirements of Part 1, 2, or 3 of
2 Article 39 of this Chapter, as identified by the Division.
3 (5) Parent. – A parent, legal guardian, or legal custodian of an eligible student.
4 (5a) Part-time student. – A child enrolled part time in a public school and part time
5 in a nonpublic school that exclusively provides services for children with
6 disabilities.
7 (6) Personal Education Savings Student Account or PESA. – A bank account

8 provided to a parent for the purpose of holding scholarship funds awarded by
9 the Authority for an eligible student to be used for qualifying education
10 expenses under G.S. 115C-595.
11 § 115C-592. Award of scholarship fundsfora personal education savings student account.
12 (a) Application Selection. – The Authority shall make available no later than February 1
13 of each year applications to eligible students for the award of scholarship funds for a personal
14 education savings student account to be used for qualifying education expenses to attend a

15 nonpublic school. Information about scholarship funds and the application process shall be made
16 available on the Authority's Web site. Applications shall be submitted electronically. Beginning
17 March 15, the The Authority shall begin selecting recipients for award scholarships according to
18 the following criteria:criteria for applications received by March 1 of each year:
19 (1) First priorityshall be given to eligible students who were awarded scholarship
20 funds for a PESA during the previous school year if those students have

21 applied by March 1.year.
22 (2) After funds have been awarded to prior recipients as provided in subdivision
23 (1) of this subsection, any remaining funds shall be used to award scholarship
24 funds for a PESA for all other eligible students.
25 (b) Scholarship Awards. – Scholarships Except for eligible students who qualify for
26 scholarship funds pursuant to subsection (b1) of this section, scholarships shall be awarded each
27 year for an amount not to exceed nine (i) eight thousand dollars ($9,000) ($8,000) per eligible

28 student for the fiscal school year in for which the application is received, except received or (ii)
29 for eligible part-time students, who shall be awarded scholarships each year for an amount not to
30 exceed students, four thousand five hundred dollars ($4,500) ($4,000) per eligible student for the
31 fiscal school year in for which the application is received. Any funds remaining on a debit card
32 or in an electronic account provided under subsection (b2) of this section at the end of a school
33 year for eligible students who qualify only under this subsection shall be returned to the
34 Authority.

35 (b1) Scholarship Awards for Students with Certain Disabilities. – An eligible student may
36 be awarded scholarship funds in an amount of up to seventeen thousand dollars ($17,000) for
37 each school year only if the student has been determined to have one or more of the following
38 disabilities as a primary or secondary disability at the time of application for scholarship funds:
39 (1) Autism.
40 (2) Hearing impairment.

41 (3) Moderate or severe intellectual or developmental disability.
42 (4) Multiple, permanent orthopedic impairments.
43 (5) Visual impairment.
44 For eligible students who qualify for scholarship funds under this subsection, no more than
45 four thousand five hundred dollars ($4,500) of funds remainingon a debit card or in an electronic
46 account at the end of a school year shall be carried forward until expended for each school year
47 upon renewal of the account under subsection (b2) of this section. In no event shall the total

48 amount of funds carried forward for an eligible student in a personal education student account
49 exceed thirty thousand dollars ($30,000). Any funds remaining on the card or in the electronic
50 account if an agreement is not renewed under G.S. 115C-595 shall be returned to the Authority.

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1 (b2) Disbursement and Deposit of Awards. – Scholarship funds shall be used only for
2 tuition and qualifying education expenses as provided in G.S. 115C-595. Recipients shall receive
3 the scholarship funds deposited in two equal amounts to a PESA in amounts, one-half in each
4 quarter semester of the fiscal school year. The first deposit of funds to a PESA shall be subject
5 to the execution of the parental agreement required by G.S. 115C-595. The parent shall then
6 receive a debit card or an electronic account with the prepaid funds loaded on the card or in the
7 electronic account at the beginning of the fiscal school year. After the initial disbursement of

8 funds, each subsequent, quarterly semester disbursement of funds shall be subject to the
9 submission by the parent of an expense report. The expense report shall be submitted
10 electronically and shall include documentation that the student received an education, as
11 described in G.S. 115C-595(a)(1), for no less than 35 70 days of the applicable quarter. semester.
12 The debit card or the electronic account shall be renewed upon the receipt of the parental
13 agreement under G.S. 115C-595 for recipients awarded scholarship funds in subsequent fiscal
14 school years. Anyfunds remaining on the card or in the electronic account at the end of the fiscal

15 year may be carried forward to the next fiscal year if the card or electronic account is renewed.
16 Any funds remaining on the card or in the electronic account if an agreement is not renewed shall
17 be returned to the Authority.
18 (c) Eligibilityfor the other scholarship programs is provided for as follows:Eligibilityfor
19 Other Scholarship Programs. –
20 (1) An eligible student under this Article may receive, in addition to a PESA, a

21 scholarship under Part 2A of Article 39 of this Chapter.
22 (2) An eligible student under this Article may receive, in addition to a PESA and
23 a scholarship under Part 2A of Article 39 of this Chapter, a scholarship under
24 the special education scholarship program for children with disabilities
25 pursuant to Part 1H of Article 9 of this Chapter, only if that student has one or
26 more of the following disabilities:
27 a. Autism.

28 b. Developmental disability.
29 c. Hearing impairment.
30 d. Moderate or severe intellectual disability.
31 e. Multiple, permanent orthopedic impairments.
32 f. Visual impairment.
33 (d) Applications Not Public Records. – Applications forscholarship funds and personally
34 identifiable information related to eligible students receiving funds shall not be a public record

35 under Chapter 132 of the General Statutes. For the purposes of this section, personally
36 identifiable information means any information directly related to a student or members of a
37 student's household, including the name, birthdate, address, Social Security number, telephone
38 number, e-mail address, or any other information or identification number that would provide
39 information about a specific student or members of a specific student's household.
40 (e) Establishment of Initial Eligibility. – An applicant may demonstrate for initial

41 eligibility that the applicant is a child with a disability, as required by G.S. 115C-591(3)c., in
42 either of the following ways:
43 (1) The by having the child has been assessed by a local education agency and
44 determined the local education agencydetermining the child to be a child with
45 a disability and with that outcome is verified bythe local education agency on
46 a form provided to the Authority.
47 (2) The child was initially assessed by a local education agency and determined

48 to be a child with a disability and, following receipt of a scholarship awarded
49 pursuant to Part 1H of Article 9 of this Chapter, was determined to have
50 continuing eligibility, as provided in G.S. 115C-112.6(c)(2), by the assessing
51 psychologist or psychiatrist. Both the initial verification from the local

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1 education agency and the continuing verification by the assessing
2 psychologist or psychiatrist shall be provided on a form to the Authority.
3 § 115C-593. Student continuing eligibility.
4 Aftertheinitialdisbursementoffunds,theAuthorityshall ensurethatthestudent'scontinuing
5 eligibility is assessed at least every three years by one of the following:
6 (1) The local education agency. – The local education agency shall assess if the
7 student continues to be a child with a disability and verify the outcome on a

8 form to be provided to the Authority.
9 (2) A licensed psychologist with a school psychology focus or a psychiatrist. –
10 The psychologist or psychiatrist shall assess, after review of appropriate
11 medical and educational records,ifthe educationandrelatedservices received
12 by the student in the nonpublic school setting have improved the child's
13 educational performance and if the student would continue to benefit from
14 placement in the nonpublic school setting. The psychologist or psychiatrist

15 shall verify the outcome of the assessment on a form to be provided to the
16 Authority.
17 § 115C-594. Verification of eligibility.
18 (a) Verification of Information. – The Authority may seek verification of information on
19 any application for the award of scholarship funds for a personal education savings student
20 account. The Authority shall select and verify six percent (6%) of applications annually,

21 including those with apparent errors on the face of the application. The Authority shall establish
22 rules for the verification process. If a household fails to cooperate with verification efforts, the
23 Authority shall revoke the award of scholarship funds for a PESA for the eligible student.
24 (b) Access to Information. – Household members of applicants Applicants for the award
25 of scholarship funds for a PESA shall authorize the Authority to access information needed for
26 verification efforts held by other State agencies, including the Department of Health and Human
27 Services and the Department of Public Instruction.

28 § 115C-595. Parental agreement; use of funds.
29 (a) Parental Agreement. – The Authority shall provide the parent of a scholarship
30 recipient with a written agreement, applicable for each year the eligible student receives
31 scholarship funds under this Article, to be signed and returned to the Authority prior to receiving
32 the scholarship funds. The agreement shall be submitted to the Authority electronically. The
33 parent shall not designate anyentityor individual to execute the agreement on the parent's behalf.
34 A parent or eligible student's failure to comply with this section shall result in a forfeit of

35 scholarship funds and those funds may be awarded to another eligible student. The parent shall
36 agree to the following conditions in order to receive scholarship funds under this Article:
37 (1) Use at least a portion of the scholarship funds to provide an education to the
38 eligible student in, at a minimum, the subjects of English language arts,
39 mathematics, social studies, and science.
40 (2) Unless the student is a part-time eligible student, release a local education

41 agency in which the student is eligible to attend under G.S. 115C-366 of all
42 obligations to educate the eligible student while the eligible student is
43 receiving scholarship funds under this Article. A parent of a student, other
44 than a part-time eligible student, who decides to enroll the student into the
45 local education agency or other North Carolina public school during the term
46 of the agreement shall notify the Authority to request a release from the
47 agreement and shall return any unexpended funds to the Authority.

48 (3) Use the scholarship funds deposited into a personal education savings student
49 account only for the following qualifying education expenses of the eligible
50 student:

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1 a. Tuition and fees for a nonpublic school that meets the requirements of
2 Part 1 or Part 2 of Article 39 of this Chapter and is subject to the
3 requirements of G.S. 115C-562.5. Tuition and fees may only be
4 disbursed to the nonpublic school as provided in subdivision (1) of
5 subsection (a1) of this section.
6 b. Textbooks required by a nonpublic school.
7 c. Tutoring and teaching services provided by an individual or facility

8 accredited by a State, regional, or national accrediting organization.
9 d. Curricula.
10 e. Fees for nationally standardized norm-referenced achievement tests,
11 advanced placement tests, or nationally recognized college entrance
12 exams.
13 f. Fees charged to the account holder for the management of the PESA.
14 g. Fees for services provided by a public school, including individual

15 classes and extracurricular programs.
16 h. Premiums charged to the account holder for any insurance or surety
17 bonds required by the Authority.
18 i. Educational therapies from a licensed or accredited practitioner or
19 provider.
20 j. Educational technology defined by the Authority as approved for use

21 pursuant to Part 1H of Article 9 of this Chapter.G.S. 115C-591(2a).
22 k. Student transportation, pursuant to a contract with an entity that
23 regularly provides student transportation, to and from (i) a provider of
24 education or related services or (ii) an education activity.
25 (3a) Use of scholarship funds for reimbursement of tuition. – Notwithstanding
26 sub-subdivision a. of subdivision (3) of this subsection, a parent of an eligible
27 student may pay tuition to certain schools with funds other than funds

28 available in the personal education student account and then request
29 reimbursement from the Authority from scholarship funds if the parent
30 complies with the provisions of subdivision (2) of subsection (a1) of this
31 section.
32 (4) Not use scholarship funds for any of the following purposes:
33 a. Computer hardware or other technological devices not defined by the
34 Authority as educational technology approved for use pursuant to Part

35 1H of Article 9 of this Chapter.G.S. 115C-591(2a).
36 b. Consumable educational supplies, including paper, pen, or markers.
37 c. Tuition and fees at an institution of higher education, as defined in
38 G.S. 116-143.1, or a private postsecondary institution.
39 d. Tuition and fees for a nonpublic school that meets the requirements of
40 Part 3 of Article 39 of this Chapter.

41 (a1) Disbursement of Funds for Tuition. – The Authority shall disburse scholarship funds
42 awarded to eligible students for tuition at a nonpublic school based upon the method selected by
43 the nonpublic school. A nonpublic school mayelect to participate in the scholarship endorsement
44 for tuition option or the reimbursement for tuition option as set forth in this subsection.
45 Scholarship fundsshall not beprovidedfortuitionforhomeschooledstudents. Scholarship funds
46 for tuition shall be disbursed as follows:
47 (1) Scholarship endorsement for tuition. – The Authority shall remit, at least two

48 times each school year, scholarship funds from the personal education student
49 account for eligible students who attend nonpublic schools who meet the
50 requirements of sub-subdivision a. of subdivision (3) of subsection (a) of this
51 section to the nonpublic school for endorsement byat least one of the student's

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1 parents or guardians. The parent or guardian shall restrictively endorse the
2 scholarship funds awarded to the eligible student for deposit into the account
3 of the nonpublic school to the credit of the eligible student. The parent or
4 guardianshallnotdesignateanyentityorindividualassociatedwiththeschool
5 as the parent's attorney-in-fact to endorse the scholarship funds. A parent's or
6 guardian's failure to comply with this subdivision shall result in forfeiture of
7 the scholarship funds for tuition. Scholarship funds forfeited for failure to

8 comply with this subdivision shall be returned to the Authority to be awarded
9 to another student.
10 (2) Reimbursement for tuition. – The parent or guardian of an eligible student
11 who enrolls in a school that is (i) a North Carolina public school other than
12 the public school to which that student would have been assigned as provided
13 in G.S. 115C-366 or (ii) a nonpublic school that meets the requirements of
14 Part 1 or Part 2 of Article 39 of this Chapter and is identified and deemed

15 eligible by the Division but elects not to be subject to G.S. 115C-562.5, may
16 pay tuition directly to the school with funds other than scholarship funds and
17 request reimbursement with funds available in the personal education student
18 account under subdivision (4) of subsection (a) of this section. However, the
19 Authority shall not reimburse the parent or guardian prior to the midpoint of
20 each semester. A parent or guardian may only receive reimbursement for

21 tuition if the parent or guardian provides documentation to the Authority that
22 the student is enrolled in the school.
23 (b) No Refunds to an Account Holder. – A nonpublic school or a provider of services
24 purchased under subsection (a) of this section shall not refund or rebate any scholarship funds to
25 a parent or eligible student in any manner. The parent shall notify the Authority if such a refund
26 is required.
27 (c) Repealed by Session Laws 2018-5, s. 38.10(m), effective for taxable years beginning

28 on or after January 1, 2018.
29 § 115C-596. Identification of nonpublic schools and distribution of personal education
30 savings student account information.
31 (a) List of Nonpublic Schools. – The Division shall provide annually by February 1 to
32 the Authority a list of all nonpublic schools operating in the State that meet the requirements of
33 Part 1, 2, or 3 of Article 39 of this Chapter.
34 (b) Information on PESAs to the Division. – The Authority shall provide information

35 about personal education savings student accounts to the Division. The Division shall provide
36 information about PESAs to all qualified nonpublic schools on an annual basis.
37 § 115C-597. Administration.
38 (a) Rules and Regulations. – The Authority shall establish rules and regulations for the
39 administration of the program, including the following:
40 (1) The administration and awarding of scholarship funds, including a lottery

41 process for the selection of recipients within the criteria established by
42 G.S. 115C-592(a), if necessary.
43 (2) Requiring a surety bond or insurance to be held by account holders.
44 (3) Use of the funds and the reporting of expenditures.
45 (4) Monitoring and control of spending scholarship funds deposited in a personal
46 education savings account.
47 The Authority shall provide recipients of scholarship funds with the annual list of defined

48 educational technology for which scholarship funds may be used.
49 (b) Contract for Management of PESAs. – The Authority may contract with a private
50 financial management firm or institution to manage PESAs in accordance with this Article.

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1 (c) Annual Audits. – The Authority shall conduct annual audits of PESAs and may audit
2 a random sampling of PESAs as needed to ensure compliance with the requirements of this
3 Article. The Authority may contract with an independent entity to conduct these audits. The
4 Authority may remove a parent or eligible student from the program and close a personal
5 education savings student account for failure to complywith the terms of the parental agreement,
6 for failure to complywith applicable laws, or because the student is no longer an eligible student.
7 (d) Administration Costs. – Of the funds allocated to the Authority to award scholarship

8 funds under this Article, the Authority may retain up to two hundred fifty thousand dollars
9 ($250,000) four percent (4%) of the funds appropriated for the program each fiscal year for
10 administrative costs associated with the program, including contracting with non-State entities
11 for administration of certain components of the program.
12 § 115C-598. Reporting requirements.
13 The Authority shall report annually, no later than October 15, to the Joint Legislative
14 Education Oversight Committee on the following information from the prior school year:

15 (1) Total number, grade level, race, ethnicity, and sex of eligible students
16 receiving scholarship funds.
17 (2) Total amount of scholarship funding awarded.
18 (3) Number of students previouslyenrolled in public schools in the prior semester
19 by the previously attended local education agency.
20 (4) Nonpublic schools in which scholarship recipients are enrolled, including

21 numbers of scholarship recipients at each nonpublic school.
22 (5) The number of substantiated cases of fraud by recipients and the number of
23 parents or students removed from the program for noncompliance with the
24 provisions of this Article.
25 § 115C-599. Duties of State agencies.
26 (a) The State Board, as part of its duty to monitor all local education agencies to
27 determine compliance with this Article and the Individuals with Disabilities Education Act

28 (IDEA), 20 U.S.C. § 1400, et seq., (2004), as amended, and federal regulations adopted under
29 this act, as provided in G.S. 115C-107.4, shall ensure that local education agencies do the
30 following:
31 (1) Conduct evaluations requested by a child's parent or guardian of suspected
32 children with disabilities, as defined in G.S. 115C-107.3, in a timely manner
33 as required by IDEA.
34 (2) Provide assessments for continuing eligibility to identified children with

35 disabilities receivingscholarship funds at the request of the parent or guardian
36 to ensure compliance with G.S. 115C-593.
37 (b) TheAuthorityshallanalyze,inconjunctionwiththeDepartmentofPublicInstruction,
38 past trends in scholarship data on an annual basis to ensure that the amount of funds transferred
39 each fiscal year by the Authority to the Department for reevaluations by local school
40 administrative units of eligible students under G.S. 115C-593 are sufficient and based on actual

41 annual cost requirements.
42 SECTION 8A.9.(b) Notwithstanding G.S. 115C-592, as amended by this section, a
43 student who was awarded scholarship funds for a PESA pursuant to Article 41 of Chapter 115C
44 of the General Statutes for the 2019-2020 school year or a student who received a scholarship
45 pursuant to Part1HofArticle9 ofChapter115C oftheGeneral Statutesforthe2019-2020school
46 year shall receive priority in the award of scholarship funds under G.S. 115C-592 for a personal
47 education student account for the 2020-2021 school year if the student applies by March 1, 2020.

48 SECTION 8A.9.(c) Part 1H of Article 9 of Chapter 115C of the General Statutes is
49 repealed.
50 SECTION 8A.9.(d) G.S. 115C-555(4) reads as rewritten:

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1 (4) It receives no funding from the State of North Carolina. For the purposes of
2 this Article, scholarship funds awarded pursuant to Part 2A of this Article,
3 Article or Article 41 of this Chapter, or Part 1H of Article 9 of this Chapter to
4 eligible students attending a nonpublic school shall not be considered funding
5 from the State of North Carolina.
6 SECTION 8A.9.(e) G.S. 115C-567.1(a), as enacted by Section 8A.7(b) of this act,
7 reads as rewritten:

8 (a) The State Education Assistance Authority, in its administration of scholarship
9 programs for eligible students pursuant to Part 2A of this Article, Article and Article 41 of this
10 Chapter, and Part 1H of Article 9 of this Chapter, Chapter may contract with a nonprofit
11 corporation representing parents and families, for marketing, outreach, and scholarship
12 application assistance for parents and students. The Authority shall issue a request for proposals
13 in order to enter into a contract with a nonprofit corporation that meets the following
14 requirements during the term of the contract:

15 (1) Be a nonprofit corporation organized pursuant to Chapter 55A of the General
16 Statutes and complyat all times with the provisions of section 501(c)(3) of the
17 Internal Revenue Code.
18 (2) Employ sufficient staff who have demonstrated a capacity to market and
19 implement a scholarship grant program, including by doing the following:
20 a. Direct mail marketing.

21 b. Radio advertising.
22 c. Targeted digital advertising.
23 d. One-on-one parent and family engagement.
24 (3) Comply with the limitations on lobbying set forth in section 501(c)(3) of the
25 Internal Revenue Code.
26 (4) Have no State officer or employee serving on the board of the nonprofit.
27 (5) Conduct at least quarterly meetings of the board of directors of the nonprofit

28 at the call of its chair.
29 SECTION 8A.9.(f) Section 5(b) of S.L. 2013-364, as rewritten by Section 3.2 of
30 S.L. 2013-363 and as amended by Section 11.18 of S.L. 2015-241, is repealed.
31 SECTION 8A.9.(g) Section 7.31(e) of this act reads as rewritten:
32 SECTION 7.31.(e) Program Administration. – The Department of Public Instruction shall
33 utilize the same administrative system used by the North Carolina State Education Assistance
34 Authority (Authority) to manage funds for the Personal Education Savings Account Student

35 Accounts for Children with Disabilities Program pursuant to G.S. 115C-597 and shall model its
36 contract in a manner that meets the requirements of this section and includes capabilities for at
37 least the following:
38 (1) The ability to restrict purchases, which may include an automated prior
39 authorization process for allowable purchases or reimbursement of allowable
40 purchases.

41 (2) Automation for the capture of purchase receipts, which shall be required for
42 the Department of Public Instruction and the teacher to store electronicallyfor
43 a total of four years for reporting and audit purposes, and transparent
44 transactions, making accountability and tracking simple.
45 (3) Ability for teachers to crowd-fund for certain products.
46 SECTION 8A.9.(h) G.S. 105-153.5(b)(12) reads as rewritten:
47 (12) The amount deposited during the taxable year to a personal education savings

48 student account under Article 41 of Chapter 115C of the General Statutes.
49 SECTION 8A.9.(i) This section does not affect the rights or liabilities of the State,
50 a taxpayer, or another person arising under a statute amended by this section before the effective

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1 date of its amendment, nor does it affect the right to any refund or credit of a tax that accrued
2 under the amended statute before the effective date of its amendment.
3 SECTION 8A.9.(j) Subsection (a) of this section applies beginning with scholarship
4 funds awarded for the 2020-2021 school year. Subsections (c) through (g) of this section become
5 effective July1, 2020. Subsection (h) of this section applies to taxable years beginning on or after
6 January 1, 2020.
7

8 RAISE CAP ON OPPORTUNITY SCHOLARSHIP ADMINISTRATIVE COSTS
9 SECTION 8A.11. G.S. 115C-562.8(c) reads as rewritten:
10 (c) Of the funds allocated to the Authority to award scholarship grants under this Part,
11 the Authority may retain the lesser of up to four percent (4%) of the funds appropriated or one
12 two million five hundred thousand dollars ($1,500,000) ($2,000,000) each fiscal year for
13 administrative costs associated with the scholarship grant program.
14

15 SEAA ADMINISTRATIVE COSTS FOR THE UNC NEED-BASED GRANT PROGRAM
16 SECTION 8A.12. G.S. 116-25.1 reads as rewritten:
17 § 116-25.1. Semester limitation on eligibility for The University of North Carolina
18 need-based financial aid grants.
19 (a) Grant Limitation. – Except as otherwise provided by this section, a student shall not
20 receive a grant from The University of North Carolina Need-Based Financial Aid Program for

21 more than 10 full-time academic semesters, or its equivalent if enrolled part-time, unless the
22 student is enrolled in a program officially designated by the Board of Governors as a five-year
23 degree program. If a student is enrolled in such a five-year degree program, then the student shall
24 not receive a need-based grant from The University of North Carolina Need-Based Financial Aid
25 Program for more than 12 full-time academic semesters or its equivalent if enrolled part-time.
26 (b) Waiver on Grant Limitation. – Upon application by a student, the constituent
27 institution may grant a waiver to the student on the limitation set forth in subsection (a) of this

28 section who may then receive a grant for the equivalent of one additional full-time academic
29 semester if the student demonstrates that any of the following have substantially disrupted or
30 interrupted the student's pursuit of a degree: (i) a military service obligation, (ii) serious medical
31 debilitation, (iii) a short-term or long-term disability, or (iv) other extraordinary hardship. The
32 Board of Governors shall establish policies and procedures to implement the waiver provided by
33 this subsection.
34 (c) Administrative Costs. – The State Education Assistance Authority may use up to one

35 and one-half percent (1.5%) of the funds appropriated for The University of North Carolina
36 Need-Based Financial Aid Program each fiscal year for administrative costs.
37
38 PART IX. HEALTH AND HUMAN SERVICES
39
40 PART IX-A. AGING AND ADULT SERVICES

41
42 STATE-COUNTY SPECIAL ASSISTANCE RATES
43 SECTION 9A.1.(a) For each year of the 2019-2021 fiscal biennium, the maximum
44 monthly rate for residents in adult care home facilities shall be one thousand one hundred
45 eighty-two dollars ($1,182) per month per resident.
46 SECTION 9A.1.(b) For each year of the 2019-2021 fiscal biennium, the maximum
47 monthly rate for residents in Alzheimer's/Dementia special care units shall be one thousand five

48 hundred fifteen dollars ($1,515) per month per resident.
49
50 INCREASE IN STATE-COUNTY SPECIAL ASSISTANCE PERSONAL NEEDS
51 ALLOWANCE

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1 SECTION9A.2.(a) EffectiveOctober1,2019,theDepartmentofHealthandHuman
2 Services, Division of Aging and Adult Services, shall increase the personal needs allowance
3 under the State-County Special Assistance program from forty-six dollars ($46.00) per month
4 per recipient to seventy dollars ($70.00) per month per recipient.
5 SECTION 9A.2.(b) Effective October 1, 2019, and notwithstanding the increase in
6 the personal needs allowance authorized by subsection (a) of this section or any other provision
7 of law to the contrary, the following limits are applicable for determining financial eligibility for

8 State-County Special Assistance:
9 (1) The total countable monthly income for individuals residing in adult care
10 home facilities shall not exceed one thousand two hundred twenty-eight
11 dollars ($1,228) per month.
12 (2) The total countable monthly income for individuals residing in
13 Alzheimer's/Dementia special care units shall not exceed one thousand five
14 hundred sixty-one dollars ($1,561) per month.

15
16 AUTHORIZATION FOR SECRETARY OF DHHS TO RAISE THE MAXIMUM
17 NUMBER OF STATE-COUNTY SPECIAL ASSISTANCE IN-HOME PAYMENTS
18 SECTION 9A.3.(a) Notwithstanding the provisions of G.S. 108A-47.1 or any other
19 provision of law to the contrary, and within existing appropriations for State-County Special
20 Assistance, the Secretaryof the Department of Health and Human Services maywaive the fifteen

21 percent (15%) cap on the number of Special Assistance in-home payments, as the Secretary
22 deems necessary.
23 SECTION 9A.3.(b) This section expires on June 30, 2021.
24
25 PART IX-B. CENTRAL MANAGEMENT AND SUPPORT
26
27 USE OF MEDICAID TRANSFORMATION FUND FOR NONRECURRING

28 EXPENDITURES OF THE NORTH CAROLINA FAMILIES ACCESSING
29 SERVICES THROUGH TECHNOLOGY (NC FAST) SYSTEM
30 SECTION 9B.1.(a) Notwithstanding the stated purpose of the Medicaid
31 Transformation Fund established under Section 12H.29 of S.L. 2015-241, the sum of eighteen
32 million ninety-one thousand eight hundred sixty-four dollars ($18,091,864) in nonrecurring
33 funds for the 2019-2020 fiscal year and the sum of eleven million two hundred twenty-nine
34 thousand eight hundred twenty-one dollars ($11,229,821) in nonrecurring funds for the

35 2020-2021 fiscal year shall be transferred from the Medicaid Transformation Fund to the
36 Department of Health and Human Services, Division of Central Management and Support. These
37 funds shall be used solely for nonrecurring operations and maintenance expenses for the North
38 Carolina Families Accessing Services Through Technology (NC FAST) system and to match
39 federal funds to expedite development and implementation of the following within the NC FAST
40 system: (i) the child welfare case management component, (ii) 24 hours per day/seven days per

41 week access to the NC FAST system, and (iii) a document management solution to allow State
42 and federal Program Integrity staff and the county departments of social services to share and
43 provide data in a timely manner. The Department of Health and Human Services, Division of
44 Central Management and Support, shall report any change in approved federal funding or federal
45 match rates within 30 days after the change to the Joint Legislative Oversight Committee on
46 Health and Human Services, the Joint Legislative Oversight Committee on Information
47 Technology, and the Fiscal Research Division.

48 SECTION 9B.1.(b) Departmental receipts appropriated in this act in the sum of
49 forty-one million one hundred twenty-nine thousand six hundred two dollars ($41,129,602) for
50 the2019-2020 fiscal year and in thesum of twenty-threemillion seven hundredseventythousand

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1 seven hundred fifty-three dollars ($23,770,753) for the 2020-2021 fiscal year shall be used for
2 the purposes described in subsection (a) of this section.
3
4 COMMUNITY HEALTH GRANT PROGRAM
5 SECTION 9B.2.(a) Funds appropriated in this act to the Department of Health and
6 Human Services, Division of Central Management, Office of Rural Health, for each year of the
7 2019-2021 fiscal biennium for the Community Health Grant Program shall be used to continue

8 to administer the Community Health Grant Program as modified by Section 11A.8 of S.L.
9 2017-57.
10 SECTION 9B.2.(b) The Office of Rural Health shall make the final decision about
11 awarding grants under this Program, but no single grant award shall exceed one hundred fifty
12 thousand dollars ($150,000) duringthe fiscal year. In awarding grants, the Office of Rural Health
13 shall consider the availabilityof other funds for the applicant; the incidence of povertyin the area
14 served by the applicant or the number of indigent clients served by the applicant; the availability

15 of, or arrangements for, after hours care; and collaboration between the applicant and a
16 community hospital or other safety net organizations.
17 SECTION 9B.2.(c) Grant recipients shall not use these funds to do any of the
18 following:
19 (1) Enhance or increase compensation or other benefits of personnel,
20 administrators, directors, consultants, or anyother persons receiving funds for

21 program administration; provided, however, funds may be used to hire or
22 retain health care providers. The use of grant funds for this purpose does not
23 obligate the Department of Health and Human Services to continue to fund
24 compensation beyond the grant period.
25 (2) Supplant existing funds, including federal funds traditionally received by
26 federally qualified community health centers. However, grant funds may be
27 used to supplement existing programs that serve the purposes described in

28 subsection (a) of this section.
29 (3) Finance or satisfy any existing debt.
30 SECTION 9B.2.(d) The Office of Rural Health mayuse up to two hundred thousand
31 dollars ($200,000) in recurring funds for each fiscal year of the 2019-2021 fiscal biennium for
32 administrative purposes.
33 SECTION 9B.2.(e) By September 1 of each year, the Office of Rural Health shall
34 submit a report to the Joint Legislative Oversight Committee on Health and Human Services on

35 community health grants that includes at least all of the following information:
36 (1) The identity and a brief description of each grantee and each program or
37 service offered by the grantee.
38 (2) The amount of funding awarded to each grantee.
39 (3) The number of individuals served by each grantee, and for the individuals
40 served, the types of services provided to each.

41 (4) Any other information requested by the Office of Rural Health as necessary
42 for evaluating the success of the Community Health Grant Program.
43 SECTION 9B.2.(f) By November 1, 2019, the Office of Rural Health shall report to
44 the Joint Legislative Oversight Committee on Health and Human Services on the implementation
45 statusofthefollowingCommunityHealthGrantProgramrequirementsenactedbySection11A.8
46 of S.L. 2017-57:
47 (1) Establishment of a Primary Care Advisory Committee, and that Committee's

48 development of an objective and equitable process for grading applications
49 for grants funded under the Community Health Grant Program.
50 (2) Development ofastandardizedmethodforgrant recipients to reportobjective,
51 measurable quality health outcomes.

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1
2 ELIMINATION OF OFFICE OF PROGRAM EVALUATION REPORTING AND
3 ACCOUNTABILITY
4 SECTION9B.4.(a) TheOfficeofProgram EvaluationReportingand Accountability
5 within the Department of Health and Human Services is eliminated.
6 SECTION 9B.4.(b) Part 31A of Article 3 of Chapter 143B of the General Statutes
7 is repealed.

8
9 VETERANS HEALTH CARE PILOT PROGRAM
10 SECTION 9B.5.(a) Pilot Program. – Of the funds appropriated in this act to the
11 DepartmentofHealthandHumanServices,DivisionofCentralManagementandSupport,Office
12 of Rural Health, the sum of four hundred thousand dollars ($400,000) in nonrecurring funds for
13 the 2019-2020 fiscal year and the sum of three hundred fifty thousand dollars ($350,000) in
14 nonrecurring funds for the 2020-2021 fiscal year shall be used to support the development and

15 implementation of a two-year pilot program to provide health care services to veterans. The
16 Department of Health and Human Services and the Department of Military and Veterans Affairs,
17 in coordination with Community Care of North Carolina and Maxim Healthcare Services, shall
18 develop and implement the pilot program in Cumberland County. The pilot program shall consist
19 of the following initiatives:
20 (1) A health care initiative to provide to veterans increased access to health care

21 resources through the care coordination efforts of community health workers.
22 (2) A workforce initiative to recruit and train unemployed and underemployed
23 veterans as community health workers for the health care initiative described
24 in subdivision (1) of this section.
25 SECTION 9B.5.(b) Termination. – The pilot program authorized by this section
26 shall terminate on June 30, 2021.
27 SECTION 9B.5.(c) Evaluation. – By February 1, 2022, the Department of Health

28 and Human Services shall conduct and submit to the Joint Legislative Oversight Committee on
29 Health and Human Services a comprehensive evaluation of the pilot program authorized by this
30 section. The comprehensive evaluation shall include at least all of the following:
31 (1) A detailed breakdown of expenditures for the pilot program.
32 (2) The specific ways in which the health care initiative provided to veterans
33 increased access to health care resources.
34 (3) The total number of unemployed and underemployed veterans who were

35 recruited and trained as community health workers under the pilot program's
36 workforce initiative.
37
38 ELIMINATION OF UNNECESSARY AND REDUNDANT REPORTS
39 SECTION 9B.6.(a) Eliminate Report on Expansion of Controlled Substances
40 Reporting System Monitoring Capacity. – G.S. 90-113.73A(b) is repealed.

41 SECTION 9B.6.(b) Eliminate Report on Coordination of Diabetes Programs. –
42 G.S. 130A-221.1(b) is repealed.
43 SECTION9B.6.(c) EliminateReportonDepartment's Coordination ofChronicCare
44 Initiatives. – G.S. 130A-222.5(3) is repealed.
45 SECTION 9B.6.(d) Eliminate Report on Compliance with Federal Maintenance of
46 Effort Requirements Under TANF. – G.S. 108A-27.12(g) is repealed.
47 SECTION 9B.6.(e) Eliminate Report on Use of Lapsed Salary Funds. –

48 G.S. 120-208.4(b) is repealed.
49
50 NORTH CAROLINA RARE DISEASE ADVISORY COUNCIL FUNDS

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1 SECTION 9B.7. Of the funds appropriated to the Department of Health and Human
2 Services, Division of Central Management and Support, the sum of two hundred fifty thousand
3 dollars ($250,000) in recurring funds for the 2019-2020 fiscal year and the sum of two hundred
4 fifty thousand dollars ($250,000) in recurring funds for the 2020-2021 fiscal year shall be
5 allocated to the School of Medicine of the Universityof North Carolina at Chapel Hill to support
6 the activities of the Advisory Council on Rare Diseases (Council) established pursuant to
7 G.S. 130A-33.65. These funds shall be used to develop a rare disease network across the State

8 for the purposes of collecting data regarding regional rare disease prevalence, stimulating rare
9 disease collaborations, and creating biotechnology economic development opportunities. The
10 Council shall partner with legislators and other stakeholders in various regions of the State to
11 increase public awareness and improve diagnosis times for individuals with rare diseases. In
12 addition, the Council shall develop key strategies on increasing access to information, integrated
13 and innovative support services, translational research collaborations, educational programs, and
14 accelerated technology, as well as emphasizing economic development and retention of talented

15 researchers. In support of these activities, the funds allocated pursuant to this section shall be
16 used by the Council for the following:
17 (1) The sum of thirty thousand dollars ($30,000) to be used to primarily support
18 seminars on rare diseases to be held throughout the State.
19 (2) Thesum oftwenty-fivethousanddollars($25,000)to beused to supporttravel
20 and per diem for members of the Council to attend conferences and other

21 partnership organization activities related to rare diseases.
22 (3) The sum of five thousand dollars ($5,000) to maintain a Web site and social
23 media presence and to create material on activities of the Council.
24 (4) The sum of one hundred sixty thousand dollars ($160,000) to establish
25 positions to support the Council, including contracting for temporary
26 employees to launch larger initiatives of the Council.
27 (5) The sum of thirty thousand dollars ($30,000) for literature, equipment, and

28 supplies to support the Council's activities.
29
30 COMPETITIVE GRANTS/NONPROFIT ORGANIZATIONS
31 SECTION 9B.8.(a) Of the funds appropriated in this act to the Department of Health
32 and Human Services, Division of Central Management and Support, for each year of the
33 2019-2021 fiscal biennium, the following amounts shall be used to allocate funds for nonprofit
34 organizations:

35 (1) The sum of ten million six hundred fifty-three thousand nine hundred eleven
36 dollars ($10,653,911) in recurring funds for each year of the 2019-2021 fiscal
37 biennium.
38 (2) The sum of four hundred fifty thousand dollars ($450,000) in nonrecurring
39 fundsforthe2019-2020fiscal yearandthesum of ninehundred fiftythousand
40 dollars ($950,000) in nonrecurring funds for the 2020-2021 fiscal year.

41 (3) The sum of four million seven hundred seventy-four thousand five hundred
42 twenty-five dollars ($4,774,525) for each year of the 2019-2021 fiscal
43 biennium appropriated in Section 9K.1(a) of this act in Social Services Block
44 Grant funds.
45 (4) The sum of one million six hundred thousand dollars ($1,600,000) for each
46 year of the 2019-2021 fiscal biennium appropriated in Section 9K.1of this act
47 in Substance Abuse Prevention and Treatment Block Grant funds.

48 SECTION 9B.8.(b) The Department shall continue administering a competitive
49 grants process for nonprofit funding. The Department shall administer a plan that, at a minimum,
50 includes each of the following:

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1 (1) A request for application (RFA) process to allow nonprofits to apply for and
2 receive State funds on a competitive basis. The Department shall require
3 nonprofits to include in the application a plan to evaluate the effectiveness,
4 including measurable impact or outcomes, of the activities, services, and
5 programs for which the funds are being requested.
6 (2) A requirement that nonprofits match a minimum of fifteen percent (15%) of
7 the total amount of the grant award.

8 (3) A requirement that the Secretary prioritize grant awards to those nonprofits
9 that are able to leverage non-State funds in addition to the grant award.
10 (4) A process that awards grants to nonprofits that have the capacity to provide
11 services on a statewide basis and that support anyof the following State health
12 and wellness initiatives:
13 a. A program targeting advocacy, support, education, or residential
14 services for persons diagnosed with autism.

15 b. A system of residential supports for those afflicted with substance
16 abuse addiction.
17 c. A program of advocacy and supports for individuals with intellectual
18 and developmental disabilities or severe and persistent mental illness,
19 substance abusers, or the elderly.
20 d. Supports and services to children and adults with developmental

21 disabilities or mental health diagnoses.
22 e. A food distribution system for needy individuals.
23 f. The provision and coordination of services for the homeless.
24 g. The provision of services for individuals aging out of foster care.
25 h. Programs promoting wellness, physical activity, and health education
26 programming for North Carolinians.
27 i. The provision of services and screening for blindness.

28 j. A provision for the delivery of after-school services for
29 apprenticeships or mentoring at-risk youth.
30 k. The provision of direct services for amyotrophic lateral sclerosis
31 (ALS) and those diagnosed with the disease.
32 l. A comprehensive smoking prevention and cessation program that
33 screens and treats tobacco use in pregnant women and postpartum
34 mothers.

35 m. A program providing short-term or long-term residential substance
36 abuse services. For purposes of this sub-subdivision, long-term
37 means a minimum of 12 months.
38 n. A program that provides year-round sports training and athletic
39 competition for children and adults with disabilities.
40 It is the intent of the General Assembly that annually the Secretary evaluate

41 and prioritize the categories of health and wellness initiatives described under
42 this subdivision to determine the best use of these funds in making grant
43 awards, exclusive of direct allocations made by the General Assembly.
44 (5) A process that ensures that funds received by the Department to implement
45 theplansupplementanddonot supplantexistingfundsforhealth and wellness
46 programs and initiatives.
47 (6) A process that allows grants to be awarded to nonprofits for up to two years.

48 (7) A requirement that initial disbursement of the grants be awarded no later than
49 30 days after certification of the State budget for the respective fiscal year.
50 SECTION 9B.8.(c) No later than July 1 of each year, as applicable, the Secretary
51 shall announce the recipients of the competitive grant awards and allocate funds to the grant

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1 recipients for the respective grant period pursuant to the amounts designated under subsection
2 (a) of this section. After awards have been granted, by September 1 of each year, the Secretary
3 shall submitareportto theJoint LegislativeOversight Committeeon HealthandHumanServices
4 on the grant awards that includes at least all of the following:
5 (1) The identity and a brief description of each grantee and each program or
6 initiative offered by the grantee.
7 (2) The amount of funding awarded to each grantee.

8 (3) The number of persons served by each grantee, broken down by program or
9 initiative.
10 SECTION 9B.8.(d) No later than December 1 of each fiscal year, each nonprofit
11 organization receiving funding pursuant to this section in the respective fiscal year shall submit
12 to the Division of Central Management and Support a written report of all activities funded by
13 State appropriations. The report shall include the following information about the fiscal year
14 preceding the year in which the report is due:

15 (1) The entity's mission, purpose, and governance structure.
16 (2) Adescription ofthetypes ofprograms, services, andactivitiesfundedbyState
17 appropriations.
18 (3) Statistical and demographical information on the number of persons served by
19 these programs, services, and activities, including the counties in which
20 services are provided.

21 (4) Outcome measures that demonstrate the impact and effectiveness of the
22 programs, services, and activities.
23 (5) A detailed program budget and list of expenditures, including all positions
24 funded, matching expenditures, and funding sources.
25 SECTION 9B.8.(e) For the 2019-2021 fiscal biennium only, from the funds
26 identified in subsection (a) of this section, the Department shall make the following allocations,
27 provided that each nonprofit organization receiving funds pursuant to this subsection shall be

28 required to seek future funding through the competitive grants process in accordance with
29 subsection (b) of this section:
30 (1) The sum of three hundred fifty thousand dollars ($350,000) in each year of
31 the 2019-2021 fiscal biennium to provide grants to Big Brothers Big Sisters.
32 (2) Thesum ofonemillionsix hundredtwenty-fivethousanddollars($1,625,000)
33 for each year of the 2019-2021 fiscal biennium and the sum of one million six
34 hundred thousand dollars ($1,600,000) appropriated in Section 9K.1(a) of this

35 act in Substance Abuse Prevention and Treatment Block Grant funds in each
36 year of the 2019-2021 fiscal biennium to Triangle Residential Options for
37 Substance Abusers, Inc., (TROSA) for the purpose of assisting individuals
38 with substance abuse addiction.
39 (3) The sum of two million seven hundred fifty thousand dollars ($2,750,000) in
40 each yearofthe2019-2021fiscalbienniumtoprovidegrantstoBoysandGirls

41 Clubs across the State to implement (i) programs that improve the motivation,
42 performance, and self-esteem of youth and (ii) other initiatives that would be
43 expected to reduce gang participation, school dropout, and teen pregnancy
44 rates.
45 (4) The sum of two hundred fifty thousand dollars ($250,000) to Cross Trail
46 Outfitters for purposes of promoting wellness and physical activity for youth
47 seven to 20 years of age.

48 (5) The sum of three million two hundred thirty-six thousand three hundred
49 twenty-one dollars ($3,236,321) for the 2019-2020 fiscal year and the sum of
50 three million seven hundred thirty-six thousand three hundred twenty-one
51 dollars ($3,736,321) for the 2020-2021 fiscal year to food banks in this State

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1 for the provision of food distribution to needy individuals, including Food
2 Bank of the Albemarle, North Carolina Association of Feeding America Food
3 Banks, MANNA Food Bank, Action Pathways, Food Bank of Central and
4 Eastern North Carolina, Second Harvest Food Bank of Northwest North
5 Carolina, and Second Harvest Food Bank of Metrolina.
6 (6) The sum of two hundred thirty-two thousand seven hundred fifty-seven
7 dollars ($232,757) in each year of the 2019-2021 fiscal biennium to the North

8 Carolina Senior Games for purposes of promoting health and education for
9 North Carolinians 50 years of age and better.
10 (7) The sum of one hundred thousand dollars ($100,000) in each year of the
11 2019-2021 fiscal biennium to Special Olympics North Carolina to promote
12 training and athletic competition for children and adults with intellectual
13 disabilities.
14

15 TELEHEALTH PILOT PROGRAM
16 SECTION 9B.10.(a) Of the funds appropriated to the Department of Health and
17 Human Services, Division of Central Management and Support, Office of Rural Health, the sum
18 of five hundred thousand dollars ($500,000) in nonrecurring funds for the 2019-2020 fiscal year
19 shall be allocated to Southeastern Regional Medical Center (Southeastern), a nonprofit
20 corporation, to develop and administer a telehealth pilot program. The purpose of the pilot

21 program is to purchase telehealth infrastructure and equipment that will enable Southeastern to
22 establish telehealth services with health care providers in Bladen County, Columbus County,
23 Robeson County, and Scotland County. The pilot program expires on December 31, 2020, unless
24 otherwise extended by law.
25 SECTION 9B.10.(b) By November 1, 2020, Southeastern shall submit to the
26 DepartmentofHealthandHumanServices,DivisionofCentralManagementandSupport,Office
27 of Rural Health, a written report of all telehealth services provided under the pilot program

28 authorized by this section. The report shall include at least all of the following information:
29 (1) A description of all telehealth infrastructure and equipment funded by State
30 appropriations.
31 (2) A description of the types of telehealth services provided under the pilot
32 program, and a list of the health care providers participating in the pilot
33 program.
34 (3) Statistical and demographical information on the number of persons served

35 under the pilot program.
36 (4) Objective outcome measures that demonstrate the impact and effectiveness of
37 the telehealth services provided under the pilot program.
38 (5) A detailed budget and list of expenditures funded by State appropriations.
39 SECTION 9B.10.(c) By March 1, 2021, the Department of Health and Human
40 Services, Division of Central Management and Support, Office of Rural Health, shall report to

41 the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal
42 Research Division on the pilot program authorized by this section. The report shall include, at a
43 minimum, the information described in subdivisions (1) through (5) of subsection (b) of this
44 section.
45
46 PART IX-C. CHILD DEVELOPMENT AND EARLY EDUCATION
47

48 NC PRE-K PROGRAMS/STANDARDS FOR FOUR- AND FIVE-STAR RATED
49 FACILITIES
50 SECTION 9C.1.(a) Eligibility. – The Department of Health and Human Services,
51 Division of Child Development and Early Education, shall continue implementing the

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1 prekindergarten program (NC Pre-K). The NC Pre-K program shall serve children who are four
2 years of age on or before August 31 of the program year. In determining eligibility, the Division
3 shall establish income eligibilityrequirements for the program not to exceed seventy-five percent
4 (75%) of the State median income. Up to twenty percent (20%) of children enrolled may have
5 family incomes in excess of seventy-five percent (75%) of median income if those children have
6 other designated risk factors. Furthermore, any age-eligible child who is a child of either of the
7 following shall be eligible for the program: (i) an active duty member of the Armed Forces of the

8 United States, including the North Carolina National Guard, State military forces, or a reserve
9 component of the Armed Forces who was ordered to active duty by the proper authority within
10 the last 18 months or is expected to be ordered within the next 18 months, or (ii) a member of the
11 Armed Forces of the United States, including the North Carolina National Guard, State military
12 forces, or a reserve component of the Armed Forces who was injured or killed while serving on
13 active duty. Eligibility determinations for NC Pre-K participants may continue through local
14 education agencies and local North Carolina Partnership for Children, Inc., partnerships.

15 Otherthandevelopmental disabilitiesorotherchronichealth issues, theDivision shall
16 not consider the health of a child as a factor in determining eligibility for participation in the NC
17 Pre-K program.
18 SECTION 9C.1.(b) Multiyear Contracts. – The Division of Child Development and
19 Early Education shall require the NC Pre-K contractor to issue multiyear contracts for licensed
20 private child care centers providing NC Pre-K classrooms.

21 SECTION 9C.1.(c) Building Standards. – Notwithstanding G.S. 110-91(4), private
22 child care facilities and public schools operating NC Pre-K classrooms shall meet the building
23 standards for preschool students as provided in G.S. 115C-521.1.
24 SECTION 9C.1.(d) Programmatic Standards. – Except as provided in subsection
25 (b1) of this section, entities operating NC Pre-K classrooms shall adhere to all of the policies
26 prescribed by the Division of Child Development and Early Education regarding programmatic
27 standards and classroom requirements.

28 SECTION 9C.1.(e) NC Pre-K Committees. – Local NC Pre-K committees shall use
29 thestandarddecision-makingprocessdevelopedbytheDivisionofChildDevelopmentandEarly
30 Education in awarding NC Pre-K classroom slots and student selection.
31 SECTION 9C.1.(f) Reporting. – The Division of Child Development and Early
32 Education shall submit an annual report no later than March 15 of each year to the Joint
33 Legislative Oversight Committee on Health and Human Services, the Office of State Budget and
34 Management, and the Fiscal Research Division. The report shall include the following:

35 (1) The number of children participating in the NC Pre-K program by county.
36 (2) The number of children participating in the NC Pre-K program who have
37 never been served in other earlyeducation programs such as child care, public
38 or private preschool, Head Start, Early Head Start, or early intervention
39 programs.
40 (3) The expected NC Pre-K expenditures for the programs and the source of the

41 local contributions.
42 (4) The results of an annual evaluation of the NC Pre-K program.
43 SECTION 9C.1.(g) Audits. – The administration of the NC Pre-K program by local
44 partnerships shall be subject to the financial and compliance audits authorized under
45 G.S. 143B-168.14(b).
46
47 RAISE BASE REIMBURSEMENT RATES FOR NC PRE-K CHILD CARE CENTERS

48 SECTION 9C.2. Of the funds appropriated in this act to the Department of Health
49 and Human Services, Division of Child Development and Early Education, funds shall be
50 allocated to raise the base reimbursement rates for child care centers participating in the North
51 Carolina Prekindergarten (NC Pre-K) program by two percent (2%) over the 2018-2019 fiscal

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1 yearratesforthe2019-2020fiscal yearandbyanadditionaltwopercent(2%)overthe2019-2020
2 rates for the 2020-2021 fiscal year. It is the intent of the General Assembly that funds allocated
3 pursuant to this section be used to increase the salaries of teachers working in child care centers
4 as a means to address disparities in teacher salaries among teachers working in child care centers
5 versus those working in public schools or Head Start centers.
6
7 CHILD CARE SUBSIDY RATES

8 SECTION 9C.3.(a) The maximum gross annual income for initial eligibility,
9 adjusted annually, for subsidized child care services shall be determined based on a percentage
10 of the federal poverty level as follows:
11 AGE INCOME PERCENTAGE LEVEL
12 0 – 5 200%
13 6 – 12 133%
14 The eligibility for any child with special needs, including a child who is 13 years of

15 age or older, shall be two hundred percent (200%) of the federal poverty level.
16 SECTION 9C.3.(b) Effective October 1, 2019, fees for families who are required to
17 sharein the cost of care areestablishedbasedonninepercent (9%)of gross familyincome. When
18 care is received at the blended rate, the co-payment shall be eighty-three percent (83%) of the
19 full-time co-payment. Co-payments for part-time care shall be seventy-five percent (75%) of the
20 full-time co-payment.

21 SECTION 9C.3.(c) Payments for the purchase of child care services for low-income
22 children shall be in accordance with the following requirements:
23 (1) Religious sponsored child care facilities operating pursuant to G.S. 110-106
24 and licensed child care centers and homes that meet the minimum licensing
25 standards that are participating in the subsidized child care program shall be
26 paid the one-star county market rate or the rate they charge privately paying
27 parents, whichever is lower,unlessprohibitedbysubsection (f)ofthis section.

28 (2) Licensed child care centers and homes with two or more stars shall receive the
29 marketrateforthatratedlicenselevelforthatage grouportheratetheycharge
30 privately paying parents, whichever is lower, unless prohibited by subsection
31 (g) of this section.
32 (3) No payments shall be made for transportation services charged by child care
33 facilities.
34 (4) Payments for subsidized child care services for postsecondary education shall

35 be limited to a maximum of 20 months of enrollment.
36 (5) The Department of Health and Human Services shall implement necessary
37 rule changes to restructure services, including, but not limited to, targeting
38 benefits to employment.
39 SECTION 9C.3.(d) Provisions of payment rates for child care providers in counties
40 that do not have at least 50 children in each age group for center-based and home-based care are

41 as follows:
42 (1) Except as applicable in subdivision (2) of this subsection, payment rates shall
43 be set at the statewide or regional market rate for licensed child care centers
44 and homes.
45 (2) If it can be demonstrated that the application of the statewide or regional
46 market rate to a county with fewer than 50 children in each age group is lower
47 than the county market rate and would inhibit the ability of the county to

48 purchase child care for low-income children, then the county market rate may
49 be applied.
50 SECTION 9C.3.(e) A market rate shall be calculated for child care centers and
51 homes at each rated license level for each county and for each age group or age category of

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1 enrollees and shall be representative of fees charged to parents for each age group of enrollees
2 within the county. The Division of Child Development and Early Education shall also calculate
3 a statewide rate and regional market rate for each rated license level for each age category.
4 SECTION 9C.3.(f) The Division of Child Development and Early Education shall
5 continue implementing policies that improve the quality of child care for subsidized children,
6 including a policy in which child care subsidies are paid, to the extent possible, for child care in
7 the higher quality centers and homes only. The Division shall define higher quality, and subsidy

8 funds shall not be paid for one- or two-star rated facilities. For those counties with an inadequate
9 number of four- and five-star rated facilities, the Division shall continue a transition period that
10 allowsthefacilitiesto continueto receivesubsidyfundswhilethefacilities work on theincreased
11 star ratings. The Division mayallow exemptions in counties where there is an inadequate number
12 of four- and five-star rated facilities for non-star rated programs, such as religious programs.
13 SECTION 9C.3.(g) Facilities licensed pursuant to Article 7 of Chapter 110 of the
14 General Statutes and facilities operated pursuant to G.S. 110-106 may participate in the program

15 that provides for the purchase of care in child care facilities for minor children of needyfamilies.
16 Except as authorized by subsection (f) of this section, no separate licensing requirements shall
17 be used to select facilities to participate. In addition, child care facilities shall be required to meet
18 any additional applicable requirements of federal law or regulations. Child care arrangements
19 exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall
20 meet the requirements established by other State law and by the Social Services Commission.

21 County departments of social services or other local contracting agencies shall not
22 use a provider's failure to comply with requirements in addition to those specified in this
23 subsection as a condition for reducing the provider's subsidized child care rate.
24 SECTION 9C.3.(h) Payment for subsidized child care services provided with
25 Temporary Assistance for Needy Families Block Grant funds shall comply with all regulations
26 and policies issued bythe Division of Child Development and EarlyEducation for the subsidized
27 child care program.

28 SECTION 9C.3.(i) Noncitizen families who reside in this State legally shall be
29 eligible for child care subsidies if all other conditions of eligibilityare met. If all other conditions
30 of eligibility are met, noncitizen families who reside in this State illegally shall be eligible for
31 child care subsidies only if at least one of the following conditions is met:
32 (1) The child for whom a child care subsidyis sought is receiving child protective
33 services or foster care services.
34 (2) The child for whom a child care subsidyis sought is developmentally delayed

35 or at risk of being developmentally delayed.
36 (3) The child for whom a child care subsidy is sought is a citizen of the United
37 States.
38 SECTION 9C.3.(j) The Department of Health and Human Services, Division of
39 Child Development and Early Education, shall require all county departments of social services
40 to include on any forms used to determine eligibility for child care subsidy whether the family

41 waiting for subsidy is receiving assistance through the NC Pre-K Program or Head Start.
42 SECTION 9C.3.(k) Department of Defense-certified child care facilities licensed
43 pursuant to G.S. 110-106.2 may participate in the State-subsidized child care program that
44 provides for the purchase of care in child care facilities for minor children in needy families,
45 provided that funds allocated from the State-subsidized child care program to Department of
46 Defense-certified child care facilities shall supplement and not supplant funds allocated in
47 accordance with G.S. 143B-168.15(g). Payment rates and fees for military families who choose

48 Department of Defense-certified child care facilities and who are eligible to receive subsidized
49 child care shall be as set forth in this section.
50
51 CHILD CARE ALLOCATION FORMULA

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1 SECTION 9C.4.(a) The Department of Health and Human Services, Division of
2 Child Development and Early Education (Division), shall allocate child care subsidy voucher
3 funds to pay the costs of necessary child care for minor children of needy families. The
4 mandatorythirty percent (30%) North Carolina Partnership for Children, Inc., subsidy allocation
5 under G.S. 143B-168.15(g) shall constitute the base amount for each county's child care subsidy
6 allocation. The Department of Health and Human Services shall use the following method when
7 allocatingfederal and Statechild carefunds,not includingtheaggregatemandatorythirtypercent

8 (30%) North Carolina Partnership for Children, Inc., subsidy allocation:
9 (1) Funds shall be allocated to a county based upon the projected cost of serving
10 children under age 11 in families with all parents working who earn less than
11 the applicable federal poverty level percentage set forth in Section 9C.3(a) of
12 this act.
13 (2) The Division may withhold up to two percent (2%) of available funds from
14 the allocation formula for (i) preventing termination of services throughout

15 the fiscal year and (ii) repayment of any federal funds identified by counties
16 as overpayments, including overpayments due to fraud. The Division shall
17 allocate to counties any funds withheld before the end of the fiscal year when
18 the Division determines the funds are not needed for the purposes described
19 in this subdivision. The Division shall submit a report to the Joint Legislative
20 Oversight Committee on Health and Human Services and the Fiscal Research

21 Division, which report shall include each of the following:
22 a. The amount of funds used for preventing termination of services and
23 the repayment of any federal funds.
24 b. The date the remaining funds were distributed to counties.
25 c. As a result of funds withheld under this subdivision and after funds
26 have been distributed, any counties that did not receive at least the
27 amount the counties received the previous year and the amount by

28 which funds were decreased.
29 The Division shall submit a report in each year of the 2019-2021 fiscal
30 biennium 30 days after the funds withheld pursuant to this subdivision are
31 distributed but no later than April 1 of each respective year.
32 (3) TheDivision shall setasidefourpercent (4%)ofchildcaresubsidyallocations
33 for vulnerable populations, which include a child identified as having special
34 needs and a child whose application for assistance indicates that the child and

35 the child's family is experiencing homelessness or is in a temporary living
36 situation. A child identified by this subdivision shall be given priority for
37 receiving services until such time as set-aside allocations for vulnerable
38 populations are exhausted.
39 SECTION 9C.4.(b) The Division may reallocate unused child care subsidy voucher
40 funds in order to meet the child care needs of low-income families. Any reallocation of funds

41 shall be based upon the expenditures of all child care subsidy voucher funding, including North
42 Carolina Partnership for Children, Inc., funds within a county. Counties shall manage service
43 levels within the funds allocated to the counties. A county with a spending coefficient over one
44 hundred percent (100%) shall submit a plan to the Division for managing the county's allocation
45 before receiving any reallocated funds.
46 SECTION 9C.4.(c) When implementing the formula under subsection (a) of this
47 section, the Division shall include the market rate increase in the formula process rather than

48 calculating the increases outside of the formula process. Additionally, the Department shall do
49 the following:
50 (1) A county's initial allocation shall be the county's expenditure in the previous
51 fiscal year or a prorated share of the county's previous fiscal year expenditures

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1 if sufficient funds are not available. With the exception of market rate
2 increases consistent with any increases approved by the General Assembly, a
3 county whose spending coefficient is less than ninety-two percent (92%) in
4 the previous fiscal year shall receive its prior year's expenditure as its
5 allocation and shall not receive an increase in its allocation in the following
6 year. A county whose spending coefficient is at least ninety-two percent
7 (92%) in the previous fiscal year shall receive, at a minimum, the amount it

8 expended in the previous fiscal year and may receive additional funding, if
9 available. The Division may waive this requirement and allow an increase if
10 the spending coefficient is below ninety-two percent (92%) due to
11 extraordinary circumstances, such as a State or federal disaster declaration in
12 the affected county. ByOctober 1 of each year, the Division shall report to the
13 Joint LegislativeOversight CommitteeonHealthandHumanServices andthe
14 Fiscal Research Division the counties that received a waiver pursuant to this

15 subdivision and the reasons for the waiver.
16 (2) Effective immediately following the next new decennial census data release,
17 implement (i) one-third of the change in a county's allocation in the year
18 following the data release, (ii) an additional one-third of the change in a
19 county's allocation beginning two years after the initial change under this
20 subdivision, and (iii) the final one-third change in a county's allocation

21 beginning the following two years thereafter.
22
23 SMART START INITIATIVES
24 SECTION 9C.5.(a) Policies. – The North Carolina Partnership for Children, Inc.,
25 and its Board shall ensure policies focus on the North Carolina Partnership for Children, Inc.'s
26 mission of improving child care quality in North Carolina for children from birth to five years of
27 age. North Carolina Partnership for Children, Inc.-funded activities shall include assisting child

28 care facilities with (i) improving quality, including helping one-, two-, and three-star-rated
29 facilities increase their star ratings, and (ii) implementing prekindergarten programs. State
30 funding for local partnerships shall also be used for evidence-based or evidence-informed
31 programs for children from birth to 5 years of age that do the following:
32 (1) Increase children's literacy.
33 (2) Increase the parents' ability to raise healthy, successful children.
34 (3) Improve children's health.

35 (4) Assistfour-andfive-star-ratedfacilitiesinimprovingandmaintainingquality.
36 SECTION 9C.5.(b) Administration. – Administrative costs shall be equivalent to,
37 on an average statewide basis for all local partnerships, not more than eight percent (8%) of the
38 total statewide allocation to all local partnerships. For purposes of this subsection, administrative
39 costs shall include costs associated with partnership oversight, business and financial
40 management, general accounting, human resources, budgeting, purchasing, contracting, and

41 information systems management. The North Carolina Partnership for Children, Inc., shall
42 continue using a single statewide contract management system that incorporates features of the
43 required standard fiscal accountability plan described in G.S. 143B-168.12(a)(4). All local
44 partnerships are required to participate in the contract management system and, directed by the
45 North Carolina Partnership for Children, Inc., to collaborate, to the fullest extent possible, with
46 other local partnerships to increase efficiency and effectiveness.
47 SECTION 9C.5.(c) Salaries. – The salary schedule developed and implemented by

48 the North Carolina Partnership for Children, Inc., shall set the maximum amount of State funds
49 that may be used for the salary of the Executive Director of the North Carolina Partnership for
50 Children, Inc., and the directors of the local partnerships. The North Carolina Partnership for
51 Children, Inc., shall base the schedule on the following criteria:

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1 (1) The population of the area serviced by a local partnership.
2 (2) The amount of State funds administered.
3 (3) The amount of total funds administered.
4 (4) The professional experience of the individual to be compensated.
5 (5) Any other relevant factors pertaining to salary, as determined by the North
6 Carolina Partnership for Children, Inc.
7 The salary schedule shall be used only to determine the maximum amount of State

8 fundsthatmaybeusedforcompensation.Nothinginthissubsectionshallbeconstruedtoprohibit
9 a local partnership from using non-State funds to supplement an individual's salary in excess of
10 the amount set by the salary schedule established under this subsection.
11 SECTION 9C.5.(d) Match Requirements. – The North Carolina Partnership for
12 Children, Inc., and all local partnerships shall, in the aggregate, be required to match one hundred
13 percent (100%) of the total amount budgeted for the program in each fiscal year of the 2019-2021
14 biennium. Of the funds the North Carolina Partnership for Children, Inc., and the local

15 partnerships are required to match, contributions of cash shall be equal to at least thirteen percent
16 (13%) and in-kind donated resources shall be equal to no more than six percent (6%) for a total
17 match requirement of nineteen percent (19%) for each year of the 2019-2021 fiscal biennium.
18 The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of
19 the required match for a fiscal year in order to meet the match requirement of the succeeding
20 fiscal year. Only in-kind contributions that are quantifiable shall be applied to the in-kind match

21 requirement. Volunteer services may be treated as an in-kind contribution for the purpose of the
22 match requirement of this subsection. Volunteer services that qualify as professional services
23 shall be valued at the fair market value of those services. All other volunteer service hours shall
24 be valued at the statewide average wage rate as calculated from data compiled by the Division of
25 Employment Security of the Department of Commerce in the Employment and Wages in North
26 Carolina Annual Report for the most recent period for which data are available. Expenses,
27 including both those paid by cash and in-kind contributions, incurred by other participating

28 non-State entities contracting with the North Carolina Partnership for Children, Inc., or the local
29 partnerships also may be considered resources available to meet the required private match. In
30 order to qualify to meet the required private match, the expenses shall:
31 (1) Be verifiable from the contractor's records.
32 (2) If in-kind, other than volunteer services, be quantifiable in accordance with
33 generally accepted accounting principles for nonprofit organizations.
34 (3) Not include expenses funded by State funds.

35 (4) Be supplemental to and not supplant preexisting resources for related program
36 activities.
37 (5) Be incurred as a direct result of the Early Childhood Initiatives Program and
38 be necessary and reasonable for the proper and efficient accomplishment of
39 the Program's objectives.
40 (6) Be otherwise allowable under federal or State law.

41 (7) Be required and described in the contractual agreements approved by the
42 North Carolina Partnership for Children, Inc., or the local partnership.
43 (8) Be reported to the North Carolina Partnership for Children, Inc., or the local
44 partnership by the contractor in the same manner as reimbursable expenses.
45 Failure to obtain a nineteen-percent (19%) match by June 30 of each year of the
46 2019-2021 fiscal biennium shall result in a dollar-for-dollar reduction in the appropriation for the
47 Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be

48 responsible for compiling information on the private cash and in-kind contributions into a report,
49 to be included in its annual report as required under G.S. 143B-168.12(d), in a format that allows
50 verification by the Department of Revenue. The same match requirements shall apply to any
51 expansion funds appropriated by the General Assembly.

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1 SECTION 9C.5.(e) Bidding. – The North Carolina Partnership for Children, Inc.,
2 and all local partnerships shall use competitive bidding practices in contracting for goods and
3 services on contract amounts as follows:
4 (1) Foramounts offivethousanddollars($5,000)orless, theprocedures specified
5 by a written policy as developed by the Board of Directors of the North
6 Carolina Partnership for Children, Inc.
7 (2) For amounts greater than five thousand dollars ($5,000), but less than fifteen

8 thousand dollars ($15,000), three written quotes.
9 (3) For amounts of fifteen thousand dollars ($15,000) or more, but less than forty
10 thousand dollars ($40,000), a request for proposal process.
11 (4) For amounts of forty thousand dollars ($40,000) or more, a request for
12 proposal process and advertising in a major newspaper.
13 SECTION9C.5.(f) Allocations. –The North CarolinaPartnershipforChildren, Inc.,
14 shall not reduce the allocation for counties with less than 35,000 in population below the

15 2012-2013 funding level.
16 SECTION 9C.5.(g) Performance-Based Evaluation. – The Department of Health
17 and Human Services shall continue to implement the performance-based evaluation system.
18 SECTION 9C.5.(h) Expenditure Restrictions. – Except as provided in subsection (i)
19 ofthis section, theDepartment ofHealthandHumanServices andtheNorth CarolinaPartnership
20 for Children, Inc., shall ensure that the allocation of funds for Early Childhood Education and

21 Development Initiatives for the 2019-2021 fiscal biennium shall be administered and distributed
22 in the following manner:
23 (1) Capital expenditures are prohibitedfor the2017-2019fiscal biennium. Forthe
24 purposes of this section, capital expenditures means expenditures for capital
25 improvements as defined in G.S. 143C-1-1(d)(5).
26 (2) Expenditures of State funds for advertising and promotional activities are
27 prohibited for the 2019-2021 fiscal biennium.

28 For the 2019-2021 fiscal biennium, local partnerships shall not spend any State funds
29 on marketing campaigns, advertising, or any associated materials. Local partnerships may spend
30 any private funds the local partnerships receive on those activities.
31 SECTION 9C.5.(i) Notwithstanding subsection (h) of this section, the North
32 Carolina Partnership for Children, Inc., and local partnerships may use up to one percent (1%) of
33 State funds for fund-raising activities. The North Carolina Partnership for Children, Inc., shall
34 include in its annual report required under G.S. 143B-168.12(d) a report on the use of State funds

35 for fund-raising. The report shall include the following:
36 (1) The amount of funds expended on fund-raising.
37 (2) Any return on fund-raising investments.
38 (3) Any other information deemed relevant.
39 SECTION 9C.5.(j) G.S. 143B-168.12(d) reads as rewritten:
40 (d) The North Carolina Partnership for Children, Inc., shall make a report no later than

41 December 1 of each year to the General Assembly Joint Legislative Oversight Committee on
42 Health and Human Services and the Fiscal Research Division of the General Assembly that shall
43 include the following:
44 (1) A description of the program and significant services and initiatives.
45 (2) A history of Smart Start funding and the previous fiscal year's expenditures.
46 (3) The number of children served by type of service.
47 (4) The type and quantity of services provided.

48 (5) The results of the previous year's evaluations of the Initiatives or related
49 programs and services.
50 (6) A description of significant policy and program changes.
51 (7) Any recommendations for legislative action.

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1
2 SMART START LITERACY INITIATIVE/DOLLY PARTON'S IMAGINATION
3 LIBRARY
4 SECTION 9C.6.(a) Funds allocated to the North Carolina Partnership for Children,
5 Inc., from the Department of Health and Human Services, shall be used to increase access to
6 Dolly Parton's Imagination Library, an early literacy program that mails age-appropriate books
7 on a monthly basis to children registered for the program.

8 SECTION 9C.6.(b) The North Carolina Partnership for Children, Inc., may use up
9 to one percent (1%) of the funds for statewide program management and up to one percent (1%)
10 of the funds for program evaluation. Funds appropriated under this section shall not be subject
11 to administrative costs requirements under Section 9C.5(b) of this act, nor shall these funds be
12 subject to the child care services funding requirements under G.S. 143B-168.15(b), child care
13 subsidy expansion requirements under G.S. 143B-168.15(g), or the match requirements under
14 Section 9C.5(d) of this act.

15
16 PART IX-D. HEALTH BENEFITS
17
18 MEDICAID ELIGIBILITY
19 SECTION 9D.1. Article 2 of Chapter 108A of the General Statutes is amended by
20 adding a new section to read:

21 § 108A-54.3A. Eligibility categories and income thresholds.
22 (a) The Department shall provide Medicaid coverage for individuals in accordance with
23 federal statutes and regulations and specifically shall provide coverage for the following
24 populations:
25 (1) Families, children under the age of 21, pregnant women, and individuals who
26 are aged, blind, or disabled, who are medicallyneedy, subject to the following
27 annual income levels after meeting the applicable deductible:

28 Family Size Income Level
29 1 $2,904
30 2 3,804
31 3 4,404
32 4 4,800
33 5 5,196
34 6 5,604

35 7 6,000
36 8 6,300
37 9 6,504
38 10 6,900
39 11 7,200
40 12 7,596

41 13 8,004
42 14 8,400
43 each additional family member add $396
44 (2) Families and children under the age of 21, subject to the following annual
45 income levels:
46 Family Size Income Level
47 1 $5,208

48 2 6,828
49 3 8,004
50 4 8,928
51 5 9,888

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1 6 10,812
2 7 11,700
3 8 12,432
4 9 13,152
5 10 14,028
6 each additional family member add $936
7 (3) Children under the age of 6 with family incomes equal to or less than two

8 hundred ten percent (210%) of the federal poverty guidelines.
9 (4) Children aged 6 through 18 with family incomes equal to or less than one
10 hundred thirty-three percent (133%) of the federal poverty guidelines.
11 (5) Children under the age of 19 who are receiving foster care or adoption
12 assistance under title IV-E of the Social Security Act, without regard to
13 income.
14 (6) Children in the legal custody of State-sponsored foster care who are under the

15 age of 21 and ineligible for Title IV-E assistance, without regard to income.
16 (7) Independent foster care adolescents ages 18, 19, and 20, as defined in 42
17 U.S.C. § 1396d(w)(1), without regard to income.
18 (8) Former foster care children under the age of 26 in accordance with 42 U.S.C.
19 § 1396a(a)(10)(A)(i)(IX), without regard to income.
20 (9) Adoptive children with special or rehabilitative needs, regardless of the

21 adoptive family's income.
22 (10) Pregnant women with incomes equal to or less than one hundred ninety-six
23 percent (196%) of the federal poverty guidelines. Coverage for pregnant
24 women eligible under this subdivision include only services related to
25 pregnancy and to other conditions determined by the Department as
26 conditions that may complicate pregnancy.
27 (11) Men and women of childbearingage with familyincomes equal to or less than

28 one hundred ninety-five percent (195%) of the federal poverty guidelines.
29 Coverage for the individuals described in this subdivision shall be limited to
30 coverage for family planning services.
31 (12) Women who need treatment for breast or cervical cancer and who are defined
32 in 42 U.S.C. § 1396a(a)(10)(A)(ii)(XVIII).
33 (13) Aged, blind, or disabled individuals, as defined in Subpart F of Part 435 of
34 Subchapter C of Chapter IV of Title 42 of the Code of Federal Regulations,

35 with incomes equal to or less than one hundred percent (100%) of the federal
36 poverty guidelines.
37 (14) Beneficiaries receiving supplemental security income under title XVI of the
38 Social Security Act.
39 (15) Workers with disabilities, as provided in G.S. 108A-66.1.
40 (16) Qualified working disabled individuals, as provided in G.S. 108A-67.

41 (17) Qualified Medicare beneficiaries with incomes equal to or less than one
42 hundred percent (100%) of the federal poverty guidelines. Coverage for the
43 individuals described in this subdivision shall be limited to payment of
44 Medicare premiums and deductibles and co-insurance for Medicare-covered
45 services.
46 (18) Specified low-income Medicare beneficiaries with incomes equal to or less
47 than one hundred twenty percent (120%) of the federal poverty guidelines.

48 Coverage for the individuals described in this subdivision shall be limited to
49 payment of Medicare Part B premiums.
50 (19) Qualifying individuals who are Medicare beneficiaries and who have incomes
51 equal to or less than one hundred thirty-five percent (135%) of the federal

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1 poverty guidelines, may be covered within funds available for the Limited
2 Medicare-Aid Capped Enrollment program. Coverage for the individuals
3 described in this subdivision shall be limited to payment of Medicare Part B
4 premiums.
5 (20) Recipients of an optional State supplementation program provided in
6 accordance with 42 U.S.C. § 1382e.
7 (21) Individuals who meet eligibilitycriteria under a Medicaid waiver approved by

8 the Centers for Medicare and Medicaid Services and authorized by an act of
9 the General Assembly, within funds available for the waiver.
10 (22) Refugees, in accordance with 8 U.S.C. § 1522.
11 (23) Qualified aliens subject to the five-year bar for means tested public assistance
12 under 8 U.S.C. § 1613 and undocumented aliens, onlyfor emergency services
13 under 8 U.S.C. § 1611.
14

15 MEDICAID ANNUAL REPORT
16 SECTION9D.2. TheDepartment of Healthand Human Services, Division ofHealth
17 Benefits (DHB), shall continue the publication of the Medicaid Annual Report and
18 accompanying tables. DHB shall publish the report and tables on its Web site no later than
19 December 31 following each State fiscal year.
20

21 ANNUAL ISSUANCE OF MEDICAID IDENTIFICATION CARDS
22 SECTION 9D.3. The Department of Health and Human Services (Department) shall
23 issue Medicaid identification cards to recipients on an annual basis with updates as needed. The
24 Department shall adopt rules, or amend any current rules relating to Medicaid identification
25 cards, to implement this section. No later than July 1, 2020, the Department shall submit a report
26 to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice confirming the
27 adoption or amendment of rules in accordance with this section.

28
29 ADMINISTRATIVE HEARINGS FUNDING
30 SECTION 9D.4. Of the funds appropriated to the Department of Health and Human
31 Services, Division of Health Benefits, for administrative contracts and interagency transfers, the
32 Department of Health and Human Services (Department) shall transfer the sum of one million
33 dollars ($1,000,000) for the 2019-2020 fiscal year and the sum of one million dollars
34 ($1,000,000) for the 2020-2021 fiscal year to the Office of Administrative Hearings (OAH).

35 These funds shall be allocated by the OAH for mediation services provided for Medicaid
36 applicant and recipient appeals and to contract for otherservices necessaryto conduct theappeals
37 process. The OAH shall continue the Memorandum of Agreement (MOA) with the Department
38 for mediation services provided for Medicaid recipient appeals and contracted services necessary
39 to conduct the appeals process. The MOA will facilitate the Department's ability to draw down
40 federal Medicaid funds to support this administrative function. Upon receipt of invoices from the

41 OAH for covered services rendered in accordance with the MOA, the Department shall transfer
42 the federal share of Medicaid funds drawn down for this purpose.
43
44 ACCOUNTING FOR MEDICAID RECEIVABLES AS NONTAX REVENUE
45 SECTION 9D.5.(a) Receivables reserved at the end of the 2019-2020 and
46 2020-2021 fiscal yearsshall, when received,be accountedfor as nontax revenuefor eachofthose
47 fiscal years.

48 SECTION 9D.5.(b) For the 2019-2020 fiscal year, the Department of Health and
49 Human Services shall deposit from its revenues one hundred sixty-five million three hundred
50 thousand dollars ($165,300,000) with the Department of State Treasurer to be accounted for as
51 nontax revenue. For the 2020-2021 fiscal year, the Department of Health and Human Services

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1 shall deposit from its revenues one hundred thirty million dollars ($130,000,000) with the
2 Department of State Treasurer to be accounted for as nontax revenue. These deposits shall
3 represent the return of General Fund appropriations, nonfederal revenue, fund balances, or other
4 resources from State-owned and State-operated hospitals that are used to provide indigent and
5 nonindigent care services. The return from State-owned and State-operated hospitals to the
6 Department of Health and Human Services will be made from nonfederal resources in an amount
7 equal to the amount of the payments from the Division of Health Benefits for uncompensated

8 care. The treatment of any revenue derived from federal programs shall be in accordance with
9 the requirements specified in the Code of Federal Regulations, Title 2, Part 225.
10
11 VOLUME PURCHASE PLANS AND SINGLE SOURCE PROCUREMENT
12 SECTION9D.6. TheDepartment of Healthand Human Services, Division ofHealth
13 Benefits, may, subject to the approval of a change in the State Medicaid Plan, contract for
14 services, medical equipment, supplies, and appliances by implementation of volume purchase

15 plans, single source procurement, or other contracting processes in order to improve cost
16 containment.
17
18 LME/MCO OUT-OF-NETWORK AGREEMENTS
19 SECTION 9D.7.(a) The Department of Health and Human Services (Department)
20 shall continue to ensure that local management entities/managed care organizations

21 (LME/MCOs) utilize an out-of-network agreement that contains standardized elements
22 developed in consultation with LME/MCOs. The out-of-network agreement shall be a
23 streamlined agreement between a single provider of behavioral health or
24 intellectual/developmental disability (IDD) services and an LME/MCO to ensure access to care
25 in accordance with 42 C.F.R. § 438.206(b)(4), reduce administrative burden on the provider, and
26 comply with all requirements of State and federal laws and regulations. LME/MCOs shall use
27 the out-of-network agreement in lieu of a comprehensive provider contract when all of the

28 following conditions are met:
29 (1) The services requested are medically necessary and cannot be provided by an
30 in-network provider.
31 (2) The behavioral health or IDD provider's site of service delivery is located
32 outside of the geographical catchment area of the LME/MCO, and the
33 LME/MCO is not accepting applications or the provider does not wish to
34 apply for membership in the LME/MCO closed network.

35 (3) The behavioral health or IDD provider is not excluded from participation in
36 the Medicaid program, the NC Health Choice program, or other State or
37 federal health care program.
38 (4) The behavioral health or IDD provider is serving no more than two enrollees
39 of the LME/MCO, unless the agreement is for inpatient hospitalization, in
40 which case the LME/MCO may, but shall not be required to, enter into more

41 than five such out-of-network agreements with a single hospital or health
42 system in any 12-month period.
43 SECTION 9D.7.(b) A Medicaid provider providing services pursuant to an
44 out-of-network agreement shall be considered a network provider for purposes of Chapter 108D
45 of the General Statutes only as it relates to enrollee grievances and appeals.
46
47 LME/MCO INTERGOVERNMENTAL TRANSFERS

48 SECTION 9D.8.(a) The local management entities/managed care organizations
49 (LME/MCOs) shall make intergovernmental transfers to the Department of Health and Human
50 Services, Division of Health Benefits (DHB), in an aggregate amount of eighteen million
51 twenty-eight thousand two hundred seventeen dollars ($18,028,217) in the 2019-2020 fiscal year

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1 and in an aggregate amount of eighteen million twenty-eight thousand two hundred seventeen
2 dollars ($18,028,217) for the 2020-2021 fiscal year. The due date and frequency of the
3 intergovernmental transfer required by this section shall be determined by DHB. The amount of
4 the intergovernmental transfer that each individual LME/MCO is required to make in each fiscal
5 year shall be as follows:
6 2019-2020 2020-2021
7 Alliance Behavioral Healthcare $2,994,453 $2,994,453

8 Cardinal Innovations Healthcare $4,032,586 $4,032,586
9 Eastpointe $1,701,156 $1,701,156
10 Partners Behavioral Health Management $1,914,860 $1,914,860
11 Sandhills Center $1,978,939 $1,978,939
12 Trillium Health Resources $3,119,822 $3,119,822
13 Vaya Health $2,286,401 $2,286,401
14 SECTION 9D.8.(b) In the event that anycountydisengages from an LME/MCO and

15 realigns with another LME/MCO during the 2019-2021 fiscal biennium, DHB shall have the
16 authority to reallocate the amount of the intergovernmental transfer that each affected
17 LME/MCO is required to make under subsection (a) of this section, taking into consideration the
18 change in catchment area and covered population, provided that the aggregate amount of the
19 transfers received from all LME/MCOs in each year of the fiscal biennium are achieved.
20 SECTION 9D.8.(c) If DHB does not make the additional capitation payment

21 associated with the Medicaid risk reserve to an LME/MCO in any given month, then the
22 intergovernmental transfer required to be made by that LME/MCO under subsection (a) shall be
23 reducedonaproratabasisandtheaggregateamounttobecollectedbyDHBinthecorresponding
24 fiscal year shall be adjusted accordingly.
25
26 CO-PAYMENTS FOR MEDICAID SERVICES
27 SECTION 9D.9.(a) Beginning November 1, 2019, the co-payments for Medicaid

28 services shall be increased to four dollars ($4.00). This section does not apply to services
29 provided underSection 1905(a)(1)through1905(a)(5)and underSection1905(a)(7)oftheSocial
30 Security Act or to recipients prohibited by federal law from cost-sharing requirements.
31 SECTION 9D.9.(b) The Department of Health and Human Services, Division of
32 Health Benefits, shall submit any necessary State Plan amendments to the Centers for Medicare
33 and Medicaid Services to implement this section.
34

35 EXPAND NORTH CAROLINA INNOVATIONS WAIVER SLOTS
36 SECTION 9D.10.(a) The Department of Health and Human Services, Division of
37 Health Benefits, shall amend the North Carolina Innovations Waiver to increase the number of
38 slots available under the waiver in the following manner:
39 (1) Fourhundred slots to bemadeavailableJanuary1,2020,anddistributedusing
40 theallocation formula currentlyin place as ofthe effective date ofthis section.

41 (2) One hundred slots to be distributed in accordance with subsection (b) of this
42 section and to be made available January 1, 2020, unless the distribution
43 method in subsection (b) of this section requires approval by the Centers for
44 Medicare and Medicaid Services (CMS). If CMS approval is required, then
45 the 100 slots shall be made available January 1, 2020, or the date that CMS
46 grants or denies approval, whichever is later. If CMS approval is required and
47 CMS does not approve the distribution method in subsection (b) of this

48 section, then the 100 slots shall be distributed using the allocation formula
49 currently in place as of the effective date of this section.
50 (3) Fourhundred slots to bemadeavailableJanuary1,2021,anddistributedusing
51 theallocation formula currentlyin place as ofthe effective date ofthis section.

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1 (4) One hundred slots to be distributed in accordance with subsection (b) of this
2 section and to be made available January 1, 2021, unless the distribution
3 method in subsection (b) of this section requires approval by the Centers for
4 Medicare and Medicaid Services (CMS). If CMS approval is required, then
5 the 100 slots shall be made available January 1, 2021, or the date that CMS
6 grants or denies approval, whichever is later. If CMS approval is required and
7 CMS does not approve the distribution method in subsection (b) of this

8 section, then the 100 slots shall be distributed using the allocation formula
9 currently in place as of the effective date of this section.
10 SECTION 9D.10.(b) The Department of Health and Human Services, Division of
11 Health Benefits, shall distribute the slots identified under subdivisions (2) and (4) of subsection
12 (a) of this section to the local management entities/managed care organizations (LME/MCOs)
13 based on a per capita basis, calculated as the number of slots multiplied bythe population in each
14 LME/MCO's catchment area divided by the population of the State. Once distributed to each

15 LME/MCO, the additional slots shall be made available to the counties on a per capita basis,
16 calculated as the number of slots multiplied by the population of the county divided by the
17 population in the LME/MCO's catchment area. Within each county, the slots shall be filled on a
18 first-come, first-served basis determined by the length of time an individual has been on the
19 waiting list.
20 SECTION 9D.10.(c) The Department of Health and Human Services, Division of

21 Health Benefits (DHB), shall convene a workgroup of stakeholders to develop a 10-year plan to
22 address the registry of unmet needs for the North Carolina Innovations Waiver. The workgroup
23 shall consider alternatives to the Innovations Waiver to address the registry of unmet needs,
24 including the implementation of a new waiver program for individuals who qualify for the
25 Innovations Waiver and alternative means of distribution of the waiver slots. This 10-year plan
26 shall include a detailed cost analysis of all recommendations and methods proposed to address
27 the registry of unmet needs. No later than December 1, 2020, DHB shall submit a report on the

28 10-year plan to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice.
29
30 ADDRESS GROUP HOMES DIRECT SUPPORT PERSONNEL STAFFING CRISIS
31 SECTION 9D.11.(a) ICF/IID Group Homes. – Of the funds appropriated to the
32 Department of Health and Human Services, Division of Health Benefits (DHB), the sum of five
33 million four hundred ninety-five thousand dollars ($5,495,000) in recurring funds for the
34 2019-2020 fiscal year and the sum of ten million nine hundred ninety-five thousand dollars

35 ($10,995,000) in recurring funds for the 2020-2021 fiscal year shall be used to adjust the per
36 member per month (PMPM) capitation amount paid to local management entity/managed care
37 organizations (LME/MCOs) operating capitated contracts for mental health, intellectual and
38 other development disabilities, and substance abuse services to include amounts sufficient to
39 increase wages paid to direct support personnel working in community-based Intermediate Care
40 Facility for Individuals with Intellectual Disabilities (ICF/IID) group homes for individuals with

41 intellectual and other developmental disabilities to align the wages paid to these direct support
42 personnel with the current wages paid to State employees in State-owned developmental centers.
43 Adjustments to the PMPM capitation amount paid, in accordance with this subsection, shall be
44 implemented no sooner than January 1, 2020. The following shall apply to PMPM capitation
45 amount adjustments made under this subsection:
46 (1) The adjustments shall be consistent with the North Carolina Medicaid State
47 Plan requirements to provide for actuarially sound rates sufficient to operate

48 and provide safe and effective services.
49 (2) DHB shall validate the actual amounts necessaryto adjust the relevant portion
50 of the LME/MCO PMPM capitation payment to wages paid to direct support

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1 personnel salaries with current wages paid to State employees in State-owned
2 developmental centers.
3 (3) The adjustments shall be considered directed payments made to LME/MCOs
4 under 42 C.F.R. § 438.6,in order to assure that the increased amounts are used
5 for wage increases.
6 (4) Providers receiving any increase in funds from LME/MCOs to be used for
7 wage increases, as required by this subsection, shall attest and provide

8 verification that those increased funds are being used for the purpose of
9 increasing wages paid to direct support personnel and employees who support
10 direct support personnel. LME/MCOs may require verifiable methods of
11 accounting such as payroll-based journals.
12 After the implementation of this subsection, DHB shall continue to work with
13 stakeholders and service providers in order to develop an appropriate methodology, to track
14 progress towards increasing direct support personnel wages, and to determine if any additional

15 resources are necessary to achieve alignment of these wages with the current wages paid to State
16 employees in State-owned developmental centers.
17 SECTION 9D.11.(b) North Carolina Innovations Waiver. – Of the funds
18 appropriated to the Department of Health and Human Services, Division of Health Benefits
19 (DHB), the sum of two hundred thousand dollars ($200,000) in nonrecurring funds shall be used
20 to conduct an actuarial analysis and a wage and hour study of the North Carolina Innovations

21 Waiver program. This actuarial analysis and study shall aid in determining the appropriate
22 adjustments to the per-slot service costs that would be necessary to align wages paid to direct
23 support personnel providing services under the North Carolina Innovations Waiver with wages
24 paid to State employees in State-owned developmental centers. The analysis and study shall be
25 completed prior to the next local management entity/managed care organization (LME/MCO)
26 rate negotiation cycle, but no later than January 15, 2020. DHB shall provide a copy of the
27 analysis and wage and hour study to the Joint Legislative Oversight Committee on Medicaid and

28 NC Health Choice and the Fiscal Research Division no later than January 15, 2020.
29 Upon completion of the analysis and the wage and hour study, DHB shall draft a plan
30 that provides for multiyear adjustments, to be phased in over a two- to three-year period, to the
31 per-slot cap on costs necessaryto align wages paid to direct support personnel providing services
32 under the Innovations Waiver with wages paid to State employees working in State-operated
33 developmental centers. This plan shall require that LME/MCOs and providers receiving an
34 increase in funds as a result of the adjustments attest and provide verification that those increased

35 funds are being used for the purpose of increasing wages paid to direct support personnel and
36 employees who supervise and support direct support personnel. The plan may require verifiable
37 methods of accounting such as payroll-based journals.
38 The actuarial analysis conducted and the plan developed under this subsection shall
39 include all of the following components:
40 (1) The average cost per Innovations Waiver slot.

41 (2) The percent of average Innovations Waiver slot costs that are related to labor
42 costs.
43 (3) Current labor costs fordirect supportpersonnel providingservices throughthe
44 Innovations Waiver.
45 (4) The percent of other indirect and administrative costs related to direct support
46 personnel providing services through the Innovations Waiver.
47 (5) Current indirect and administrative costs related to direct support personnel

48 providing services through the Innovations Waiver.
49 (6) An accurate number of full-time equivalents (FTEs) for direct support
50 personnel providing services through the Innovations Waiver.

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1 (7) Current average hourly wage for direct support personnel providing services
2 through the Innovations Waiver.
3 (8) The total cost to increase the wages of direct support personnel providing
4 services through the Innovations Waiver to a minimum of fifteen dollars
5 ($15.00) per hour, or the current wage paid to State employees working in
6 State-operated developmental centers.
7 (9) Recommended resources necessary to add additional Innovations Waiver

8 slots.
9 (10) Recommended resources necessary to increase the wages of direct support
10 personnel providing services through the Innovations Waiver to a minimum
11 of fifteen dollars ($15.00) per hour, or the current wage paid to State
12 employees working in State-operated developmental centers.
13 No later than March 1, 2020, DHB shall submit a copy of the plan and any related
14 recommendations to the Joint Legislative Oversight Committee on Medicaid and NC Health

15 Choice. DHB shall not pursue any State Plan amendments or any changes to the North Carolina
16 Innovations Waiver that would be necessary to increase the wages of direct support personnel
17 providing services through the Innovations Waiver to a minimum of fifteen dollars ($15.00) per
18 hour, or the current wage paid to State employees working in State-operated developmental
19 centers, without further legislation directing the implementation of the wage increase.
20 SECTION 9D.11.(c) Methodology for Determining Appropriate Wages to be Paid.

21 – To establish a baseline methodology for determining the appropriate wages to be paid in
22 accordance with this section, the Department of Health and Human Services, Division of Health
23 Benefits (DHB), shall use information from the Office of State Human Resources job
24 classification and wage and hour data for the specific employees working at State-operated
25 developmental centers who are in comparable job classifications as those direct support
26 personnel working in community-based Intermediate Care Facility for Individuals with
27 Intellectual Disabilities (ICF/IID) group homes and those direct support personnel providing

28 services through the North Carolina Innovations Waiver. DHB shall make appropriate
29 adjustments for health insurance, retirement benefits, and other key factors that drive total labor
30 costs. DHB shall also take into consideration market-based wage comparisons between direct
31 support personnel working in community-based ICF/IID group homes and those direct support
32 personnel providing services through the North Carolina Innovations Waiver and State
33 employees working in the State-operated developmental centers, direct support personnel
34 working in private work settings, including health care facilities and health services settings, and

35 employees working in private sector businesses that compete to hire the same employees, such
36 as retail and fast food. DHB may accept actuarially sound projections of competitive wage and
37 hour data and other cost data from non-State entities in order to calculate forward-looking wage
38 analysis formulas and finalize the exact rates needed to meet this urgent need, as required by this
39 section.
40

41 DISABLED ADULT CHILD PASSALONG ELIGIBILITY
42 SECTION 9D.12. Effective January 1, 2020, the eligibility requirements for the
43 Disabled Adult Child Passalong authorized under Section 1634 of the Social Security Act for the
44 Medicaid program shall consist of only the following four requirements:
45 (1) The adult is currently entitled to and receives federal Retirement, Survivors,
46 and DisabilityInsurance (RSDI)benefits as adisabledadult childonaparent's
47 record due to the retirement, death, or disability of a parent.

48 (2) The adult is blind or has a disability that began before age 22.
49 (3) The adult would currently be eligible for Supplemental Security Income (SSI)
50 or State-CountySpecial Assistance if the current RSDI benefit is disregarded.

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1 (4) For eligibility that is based on former receipt of State-County Special
2 Assistance and not SSI, the adult must currently reside in an adult care home.
3
4 INCREASE IN REIMBURSEMENT FOR PRIMARY CARE PROVIDERS
5 SECTION 9D.12A. The Department of Health and Human Services, Division of
6 Health Benefits, shall increase the reimbursement for the evaluation and management codes that
7 are (i) paid to primary care physicians, including obstetricians and gynecologists, nurse

8 practitioners, and physician assistants, and (ii) contained in the State Plan Amendment Number
9 2018-0012 submitted by the Department of Health and Human Services on March 8, 2019.
10
11 ESTABLISH NEW ADULT CARE HOME PAYMENT METHODOLOGY
12 SECTION 9D.12B.(a) It is the intent of the General Assembly to provide funding
13 to adult carehomesin the Statein amannerthatrecognizes theimportanceof astableandreliable
14 funding stream to ensure access, choice, and quality of care within the adult care home segment

15 of the care continuum. In furtherance of this intent, and as the North Carolina Medicaid program
16 transitions to a managed care delivery system, the Department of Health and Human Services is
17 directed to establish and convene a workgroup to evaluate reimbursement options for services
18 provided by adult care homes that take into account all funding streams and to develop a new
19 service definition, or definitions, under Medicaid managed care for these services. The
20 workgroup shall consist of adult care home industry representatives and other relevant

21 stakeholders. In development of the new service definition, or definitions, the workgroup shall
22 include all of the following components:
23 (1) Support for alternative payment models available under the State's 1115
24 Medicaid waiver forMedicaid transformation,includingpay-for-performance
25 initiatives.
26 (2) Best practices for long-term services and supports.
27 (3) Efficient payment methodologies.

28 SECTION 9D.12B.(b) No later than December 1, 2020, the Department of Health
29 and Human Services shall submit areportonthe newservicedefinition,ordefinitions, developed
30 by the workgroup, as required in subsection (a) of this section, to the Joint Legislative Oversight
31 Committee on Health and Human Services, the Joint Legislative Oversight Committee on
32 Medicaid and NC Health Choice, and the Fiscal Research Division.
33
34 DURATION OF MEDICAID AND NC HEALTH CHOICE PROGRAM

35 MODIFICATIONS
36 SECTION9D.13. Except for eligibilitycategories andincome thresholds andexcept
37 for statutory changes, the Department of Health and Human Services shall not be required to
38 maintain,afterJune30,2021,anymodificationstotheMedicaidandNCHealthChoiceprograms
39 required by this Subpart.
40

41 MEDICAID CONTINGENCY RESERVE CODIFICATION
42 SECTION 9D.14. Article 4 of Chapter 143C of the General Statutes is amended by
43 adding a new section to read:
44 § 143C-4-11. Medicaid Contingency Reserve.
45 (a) Medicaid Contingency Reserve. – The Medicaid Contingency Reserve is established
46 as a reserve to be used only for budget shortfalls in Medicaid or NC Health Choice programs.
47 (b) Funds from the Medicaid Contingency Reserve may be allocated or expended only if

48 all of the following criteria are met:
49 (1) There is an act of appropriation by the General Assembly.
50 (2) After the State Controller has verified that receipts are being used
51 appropriately, the Director of the Budget has found that additional funds are

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1 needed to cover a shortfall in the Medicaid or NC Health Choice budget for
2 the State fiscal year.
3 (3) The Director of the Budget has reported immediately to the Fiscal Research
4 Division on the amount of the shortfall found in accordance with subdivision
5 (2) of this subsection. This report shall include an analysis of the causes of the
6 shortfall, such as (i) unanticipated enrollment and mix of enrollment, (ii)
7 unanticipated growth or utilization within particular service areas, (iii) errors

8 in the data or analysis used to project the Medicaid or NC Health Choice
9 budget, (iv) the failure of the program to achieve budgeted savings, (v) other
10 factors and market trends that have impacted the price of or spending for
11 services, (vi) variations in receipts from prior years or from assumptions used
12 to prepare the Medicaid and NC Health Choice budget for the current fiscal
13 year, or (vii) other factors. The report shall also include data in an electronic
14 format that is adequate for the Fiscal Research Division to confirm the amount

15 of the shortfall and its causes.
16 (c) Nothing in this section shall be construed to limit the authority of the Governor to
17 carry out the Governor's duties under the Constitution.
18
19 USE OF MEDICAID TRANSFORMATION FUND FOR MEDICAID
20 TRANSFORMATION NEEDS

21 SECTION 9D.15.(a) Claims Run Out. – Funds from the Medicaid Transformation
22 Fund may be transferred to the Department of Health and Human Services, Division of Health
23 Benefits (DHB), as needed for the purpose of paying claims related to services billed under the
24 fee-for-service payment model for recipients who are being, or have been, transitioned to
25 managed care, otherwise known as claims run out. Funds may be transferred to DHB as the
26 need to pay claims run out arises and need not be transferred in one lump sum. To the extent that
27 any funds are transferred under this subsection, the funds are appropriated for the purpose set

28 forth in this subsection.
29 SECTION 9D.15.(b) Non-Claims Run Out Medicaid Transformation Needs. –
30 Subject to the fulfillment of conditions specified in subsection (c) of this section, the sum of
31 twenty-seven million two hundred eighty thousand nine hundred forty-seven dollars
32 ($27,280,947) in nonrecurring funds for the 2019-2020 fiscal year and the sum of ten million
33 nine hundred eighty-three thousand five hundred forty-eight dollars ($10,983,548) in
34 nonrecurring funds for the 2020-2021 fiscal year from the Medicaid Transformation Fund may

35 be transferred to the Department of Health and Human Services, Division of Health Benefits
36 (DHB), for the sole purpose of providing the State share for nonrecurring qualifying needs
37 directly related to Medicaid transformation, as required by S.L. 2015-241, as amended. Funds
38 may be transferred to DHB as nonrecurring qualifying needs arise during the 2019-2021 fiscal
39 biennium and need not be transferred in one lump sum.
40 For the purposes of this section, the term qualifying need shall be limited to

41 information technology, time-limited staffing, and contracts related to the following Medicaid
42 transformation needs:
43 (1) Program design.
44 (2) Beneficiary experience.
45 (3) NC FAST upgrades related to Medicaid transformation.
46 (4) Data management tools.
47 (5) Program integrity.

48 (6) Technical and operational integration.
49 (7) Other nonrecurring needs identified by DHB, as determined in consultation
50 with the Office of State Budget and Management.

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1 SECTION 9D.15.(c) Requests for Transfer of Funds for Qualifying Need. – A
2 request by the Department of Health and Human Services, Division of Health Benefits (DHB),
3 for the transfer of funds pursuant to subsection (b) of this section shall be made to the Office of
4 State Budget and Management (OSBM) and shall include the amount requested and the specific
5 nonrecurring qualifying need for which the funds are to be used. None of the funds identified in
6 subsection (b) of this section shall be transferred to DHB until OSBM verifies the following
7 information:

8 (1) The amount requested is to be used for a nonrecurring qualifying need in the
9 2019-2021 fiscal biennium.
10 (2) The amount requested provides a State share that will not result in total
11 requirements that exceed one hundred ninety million dollars ($190,000,000)
12 in nonrecurring funds for the 2019-2021 fiscal biennium.
13 SECTION 9D.15.(d) Federal Fund Receipts. – Any federal funds received in any
14 fiscal yearbytheDepartment ofHealthandHumanServices, Division ofHealth Benefits (DHB),

15 that represent a return of State share already expended on a qualifying need related to the funds
16 received by the DHB under this section shall be deposited into the Medicaid Transformation
17 Fund.
18 SECTION 9D.15.(e) Administrative Bridge Funding. – Notwithstanding the stated
19 purpose of the Medicaid Transformation Fund established under Section 12H.29 of S.L.
20 2015-241, the sum of thirty million six hundred fifty-eight thousand eight hundred eighty-five

21 dollars ($30,658,885) in nonrecurring funds for the 2019-2020 fiscal year and the sum of
22 twenty-one million three hundred forty-five thousand eight hundred eight dollars ($21,345,808)
23 in nonrecurring funds for the 2020-2021 fiscal year from the Medicaid Transformation Fund may
24 be transferred to the Department of Health and Human Services for the purpose of providing
25 nonrecurring funding for administrative expenses during the transition to Medicaid managed
26 care.
27

28 MEDICAID TRANSFORMATION HOTLINE OPTION
29 SECTION9D.15A. TheDepartment of HealthandHumanServices shall ensurethat
30 the existing DHHS Customer Service hotline is responsive to questions posed by a Medicaid
31 beneficiary or provider or by the general public that are related to the rollout of Medicaid
32 Transformation during the 2019-2020 fiscal year.
33
34 MEDICAID TRANSFORMATION ADMINISTRATIVE REDUCTION FLEXIBILITY

35 AND REPORT
36 SECTION 9D.15B.(a) In order to achieve the budgeted reduction in administrative
37 costs attributable to the implementation of Medicaid transformation in the amount of thirty
38 million six hundred fifty-eight thousand eight hundred fifty-five dollars ($30,658,855) in
39 recurring funds for the 2019-2020 fiscal year and in the amount of forty-two million six hundred
40 ninety-one thousand six hundred fifteen dollars ($42,691,615) in recurring funds for the

41 2020-2021fiscal year,theSecretaryoftheDepartmentofHealthandHumanServices(Secretary)
42 mayreduce administrativecosts acrossall Divisions withintheDepartment ofHealth andHuman
43 Services. In achieving these budgeted reduction amounts, the Secretary shall not reduce any
44 funds that (i) impact direct services or (ii) are used to support the 2012 settlement agreement
45 entered into between the United States Department of Justice and the State of North Carolina to
46 ensure that the State will willingly meet the requirements of the Americans with Disabilities Act
47 of 1990, Section 504 of the Rehabilitation Act of 1973, and the United States Supreme Court

48 decision in Olmstead v. L.C., 527 U.S. 581(1999). Theprohibition onreducing fundsthatimpact
49 direct services shall not be construed to prohibit a reduction in administrative costs associated
50 with contracts for the provision of direct services.

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1 SECTION 9D.15B.(b) By January 15, 2020, and January 15, 2021, the Secretary
2 shall submit a report to the Joint Legislative Oversight Committee on Health and Human
3 Services, the Joint Legislative Oversight Committee on Medicaid and North Carolina Health
4 Choice, theHouseofRepresentativesAppropriations CommitteeonHealth and Human Services,
5 the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research
6 Division on the actions taken during that fiscal year to achieve the budgeted reduction in
7 administrative costs attributable to the implementation of Medicaid transformation. If the

8 Secretary elects to eliminate positions, the report shall include a list of each position eliminated,
9 along with its position number, title, and the amount of salary and fringe benefits associated with
10 each position.
11
12 TRIBAL OPTION/MEDICAID TRANSFORMATION
13 SECTION 9D.16.(a) The Department of Health and Human Services may contract
14 with an Indian managed care entity (IMCE) or an Indian health care provider (IHCP), as defined

15 under 42 C.F.R. § 438.14(a), to assist in the provision of health care or health care–related
16 services to Medicaid and NC Health Choice beneficiaries who are members of federally
17 recognized tribes or who are eligible to enroll in an IMCE. Contracts may include health care or
18 health care–related services as agreeduponwith the IMCEor IHCP, as approvedbytheSecretary
19 of the Department of Health and Human Services and as allowed by the Centers for Medicare
20 and Medicaid Services (CMS), including, but not limited to, the following services:

21 (1) Primary care case management as a primary care case managed system or
22 entity, as described in 42 C.F.R. § 438.2.
23 (2) Utilization management and referrals.
24 (3) The management or provision of home- and community-based services under
25 a 1915(c) waiver.
26 (4) The management or provision of specialized services covered by a BH IDD
27 Tailored Plan in accordance with Subdivision 10 of Section 4 of S.L.

28 2015-245, as amended by S.L. 2018-48.
29 Coverage provided by the IMCE or IHCP may be more permissive, but no more
30 restrictive, than Medicaid or NC Health Choice medical coverage policy adopted or amended by
31 the Department of Health and Human Services; however, the coverage shall be in compliance
32 with federal regulations and policies related to the receipt of federal funding for these health care
33 or health care–related services.
34 SECTION 9D.16.(b) Subdivision 5 of Section 4 of S.L. 2015-245, as amended by

35 Subsection 2(b) of S.L. 2016-121, S.L. 2018-48, and Section 5 of 2018-49, reads as rewritten:
36 (5) Populations covered by PHPs. – Capitated PHP contracts shall cover all
37 Medicaid and NC Health Choice program aid categories except for the
38 following categories:
39 …
40 e. Members of federally recognized tribes. Members of federally

41 recognized tribes shall have the option to enroll voluntarily in PHPs.
42 e1. Eligible recipients who are enrolled in a DHHS-contracted Indian
43 managed care entity, as defined in 42 C.F.R. § 438.14(a).
44 ….
45 SECTION 9D.16.(c) Subdivision 9 of Section 4 of S.L. 2015-245, as amended by
46 S.L. 2018-48, reads as rewritten:
47 (9) LME/MCOs. – Beginning on the date that capitated contracts begin,

48 LME/MCOs shall cease managing Medicaid services for all Medicaid
49 recipients other than recipients described in sub-subdivisions a., d., e., e1., f.,
50 g., j., k., and l. of subdivision (5) of this section. Until BH IDD Tailored Plans
51 become operational, all of the following shall occur:

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1 a. LME/MCOs shall continue to manage the Medicaid services that are
2 currently covered by the LME/MCOs for Medicaid recipients
3 described in sub-subdivisions a., d., e., e1., f., g., j., k., and l. of
4 subdivision (5) of this section.
5 ….
6 SECTION 9D.16.(d) The Department of Health and Human Services is authorized
7 to seek approval from CMS and submit any necessary State Plan Amendments and waivers, or

8 any amendments thereto, to implement the provisions of this section.
9
10 REPEAL OF PAST DIRECTIVE TO ELIMINATE GME TO ALIGN WITH MEDICAID
11 TRANSFORMATION
12 SECTION 9D.17. Section 12H.12(b) of S.L. 2014-100 and Section 12H.23 of S.L.
13 2015-241, as amended by Section 88 of S.L. 2015-264, are repealed.
14

15 REVISED HOSPITAL ASSESSMENTS, SUPPLEMENTAL PAYMENTS, AND
16 DIRECTED PAYMENTS
17 SECTION 9D.18.(a) Effective October 1, 2019, Article 7 of Chapter 108A of the
18 General Statutes is repealed.
19 SECTION 9D.18.(b) Effective October 1, 2019, Chapter 108A of the General
20 Statutes is amended by adding a new Article to read:

21 Article 7A.
22 Hospital Assessment Act.
23 Part 1. General.
24 § 108A-130. Short title and purpose.
25 This Articleshall beknownas the Hospital Assessment Act.This Articledoes notauthorize
26 a political subdivision of the State to license a hospital for revenue or impose a tax or assessment
27 on a hospital.

28 § 108A-131. Definitions.
29 The following definitions apply in this Article:
30 (1) Base assessment. – The assessment payable under G.S. 108A-142.
31 (2) CMS. – Centers for Medicare and Medicaid Services.
32 (3) Critical access hospital. – Defined in 42 C.F.R. § 400.202.
33 (4) Department. – The Department of Health and Human Services.
34 (5) Prepaid health plan. – As defined in Section 4 of S.L. 2015-245, as amended.

35 (6) Public hospital. – A hospital that certifies its public expenditures to the
36 Department pursuant to 42 C.F.R. § 433.51(b) duringthe fiscal year for which
37 the assessment applies.
38 (7) Secretary. – The Secretary of Health and Human Services.
39 (8) State's annual Medicaid payment. – An amount equal to one hundred ten
40 million dollars ($110,000,000) for State fiscal year 2019-2020, increased each

41 year over the prior year's payment bythe percentage specified as the Medicare
42 Market Basket Index less productivity most recently published in the Federal
43 Register.
44 (9) Supplemental assessment. – The assessment payable under G.S. 108A-141.
45 (10) Total hospital costs. – The costs as calculated using the most recent available
46 Hospital Cost Report Information System's cost report data available through
47 CMS or other comparable data, including both inpatient and outpatient

48 components, for all hospitals that are not exempt from the applicable
49 assessment.
50 § 108A-132. Due dates and collections.

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1 (a) Beginning October 1, 2019, assessments under this Article are due quarterly in the
2 timeand manner prescribed bytheSecretaryandshall beconsidered delinquent ifnot paid within
3 seven calendar days of this due date.
4 (b) With respect to any hospital owing a past due assessment amount under this Article,
5 the Department may withhold the unpaid amount from Medicaid or NC Health Choice payments
6 otherwise due or impose a late payment penalty. The Secretary may waive a penalty for good
7 cause shown.

8 (c) In the event the data necessary to calculate an assessment under this Article is not
9 available to the Secretary in time to impose the quarterly assessments for a payment year, the
10 Secretary may defer the due date for the assessment to a subsequent quarter.
11 § 108A-133. Assessment appeals.
12 A hospital may appeal a determination of the assessment amount owed through a
13 reconsideration review. The pendencyof an appeal does not relieve a hospital from its obligation
14 to pay an assessment amount when due.

15 § 108A-134. Allowable costs; patient billing.
16 (a) Assessments paid under this Article may be included as allowable costs of a hospital
17 for purposes of any applicable Medicaid reimbursement formula, except that assessments paid
18 under this Article shall be excluded from cost settlement.
19 (b) Assessments imposed under this Article may not be added as a surtax or assessment
20 on a patient's bill.

21 § 108A-135. Rule-making authority.
22 The Secretary may adopt rules to implement this Article.
23 § 108A-136. Repeal.
24 IfCMS determines that an assessment underthis Article is impermissibleorrevokes approval
25 of an assessment under this Article, then that assessment shall not be imposed and the
26 Department's authority to collect the assessment is repealed.
27 Part 2. Supplemental and Base Assessments.

28 § 108A-140. Applicability.
29 (a) The assessments imposed under this Part apply to all licensed North Carolina
30 hospitals, except as provided in this section.
31 (b) The following hospitals are exempt from both the supplemental assessment and the
32 base assessment:
33 (1) Critical access hospitals.
34 (2) Freestanding psychiatric hospitals.

35 (3) Freestanding rehabilitation hospitals.
36 (4) Long-term care hospitals.
37 (5) State-owned and State-operated hospitals.
38 (6) The primaryaffiliated teaching hospital for each University of North Carolina
39 medical school.
40 (c) Public hospitals are exempt from the supplemental assessment.

41 § 108A-141. Supplemental assessment.
42 (a) The supplemental assessment shall be a percentage, established by the General
43 Assembly, of total hospital costs.
44 (b) The Department shall propose the rate of the supplemental assessment to be imposed
45 under this section when the Department prepares its budget request for each upcoming fiscal
46 year. The Governor shall submit the Department's proposed supplemental assessment rate to the
47 General Assembly each fiscal year.

48 (c) The Department shall base the proposed supplemental assessment rate on all of the
49 following factors:
50 (1) The percentage change in aggregate payments to hospitals subject to the
51 supplemental assessment for Medicaid and NC Health Choice enrollees,

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1 excluding hospital access payments made under 42 C.F.R. § 438.6, as
2 demonstrated in data from prepaid health plans and the State, as determined
3 by the Department.
4 (2) Any changes in the federal medical assistance percentage rate applicable to
5 the Medicaid or NC Health Choice programs for the applicable year.
6 (d) The rate for the supplemental assessment for each taxable year shall be the percentage
7 rate set by law by the General Assembly.

8 § 108A-142. Base assessment.
9 (a) The base assessment shall be a percentage, established by the General Assembly, of
10 total hospital costs.
11 (b) The Department shall propose the rate of the base assessment to be imposed under
12 this section when the Department prepares its budget request for each upcoming fiscal year. The
13 Governor shall submit the Department's proposed base assessment rate to the General Assembly
14 each fiscal year.

15 (c) The Department shall base the proposed base assessment rate on all of the following
16 factors:
17 (1) The change in the State's annual Medicaid payment for the applicable year.
18 (2) The percentage change in aggregate payments to hospitals subject to the base
19 assessment for Medicaid and NC Health Choice enrollees, excluding hospital
20 access payments made under 42 C.F.R. § 438.6, as demonstrated in data from

21 prepaid health plans and the State, as determined by the Department.
22 (3) Any changes in the federal medical assistance percentage rate applicable to
23 the Medicaid or NC Health Choice programs for the applicable year.
24 (4) Any changes as determined bythe Department in (i) reimbursement under the
25 Medicaid State Plan, (ii) managed care payments authorized under 42 C.F.R.
26 § 438.6 for which the nonfederal share is not funded by General Fund
27 appropriations, and (iii) reimbursement under the NC Health Choice program.

28 (d) The rate for the base assessment for each taxable year shall be the percentage rate set
29 by law by the General Assembly.
30 § 108A-143. Payment from other hospitals.
31 If a hospital that is exempt from both the base and supplemental assessments under this Part
32 (i) makes an intergovernmental transfer to the Department to be used to draw down matching
33 federalfundsand(ii)has acquired,merged,leased,ormanagedanotherhospitalonorafterMarch
34 25, 2011, then the exempt hospital shall transfer to the State an additional amount. The additional

35 amount shall be a percentage of the amount of funds that (i) would be transferred to the State
36 through such an intergovernmental transfer and (ii) are to be used to match additional federal
37 funds that the exempt hospital is able to receive because of the acquired, merged, leased, or
38 managed hospital. That percentage shall be calculated by dividing the amount of the State's
39 annual Medicaid payment by the total amount collected under the base assessment under
40 G.S. 108A-142.

41 § 108A-144. Use of funds.
42 The proceeds of the assessments imposed under this Part, and all corresponding matching
43 federal funds, must be used to make the State's annual Medicaid payment to the State, to fund
44 payments to hospitals made directly by the Department, to fund a portion of capitation payments
45 to prepaid health plans attributable to hospital care, and to fund the nonfederal share of graduate
46 medical education payments.
47 SECTION 9D.18.(c) The percentage rate to be used in calculating the supplemental

48 assessment under G.S. 108A-141, as enacted in subsection (b) of this section, is two and
49 twenty-six hundredths percent (2.26%) for the taxable year October 1, 2019, through September
50 30, 2020.

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1 SECTION 9D.18.(d) The percentage rate to be used in calculating the base
2 assessment under G.S. 108A-142, as enacted in subsection (b) of this section, is one and
3 seventy-seven hundredths percent (1.77%) for the taxable year October 1, 2019, through
4 September 30, 2020.
5 SECTION 9D.18.(e) The Department of Health and Human Services shall revise the
6 supplemental payment program for eligible medical professional providers described in the
7 Medicaid State Plan, Attachment 4.19-B, Section 5, Pages 2 and 3, as required by this section.

8 This payment program shall be called the Average Commercial Rate Supplemental and Directed
9 Payment Program. Effective October 1, 2019, the following two changes to the program shall be
10 implemented:
11 (1) The program shall no longer utilize a limit on the number of eligible medical
12 professional providers that may be reimbursed through the program, and
13 instead shall utilize a limit on the total payments made under the program.
14 (2) Payments under the program shall consist of two components: (i)

15 supplemental payments that increase reimbursement to the average
16 commercial rate under the State Plan and (ii) directed payments that increase
17 reimbursement to the average commercial rate under the managed care
18 system.
19 SECTION 9D.18.(f) The limitation on total payments made under the Average
20 Commercial Rate Supplemental and Directed Payment Program for eligible medical professional

21 providersshallapplytothecombinedamountofpaymentsmadeassupplementalpayments under
22 the State Plan and payments made as directed payments under the managed care system and shall
23 be based on the amount of supplemental payments for services provided during the 2018-2019
24 fiscal year as follows:
25 (1) For services provided during the period October 1, 2019, through June 30,
26 2020, the total annual supplemental and directed payments made under the
27 AverageCommercialRateSupplementalandDirectedPaymentProgramshall

28 not exceed seventy-five percent (75%) of the gross supplemental payments
29 for services provided by eligible medical providers during the 2018-2019
30 fiscal year.
31 (2) For services provided on or after July 1, 2020, the total annual supplemental
32 and directed payments made under the Average Commercial Rate
33 Supplemental and Directed Payment Program shall not exceed one hundred
34 percent (100%) of the gross supplemental payments for services provided by

35 eligible medical providers during the 2018-2019 fiscal year, increased at the
36 start of each State fiscal year by an inflation factor determined by the
37 Department of Health and Human Services, Division of Health Benefits.
38 SECTION 9D.18.(g) Consistent with the existing supplemental payment program
39 for eligible medical professional providers, the Department of Health and Human Services shall
40 limit the total amount of supplemental and directed payments that maybe received bythe eligible

41 providers affiliated with East Carolina University Brody School of Medicine and University of
42 North Carolina at Chapel Hill Health Care System. Average commercial rate supplemental
43 payments and directed payments shall not be made for services provided in Wake County.
44 SECTION 9D.18.(h) The Department of Health and Human Services is not
45 authorized to make any modifications to the supplemental payment program for eligible medical
46 professional providers, except as authorized in subsections (e) through (g) of this section.
47 SECTION 9D.18.(i) Effective October 1, 2019, Section 12H.13(e) of S.L. 2013-360

48 and Sections 12H.13(b) and 12H.13A of S.L. 2014-100 are repealed.
49 SECTION 9D.18.(j) Notwithstanding G.S. 143C-4-11(b), as enacted by Section
50 9D.14 of this act, the State Controller shall transfer funds from the Medicaid Contingency
51 Reserve to the Department of Health and Human Services, Division of Health Benefits (DHB),

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1 only upon request bythe DHB as needed to cover any shortfall in receipts from the supplemental
2 or base assessments under G.S. 108A-141 and G.S. 108A-142, enacted by subsection (b) of this
3 section, that are anticipated in this act, and only if the following two conditions are met:
4 (1) The Office of State Budget and Management (OSBM) has certified that there
5 will be a shortfall in receipts anticipated in this act from the supplemental or
6 base assessments.
7 (2) OSBM has certified that the amount requested by DHB does not exceed the

8 shortfall in receipts certified by OSBM under subdivision (1) of this
9 subsection.
10 Upon making the request to the State Controller for the transfer of funds pursuant to
11 this section, DHB shall notify the Fiscal Research Division and the Joint Legislative Oversight
12 Committee on Medicaid and NC Health Choice of the request and the amount of the request. To
13 the extent any funds are transferred under this subsection, the funds are hereby appropriated for
14 the purpose set forth in this subsection. The authorityset forth in this subsection expires June 30,

15 2020.
16 SECTION 9D.18.(k) The Department of Health and Human Services, Division of
17 Health Benefits (DHB), shall establish a new fund code entitled Hospital Assessment Fund in
18 Budget Code 24445. When setting the supplemental assessment and base assessment rates in
19 accordance with G.S. 108A-141(d) and G.S. 108A-142(d) for the 2020-2021 taxable year, funds
20 in the Hospital Assessment Fund shall be used to support a decrease in the supplemental

21 assessment or base assessment rates submitted by the Governor under G.S. 108A-141(b) and
22 G.S. 108A-142(b) that corresponds with the amount in the Hospital Assessment Fund.
23 SECTION 9D.18.(l) For the 2019-2020 fiscal year only, if the amount of receipts
24 collected, in aggregate, from the supplemental and base assessments under G.S. 108A-141 and
25 G.S. 108A-142 is above the amount, in aggregate, anticipated in this act from the supplemental
26 and base assessments, then the total amount of those over-realized receipts shall be transferred
27 as follows:

28 (1) Forty-five million dollars ($45,000,000) shall be transferred to the Hospital
29 Assessment Fund created under subsection (k) of this section. If the total
30 amount of over-realized receipts is less than forty-five million dollars
31 ($45,000,000), then the full amount of over-realized receipts shall be
32 transferred to the Hospital Assessment Fund.
33 (2) The remaining amount of over-realized receipts not transferred under
34 subdivision (1) of this subsection shall be transferred to the Medicaid

35 Transformation Reserve.
36 (3) Prior to transferring any amount of over-realized receipts under this
37 subsection, the Office of State Budget and Management shall certify that (i)
38 there will be, in aggregate,over-realizedreceipts forthe2019-2020 fiscal year
39 from the supplemental and base assessments and (ii) the amounts to be
40 transferred are in compliance with this subsection.

41 SECTION 9D.18.(m) If House Bill 656, 2019 Regular Session, becomes law, then
42 G.S. 108A-131(5), as enacted by subsection (b) of this section, reads as rewritten:
43 (5) Prepaid health plan. – As defined in Section 4 of S.L. 2015-245, as
44 amended.G.S. 108D-1.
45 SECTION 9D.18.(n) Except as otherwise provided, this section becomes effective
46 July 1, 2019.
47

48 GROSS PREMIUMS TAX/PREPAID HEALTH PLANS
49 SECTION 9D.19.(a) The title of Article 8B of Chapter 105 of the General Statutes
50 reads as rewritten:
51 Article 8B.

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1 Taxes Upon Insurance Companies.Companies and Prepaid Health Plans.
2 SECTION 9D.19.(b) G.S. 105-228.3 reads as rewritten:
3 § 105-228.3. Definitions.
4 The following definitions apply in this Article:
5 (1) Article 65 corporation. – A corporation subject to Article 65 of Chapter 58 of
6 the General Statutes, regulating hospital, medical, and dental service
7 corporations.

8 (2) Capitation payment. – Amounts paid bythe Department of Health and Human
9 Services to prepaid health plans under capitated contracts for the delivery of
10 Medicaid and NC Health Choice services in accordance with S.L. 2015-245,
11 as amended.
12 (1a)(3) Captive insurance company. – Defined in G.S. 58-10-340.
13 (1b)(4)Foreign captive insurance company. – A captive insurance company as
14 defined in G.S. 58-10-340(9), except that such company is not formed or

15 licensed under the laws of this State but is formed and licensed under the laws
16 of any jurisdiction within the United States other than this State.
17 (2)(5) Insurer. – An insurer as defined in G.S. 58-1-5 or a group of employers who
18 have pooled their liabilities pursuant to G.S. 97-93 of the Workers'
19 Compensation Act.
20 (6) Prepaid health plan. – As defined in Section 4 of S.L. 2015-245, as amended.

21 (3)(7) Self-insurer. – An employer that carries its own risk pursuant to G.S. 97-93 of
22 the Workers' Compensation Act.
23 SECTION 9D.19.(c) G.S. 105-228.5 reads as rewritten:
24 § 105-228.5. Taxes measured by gross premiums.
25 (a) TaxLevied.–Ataxisleviedinthissectiononinsurers,Article65corporations,health
26 maintenance organizations, prepaid health plans, and self-insurers. An insurer, health
27 maintenance organization, prepaid health plan, or Article 65 corporation that is subject to the tax

28 levied by this section is not subject to franchise or income taxes imposed by Articles 3 and 4,
29 respectively, of this Chapter.
30 (b) Tax Base. –
31 (1) Insurers. – The tax imposed by this section on an insurer or a health
32 maintenanceorganizationshallbemeasuredbygrosspremiumsfrombusiness
33 done in this State during the preceding calendar year.
34 (2) Repealed bySession Laws 2006-196, effective for taxable years beginning on

35 or after January 1, 2008.
36 (3) Article 65 Corporations. – The tax imposed by this section on an Article 65
37 corporation shall be measured by gross collections from membership dues,
38 exclusive of receipts from cost plus plans, received by the corporation during
39 the preceding calendar year.
40 (4) Self-insurers. – The tax imposed by this section on a self-insurer shall be

41 measured by the gross premiums that would be charged against the same or
42 most similar industry or business, taken from the manual insurance rate then
43 in force in this State, applied to the self-insurer's payroll for the previous
44 calendar year as determined under Article 36 of Chapter 58 of the General
45 Statutes modified by the self-insurer's approved experience modifier.
46 (5) Prepaid Health Plans. – The tax imposed by this section on a prepaid health
47 plan shall be measured by gross capitation payments received by the prepaid

48 health plan from the Department of Health and Human Services for services
49 provided to enrollees in the State Medicaid program or NC Health Choice
50 program in the preceding calendar year.

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1 (b1) Calculation of Tax Base. – In determining the amount of gross premiums from
2 business in this State, all gross premiums received in this State, credited to policies written or
3 procured in this State, or derived from business written in this State shall be deemed to be for
4 contracts covering persons, property, or risks resident or located in this State unless one of the
5 following applies:
6 (1) The premiums are properly reported and properly allocated as being received
7 from business done in some other nation, territory, state, or states.

8 (2) The premiums are from policies written in federal areas for persons in military
9 service who pay premiums by assignment of service pay.
10 Gross premiums from business done in this State in the case of life insurance contracts,
11 including supplemental contracts providing for disability benefits, accidental death benefits, or
12 other special benefits that are not annuities, means all premiums collected in the calendar year,
13 otherthanforcontracts of reinsurance,forpoliciesthepremiums on which arepaid byor credited
14 to persons, firms, or corporations resident in this State, or in the case of group policies, for

15 contracts of insurance covering persons resident within this State. The only deductions allowed
16 shall be for premiums refunded on policies rescinded for fraud or other breach of contract and
17 premiums that were paid in advance on life insurance contracts and subsequently refunded to the
18 insured, premium payer, beneficiary or estate. Gross premiums shall be deemed to have been
19 collected for the amounts as provided in the policy contracts for the time in force during the year,
20 whether satisfied by cash payment, notes, loans, automatic premium loans, applied dividend, or

21 by any other means except waiver of premiums by companies under a contract for waiver of
22 premium in case of disability.
23 Gross premiums from business done in this State in the case of prepaid health plans means
24 all capitation payments received by a prepaid health plan from the Department of Health and
25 Human Services for the delivery of services to enrollees in the State Medicaid program or NC
26 Health Choice program in the calendar year. Capitation payments refunded by a prepaid health
27 plan to the State are the only allowable deductions.

28 Gross premiums from business done in this State for all other health care plans and contracts
29 of insurance, including contracts of insurance required to be carried by the Workers'
30 Compensation Act, means all premiums written during the calendar year, or the equivalent
31 thereof in the case of self-insurers under the Workers' Compensation Act, for contracts covering
32 property or risks in this State, other than for contracts of reinsurance, whether the premiums are
33 designated as premiums, deposits, premium deposits, policy fees, membership fees, or
34 assessments. Gross premiums shall be deemed to have been written for the amounts as provided

35 in the policy contracts, new and renewal, becoming effective during the year irrespective of the
36 time or method of making payment or settlement for the premiums, and with no deduction for
37 dividends whether returned in cash or allowed in payment or reduction of premiums or for
38 additional insurance, and without any other deduction except for return of premiums, deposits,
39 fees, or assessments for adjustment of policy rates or for cancellation or surrender of policies.
40 (c) Exclusions. – Every insurer, in computing the premium tax, shall exclude all of the

41 following from the gross amount of premiums, and the gross amount of excluded premiums is
42 exempt from the tax imposed by this section:
43 (1) All premiums received on or after July 1, 1973, from policies or contracts
44 issued in connection with the funding of a pension, annuity, or profit-sharing
45 plan qualified or exempt under section 401, 403, 404, 408, 457 or 501 of the
46 Code as defined in G.S. 105-228.90.
47 (2) Premiums or considerations received from annuities, as defined in

48 G.S. 58-7-15.
49 (3) Funds or considerations received in connection with funding agreements, as
50 defined in G.S. 58-7-16.

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1 (4) The following premiums, to the extent federal law prohibits their taxation
2 under this Article:
3 a. Federal Employees Health Benefits Plan premiums.
4 b. Medicaid or Medicare premiums.
5 c. Medicaid or NC Health Choice premiums, other than capitation
6 payments, paid by or on behalf of a Medicaid or NC Health Choice
7 beneficiary.

8 (d) Tax Rates; Disposition. –
9 (1) Workers' Compensation. – The tax rate to be applied to gross premiums, or
10 the equivalent thereof in the case of self-insurers, on contracts applicable to
11 liabilitiesundertheWorkers'CompensationAct is two and five-tenths percent
12 (2.5%). The net proceeds shall be credited to the General Fund.
13 (2) Other Insurance Contracts. – The tax rate to be applied to gross premiums on
14 all other taxable contracts issued by insurers or health maintenance

15 organizations and to be applied to gross premiums and gross collections from
16 membership dues, exclusive of receipts from cost plus plans, received by
17 Article 65 corporations is one and nine-tenths percent (1.9%). The net
18 proceeds shall be credited to the General Fund.
19 (2a) Prepaid Health Plans. – The tax rate to be applied to gross premiums from
20 capitation payments received by prepaid health plans is one and nine-tenths

21 percent (1.9%). The net proceeds shall be credited to the General Fund.
22 (3) Additional Rate on Property Coverage Contracts. – An additional tax at the
23 rate of seventy-four hundredths percent (0.74%) applies to gross premiums on
24 insurance contracts for property coverage. The tax is imposed on ten percent
25 (10%) of the gross premiums from insurance contracts for automobile
26 physical damage coverage and on one hundred percent (100%) of the gross
27 premiums from all other contracts for property coverage. Twenty percent

28 (20%) of the net proceeds of this additional tax must be credited to the
29 Volunteer Fire Department Fund established in Article 87 of Chapter 58 of
30 the General Statutes. Twenty percent (20%) of the net proceeds must be
31 credited to the Department of Insurance for disbursement pursuant to
32 G.S. 58-84-25. Up to twentypercent (20%), as determined in accordance with
33 G.S. 58-87-10(f), must be credited to the Workers' Compensation Fund. The
34 remaining net proceeds must be credited to the General Fund. The additional

35 tax imposed on property coverage contracts under this subdivision is a special
36 purpose assessment based on gross premiums and not a gross premiums tax.
37 The following definitions apply in this subdivision:
38 a. Automobile physical damage. – The following lines of business
39 identified by the NAIC: private passenger automobile physical
40 damage and commercial automobile physical damage.

41 b. Property coverage. – The following lines of business identified by the
42 NAIC: fire, farm owners multiple peril, homeowners multiple peril,
43 nonliabilityportion ofcommercial multipleperil,oceanmarine,inland
44 marine, earthquake, private passenger automobile physical damage,
45 commercial automobile physical damage, aircraft, and boiler and
46 machinery. The term also includes insurance contracts for wind
47 damage.

48 c. NAIC. – National Association of Insurance Commissioners.
49 (4) Repealed bySession Laws 2006-196, effective for taxable years beginning on
50 or after January 1, 2008.

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1 (5) Repealed by Session Laws 2003-284, s. 43.1, effective for taxable years
2 beginning on or after January 1, 2004.
3 (6) Repealed by Session Laws 2005-276, s. 38.4(a), effective for taxable years
4 beginning on or after January 1, 2007.
5 (e) Report and Payment. – Each taxpayer doing business in this State shall, within the
6 first 15 days of March, file with the Secretary of Revenue a full and accurate report of the total
7 gross premiums as defined in this section, the payroll and other information required by the

8 Secretary in the case of a self-insurer, or the total gross collections from membership dues
9 exclusive of receipts from cost plus plans collected in this State during the preceding calendar
10 year. The taxes imposed by this section shall be remitted to the Secretary with the report.
11 (f) Installment Payments Required. – Taxpayers that are subject to the tax imposed by
12 this section and have a premium tax liability of ten thousand dollars ($10,000) or more for
13 business done in North Carolina during the immediately preceding year shall remit three equal
14 quarterly installments with each installment equal to at least thirty-three and one-third percent

15 (33 1/3%) of the premium tax liability incurred in the immediately preceding taxable year. The
16 quarterly installment payments shall be made on or before April 15, June 15, and October 15 of
17 each taxable year. The company taypayer shall remit the balance by the following March 15 in
18 the same manner provided in this section for annual returns.
19 The Secretary may permit an insurance company or prepaid health plan to pay less than the
20 required estimated payment when the insurer or prepaid health plan reasonably believes that the

21 total estimated payments made for the current year will exceed the total anticipated tax liability
22 for the year.
23 An underpayment or an overpayment of an installment payment required by this subsection
24 accrues interest in accordance with G.S. 105-241.21. An overpayment of tax shall be credited to
25 the company taxpayer and applied against the taxes imposed upon the company taxpayer under
26 this Article.
27 (g) Exemptions. – This section does not apply to farmers' mutual assessment fire

28 insurance companies or to fraternal orders or societies that do not operate for a profit and do not
29 issue policies on any person except members. This section does not apply to a captive insurance
30 company taxed under G.S. 105-228.4A.
31 SECTION 9D.19.(d) G.S. 58-6-25 reads as rewritten:
32 § 58-6-25. Insurance regulatory charge.
33 …
34 (e) Definitions. – The following definitions apply in this section:

35 …
36 (2) Insurance company. – A company or prepaid health plan that pays the gross
37 premiums tax levied in G.S. 105-228.5 and G.S. 105-228.8.
38 ….
39 SECTION 9D.19.(e) G.S. 105-259 reads as rewritten:
40 § 105-259. Secrecy required of officials; penalty for violation.

41 …
42 (b) Disclosure Prohibited. – An officer, an employee, or an agent of the State who has
43 access to tax information in the course of service to or employment by the State may not disclose
44 the information to any other person except as provided in this subsection. Standards used or to
45 be used for the selection of returns for examination and data used or to be used for determining
46 the standards may not be disclosed for any purpose. All other tax information may be disclosed
47 only if the disclosure is made for one of the following purposes:

48 …
49 (49) To exchange information concerning a tax imposed by Article 8B of this
50 Chapter with the North Carolina Department of Insurance or the North

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1 Carolina Department of Health and Human Services when the information is
2 needed to fulfill a duty imposed on the Department.Department of Revenue.
3 ….
4 SECTION 9D.19.(f) If House Bill 656, 2019 Regular Session, becomes law, then
5 G.S. 105-228.3(6), as enacted by subsection (b) of this section, reads as rewritten:
6 (6) Prepaid health plan. – As defined in Section 4 of S.L. 2015-245, as
7 amended.G.S. 108D-1.

8 SECTION 9D.19.(g) This section is effective October 1, 2019, and applies to
9 capitation payments received by prepaid health plans on or after that date.
10
11 PART IX-E. HEALTH SERVICE REGULATION
12
13 FUNDS TO CONTINUE COMMUNITY PARAMEDICINE PILOT PROGRAM
14 SECTION 9E.1.(a) Of the funds appropriated to the Department of Health and

15 Human Services, Division of Health Service Regulation, the sum of three hundred fifty thousand
16 dollars ($350,000) in nonrecurring funds for the 2019-2020 fiscal year and the sum of three
17 hundred fifty thousand dollars ($350,000) in nonrecurring funds for the 2020-2021 fiscal year
18 shall be used to continue the community paramedicine pilot program authorized in Section
19 12A.12 of S.L. 2015-241, as amended by Section 12A.3 of S.L. 2016-94, as follows:
20 (1) The sum of two hundred ten thousand dollars ($210,000) in nonrecurring

21 funds for each year of the fiscal biennium shall be allocated to the New
22 Hanover Regional Emergency Medical Services site.
23 (2) The sum of seventythousand dollars ($70,000) in nonrecurring funds for each
24 year of the fiscal biennium shall be allocated to the McDowell County
25 Emergency Medical Services site.
26 (3) The sum of seventythousand dollars ($70,000) in nonrecurring funds for each
27 year of the fiscal biennium shall be allocated to the Wake County Emergency

28 Medical Services site.
29 The focus of this community paramedicine pilot program shall continue to be
30 expansion of the role of paramedics to allow for community-based initiatives that result in
31 providing care that avoids nonemergency use of emergency rooms and 911 services and
32 avoidance of unnecessary admissions into health care facilities.
33 SECTION 9E.1.(b) The participation requirements, objectives, standards, and
34 required outcomes for the pilot program shall remain the same as established pursuant to Section

35 12A.12 of S.L. 2015-241, as amended by Section 12A.3 of S.L. 2016-94.
36 SECTION 9E.1.(c) By December 1, 2021, the Department of Health and Human
37 Services shall submit an updated report on the community paramedicine pilot program to the
38 Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research
39 Division. At a minimum, the report shall include all of the following:
40 (1) Any updated version of the evaluation plan required by subsection (d) of

41 Section 12A.12 of S.L. 2015-241.
42 (2) An updated estimate of the cost to expand the program incrementally and
43 statewide.
44 (3) An updated estimate of any potential savings of State funds associated with
45 expansion of the program.
46 (4) If expansion of the program is recommended, an updated time line for
47 expanding the program.

48 (5) Recommendations to make all piloted program sites fully receipt supported.
49
50 MORATORIUM ON SPECIAL CARE UNIT LICENSES

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1 SECTION9E.2.(a) FortheperiodbeginningJuly1,2019, and endingJune30,2021,
2 the Department of Health and Human Services, Division of Health Service Regulation, shall not
3 issue any licenses for special care units as defined in G.S. 131D-4.6 and G.S. 131E-114. This
4 prohibition shall not restrict the Department of Health and Human Services from doing any of
5 the following:
6 (1) Issuing a license to a facility that is acquiring an existing special care unit.
7 (2) Issuing a license for a special care unit in any area of the State upon a

8 determination by the Secretary of the Department of Health and Human
9 Services that increased access to this type of care is necessary in that area
10 during the moratorium imposed by this section.
11 (3) Processing all completed applications for special care unit licenses received
12 bytheDivision of HealthServiceRegulationalongwith theapplicablelicense
13 fee prior to June 1, 2013.
14 (4) Issuing a license to a facility that was in possession of a certificate of need as

15 of July 31, 2013, that included authorization to operate special care unit beds.
16 SECTION 9E.2.(b) The Department of Health and Human Services shall submit a
17 reportto theJoint LegislativeOversight Committeeon HealthandHumanServices andtheFiscal
18 Research Division by March 1, 2021, containing at least the following information:
19 (1) The number of licensed special care units in the State.
20 (2) The capacity of the currently licensed special care units to serve people in

21 need of their services.
22 (3) The anticipated growth in the number of people who will need the services of
23 a licensed special care unit.
24 (4) The number of applications received from special care units seeking licensure
25 as permitted bythis section and the number of those applications that were not
26 approved.
27

28 PART IX-F. MENTAL HEALTH/DEVELOPMENTAL DISABILITIES/SUBSTANCE
29 ABUSE SERVICES
30
31 SINGLE-STREAM FUNDING FOR MH/DD/SAS COMMUNITY SERVICES
32 SECTION 9F.1.(a) For the purpose of mitigating cash flow problems that many
33 local management entities/managed care organizations (LME/MCOs) experience at the
34 beginning of each fiscal year relative to single-stream funding, the Department of Health and

35 Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse
36 Services (DMH/DD/SAS), shall distribute not less than one-twelfth of each LME/MCO's base
37 budget allocation at the beginning of the fiscal year and subtract the amount of that distribution
38 from the LME/MCO's total reimbursements for the fiscal year. For each month of the fiscal year
39 after July, the DMH/DD/SAS shall distribute, on the third working day of the month,
40 one-eleventh of the amount of each LME/MCO's single-stream allocation that remains after

41 subtracting the amount of the distribution that was made to the LME/MCO in July of the fiscal
42 year.
43 SECTION 9F.1.(b) In addition to the recurring reduction for single-stream funding
44 required by Section 11F.2 of S.L. 2017-57, as amended by Section 4 of S.L. 2017-206 and
45 Section 11F.1 of S.L. 2018-5, the DMH/DD/SAS is directed to further reduce its allocation for
46 single-stream funding by seven million five hundred thousand dollars ($7,500,000) in recurring
47 funds for the 2019-2020 fiscal year and by seven million five hundred thousand dollars

48 ($7,500,000) in recurring funds for the 2020-2021 fiscal year.
49 The DMH/DD/SAS shall allocate the combined total of the recurring reduction for
50 single-stream funding required by this section and the recurring reduction for single-stream

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1 funding that was required by Section 11F.2 of S.L. 2017-57, as amended by Section 4 of S.L.
2 2017-206 and Section 11F.1 of S.L. 2018-5, among the LME/MCOs as follows:
3 FY 2019-2020 FY 2020-2021
4 Alliance Behavioral Healthcare ($5,372,060) ($5,372,060)
5 Cardinal Innovations Healthcare ($11,513,564) ($11,513,564)
6 Eastpointe ($3,451,303) ($3,451,303)
7 Partners Behavioral Health Management ($4,330,117) ($4,330,117)

8 Sandhills Center ($3,911,405) ($3,911,405)
9 Trillium Health Resources ($6,307,041) ($6,307,041)
10 Vaya Health ($9,055,405) ($9,055,405)
11 Total ($43,940,895) ($43,940,895)
12
13 By March 1, 2020, the Secretary of Health and Human Services shall submit to the
14 Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research

15 Division a proposal for any adjustments to the specified recurring reductions among the
16 LME/MCOs for future fiscal years. The proposal must include a detailed explanation supporting
17 any proposed changes.
18 SECTION 9F.1.(c) During each year of the 2019-2021 fiscal biennium, each
19 LME/MCO shall fund at least ninety percent (90%) of the level of single-stream service
20 utilization as during the 2014-2015 fiscal year across the LME/MCO's catchment area, provided

21 that an LME/MCO shall not reduce funding for single-stream service utilization for home and
22 community-based services or services that support the 2012 settlement agreement entered into
23 between the United States Department of Justice and the State of North Carolina to ensure that
24 the State will willingly meet the requirements of the Americans with Disabilities Act of 1990,
25 Section 504 of the Rehabilitation Act of 1973, and the United States Supreme Court decision in
26 Olmstead v. L.C., 527 U.S. 581 (1999). This requirement shall not be construed to require
27 LME/MCOs to authorize or maintain the same level of services for anyspecific individual whose

28 services were paid for with single-stream funding. Further, this requirement shall not be
29 construed to create a private right of action for any person or entity against the State of North
30 Carolina or the Department of Health and Human Services or any of its divisions, agents, or
31 contractors and shall not be used as authority in any contested case brought pursuant to Chapter
32 108C of the General Statutes or Chapter 108D of the General Statutes.
33 SECTION 9F.1.(d) If, on or after June 1, 2020, the Office of State Budget and
34 Management (OSBM) certifies a Medicaid and NC Health Choice budget surplus and sufficient

35 cash in Budget Code 14445 to meet total obligations for the 2019-2020 fiscal year, then the
36 Department of Health and Human Services, Division of Health Benefits (DHB), may transfer to
37 theDMH/DD/SASfundsnottoexceedtheamountofthecertifiedsurplusorthirtymilliondollars
38 ($30,000,000), whichever is less, to offset the reduction in single-stream funding required bythis
39 section.
40 If, on or after June 1, 2021, the OSBM certifies a Medicaid and NC Health Choice

41 budget surplus and sufficient cash in Budget Code 14445 to meet total obligations for fiscal year
42 2018-2019, then the DHB may transfer to the DMH/DD/SAS funds not to exceed the amount of
43 the certified surplus or thirty million dollars ($30,000,000), whichever is less, to offset the
44 reduction in single-stream funding required by this section.
45 TheDMH/DD/SAS shall allocatefundstransferred pursuant to this subsectionamong
46 the LME/MCOs based on the individual LME/MCO's percentage of recurring reductions in
47 single-stream funding for the fiscal year, as required by subsection (b) of this section. These

48 funds shall be allocated as prescribed by June 30 of each State fiscal year.
49 SECTION 9F.1.(e) The Department of Health and Human Services shall develop a
50 maintenance of effort (MOE) spending requirement for all mental health and substance abuse
51 services which must be maintained using nonfederal State appropriations on an annual basis in

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1 order to meet MOE requirements for federal block grant awards. LME/MCOs shall ensure the
2 MOE spending requirement is met using State appropriations.
3
4 FUNDS FOR LOCAL INPATIENT PSYCHIATRIC BEDS OR BED DAYS
5 SECTION 9F.2.(a) Use of Funds. – Of the funds appropriated to the Department of
6 Health and Human Services, Division of Mental Health, Developmental Disabilities, and
7 Substance Abuse Services, for crisis services, the sum of forty million six hundred twenty-one

8 thousand six hundred forty-four dollars ($40,621,644) in recurringfunds for the 2019-2020 fiscal
9 year and the sum of fortymillion six hundred twenty-one thousand six hundred forty-four dollars
10 ($40,621,644) in recurring funds for the 2020-2021 fiscal year shall be used to purchase
11 additional new or existing local inpatient psychiatric beds or bed days not currently funded by or
12 through local management entities/managed care organizations (LME/MCOs). The Department
13 shall continue to implement a two-tiered system of payment for purchasing these local inpatient
14 psychiatric beds or bed days based on acuitylevel with an enhanced rate of payment for inpatient

15 psychiatric beds or bed days for individuals with higher acuity levels, as defined by the
16 Department. The enhanced rate of payment for inpatient psychiatric beds or bed days for
17 individuals with higher acuity levels shall not exceed the lowest average cost per patient bed day
18 among the State psychiatric hospitals. In addition, at the discretion of the Secretaryof Health and
19 Human Services, existing funds allocated to LME/MCOs for community-based mental health,
20 developmentaldisabilities,andsubstanceabuseservicesmaybeusedtopurchaseadditionallocal

21 inpatient psychiatric beds or bed days. Funds designated in this subsection for the purchase of
22 local inpatient psychiatric beds or bed days shall not be used to supplant other funds appropriated
23 or otherwise available to the Department for the purchase of inpatient psychiatric services
24 through contracts with local hospitals.
25 SECTION 9F.2.(b) Distribution and Management of Beds or Bed Days. – Except as
26 provided in this subsection, the Department shall work to ensure that any local inpatient
27 psychiatric beds or bed days purchased in accordance with this section are utilized solely for

28 individuals who are medicallyindigent, as defined in this subsection. In addition, the Department
29 shall work to ensurethat anylocal inpatientpsychiatricbeds orbed days purchased in accordance
30 with this section are distributed across the State in LME/MCO catchment areas and according to
31 need as determined by the Department. The Department shall ensure that beds or bed days for
32 individuals with higher acuity levels are distributed across the State in LME/MCO catchment
33 areas and according to greatest need based on hospital bed utilization data. The Department shall
34 enter into contracts with LME/MCOs and local hospitals for the management of these beds or

35 bed days. The Department shall work to ensure that these contracts are awarded equitablyaround
36 all regions of the State. LME/MCOs shall manage and control these local inpatient psychiatric
37 beds or bed days, including the determination of the specific local hospital or State psychiatric
38 hospital to which an individual should be admittedpursuant to an involuntary commitment order.
39 The Department mayuse up to ten percent (10%) of the funds allocated in this section
40 for each year of the 2019-2021 fiscal biennium to pay for facility-based crisis services and

41 nonhospital detoxification services for individuals in need of these services, regardless if the
42 individuals are medically indigent, defined as uninsured persons who (i) are financially unable
43 to obtain private insurance coverage as determined bythe Department and (ii) are not eligible for
44 government-funded health coverage such as Medicare or Medicaid.
45 SECTION 9F.2.(c) Funds to Be Held in Statewide Reserve. – Funds appropriated to
46 the Department for the purchase of local inpatient psychiatric beds or bed days shall not be
47 allocatedto LME/MCOs but shall beheld in astatewidereserveat theDivisionofMental Health,

48 Developmental Disabilities, and Substance Abuse Services to pay for services authorized by the
49 LME/MCOs and billed bythe hospitals through the LME/MCOs. LME/MCOs shall remit claims
50 for payment to the Department within 15 working days after receipt of a clean claim from the

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1 hospital and shall pay the hospital within 30 working days after receipt of payment from the
2 Department.
3 SECTION 9F.2.(d) Ineffective LME/MCO Management of Beds or Bed Days. – If
4 the Department determines that (i) an LME/MCO is not effectively managing the beds or bed
5 days for which it has responsibility, as evidenced by beds or bed days in the local hospital not
6 being utilized while demand for services at the State psychiatric hospitals has not decreased, or
7 (ii) the LME/MCO has failed to complywith the prompt payment provisions of subsection (c) of

8 this section, the Department may contract with another LME/MCO to manage the beds or bed
9 days or,notwithstanding anyother provision oflawto the contrary, maypaythe hospitaldirectly.
10 SECTION 9F.2.(e) Reporting by LME/MCOs. – The Department shall establish
11 reporting requirements for LME/MCOs regarding the utilization of these beds or bed days.
12 SECTION 9F.2.(f) Reporting by Department. – By no later than December 1, 2020,
13 and by no later than December 1, 2021, the Department shall report to the Joint Legislative
14 Oversight Committee on Health and Human Services and the Fiscal Research Division on all of

15 the following:
16 (1) A uniform system for beds or bed days purchased during the preceding fiscal
17 year from (i) funds appropriated in this act that are designated for this purpose
18 in subsection (a) of this section, (ii) existing State appropriations, and (iii)
19 local funds.
20 (2) An explanation of the process used by the Department to ensure that, except

21 as otherwise provided in subsection (a) of this section, local inpatient
22 psychiatric beds or bed days purchased in accordance with this section are
23 utilized solely for individuals who are medically indigent, along with the
24 numberof medicallyindigent individuals served bythepurchase ofthesebeds
25 or bed days.
26 (3) The amount of funds used to pay for facility-based crisis services, along with
27 the number of individuals who received these services and the outcomes for

28 each individual.
29 (4) Theamount offundsusedto payfornonhospitaldetoxification services, along
30 with the number of individuals who received these services and the outcomes
31 for each individual.
32 (5) Other Department initiatives funded by State appropriations to reduce State
33 psychiatric hospital use.
34

35 TRAUMATIC BRAIN INJURY FUNDING
36 SECTION 9F.3. Of the funds appropriated in this act to the Department of Health
37 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
38 Abuse Services, for traumatic brain injury (TBI) services, the sum of two million three hundred
39 seventy-three thousand eighty-six dollars ($2,373,086) in recurring funds for the 2019-2020
40 fiscal year and the sum of two million three hundred seventy-three thousand eighty-six dollars

41 ($2,373,086) in recurring funds for the 2020-2021 fiscal year shall be used exclusivelyto support
42 TBI services as follows:
43 (1) The sum of three hundred fifty-nine thousand two hundred eighteen dollars
44 ($359,218) shall be used to fund contracts with the Brain Injury Association
45 of North Carolina, Carolinas Rehabilitation, or appropriate service providers
46 to assist families in accessing the continuum of care and to provide
47 educational programs on brain injury prevention, intervention, and care.

48 (2) The sum of two million thirteen thousand eight hundred sixty-eight dollars
49 ($2,013,868) shall be used to provide services and supports, established bythe
50 Division of Mental Health, Developmental Disabilities, and Substance Abuse
51 Services in its operating processes, including residential, day program,

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1 transportation, respite, and home modification, to individuals with TBI
2 statewide.
3
4 ADULT AND PEDIATRIC TRAUMATIC BRAIN INJURY PILOT PROGRAM
5 SECTION 9F.3A.(a) Of the funds appropriated in this act to the Department of
6 Health and Human Services, Division of Mental Health, Developmental Disabilities, and
7 Substance Abuse Services, the sum of three hundred thousand dollars ($300,000) in nonrecurring

8 funds for the 2019-2020 fiscal year shall be used to continue the adult and pediatric traumatic
9 brain injury pilot program, as authorized by Section 11F.9 of S.L. 2017-57, as amended by
10 Section 3.3 of S.L. 2017-212.
11 SECTION 9F.3A.(b) By April 1, 2020, the Department of Health and Human
12 Services shall submit a report on the pilot program authorized by Section 11F.9 of S.L. 2017-57,
13 as amended by Section 3.3 of S.L. 2017-212, to the Joint Legislative Oversight Committee on
14 Health and Human Services and the Fiscal Research Division. At a minimum, the report shall

15 include all of the following:
16 (1) Thenumberandoutcomeofpatientsservedat eachprogramsite,brokendown
17 by patient age and county of origin.
18 (2) A breakdown of expenditures at each program site by type of service.
19 (3) An estimate of the cost to expand the program incrementally and statewide.
20 (4) An estimate of any potential savings of State funds associated with expansion

21 of the program.
22 (5) If expansion of the program is recommended, a time line for expanding the
23 program.
24
25 DOROTHEA DIX HOSPITAL PROPERTY FUNDS
26 SECTION 9F.4. Any funds allocated to the Department of Health and Human
27 Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services,

28 from the Dorothea Dix Hospital PropertyFund established under G.S. 143C-9-2(b1), pursuant to
29 Section 12F.4 of S.L. 2016-94 and Section 11F.5 of S.L. 2017-57, as amended, that are not
30 expended or encumbered as of June 30, 2020, shall remain in the Dorothea Dix Hospital Property
31 Fund.
32
33 FUNDS FOR NEW BROUGHTON HOSPITAL
34 SECTION 9F.5. Of the funds appropriated in this act to the Department of Health

35 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
36 Abuse Services, for the 2020-2021 fiscal year, the sum of four million nine hundred thousand
37 dollars ($4,900,000) in recurring funds shall be used for new staffing and operational support,
38 including utilities, maintenance costs, and other physical plant operating costs to open new
39 Psychiatric Intensive Care Unit beds in the new Broughton Hospital.
40

41 SUPPLEMENTAL SHORT-TERM ASSISTANCE FOR GROUP HOMES
42 SECTION 9F.6.(a) As used in this section, group home means any facilitythat (i)
43 is licensed under Chapter 122C of the General Statutes, (ii) meets the definition of a supervised
44 living facilityunder 10A NCAC 27G .5601(c)(1) or 10A NCAC 27G .5601(c)(3), and (iii) serves
45 adults whose primarydiagnosis is mental illness or a developmental disabilitybut may also have
46 other diagnoses.
47 SECTION 9F.6.(b) Of the funds appropriated in this act to the Department of Health

48 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
49 Abuse Services, the sum of one million eight hundred thousand dollars ($1,800,000) in
50 nonrecurring funds for each year of the 2019-2021 fiscal biennium shall be used to provide

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1 temporary, short-term financial assistance in the form of a monthly payment to group homes on
2 behalf of each resident who meets all of the following criteria:
3 (1) Was eligible for Medicaid-covered personal care services (PCS) prior to
4 January 1, 2013, but was determined to be ineligible for PCS on or after
5 January1, 2013, due to Medicaid State Plan changes in PCS eligibilitycriteria
6 specified in Section 10.9F of S.L. 2012-142, as amended by Section 3.7 of
7 S.L. 2012-145 and Section 70 of S.L. 2012-194.

8 (2) Has continuously resided in a group home since December 31, 2012.
9 SECTION 9F.6.(c) These monthly payments shall be subject to all of the following
10 requirements and limitations:
11 (1) The amount of the monthly payments authorized by this section shall not
12 exceed four hundred sixty-four dollars and thirty cents ($464.30) per month
13 for each resident who meets all criteria specified in subsection (b) of this
14 section.

15 (2) A group home that receives the monthly payments authorized by this section
16 shall not, under any circumstances, use these payments for any purpose other
17 than providing, as necessary, supervision and medication management for a
18 resident who meets all criteria specified in subsection (b) of this section.
19 (3) The Department shall make monthly payments authorized by this section to a
20 group home on behalf of each resident who meets all criteria specified in

21 subsection (b) of this section only for the period commencing July 1, 2019,
22 and ending June 30, 2021, or upon depletion of the one million eight hundred
23 thousand dollars ($1,800,000) in nonrecurring funds appropriated in this act
24 to the Division of Mental Health, Developmental Disabilities, and Substance
25 Abuse Services, for supplemental short-term assistance for group homes, for
26 each year of the 2019-2021 fiscal biennium for the purpose of this section,
27 whichever is earlier.

28 (4) The Department shall make monthlypayments authorized bythis section only
29 to the extent sufficient funds are available from the one million eight hundred
30 thousand dollars ($1,800,000) in nonrecurring funds appropriated in this act
31 to the Division of Mental Health, Developmental Disabilities, and Substance
32 Abuse Services, for supplemental short-term assistance for group homes, for
33 each year of the 2019-2021 fiscal biennium for the purpose of this section.
34 (5) The Department shall not make monthly payments authorized by this section

35 to a group home on behalf of a resident during the pendency of an appeal by
36 or on behalf of the resident under G.S. 108A-70.9A.
37 (6) The Department shall terminate all monthlypayments pursuant to this section
38 on June 30, 2021, or upon depletion of the one million eight hundred thousand
39 dollars ($1,800,000) in nonrecurring funds appropriated in this act to the
40 Division of Mental Health, Developmental Disabilities, and Substance Abuse

41 Services, for supplemental short-term assistance for group homes, for each
42 year of the 2019-2021 fiscal biennium for the purpose of this section,
43 whichever is earlier.
44 (7) Each group home that receives the monthly payments authorized by this
45 section shall submit to the Department a list of all funding sources for the
46 operational costsofthegrouphomefortheprecedingtwo years,in accordance
47 with the schedule and format prescribed by the Department.

48 SECTION 9F.6.(d) The Department shall use an existing mechanism to administer
49 these funds in the least restrictive manner that ensures compliance with this section and timely
50 and accurate payments to group homes. The Department shall not, under any circumstances, use
51 anyportion of the one million eight hundred thousand dollars ($1,800,000) in nonrecurringfunds

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1 appropriated in this act to the Division of Mental Health, Developmental Disabilities, and
2 SubstanceAbuseServices, forsupplemental short-term assistance for group homes,foreach year
3 of the 2019-2021 fiscal biennium for anyother purpose than the purpose specified in this section.
4 SECTION 9F.6.(e) Nothing in this section shall be construed as an obligation bythe
5 General Assembly to appropriate funds for the purpose of this section, or as an entitlement by
6 any group home, resident of a group home, or other person to receive temporary, short-term
7 financial assistance under this section.

8 SECTION 9F.6.(f) This section expires June 30, 2021.
9
10 REPORT ON USE OF FUNDS TO PURCHASE INPATIENT ALCOHOL AND
11 SUBSTANCE USE DISORDER TREATMENT SERVICES
12 SECTION9F.8. TheDepartment ofHealthandHumanServices, Division ofMental
13 Health, Developmental Disabilities, and Substance Abuse Services, shall report annually,
14 beginning September 1, 2019, and ending on September 1, 2026, on the implementation of the

15 use of funds to purchase inpatient alcohol and substance use disorder treatment services required
16 by Section 12F.12 of S.L. 2015-241, as amended by Section 11F.4 of S.L. 2017-57. The report
17 shall be submitted to the Joint Legislative Oversight Committee on Health and Human Services
18 and the Fiscal Research Division with the following information for the prior fiscal year and the
19 two preceding fiscal years, for each Alcohol and Drug Abuse Treatment Center (ADATC):
20 (1) The number of beds in operation.

21 (2) The number of bed days.
22 (3) The total amount of receipts, the amount of those receipts that were received
23 from local management entities/managed care organizations, and the amount
24 of those receipts that were received from all other sources.
25 (4) Cost of operation of the ADATC, with personnel and staffing costs reported
26 separately from all other costs.
27 (5) The ADATC's profit or loss.

28
29 FUNDS FOR OVERDOSE MEDICATIONS
30 SECTION 9F.9. Of the funds appropriated in this act to the Department of Health
31 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
32 Abuse Services, the sum of one hundred thousand dollars ($100,000) in recurring funds for each
33 fiscal year of the 2019-2021 fiscal biennium shall be used to purchase opioid antagonists, as
34 defined in G.S. 90-12.7, to reverse opioid-related drug overdoses as follows:

35 (1) Seventy-five thousand dollars ($75,000) in recurring funds for each year of
36 the 2019-2021 fiscal biennium shall be used to purchase opioid antagonists to
37 be distributed at no charge to the North Carolina Harm Reduction Coalition
38 to serve individuals at risk of experiencing an opioid-related drug overdose or
39 to the friends and family members of an at-risk individual.
40 (2) Twenty-five thousand dollars ($25,000) in recurringfunds for each year of the

41 2019-2021 fiscal biennium shall be used to purchase opioid antagonists to be
42 distributed at no charge to North Carolina law enforcement agencies.
43
44 FUNDS FOR VAYA HEALTH TO EXPAND FACILITY-BASED CRISIS SERVICES
45 SECTION 9F.10.(a) Funds appropriated in S.L. 2018-5 to the Department of Health
46 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
47 Abuse Services, to be allocated to Vaya Health (Vaya) as a grant-in-aid for the construction of a

48 facility-based crisis center in Wilkes County, shall not revert, but shall be expended or
49 encumbered by December 31, 2019. Vaya shall not use these funds for any purpose other than
50 the purpose stated in Section 11F.5 of S.L. 2018-5.

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1 SECTION 9F.10.(b) This section becomes effective June 30, 2019, and applies to
2 funds not obligated on that date.
3
4 FUNDS FOR EVIDENCE-BASED SUPPORTED EMPLOYMENT SERVICES FOR
5 INDIVIDUALS WITH SERIOUS MENTAL ILLNESS, INTELLECTUAL
6 DISABILITIES, OR DEVELOPMENTAL DISABILITIES
7 SECTION 9F.11. Of the funds appropriated in this act to the Department of Health

8 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
9 Abuse Services, the sum of one hundred twenty-five thousand dollars ($125,000) in recurring
10 funds for each year of the 2019-2021 fiscal biennium shall be allocated as a grant to the North
11 Carolina Association of People Supporting Employment First (NC APSE) to develop and
12 implement training programs for the Department, including online training modules, on the
13 provision of evidence-based supported employment services for individuals in targeted
14 populations, in order to assist these individuals with preparation for, identification of, and

15 maintenance of integrated, paid, competitive employment. The Department shall make these
16 training programs available throughout the State to (i) employers that have hired or are willing
17 to hire individuals in targeted populations, (ii) service providers of local management
18 entities/managed care organizations, and (iii) any other entity the Department determines will
19 benefit from receiving this training in order to achieve improved employment outcomes for
20 individuals in targeted populations. As used in this section, individuals in targeted populations

21 means individuals with serious mental illness who are in or at risk of entry to an adult care home
22 and individuals with intellectual disabilities, developmental disabilities, or both.
23
24 YOUTH TOBACCO ENFORCEMENT FUNDING
25 SECTION 9F.12. Of the funds appropriated in this act to the Department of Health
26 and Human Services, Division of Mental Health, Developmental Disabilities, and Substance
27 AbuseServices, thesum ofthreehundredthousanddollars($300,000)in recurringfundsforeach

28 year of the 2019-2021 fiscal biennium shall be transferred to the Alcohol Law Enforcement
29 Branch. The Alcohol Law Enforcement Branch shall allocate these funds for the performance of
30 statewide compliance checks to enforce the State's youth tobacco access law (G.S. 14-313).
31
32 STUDY ESTABLISHMENT OF A REGIONAL BEHAVIORAL HEALTH CENTER
33 SECTION 9F.13.(a) Of the funds appropriated to the Department of Health and
34 Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse

35 Services, the sum of one hundred eighty thousand dollars ($180,000) in nonrecurring funds for
36 the 2019-2020 fiscal year, shall be used to conduct, through Partners Behavioral Health
37 Management, a feasibility study for the establishment of a behavioral health crisis center located
38 in Burke County to serve a broader region, to be determined by the findings of the feasibility
39 study. The study shall, at a minimum, include all of the following:
40 (1) A description of all programs and services to be provided at the facility.

41 (2) The facility's service area and the demand for service in that area.
42 (3) Current provider capacity to meet the demand for service in that area.
43 (4) A recommended location for the facility, including the cost to rent, purchase,
44 or construct a facility at the recommended location, along with the cost of any
45 land, buildings, land improvements, or building improvements.
46 (5) Start-up costs for the facility and programs offered at the facility, including
47 any necessary training.

48 (6) Annual cost to operate the facility, including staff, training, supplies, food,
49 housekeeping, security, maintenance, administration, medications, and
50 information technology.
51 (7) Cost to rent or purchase equipment for the facility.

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1 (8) Anticipated sources of public and private payment for services provided at the
2 facility, including private insurance, Medicaid, State appropriations, patient
3 payments, and other payment sources.
4 (9) The estimated amount of recurring and nonrecurring State appropriations
5 necessary to start and sustain the facility.
6 (10) Any referral agreements necessary to ensure continuity of patient care.
7 (11) An implementation time line.

8 SECTION 9F.13.(b) By February 10, 2020, the Department of Health and Human
9 Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services,
10 and Partners Behavioral Health Management shall jointly submit a written report of the findings
11 of the feasibility study authorized by subsection (a) of this section to the Joint Legislative
12 Oversight Committee on Health and Human Services.
13
14 ESTABLISH A WORKGROUP TO REDUCE ADMINISTRATIVE DUPLICATION

15 FOR MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE
16 USE DISORDER PROVIDERS
17 SECTION 9F.14.(a) The Secretary of the Department of Health and Human
18 Services shall establish a workgroup to examine current administrative requirements for mental
19 health, intellectual/developmental disability, and substance use disorder providers and how best
20 to integrate these requirements with similar administrative requirements for physical health

21 providers in order to avoid duplication and enhance efficiency. The workgroup shall consist of
22 representatives from the Division of Mental Health, Developmental Disabilities, and Substance
23 Abuse Services, the Division of Health Benefits, the Division of Health Service Regulation, local
24 management entity/managed care organizations, providers, and stakeholders. The examination
25 shall include a review of at least all of the following categories of requirements imposed on
26 mental health, intellectual/developmental disability, and substance use disorder providers and
27 physical health providers:

28 (1) Training.
29 (2) Service delivery.
30 (3) Documentation.
31 (4) Claims processing.
32 (5) Reporting.
33 (6) Monitoring.
34 (7) Oversight.

35 (8) Facility licensure.
36 (9) Medicaid enrollment.
37 (10) Credentialing.
38 (11) Accreditation.
39 (12) Contracts.
40 (13) Investigations.

41 (14) Audits.
42 SECTION 9F.14.(b) In conducting the examination required under subsection (a)
43 of this section, the workgroup shall identify the federal or State entity that created each
44 requirement examined by the workgroup to include State legislation, statutes, contractual
45 requirements, federal Medicaid and managed care law, and provide a recommendation about
46 whether that requirement should remain, be eliminated, or be redesigned. The workgroup shall
47 consider any requirement imposed on mental health, intellectual/developmental disability, and

48 substance use disorder providers that:
49 (1) Is not federally mandated.
50 (2) Exceeds what is required for physical health.
51 (3) Does not add value to the delivery of behavioral health services.

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1 (4) Is unable to be incorporated into standard electronic health records or does not
2 align with meaningful use of electronic health records.
3 SECTION 9F.14.(c) By March 31, 2020, the Department of Health and Human
4 Services shall report the findings and recommendations of the workgroup to the Joint Legislative
5 Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee
6 on Medicaid and NC Health Choice, and the Fiscal Research Division.
7

8 MEDICATION-ASSISTED OPIOID USE DISORDER TREATMENT PILOT
9 PROGRAM FUNDING
10 SECTION 9F.16.(a) Of the funds appropriated to the Department of Health and
11 Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse
12 Services (Division), the sum of five hundred thousand dollars ($500,000) for each year of the
13 2019-2021 fiscal biennium allocated in Section 9K.1 of this act in Substance Abuse Prevention
14 and Treatment Block Grant funds for Substance Abuse Services – Treatment for Children/Adults

15 shall beallocatedand used to fundthecontinuationofthemedication-assistedopioiduse disorder
16 treatment pilot program as authorized by Section 12F.1 of S.L. 2016-94, as amended by Section
17 3.1 of S.L. 2017-212.
18 SECTION 9F.16.(b) Section 12F.1(g) of S.L. 2016-94, as amended by Section 3.1
19 of S.L. 2017-212, reads as rewritten:
20 SECTION 12F.1.(g) Evaluation of Pilot Program. – ByNovember 1, 2020, March 1, 2021,

21 the Department shall conduct and submit to theJoint Legislative Oversight Committee on Health
22 and Human Services a comprehensive evaluation of the effectiveness of this pilot program in
23 addressing North Carolina's growing opioid addiction and overdose crisis. The Department may
24 contract with an institution of higher education or other qualified entity with expertise in
25 evaluating programs similar to the pilot program authorized by this section. The comprehensive
26 evaluation shall include whether this pilot program was successful as measured by at least all of
27 the following:

28 (1) The total number of program participants who successfully transitioned to
29 opioid abstinence for a minimum of 30 days, 60 days, 90 days, six months, 12
30 months, and 18 months.
31 (2) A cost-benefit analysis of the pilot program.
32
33 PART IX-G. PUBLIC HEALTH
34

35 LOCAL HEALTH DEPARTMENTS/COMPETITIVE GRANT PROCESS TO
36 IMPROVE MATERNAL AND CHILD HEALTH
37 SECTION 9G.1.(a) Funds appropriated in this act to the Department of Health and
38 Human Services, Division of Public Health, for each year of the 2019-2021 fiscal biennium to
39 award competitive grants to local health departments for the improvement of maternal and child
40 health shall be used to continue administering a competitive grant process for local health

41 departments based on maternal and infant health indicators and the county's detailed proposal to
42 invest in evidence-based programs to achieve the following goals:
43 (1) Improve North Carolina's birth outcomes.
44 (2) Improve the overall health status of children in this State from birth to age 5.
45 (3) Lower the State's infant mortality rate.
46 SECTION 9G.1.(b) The plan for administering the competitive grant process shall
47 include at least all of the following components:

48 (1) A request for application (RFA) process to allow local health departments to
49 applyforand receiveStatefundsonacompetitivebasis. TheDepartment shall
50 requirelocal healthdepartments to includeinthe applicationaplanto evaluate

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1 the effectiveness, including measurable impact or outcomes, of the activities,
2 services, and programs for which the funds are being requested.
3 (2) A requirement that the Secretary prioritize grant awards to those local health
4 departments that are able to leverage non-State funds in addition to the grant
5 award.
6 (3) Ensures that funds received by the Department to implement the plan
7 supplement and do not supplant existing funds for maternal and child health

8 initiatives.
9 (4) Allows grants to be awarded to local health departments for up to two years.
10 SECTION 9G.1.(c) No later than July 1 of each year, as applicable, the Secretary
11 shall announce the recipients of the competitive grant awards and allocate funds to the grant
12 recipients for the respective grant period pursuant to the amounts designated under subsection
13 (a) of this section. After awards have been granted, the Secretaryshall submit a report to the Joint
14 Legislative Oversight Committee on Health and Human Services on the grant awards that

15 includes at least all of the following:
16 (1) The identity and a brief description of each grantee and each program or
17 initiative offered by the grantee.
18 (2) The amount of funding awarded to each grantee.
19 (3) The number of persons served by each grantee, broken down by program or
20 initiative.

21 SECTION 9G.1.(d) No later than December 1 of each fiscal year, each local health
22 department receiving funding pursuant to this section in the respective fiscal year shall submit to
23 the Division of Public Health a written report of all activities funded byState appropriations. The
24 report shall include the following information about the fiscal year preceding the year in which
25 the report is due:
26 (1) Adescription ofthetypes ofprograms, services, and activitiesfundedbyState
27 appropriations.

28 (2) Statistical and demographical information on the number of persons served by
29 these programs, services, and activities, including the counties in which
30 services are provided.
31 (3) Outcome measures that demonstrate the impact and effectiveness of the
32 programs, services, and activities based on the evaluation protocols developed
33 by the Division, in collaboration with the University of North Carolina
34 Gillings School ofGlobal PublicHealth,pursuant to Section12E.11(e)ofS.L.

35 2015-241, and reported to the Joint Legislative Oversight Committee on
36 Health and Human Services on April 1, 2016.
37 (4) A detailed program budget and list of expenditures, including all positions
38 funded, matching expenditures, and funding sources.
39
40 INCREASED FUNDS FOR LOCAL COMMUNICABLE DISEASE SURVEILLANCE,

41 DETECTION, CONTROL, AND PREVENTION
42 SECTION 9G.2. Of the funds appropriated in this act to the Department of Health
43 and Human Services, Division of Public Health, the sum of two million seven hundred fifty
44 thousand dollars ($2,750,000) in recurring funds for the 2019-2020 fiscal year and the sum of
45 four million dollars ($4,000,000) in recurring funds for the 2020-2021 fiscal year shall be
46 allocated to local health departments to expand local infrastructure for activities associated with
47 the surveillance, detection, control, and prevention of communicable diseases. In distributing

48 these funds for the 2019-2020 fiscal year, the Division of Public Health shall allocate to each
49 local health department the sum of twenty-seven thousand five hundred dollars ($27,500) for
50 each county it serves. In distributing these funds for the 2020-2021 fiscal year, the Division of
51 PublicHealth shall allocateto each local healthdepartment (i)thesum oftwentythousanddollars

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1 ($20,000) for each county it serves, and (ii) from the remaining two million dollars ($2,000,000),
2 an amount based upon the percentage of the State population served by each of the local health
3 departments. Local health departments shall use all funds allocated under this section to
4 supplement and not supplant existing funds for the surveillance, detection, control, and
5 prevention of communicable diseases.
6
7 LIMITATION ON USE OF STATE FUNDS

8 SECTION 9G.3. The limitation on the use of State funds as stated in Section 12E.13
9 of S.L. 2015-241 shall apply to funds appropriated in this act to the Department of Health and
10 Human Services for each fiscal year of the 2019-2021 fiscal biennium.
11
12 REPORT ON PREMIUM ASSISTANCE PROGRAM WITHIN AIDS DRUG
13 ASSISTANCE PROGRAM
14 SECTION 9G.4. Upon a determination by the Department of Health and Human

15 Services, Division of Public Health, that, in six months or less, it will no longer be feasible to
16 operatethehealth insurance premium assistanceprogram implementedwithin theNorth Carolina
17 AIDS Drug Assistance Program (ADAP) on a cost-neutral basis or in a manner that achieves
18 savings to the State, the Department shall submit a report to the Joint Legislative Oversight
19 Committee on Health and Human Services notifying the Committee of this determination along
20 with supporting documentation and a proposed course of action with respect to health insurance

21 premium assistance program participants.
22
23 CAROLINA PREGNANCY CARE FELLOWSHIP FUNDS
24 SECTION 9G.5. Of the funds appropriated in this act to the Department of Health
25 and Human Services, Division of Public Health, for the 2019-2021 fiscal biennium, for Carolina
26 Pregnancy Care Fellowship, a nonprofit corporation, no more than fifteen percent (15%) of the
27 funds allocated for the 2019-2020 fiscal year and for the 2020-2021 fiscal year shall be used for

28 administrative purposes. The balance of these funds shall be used for direct services.
29
30 MOUNTAIN AREA PREGNANCY SERVICES FUNDS
31 SECTION 9G.5A. Of the funds appropriated in this act to the Department of Health
32 and Human Services, Division ofPublicHealth,for the2019-2021 fiscal biennium, forMountain
33 Area Pregnancy Services, a nonprofit corporation, no more than fifteen percent (15%) of the
34 funds allocated for the 2019-2020 fiscal year and for the 2020-2021 fiscal year shall be used for

35 administrative purposes. The balance of these funds shall be used for direct services.
36
37 CAROLINA PREGNANCY CARE FELLOWSHIP CARRYFORWARD FOR
38 DURABLE MEDICAL EQUIPMENT AND TRAINING
39 SECTION 9G.6. Funds appropriated to the Department of Health and Human
40 Services, Division of Public Health, for the 2018-2019 fiscal year, for allocation to Carolina

41 Pregnancy Care Fellowship, a nonprofit corporation, shall not revert, but shall remain available
42 until the end of the 2019-2021 fiscal biennium. Carolina Pregnancy Care Fellowship shall use
43 these funds to provide grants to clinics that apply to the Carolina Pregnancy Care Fellowship for
44 durable medical equipment, training, or a combination of both, without any limitation on how
45 much of the funds carried forward may be expended for durable medical equipment or training.
46 Carolina Pregnancy Care Fellowship shall not use more than ten percent (10%) of the funds
47 carried forward from the 2018-2019 fiscal year for administrative purposes.

48
49 STATEWIDE EXPANSION OF THE CONTINUUM OF CARE PILOT PROGRAM
50 SECTION9G.7.(a) Ofthefundsappropriatedin this act to theDepartment ofHealth
51 and Human Services, Division of Public Health, the sum of one million two hundred thousand

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1 dollars ($1,200,000) in nonrecurring funds for the 2019-2020 fiscal year and the sum of one
2 million two hundred thousand dollars ($1,200,000) in nonrecurring funds for the 2020-2021
3 fiscal year shall be allocated to the Human Coalition, a nonprofit organization, to extend and
4 expand the pilot program authorized by Section 11E.13(b) of S.L. 2017-57, as provided in
5 subsection (b) of this section. These funds shall be used for nonreligious, nonsectarian purposes
6 only.
7 SECTION 9G.7.(b) The Human Coalition shall use funds allocated pursuant to

8 subsection(a)ofthissectiontoexpandthecontinuumofcarepilotprogramauthorizedbySection
9 11E.13(b) of S.L. 2017-57 to a statewide program. The purpose of the statewide continuum of
10 care program is to (i) encourage healthy childbirth, (ii) support childbirth as an alternative to
11 abortion, (iii) promote family formation, (iv) assist in establishing successful parenting
12 techniques, and (v) increase the economic self-sufficiency of families. The statewide continuum
13 of care program shall consist of existing locations of the pilot program authorized by Section
14 11E.13(b) of S.L. 2017-57 and other locations around the State to be determined by the Human

15 Coalition. All providers rendering services under the statewide program for which they are
16 compensated with funds allocated pursuant to subsection (a) of this section shall be physically
17 located in the State of North Carolina. The statewide continuum of care program shall provide
18 direct services, supports, social services case management, and referrals to biological parents of
19 unborn children and biological or adoptive parents of children under the age of two, and shall
20 consist of at least all of the following components:

21 (1) Outreach to at-risk populations eligible for the program.
22 (2) The use of licensed nurses to perform the following functions:
23 a. Assessment and evaluation of needs related to pregnancyor parenting.
24 b. Provision of medically accurate, pregnancy-related medical
25 information to program participants.
26 (3) The use of licensed social workers, or other individuals of equivalent
27 experience, to perform the following functions:

28 a. Development of a care plan, resources, and supports for program
29 participants to address identified needs.
30 b. Referrals to appropriate local resources, including State and federal
31 benefits programs and local charitable organizations.
32 c. Assistance in applying for State and federal benefits programs.
33 d. Assistance in accomplishing elements of the care plan.
34 SECTION 9G.7.(c) In order to be eligible to receive services under the statewide

35 continuum of care program, an individual shall, at the time of initial contact with the program,
36 be (i) a resident of North Carolina and (ii) a biological parent of an unborn child or a biological
37 or adoptive parent of a child under the age of two. Participants of the pilot program authorized
38 under Section 11E.13(b) of S.L. 2017-57, who terminated a pregnancy prior to birth, are eligible
39 to continue to receive continuum of care program services for a period of six months from the
40 date of termination of pregnancy.

41 SECTION 9G.7.(d) The Human Coalition may use up to ten percent (10%) of the
42 funds allocated for each year of the 2019-2021 fiscal biennium for administrative purposes.
43 SECTION 9G.7.(e) By December 1, 2019, and every six months thereafter, the
44 Human Coalition shall report to the Department of Health and Human Services on the status and
45 operation of the continuum of care program authorized by subsection (b) of this section. The
46 report shall include at least all of the following:
47 (1) A detailed breakdown of expenditures for the program.

48 (2) The number of individuals served by the program, and for the individuals
49 served, the types of services provided to each.
50 (3) Any other information requested by the Department of Health and Human
51 Services as necessary for evaluating the success of the program.

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1 SECTION 9G.7.(f) ByApril 1,2020,theDepartment ofHealthandHumanServices
2 shall report to the Joint Legislative Oversight Committee on Health and Human Services and the
3 Fiscal Research Division on the status and operation of the continuum of care program.
4 SECTION 9G.7.(g) Section 11E.13(f) of S.L. 2017-57 is repealed.
5
6 FIREARM SAFE STORAGE AWARENESS INITIATIVE
7 SECTION 9G.8.(a) Appropriation. – Of the funds appropriated in this act to the

8 Department of Health and Human Services, Division of Public Health, the sum of ninety
9 thousand dollars ($90,000) in nonrecurring funds for the 2019-2020 fiscal year and the sum of
10 seventy thousand ($70,000) in nonrecurring funds for the 2020-2021 fiscal year shall be used to
11 cover any costs associated with launching the firearm safe storage awareness initiative required
12 by this section, including the purchase and distribution of gun locks.
13 SECTION 9G.8.(b) Firearm Safe Storage Awareness Initiative. – The Department
14 of Health and Human Services (Department) shall launch a two-year statewide firearm safe

15 storage awareness initiative to educate the public about the importance of the safe storage of
16 firearms and to facilitate the distribution of gun locks. The initiative required under this section
17 shall include the development of (i) the Internet Web site and toolkit required under subsection
18 (c) of this section and (ii) the outreach process required under subsection (d) of this section.
19 SECTION 9G.8.(c) Development of Web Site and Toolkit. – The Department shall
20 develop an Internet Web site to provide information to the public about (i) the importance of the

21 safe storage of a firearm, especially with respect to access by children and youth; (ii) methods
22 for safely storing a firearm; (iii) contact information for obtaining free gun locks, if available;
23 (iv) information on State laws related to the safe storage of firearms; (v) links to Internet Web
24 pages for various resources related to firearm safety such as resources addressing domestic
25 violence, hunter education, and suicide prevention; and (vi) access to a toolkit of information that
26 local communities mayuse to launch firearm safe storage initiatives at the local level. The toolkit
27 shall provide materials and resources that may be tailored to a community's needs and used for

28 launching local education and awareness campaigns, events, and local groups focused on firearm
29 safe storage and the distribution of free or discounted gun locks. The Department shall develop
30 the Internet Web site and toolkit required under this subsection by July 1, 2020.
31 SECTION 9G.8.(d) Development of State-Coordinated Outreach. – Upon
32 development of the Internet Web site and toolkit required under subsection (c) of this section,
33 the Department shall develop and implement an outreach process for (i) disseminating the
34 Internet Web site information and toolkit to the public and to local communities and (ii) the

35 provision of technical assistance to local communities on utilizing the toolkit to launch local
36 initiatives.
37 SECTION 9G.8.(e) Use of Third-Party Entity. – The Department may contract with
38 athird-partyentitywith relevant expertiserelatedtopublichealth and injurypreventionto launch
39 the firearm safe storage awareness initiative required by this section.
40 SECTION 9G.8.(f) Prohibition on Advocacy. – The firearm safe storage awareness

41 initiative required by this section, and any State funds used to launch and maintain the initiative,
42 shall not be used to advocate, promote, or lobby for the creation of new, or the revision of
43 existing, laws regulating firearms. The firearm safe storage awareness initiative, and any State
44 funds used to launch or maintain the initiative, shall only be used for the purposes set forth in
45 this section and only to explain and promote existing laws regulating firearms and best practices
46 for firearm storage and safety.
47 SECTION 9G.8.(g) Report. – By September 1, 2020, the Department of Health and

48 Human Services shall submit a report to the Joint Legislative Oversight Committee on Health
49 and Human Services detailing the Department's progress in meeting the requirement set forth in
50 this section.
51

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1 HUNTERSVILLE OCULAR MELANOMA STUDY
2 SECTION 9G.9.(a) Of the funds appropriated to the Department of Health and
3 Human Services, Division of Public Health, the sum of one hundred thousand dollars ($100,000)
4 in nonrecurring funds for the 2019-2020 fiscal year shall be allocated as a grant to the Town of
5 Huntersville to study and abate the cause of frequent cases of ocular melanoma in the area.
6 SECTION 9G.9.(b) By September 1, 2019, the Town of Huntersville shall provide
7 a report to the Department of Environmental Quality and the Department of Health and Human

8 Services on the use of the funds from the 2017 grant and the budget plan for the funds allocated
9 in this section.
10
11 STRENGTHEN CHILD FATALITY PREVENTION SYSTEM
12 SECTION 9G.10.(a) Article 3 of Chapter 143B of the General Statutes is amended
13 by adding a new Part to read:
14 Part 4C. State Office of Child Fatality Prevention.

15 § 143B-150.25. Definitions.
16 The following definitions apply in this Article:
17 (1) Child death review team. – The collective term for a multidisciplinary team
18 responsible for performing any type of child fatality review pursuant to this
19 Article, the Juvenile Code of Article 14 of Chapter 7B of the General Statutes,
20 or G.S. 143B-150.20.

21 (2) Child Fatality Prevention System. – The statewide system comprised of the
22 following:
23 a. Child death review teams.
24 b. The North Carolina Child Fatality Task Force created in
25 G.S. 7B-1402.
26 c. State and local staff who support the work of the groups described in
27 sub-subdivisions a. and b.

28 d. Medical examiner child fatality staff.
29 (3) Medical examiner child fatality staff. – Staff within the Office of the Chief
30 Medical Examiner whose primary responsibilities involve addressing child
31 fatalities.
32 (4) State Office. – The State Office of Child FatalityPrevention established under
33 this Article.
34 § 143B-150.26. Establishment and purpose of State Office.

35 The State Office of Child Fatality Prevention is established within the Department of Health
36 and Human Services, Division of Public Health, to serve as the lead agency for child fatality
37 prevention in North Carolina. The purpose of the State Office is to oversee the coordination of
38 State-level support functions for the entire North Carolina Child Fatality Prevention System in a
39 way that maximizes efficiency and effectiveness and expands system capacity. The Department
40 shalldeterminethemostappropriateplacement for,andconfigurationof,StateOfficestaffwithin

41 the Department, subject to the following limitation: medical examiner child fatality staff shall
42 continue to work under the direction of the Chief Medical Examiner and address child fatalities
43 within the jurisdiction of the medical examiner pursuant to G.S. 130A-383, while working
44 collaboratively with the State Office and child death review teams.
45 § 143B-150.27. Powers and duties.
46 The State Office has the following powers and duties:
47 (1) To coordinate the work of the statewide Child Fatality Prevention System.

48 (2) To implement and manage a centralized data and information system capable
49 of gathering, analyzing, and reporting aggregate information from child death
50 review teams with appropriate protocols for sharing information and
51 protecting confidentiality.

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1 (3) To create and implement tools, guidelines, resources, and training, and
2 provide technical assistance for child death review teams to enable the teams
3 to do the following:
4 a. Conduct effective reviews.
5 b. Make effective recommendations about child fatality prevention.
6 c. Gather, analyze, and appropriately report on case data and findings
7 while protecting confidentiality.

8 d. Facilitate the implementation of prevention strategies in their
9 communities.
10 (4) To convene and facilitate a multidisciplinary FatalityReview and Data Group
11 to advise the State Office with respect to the submission of information and
12 reports to the Child Fatality Task Force, child death review teams, and other
13 relevant organizations.
14 (5) To perform research, convene stakeholders and experts, and collaborate with

15 otherorganizations andindividuals for thepurposeofunderstandingthedirect
16 and contributing causes of child deaths as well as evidence-driven strategies,
17 programs, and policies to prevent child deaths, abuse, and neglect in order to
18 inform the work of the Child Fatality Prevention System or as requested by
19 the Child Fatality Task Force.
20 (6) ToeducateStateand local leaders,including theGeneral Assembly, executive

21 department heads, as well as stakeholders, advocates, and the public about the
22 Child Fatality Prevention System and issues and prevention strategies
23 addressed by the system.
24 (7) To collaborate with State and local agencies, nonprofit organizations,
25 academia, advocacyorganizations, and others to facilitate the implementation
26 of evidence-driven initiatives to prevent child abuse, neglect, and death, such
27 as education and awareness initiatives.

28 (8) To create and implement processes for evaluating the ability of the Child
29 Fatality Prevention System to achieve outcomes sought to be accomplished
30 by the system and to report to the Child Fatality Task Force on these
31 evaluations and on statewide functioning of the Child Fatality Prevention
32 System.
33 SECTION 9G.10.(b) Of the funds appropriated to the Department of Health and
34 Human Services, Division of Public Health, the sum of one hundred fifty thousand dollars

35 ($150,000) in recurring funds for the 2019-2020 fiscal year and the sum of three hundred
36 thousand dollars ($300,000) in recurring funds for the 2020-2021 fiscal year, shall be used to
37 establish and operate the State Office of Child Fatality Prevention (State Office) established
38 under Part 4C of Article 3 of Chapter 143B of the General Statutes, as enacted by this section.
39 TheDepartmentofHealthandHumanServicesshallnotusefundsappropriatedinthissubsection
40 for any purpose other than the purpose specified in this subsection.

41 SECTION 9G.10.(c) Subsection (b) of this section becomes effective July 1, 2019.
42 SECTION 9G.10.(d) It is the intent of the General Assembly to restructure North
43 Carolina's Child Fatality Prevention System in order to eliminate the silos and redundancy that
44 exist within the current system, implement centralized coordination of the system, streamline the
45 system's State-level support functions, maximize the usefulness of data and information derived
46 from teams that review child fatalities, ensure that relevant and appropriate information and
47 recommendations from teams that review child fatalities reach appropriate local and State

48 leaders, and strengthen the system's effectiveness in preventing child abuse, neglect, and death.
49 To that end, by March 4, 2020, the Department of Health and Human Services, in consultation
50 with individuals knowledgeable about child fatality review and prevention, shall develop and
51 submit to the Joint Legislative Oversight Committee on Health and Human Services a detailed

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1 written proposal for restructuring the statewide Child Fatality Prevention System. The
2 Department's plan shall, at a minimum, include recommendations for accomplishing all of the
3 following:
4 (1) Reducing the number and types of child death review teams by combining the
5 functions of the Local Child Fatality Prevention Team, Community Child
6 Protection Team, State Child Fatality Prevention Team, and State Child
7 Fatality Review Team into a single local team with different procedures and

8 required participants for different categories of child fatality reviews, with
9 attention given to the following:
10 a. Aplanthatallows alocal team to choose whethertobea single-county
11 or multicounty team.
12 b. An examination of the purpose, process, and function of child death
13 reviews related to abuse and neglect that are currently conducted by
14 the Child Fatality Review Team, State Child Fatality Prevention

15 Review Team, and Community Child Protection Teams, and a plan
16 that articulates the most appropriate purpose and functions for these
17 types of reviews, alongwith specialized procedures, team participants,
18 and State-level technical assistance necessary to fully address such
19 cases. This plan shall take into account the different methods of
20 information collection and sharing by these teams as well as any

21 relevant federal laws, such as those related to State child abuse
22 prevention plans.
23 c. Whether there is a need for specialized procedures and required
24 participants for certain categories of infant deaths or other categories
25 of deaths.
26 d. Whether there are circumstances under which a State-level team
27 review of a child fatality would be occasionally, but not routinely,

28 necessaryand if so, a description of those circumstances and a plan for
29 how the Fatality Review and Data Group should be structured to carry
30 out this function.
31 (2) Discontinuing the practices of using (i) Community Child Protection Teams
32 as citizen review panels to fulfill the requirements of the federal Child Abuse
33 Prevention and Treatment Act and (ii) child death review teams to review
34 active cases involving children and families involved with local departments

35 of social services child protective services. The Department's recommended
36 plan shall include a more effective framework for meeting federal
37 requirements for citizen review panels and for reviewing active cases
38 involving children and families involved with local departments of social
39 services child protective services.
40 (3) Reducing the volume of team fatality reviews by changing the types of deaths

41 requiring review based on specific categories of death most likely to yield
42 prevention opportunities, including deaths resulting from the following:
43 a. Undetermined causes.
44 b. Unintentional injury.
45 c. Violence.
46 d. Motor vehicle incidents.
47 e. Child abuse or neglect, suspected child abuse or neglect, or cases

48 involving children and families involved with local departments of
49 social services child protective services within the 12-month period
50 preceding the fatality.
51 f. Sudden unexpected infant death.

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1 g. Suicide.
2 h. Deaths not expected in the next six months.
3 i. Infant deaths that meet criteria determined by the Department, in
4 consultation with child fatality review and prevention experts and
5 perinatal health experts, in order to optimize the identification of
6 prevention opportunities.
7 j. Any other category of death determined by the Department for which

8 team review would be likely to yield prevention opportunities.
9 (4) Implementing a centralized electronic data and information system for data
10 andinformationmanagedbytheStateOfficethatincludesallofthefollowing:
11 a. Participation in the National Child Death Review Case Reporting
12 System.
13 b. Creation, implementation, and support for procedures and tools
14 addressing data and reporting for child death review teams.

15 c. Development and implementation of policies and procedures for
16 appropriate sharing and protection of information and data with
17 respecttoinformationusedbyorgeneratedfromchildfatalityreviews.
18 d. An evaluation of existing laws, rules, and policies addressing
19 information protection and sharing as it relates to child death reviews
20 in order to make recommendations concerning any changes needed to

21 support the effective functioning of the restructured statewide Child
22 Fatality Prevention System.
23 (5) Creating a multi-sector, multidisciplinary Fatality Review and Data Group to
24 be convened and facilitated by the State Office for the purpose of periodically
25 reviewing aggregate data and recommendations from child death review
26 teams and child death data from the Office of the Chief Medical Examiner in
27 order to advise State Office staff on relevant, appropriate information and

28 reports that should be submitted to the Child Fatality Task Force, distributed
29 among child death review teams, submitted directly to relevant organizations,
30 or a combination of these.
31 SECTION 9G.10.(e) By December 1, 2019, the Department of Health and Human
32 Services shall execute any contractual agreements and interagency data sharing agreements
33 necessaryfor participation bychild death review teams in the National Child Death Review Case
34 Reporting System. Once the necessary agreements are in place and appropriate policies and

35 protocols addressingutilization ofthisSystem havebeen adopted,local Child FatalityPrevention
36 Teams shall utilize the National Child Death Review Case Reporting System.
37 SECTION 9G.10.(f) Subsection (e) of this section is effective when it becomes law.
38 SECTION 9G.10.(g) Article 14 of Chapter 7B of the General Statutes reads as
39 rewritten:
40 Article 14.

41 North Carolina Child Fatality Prevention System.
42 § 7B-1400. Declaration of public policy.
43 The General Assembly finds that it is the public policy of this State to prevent the abuse,
44 neglect, and death of juveniles. The General Assembly further finds that the prevention of the
45 abuse, neglect, and death of juveniles is a community responsibility; that professionals from
46 disparate disciplines have responsibilities for children or juveniles and have expertise that can
47 promote their safetyand well-being; and that multidisciplinaryreviews of the abuse, neglect, and

48 death of juveniles can lead to a greater understanding of the causes and methods of preventing
49 these deaths. It is, therefore, the intent of the General Assembly, through this Article, to establish
50 astatewidemultidisciplinary, multiagencychildfatalityprevention system consistingoftheState
51 Team established in G.S. 7B-1404 and the Local Teams established in G.S. 7B-1406. system.

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1 The purpose of the system is to assess the records of selected cases in which children are being
2 served by child protective services and the records of all deaths of children child deaths in North
3 Carolina from birth to age 18 18, and with respect to these cases, to study data and prevention
4 strategies related to child abuse, neglect, and death, and to utilize multidisciplinary team reviews
5 of deaths in order to (i) develop a communitywide approach to the problem of child abuse and
6 neglect, (ii) understand the direct and contributing causes of childhood deaths, (iii) identify any
7 gaps or deficiencies that may exist in the delivery of services to children and their families by

8 publicagenciesthataredesignedtoprevent futurechildabuse,neglect,ordeath, and(iv)identify,
9 and aid in facilitating the implementation of, evidence-driven strategies to prevent child death
10 and promote child well-being, and (v) make and implement recommendations for changes to
11 laws, rules, and policies that will support the safe and healthy development of our children and
12 prevent future child abuse, neglect, and death.
13 § 7B-1401. Definitions.
14 The following definitions apply in this Article:

15 (1) Additional Child Fatality. – Any death of a child that did not result from
16 suspected abuse or neglect and about which no report of abuse or neglect had
17 been made to the county department of social services within the previous 12
18 months.
19 (1a) Child Death Review Team. – The collective term for any multidisciplinary
20 team responsible for performing any type of child fatality review pursuant to

21 this Article, G.S. 143B-150.20, or Part 4C of Article 3 of Chapter 143B of the
22 General Statutes.
23 (1b) Child Fatality Prevention System. – The statewide system comprised of child
24 death review teams, the North Carolina Child Fatality Task Force, State and
25 local staff who support the work of these groups, and the medical examiner
26 child fatality staff.
27 (2) Local Team. – A Community Child Protection Team or a Child Fatality

28 Prevention Team.
29 (2a) Medical Examiner Child Fatality Staff. – Staff within the Office of the Chief
30 Medical Examiner whose primary responsibilities involve addressing child
31 fatalities.
32 (2b) State Office. – The State Office of Child FatalityPrevention established under
33 Part 4C of Article 3 of Chapter 143B of the General Statutes that coordinates
34 the work of the Child Fatality Prevention System.

35 (3) State Team. – The North Carolina Child Fatality Prevention Team.
36 (4) Task Force. – The North Carolina Child Fatality Task Force.
37 (5) Team Coordinator. Coordinators. – The Child Fatality Prevention Team
38 Coordinator.Any individual designated within the State Office to work as a
39 Child Fatality Prevention Team Coordinator.
40 § 7B-1402. Task Force – creation; membership; vacancies.

41 (a) There is created the North Carolina Child Fatality Task Force within the Department
42 of Health and Human Services for budgetary purposes only.
43 (b) The Task Force shall be composed of 35 36 members, 11 12 of whom shall be ex
44 officio members, four of whom shall be appointed by the Governor, 10 of whom shall be
45 appointed by the Speaker of the House of Representatives, and 10 of whom shall be appointed
46 bythePresident ProTemporeoftheSenate.Theex officio membersotherthantheChiefMedical
47 Examiner shall be nonvoting members and may designate representatives from their particular

48 departments, divisions, or offices to represent them on the Task Force. In making appointments
49 or designating representatives, appointing authorities and ex officio members shall use best
50 efforts to select members or representatives with sufficient knowledge and experience to
51 effectively contribute to the issues examined by the Task Force and, to the extent possible, to

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1 reflect the geographical, political, gender, and racial diversity of this State. The members shall
2 be as follows:
3 (1) The Chief Medical Examiner;Examiner.
4 (2) The Attorney General;General.
5 (3) The Director of the Division of Social Services;Services.
6 (4) The Director of the State Bureau of Investigation;Investigation.
7 (5) The Director of the Division of Maternal and Child Health Section of the

8 Department of Health and Human Services;Services.
9 (6) The chair of the Council for Women and Youth Involvement;Involvement.
10 (7) The Superintendent of Public Instruction;Instruction.
11 (8) The Chairman of the State Board of Education;Education.
12 (9) The Director of the Division of Mental Health, Developmental Disabilities,
13 and Substance Abuse Services;Services.
14 (10) The Secretary of the Department of Health and Human Services;Services.

15 (11) The Director of the Administrative Office of the Courts;Courts.
16 (11a) The Director of the Juvenile Justice Section, Division of Adult Correction and
17 Juvenile Justice, Department of Public Safety.
18 (12) A director of a county department of social services, appointed by the
19 Governor upon recommendation of the President of the North Carolina
20 Association of County Directors of Social Services;Services.

21 (13) A representative from a Sudden Infant Death Syndrome or safe infant sleep
22 counseling and education program, appointed by the Governor upon
23 recommendation of the Director of the Division of Maternal and Child Health
24 Section of the Department of Health and Human Services;Services.
25 (14) Arepresentativefrom the North CarolinaChildAdvocacyInstitute, NC Child,
26 appointed by the Governor upon recommendation of the President of the
27 Institute;organization.

28 (15) A director of a local department of health, appointed by the Governor upon
29 the recommendation of the President of the North Carolina Association of
30 Local Health Directors;Directors.
31 (16) A representative from a private group, other than the North Carolina Child
32 Advocacy Institute, NC Child, that advocates for children, appointed by the
33 Speaker of the House of Representatives upon recommendation of private
34 child advocacy organizations;organizations.

35 (17) A pediatrician, licensed to practice medicine in North Carolina, appointed by
36 the Speaker of the House of Representatives upon recommendation of the
37 North Carolina Pediatric Society;Society.
38 (18) A representative from the North Carolina League of Municipalities, appointed
39 by the Speaker of the House of Representatives upon recommendation of the
40 League;League.

41 (18a) A representative from the North Carolina Domestic Violence Commission,
42 appointed by the Speaker of the House of Representatives upon
43 recommendation of the Director of the Commission;Commission.
44 (19) One public member, appointed by the Speaker of the House of
45 Representatives;Representatives.
46 (20) A county or municipal law enforcement officer, appointed by the President
47 Pro Tempore of the Senate upon recommendation of organizations that

48 represent local law enforcement officers;officers.
49 (21) Adistrictattorney,appointedbythePresidentProTemporeoftheSenateupon
50 recommendation of the President of the North Carolina Conference of District
51 Attorneys;Attorneys.

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1 (22) A representative from the North Carolina Association of County
2 Commissioners, appointed by the President Pro Tempore of the Senate upon
3 recommendation of the Association;Association.
4 (22a) A representative from the North Carolina Coalition Against Domestic
5 Violence, appointed by the President Pro Tempore of the Senate upon
6 recommendation of the Executive Director of the Coalition;Coalition.
7 (23) One public member, appointed by the President Pro Tempore of the Senate;

8 andSenate.
9 (24) Five members of the Senate, appointed by the President Pro Tempore of the
10 Senate, and five members of the House of Representatives, appointed by the
11 Speaker of the House of Representatives.
12 (c) All members of the Task Force are voting members. Vacancies in the appointed
13 membership shall be filled by the appointing officer who made the initial appointment. Terms
14 shall be two years. The members shall elect a chair who shall preside for the duration of the

15 chair's term as member. In the event a vacancy occurs in the chair before the expiration of the
16 chair's term, the members shall elect an acting chair to serve for the remainder of the unexpired
17 term.
18 § 7B-1402.1. Task Force – organization; committees, leadership, policies and procedures;
19 public meetings.
20 (a) Committees. – The Task Force shall carry out its duties through the work of the

21 following three committees:
22 (1) A Perinatal Health Committee to address healthy pregnancies, births, and
23 infants.
24 (2) An Unintentional Death Prevention Committee to address the prevention of
25 deaths resulting from unintentional causes such as motor vehicle or bicycle
26 accidents, poisoning, burning, or drowning.
27 (3) An Intentional Death Prevention Committee to address the prevention of

28 deaths resulting from intentional causes such as homicide, suicide, abuse, or
29 neglect.
30 Based on a process developed by the Executive Committee and approved by a majority vote
31 of the Task Force pursuant to subdivision (c)(2) of this section, Task Force members shall be
32 assigned to the three committees, and volunteers with expertise in the subject matter of the
33 committees shall be identified and selected to participate on, and contribute to the work of, the
34 committees.

35 The Task Force or any of its committees may request assistance from the State Office in the
36 performance of its duties, including assistance with administrative functions, research, or the
37 convening and facilitation of special stakeholder groups or work groups to more fully address an
38 issue of interest to the Task Force or any of its committees in order to better inform their work.
39 Each committeeshall submit recommendations approvedbyamajorityvote ofthecommittee
40 members to the Task Force for consideration. Committee recommendations shall not become

41 final until approved by a majority vote of the Task Force.
42 (b) Leadership. – The leadership of the Task Force and its committees shall be organized
43 as follows:
44 (1) Task Force chair or cochairs. – Task Force members shall elect by a majority
45 vote a chair or two cochairs from among its membership, who shall preside
46 for the duration of the chair's or cochair's term. In the event a vacancy occurs
47 in a chair position before the expiration of the chair's term, the Task Force

48 members shall elect an actingchair to serve for the remainder of the unexpired
49 term or, if there are cochairs, may elect not to fill the vacant cochair position
50 and to be led by the remaining cochair.

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1 (2) Committee cochairs. – Task Force members shall elect by a majority vote of
2 the Task Force two cochairs per committee, at least one of whom shall be a
3 Task Force member and one of whom may be a nonmember with expertise in
4 the subject matter of the committee. Committee cochairs shall serve for a term
5 of two years and are not subject to term limits.
6 (3) Executive Committee. – The Executive Committee shall be comprised of the
7 Task Force chair or cochairs, the committee cochairs, and any current Task

8 Force Coordinator or Director. The Executive Committee is responsible for
9 all of the following:
10 a. Discussing and advising the Task Force with respect to its business
11 and administration.
12 b. Advising Task Force staff on issues between meetings.
13 c. Developing recommended policies and procedures for consideration
14 by the full Task Force as described in subsection (c) of this section.

15 d. Working to advance approved Task Force recommendations.
16 (4) Staff. – The Task Force Chairs shall work with the Secretary of the
17 Department of Health and Human Services to hire or designate staff to
18 coordinate the work of the Task Force; educate department heads, the General
19 Assembly, and organizations whose work addresses child health and safety,
20 and the public about Task Force findings and recommendations; serve as

21 representatives of the Task Force; and assist the Task Force in any other way
22 the Executive Committee deems necessary in carrying out the duties of the
23 Task Force.
24 (c) Policies and Procedures. – The Executive Committee of the Task Force shall develop,
25 and from time to time revise as necessary, policies and procedures to facilitate the efficient and
26 effective operations of the Task Force. These policies and procedures and any recommended
27 revisions become effective upon approval by a majority vote of the Task Force. The Executive

28 Committee shall develop policies and procedures that, at a minimum, address the following:
29 (1) Nominations and elections of a Task Force chair or cochairs and committee
30 cochairs.
31 (2) Assignment of Task Force members to specific committees as well as the
32 identification of volunteers to serve on committees with representation from
33 relevant agencies and a relevant range of subject matter experts.
34 (3) Voting rules.

35 (4) The manner in which issues are identified for study by the Task Force.
36 (5) Expectations of members related to attendance.
37 (6) Conflicts of interest.
38 (d) Public Meetings. – Meetings of the Task Force and its three subject area committees
39 are subject to the public meeting requirements of Article 33C of Chapter 143 of the General
40 Statutes. Meetings of the Executive Committee, stakeholder groups, or work groups convened to

41 more fully address an issue of interest to the Task Force or its subject area committees are not
42 subject to these requirements.
43 § 7B-1403. Task Force – duties.
44 The Task Force shall:shall do all of the following:
45 (1) Undertake a statistical study of the incidences and causes of child deaths in
46 this State and establish a profile of child deaths. as well as evidence-driven
47 strategies for preventing future child deaths, abuse, and neglect. The study

48 shall include (i) an analysis of all community and private and public agency
49 involvement with the decedents and their families prior to death, and (ii) an at
50 least all of the following:

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1 a. Aggregate information from child death reviews compiled bythe State
2 Office addressing data on child deaths, the identification of system
3 problems, and team recommendations for prevention strategies.
4 b. A data analysis of all child deaths by age, cause, race and ethnicity,
5 socioeconomic status, and geographic distribution;distribution.
6 c. Information from subject matter experts that can inform the
7 understanding of the causes of child deaths; strategies to prevent child

8 deaths, abuse, and neglect; or a combination of these.
9 (2) Develop a system for multidisciplinary review of child deaths. In developing
10 such a system, the Task Force shall study the operation of existing Local
11 Teams. The Task Force shall also consider the feasibility and desirability of
12 local or regional review teams and, should it determine such teams to be
13 feasible and desirable, develop guidelines for the operation of the teams. The
14 Task Force shall also examine the laws, rules, and policies relating to

15 confidentiality of and access to information that affect those agencies with
16 responsibilities for children, including State and local health, mental health,
17 social services, education, and law enforcement agencies, to determine
18 whether those laws, rules, and policies inappropriately impede the exchange
19 of information necessary to protect children from preventable deaths, and, if
20 so, recommend changes to them;Advise the State Office of Child Fatality

21 Prevention with respect to the operation of an effective statewide system for
22 multidisciplinary review of child deaths and the implementation of
23 evidence-driven strategies to prevent child deaths, abuse, and neglect.
24 (3) Receive and consider reports from the State Team; andTeam and the State
25 Office.
26 (4) Develop recommendations for changes in law, policy, rules, or the
27 implementation of evidence-driven prevention strategies to be included in the

28 annual report required by G.S. 7B-1412.
29 (5) Perform any other studies, evaluations, or determinations the Task Force
30 considers necessary to carry out its mandate.
31 § 7B-1404. State Team – creation; membership; vacancies.
32 (a) There is created the North Carolina Child Fatality Prevention Team within the
33 Department of Health and Human Services for budgetary purposes only.
34 (b) The State Team shall be composed of the following 11 members of whom nine

35 members are ex officio and two are appointed:
36 (1) The Chief Medical Examiner, who shall chair the State Team;
37 (2) The Attorney General;
38 (3) The Director of the Division of Social Services, Department of Health and
39 Human Services;
40 (4) The Director of the State Bureau of Investigation;

41 (5) The Director of the Division of Maternal and Child Health of the Department
42 of Health and Human Services;
43 (6) The Superintendent of Public Instruction;
44 (7) The Director of the Division of Mental Health, Developmental Disabilities,
45 and Substance Abuse Services, Department of Health and Human Services;
46 (8) The Director of the Administrative Office of the Courts;
47 (9) The pediatrician appointed pursuant to G.S. 7B-1402(b) to the Task Force;

48 (10) A public member, appointed by the Governor; and
49 (11) The Team Coordinator.Coordinators.
50 The ex officio members other than the Chief Medical Examiner may designate a
51 representative from their departments, divisions, or offices to represent them on the State Team.

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1 (c) All members of the State Team are voting members. Vacancies in the appointed
2 membership shall be filled by the appointing officer who made the initial appointment.
3 § 7B-1405. State Team – duties.
4 The State Team shall:shall do all of the following:
5 (1) Review current deaths of children when those deaths are attributed to child
6 abuse or neglect or when the decedent was reported as an abused or neglected
7 juvenile pursuant to G.S. 7B-301 at any time before death;death.

8 (2) Report to the Task Force during the existence of the Task Force, in the format
9 and at the time required by the Task Force, on the State Team's activities and
10 its recommendations for changes to any law, rule, and policy that would
11 promote the safety and well-being of children;children.
12 (3) Upon request of a Local Team, provide technical assistance to the
13 Team;Team.
14 (4) Periodically assess the operations of the multidisciplinary child fatality

15 prevention system and make recommendations for changes as needed;
16 (5) Work with the Team Coordinator to develop guidelines for selecting child
17 deaths to receive detailed, multidisciplinary death reviews by Local Teams
18 that review cases of additional child fatalities; and
19 (6) Receive reports of findings and recommendations from Local Teams that
20 reviewcases ofadditional childfatalitiesandworkwith theTeam Coordinator

21 Coordinators to implement recommendations.
22 § 7B-1406. Community Child Protection Teams; Child Fatality Prevention Teams;
23 creation and duties.
24 (a) CommunityChild ProtectionTeams are establishedin everycountyoftheState.Each
25 Community Child Protection Team shall:
26 (1) Review, in accordance with the procedures established by the director of the
27 county department of social services under G.S. 7B-1409:

28 a. Selected active cases in which children are being served by child
29 protective services; and
30 b. Cases in which a child died as a result of suspected abuse or neglect,
31 and
32 1. A report of abuse or neglect has been made about the child or
33 the child's family to the county department of social services
34 within the previous 12 months, or

35 2. The child or the child's family was a recipient of child
36 protective services within the previous 12 months.
37 (2) Submit annually to the board of county commissioners recommendations, if
38 any, and advocate for system improvements and needed resources where gaps
39 and deficiencies may exist.
40 In addition, each Community Child Protection Team may review the records of all additional

41 child fatalities and report findings in connection with these reviews to the Team
42 Coordinator.Coordinators.
43 (b) Any Community Child Protection Team that determines it will not review additional
44 child fatalities shall notify the Team Coordinator. Coordinators. In accordance with the plan
45 established under G.S. 7B-1408(1), a separate Child Fatality Prevention Team shall be
46 established in that county to conduct these reviews. Each Child Fatality Prevention Team shall:
47 (1) Review the records of all cases of additional child fatalities.

48 (2) Submit annually to the board of county commissioners recommendations, if
49 any, and advocate for system improvements and needed resources where gaps
50 and deficiencies may exist.

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1 (3) Report findings in connection with these reviews to the Team
2 Coordinator.Coordinators.
3 (c) All reports to the Team Coordinator Coordinators under this section shall include:
4 (1) A listing of the system problems identified through the review process and
5 recommendations for preventive actions;
6 (2) Any changes that resulted from the recommendations made by the Local
7 Team;

8 (3) Information about each death reviewed; and
9 (4) Any additional information requested bythe Team Coordinator.Coordinators.
10 § 7B-1407. Local Teams; composition.
11 (a) Each Local Team shall consist of representatives of public and nonpublic agencies in
12 the community that provide services to children and their families and other individuals who
13 represent the community. No single team shall encompass a geographic or governmental area
14 larger than one county.

15 (b) Each Local Team shall consist of the following persons:
16 (1) The director of the county department of social services and a member of the
17 director's staff;
18 (2) A local law enforcement officer, appointed by the board of county
19 commissioners;
20 (3) An attorney from the district attorney's office, appointed by the district

21 attorney;
22 (4) The executive director of the local community action agency, as defined by
23 the Department of Health and Human Services, or the executive director's
24 designee;
25 (5) The superintendent of each local school administrative unit located in the
26 county, or the superintendent's designee;
27 (6) A member of the county board of social services, appointed by the chair of

28 that board;
29 (7) A local mental health professional, appointed by the director of the area
30 authority established under Chapter 122C of the General Statutes;
31 (8) The local guardian ad litem coordinator, or the coordinator's designee;
32 (9) The director of the local department of public health; and
33 (10) A local health care provider, appointed by the local board of health.
34 (c) In addition, a Local Team that reviews the records of additional child fatalities shall

35 include the following five additional members:
36 (1) Anemergencymedical servicesproviderorfirefighter,appointedbytheboard
37 of county commissioners;
38 (2) A district court judge, appointed by the chief district court judge in that
39 district;
40 (3) A county medical examiner, appointed by the Chief Medical Examiner;

41 (4) Arepresentative of alocal childcare facilityor HeadStart program, appointed
42 by the director of the county department of social services; and
43 (5) A parent of a child who died before reaching the child's eighteenth birthday,
44 to be appointed by the board of county commissioners.
45 (d) The Team Coordinator Coordinators shall serve as an ex officio member of each
46 Local Team that reviews the records of additional child fatalities. The board of county
47 commissioners mayappoint a maximum of five additional members to represent county agencies

48 or the communityat large to serve on anyLocal Team. Vacancies on a Local Team shall be filled
49 by the original appointing authority.
50 (e) Each Local Team shall elect a member to serve as chair at the Team's pleasure.
51 (f) Each Local Team shall meet at least four times each year.

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1 (g) The director of the local department of social services shall call the first meeting of
2 the Community Child Protection Team. The director of the local department of health, upon
3 consultation with the Team Coordinator, Coordinators shall call the first meeting of the Child
4 Fatality Prevention Team. Thereafter, the chair of each Local Team shall schedule the time and
5 place of meetings, in consultation with these directors, and shall prepare the agenda. The chair
6 shall schedule Team meetings no less often than once per quarter and often enough to allow
7 adequate review of the cases selected for review. Within three months of election, the chair shall

8 participate in the appropriate training developed under this Article.
9 § 7B-1408. Child Fatality Prevention Team Coordinator; Coordinators; duties.
10 The One or more Child Fatality Prevention Team Coordinator Coordinators shall serve as
11 liaison between the State Team and the Local Teams that review records of additional child
12 fatalities and shall provide technical assistance to these Local Teams. The Team Coordinator
13 Coordinators shall:
14 (1) Develop a plan to establish Local Teams that review the records of additional

15 child fatalities in each county.
16 (2) Develop model operatingprocedures forthese Local Teams that address when
17 public meetings should be held, what items should be addressed in public
18 meetings, what information may be released in written reports, and any other
19 informationtheTeamCoordinatorconsidersCoordinatorsconsidernecessary.
20 (3) Provide structured training for these Local Teams at the time of their

21 establishment, and continuing technical assistance thereafter.
22 (4) Provide statistical information on all child deaths occurring in each county to
23 the appropriate Local Team, and assure that all child deaths in a county are
24 assessed through the multidisciplinary system.
25 (5) Monitor the work of these Local Teams.
26 (6) Receive reports of findings, and other reports that the Team Coordinator
27 Coordinators may require, from these Local Teams.

28 (7) Report the aggregated findings of these Local Teams to each Local Team that
29 reviews the records of additional child fatalities and to the State Team.
30 (8) Evaluate the impact of local efforts to identify problems and make changes.
31 § 7B-1409. Community Child Protection Teams; duties of the director of the county
32 department of social services.
33 In addition to any other duties as a member of the CommunityChild Protection Team, and in
34 connection with the reviews under G.S. 7B-1406(a)(1), the director of the county department of

35 social services shall:
36 (1) Assure the development of written operating procedures in connection with
37 these reviews, including frequency of meetings, confidentiality policies,
38 training of members, and duties and responsibilities of members;
39 (2) Assure that the Team defines the categories of cases that are subject to its
40 review;

41 (3) Determine and initiate the cases for review;
42 (4) Bring for review any case requested by a Team member;
43 (5) Provide staff support for these reviews;
44 (6) Maintain records, including minutes of all official meetings, lists of
45 participants for each meeting of the Team, and signed confidentiality
46 statements required under G.S. 7B-1413, in compliance with applicable rules
47 and law; and

48 (7) Report quarterly to the county board of social services, or as required by the
49 board, on the activities of the Team.
50 § 7B-1410. Local Teams; duties of the director of the local department of health.

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1 In addition to anyother duties as a member of the Local Team andin connectionwith reviews
2 of additional child fatalities, the director of the local department of health shall:
3 (1) Distribute copies of the written procedures developed by the Team
4 Coordinator Coordinators under G.S. 7B-1408 to the administrators of all
5 agencies represented on the Local Team and to all members of the Local
6 Team;
7 (2) Maintain records, including minutes of all official meetings, lists of

8 participants for each meeting of the Local Team, and signed confidentiality
9 statements required under G.S. 7B-1413, in compliance with applicable rules
10 and law;
11 (3) Provide staff support for these reviews; and
12 (4) Report quarterly to the local board of health, or as required by the board, on
13 the activities of the Local Team.
14 § 7B-1411. Community Child Protection Teams; responsibility for training of team

15 members.
16 The Division of Social Services, Department of Health and Human Services, Services shall
17 develop and make available, on an ongoing basis, for the members of Local Teams that review
18 active cases in which children are being served by child protective services, training materials
19 that address the role and function of the Local Team, confidentiality requirements, an overview
20 of child protective services law and policy, and Team record keeping.

21 § 7B-1412. Task Force – reports.
22 TheWithin thefirst week oftheconveningor reconveningoftheGeneral Assembly,the Task
23 Force shall report annually to the Governor and General Assembly, within the first week of the
24 conveningor reconveningofthe General Assembly. Governor,the General Assembly, theChairs
25 of the House and Senate Appropriations Committees on Health and Human Services, the Chairs
26 of the Joint Legislative Oversight Committee on Health and Human Services, and the Secretary
27 of the Department of Health and Human Services. The report shall contain at least a all of the

28 following:
29 (1) A summary of the conclusions and recommendations for each of the Task
30 Force's duties, as well as any duties.
31 (2) A summary of activities and functioning of the Child Fatality Prevention
32 System as a whole.
33 (3) Any other recommendations for changes to any law, rule, or policy policy, or
34 for the implementation of evidence-driven prevention strategies that it has

35 determined will promote the safety and well-being of children. Any
36 recommendations of changes to law, rule, or policy shall be accompanied by
37 specific legislative or policy proposals and detailed fiscal notes setting forth
38 the costs to the State.proposals. The Task Force may request assistance from
39 the Fiscal Research Division of the General Assembly in developing fiscal
40 notes or other fiscal information to accompany these recommendations.

41 § 7B-1413. Access to records.
42 (a) The State Team, the Local Teams, and the Task Force during its existence, shall have
43 access to all medical records, hospital records, and records maintained by this State, any county,
44 or any local agency as necessary to carry out the purposes of this Article, including police
45 investigations data, medical examiner investigative data, health records, mental health records,
46 and social services records. The State Team, the Task Force, and the Local Teams shall not, as
47 part of the reviews authorized under this Article, contact, question, or interview the child, the

48 parent of the child, or any other familymember of the child whose record is being reviewed. Any
49 member of a Local Team may share, only in an official meeting of that Local Team, any
50 information available to that member that the Local Team needs to carry out its duties.

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1 The State Office shall have access to all medical records, hospital records, and records
2 maintained by this State, any county, or any local agency as necessary to carry out the purposes
3 of Part 4C of Article 3 of Chapter 143B of the General Statutes.
4 (b) Meetings of the State Team and the Local Teams are not subject to the provisions of
5 Article33C ofChapter143 oftheGeneral Statutes.However,the Local Teams mayhold periodic
6 public meetings to discuss, in a general manner not revealing confidential information about
7 children and families, the findings of their reviews and their recommendations for preventive

8 actions. Minutes of all public meetings, excluding those of executive sessions, shall be kept in
9 compliance with Article 33C of Chapter 143 of the General Statutes. Any minutes or any other
10 information generated during any closed session shall be sealed from public inspection.
11 (c) All otherwise confidential information and records acquired bythe State Office, State
12 Team, the Local Teams, and the Task Force during its existence, in the exercise of their duties
13 are confidential; are not subject to discovery or introduction into evidence in any proceedings;
14 and mayonlybe disclosed as necessaryto carryout the purposes of the State Office, State Team,

15 the Local Teams, and the Task Force. In addition, all otherwise confidential information and
16 records created by a Local Team in the exercise of its duties are confidential; are not subject to
17 discovery or introduction into evidence in any proceedings; and may only be disclosed as
18 necessary to carry out the purposes of the Local Team. No member of the State Team, a Local
19 Team, nor any person who attends a meeting of the State Team or a Local Team, may testify in
20 any proceeding about what transpired at the meeting, about information presented at the meeting,

21 or about opinions formed by the person as a result of the meetings. This subsection shall not,
22 however, prohibit a person from testifying in a civil or criminal action about matters within that
23 person's independent knowledge.
24 (d) EachmemberofaLocal Teamandinvitedparticipantshallsignastatementindicating
25 an understanding of and adherence to confidentiality requirements, including the possible civil
26 or criminal consequences of any breach of confidentiality.
27 (e) Cases receiving child protective services at the time of review by a Local Team shall

28 have an entry in the child's protective services record to indicate that the case was received by
29 that Team. Additional entry into the record shall be at the discretion of the director of the county
30 department of social services.
31 (f) The Social Services Commission shall adopt rules to implement this section in
32 connection with reviews conducted by Community Child Protection Teams. The Commission
33 for Public Health shall adopt rules to implement this section in connection with Local Teams that
34 review additional child fatalities. In particular, these rules shall allow information generated by

35 an executive session of a Local Team to be accessible for administrative or research purposes
36 only.
37 § 7B-1414. Administration; funding.
38 (a) To the extent of funds available, the chairs of the Task Force and State Team may
39 hire staff or consultants to assist the Task Force and the State Team in completing their its duties.
40 (a1) To the extent of funds available and consistent with G.S. 7B-1402.1(b)(4), the chairs

41 of the Task Force shall work with the Secretaryof the Department of Health and Human Services
42 to hire or designate staff or consultants to assist the Task Force and its subject matter committees
43 in completing their duties.
44 (b) Members, staff, and consultants of the Task Force or State Team shall receive travel
45 and subsistence expenses in accordance with the provisions of G.S. 138-5 or G.S. 138-6, as the
46 case may be, paid from funds appropriated to implement this Article and within the limits of
47 those funds.

48 (c) With the approval of the Legislative Services Commission, legislative staff and space
49 in the Legislative Building and the Legislative Office Building may be made available to the
50 Task Force.
51 SECTION 9G.10.(h) G.S. 143B-150.20 reads as rewritten:

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1 § 143B-150.20. State Child Fatality Review Team; establishment; purpose; powers;
2 duties; report by Division of Social Department of Health and Human Services.
3 (a) There is established in the Department of Health and Human Services, Division of
4 Social Services, Services a State Child FatalityReview Team to conduct in-depth reviews of any
5 child fatalities which have occurred involving children and families involved with local
6 departments of social services child protective services in the 12 months preceding the fatality.
7 Steps in this in-depth review shall include interviews with any individuals determined to have

8 pertinent information as well as examination of any written materials containing pertinent
9 information.
10 (b) The purpose of these reviews shall be to implement a team approach to identifying
11 factors which may have contributed to conditions leading to the fatality and to develop
12 recommendations for improving coordination between local and State entities which might have
13 avoided the threat of injury or fatality and to identify appropriate remedies. The Division of
14 Social Services Department shall make public the findings and recommendations developed for

15 each fatality reviewed relating to improving coordination between local and State entities. These
16 findings shall not be admissible as evidence in any civil or administrative proceedings against
17 individuals or entities that participate in child fatality reviews conducted pursuant to this section.
18 The State Child Fatality Review Team shall consult with the appropriate district attorney in
19 accordance with G.S. 7B-2902(d) prior to the public release of the findings and
20 recommendations.

21 (c) The State Child Fatality Review Team shall include representatives of the local
22 departments of social services and the Division of Social Services, a member of the local
23 Community Child Protection Team, a member of the local child fatality prevention team, a
24 representative from local law enforcement, a prevention specialist, and a medical professional.
25 (d) The State Child Fatality Review Team shall have access to all medical records,
26 hospital records, and records maintained by this State, any county, or any local agency as
27 necessarytocarryoutthepurposesofthissubsection,includingpoliceinvestigativedata,medical

28 examiner investigative data, health records, mental health records, and social services records.
29 The State Child Fatality Review Team may receive a copy of any reviewed materials necessary
30 to the conduct of the fatality review. Any member of the State Child Fatality Review Team may
31 share, only in an official meeting of the State Child Fatality Review Team, any information
32 available to that member that the State Child Fatality Review Team needs to carry out its duties.
33 If the State Child Fatality Review Team does not receive information requested under this
34 subsection within 30 days after making the request, the State Child Fatality Review Team may

35 apply for an order compelling disclosure. The application shall state the factors supporting the
36 need for an order compelling disclosure. The State Child Fatality Review Team shall file the
37 application in the district court of the county where the investigation is being conducted, and the
38 court shall have jurisdiction to issue any orders compelling disclosure. Actions brought under
39 this section shall be scheduled for immediate hearing, and subsequent proceedings in these
40 actions shall be given priority by the appellate courts.

41 (e) Meetings of the State Child Fatality Review Team are not subject to the provisions of
42 Article 33C of Chapter 143 of the General Statutes. However, the State Child Fatality Review
43 Team may hold periodic public meetings to discuss, in a general manner not revealing
44 confidential information about children and families, the findings of their reviews and their
45 recommendations for preventive actions. Minutes of all public meetings, excluding those of
46 closed sessions, shall be kept in compliance with Article 33C of Chapter 143 of the General
47 Statutes. Any minutes or any other information generated during any executive session shall be

48 sealed from public inspection.
49 (f) All otherwise confidential information and records acquired by the State Child
50 Fatality Review Team, in the exercise of its duties are confidential; are not subject to discovery
51 or introduction into evidence in any proceedings except pursuant to an order of the court; and

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1 may only be disclosed as necessary to carry out the purposes of the State Child Fatality Review
2 Team. In addition, all otherwise confidential information and records created by the State Child
3 Fatality Review Team in the exercise of its duties are confidential; are not subject to discovery
4 or introduction into evidence in anyproceedings; and mayonlybe disclosed as necessaryto carry
5 out the purposes of the State Child FatalityReview Team. No member of the State Child Fatality
6 Review Team, nor any person who attends a meeting of the State Child Fatality Review Team,
7 may testify in any proceeding about what transpired at the meeting, about information presented

8 atthemeeting,oraboutopinionsformedbythepersonasaresultofthemeetings.Thissubsection
9 shall not, however, prohibit a person from testifying in a civil or criminal action about matters
10 within that person's independent knowledge.
11 (g) Each member of the State Child Fatality Review Team and invited participant shall
12 sign a statement indicating an understanding of and adherence to confidentiality requirements,
13 including the possible civil or criminal consequences of any breach of confidentiality.
14 (h) Repealed by Session Laws 2013-360, s. 12A.8(f), effective July 1, 2013.

15 SECTION 9G.10.(i) Except as otherwise provided, this section becomes effective
16 December 1, 2019.
17
18 PART IX-H. SERVICES FOR THE BLIND/DEAF/HARD OF HEARING [RESERVED]
19
20 PART IX-I. SOCIAL SERVICES

21
22 TEMPORARYFINANCIALASSISTANCEFORFACILITIESLICENSEDTOACCEPT
23 STATE-COUNTY SPECIAL ASSISTANCE
24 SECTION 9I.1.(a) The following definitions apply in this section:
25 (1) Facility licensed to accept State-County Special Assistance payments or
26 facility. – Any residential care facility that is (i) licensed by the Department
27 of Health and Human Services and (ii) authorized to accept State-County

28 Special Assistance payments from its residents.
29 (2) State-CountySpecial Assistance. – The program authorized byG.S. 108A-40.
30 SECTION 9I.1.(b) Nonrecurring funds appropriated in this act to the Department of
31 Health and Human Services, Division of Social Services (DSS), for each year of the 2019-2021
32 fiscal biennium for facilities licensed to accept State-County Special Assistance payments shall
33 be used to provide temporary financial assistance in the form of a monthly payment to these
34 facilities on behalf of each resident who is a recipient of State-County Special Assistance. The

35 counties shall pay to the State fifty percent (50%) of the cost of providing these monthly
36 payments to these facilities. The monthly payments provided by DSS to these facilities shall be
37 subject to all of the following requirements and limitations:
38 (1) The amount of the monthly payments authorized by this section is as follows:
39 a. For the period commencing July 1, 2019, and ending September 30,
40 2019, an amount equal to thirty-four dollars ($34.00) per month for

41 each resident of the facility as of the first day of the month who is a
42 recipient of State-County Special Assistance.
43 b. For the period commencing October 1, 2019, and ending June 30,
44 2021, an amount equal to seventy dollars ($70.00) per month for each
45 resident ofthefacilityas ofthefirst dayofthemonth whois arecipient
46 of State-County Special Assistance.
47 (2) A facility that receives the monthly payments authorized by this section shall

48 not, under any circumstances, use these payments for any purpose other than
49 to offset the cost of serving residents who are recipients of State-County
50 Special Assistance.

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1 (3) The DSS shall make monthlypayments authorized by this section to a facility
2 on behalf of a resident only for the period commencing July 1, 2019, and
3 ending June 30, 2021.
4 (4) The DSS shall make monthly payments authorized by this section only to the
5 extent sufficient State and county funds allocated to the DSS for each year of
6 the 2019-2021 fiscal biennium are available for this purpose.
7 (5) The DSS shall not make monthly payments authorized by this section to a

8 facility on behalf of a resident whose eligibility determination for
9 State-County Special Assistance is pending.
10 (6) The DSS shall terminate all monthly payments pursuant to this section on the
11 earlier of the following:
12 a. June 30, 2021.
13 b. Upon depletion of the State and county funds allocated to the DSS for
14 each year of the 2019-2021 fiscal year for this purpose.

15 SECTION 9I.1.(c) Notwithstanding any provision of this act or any other provision
16 oflawto thecontrary, the DSS shall not berequiredto provideanytemporaryfinancialassistance
17 to facilities beyond June 30, 2021, or upon depletion of the State and county funds allocated to
18 the DSS for each year of the 2019-2021 fiscal biennium for this purpose, whichever is earlier.
19 SECTION 9I.1.(d) If possible, the DSS shall use an existing mechanism to
20 administer these funds in the least restrictive manner that ensures compliance with this section

21 and timely and accurate payments to facilities. The DSS shall not, under any circumstances, use
22 any portion of the State and county funds allocated to the DSS for each year of the 2019-2021
23 fiscal biennium for the purpose of this section for any other purpose.
24 SECTION 9I.1.(e) Of the funds appropriated in this act to the DSS for each year of
25 the 2019-2021 fiscal biennium for facilities licensed to accept State-County Special Assistance
26 payments, the DSS shall not use more than two hundred fifty thousand dollars ($250,000) in
27 nonrecurring funds for each year of the 2019-2021 fiscal biennium for administrative purposes.

28 SECTION 9I.1.(f) Nothing in this section shall be construed as an obligation by the
29 General Assembly to appropriate funds for the purpose of this section, or as an entitlement by
30 any facility, resident of a facility, or other person to receive temporary financial assistance under
31 this section.
32 SECTION 9I.1.(g) This section expires on June 30, 2021.
33
34 TANF BENEFIT IMPLEMENTATION

35 SECTION 9I.2.(a) Beginning October 1, 2019, the General Assembly approves the
36 plantitled North CarolinaTemporaryAssistance forNeedyFamilies State PlanFY 2019-2022,
37 prepared by the Department of Health and Human Services and presented to the General
38 Assembly. The North Carolina Temporary Assistance for Needy Families State Plan covers the
39 period October 1, 2019, through September 30, 2022. The Department shall submit the State
40 Plan,as revisedin accordance with subsection(b) ofthis section, to theUnitedStates Department

41 of Health and Human Services.
42 SECTION 9I.2.(b) The counties approved as Electing Counties in the North
43 Carolina Temporary Assistance for Needy Families State Plan FY 2019-2022, as approved by
44 this section, are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson.
45 SECTION 9I.2.(c) Counties that submitted the letter of intent to remain as an
46 Electing County or to be redesignated as an Electing County and the accompanying county plan
47 for years 2019 through 2022, pursuant to G.S. 108A-27(e), shall operate under the Electing

48 County budget requirements effective July 1, 2019. For programmatic purposes, all counties
49 referred to in this subsection shall remain under their current county designation through
50 September 30, 2022.

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1 SECTION 9I.2.(d) For each year of the 2019-2021 fiscal biennium, Electing
2 Counties shall be held harmless to their Work First Family Assistance allocations for the
3 2018-2019 fiscal year, provided that remaining funds allocated for Work First FamilyAssistance
4 and Work First Diversion Assistance are sufficient for payments made by the Department on
5 behalf of Standard Counties pursuant to G.S. 108A-27.11(b).
6 SECTION 9I.2.(e) In the event that departmental projections of Work First Family
7 Assistance and Work First Diversion Assistance for the 2019-2020 fiscal year or the 2020-2021

8 fiscal year indicate that remaining funds are insufficient for Work First Family Assistance and
9 Work First Diversion Assistance payments to be made on behalf of Standard Counties, the
10 Department is authorized to deallocate funds, of those allocated to Electing Counties for Work
11 First Family Assistance in excess of the sums set forth in G.S. 108A-27.11, up to the requisite
12 amount for payments in Standard Counties. Prior to deallocation, the Department shall obtain
13 approval bythe Office of State Budget and Management. If the Department adjusts the allocation
14 set forth in subsection (d) of this section, then a report shall be made to the Joint Legislative

15 Oversight Committee on Health and Human Services and the Fiscal Research Division.
16
17 INTENSIVE FAMILYPRESERVATIONSERVICES FUNDINGANDPERFORMANCE
18 ENHANCEMENTS
19 SECTION 9I.3.(a) Notwithstanding the provisions of G.S. 143B-150.6, the
20 Intensive Family Preservation Services (IFPS) Program shall provide intensive services to

21 children and families in cases of abuse, neglect, and dependency where a child is at imminent
22 risk of removal from the home and to children and families in cases of abuse where a child is not
23 at imminent risk of removal. The Program shall be implemented statewide on a regional basis.
24 The IFPS shall ensure the application of standardized assessment criteria for determining
25 imminent risk and clear criteria for determining out-of-home placement.
26 SECTION 9I.3.(b) The Department of Health and Human Services shall require that
27 any program or entity that receives State, federal, or other funding for the purpose of IFPS shall

28 provide information and data that allows for the following:
29 (1) An established follow-up system with a minimum of six months of follow-up
30 services.
31 (2) Detailed information on the specific interventions applied, including
32 utilization indicators and performance measurement.
33 (3) Cost-benefit data.
34 (4) Data on long-term benefits associated with IFPS. This data shall be obtained

35 by tracking families through the intervention process.
36 (5) The number of families remaining intact and the associated interventions
37 while in IFPS and 12 months thereafter.
38 (6) Thenumberand percentage,byrace,ofchildrenwhoreceived IFPS compared
39 to the ratio of their distribution in the general population involved with Child
40 Protective Services.

41 SECTION 9I.3.(c) The Department shall continue implementing a
42 performance-based funding protocol and shall only provide funding to those programs and
43 entities providing the required informationspecifiedin subsection (b) of this section.Theamount
44 of funding shall be based on the individual performance of each program.
45
46 CHILD CARING INSTITUTIONS
47 SECTION 9I.4. Until the Social Services Commission adopts rules setting

48 standardized rates for child caring institutions as authorized under G.S. 143B-153(8), the
49 maximum reimbursement for child caringinstitutions shall not exceed the rate established for the
50 specific child caring institution by the Department of Health and Human Services, Office of the

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1 Controller. In determining the maximum reimbursement, the State shall include county and IV-E
2 reimbursements.
3
4 USE OF FOSTER CARE BUDGET FOR GUARDIANSHIP ASSISTANCE PROGRAM
5 SECTION 9I.5. Of the funds available for the provision of foster care services, the
6 Department of Health and Human Services, Division of Social Services, may continue to provide
7 for the financial support of children who are deemed to be (i) in a permanent family placement

8 setting, (ii) eligible for legal guardianship, and (iii) otherwise unlikely to receive permanency.
9 No additional expenses shall be incurred beyond the funds budgeted for foster care for the
10 Guardianship Assistance Program (GAP). The Guardianship Assistance Program shall include
11 provisions for extending guardianship services for individuals and youth who exited foster care
12 through the Guardianship Assistance Program after 16 years of age or who have attained the age
13 of 18 years and opt to continue to receive guardianship services until reaching 21 years of age if
14 the individual is (i) completing secondary education or a program leading to an equivalent

15 credential, (ii) enrolled in an institution that provides postsecondaryor vocational education, (iii)
16 participating in a program or activity designed to promote, or remove barriers to, employment,
17 (iv) employed for at least 80 hours per month, or (v) incapable of completing the educational or
18 employment requirements of this section due to a medical condition or disability. The
19 Guardianship Assistance Program rates shall reimburse the legal guardian for room and board
20 and be set at the same rate as the foster care room and board rates in accordance with rates

21 established under G.S. 108A-49.1.
22
23 CHILD WELFARE POSTSECONDARY SUPPORT PROGRAM (NC REACH)
24 SECTION 9I.6.(a) Funds appropriated from the General Fund to the Department of
25 Health and Human Services for the child welfare postsecondary support program shall be used
26 to continue providing assistance with the cost of attendance as that term is defined in 20 U.S.C.
27 § 1087ll for the educational needs of foster youth aging out of the foster care system, youth who

28 exit foster care to a permanent home through the Guardianship Assistance Program (GAP), or
29 special needs children adopted from foster care after age 12. These funds shall be allocated by
30 the State Education Assistance Authority.
31 SECTION 9I.6.(b) Of the funds appropriated from the General Fund to the
32 Department of Health and Human Services, the sum of fifty thousand dollars ($50,000) for each
33 year of the 2019-2021 fiscal biennium shall be allocated to the North Carolina State Education
34 Assistance Authority (SEAA). The SEAA shall use these funds only to perform administrative

35 functions necessary to manage and distribute scholarship funds under the child welfare
36 postsecondary support program.
37 SECTION 9I.6.(c) Of the funds appropriated from the General Fund to the
38 Department of Health and Human Services, the sum of three hundred thirty-nine thousand four
39 hundred ninety-three dollars ($339,493) for each year of the 2019-2021 fiscal biennium shall be
40 used to contract with an entity to administer the child welfare postsecondary support program

41 describedundersubsection(a)ofthissection,whichadministrationshallincludetheperformance
42 of case management services.
43 SECTION 9I.6.(d) Funds appropriated to the Department of Health and Human
44 Services for the child welfare postsecondary support program shall be used only for students
45 attending public institutions of higher education in this State.
46
47 FEDERAL CHILD SUPPORT INCENTIVE PAYMENTS

48 SECTION 9I.7.(a) Centralized Services. – The North Carolina Child Support
49 Services Section (NCCSS) of the Department of Health and Human Services, Division of Social
50 Services, shall retain up to fifteen percent (15%) of the annual federal incentive payments it

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1 receives from the federal government to enhance centralized child support services. To
2 accomplish this requirement, NCCSS shall do the following:
3 (1) In consultation with representatives from county child support services
4 programs, identify how federal incentive funding could improve centralized
5 services.
6 (2) Use federal incentive funds to improve the effectiveness of the State's
7 centralized child support services bysupplementing and not supplanting State

8 expenditures for those services.
9 (3) Continue to develop and implement rules that explain the State process for
10 calculating and distributing federal incentive funding to county child support
11 services programs.
12 SECTION 9I.7.(b) County Child Support Services Programs. – NCCSS shall
13 allocate no less than eighty-five percent (85%) of the annual federal incentive payments it
14 receives from the federal government to county child support services programs to improve

15 effectiveness and efficiency using the federal performance measures. To that end, NCCSS shall
16 do the following:
17 (1) In consultation with representatives from county child support services
18 programs, examine the current methodology for distributing federal incentive
19 funding to the county programs and determine whether an alternative formula
20 would be appropriate. NCCSS shall use its current formula for distributing

21 federal incentive funding until an alternative formula is adopted.
22 (2) Upon adopting an alternative formula, develop a process to phase in the
23 alternative formula for distributing federal incentive funding over a four-year
24 period.
25 SECTION 9I.7.(c) Reporting by County Child Support Services Programs. –
26 NCCSS shall continue implementing guidelines that identify appropriate uses for federal
27 incentivefunding. Toensurethose guidelinesareproperlyfollowed, NCCSS shall requirecounty

28 child support services programs to comply with each of the following:
29 (1) Submit an annual plan describing how federal incentive funding would
30 improve program effectiveness and efficiency as a condition of receiving
31 federal incentive funding.
32 (2) Report annually on the following: (i) how federal incentive funding has
33 improved program effectiveness and efficiency and been reinvested into their
34 programs, (ii) provide documentation that the funds were spent according to

35 their annual plans, and (iii) explain any deviations from their plans.
36 SECTION 9I.7.(d) Reporting by NCCSS. – NCCSS shall submit a report on federal
37 child support incentive funding to the Joint Legislative Oversight Committee on Health and
38 Human Services and the Fiscal Research Division by November 1 of each year. The report shall
39 describe how federal incentive funds enhanced centralized child support services to benefit
40 county child support services programs and improved the effectiveness and efficiency of county

41 child support services programs. The report shall further include any changes to the State process
42 the NCCSS used in calculating and distributing federal incentive funding to countychild support
43 services programs and any recommendations for further changes.
44
45 FINAL REPORT/CHILD WELFARE SYSTEM CHANGES
46 SECTION 9I.8.(a) Federal Improvement Plan Implementation/Report. – The
47 DepartmentofHealthandHumanServices,DivisionofSocialServices(Division),shallcontinue

48 implementing the requirements of the federal Program Improvement Plan to bring our State into
49 compliance with national standards for child welfare policy and practices. The Division shall
50 notify the Joint Legislative Oversight Committee on Health and Human Services (Committee)
51 and the Fiscal Research Division within 30 days of complete implementation of the Program

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1 Improvement Plan. The Division shall submit a final report to the Committee on the
2 implementation and outcomes of the Program Improvement Plan no later than 90 days after
3 implementation is complete.
4 SECTION 9I.8.(b) Child Welfare/NC FAST/Report. – The Division shall notifythe
5 Joint Legislative Oversight Committee on Health and Human Services (Committee) and the
6 Fiscal Research Division within 30 days of complete implementation of the child welfare
7 component of the North Carolina Families Accessing Services Through Technology (NC FAST)

8 system. The Division shall then submit a final report to the Committee on the implementation
9 and outcomes of the child welfare component of the NC FAST system no later than 90 days after
10 implementation is complete.
11
12 INCREASE ACCESS TO PUBLIC BENEFITS FOR OLDER DUAL ELIGIBLE
13 SENIORS
14 SECTION 9I.9.(a) The Department of Health and Human Services, Division of

15 Social Services (Division), shall continue implementing an evidence-based pilot program to
16 increase access to public benefits for seniors aged 65 and older who are dually enrolled in
17 Medicare and Medicaid to (i) improve the health and independence of seniors and (ii) reduce
18 healthcarecosts.TheDivisionshallcontinuetopartnerwithanot-for-profitfirmforthepurposes
19 of engaging in a data-driven campaign to help seniors aged 65 and older who are dually enrolled
20 in Medicare and Medicaid meet their basic social needs. The not-for-profit firm shall have

21 demonstrated experience in assisting with these types of services and the partnership shall
22 accomplish each of the following:
23 (1) Identify, through data sharing, dual eligible seniors aged 65 and older who
24 qualify for the Supplemental Nutrition and Assistance Program (SNAP) but
25 are not currently enrolled.
26 (2) Conduct an outreach program toward those seniors for the purpose of
27 enrolling them into SNAP.

28 (3) Provide comprehensive application assistance through outreach specialists to
29 complete public benefits application processes.
30 (4) Evaluate project effectiveness and explore how data can be utilized to achieve
31 optimal outcomes.
32 (5) Make recommendations regarding policy options available to the State to
33 streamline access to benefits.
34 SECTION 9I.9.(b) The Division shall report to the Office of the Governor and the

35 Joint Legislative Oversight Committee on Health and Human Services on its progress in the pilot
36 program by February 1 following each year the pilot program is in place. The report shall, at a
37 minimum, include the following:
38 (1) The number of seniors age 65 and older who are dual eligibles but are not
39 enrolled in SNAP.
40 (2) The number of those identified that would be included in the sample

41 population.
42 (3) Methods of outreach toward those seniors in the sample population.
43 (4) Number of to date enrollments in SNAP as a direct result of outreach during
44 the pilot program.
45 (5) Participation rate to date in SNAP of those seniors in the sample population.
46 (6) Any other findings the Division deems relevant.
47 SECTION9I.9.(c) If funding andcapacityexist,theDivision ofSocial Services may

48 expand the pilot program to include other public benefits programs.
49
50 SUCCESSFUL TRANSITION/FOSTER CARE YOUTH

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1 SECTION 9I.10. The Foster Care Transitional Living Initiative Fund shall continue
2 to fund and support transitional living services that demonstrate positive outcomes for youth,
3 attract significant private sector funding, and lead to the development of evidence-based
4 programs to serve the at-risk population described in this section. The Fund shall continue to
5 support a demonstration project with services provided by Youth Villages to (i) improve
6 outcomes for youth ages 17-21 years who transition from foster care through implementation of
7 outcome-based Transitional Living Services, (ii) identify cost-savings in social services and

8 juvenile and adult correction services associated with the provision of Transitional Living
9 Services to youth aging out of foster care, and (iii) take necessary steps to establish an
10 evidence-based transitional living program available to all youth aging out of foster care. In
11 continuing to implement these goals, the Foster Care Transitional Living Initiative Fund shall
12 support the following strategies:
13 (1) Transitional LivingServices, whichis anoutcome-based program thatfollows
14 the Youth Villages Transitional Living Model. Outcomes on more than 7,000

15 participants havebeentrackedsincethe program's inception. The program has
16 been evaluated through an independent Randomized Controlled Trial. Results
17 indicate that the Youth Villages Transitional Living Model had positive
18 impacts in a variety of areas, including housing stability, earnings, economic
19 hardship, mental health, and intimate partner violence in comparison to the
20 control population.

21 (2) Public-Private Partnership, which is a commitment by private-sector funding
22 partners to match at least twenty-five percent (25%) of the funds appropriated
23 to the Foster Care Transitional Living Initiative Fund for the 2019-2021 fiscal
24 biennium for the purposes of providing Transitional Living Services through
25 the Youth Villages Transitional Living Model to youth aging out of foster
26 care.
27 (3) Impact Measurement and Evaluation, which are services funded through

28 private partners to provide independent measurement and evaluation of the
29 impact the Youth Villages Transitional LivingModel has on the youth served,
30 the foster care system, and on other programs and services provided by the
31 State which are utilized by former foster care youth.
32 (4) Advancement of Evidence-Based Process, which is the implementation and
33 ongoing evaluation of the Youth Villages Transitional Living Model for the
34 purposes of establishing the first evidence-based transitional living program

35 in thenation. Toestablishtheevidence-basedprogram, additional randomized
36 controlled trials may be conducted to advance the model.
37
38 FINAL REPORT UPON COMPLETE IMPLEMENTATION/EASTERN BAND OF
39 CHEROKEE INDIANS ASSUMPTION OF SERVICES
40 SECTION9I.11. TheDepartment of Healthand Human Services, Division ofSocial

41 Services, shall submit a final report to the Joint Legislative Oversight Committee on Health and
42 Human Services on the assumption of certain services by the Eastern Band of Cherokee Indians
43 as implemented pursuant to Section 12C.10 of S.L. 2015-241, as amended by Section 12C.2 of
44 S.L. 2016-94, when implementation is complete.
45
46 CHILD ADVOCACY CENTER FUNDING
47 SECTION 9I.12. Of the funds appropriated in this act to the Department of Health

48 and Human Services, Division of Social Services, for each year of the 2019-2021 fiscal biennium
49 for child advocacy centers, allocations shall be made as follows:
50 (1) Upto onehundredthousanddollars($100,000) for each childadvocacycenter
51 in good standing with Children's Advocacy Centers of North Carolina, Inc.

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1 (2) One hundred thousand dollars ($100,000) to Children's Advocacy Centers of
2 North Carolina, Inc., for its operations.
3
4 ENHANCE PERMANENCY INNOVATION INITIATIVE
5 SECTION 9I.13.(a) G.S. 131D-10.9B(a) reads as rewritten:
6 (a) There is created the Permanency Innovation Initiative Fund that will support a
7 demonstration project with services provided by Children's Home Society of North Carolina to

8 (i) improve permanency outcomes for children living in foster care through reunification with
9 parents, providing placement or guardianship with other relatives, or adoption, (ii) improve
10 engagement with biological relatives of children in or at risk of entering foster care, and (iii)
11 reduce costs associated with maintaining children in foster care. In implementing these goals, the
12 Permanency Innovation Initiative Fund shall support the following strategies:
13 …
14 (3) Permanency Training Services, which are services delivered by Children's

15 Home Society of North Carolina to enhance the readiness of support county
16 departments of social services to implement the permanency strategies under
17 subdivision (2) of this subsection subsection, advance permanency-focused
18 services for children in the legal custody of county departments of social
19 services, and provide training services to support the delivery of the
20 services.and support services to caregivers and family members who are

21 supporting the permanency goal of children in the legal custody of county
22 departments of social services.
23 SECTION 9I.13.(b) Funds appropriated to the Department of Health and Human
24 Services, Division of Social Services, for each year of the 2019-2021 fiscal biennium for the
25 Permanency Innovation Initiative Fund shall be supplemented, not supplanted, by all available
26 federal matching funds.
27

28 FUNDS FOR STANDARDIZED ASSESSMENT/FOSTER CARE PILOT
29 SECTION 9I.14.(a) Of the funds appropriated to the Department of Health and
30 Human Services, Division of Social Services, the sum of eighty thousand dollars ($80,000) for
31 the 2019-2020 fiscal year and the sum of one hundred fifty thousand dollars ($150,000) for the
32 2020-2021 fiscal year shall be used for a pilot project to develop and implement a process for
33 every child, four years of age and older, entering into foster care to receive a standardized trauma
34 and evidence-informed screening and assessment to ensure an appropriate diagnosis, which will

35 in turn lead to the proper provision of services for the child. Up to three local management
36 entities/managed care organizations (LME/MCOs) shall participate in the pilot project. The
37 LME/MCOs shall collaborate with their county departments of social services in up to four
38 counties within the LME/MCOs' catchment areas on developing and implementing the
39 standardized screening and assessments, with the intent that (i) by January 1, 2020, the
40 LME/MCOs and their county departments of social services begin training for implementation

41 of the assessments and (ii) by August 1, 2020, the LME/MCOs and county departments of social
42 services begin conducting the assessments. The pilot project shall include support for the
43 LME/MCOs and county departments of social services for training in trauma-focused care and
44 the use of the screening and assessment tool. For providers, the pilot project shall provide
45 ongoing oversight, training, certification, and coaching to ensure fidelity to the screening and
46 assessment model. For purposes of this section, trauma is defined as the result of an event,
47 series of events, or set of circumstances that is experienced by an individual as physically or

48 emotionally harmful or threatening and that has lasting adverse effects on the individual's
49 functioning and physical, social, emotional, or spiritual well-being.
50 SECTION 9I.14.(b) The Division of Social Services shall submit a report on the
51 pilot project described under subsection (a) of this section to the Joint Legislative Oversight

H966-PCCS30485-LRxr-3 House Bill 966 Page 191 General Assembly Of North Carolina Session 2019

1 Committee on Health and Human Services by April 1, 2022, that shall include, for each
2 participating county, tracking of case flow, completion and timing of the trauma checklist and
3 screening tool, a comprehensive clinical assessment, and diagnostic finding and service
4 recommendations from the assessment.
5
6 FUNDS FOR QUALITY ASSURANCE POSITIONS
7 SECTION 9I.16. Of the funds appropriated in this act to the Department of Health

8 andHumanServices,DivisionofSocialServices,thesumofsevenhundredfiftythousanddollars
9 ($750,000) in recurring funds for each year of the 2019-2021 fiscal biennium shall be used to
10 provide a fifty percent (50%) match for participating counties to establish new quality assurance
11 positions for child welfare within county departments of social services offices in the State. The
12 Division shall prioritize receipt of the matching funds based on county need. The Division shall
13 allocate the positions funded pursuant to this section based on a percentage of county population
14 such that (i) counties having at least one percent (1%) of the State's population each shall receive

15 one position and (ii) counties having less than one percent (1%) of the State's population shall
16 share a position, as determined by the Division. The Division shall implement a comprehensive
17 continuous quality improvement (CQI) training plan that provides all staff, new and existing,
18 with introductory and ongoing training on the Division's CQI plan, policies, and requirements
19 that provide clarity regarding staff and stakeholder roles in the CQI process.
20

21 REPORT ON CERTAIN SNAP AND TANF EXPENDITURES
22 SECTION 9I.17.(a) Funds appropriated in this act to the Department of Health and
23 Human Services, Division of Social Services (Division), for each year of the 2019-2021 fiscal
24 biennium for a report on certain Supplemental Nutrition Assistance Program (SNAP) and
25 Temporary Assistance for Needy Families (TANF) expenditures shall be allocated for vendor
26 costs to generate the data regarding expenditures of those programs. The vendor shall generate
27 data to be submitted to the Division that includes, at a minimum, each of the following:

28 (1) The dollar amount and number of transactions accessed or expended
29 out-of-state, by state, for both SNAP benefits and TANF benefits.
30 (2) The amount of benefits expended out-of-state, by state, from active cases for
31 both SNAP and TANF.
32 (3) The dollar amount and number of transactions of benefits accessed or
33 expended in this State, by types of retailers or institutions, for both SNAP and
34 TANF.

35 SECTION 9I.17.(b) Upon receiving the expenditures data for SNAP and TANF
36 from thevendor,theDivision shall evaluatethedata.TheDivision shall alsoprovidetheProgram
37 Evaluation Division of the General Assembly with a copy of the raw data submitted by the
38 vendor in accordance with subsection (c) of this section. After evaluating the expenditures data,
39 the Division shall submit a report on its analysis of the data by June 30 and December 31 of each
40 year to the Joint Legislative Oversight Committee on Health and Human Services and Fiscal

41 Research Division. The Division shall post its report required by this subsection on its Web site
42 and otherwise make the data available by June 30 and December 31 of each year. In the first
43 report required by this section, the Division shall report how this data is used to investigate fraud
44 and abuse in both SNAP and TANF. The Division shall also report on other types of data and
45 how that data is utilized in the detection of fraud and abuse.
46 SECTION 9I.17.(c) The Division shall maintain the confidentiality of information
47 not public under Chapter 132 of the General Statutes. The Division shall properly redact any

48 information subject to reporting under this section to prevent identification of individual
49 recipients of SNAP or TANF benefits.
50
51 INCREASE FOSTER CARE AND ADOPTION ASSISTANCE RATES

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1 SECTION 9I.18.(a) G.S. 108A-49.1 reads as rewritten:
2 § 108A-49.1. Foster care and adoption assistance payment rates.
3 (a) The maximum rates for State participation in the foster care assistance program are
4 established on a graduated scale as follows:
5 (1) $475.00 $514.00 per child per month for children from birth through five
6 years of age.
7 (2) $581.00 $654.00 per child per month for children six through 12 years of age.

8 (3) $634.00 $698.00 per child per month for children at least 13 but less than 21
9 years of age.
10 (b) The maximum rates for the State adoption assistance program are established
11 consistent with the foster care rates as follows:
12 (1) $475.00 $514.00 per child per month for children from birth through five
13 years of age.
14 (2) $581.00 $654.00 per child per month for children six through 12 years of age.

15 (3) $634.00 $698.00 per child per month for children at least 13 but less than 21
16 years of age.
17 ….
18 SECTION 9I.18.(b) This section becomes effective July 1, 2020.
19
20 CHILD WELFARE/BEHAVIORAL HEALTH PILOT PROJECT

21 SECTION 9I.19.(a) From funds appropriated in this act to the Department of Health
22 and Human Services, Division of Social Services, for the 2019-2020 fiscal year, the Division of
23 Social Services, in collaboration with the Divisionof Mental Health, Developmental Disabilities,
24 and Substance Abuse Services, shall establish a two-year child welfare and behavioral health
25 pilot project that will provideeasier access to comprehensivehealth services forchildrenin foster
26 care by (i) creating better continuity of care, (ii) providing an alternative to therapeutic foster
27 care, and (iii) ensuring care and services are available without disruption to a child's foster care

28 placement while accessing services needed to treat the child's trauma. Four counties shall
29 participate in the pilot project, which shall include Davie, Forsyth, Rockingham, and Stokes.
30 SECTION 9I.19.(b) The purpose of the pilot project is to establish a
31 trauma-informed integrated health foster care model to facilitate partnerships between county
32 departments of social services and local management entities/managed care organizations
33 (LME/MCOs) regarding children placed in foster care that will do each of the following:
34 (1) Address safety and health needs of children with the application of

35 trauma-informed tools.
36 (2) Address appropriate preventive and medical care for children placed in foster
37 care.
38 (3) Address other social determinants of health, specifically those related to
39 education and social development.
40 (4) Meet the goals of Medicaid Transformation, Child Welfare Reform, and the

41 federal Families First Prevention Services Act (Family First Act).
42 (5) Provide for collaboration across agencies, including private behavioral health
43 providers, health systems, and agencies of social determinants of health.
44 (6) Allow for the development of alternative funding models and service
45 definitions.
46 (7) Allow for behavioral health services in family foster homes augmented with
47 mental health services.

48 (8) Allow for wraparound services for the child to support a singular, unified goal
49 of children in foster care having a single placement.
50 (9) Assign dedicated care coordination to each county social services agency.

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1 SECTION 9I.19.(c) The Division of Social Services and the Division of Mental
2 Health, Developmental Disabilities, and Substance Abuse Services shall submit a progress report
3 on the pilot project established under this section to the Joint Legislative Oversight Committee
4 on Health and Human Services (Committee) by April 1, 2020, and submit a final report to the
5 Committee by October 1, 2021, that, at a minimum, includes each of the following:
6 (1) The average cost of providing alternatives to therapeutic foster care.
7 (2) An outline of enhanced services offered and developed during the pilot

8 project, including barriers and challenges.
9 (3) The outcomes achieved from the pilot project.
10 (4) A plan outlining the potential for replication across other counties, including
11 cost-modeling recommendations.
12
13 PART IX-J. VOCATIONAL REHABILITATION SERVICES [RESERVED]
14

15 PART IX-K. DHHS BLOCK GRANTS
16
17 DHHS BLOCK GRANTS
18 SECTION9K.1.(a) Exceptasotherwiseprovided,appropriationsfromfederalblock
19 grant funds are made for each year of the fiscal biennium ending June 30, 2021, according to the
20 following schedule:

21
22 TEMPORARY ASSISTANCE FOR NEEDY FY 2019-2020 FY 2020-2021
23 FAMILIES (TANF) FUNDS
24
25 Local Program Expenditures
26
27 Division of Social Services

28
29 01. Work First Family Assistance $37,549,914 $35,549,914
30
31 02. Work First County Block Grants 80,093,566 80,093,566
32
33 03. Work First Electing Counties 2,378,213 2,378,213
34

35 04. Adoption Services – Special Children
36 Adoption Fund 2,026,877 2,026,877
37
38 05. Child Protective Services – Child Welfare
39 Workers for Local DSS 9,412,391 9,412,391
40

41 06. Funding for Counties to Assist with County
42 Implementation of NC FAST, Project 4 8,092 0
43
44 07. Child Welfare Program Improvement Plan 775,176 775,176
45
46 08. Child Welfare Collaborative 400,000 400,000
47

48 09. Child Welfare Initiatives 1,400,000 1,400,000
49
50 Division of Child Development and Early Education
51

Page 194 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 10. Subsidized Child Care Program 53,203,069 45,813,694
2
3 11. Swap-Child Care Subsidy 5,400,000 12,600,000
4
5 12. NC Pre-K Services 66,300,000 68,300,000
6
7 Division of Public Health

8
9 13. Teen Pregnancy Prevention Initiatives 3,450,000 3,450,000
10
11 DHHS Administration
12
13 14. Division of Social Services 2,482,260 2,482,260
14

15 15. Office of the Secretary 34,042 34,042
16
17 16. Eligibility Systems – Operations and
18 Maintenance 653,815 711,349
19
20 17. NC FAST Implementation 1,817,362 0

21
22 18. Division of Social Services – Workforce
23 Innovation & Opportunity Act (WIOA) 93,216 93,216
24
25 Transfers to Other Block Grants
26
27 Division of Child Development and Early Education

28
29 19. Transfer to the Child Care and
30 Development Fund 21,773,001 21,773,001
31
32 Division of Social Services
33
34 20. Transfer to Social Services Block

35 Grant for Child Protective Services –
36 Training 1,300,000 1,300,000
37
38 21. Transfer to Social Services Block
39 Grant for Child Protective Services 5,040,000 5,040,000
40

41 22. Transfer to Social Services Block
42 Grant for County Departments of
43 Social Services for Children's Services 13,097,783 13,097,783
44
45 23. Transfer to Social Services Block
46 Grant – Foster Care Services 1,385,152 1,385,152
47

48 24. Transfer to Social Services Block 1,582,000 1,582,000
49 Grant – Child Advocacy Centers
50
51 25. Transfer to Social Services Block 737,067 737,067

H966-PCCS30485-LRxr-3 House Bill 966 Page 195 General Assembly Of North Carolina Session 2019

1 Grant – Child Protective Services,
2 Child Welfare Training for Counties
3
4 TOTAL TEMPORARY ASSISTANCE FOR
5 NEEDY FAMILIES (TANF) FUNDS $312,392,996 $310,435,701
6
7 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)

8 EMERGENCY CONTINGENCY FUNDS
9
10 Local Program Expenditures
11
12 Division of Child Development and Early Education
13
14 01. Subsidized Child Care $33,439,988 $33,439,988

15
16 TOTAL TEMPORARY ASSISTANCE FOR
17 NEEDY FAMILIES (TANF) EMERGENCY
18 CONTINGENCY FUNDS $33,439,988 $33,439,988
19
20 SOCIAL SERVICES BLOCK GRANT

21
22 Local Program Expenditures
23
24 Divisions of Social Services and Aging and Adult Services
25
26 01. County Departments of Social Services $19,905,849 $19,905,849
27

28 02. County Departments of Social Services
29 (Transfer From TANF) $13,097,783 $13,097,783
30
31 03. EBCI Tribal Public Health and Human Services 244,740 244,740
32
33 04. Child Protective Services
34 (Transfer From TANF) 5,040,000 5,040,000

35
36 05. State In-Home Services Fund 1,943,950 1,943,950
37
38 06. Adult Protective Services 2,138,404 2,138,404
39
40 07. State Adult Day Care Fund 1,994,084 1,994,084

41
42 08. Child Protective Services/CPS
43 Investigative Services – Child Medical
44 Evaluation Program 901,868 901,868
45
46 09. Special Children Adoption Incentive Fund 462,600 462,600
47

48 10. Child Protective Services – Child
49 Welfare Training for Counties
50 (Transfer From TANF) 1,300,000 1,300,000
51

Page 196 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 11. Child Protective Services – Child
2 Welfare Training for Counties
3 (Transfer From TANF) 737,067 737,067
4
5 12. Home and Community Care Block
6 Grant (HCCBG) 2,696,888 2,696,888
7

8 13. Child Advocacy Centers
9 (Transfer from TANF $1,582,000) 1,582,000 1,582,000
10
11 14. Guardianship – Division of Social Services 1,802,671 1,802,671
12
13 15. Foster Care Services
14 (Transfer From TANF) 1,385,152 1,385,152

15
16 Division of Central Management and Support
17
18 16. DHHS Competitive Block Grants
19 for Nonprofits 4,774,525 4,774,525
20

21 Division of Mental Health, Developmental Disabilities, and Substance Abuse Services
22
23 17. Mental Health Services – Adult and
24 Child/Developmental Disabilities Program/
25 Substance Abuse Services – Adult 4,149,595 4,149,595
26
27 DHHS Program Expenditures

28
29 Division of Services for the Blind
30
31 18. Independent Living Program 3,603,793 3,603,793
32
33 Division of Health Service Regulation
34

35 19. Adult Care Licensure Program 402,951 402,951
36
37 20. Mental Health Licensure and
38 Certification Program 200,880 200,880
39
40 Division of Aging and Adult Services

41
42 21. Guardianship 3,825,443 3,825,443
43
44 DHHS Administration
45
46 22. Division of Aging and Adult Services 679,541 679,541
47

48 23. Division of Social Services 654,220 654,220
49
50 24. Office of the Secretary/Controller's Office 132,047 132,047
51

H966-PCCS30485-LRxr-3 House Bill 966 Page 197 General Assembly Of North Carolina Session 2019

1 25. Legislative Increases/Fringe Benefits 236,278 236,278
2
3 26. Division of Child Development and
4 Early Education 13,878 13,878
5
6 27. Division of Mental Health, Developmental
7 Disabilities, and Substance Abuse Services 27,446 27,446

8
9 28. Division of Health Service Regulation 121,719 121,719
10
11 TOTAL SOCIAL SERVICES BLOCK GRANT $74,055,372 $74,055,372
12
13 LOW-INCOME ENERGY ASSISTANCE BLOCK GRANT
14

15 Local Program Expenditures
16
17 Division of Social Services
18
19 01. Low-Income Energy Assistance
20 Program (LIEAP) $40,298,638 $40,298,638

21
22 02. Crisis Intervention Program (CIP) 40,298,638 40,298,638
23
24 Local Administration
25
26 Division of Social Services
27

28 03. County DSS Administration 6,618,366 6,618,366
29
30 DHHS Administration
31
32 Division of Central Management and Support
33
34 04. Division of Social Services 10,000 10,000

35
36 05. Office of the Secretary/DIRM 128,954 128,954
37
38 06. Office of the Secretary/Controller's Office 18,378 18,378
39
40 07. NC FAST Development 2,287,188 2,287,188

41
42 08. NC FAST Operations and Maintenance 2,539,033 2,539,033
43
44 Transfers to Other State Agencies
45
46 Department of Environmental Quality
47

48 09. Weatherization Program 8,692,641 8,552,641
49
50 10. Heating Air Repair and Replacement
51 Program (HARRP) 5,881,761 5,701,761

Page 198 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1
2 11. Local Residential Energy Efficiency Service
3 Providers – Weatherization 544,742 514,742
4
5 12. Local Residential Energy Efficiency Service
6 Providers – HARRP 327,169 277,169
7

8 13. DEQ – Weatherization Administration 544,742 514,742
9
10 14. DEQ – HARRP Administration 277,169 277,169
11
12 Department of Administration
13
14 15. N.C. Commission on Indian Affairs 87,736 87,736

15
16 TOTAL LOW-INCOME ENERGY
17 ASSISTANCE BLOCK GRANT $108,555,155 $108,125,155
18
19 CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
20

21 Local Program Expenditures
22
23 Division of Child Development and Early Education
24
25 01. Child Care Services $232,109,943 $239,499,318
26
27 02. Smart Start Subsidy 7,392,654 7,392,654

28
29 03. Transfer from TANF Block Grant
30 for Child Care Subsidies 21,773,001 21,773,001
31
32 04. Quality and Availability Initiatives
33 (TEACH Program $3,800,000) 55,217,124 55,217,124
34

35 DHHS Administration
36
37 Division of Child Development and Early Education
38
39 05. DCDEE Administrative Expenses 9,710,886 9,710,886
40

41 Division of Social Services
42
43 06. Local Subsidized Child Care
44 Services Support 18,533,357 18,533,357
45
46 07. Direct Deposit for Child Care Payments 505,100 505,100
47

48 Division of Central Management and Support
49
50 08. NC FAST Development 464,290 0
51

H966-PCCS30485-LRxr-3 House Bill 966 Page 199 General Assembly Of North Carolina Session 2019

1 09. NC FAST Operations and Maintenance 1,104,504 1,201,697
2
3 10. DHHS Central Administration – DIRM
4 Technical Services 645,162 645,162
5
6 11. DHHS Central Administration 7,346 7,346
7

8 Division of Public Health
9
10 12. Child Care Health Consultation Contracts 62,205 62,205
11
12 TOTAL CHILD CARE AND DEVELOPMENT
13 FUND BLOCK GRANT $347,525,572 $354,547,850
14

15 MENTAL HEALTH SERVICES BLOCK GRANT
16
17 Local Program Expenditures
18
19 01. Mental Health Services – Child $4,779,087 $4,779,087
20

21 02. Mental Health Services – Adult/Child 18,531,361 18,531,360
22
23 03. Mental Health Services – First
24 Psychotic Symptom Treatment 1,976,970 1,976,970
25
26 DHHS Administration
27

28 Division of Mental Health, Developmental Disabilities, and Substance Abuse Services
29
30 04. Administration 200,000 200,000
31
32 TOTAL MENTAL HEALTH SERVICES
33 BLOCK GRANT $25,487,418 $25,487,417
34

35 SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT
36
37 Local Program Expenditures
38
39 Division of Mental Health, Developmental Disabilities, and Substance Abuse Services
40

41 01. Substance Abuse – HIV and IV Drug $3,500,747 $2,550,915
42
43 02. Substance Abuse Prevention 9,110,422 9,110,422
44
45 03. Substance Abuse Services – Treatment for
46 Children/Adults
47 (Medication-Assisted Opioid Use Disorder

48 Treatment Pilot Program $500,000;
49 First Step Farm of WNC, Inc. $100,000) 28,203,732 29,500,823
50
51 05. Crisis Solutions Initiatives – Collegiate

Page 200 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Wellness/Addiction Recovery 1,085,000 1,085,000
2
3 06. Crisis Solutions Initiatives – Community
4 Paramedic Mobile Crisis Management 20,000 20,000
5
6 DHHS Program Expenditures
7

8 Division of Central Management and Support
9
10 07. Competitive Grants 1,600,000 1,600,000
11
12 DHHS Administration
13
14 Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

15
16 08. Administration 454,000 454,000
17
18 09. Controlled Substance Reporting System
19 Enhancement 427,655 427,655
20

21 10. Veterans Initiatives 250,000 250,000
22
23 Division of Public Health
24
25 11. HIV Testing for Individuals in Substance
26 Abuse Treatment 1,300,000 0
27

28 TOTAL SUBSTANCE ABUSE PREVENTION
29 AND TREATMENT BLOCK GRANT $45,951,556 $44,998,815
30
31 MATERNAL AND CHILD HEALTH BLOCK GRANT
32
33 Local Program Expenditures
34

35 Division of Public Health
36
37 01. Women and Children's Health Services
38 (Safe Sleep Campaign $45,000; Sickle Cell
39 Centers $100,000; Prevent Blindness $575,000;
40 March of Dimes $350,000; Teen Pregnancy

41 Prevention Initiatives $650,000;
42 17P Project $52,000; Nurse-Family
43 Partnership $950,000; Perinatal & Neonatal
44 Outreach Coordinator Contracts $440,000;
45 Mountain Area Pregnancy Services $50,000) $14,719,224 $14,719,224
46
47 02. Oral Health 48,227 48,227

48
49 03. Evidence-Based Programs in Counties
50 With Highest Infant Mortality Rates 1,575,000 1,575,000
51

H966-PCCS30485-LRxr-3 House Bill 966 Page 201 General Assembly Of North Carolina Session 2019

1 DHHS Program Expenditures
2
3 04. Children's Health Services 1,427,323 1,427,323
4
5 05. Women's Health – Maternal Health 169,864 169,864
6
7 06. Women and Children's Health – Perinatal

8 Strategic Plan Support Position 68,245 68,245
9
10 07. State Center for Health Statistics 158,583 158,583
11
12 08. Health Promotion – Injury and
13 Violence Prevention 87,271 87,271
14

15 DHHS Administration
16
17 09. Division of Public Health Administration 552,571 552,571
18
19 TOTAL MATERNAL AND CHILD
20 HEALTH BLOCK GRANT $18,806,308 $18,806,308

21
22 PREVENTIVE HEALTH SERVICES BLOCK GRANT
23
24 Local Program Expenditures
25
26 01. Physical Activity and Prevention $3,030,116 $3,030,116
27

28 02. Injury and Violence Prevention
29 (Services to Rape Victims – Set-Aside) 160,000 160,000
30
31 DHHS Program Expenditures
32
33 Division of Public Health
34

35 03. HIV/STD Prevention and
36 Community Planning 137,648 137,648
37
38 04. Oral Health Preventive Services 150,000 150,000
39
40 05. Laboratory Services – Testing,

41 Training, and Consultation 21,000 21,000
42
43 06. Injury and Violence Prevention
44 (Services to Rape Victims – Set-Aside) 53,206 53,206
45
46 07. Performance Improvement and
47 Accountability 592,123 592,123

48
49 08. State Center for Health Statistics 82,505 82,505
50
51 DHHS Administration

Page 202 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1
2 Division of Public Health
3
4 09. Division of Public Health 65,000 65,000
5
6 TOTAL PREVENTIVE HEALTH
7 SERVICES BLOCK GRANT $4,291,598 $4,291,598

8
9 COMMUNITY SERVICES BLOCK GRANT
10
11 01. Community Action Agencies $24,170,204 $20,539,214
12
13 02. Discretionary Funding 921,096 921,096
14

15 03. Office of Economic Opportunity 981,096 981,096
16
17 04. Office of Economic Opportunity – Workforce
18 Investment Opportunities Act (WIOA) 60,000 60,000
19
20 TOTAL COMMUNITY SERVICES

21 BLOCK GRANT $26,132,396 $22,501,406
22
23 GENERAL PROVISIONS
24 SECTION 9K.1.(b) Information to Be Included in Block Grant Plans. – The
25 Department of Health and Human Services shall submit a separate plan for each Block Grant
26 received and administered by the Department, and each plan shall include the following:
27 (1) A delineation of the proposed allocations by program or activity, including

28 State and federal match requirements.
29 (2) A delineation of the proposed State and local administrative expenditures.
30 (3) An identification of all new positions to be established through the Block
31 Grant, including permanent, temporary, and time-limited positions.
32 (4) A comparison of the proposed allocations by program or activity with two
33 prior years' program and activity budgets and two prior years' actual program
34 or activity expenditures.

35 (5) A projection of current year expenditures by program or activity.
36 (6) A projection of federal Block Grant funds available, including unspent federal
37 funds from the current and prior fiscal years.
38 (7) The required amount of maintenance of effort and the amount of funds
39 qualifying for maintenance of effort in the previous year delineated by
40 program or activity.

41 SECTION 9K.1.(c) Changes in Federal Fund Availability. – If the Congress of the
42 United States increases the federal fund availability for any of the Block Grants or contingency
43 funds and other grants related to existing Block Grants administered bythe Department of Health
44 and Human Services from the amounts appropriated in this act, the Department shall allocate the
45 increase proportionally across the program and activity appropriations identified for that Block
46 Grant in this section. In allocating an increase in federal fund availability, the Office of State
47 Budget and Management shall not approve funding for new programs or activities not

48 appropriated in this act.
49 If the Congress of the United States decreases the federal fund availability for any of
50 the Block Grants or contingency funds and other grants related to existing Block Grants
51 administered by the Department of Health and Human Services from the amounts appropriated

H966-PCCS30485-LRxr-3 House Bill 966 Page 203 General Assembly Of North Carolina Session 2019

1 in this act, the Department shall develop a plan to adjust the Block Grants based on reduced
2 federal funding.
3 Notwithstanding the provisions of this subsection, for fiscal years 2019-2020 and
4 2020-2021, increases in the federal fund availability for the Temporary Assistance to Needy
5 Families (TANF) Block Grant shall be used only for the North Carolina Child Care Subsidy
6 program to pay for child care in four- or five-star rated facilities for 4-year-old children and shall
7 not be used to supplant State funds.

8 Prior to allocating the change in federal fund availability, the proposed allocation
9 must be approved by the Office of State Budget and Management. If the Department adjusts the
10 allocation of any Block Grant due to changes in federal fund availability, then a report shall be
11 made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal
12 Research Division.
13 SECTION 9K.1.(d) Except as otherwise provided, appropriations from federal
14 Block Grant funds are made for each year of the fiscal biennium ending June 30, 2021, according

15 to the schedule enacted for State fiscal years 2019-2020 and 2020-2021 or until a new schedule
16 is enacted by the General Assembly.
17 SECTION 9K.1.(e) All changes to the budgeted allocations to the Block Grants or
18 contingency funds and other grants related to existing Block Grants administered by the
19 Department of Health and Human Services that are not specificallyaddressed in this section shall
20 be approved by the Office of State Budget and Management. The Office of State Budget and

21 Management shall not approve funding for new programs or activities not appropriated in this
22 section. Additionally, if budgeted allocations are decreased, the Office of State Budget and
23 Management shall not approve any reduction of funds designated for subrecipients in subsection
24 (a) of this section under (i) Item 03 of the Substance Abuse Prevention and Treatment Block
25 Grant or (ii) Item 01 of the Maternal and Child Health Block Grant. The Office of State Budget
26 and Management shall consult with the Joint Legislative Oversight Committee on Health and
27 Human Services for review prior to implementing any changes. In consulting, the report shall

28 include an itemized listing of affected programs, including associated changes in budgeted
29 allocations. All changes to the budgeted allocations to the Block Grants shall be reported
30 immediately to the Joint Legislative Oversight Committee on Health and Human Services and
31 the Fiscal Research Division. This subsection does not apply to Block Grant changes caused by
32 legislative salary increases and benefit adjustments.
33 SECTION 9K.1.(f) Except as otherwise provided, the Department of Health and
34 Human Services shall have flexibility to transfer funding between the Temporary Assistance for

35 NeedyFamilies (TANF) BlockGrant andthe TANFEmergencyContingencyFunds BlockGrant
36 so long as the total allocation for the line items within those block grants remains the same.
37
38 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS
39 SECTION 9K.1.(g) The sum of eighty million ninety-three thousand five hundred
40 sixty-six dollars ($80,093,566) for each year of the 2019-2021 fiscal biennium appropriated in

41 this act in TANF funds to the Department of Health and Human Services, Division of Social
42 Services, shall be used for Work First County Block Grants. The Division shall certify these
43 fundsintheappropriateState-levelservicesbasedonprioryearactualexpenditures.TheDivision
44 has the authority to realign the authorized budget for these funds among the State-level services
45 based on current year actual expenditures. The Division shall also have the authority to realign
46 appropriated funds from Work First Family Assistance for electing counties to the Work First
47 County Block Grant for electing counties based on current year expenditures so long as the

48 electing counties meet Maintenance of Effort requirements.
49 SECTION 9K.1.(h) The sum of nine million four hundred twelve thousand three
50 hundred ninety-one dollars ($9,412,391) appropriated in this act to the Department of Health and
51 Human Services, Division of Social Services, in TANF funds for each fiscal year of the

Page 204 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 2019-2021 fiscal biennium for child welfare improvements shall be allocated to the county
2 departments of social services for hiring or contracting staff to investigate and provide services
3 in Child Protective Services cases; to provide foster care and support services; to recruit, train,
4 license, and support prospective foster and adoptive families; and to provide interstate and
5 post-adoption services for eligible families.
6 Counties shall maintain their level of expenditures in local funds for Child Protective
7 Services workers. Of the Block Grant funds appropriated for Child Protective Services workers,

8 the total expenditures from State and local funds for fiscal years 2019-2020 and 2020-2021 shall
9 not be less than the total expended from State and local funds for the 2012-2013 fiscal year.
10 SECTION 9K.1.(i) The sum of two million twenty-six thousand eight hundred
11 seventy-seven dollars ($2,026,877) appropriated in this act in TANF funds to the Department of
12 Health and Human Services, Special Children Adoption Fund, for each fiscal year of the
13 2019-2021 fiscal biennium shall be used in accordance with G.S. 108A-50.2. The Division of
14 Social Services, in consultation with the North Carolina Association of County Directors of

15 Social Services and representatives of licensed private adoption agencies, shall develop
16 guidelines for the awarding of funds to licensed public and private adoption agencies upon the
17 adoption of children described in G.S. 108A-50 and in foster care. Payments received from the
18 Special Children Adoption Fund by participating agencies shall be used exclusively to enhance
19 theadoption services program. Nolocal matchshall berequired as a condition forreceipt ofthese
20 funds.

21 SECTION 9K.1.(j) The sum of one million four hundred thousand dollars
22 ($1,400,000) appropriated in this act in TANF funds to the Department of Health and Human
23 Services, Division of Social Services, for each fiscal year of the 2019-2021 fiscal biennium shall
24 be used for child welfare initiatives to (i) enhance the skills of social workers to improve the
25 outcomes for families and children involved in child welfare and (ii) enhance the provision of
26 services to families in their homes in the least restrictive setting.
27 SECTION 9K.1.(k) Of the three million four hundred fifty thousand dollars

28 ($3,450,000) allocated in this act in TANF funds to the Department of Health and Human
29 Services, Division of Public Health, for each year of the 2019-2021 fiscal biennium for teen
30 pregnancy prevention initiatives, the sum of five hundred thousand dollars ($500,000) in each
31 year of the 2019-2021 fiscal biennium shall be used to provide services for youth in foster care
32 or the juvenile justice system.
33
34 SOCIAL SERVICES BLOCK GRANT

35 SECTION 9K.1.(l) The sum of nineteen million nine hundred five thousand eight
36 hundred forty-nine dollars ($19,905,849) for each year of the 2019-2021 fiscal biennium
37 appropriated in this act in the Social Services Block Grant to the Department of Health and
38 Human Services, Division of Social Services, and the sum of thirteen million ninety-seven
39 thousand seven hundred eighty-three dollars ($13,097,783) for each year of the 2019-2021 fiscal
40 biennium transferred from funds appropriated in the TANF Block Grant shall be used for county

41 block grants. The Division shall certify these funds in the appropriate State-level services based
42 on prior year actual expenditures. The Division has the authority to realign the authorized budget
43 forthesefunds,aswellas StateSocialServices BlockGrantfunds,amongtheState-levelservices
44 based on current year actual expenditures.
45 Of the funds allocated in this subsection for each year of the 2019-2021 fiscal
46 biennium for county block grants, three million dollars ($3,000,000) shall be used to assist
47 counties in the implementation of Project 4, Child Services, in North Carolina Families

48 Accessing Services Through Technology (NC FAST).These funds shall be available in each
49 fiscal year of the fiscal biennium for this purpose.
50 SECTION 9K.1.(m) The sum of one million three hundred thousand dollars
51 ($1,300,000) appropriated in this act in the Social Services Block Grant to the Department of

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1 Health and Human Services, Division of Social Services, for each fiscal year of the 2019-2021
2 fiscal biennium shall be used to support various child welfare training projects as follows:
3 (1) Provide a regional training center in southeastern North Carolina.
4 (2) Provide training for residential child caring facilities.
5 (3) Provide for various other child welfare training initiatives.
6 SECTION 9K.1.(n) The Department of Health and Human Services is authorized,
7 subject to the approval of the Office of State Budget and Management, to transfer Social Services

8 Block Grant funding allocated for departmental administration between divisions that have
9 received administrative allocations from the Social Services Block Grant.
10 SECTION 9K.1.(o) Social Services Block Grant funds appropriated for the Special
11 Children Adoption Incentive Fund shall require a fifty percent (50%) local match.
12 SECTION 9K.1.(p) The sum of five million forty thousand dollars ($5,040,000)
13 appropriated in this act in the Social Services Block Grant for each fiscal year of the 2019-2021
14 fiscal biennium shall be allocated to the Department of Health and Human Services, Division of

15 Social Services. The Division shall allocate these funds to local departments of social services to
16 replace the loss of Child Protective Services State funds that are currently used by county
17 governments to pay for Child Protective Services staff at the local level. These funds shall be
18 used to maintain the number of Child Protective Services workers throughout the State. These
19 Social Services Block Grant funds shall be used to pay for salaries and related expenses onlyand
20 are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty-five percent (25%).

21 SECTION 9K.1.(q) The sum of four million seven hundred seventy-four thousand
22 five hundred twenty-five dollars ($4,774,525) for each year of the 2019-2021 fiscal biennium
23 appropriated in this act in the Social Services Block Grant to the Department of Health and
24 Human Services (DHHS), Division ofCentral Management and Support, shall beused forDHHS
25 competitive block grants pursuant to Section 9B.8 of this act. These funds are exempt from the
26 provisions of 10A NCAC 71R .0201(3).
27 SECTION 9K.1.(r) The sum of one million five hundred eighty-two thousand

28 dollars ($1,582,000) appropriated in this act in the Social Services Block Grant for each fiscal
29 yearofthe2019-2021fiscalbienniumtotheDepartmentofHealthandHumanServices,Division
30 of Social Services, shall be used to continue support for the Child Advocacy Centers, and the
31 funds are exempt from the provisions of 10A NCAC 71R .0201(3).
32 SECTION 9K.1.(s) The sum of three million eight hundred twenty-five thousand
33 four hundred forty-three dollars ($3,825,443) for each fiscal year of the 2019-2021 fiscal
34 biennium appropriated in this act in the Social Services Block Grant to the Department of Health

35 and Human Services, Divisions of Social Services and Aging and Adult Services, shall be used
36 for guardianship services pursuant to Chapter 35A of the General Statutes. The Department may
37 expend funds allocated in this section to support existing corporate guardianship contracts during
38 the 2019-2020 and 2020-2021 fiscal years.
39 SECTION 9K.1.(t) Of the funds appropriated in the Social Services Block Grant to
40 the Division of Aging and Adult Services for Adult Protective Services, the sum of eight hundred

41 ninety-three thousand forty-one dollars ($893,041) shall be used to increase the number of Adult
42 Protective Services workers where these funds can be the most effective. These funds shall be
43 used to pay for salaries and related expenses and shall not be used to supplant any other source
44 of fundingfor staff. These funds are also exempt from 10A NCAC 71R .0201(3) requiringa local
45 match of twenty-five percent (25%).
46 SECTION 9K.1.(u) The sum of seven hundred thirty-seven thousand sixty-seven
47 dollars ($737,067) appropriated in this act in the Social Services Block Grant for each fiscal year

48 of the 2019-2021 fiscal biennium shall be allocated to the Department of Health and Human
49 Services, Division of Social Services. These funds shall be used to assist with training needs for
50 county child welfare training staff and shall not be used to supplant any other source of funding

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1 for staff. County departments of social services are exempt from 10A NCAC 71R .0201(3)
2 requiring a local match of twenty-five percent (25%).
3
4 LOW-INCOME ENERGY ASSISTANCE BLOCK GRANT
5 SECTION 9K.1.(v) Additional emergency contingency funds received may be
6 allocated for Energy Assistance Payments or Crisis Intervention Payments without prior
7 consultation with the Joint Legislative Oversight Committee on Health and Human Services.

8 Additional funds received shall be reported to the Joint Legislative Oversight Committee on
9 Health and Human Services and the Fiscal Research Division upon notification of the award. The
10 Department of Health and Human Services shall not allocate funds for any activities, including
11 increasing administration, other than assistance payments, without prior consultation with the
12 Joint Legislative Oversight Committee on Health and Human Services.
13 SECTION 9K.1.(w) The sum of forty million two hundred ninety-eight thousand
14 six hundred thirty-eight dollars ($40,298,638) for each year of the 2019-2021 fiscal biennium

15 appropriated in this act in the Low-Income Energy Assistance Block Grant to the Department of
16 Health and Human Services, Division of Social Services, shall be used for Energy Assistance
17 Payments for the households of (i) elderly persons age 60 and above with income up to one
18 hundred thirty percent (130%) of the federal poverty level and (ii) disabled persons eligible for
19 services funded through the Division of Aging and Adult Services.
20 County departments of social services shall submit to the Division of Social Services

21 an outreach plan for targeting households with 60-year-old household members no later than
22 August 1 of each year. The outreach plan shall comply with the following:
23 (1) Ensure that eligible households are made aware of the available assistance,
24 with particular attention paid to the elderly population age 60 and above and
25 disabled persons receiving services through the Division of Aging and Adult
26 Services.
27 (2) Include efforts by the county department of social services to contact other

28 State and local governmental entities and community-based organizations to
29 (i) offer the opportunity to provide outreach and (ii) receive applications for
30 energy assistance.
31 (3) Be approved by the local board of social services or human services board
32 prior to submission.
33
34 CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

35 SECTION9K.1.(x) Paymentforsubsidizedchildcareservicesprovidedwithfederal
36 TANF funds shall comply with all regulations and policies issued by the Division of Child
37 Development and Early Education for the subsidized child care program.
38 SECTION 9K.1.(y) If funds appropriated through the Child Care and Development
39 Fund Block Grant for any program cannot be obligated or spent in that program within the
40 obligation or liquidation periods allowed by the federal grants, the Department may move funds

41 to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order
42 to use the federal funds fully.
43
44 MENTAL HEALTH SERVICES BLOCK GRANT
45 SECTION 9K.1.(z) The sum of one million nine hundred seventy-six thousand nine
46 hundredseventydollars($1,976,970)appropriatedinthisactintheMentalHealthServices Block
47 Grant to the Department of Health and Human Services, Division of Mental Health,

48 Developmental Disabilities, and Substance Abuse Services, for each year of the 2019-2021 fiscal
49 biennium is allocated for Mental Health Services – First Psychotic Symptom Treatment.
50
51 SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

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1 SECTION 9K.1.(aa) The sum of two hundred fifty thousand dollars ($250,000)
2 appropriated in this act in the Substance Abuse Prevention and Treatment Block Grant to the
3 Department of Health and Human Services, Division of Mental Health, Developmental
4 Disabilities, and Substance Abuse Services, for each fiscal year of the 2019-2021 fiscal biennium
5 shall be used to support Veterans initiatives.
6
7 MATERNAL AND CHILD HEALTH BLOCK GRANT

8 SECTION 9K.1.(bb) If federal funds are received under the Maternal and Child
9 Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104-193 (42
10 U.S.C. § 710), for the 2019-2020 fiscal year or the 2020-2021 fiscal year, then those funds shall
11 be transferred to the State Board of Education to be administered by the Department of Public
12 Instruction. The Department of Public Instruction shall use the funds to establish an abstinence
13 until marriage education program and shall delegate to one or more persons the responsibility of
14 implementing the program and G.S. 115C-81(e1)(4) and (4a). The Department of Public

15 Instruction shall carefully and strictly follow federal guidelines in implementing and
16 administering the abstinence education grant funds.
17 SECTION 9K.1.(cc) The sum of one million five hundred seventy-five thousand
18 dollars ($1,575,000) appropriated in this act in the Maternal and Child Health Block Grant to the
19 Department of Health and Human Services, Division of Public Health, for each year of the
20 2019-2021 fiscal biennium shall be used for evidence-based programs in counties with the

21 highest infant mortality rates. The Division shall report on (i) the counties selected to receive the
22 allocation, (ii) the specific evidence-based services provided, (iii) the number of women served,
23 and (iv) any impact on the counties' infant mortality rate. The Division shall report its findings
24 to the House of Representatives Appropriations Committee on Health and Human Services, the
25 Senate Appropriations Committee on Health and Human Services, and the Fiscal Research
26 Division no later than December 31 of each year.
27 SECTION9K.1.(dd) Thesumofsixty-eightthousandtwohundredforty-fivedollars

28 ($68,245) allocated in this section in the Maternal and Child Health Block Grant to the
29 Department of Health and Human Services, Division of Public Health, Women and Children's
30 Health Section, foreach fiscal yearofthe2019-2021fiscal biennium shall not beused to supplant
31 existing State or federal funds. This allocation shall be used for a Public Health Program
32 Consultant position assigned full-time to manage the North Carolina Perinatal Health Strategic
33 Plan and provide staff support for the stakeholder work group.
34 SECTION 9K.1.(ee) The sum of one hundred thousand dollars ($100,000) allocated

35 in this section in the Maternal and Child Health Block Grant to the Department of Health and
36 Human Services, Division of Public Health, for each year of the 2019-2021 fiscal biennium for
37 community-based sickle cell centers shall not be used to supplant existing State or federal funds.
38
39 PART X. AGRICULTURE AND CONSUMER SERVICES
40

41 DACS REPORT CHANGES
42 SECTION 10.1.(a) G.S. 19A-62(c) reads as rewritten:
43 (c) Report. – In March of each year, the Department must report to the Joint Legislative
44 Commission on Governmental Operations JointLegislative Oversight Committee on Agriculture
45 and Natural and Economic Resources and the Fiscal Research Division. The report must contain
46 information regarding all revenues and expenditures of the Spay/Neuter Account.
47 SECTION 10.1.(b) G.S. 19A-69 reads as rewritten:

48 § 19A-69. Report.
49 The Department shall report annually to the Joint Legislative Commission on Governmental
50 Operations Joint Legislative Oversight Committee on Agriculture and Natural and Economic

Page 208 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Resources and the Fiscal Research Division no later than March 1. The report shall contain
2 information regarding all revenues and expenditures of the Animal Shelter Support Fund.
3 SECTION 10.1.(c) G.S. 106-744(i) reads as rewritten:
4 (i) The AdvisoryCommittee shall report no later than October 1 of each year to the Joint
5 Legislative Commission on Governmental Operations, Joint Legislative Oversight Committee
6 on Agriculture and Natural and Economic Resources, the Environmental Review Commission,
7 and the House of Representatives and Senate Appropriations Subcommittees on Natural and

8 Economic Resources the chairs of the Senate Appropriations Committee onAgriculture, Natural,
9 and Economic Resources, and the chairs of the House of Representatives Appropriations
10 Committee on Agriculture and Natural and Economic Resources regarding the activities of the
11 Advisory Committee, the agriculture easements purchased, and agricultural projects funded
12 during the previous fiscal year.
13 SECTION 10.1.(d) G.S. 106-747(f) reads as rewritten:
14 (f) Reports. – The Committee shall report on its activities conducted to implement this

15 section, including any findings, recommendations, and legislative proposals, to the North
16 CarolinaMilitaryAffairs Commission and Commission, theAgriculture and ForestryAwareness
17 Study Commission Commission, and the Joint Legislative Oversight Committee on Agriculture
18 andNatural andEconomicResourcesbeginningSeptember1,2017,andannuallythereafter,until
19 such time as the Committee completes its work.
20 SECTION 10.1.(e) G.S. 106-755.1(14) reads as rewritten:

21 (14) By September 1 of each year, to report to the House of Representatives
22 Appropriations Subcommittee on Natural and Economic Resources, the
23 Senate Appropriations Committee on Natural and Economic Resources, the
24 Joint Legislative Commission on Governmental Operations, chairs of the
25 Senate Appropriations Committee on Agriculture, Natural, and Economic
26 Resources, the chairs of the House of Representatives Appropriations
27 Committee on Agriculture and Natural and Economic Resources, the Joint

28 Legislative Oversight Committee on Agriculture and Natural and Economic
29 Resources, and the Fiscal Research Division on the activities of the Council,
30 the status of the wine and grape industry in North Carolina and the United
31 States, progress on the development and implementation of the State
32 Viticulture Plan, and any contracts or agreements entered into by the Council
33 for research, education, or marketing.
34 SECTION 10.1.(f) G.S. 106-887(i) reads as rewritten:

35 (i) The Department shall report no later than October 1 of each year to the Joint
36 Legislative Commission on Governmental Operations, the House and Senate Appropriations
37 Subcommittees on Natural and Economic Resources, Joint Legislative Oversight Committee on
38 Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations
39 Committee on Agriculture, Natural, and Economic Resources, the chairs of the House of
40 Representatives Appropriations Committee on Agriculture and Natural and Economic

41 Resources, the Fiscal Research Division, and the Environmental Review Commission on the
42 Department's management activities at DuPont State Recreational Forest during the preceding
43 fiscal yearandplansformanagementofDuPontStateRecreational Forest fortheupcomingfiscal
44 year.
45 SECTION 10.1.(g) G.S. 106-911 reads as rewritten:
46 § 106-911. Annual report on wildfires.
47 No later than October 1 of each year, beginning October 1, 2012, the Commissioner shall

48 submit a written report on wildfires in the State to the chairs of the House Appropriations
49 Subcommittee on Natural and Economic Resources and the Senate Appropriations Committee
50 on Natural and Economic Resources, the Joint Legislative Commission on Governmental
51 Operations, Senate Appropriations Committee on Agriculture, Natural, and Economic

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1 Resources, the chairs of the House of Representatives Appropriations Committee on Agriculture
2 and Natural and Economic Resources, the Joint Legislative Oversight Committee on Agriculture
3 andNatural andEconomicResources, andtheFiscalResearchDivisionoftheGeneralAssembly.
4 The report shall include the following information for all major or project wildfires during the
5 prior fiscal year:
6 ….
7 SECTION 10.1.(h) G.S. 106-1029(b)(3) and (5) read as rewritten:

8 (3) Establish in November prior to those sessions in which the General Assembly
9 considers the State budget, the estimated total assessment that will be
10 collectibleinthenextbudgetperiodandsoinformtheGeneralAssembly;Joint
11 Legislative Oversight Committee on Agriculture and Natural and Economic
12 Resources.
13 …
14 (5) By January 15 of each odd-numbered year, report to the General Assembly

15 Joint Legislative Oversight Committee on Agriculture and Natural and
16 Economic Resources on the number of acres reforested, type of owners
17 assisted, geographic distribution of funds, the amount of funds encumbered
18 encumbered, and other matters. The report shall include the information by
19 forestry district and statewide and shall be for the two fiscal years prior to the
20 date of the report.

21 SECTION 10.1.(i) Section 11.1 of S.L. 2012-142 is codified as G.S. 106-915 and
22 reads as rewritten:
23 § 106-915. B.R.I.D.G.E. Youthful Offenders Program; annual report.
24 (a) The Division of Adult Correction and Juvenile Justice of the Department of Public
25 Safety shall give priority to the B.R.I.D.G.E. Youthful Offenders Program operated in
26 cooperation with the North Carolina Forest Service when assigning youthful offenders from the
27 Western Youth Institution Foothills Correctional Institution to work programs.

28 (b) The North Carolina Forest Service shall submit an annual report on the B.R.I.D.G.E.
29 Youthful Offenders Program no later than October 1 of each year beginning October 1, 2012, to
30 the Fiscal Research Division, the Chairs of the House Appropriations Subcommittee on Natural
31 and Economic Resources and the Senate Appropriations Committee on Natural and Economic
32 Resources, the Chairs of the House Appropriations Subcommittee on Justice and Public Safety
33 and the Senate Appropriations Committee on Justice and Public Safety, the Joint Legislative
34 Commission on Governmental Operations, chairs of the Senate Appropriations Committee on

35 Agriculture, Natural, and Economic Resources, the chairs of the House of Representatives
36 Appropriations Committee on Agriculture and Natural and Economic Resources, the Joint
37 Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the
38 chairs of the Senate Appropriations Committee on Justice and Public Safety, the chairs of the
39 House of Representatives Appropriations Committee on Justice and Public Safety, and the Joint
40 Legislative Oversight Committee on Justice and Public Safety. The report shall include the

41 following information for the prior fiscal year:
42 ….
43 SECTION 10.1.(j) Section 13.7(b) of S.L. 2013-360 is codified as G.S. 106-590 and
44 reads as rewritten:
45 § 106-590. Annual report on funds allocated to the North Carolina Agricultural
46 Foundation, Inc.
47 North Carolina Agricultural Foundation – FFA Foundation (hereinafter FFA Foundation)

48 The North Carolina Agricultural Foundation, Inc., shall do the following if the Department of
49 Agriculture and Consumer Services allocates funds to the entity:it for programs of the North
50 Carolina Future Farmers of America Association:

Page 210 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (1) By September 1 of each year, and more frequently as requested, report to the
2 Joint Legislative Commission on Governmental Operations Joint Legislative
3 Oversight Committee on Agriculture and Natural and Economic Resources
4 and the Fiscal Research Division on prior State fiscal year program activities,
5 objectives, and accomplishments and prior State fiscal year itemized
6 expenditures and fund sources.
7 (2) Provide to the Fiscal Research Division a copy of the organization's annual

8 audited financial statement within 30 days of issuance of the statement.
9
10 TIMBER SALES/RETENTION AND USE OF PROCEEDS
11 SECTION 10.2.(a) G.S. 146-30(c) reads as rewritten:
12 (c) The amount or rate of such service charge shall be fixed by rules and regulations
13 adopted by the Governor and approved by the Council of State, but as to any particular sale,
14 lease, rental, or other disposition, it shall not exceed ten percent (10%) of the gross amount

15 received from such sale, lease, rental, or other disposition. Notwithstanding any other provision
16 of this Subchapter, the net proceeds derived from the sale of land or products of land owned by
17 or under the supervision and control of the Wildlife Resources Commission, or acquired or
18 purchased with funds of that Commission, shall be paid into the Wildlife Resources Fund.
19 Provided, however, the net proceeds derived from the sale of land or timber from land owned by
20 or under the supervision and control of the Department of Agriculture and Consumer Services

21 shall be deposited with the State Treasurer in a capital improvement account to the credit of the
22 Department of Agriculture and Consumer Services, to be used for such specific capital
23 improvement projects or other purposes as are provided by transfer of funds from those accounts
24 in the Capital Improvement Appropriations Act. Provided further, the net proceeds derived from
25 the sale of park land owned byor under the supervision and control of the Department of Natural
26 and Cultural Resources shall be deposited with the State Treasurer in a capital improvement
27 account to the credit of the Department of Administration to be used for the purpose of park land

28 acquisition as provided by transfer of funds from those accounts in the Capital Improvement
29 Appropriations Act. In the Capital Improvement Appropriations Act, line items for purchase of
30 park and agricultural lands will be established for use by the Departments of Administration and
31 Agriculture. The use of such funds for any specific capital improvement project or land
32 acquisition is subject to approval by the Director of the Budget. No other use may be made of
33 funds in these line items without approval by the General Assembly except for incidental
34 expenses related to the project or land acquisition. Additionally with the approval of the Director

35 of the Budget, either Department may request funds from the Contingency and Emergency Fund
36 when the necessity of prompt purchase of available land can be demonstrated and funds in the
37 capital improvement accounts are insufficient. Provided further, the net proceeds derived from
38 the sale of any portion of the land owned by the State in or around the Butner Reservation on or
39 after July 1, 1980, shall be deposited with the State Treasurer in a capital improvement account
40 to the credit of the Department of Health and Human Services to make capital improvements on

41 or to property owned by the State in the Butner Reservation subject to approval by the Office of
42 State Budget and Management, and may be used to build industrial access roads to industries
43 located or to be located on the Butner Reservation, to construct new city streets in the Butner
44 Reservation, extend water and sewer service on the Butner Reservation, repair storm drains on
45 the Butner Reservation, and for other capital uses on the Reservation as determined by the
46 Secretary. Provided further, notwithstanding anyother provision of this Subchapter, the proceeds
47 derived from the lease dispositions of land or facilities owned or under the supervision and

48 control of East Carolina University's Division of Health Sciences for the delivery of health care
49 services shall be deposited in clinical accounts at East Carolina University to be used to improve
50 access to patient care. Provided further, notwithstanding any other provision of this Subchapter,

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1 the net proceeds derived from the sale of land or facilities purchased with funds from the State
2 Highway Fund shall be deposited into the State Highway Fund.
3 SECTION 10.2.(b) G.S. 106-878(a) reads as rewritten:
4 (a) Application of Proceeds Generally. – Except Notwithstanding Article 7 of Chapter
5 146 of the General Statutes, and except as provided in this section, all money received from the
6 sale of wood, timber, minerals, or other products from the State forests shall be paid into theState
7 treasury and to the credit of the Department; and such money shall be expended in carrying out

8 the purposes of this Article and of forestry in general, under the direction of the Commissioner.
9
10 TOBACCO TRUST FUND ADMINISTRATIVE EXPENSES
11 SECTION 10.4. Notwithstanding G.S. 143-717(i), the Tobacco Trust Fund
12 Commission may use three hundred seventy-five thousand dollars ($375,000) for the 2019-2020
13 fiscal year for administrative and operating expenses of the Commission and its staff.
14

15 EASTERN NORTH CAROLINA FOOD COMMERCIALIZATION CENTERFUNDING
16 SECTION 10.6.(a) Funds appropriated by this act to the Department of Agriculture
17 and Consumer Services for local food processing initiatives shall be used to provide a directed
18 grant to the Eastern North Carolina Food Commercialization Center to provide matching funds
19 for a federal construction grant and to provide working capital and equipment for the Center.
20 SECTION 10.6.(b) The Center shall submit an annual report on the use of the funds

21 allocated bythis section to theJoint Legislative Oversight Committee on Agriculture and Natural
22 and Economic Resources and the Fiscal Research Division no later than April 1 of each year until
23 the funds are spent or have reverted.
24
25 SWINE BIOGAS
26 SECTION 10.9. Of the funds appropriated in this act to the Department of
27 Commerce for the Expanded Gas Products Service to Agriculture Fund (Budget Code

28 24609-2539), the sum of four hundred fifty thousand dollars ($450,000) is allocated for the
29 purpose of providing cost share assistance to swine farmers for the installation of anaerobic
30 digesters to be used for the production of biogas at an eligible farm.
31 The funds shall be administered through the Agriculture Cost Share Program for
32 Nonpoint Source Pollution Control established by Article 72 of Chapter 106 of the General
33 Statutes. Notwithstanding G.S. 106-850(b)(6), participants shall be eligible for cost share of no
34 more than seventy-five percent (75%) of that portion of the construction and equipment costs for

35 the project in excess of four hundred fortydollars ($440.00) per 1,000 pounds of steady state live
36 weight of swine located at the eligible farm. The annual limit specified in G.S. 106-850(b)(6)
37 shall not apply to funds allocated by this section, but total funding provided for any project shall
38 not exceed one hundred thousand dollars ($100,000) over the lifetime of the project. Any
39 allocated funds not awarded for the purposes specified in this section by June 30, 2020, shall
40 revert to the Expanded Gas Products Service to Agriculture Fund (Budget Code 24609-2539).

41 For purposes of this section, an eligible farm shall be a swine farm meeting the
42 following criteria:
43 (1) The swine farm has a design capacity of less than 1,000,000 pounds steady
44 state live weight.
45 (2) The swine farm has entered into a contract with a duration of 10 years or more
46 for the purchase of the biogas produced by the anaerobic digester.
47

48 INNOVATIVE LAGOON SLUDGE TREATMENT
49 SECTION 10.10. Of the funds appropriated in this act to the Department of
50 Commerce for the Expanded Gas Products Service to Agriculture Fund (Budget Code
51 24609-2539), the sum of four hundred fifty thousand dollars ($450,000) is allocated for the

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1 purpose of providing cost share assistance to swine farmers for the installation of innovative
2 swine anaerobic lagoon sludge management systems utilizing constructed wetlands as the
3 primary system component.
4 The funds shall be administered through the Agriculture Cost Share Program for
5 Nonpoint Source Pollution Control established by Article 72 of Chapter 106 of the General
6 Statutes. The annual limit specified in G.S. 106-850(b)(6) shall not apply to funds allocated by
7 this section, but total funding provided for any project shall not exceed one hundred fifty

8 thousand dollars ($150,000) over the lifetime of the project. Any allocated funds not awarded for
9 the purposes specified in this section byJune 30, 2020, shall revert to the Expanded Gas Products
10 Service to Agriculture Fund (Budget Code 24609-2539).
11
12 HEMLOCK RESTORATION REPORT
13 SECTION 10.12. The North Carolina Forest Service shall report on the hemlock
14 restoration initiatives funded by this act. The report shall include the following with respect to

15 each hemlock restoration initiative funded during the 2019-2021 biennium:
16 (1) Identification of goals and outcomes for the initiative.
17 (2) A description of the measures used or data collected to evaluate the efficiency
18 and effectiveness of the initiative in reaching its desired goals and outcomes.
19 (3) The performance of each initiative with respect to the identified goals and
20 outcomes.

21 The Forest Service shall provide its report on the prior fiscal year's funding to the
22 Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources and
23 the Fiscal Research Division no later than October 1 of each year in the 2019-2021 fiscal
24 biennium.
25
26 PRESCRIBED BURNING MATCHING GRANT PROGRAM
27 SECTION 10.13.(a) Funds appropriated to the North Carolina Forest Service of the

28 Department of Agriculture and Consumer Services for prescribed burning grants shall be used to
29 support prescribed burns on privately owned forestlands that will maximize the benefits set forth
30 in Article 80 of Chapter 106 of the General Statutes.
31 SECTION 10.13.(b) To be eligible for funding, prescribed burning projects must
32 meet all of the following criteria:
33 (1) The project must comply with the requirements of Article 80 of Chapter 106
34 of the General Statutes, as determined by the Forest Service.

35 (2) Funds provided bytheProgram must bematchedbyfundsfrom thelandowner
36 or other non-State sources. The required match shall be one non-State dollar
37 ($1.00)foreveryState dollarfor each acreof thefirst 99 acres for alandowner
38 forwhom prescribedburns are conductedin acalendar yearand twonon-State
39 dollars ($2.00) for every State dollar for all other acres owned by the
40 landowner for which aprescribed burnis conductedin thesame calendar year.

41 SECTION 10.13.(c) The Department of Agriculture and Consumer Services shall
42 report on its implementation of this section no later than October 1, 2020, to the Joint Legislative
43 Oversight Committee on Agriculture and Natural and Economic Resources and the Fiscal
44 Research Division.
45
46 FARMLAND PRESERVATION FUND CODES
47 SECTION 10.14. It is the intent of the General Assembly to consolidate all fund

48 balances related to the Agricultural Development and Farmland Preservation Trust Fund within
49 the Land Preservation and Trust Investment Fund (General Fund Code 63701-6208) for the
50 2020-2021 fiscal year and to (i) direct the Office of State Budget and Management to close the
51 Farmland Preservation Special Fund (General Fund Code 23700-2108) and (ii) redirect the

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1 current transfer from the Agriculture General Fund (Code 13700) from the Farmland
2 Preservation Special Fund to the Land Preservation and Trust Investment Fund.
3
4 STUDY CROP INSURANCE FOR SHELLFISH AQUACULTURE
5 SECTION 10.15. TheDepartment ofAgriculture andConsumerServices shall study
6 crop insurance and other loss risk mitigation and protection programs available to persons
7 engaging in shellfish aquaculture in North Carolina. The Department shall consult with the North

8 Carolina Shellfish Growers Association when conducting its study and shall include at least all
9 of the following in the study and report:
10 (1) An overview and assessment of currently available State or federal programs
11 (including programs offered in other states) and identification of gaps or
12 shortfalls in the coverage provided by those programs.
13 (2) The identification of options for insurance or other risk protection programs
14 subsidized or underwritten by the State, including an analysis of feasibility,

15 cost, and whether the option would provide sufficient spread of risk to be an
16 actuarially sound investment of public funds.
17 (3) If no program geographically limited to this State is actuarially sound, an
18 assessment of legal, practical, or political barriers to a federal or multistate
19 crop insurance or other risk mitigation program for shellfish aquaculture.
20 The Department and the Association shall submit the report, including

21 recommendations for required funding and any legislative changes needed, to the Joint
22 Legislative Oversight Committee on Agriculture and Natural and Economic Resources and the
23 Fiscal Research Division no later than April 1, 2020.
24
25 PART XI. COMMERCE
26
27 COMMERCE REPORT CHANGE

28 SECTION 11.1. G.S. 143B-434.01(b) reads as rewritten:
29 (b) Plan. – The Secretary shall review and update the existing Plan on or before April 1
30 of each year. The Plan shall cover a period of four years and each annual update shall extend the
31 time frame by one year so that a four-year plan is always in effect. The Secretary shall provide
32 copies of the Plan and each annual update to the Governor and the Joint Legislative Commission
33 on Governmental Operations. Governor, the chairs of the Senate Appropriations Committee on
34 Agriculture, Natural, and Economic Resources, the chairs of the House of Representatives

35 Appropriations Committee on Agriculture and Natural and Economic Resources, and the Joint
36 Legislative Economic Development and Global Engagement Oversight Committee. The Plan
37 shall encompass all of the components set out in this section.
38
39 COMMUNITY DEVELOPMENT BLOCK GRANTS
40 SECTION 11.2.(a) Of the funds appropriated in this act for federal block grant

41 funds, the following allocations are made for the fiscal years ending June 30, 2020, and June 30,
42 2021, according to the following schedule:
43
44 COMMUNITY DEVELOPMENT BLOCK GRANT
45
46 01. State Administration $1,610,278
47

48 02. Neighborhood Revitalization 10,000,000
49
50 03. Economic Development 11,000,000
51

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1 04. Infrastructure 25,719,918
2
3 TOTAL COMMUNITY DEVELOPMENT
4 BLOCK GRANT – 2020 Program Year $48,330,196
5 2021 Program Year $48,330,196
6
7 SECTION 11.2.(b) If federal funds are reduced below the amounts specified in this

8 section aftertheeffective dateofthis act, theneveryprogram in eachofthesefederal block grants
9 shall be reduced by the same percentage as the reduction in federal funds.
10 SECTION 11.2.(c) Any block grant funds appropriated by the Congress of the
11 United States in addition to the funds specified in this section shall be expended as follows: each
12 program category under the Community Development Block Grant shall be increased by the
13 same percentage as the increase in federal funds.
14 SECTION 11.2.(d) The Department of Commerce shall consult with the Joint

15 Legislative Commission on Governmental Operations prior to reallocating Community
16 Development Block Grant Funds. Notwithstanding the provisions of this subsection, whenever
17 the Director of the Budget finds either of the following conditions exist:
18 (1) If a reallocation is required because of an emergency that poses an imminent
19 threat to public health or public safety, then the Director of the Budget may
20 authorize the reallocation without consulting the Commission. The

21 Department of Commerce shall report to the Commission on the reallocation
22 no later than 30 days after it was authorized and shall identify in the report the
23 emergency, the type of action taken, and how it was related to the emergency.
24 (2) If the State will lose federal block grant funds or receive less federal block
25 grant funds in the next fiscal year unless a reallocation is made, then the
26 Department of Commerce shall provide a written report to the Commission
27 on the proposed reallocation and shall identify the reason that failure to take

28 action will result in the loss of federal funds. If the Commission does not hear
29 the issue within 30 days of receipt of the report, the Department may take the
30 action without consulting the Commission.
31 SECTION 11.2.(e) By September 1, 2019, and September 1, 2020, the Department
32 of Commerce shall report to the chairs of the House of Representatives Appropriations
33 Committee on Agriculture and Natural and Economic Resources; the chairs of the Senate
34 Appropriations Committee on Agriculture, Natural, and Economic Resources; the Joint

35 Legislative Economic Development and Global Engagement Oversight Committee; and the
36 Fiscal Research Division on the use of Community Development Block Grant Funds
37 appropriated in the prior fiscal year. The report shall include the following:
38 (1) A discussion of each of the categories of funding and how the categories were
39 selected, including information on how a determination was made that there
40 was a statewide need in each of the categories.

41 (2) Information on the number of applications that were received in each category
42 and the total dollar amount requested in each category.
43 (3) A list of grantees, including the grantee's name, county, categoryunder which
44 the grant was funded, the amount awarded, and a narrative description of the
45 project.
46 SECTION 11.2.(f) For purposes of this section, eligible activities under the category
47 of infrastructure in subsection (a) of this section shall be defined as provided in the HUD State

48 Administered Community Development Block Grant definition of the term infrastructure.
49 Notwithstanding the provisions of subsection (d) of this section, funds allocated to the
50 infrastructure category in subsection (a) of this section shall not be reallocated to any other
51 category.

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1 SECTION 11.2.(g) Throughout each year, deobligated funds arise in the various
2 funding categories and program years of the Community Development Block Grant (CDBG)
3 program as a result of (i) projects coming in under budget, (ii) projects being cancelled, or (iii)
4 projects being required to repay funds. Surplus federal administrative funds in the CDBG
5 program mayvaryfrom yearto yearbaseduponthe amount ofState-appropriated fundsallocated
6 and the amount of eligible in-kind funds identified.
7 SECTION 11.2.(h) To allow the Department of Commerce and the Department of

8 Environmental Qualityto quicklydeploydeobligated and surplus federal administrative funds as
9 they are identified throughout the program year, the following shall apply to the use of
10 deobligated CDBG funds and surplus federal administrative funds:
11 (1) All surplus federal administrative funds shall be divided equally between the
12 Departments of Commerce and Environmental Quality and shall be used as
13 provided in subdivisions (2) and (3) of this subsection.
14 (2) All deobligated funds allocated to the Department of Commerce and any

15 surplus federal administrative funds, as provided for in subdivision (1) of this
16 subsection, may be used by the Department for all of the following:
17 a. To issue grants in the CDBG economic development or neighborhood
18 revitalization program category.
19 b. For providing training and guidance to local governments relative to
20 theCDBGprogram,itsmanagement,andadministrativerequirements.

21 c. For anyother purpose consistent with the Department's administration
22 of the CDBG program if an equal amount of State matching funds is
23 available.
24 (3) All deobligated funds allocated to the Department of Environmental Quality
25 and any surplus federal administrative funds, as provided for in subdivision
26 (1) of this subsection, may be used by the Department for all of the following:
27 a. To issue grants in the CDBG infrastructure program category.

28 b. For anyother purpose consistent with the Department's administration
29 of the CDBG program if an equal amount of State matching funds is
30 available.
31
32 GOLDEN LEAF FOUNDATION CODIFICATION AND REPORT CHANGES
33 SECTION 11.3.(a) Chapter 143 of the General Statutes is amended by adding a new
34 Article 74A, to be entitled Golden LEAF Foundation. Section 1 of S.L. 1999-2 is codified as

35 G.S. 143-710, to be entitled Golden LEAF Foundation. Section 2(c) of S.L. 1999-2, as
36 amended by Section 15.10A(a) of S.L. 2013-360, is codified as G.S. 143-711, to be entitled
37 Board ofdirectors.Section 3 ofS.L.1999-2 is codified as G.S. 143-712, to beentitled Articles
38 of incorporation; reporting. Section 4 of S.L. 1999-2 is repealed. Section 5 of S.L. 1999-2 is
39 codified as G.S. 143-711(b). Section 6 of S.L. 1999-2, as amended by Section 6.11(d) of S.L.
40 2011-145, Section 7(b) of S.L. 2011-391, and Section 6.4(b) of S.L. 2013-360, is codified as

41 G.S. 143-713, to be entitled Use of funds.
42 SECTION 11.3.(b) Article 74A of Chapter 143 of the General Statutes, as enacted
43 by subsection (a) of this section, reads as rewritten:
44 Article 74A.
45 Golden LEAF Foundation.
46 § 143-710. Golden LEAF Foundation.
47 The creation of the nonprofit corporation Golden L.E.A.F. (Long-term Economic

48 Advancement Foundation), Inc., (Golden LEAF Foundation) pursuant to subparagraph VI.A.1
49 of the Consent Decree and Final Judgment entered in that action of 98 CVS 14377 on December
50 21, 1998, is hereby approved for the purposes and on the terms and conditions set forth in
51 subparagraph VI.A.1 of the Consent Decree and Final Judgment.

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1 § 143-711. Board of directors.
2 (a) The General Assembly also approves the provisions in the Consent Decree
3 concerning the governance of the nonprofit corporation Golden LEAF Foundation by 15
4 directors holding staggered, four-year terms, five directors to be appointed by the Governor of
5 the State of North Carolina, one of whom shall be the chair Chair of the Rural Infrastructure
6 Authoritycreated in G.S. 143B-472.128, or the chair's Chair's designee, five bythe President Pro
7 Tempore of the North Carolina Senate, and five by the Speaker of the North Carolina House of

8 Representatives; and that the Governor shall appoint the first Chair among his the Governor's
9 appointees, and the directors shall elect their own Chair from among their number for subsequent
10 terms. Members of the General Assembly may shall not be appointed to serve on the board of
11 directors while serving in the General Assembly.
12 (b) It is the intent of the General Assembly that the Governor, Speaker of the House of
13 Representatives, and President Pro Tempore of the Senate, in appointing directors to the
14 nonprofit corporation, Golden LEAF Foundation, shall, in their sole discretion, include among

15 their appointments representatives of tobacco production, tobacco manufacturing,
16 tobacco-related employment, health, and economic development interests, with each appointing
17 authority selecting at least two directors from these interests. It is also the intent of the General
18 Assembly that the appointing authorities, in appointing directors, shall appoint members that
19 represent the geographic, gender, and racial diversity of the State.
20 § 143-712. Articles of incorporation; reporting.

21 The Attorney General shall draft articles of incorporation for the nonprofit corporation
22 Golden LEAF Foundation to enable the nonprofit corporation Golden LEAF Foundation to carry
23 out its mission as set out in the Consent Decree. The articles of incorporation shall provide for
24 the following:
25 (1) Consultation; reporting. – The nonprofit corporation Golden LEAF
26 Foundation shall consult with the Joint Legislative Commission on
27 Governmental Operations (Commission) prior to the corporation's board of

28 directors (i) adopting bylaws and (ii) adopting the annual operating budget.
29 The nonprofit corporation Golden LEAF Foundation shall also report on its
30 programs and activities to the Commission Joint Legislative Commission on
31 Governmental Operations, the Joint Legislative Oversight Committee on
32 Agriculture and Natural and Economic Resources, and the Joint Legislative
33 Economic Development and Global Engagement Oversight Committee on or
34 before March 1 September 15 of each fiscal year and more frequently as

35 requested by the Commission. any of these entities. The report shall include
36 information on the activities and accomplishments during the fiscal year,
37 itemized expenditures during the fiscal year, planned activities and goals for
38 at least the next 12 months, and itemized anticipated expenditures for the next
39 fiscal year.all of the following information:
40 a. Grants made in the prior fiscal year, including the amount, term, and

41 purpose of the grant.
42 b. Outcome data collected by the Golden LEAF Foundation, including
43 the number of jobs created.
44 c. Cumulative grant data by program and by county.
45 d. Unaudited actual administrative expenses and grants made in the prior
46 fiscal year.
47 e. Current fiscal year budget, planned activities, and goals for the current

48 fiscal year.
49 The nonprofit corporation Golden LEAF Foundation shall also annually
50 provide to the Commission Joint Legislative Oversight Committee on
51 Agriculture and Natural and Economic Resources and the Joint Legislative

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1 Economic Development and Global Engagement Oversight Committee an
2 itemized report of its administrative expenses and copies of its annual report
3 and tax return information.for the previous fiscal year by September 15 of
4 each year, a copy of its annual audited financial statement for the previous
5 fiscal year within 30 days of having received an audit report from an
6 independent auditor, and a copy of its annual federal income tax return for the
7 previous fiscal year within 30 days of filing.

8 (2) Public records; open meetings. – The nonprofit corporation Golden LEAF
9 Foundation is subject to the Open Meetings Law as provided in Article 33C
10 of Chapter 143 of the General Statutes and the Public Records Act as provided
11 in Chapter 132 of the General Statutes. The nonprofit corporation Golden
12 LEAF Foundation shall publish at least annually a report, available to the
13 public and filed with the Joint Legislative Commission on Governmental
14 Operations, Joint Legislative Oversight Committee on Agriculture and

15 Natural and Economic Resources and the Joint Legislative Economic
16 Development and Global Engagement Oversight Committee, of every
17 expenditure or distribution in furtherance of the public charitable purposes of
18 the nonprofit corporation.Golden LEAF Foundation.
19 (3) Transferofassets. –The nonprofit corporationmayGolden LEAF Foundation
20 shall not dispose of assets pursuant to G.S. 55A-12-02 without the approval

21 of the General Assembly.
22 (4) Charter repeal. – The charter of the nonprofit corporation Golden LEAF
23 Foundation may be repealed at any time by the legislature General Assembly
24 pursuant to Article VIII, Section 1 of the North Carolina Constitution. The
25 nonprofit corporation may Golden LEAF Foundation shall not amend its
26 articles of incorporation without the approval of the General Assembly.
27 (5) Dissolution. – The nonprofit corporation Golden LEAF Foundation may be

28 dissolved pursuant to Chapter 55A of the General Statutes, by the General
29 Assembly, or by the Court pursuant to the Consent Decree. Upon dissolution,
30 allunencumberedassets andfundsofthe nonprofitcorporation,Golden LEAF
31 Foundation, including the right to receive future funds pursuant to Section 2
32 of this act, funds, are transferred to the Settlement Reserve Fund established
33 pursuant to G.S. 143-16.4.
34 § 143-713. Use of funds.

35 (a) The funds under the Master Settlement Agreement, which is incorporated into the
36 Consent Decree, shall be credited to the Settlement Reserve Fund.
37 (b) Any monies paid into the North Carolina State Specific Account from the Disputed
38 Payments Account on account of the Non-Participating Manufacturers that would have been
39 transferred to The Golden L.E.A.F. (Long-Term Economic Advancement Foundation), Inc., the
40 Golden LEAF Foundation shall be deposited in the Settlement Reserve Fund.

41 SECTION 11.3.(c) G.S. 105-113.4C reads as rewritten:
42 § 105-113.4C. Enforcement of Master Settlement Agreement Provisions.
43 The Master Settlement Agreement between the states and the tobacco product manufacturers,
44 incorporated by reference into the consent decree referred to in S.L. 1999-2, G.S. 143-710,
45 requires each state to diligently enforce Article 37 of Chapter 66 of the General Statutes. The
46 Office of the Attorney General and the Secretary of Revenue shall perform the following
47 responsibilities in enforcing Article 37:

48 ….
49
50 COMMERCE NONPROFITS/REPORTING REQUIREMENTS

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1 SECTION 11.4.(a) The entities listed in subsection (b) of this section shall do the
2 following for each year that State funds are expended:
3 (1) By September 1 of each year, and more frequently as requested, report to the
4 Joint Legislative Oversight Committee on Agriculture and Natural and
5 Economic Resources; the chairs of the House of Representatives
6 Appropriations Committee on Agriculture and Natural and Economic
7 Resources; the chairs oftheSenate Appropriations CommitteeonAgriculture,

8 Natural, and Economic Resources; and the Fiscal Research Division on prior
9 Statefiscal yearprogramactivities,objectives,andaccomplishmentsandprior
10 State fiscal year itemized expenditures and fund sources.
11 (2) Provide to the Joint Legislative Oversight Committee on Agriculture and
12 Natural and Economic Resources; the chairs of the House of Representatives
13 Appropriations Committee on Agriculture and Natural and Economic
14 Resources; the chairs oftheSenate Appropriations CommitteeonAgriculture,

15 Natural, and Economic Resources; and the Fiscal Research Division a copy of
16 the entity's annual audited financial statement within 30 days of issuance of
17 the statement.
18 SECTION 11.4.(b) The following entities shall comply with the requirements of
19 subsection (a) of this section:
20 (1) North Carolina Biotechnology Center.

21 (2) High Point Market Authority.
22 (3) RTI International.
23 (4) Carolina Small Business Development Fund.
24
25 NC BIOTECHNOLOGY CENTER
26 SECTION 11.5.(a) Of the funds appropriated in this act to the Department of
27 Commerce for the North Carolina Biotechnology Center (hereinafter Center) for each fiscal

28 year in the 2019-2021 biennium shall be allocated for the following purposes in the following
29 proportions:
30 (1) Job creation: AgBiotech Initiative, economic and industrial development, and
31 related activities–twenty-one percent (21%) of the funding.
32 (2) Scienceand commercialization:scienceandtechnologydevelopment,Centers
33 of Innovation, business and technology development, education and training,
34 and related activities–sixty-five percent (65%) of the funding.

35 (3) Center operations: administration, professional and technical assistance and
36 oversight, corporate communications, human resource management, financial
37 and grant administration, legal, and accounting–fourteen percent (14%) of the
38 funding.
39 SECTION 11.5.(b) The Center shall prioritize fundingand distribution of loans over
40 existing funding and distribution of grants.

41 SECTION 11.5.(c) Up to ten percent (10%) of the sum of each of the allocations in
42 subsection (a) of this section maybe reallocated to subdivision (a)(1) or subdivision (a)(2) of this
43 section if, in the judgment of Center management, the reallocation will advance the mission of
44 the Center.
45
46 FOOD PROCESSING ADVERTISING REPORT
47 SECTION 11.5A. The nonprofit corporation with which the Department of

48 Commerce contracts pursuant to G.S. 143B-431.01 shall submit a supplementary report along
49 with the annual report required pursuant to G.S. 143B-431.01(c)(2). The supplementary report
50 shall detail the uses of funds provided for food processing marketing and advertising during the
51 most recent fiscal year and the planned expenditures for the current fiscal year. The

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1 supplementary report shall be required for so long as the nonprofit corporation receives State
2 funds for this purpose.
3
4 MODIFY FILM GRANT
5 SECTION 11.6.(a) G.S. 143B-437.02A reads as rewritten:
6 § 143B-437.02A. The Film and Entertainment Grant Fund.
7 (a) Creation and Purpose of Fund. – There is created in the Department of Commerce a

8 special, nonreverting account to be known as the Film and Entertainment Grant Fund to provide
9 funds to encourage the production of motion pictures, television shows, movies for television,
10 productions intended for on-line distribution, and commercials and to develop the filmmaking
11 industry within the State. The Department of Commerce shall adopt guidelines providing for the
12 administration of the program. Those guidelines mayprovide for the Secretaryto award the grant
13 proceeds over a period of time, not to exceed three years. Those guidelines shall include the
14 following provisions, which shall apply to each grant from the account:

15 (1) The funds are reserved for a production on which the production companyhas
16 qualifying expenses of at least the following:
17 a. For a feature-length film:
18 1. Three million dollars ($3,000,000), One million five hundred
19 thousand dollars ($1,500,000), if for theatrical viewing.
20 2. One million dollars ($1,000,000), Five hundred thousand

21 dollars ($500,000), if a movie for television.
22 b. For a television series, one million dollars ($1,000,000) five hundred
23 thousand dollars ($500,000) per episode.
24 c. For a commercial for theatrical or television viewing or on-line
25 distribution, two hundred fifty thousand dollars ($250,000).
26 (2) The funds are not used to provide a grant in excess of any of the following:
27 …

28 b. An amount more than seven million dollars ($7,000,000) for a
29 feature-length film, more than twelve fifteen million dollars
30 ($12,000,000) ($15,000,000) for a single season of a television series,
31 or two hundred fifty thousand dollars ($250,000) for a commercial for
32 theatrical or television viewing or on-line distribution.
33 …
34 (d1) Agreement Binding. – An agreement awarding a grant pursuant to this section for

35 which the production company is entitled to payment for performance under the agreement is a
36 bindingobligation of the State and is not subject to State funds being appropriated bythe General
37 Assembly.
38 ….
39 SECTION 11.6.(b) This section becomes effective July 1, 2019, and applies to
40 grants made on or after that date.

41
42 FILM SCHOOL ALLOCATION OF FILM GRANT PROGRAM
43 SECTION 11.7. Of the funds appropriated in this act to the Department of
44 Commerce for the Film and Entertainment Grant Fund, the Department may award up to one
45 million dollars ($1,000,000) in each fiscal year of the 2019-2021 fiscal biennium for grants for
46 productions that are a project of one or more students of a film program of an accredited
47 university in or an accredited college in this State. The provisions of G.S. 143B-437.02A, other

48 than the provisions of subsections (d) and (f) of that section, apply to grants made pursuant to
49 this section. The Department shall submit to the Joint Economic Development and Global
50 Engagement Oversight Committee and to the Fiscal Research Division an initial report on grants

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1 made pursuant to this section no later April 1, 2020, and a final report no later than October 1,
2 2021.
3
4 ROWLAND FUNDING CLARIFICATION
5 SECTION 11.8. Funds appropriated to the Rural Economic Development Fund by
6 S.L. 2018-5 and allocated to the Town of Rowland for road signage improvements shall instead
7 be used for renovation, restoration, and preservation work on the Rowland train depot.

8
9 MOVE BOXING COMMISSION AND GIVE IT RULE-MAKING AUTHORITY
10 SECTION 11.10.(a) The Boxing Advisory Commission created under
11 G.S. 143-652.2 is transferred to the Department of Commerce and is renamed the Boxing
12 Commission. This transfer shall have all of the elements of a Type II transfer, as described in
13 G.S. 143A-6, except that the management functions of the Commission shall not be performed
14 under the direction and supervision of the Secretary of the Department of Commerce.

15 SECTION 11.10.(b) Article 68 of Chapter 143 of the General Statutes reads as
16 rewritten:
17 Article 68.
18 Regulation of Boxing.
19 …
20 § 143-651. Definitions.

21 The following definitions apply in this Article:
22 …
23 (4b) Commission. – The Boxing Commission.
24 …
25 (23b) Sanctioned amateur match. – Any match regulated by an amateur sports
26 organization that has been recognized and approved by the
27 Branch.Commission.

28 …
29 § 143-652.1. Regulation of boxing, kickboxing, mixed martial arts, and toughman events.
30 (a) Regulation. – The Alcohol Law Enforcement Branch of the Department of Public
31 Safety Commission shall regulate live boxing, kickboxing, and mixed martial arts matches,
32 whether professional, amateur, or sanctioned amateur, or toughman events, in which admission
33 is charged for viewing, or the contestants compete for a purse or prize of value greater than
34 twenty-five dollars ($25.00). The Branch Commission shall have the exclusive authority to

35 approve and issue rules for the regulation of the conduct, promotion, and performances of live
36 boxing, kickboxing, and mixed martial arts matches and exhibitions, whether professional,
37 amateur, or sanctioned amateur, and toughman events in this State. The rules shall be issued
38 pursuant to the provisions of Chapter 150B of the General Statutes and may include, without
39 limitation, the following subjects:
40 …

41 (b) Enforcement. – Except as otherwise authorized under G.S. 143-652.2(f), the
42 Executive Director of the Commission shall enforce this Article through the Branch. The Branch
43 shall assist the Executive Director in enforcing this Article.
44 § 143-652.2. Boxing Advisory Commission.
45 (a) Creation. – The Boxing Advisory Commission is created within the Department of
46 Public Safetyto advise the Alcohol Law Enforcement Branch of the Department of Public Safety
47 concerning matters regulated by this Article. for the purposes set forth in G.S. 143-652.1. The

48 Commission shall be administratively located within the Department of Commerce, but shall
49 exercise its powers independently of the Secretary of Commerce. The Commission shall consist
50 of six voting members and two nonvoting advisory members. All the members shall be residents
51 of North Carolina. The members shall be appointed as follows:

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1 (1) One Two voting member members shall be appointed by the Governor for an
2 initial term of two years.
3 (2) One voting member shall be appointed by the General Assembly upon the
4 recommendationofthe President ProTemporeoftheSenateforaninitial term
5 of three years.
6 (3) One voting member shall be appointed by the General Assembly upon the
7 recommendation of the Speaker of the House of Representatives for an initial

8 term of three years.
9 (4) One voting member shall be appointed by the Secretary of Public Safety
10 Commerce for an initial term of three years.
11 (5) One voting member shall be appointed by the Lieutenant Governor for an
12 initial term of two years.
13 (6) One voting member shall be appointed by the Tribal Council of the Eastern
14 Band of the Cherokee Governor for an initial term of three years.years, from

15 nominations made bythe Tribal Council of the Eastern Band of the Cherokee,
16 which shall nominate three individuals for the position.
17 (7) One nonvoting advisory member shall be appointed by the Speaker of the
18 House of Representatives for an initial term of one year, from nominations
19 made by the North Carolina Medical Society, which shall nominate two
20 licensed physicians for the position.

21 (8) One nonvoting advisory member shall be appointed by the President Pro
22 Tempore of the Senate for an initial term of one year, from nominations made
23 by the North Carolina Medical Society, which shall nominate two licensed
24 physicians for the position.
25 Notwithstanding the schedule above in subdivisions (1), (5), (7), and (8) of this subsection,
26 if any former member of the North Carolina Boxing Commission is appointed to the initial
27 membership, that person shall serve an initial term of three years. Appointments by the General

28 Assembly pursuant to subdivisions (2) and (3) of this subsection shall be made in accordance
29 with G.S. 120-121. The member appointed pursuant to subdivision (6) of this subsection may
30 serve on the Commission only if an agreement exists and remains in effect between the Tribal
31 Council of the Eastern Band of the Cherokee and the Commission authorizing the Commission
32 to regulate professional boxing matches within the Cherokee Indian Reservation as provided by
33 the Professional Boxing Safety Act of 1996.
34 The two nonvoting advisory members appointed pursuant to subdivisions (7) and (8) of this

35 subsection shall advise the Commission and the Branch on matters concerning the health and
36 physical condition of boxers and health issues relating to the conduct of exhibitions and boxing
37 matches. Theymayprepareand submit to theCommission forits considerationandto the Branch
38 for its approval any rules that in their judgment will safeguard the physical welfare of all
39 participants engaged in boxing.
40 Terms for all members of the Commission except for the initial appointments shall be for

41 three years.
42 The Secretary of Public Safety Governor shall designate which member of the Commission
43 is to serve as chair. A member of A member appointed pursuant to subdivision (1) or (6) of this
44 subsection shall serve at the Governor's pleasure. The other members of the Commission may be
45 removed from office by the Secretary of Public Safety member's appointing authority for cause.
46 Members of the Commission are subject to the conflicts of interest requirements of 15 U.S.C. §
47 6308 (contained in the Professional Boxing Safety Act of 1996, as amended). Each member,

48 before entering upon the duties of a member, shall take and subscribe an oath to perform the
49 duties of the office faithfully, impartially, and justly to the best of the member's ability. A record
50 of these oaths shall be filed in the Department of Public Safety.Commerce.

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1 (b) Vacancies. – Members shall serve until their successors are appointed and have been
2 qualified. Any Vacancies for members appointed by the General Assembly shall be filled in
3 accordance with G.S. 120-122. Except as otherwise provided in this subsection, any vacancy in
4 the membership of the Commission shall be filled in the same manner as the original
5 appointment. A vacancy in the membership of the Commission other than by expiration of term
6 shall be filled for the unexpired term only.
7 (c) Meetings. – Meetings of the Commission shall be called by the chair or by any two

8 members of the Commission, and meetings shall be held at least quarterly. Any three voting
9 members of the Commission shall constitute a quorum at any meeting. Action may be taken and
10 motions and resolutions adopted by the Commission at any meeting by the affirmative vote of a
11 majority of the members of the Commission present at a meeting at which a quorum exists.
12 (d) Review Authority of the Commission. – The Commission shall review existing rules
13 adopted under this Article and shall from time to time make recommendations to the Branch for
14 changes or addition to such rules. Anyproposals for change, amendment, addition, or deletion to

15 those rules shall be submitted by the Branch to the Commission for its comments prior to
16 approval.
17 (e) Compensation. – None of the members of the Commission shall receive
18 compensation for serving on the Commission. However, members of the Commission may be
19 reimbursed for their expenses in accordance with the provisions of Chapter 138 of the General
20 Statutes.

21 (f) Staff Assistance. – The Secretary of Public Safety shall provide staff assistance to the
22 Commission.The Commission shall hire a person to serve as Executive Director of the
23 Commission. If necessary, the Executive Director may train and contract with independent
24 contractors for the purpose of regulating and monitoring events, issuing licenses, collecting fees,
25 and enforcing rules of the Commission. The Executive Director may initiate and review criminal
26 backgroundchecks onpersonsrequestingtoworkasindependent contractorsfortheCommission
27 or persons applying to be licensed bythe Commission. The Commission may also hire additional

28 staff.
29 (g) Initial appointments to the Commission under this section shall be for terms
30 commencing July 1, 2007.
31 …
32 § 143-654. Licensing and permitting.
33 (a) License and Permit Required. – Except for sanctioned amateur matches, it is unlawful
34 for any person to act in this State as an announcer, contestant, judge, manager, matchmaker,

35 promoter, referee, timekeeper, or second unless the person is licensed to do so under this Article.
36 It is unlawful for a promoter to present a match in this State, other than a sanctioned amateur
37 match, unless the promoter has a permit issued under this Article to do so. The Branch
38 Commission has the exclusive authority to issue, deny, suspend, or revoke any license or permit
39 provided for in this Article.
40 (b) License. –All licenses issuedunderthis Articleshall bevalidonlyduringthe calendar

41 year in which they are issued, except contestant licenses shall be valid for one year from the date
42 of issuance. A license for an announcer, contestant, judge, matchmaker, referee, timekeeper, or
43 second shall be issued only to a natural person. A natural person shall not transfer or assign a
44 license or change it into another name. A license for a manager or promoter may be issued to a
45 corporation or partnership; provided, however, that all officers or partners shall submit an
46 application for individual licensure, and only those officers or partners who are licensed shall be
47 entitled to negotiate or sign contracts. The addition of a new officer or partner during the license

48 period shall necessitate the filing of an application for individual licensure by the new officer or
49 partner.
50 An applicant for a license shall file with the Branch Commission the appropriate
51 nonrefundable fee and any forms, documents, medical examinations, or exhibits the Branch

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1 Commission may require in order to properly administer this Article. The information requested
2 shall include the date of birth and social security number of each applicant as well as any other
3 personal data necessary to positively identify the applicant and may include the requirement of
4 verification of any documents the Branch Commission deems appropriate. A person may not
5 participate under a fictitious or assumed name in any match unless the person has first registered
6 the name with the Branch.Commission.
7 (c) Surety Bond. – An applicant for a promoter's license must submit, in addition to any

8 other forms, documents, or exhibits requested bythe Branch, Commission, a suretybond payable
9 to the Branch Commission for the benefit of any person injured or damaged by (i) the promoter's
10 failure to comply with any provision of this Article or any rules adopted by the Branch
11 Commission or (ii) the promoter's failure to fulfill the obligations of any contract related to the
12 holding of a match. The surety bond shall be issued in an amount to be no less than ten thousand
13 dollars ($10,000). The amount of the surety bond shall be negotiable upon the sole discretion of
14 the Branch. Commission. All surety bonds shall be upon forms approved and supplied by the

15 Secretary of Public Safety and supplied by the Branch.Commission.
16 (d) Permit. – A permit issued to a promoter under this Article is valid for a single match.
17 An applicant for a permit shall file with the Branch Commission the appropriate nonrefundable
18 fee and any forms or documents the Branch Commission may require.
19 § 143-655. Fees; State Boxing Revenue Account.
20 (a) License Fees. – The Branch Commission shall collect the following license fees:

21 Announcer $75.00
22 Contestant $50.00
23 Judge $75.00
24 Manager $150.00
25 Matchmaker $300.00
26 Promoter $450.00
27 Referee $75.00

28 Timekeeper $75.00
29 Second $50.00.
30 The annual license renewal fees shall not exceed the initial license fees.
31 (b) Permit Fees. – The Branch Commission may establish a fee schedule for permits
32 issued under this Article. The fees may vary depending on the seating capacity of the facility to
33 be used to present a match. The fee may not exceed the following amounts:
34 Seating Capacity Fee Amount

35 Less than 2,000 $150.00
36 2,000 – 5,000 $300.00
37 Over 5,000 $450.00.
38 (b1) Admission Fees. – The Branch Commission shall collect a fee in the amount of two
39 dollars ($2.00) per spectator to attend events regulated in this Article.
40 (c) StateBoxingRevenueAccount. – Thereis createdtheStateBoxingRevenue Account

41 within the Department of Public Safety. Commerce. Monies collected pursuant to the provisions
42 of this Article shall be credited to the Account and applied to the administration of the Article.
43 § 143-656. Contracts and financial arrangements.
44 Any contract between licensees and related to a match or exhibition held or to be held in this
45 State must meet the requirements of administrative rules as set forth bythe Branch. Commission.
46 Any contract which does not satisfy the requirements of the administrative rules shall be void
47 and unenforceable. All contracts shall be in writing.

48 …
49 § 143-658. Violations.
50 (a) Civil Penalties. – The Secretary of Public Safety Commission may issue an order
51 against a licensee or other person who willfully violates any provision of this Article, imposing

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1 a civil penaltyof up to five thousand dollars ($5,000) for a single violation or of up to twenty-five
2 thousand dollars ($25,000) for multiple violations in a single proceeding or a series of related
3 proceedings. No order under this subsection may be entered without giving the licensee or other
4 person 15 days' prior notice and an opportunity for a contested case hearing conducted pursuant
5 to Article 3 of Chapter 150B of the General Statutes.
6 The clear proceeds of civil penalties imposed pursuant to this subsection shall be remitted to
7 the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.

8 (b) Criminal Penalties. – A willful violation of any provision of this Article shall
9 constitute a Class 2 misdemeanor. The Secretary of Public Safety Commission may refer any
10 available evidence concerning violations of this Article to the proper district attorney, who may,
11 with or without such a reference, institute the appropriate criminal proceedings.
12 (c) Injunction. – Whenever it appears to the Secretary of Public Safety Commission that
13 a person has engaged or is about to engage in an act or practice constituting a violation of any
14 provision of this Article or any rule or order hereunder, issued pursuant to this Article, the

15 Secretary of Public Safety Commission may bring an action in any court of competent
16 jurisdiction to enjoin those acts or practices and to enforce compliance with this Article or any
17 rule or order issued pursuant to this Article.
18 ….
19 SECTION 11.10.(c) Initial appointments to the Boxing Commission under
20 G.S. 143-652.2, as amended by subsection (b) of this section, shall be for terms commencing

21 July 1, 2019. The terms of the members serving on the Boxing Advisory Commission as of June
22 30, 2019, expire on the effective date of this section.
23 SECTION 11.10.(d) The following position within the Alcohol Law Enforcement
24 Branch of the Department of Public Safety is transferred to the Boxing Commission:
25 Administrative Specialist II (Position 60084319).
26 SECTION11.10.(e) TheBoxingAuthoritySectionoftheAlcohol LawEnforcement
27 Branch of the Department of Public Safety, referenced in Chapter 10 of Title 14B of the North

28 Carolina Administrative Code, is abolished.
29 SECTION 11.10.(f) Funds in the State Boxing Revenue Account within the
30 Department of Public Safety as of the effective date of this section shall be transferred into the
31 State Boxing Revenue Account within the Department of Commerce. Once these funds have
32 been transferred, theStateBoxingRevenueAccount withintheDepartment ofPublicSafetyshall
33 be closed.
34 SECTION 11.10.(g) Rules adopted by the Alcohol Law Enforcement Branch of the

35 Department of Public Safety under G.S. 143-652.1 shall remain in effect until amended or
36 repealed in accordance with G.S. 143-652.1, as amended by subsection (b) of this section.
37 Policies, procedures, and guidance shall remain in effect until similarly amended or repealed.
38 SECTION 11.10.(h) The implementation of this section shall not affect any
39 investigation pursuant to Article 68 of Chapter 143 of the General Statutes ongoing as of the
40 effective date of this section. Any hearing or proceeding pursuant to Article 68 of Chapter 143

41 oftheGeneralStatutesongoingas oftheeffectivedateofthissectionshallcontinue.Prosecutions
42 for offenses or violations committed prior to the effective date of this section are not abated or
43 affected bythis section, and the statutes that would be applicable but for this section shall remain
44 applicable to those prosecutions.
45 SECTION 11.10.(i) If House Bill 99, 2019 Regular Session, or a substantially
46 similar bill of the 2019 Regular Session that renames the Alcohol Law Enforcement Branch as
47 the Alcohol Law Enforcement Division becomes law, the Revisor of Statutes shall replace

48 Branch with ALE Division wherever it appears in G.S. 143-652.1, as amended by this
49 section, and G.S. 143-655, as amended by this section.

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1 SECTION 11.10.(j) This section becomes effective July 1, 2019, and applies to (i)
2 applications for a license or permit submitted on or after that date, (ii) contracts entered into on
3 or after that date, and (iii) offenses and violations committed on or after that date.
4
5 AFFORDABLE HOUSING FUNDS
6 SECTION 11.11. The sum of two million five hundred thousand dollars
7 ($2,500,000) in nonrecurring funds appropriated by this act to the Department of Commerce and

8 allocated in the Committee Report described in Section 42.2 of this act for matching grants to
9 nonprofits for the planning and construction of affordable housing projects in this State shall be
10 matched by the grant recipients on the basis of one dollar ($1.00) in allocated State funds for
11 every one dollar ($1.00) in non-State funds. The Department of Commerce shall develop
12 guidelines and procedures for the administration and distribution of the grants to nonprofits.
13 Upon submission of documentation satisfactory to the Department that the nonprofit grantee has
14 obtained sufficient matching funds in accordance with this section, the Department shall disburse

15 grant funds to the nonprofit grantee in an amount equal to the amount of non-State matching
16 funds obtained. Documentation of sufficient matching funds and disbursement of grant proceeds
17 may be permitted on a monthly basis until the total amount awarded to the nonprofit grantee has
18 been disbursed. On or before May 1, 2020, the Department of Commerce shall submit a report
19 to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic
20 Resources and the Fiscal Research Division on the affordable housing grant program described

21 in this section. The report shall include information detailing the number of grants issued, the
22 grant recipients, the specific areas of the State where grant funds have been allocated, and the
23 number of affordable housing units developed as a result of the grant program. Any unmatched
24 funds pursuant to this section shall revert to the General Fund on June 30, 2021.
25
26 PART XII. ENVIRONMENTAL QUALITY
27

28 DEQ REPORT CHANGES
29 SECTION 12.1.(a) Section 15.6(b) of S.L. 1999-237, as amended by Section 4.21
30 of S.L. 2017-10, reads as rewritten:
31 Section 15.6.(b) The Department of Environmental Quality and the Office of State Budget
32 and Management shall report to the Joint Legislative Oversight Committee on Agriculture and
33 Natural and Economic Resources the amount and the source of the funds used pursuant to
34 subsection (a) of this section within 30 days of the expenditure of these funds.on or before April

35 15 of each year and shall include this information in the status of solid waste management report
36 required to be submitted pursuant to G.S. 130A-309.06(c).
37 SECTION 12.1.(b) G.S. 130A-309.06(c) reads as rewritten:
38 (c) TheDepartment shall reportto theEnvironmental ReviewCommission and theFiscal
39 Research Division on or before January 15 April 15 of each year on the status of solid waste
40 management efforts in the State. The report shall include:include all of the following:

41 …
42 (17) A report Reports on the Inactive Hazardous Waste Response Act of 1987
43 pursuant to G.S. 130A-310.10(a).G.S. 130A-310.10.
44 …
45 (20) A report on the use of funds for Superfund cleanups and inactive hazardous
46 site cleanups.
47 SECTION 12.1.(c) G.S. 130A-294(i) reads as rewritten:

48 (i) The Department shall include in the status of solid waste management report required
49 to be submitted on or before January 15 of each year pursuant to G.S. 130A-309.06(c) a report
50 on the implementation and cost of the hazardous waste management program. The report shall
51 include an evaluation of how well the State and private parties are managing and cleaning up

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1 hazardous waste. The report shall also include recommendations to the Governor, State agencies,
2 and the General Assembly on ways to: improve waste management; reduce the amount of waste
3 generated; maximize resource recovery, reuse, and conservation; and minimize the amount of
4 hazardous waste which must be disposed of. The report shall include beginning and ending
5 balances in the Hazardous Waste Management Account for the reporting period, total fees
6 collected pursuant to G.S. 130A-294.1, anticipated revenue from all sources, total expenditures
7 by activities and categories for the hazardous waste management program, any recommended

8 adjustments in annual and tonnage fees which may be necessary to assure the continued
9 availability of funds sufficient to pay the State's share of the cost of the hazardous waste
10 management program, and any other information requested by the General Assembly. In
11 recommending adjustments in annual and tonnage fees, the Department may propose fees for
12 hazardous waste generators, and for hazardous waste treatment facilities that treat waste
13 generated on site, which are designed to encourage reductions in the volume or quantity and
14 toxicity of hazardous waste. The report shall also include a description of activities undertaken

15 to implement the resident inspectors program established under G.S. 130A-295.02. In addition,
16 the report shall include an annual update on the mercury switch removal program that shall
17 include, at a minimum, all of the following:
18 ….
19 SECTION 12.1.(d) G.S. 130A-309.64(e) reads as rewritten:
20 (e) The Department shall include in the report to be delivered to the Environmental

21 Review Commission on or before January 15 of each year pursuant to G.S. 130A-309.06(c) a
22 description of the implementation of the North Carolina Scrap Tire Disposal Act under this Part
23 for the fiscal year ending the preceding June 30. The description of the implementation of the
24 North Carolina Scrap Tire Disposal Act shall include a list of the recipients of grants under
25 subsection (a) of this section and the amount of each grant for the previous 12-month period. The
26 report also shall include the amount of funds used to clean up nuisance sites under subsection (d)
27 of this section.

28 SECTION 12.1.(e) G.S. 130A-309.85 reads as rewritten:
29 § 130A-309.85. Reporting on the management of white goods.
30 The Department shall include in the report to be delivered to the Environmental Review
31 Commission on or before 15 January of each year pursuant to G.S. 130A-309.06(c) a description
32 of the management of white goods in the State for the fiscal year ending the preceding 30 June.
33 The description of the management of white goods shall include the following information:
34 ….

35 SECTION 12.1.(f) G.S. 130A-309.140(a) reads as rewritten:
36 (a) The Department shall include in the status of solid waste management report required
37 to be submitted on or before January 15 of each year pursuant to G.S. 130A-309.06(c) a report
38 on the recycling of discarded computer equipment and televisions in the State under this Part.
39 The report must include an evaluation of the recycling rates in the State for discarded computer
40 equipment and televisions, a discussion of compliance and enforcement related to the

41 requirements of this Part, and any recommendations for any changes to the system of collection
42 and recycling of discarded computer equipment, televisions, or other electronic devices.
43 SECTION 12.1.(g) G.S. 130A-310.10 reads as rewritten:
44 § 130A-310.10. Annual reports.
45 (a) The Secretary shall include in the status of solid waste management report required
46 to be submitted on or before January 15 of each year pursuant to G.S. 130A-309.06(c) a report
47 on inactive hazardous sites that includes at least the following:

48 (1) The Inactive Hazardous Waste Sites Priority List.
49 (2) A list of remedial action plans requiring State funding through the Inactive
50 Hazardous Sites Cleanup Fund.

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1 (3) A comprehensive budget to implement these remedial action plans and the
2 adequacy of the Inactive Hazardous Sites Cleanup Fund to fund the cost of
3 said these plans.
4 (4) A prioritized list of sites that are eligible for remedial action under
5 CERCLA/SARA together with recommended remedial action plans and a
6 comprehensive budget to implement such these plans. The budget for
7 implementing a remedial action plan under CERCLA/SARA shall include a

8 statementastoanyappropriationthatmaybenecessarytopaytheState'sshare
9 of such the plan.
10 (5) A list of sites and remedial action plans undergoing voluntary cleanup with
11 Departmental approval.
12 (6) A list of sites and remedial action plans that may require State funding, a
13 comprehensive budget if implementation of these possible remedial action
14 plans is required, and the adequacy of the Inactive Hazardous Sites Cleanup

15 Fund to fund the possible costs of said these plans.
16 (7) A list of sites that pose an imminent hazard.
17 (8) A comprehensive budget to develop and implement remedial action plans for
18 sites that pose imminent hazards and that may require State funding, and the
19 adequacy of the Inactive Hazardous Sites Cleanup Fund.
20 (8a) Repealed by Session Laws 2015-286, s. 4.7(f), effective October 22, 2015.

21 (9) Any other information requested by the General Assembly or the
22 Environmental Review Commission.
23 (a1) On or before October 1 April 15 of each year, the Department shall report to each
24 member of the General Assemblywho has an inactive hazardous substance or waste disposal site
25 in the member's district. This report shall include the location of each inactive hazardous
26 substance or waste disposal site in the member's district, the type and amount of hazardous
27 substances or waste known or believed to be located on each of these sites, the last action taken

28 at each of these sites, and the date of that last action. The Department shall include this
29 information in the status of solid waste management report required to be submitted pursuant to
30 G.S. 130A-309.06(c).
31 (b) Repealed by Session Laws 2001-452, s. 2.3, effective October 28, 2001.
32 SECTION 12.1.(h) G.S. 130A-310.40 reads as rewritten:
33 § 130A-310.40. Legislative reports.
34 The Department shall include in the status of solid waste management report required to be

35 submitted on or before January 15 of each year pursuant to G.S. 130A-309.06(c) an evaluation
36 of the effectiveness of this Part in facilitating the remediation and reuse of existing industrial and
37 commercial properties. This evaluation shall include any recommendations for additional
38 incentives orchanges, ifneeded, to improvetheeffectiveness ofthis Partin addressing suchthese
39 properties. This evaluation shall also include a report on receipts by and expenditures from the
40 Brownfields Property Reuse Act Implementation Account.

41 SECTION 12.1.(i) G.S. 143-215.104U(a) reads as rewritten:
42 (a) The Secretary shall include in the status of solid waste management report required
43 to be submitted on or before January 15 of each year pursuant to G.S. 130A-309.06(c) a report
44 on at least the following:
45 ….
46 SECTION 12.1.(j) Section 14.22(j) of S.L. 2013-360 reads as rewritten:
47 SECTION 14.22.(j) This section authorizes a Long Term Dredging Memorandum of

48 Agreement with the U.S. Army Corps of Engineers which may last beyond the current fiscal
49 biennium and which shall provide for all of the following:
50 (1) Prioritization of projects through joint consultation with the State, applicable
51 units of local government, and the U.S. Army Corps of Engineers.

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1 (2) Compliance with G.S. 143-215.73F. Funds in the Shallow Draft Navigation
2 Channel Dredging Fund shall be used in accordance with that section.
3 (3) Annual reporting by the Department on the use of funds provided to the U.S.
4 Army Corps of Engineers under the Long Term Dredging Memorandum of
5 Agreement. These reports shall be made to the Joint Legislative Commission
6 on Governmental Operations, Joint Legislative Oversight Committee on
7 Agriculture and Natural and Economic Resources, the Fiscal Research

8 Division, and the Office of State Budget and Management and shall include
9 all of the following:
10 a. A list of all projects commenced.
11 b. The estimated cost of each project.
12 c. The date that work on each project commenced or is expected to
13 commence.
14 d. The date that work on each project was completed or is expected to be

15 completed.
16 e. The actual cost of each project.
17
18 COLLABORATORY/GENX
19 SECTION 12.2. Section 13.1(g) of S.L. 2018-5 reads as rewritten:
20 SECTION 13.1.(g) The North Carolina Policy Collaboratory at the University of North

21 Carolina at Chapel Hill (Collaboratory) shall identify faculty expertise, technology, and
22 instrumentation, including mass spectrometers, located within institutions of higher education in
23 the State, including the Universities of North Carolina at Chapel Hill and Wilmington, North
24 Carolina State University, North Carolina A&T State University, Duke University, and other
25 public and private institutions, and coordinate these facultyand resources to conduct nontargeted
26 analysis for PFAS, including GenX, at all public water supply surface water intakes and one
27 public water supply well selected by each municipal water system that operates groundwater

28 wells for public drinking water supplies as identified by the Department of Environmental
29 Quality, to establish a water quality baseline for all sampling sites. The Collaboratory, in
30 consultation with the participating institutions of higher education, shall establish a protocol for
31 the baseline testing required by this subsection, as well as a protocol for periodic retesting of the
32 municipal intakes and additional public water supply wells. No later than December 1, 2019,
33 December 1, 2020, Collaboratory shall report the results of such sampling by identifying
34 chemical families detected at each intake to the Environmental Review Commission, the Joint

35 Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the
36 Department of Environmental Quality, the Department of Health and Human Services, and the
37 United States Environmental Protection Agency.
38
39 SEPTAGE MANAGEMENT PROGRAM PERMITTING TIME LINE AMENDMENTS
40 SECTION 12.3. G.S. 130A-291.1(e2) reads as rewritten:

41 (e2) A properly completed application for a permit and the annual fee under this section
42 are due by1 JanuaryDecember 15 of each year. The Department shall mail a notice of the annual
43 fees to each permitted septage management firm and each individual who operates a septage
44 treatment or disposal facility prior to 1 November October 1 of each calendar year. A late fee in
45 the amount equal to fifty percent (50%) of the annual permit fee under this section shall be
46 submitted when a properly completed application and annual permit fee are not submitted by 1
47 January January 1 following the 1 November October 1 notice. The clear proceeds of civil

48 penaltiescollectedpursuant to this subsectionshallberemittedto theCivilPenaltyand Forfeiture
49 Fund in accordance with G.S. 115C-457.2.
50

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1 SHALLOW DRAFT NAVIGATION CHANNEL DREDGING AND AQUATIC WEED
2 FUND AMENDMENTS
3 SECTION 12.4. G.S. 143-215.73F(b) reads as rewritten:
4 (b) Uses of Fund. – Revenue in the Fund may only be used for the following purposes:
5 (1) To provide the State's share of the costs associated with any dredging project
6 designed to keep shallow draft navigation channels located in State waters or
7 waters of the state State located within lakes navigable and safe.

8 (2) For aquatic weed control projects in waters of the State under Article 15 of
9 Chapter 113A of the General Statutes. Funding for aquatic weed control
10 projects is limited to one million dollars ($1,000,000) in each fiscal year.
11 (3)(3a) For the compensation of a beach and inlet management project manager with
12 the Division of Coastal Management of the Department of Environmental
13 Quality for the purpose of overseeing all For administrative support of Fund
14 operations, limited to one hundred thousand dollars ($100,000) in each fiscal

15 year.
16 (3b) For administrative support of activities related to beach and inlet management
17 in the State. Fundingfor the position is limited to ninety-nine thousand dollars
18 ($99,000) in each fiscal year.State, limited to one hundred thousand dollars
19 ($100,000) in each fiscal year.
20 (4) To provide funding for siting and acquisition of dredged disposal easement

21 sites associated with the maintenance of the Atlantic Intracoastal Waterway
22 between the border with the state of South Carolina and the border with the
23 Commonwealth of Virginia, under a Memorandum of Agreement between the
24 State and the federal government.
25 (5) For assessments and data collection regarding dredge material disposal sites
26 located in the State.
27

28 MOUNT AIRY FUNDING CLARIFICATION
29 SECTION12.5.(a) Subdivision (2)ofSection13.4ofS.L. 2018-5reads as rewritten:
30 (2) One million dollars ($1,000,000) to the Town of Mount Airy for a water and
31 sewer line extension project.water or sewer projects.
32 SECTION 12.5.(b) This section becomes effective June 30, 2019.
33
34 WATER AND SEWER INFRASTRUCTURE GRANTS

35 SECTION 12.6. Of the funds appropriated by this act to the Division of Water
36 Infrastructure of the Department of Environmental Quality for water and sewer infrastructure
37 grants, the following sums are allocated to the indicated local governments for the 2019-2020
38 fiscal year for various water and sewer infrastructure projects, including asset inventory and
39 assessment:
40 (1) Two hundred thousand dollars ($200,000) to the Town of Four Oaks.

41 (2) Three million dollars ($3,000,000) to the Town of Maysville.
42 (3) Five hundred thousand dollars ($500,000) to the Town of Midland.
43 (4) One hundred thousand dollars ($100,000) to the Town of Wilson's Mills.
44 (5) One hundred fifty thousand dollars ($150,000) to the Town of Salemburg.
45 (6) One hundred fifty thousand dollars ($150,000) to the Town of Bethel.
46 (7) One million dollars ($1,000,000) to Sampson County.
47

48 WASTEWATER INFRASTRUCTURE PROJECT
49 SECTION 12.7. Notwithstanding G.S. 159G-22(b), fifteen million dollars
50 ($15,000,000) of funds appropriated in this act to the Division of Water Infrastructure for the
51 Wastewater Reserve shall be used to provide a loan to the City of King for a wastewater system.

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1 Notwithstanding G.S. 159G-20(21) and G.S. 159G-40(b)(1), the interest rate for the loan shall
2 be zero percent (0%).
3
4 INVESTMENT FLEXIBILITY AND RETAINED EARNINGS FOR RIPARIAN
5 BUFFER RESTORATION FUND AND RETAINED EARNINGS FOR ECOSYSTEM
6 RESTORATION FUND
7 SECTION 12.8.(a) G.S. 147-69.2(a) reads as rewritten:

8 (a) This section applies to funds held by the State Treasurer to the credit of each of the
9 following:
10 …
11 (17n) The Riparian Buffer Restoration Fund.
12 ….
13 SECTION 12.8.(b) G.S. 147-69.2(d) reads as rewritten:
14 (d) The State Treasurer may invest funds deposited pursuant to subdivisions (17i), (17j),

15 and (17k) (17k), (17l), and (17n) of subsection (a) of this section in any of the investments
16 authorizedundersubdivisions(1)through(6)andsubdivision(8)ofsubsection(b)ofthissection.
17 The State Treasurer may require a minimum deposit, up to one hundred thousand dollars
18 ($100,000), and may assess a reasonable fee, not to exceed 15 basis points, as a condition of
19 participation pursuant to this subsection. Fees assessed by the State Treasurer may be used to
20 defray the costs of administering the funds and expenditures authorized under this section. Funds

21 deposited pursuant to this subsection shall remain the funds of the North Carolina Conservation
22 Easement Endowment Fund, the Conservation Grant Fund, the Ecosystem Restoration Fund, the
23 Riparian Buffer Restoration Fund, or the Wildlife Endowment Fund, as applicable, and interest
24 or other investment income earned thereon shall be prorated and credited to the North Carolina
25 Conservation Easement Endowment Fund, the Conservation Grant Fund, the Ecosystem
26 Restoration Fund, the Riparian Buffer Restoration Fund, or the Wildlife Endowment Fund on the
27 basis of the amounts contributed to the respective Funds, figured according to sound accounting

28 principles.
29
30 CERTAIN TIMBER SALES/NONREVERT
31 SECTION 12.9. Section 14.3 of S.L. 2015-241 reads as rewritten:
32 SECTION 14.3. The Department of Environment and Natural Resources' Environmental
33 Quality's Stewardship Program may retain revenue generated from timber harvesting on the
34 Great Coharie property in the Conservation Grant Endowment Interest Fund (6705) (Fund Code

35 64307-6705) for the purpose of restoration and stewardship of that property and these funds are
36 hereby appropriated for that purpose. Any unused portion of this revenue remaining in the Fund
37 on June 30, 2019 June 30, 2021, shall revert to the General Fund.
38
39 CONSERVATION GRANT FUND CHANGES
40 SECTION 12.10.(a) G.S. 113A-235(a) is recodified as G.S. 113A-235(a1), and

41 G.S. 113A-232(c) is recodified as G.S. 113A-235(a).
42 SECTION 12.10.(b) G.S. 113A-232, as amended by subsection (a) of this section,
43 reads as rewritten:
44 § 113A-232. Conservation Grant Fund.
45 (a) Fund Created. – The Conservation Grant Fund is created within the Department of
46 Environmental Quality. The Fund shall be administered by the Department. The purpose of the
47 Fund is to stimulate the use of conservation easements, to improve the capacity of private

48 nonprofit land trust organizations to successfully accomplish conservation projects, to better
49 equip real estate related professionals to pursue opportunities for conservation, to increase
50 landownerparticipation in landandwaterconservation, and to provideanopportunityto leverage
51 private and other public monies for conservation easements.

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1 (a1) Fund Purpose. – The purpose of the Conservation Grant Fund is to stimulate the use
2 of conservation easements, to steward properties held by deed or conservation easement by the
3 State, to improve the capacity of private nonprofit land trust organizations to successfully
4 accomplish conservation projects, to better equip real estate related professionals to pursue
5 opportunities for conservation, to increase landowner participation in land and water
6 conservation, and to provide an opportunity to leverage private and other public funds for
7 conservation easements.

8 (b) Fund Sources. – The Conservation Grant Fund shall consist of any monies funds
9 appropriated to it bythe General Assemblyand any monies funds received from public or private
10 sources. Unexpended monies funds in the Fund that were appropriated from the General Fund
11 by the General Assembly shall revert at the end of the fiscal year unless the General Assembly
12 otherwise provides. Unexpended monies funds in the Fund from other sources shall not revert
13 and shall remain available for expenditure in accordance with this Article.
14 (c1) Grant Eligibility. – State Conservation properties, as described in G.S. 113A-235,

15 State conservation land management agencies, local government conservation land management
16 agencies, and private nonprofit land trust organizations are eligible to receive grants from the
17 Conservation Grant Fund. Private nonprofit land trust organizations must be certified under
18 section Section 501(c)(3) of the Internal Revenue Code to aid in managing the land.
19 (d) Use of Revenue. – Revenue in and investment income generated by the Conservation
20 Grant Fund may be used only for the following purposes:

21 (1) The administrative costs of the Department in administering the Fund.Fund
22 and stewardship program operations.
23 (2) Conservation grants Expenses related to grants, contracts, and agreements
24 made in accordance with this Article.Article, including any of the following:
25 a. Reimbursement for total or partial transaction costs for a donation of
26 real property or an interest in real property from an individual or
27 corporation, when the Department determines either of the following:

28 1. The donor has insufficient financial ability to pay all costs or
29 insufficient taxable income to allow these costs to be included
30 in the donated value.
31 2. The donor has insufficient tax burdens to allow these costs to
32 be offset by charitable deductions.
33 b. Management support, including initial baseline inventory and
34 planning.

35 c. Monitoring compliance of conservation easements, the related use of
36 riparian buffers, natural areas, and greenways, and the presence of
37 ecological integrity.
38 d. Education and studies on conservation properties, including
39 information materials intended for landowners and education for staff
40 and volunteers.

41 e. Stewardship of conservation properties.
42 f. Transaction costs for recipients, including legal expenses, closing and
43 title costs, and unusual direct costs, such as overnight travel.
44 g. Administrative costs.
45 h. Award of grants under G.S. 113A-234.
46 i. Legal expenses incurred in protecting and seeking remedies for
47 damages to Department-held conservation properties.

48 j. Acquisition of conservation properties and easements.
49 (3) To establish an endowment account, the interest from which will be used for
50 a purpose described in G.S. 113A-233(a).this subsection. The principal of this

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1 account shall not be used for the purchase of real propertyor an interest in real
2 property.
3 SECTION 12.10.(c) G.S. 113A-233 is repealed.
4 SECTION 12.10.(d) G.S. 113A-234 reads as rewritten:
5 § 113A-234. Administration of grants.
6 (a) Grant Procedures and Criteria. – The Secretary of the Department of Environmental
7 Quality shall establish the procedures and criteria for awarding grants from the Conservation

8 Grant Fund. The criteria shall focus grants on those areas, approaches, and techniques that are
9 likely to provide the optimum positive effect on environmental protection. The Secretary shall
10 make the final decision on the award of grants and shall announce the award publicly in a timely
11 manner.
12 ….
13 SECTION 12.10.(e) G.S. 113A-235, as amended by subsection (a) of this section,
14 reads as rewritten:

15 § 113A-235. Conservation easements.properties eligible for funding.
16 (a) Property Eligibility. – In order for real property or an interest in real property to be
17 the subject of eligible for a grant under this Article, Article as a conservation property, the real
18 property or interest in real property must meet all of the following conditions:
19 …
20 (a1) Acquisition and Protection of Conservation Easements. Properties. – Ecological

21 systems and appropriate public use of these systems may be protected through conservation
22 easements, including conservation agreements under Article 4 of Chapter 121 of the General
23 Statutes, the Conservation and Historic Preservation Agreements Act, and conservation
24 easements under the Conservation Reserve Enhancement Program. The Department mayacquire
25 conservation properties and easements by purchase, gift, or assignment, in accordance with
26 G.S. 146-22. The Department of Environmental Quality shall work cooperatively with State and
27 local agencies and qualified nonprofit organizations to monitor compliance with conservation

28 easements and conservation agreements and to ensure the continued viability of the protected
29 ecosystems. Soil and water conservation districts established under Chapter 139 of the General
30 Statutes may acquire easements under the Conservation Reserve Enhancement Program by
31 purchase or gift.
32 ….
33 SECTION 12.10.(f) Article 16 of Chapter 113A of the General Statutes is amended
34 by adding two new sections to read:

35 § 113A-236. Conservation Grant Fund contribution for long-term management of
36 properties or property interests donated or assigned to Department.
37 A donor or assignor of conservation propertyinterests donated or assigned to the Department
38 shall make a contribution to cover costs related to the long-term management of the property.
39 The donor or assignor shall make the donation at the time the property interest is transferred to
40 the Department and shall meet or exceed the minimum amount determined by the Department to

41 be sufficient for managing and stewarding the property in perpetuity. Nothing in this section is
42 intended to require the Department to accept an offer to donate or assign a conservation property
43 interest.
44 § 113A-237. Rule-making authority.
45 The Department may adopt rules to implement this Article, including the calculation and
46 collection of the minimum contribution to the Conservation Grant Fund required by
47 G.S. 113A-236.

48 SECTION 12.10.(g) Until the Department of Environmental Quality adopts rules
49 implementing G.S. 113A-236, as enacted by subsection (f) of this section, the minimum
50 long-term management contribution shall be calculated as follows:

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1 (1) For parties that desire to assign a conservation property interest to the
2 Department, including, but not limited to, conservation easements, the
3 minimum contribution shall be twenty-five thousand dollars ($25,000) plus
4 one thousand dollars ($1,000) per acre.
5 (2) For parties that desire to donate a conservation property in fee to the
6 Department, the minimum contribution shall be twenty-five thousand dollars
7 ($25,000) plus twenty percent (20%) of the tax value of the parcel.

8 SECTION 12.10.(h) Subsection (g) of this section expires when the Department of
9 Environmental Quality adopts permanent rules implementing G.S. 113A-236, as enacted by
10 subsection (f) of this section.
11
12 REDIRECT PFAS RECOVERY FUNDS
13 SECTION 12.13. Funds appropriated to the Division of Water Infrastructure of the
14 Department of Environmental Quality for the 2018-2019 fiscal year by Section 13.1(d) of S.L.

15 2018-5 and deposited into the PFAS RecoveryFund shall be transferred and reallocated for other
16 projects as follows:
17 (1) Eight hundred thirty-seven thousand seven hundred fifty-five dollars
18 ($837,755)totheCompensatoryMitigationFundforthepurposeofdissolving
19 the conservation easement associated with the Little Alamance Creek stream
20 restoration project in Alamance County and held by the State of North

21 Carolina. Any additional funds needed to dissolve the conservation easement
22 shall be provided by the Department of Environmental Quality from funds
23 available to the Department.
24 (2) Two hundred thousand dollars ($200,000) to the Oil or Other Hazardous
25 Substances Pollution Protection Fund established by G.S. 143-215.87 to be
26 used by the Department of Environmental Quality for investigation and
27 remediation of discharges of petroleum products into waters of the State that

28 are ineligible for funding from programs addressing leaking underground
29 storage tanks.
30 (3) One hundred thousand dollars ($100,000) to provide a directed grant to
31 MountainTrue, a nonprofit corporation, for recreational water quality testing.
32 (4) Five hundred thousand dollars ($500,000) to provide a directed grant to the
33 Town of Maysville for remediation, modification, reconstruction, or
34 replacement of a contaminated public water supply well.

35 (5) One hundred thousand dollars ($100,000) to provide a directed grant to the
36 Town of Benson for a water and wastewater infrastructure project.
37 (6) One hundred thousand dollars ($100,000) to provide a directed grant to the
38 Town of Angier for a water and wastewater infrastructure project.
39 (7) One hundred sixty-two thousand two hundred forty-five dollars ($162,245) to
40 provide a directed grant to the Town of Kenansville for a water and

41 wastewater infrastructure project.
42
43 DRY CLEANING SOLVENT PROGRAM EXTENSION
44 SECTION 12.14.(a) G.S. 143-215.104A reads as rewritten:
45 § 143-215.104A. Title; sunset.
46 This part is the Dry-Cleaning Solvent Cleanup Act of 1997 and may be cited by that name.
47 Except as otherwise provided in this section, this This part expires 1 January 2022.January 1,

48 2032, except with respect to all of the following:
49 (1) G.S. 143-215.104K is not repealed does not expire to the extent that it applies
50 to liability arising from dry-cleaning solvent contamination described in a
51 Dry-Cleaning Solvent Assessment Agreement or Dry-Cleaning Solvent

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1 Remediation Agreement entered into by the Environmental Management
2 Commission pursuant to G.S. 143-215.104H and G.S. 143-215.104I.
3 (2) Any Dry-Cleaning Solvent Assessment Agreement or Dry-Cleaning Solvent
4 Remediation Agreement in force as of 1 January 2012 January 1, 2032, shall
5 continue to be governed by the provisions of Part 6 of Article 21A of Chapter
6 143 of the General Statutes as though those provisions had not been repealed.
7 (3) G.S. 143-215.104D(b)(2) is not repealed; does not expire; rules adopted by

8 the Environmental Management Commission pursuant to
9 G.S. 143-215.104D(b)(2) shall continue in effect; and those rules may be
10 enforced pursuant to G.S. 143-215.104P, 143-215.104Q, and 143-215.104R,
11 which shall remain in effect for that purpose.
12 SECTION 12.14.(b) G.S. 105-164.44E reads as rewritten:
13 § 105-164.44E. Transfer to the Dry-Cleaning Solvent Cleanup Fund.
14 (a) Transfer.– At the end of each quarter,the Secretarymust transferto theDry-Cleaning

15 Solvent Cleanup Fund established under G.S. 143-215.104C an amount equal to fifteen percent
16 (15%) of the net State sales and use taxes collected under G.S. 105-164.4(a)(4) during the
17 previous fiscal year, as determined by the Secretary based on available data.
18 (b) Sunset. – This section is repealed effective July 1, 2020.July 1, 2030.
19 SECTION 12.14.(c) G.S. 105-187.35 reads as rewritten:
20 § 105-187.35. Sunset.

21 This Article is repealed effective January 1, 2020.January 1, 2030.
22
23 WATER/WASTEWATER PUBLIC ENTERPRISE REFORM
24 SECTION 12.15.(a) G.S. 159G-20 reads as rewritten:
25 § 159G-20. Definitions.
26 The following definitions apply in this Chapter:
27 …

28 (4a) Distressed unit. – A public water system or wastewater system operated by a
29 local government unit exhibiting signs of failure to identify or address those
30 financial or operating needs necessary to enable that system to become or to
31 remain a local government unit generating sufficient revenues to adequately
32 fund management and operations, personnel, appropriate levels of
33 maintenance, and reinvestment that facilitate the provision of reliable water
34 or wastewater services.

35 …
36 (13) Local government unit. – Any of the following:
37 a. A city as defined in G.S. 160A-1.
38 b. A county.
39 c. A consolidated city-county as defined in G.S. 160B-2.
40 d. A county water and sewer district created pursuant to Article 6 of

41 Chapter 162A of the General Statutes.Any of the following entities
42 created pursuant to Chapter 162A of the General Statutes:
43 1. A water and sewer authority created pursuant to Article 1.
44 2. A metropolitan water district created pursuant to Article 4.
45 3. A metropolitan sewerage district created pursuant to Article 5.
46 4. A metropolitan water and sewerage district created pursuant to
47 Article 5A.

48 5. A county water and sewer district created pursuant to Article
49 6.
50 e. A metropolitan sewerage district or a metropolitan water district
51 created pursuant to Article 4 of Chapter 162A of the General Statutes.

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1 f. A water and sewer authority created under Article 1 of Chapter 162A
2 of the General Statutes.
3 g. A sanitary district created pursuant to Part 2 of Article 2 of Chapter
4 130A of the General Statutes.
5 h. A joint agency created pursuant to Part 1 or Part 5 of Article 20 of
6 Chapter 160A of the General Statutes.
7 i. A joint agency that was created by agreement between two cities and

8 towns to operate an airport pursuant to G.S. 63-56 and that provided
9 drinking water and wastewater services off the airport premises before
10 1 January 1995.
11 …
12 (22a) Viable Utility Reserve. – The Viable Utility Reserve established in
13 G.S. 159G-22 as an account in the Water Infrastructure Fund.
14 ….

15 SECTION 12.15.(b) G.S. 159G-22 is amended by adding two new subsections to
16 read:
17 (h) Viable Utility Reserve. – The Viable Utility Reserve is established as an account
18 within the Water Infrastructure Fund. The account is established to receive appropriated State
19 funds to be used for grants to local government units for those purposes authorized under this
20 Article. Revenue credited to the Viable Utility Reserve is neither received from the federal

21 government nor provided as a match for federal funds.
22 (i) Viable Utility Accounts. – The Department is directed to establish accounts within
23 the Viable Utility Reserve to administer grants for public water systems or wastewater systems
24 owned by local government units.
25 SECTION 12.15.(c) G.S. 159G-30 reads as rewritten:
26 § 159G-30. Department's responsibility.
27 The Department, through the Division of Water Infrastructure, Division, administers loans

28 the following:
29 (1) Loans and grants made from the CWSRF, the DWSRF, the Wastewater
30 Reserve, and the Drinking Water Reserve and shall administer the Reserve.
31 (2) The award of funds by the State Water Infrastructure Authority from the
32 CommunityDevelopment Block Grant program to local government units for
33 infrastructure projects.
34 (3) Grants made from the Viable Utility Reserve.

35 SECTION 12.15.(d) G.S. 159G-31 is amended by adding a new subsection to read:
36 (d) A local government unit is eligible to apply for a grant from the Viable Utility
37 Reserve.
38 SECTION 12.15.(e) G.S. 159G-32 is amended by adding a new subsection to read:
39 (d) Viable Utility Reserve. – The Department is authorized to make grants from the
40 Viable Utility Reserve to do any of the following:

41 (1) Provide physical interconnection and extension of public water or wastewater
42 infrastructure to provide regional service.
43 (2) Rehabilitate existing public water or wastewater infrastructure.
44 (3) Decentralize an existing public water system or wastewater system into
45 smaller viable parts.
46 (4) Fund a study of any one or more of the following:
47 a. Rates.

48 b. Asset inventory and assessment.
49 c. Merger and regionalization options.
50 (5) Fund other options deemed feasible which results in local government units
51 generating sufficient revenues to adequately fund management and

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1 operations, personnel, appropriate levels of maintenance, and reinvestment
2 that facilitate the provision of reliable water or wastewater services.
3 SECTION 12.15.(f) Article 2 of Chapter 159G of the General Statutes is amended
4 by adding a new section to read:
5 § 159G-34.5. Grant types available from Viable Utility Reserve.
6 (a) The Department is authorized to make the following types of grants from the Viable
7 Utility Reserve:

8 (1) Asset assessment and rate study grant. – An asset inventory and assessment
9 grant is available to inventory the existing public water or wastewater system,
10 or both, document the condition of the inventoried infrastructure, and conduct
11 a rate study to determine a rate structure sufficient to prevent the local
12 government unit from becoming a distressed unit.
13 (2) Merger/regionalization feasibility grant. – A merger/regionalization grant is
14 available to determine the feasibility of consolidating the management of

15 multiple water or wastewater systems into a single operation or to provide
16 regional treatment or water supply and the best way of carrying out the
17 consolidation orregionalization.TheDepartment shall not make a grant under
18 this subdivision for a merger or regionalization proposal that would result in
19 a new surface water transfer regulated under G.S. 143-215.22L.
20 (3) Project grant. –Aproject grantisavailableforaportionofthecostsofapublic

21 water system or wastewater system project as defined in G.S. 159G-32(d).
22 (b) A grant awarded from the Viable Utility Reserve may be awarded to a regional
23 council of government created under Part 2 of Article 20 of Chapter 160A of the General Statutes
24 or to a regional planning commission created under Article 19 of Chapter 153A of the General
25 Statutes, if the Department and the Local Government Commission determine it is in the best
26 interest of the local government unit.
27 (c) Each type of grant must be administered through a separate account within the Viable

28 Utility Reserve.
29 SECTION 12.15.(g) G.S. 159G-35 reads as rewritten:
30 § 159G-35. Criteria for loans and grants.
31 (a) CWSRF and DWSRF. – Federal law determines the criteria for awarding a loan or
32 grant from the CWSRF or the DWSRF. An award of a loan or grant from one of these accounts
33 must meet the criteria set under federal law. The Department is directed to establish through
34 negotiation with the United States Environmental Protection Agency the criteria for evaluating

35 applications for loans and grants from the CWSRF and the DWSRF and the priority assigned to
36 the criteria. The Department must incorporate the negotiated criteria and priorities in the
37 Capitalization Grant Operating Agreement between the Department and the United States
38 Environmental Protection Agency. The criteria and priorities incorporated in the Agreement
39 apply to a loan or grant from the CWSRF or the DWSRF. The priority considerations in
40 G.S. 159G-23 do not apply to a loan or grant from the CWSRF or the DWSRF.

41 (b) Certain Reserves. – The priority considerations in G.S. 159G-23 apply to a loan or
42 grant from the Wastewater Reserve or the Drinking Water Reserve. The Department may
43 establish by rule other criteria that apply to a loan or grant from the Wastewater Reserve or the
44 Drinking Water Reserve.
45 (c) Viable UtilityReserve. – The Local Government Commission and the Authorityshall
46 jointly develop evaluation criteria for grants from the Viable Utility Reserve. These evaluation
47 criteria shall be used to review applications and award grants as provided in G.S. 159G-39.

48 SECTION 12.15.(h) G.S. 159G-36 reads as rewritten:
49 § 159G-36. Limits on loans and grants.

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1 (a) CWSRF and DWSRF. – Federal law governs loans and grants from the CWSRF and
2 the DWSRF. An award of a loan or grant from one of these accounts must be consistent with
3 federal law.
4 (b) Certain Reserve Cost Limit. – The amount of a loan or grant from the Wastewater
5 Reserve or the Drinking Water Reserve may not exceed the construction costs of a project. A
6 loan or grant from one of these Reserves is available only to the extent that other funding sources
7 are not reasonably available to the applicant.

8 (b1) Viable Utility Reserve Cost Limit. – The amount of a grant from the Viable Utility
9 Reserveshallnotexceedtheconstructioncostsofa project.A grant fromthis Reserveisavailable
10 only to the extent that other funding sources are not reasonably available to the applicant.
11 (c) Certain Reserve Recipient Limit. – The following limits apply to the loan or grant
12 types made from the Wastewater Reserve or the Drinking Water Reserve to the same local
13 government unit or nonprofit water corporation:
14 (1) The amount of loans awarded for a fiscal year may not exceed three million

15 dollars ($3,000,000).
16 (2) The amount of loans awarded for three consecutive fiscal years for targeted
17 interest rate projects may not exceed three million dollars ($3,000,000).
18 (3) The amount of project grants awarded for three consecutive fiscal years may
19 not exceed three million dollars ($3,000,000).
20 (4) The amount of merger/regionalization feasibility grants awarded for three

21 consecutive fiscal years may not exceed fifty thousand dollars ($50,000).
22 (5) The amount of asset inventory and assessment grants awarded for three
23 consecutive fiscal years may not exceed one hundred fifty thousand dollars
24 ($150,000).
25 (d) Viable Utility Reserve Recipient Limit. – Grants under the Viable Utility Reserve
26 shall not exceed fifteen million dollars ($15,000,000) to anysingle local government unit. Where
27 two or more local government units are merging into a single utility, the total grant awarded shall

28 not exceed thirty million dollars ($30,000,000).
29 SECTION 12.15.(i) G.S. 159G-37 reads as rewritten:
30 § 159G-37. Application to CWSRF, Wastewater Reserve, DWSRF, and Drinking Water
31 Reserve.Reserve, and Viable Utility Reserve.
32 (a) Application. – An application for a loan or grant from the CWSRF, the Wastewater
33 Reserve, the DWSRF, or the Drinking Water Reserve Reserve, or a grant from the Viable Utility
34 Reserve, must be filed with the Division of Water Infrastructure of the Department. Division. An

35 application must be submitted on a form prescribed by the Division and must contain the
36 information required by the Division. An applicant must submit to the Division any additional
37 information requested by the Division to enable the Division to make a determination on the
38 application. An application that does not contain information required on the application or
39 requested by the Division is incomplete and is not eligible for consideration. An applicant may
40 submit an application in as many categories as it is eligible for consideration under this Article.

41 (b) Certification. – The Division of Water Infrastructure shall require all local
42 governments applying for loans or grants for water or wastewater purposes to certify that no
43 funds received from water or wastewater utility operations have been transferred to the local
44 government's general fund for the purpose of supplementing the resources of the general fund.
45 The prohibition in this section shall not be interpreted to include payments made to the local
46 government to reimburse the general fund for expenses paid from that fund that are reasonably
47 allocable to the regular and ongoing operations of the utility, including, but not limited to, rent

48 and shared facility costs, engineering and design work, plan review, and shared personnel costs.
49 SECTION 12.15.(j) G.S. 159G-39 is amended by adding a new subsection to read:
50 (e) Viable Utility Reserve Terms. – The Department shall not award a grant from the
51 Viable Utility Reserve Fund unless the Local Government Commission approves the award of

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1 the grant and the terms of the grant. The Department and the Local Government Commission
2 may, in their discretion, impose specific performance measures or conditions on any grant
3 awarded from the Viable Utility Reserve.
4 SECTION 12.15.(k) Article 2 of Chapter 159G of the General Statutes is amended
5 by adding a new section to read:
6 § 159G-45. Assessment of local government units; assistance.
7 (a) The Authority and the Local Government Commission shall develop criteria to

8 determine how local government units should be assessed and reviewed in accordance with this
9 section, and these criteria shall address at least all of the following:
10 (1) Whether the public water or wastewater system serves less than 10,000
11 customers.
12 (2) Whether the public water or wastewater system has an established,
13 operational, and adequately funded program for its repair, maintenance, and
14 management.

15 (3) Whether the annual debt service is disproportionate to the public water or
16 wastewater system's annual revenue.
17 (4) Whether the local government unit has appropriated funds from its utility or
18 public service enterprise fund in accordance with G.S. 159-13(b)(14) in two
19 or more of the preceding five fiscal years without maintaining a reserve fund
20 sufficient to provide for operating expenses, capital outlay, and debt service.

21 (5) Whether the local government unit has appropriated funds to supplement the
22 operating expenses, capital outlay, or debt service on outstanding utility or
23 enterprise bonds or notes in excess of the user fees collected in two or more
24 of the preceding five fiscal years.
25 (b) Utilizing the assessment and review process, the Authority and Local Government
26 Commission shall identify distressed units. Each distressed unit identified under this subsection
27 shall do all of the following:

28 (1) Conduct an asset assessment and rate study, as directed and approved by the
29 Authority and the Local Government Commission.
30 (2) Participate in a training and educational program approved by the Authority
31 and the Local Government Commission for that distressed unit. Attendance
32 shall be mandatory for any governing board members and staff whose
33 participationisrequiredbytheAuthorityandLocal GovernmentCommission.
34 The scope of training and education, and its method of delivery, shall be at the

35 discretion of the Authority and Local Government Commission.
36 (3) Develop an action plan, taking into consideration all of the following:
37 a. A short-term and a long-term plan for infrastructure repair,
38 maintenance, and management.
39 b. Continuing education of the governing board and system operating
40 staff.

41 c. Long-term financial management to ensure the public water system or
42 wastewater system will generate sufficient revenue to adequately fund
43 management and operations, personnel, appropriate levels of
44 maintenance, and reinvestment that facilitate the provision of reliable
45 water or wastewater services.
46 d. AnyothermattersidentifiedbytheAuthorityorthe LocalGovernment
47 Commission.

48 (c) Once an identified distressed unit has completed all of the requirements of subsection
49 (b) of this section, that unit shall no longer be identified as a distressed unit for the remainder of
50 that assessment and review cycle.

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1 (d) The Authority and the Local Government Commission shall establish the frequency
2 of the cycle for assessment and review of local government units under this section, which shall
3 be no less than every two years.
4 SECTION 12.15.(l) Chapter 162A of the General Statutes is amended by adding a
5 new Article to read:
6 Article 10.
7 Dissolution and Merger of Units.

8 § 162A-850. Unit defined.
9 For purposes of this Article, the term unit means any of the following entities created
10 pursuant to this Chapter:
11 (1) A water and sewer authority created pursuant to Article 1.
12 (2) A metropolitan water district created pursuant to Article 4.
13 (3) A metropolitan sewerage district created pursuant to Article 5.
14 (4) A metropolitan water and sewerage district created pursuant to Article 5A.

15 (5) A county water and sewer district created pursuant to Article 6.
16 § 162A-855. Information needed to merge or dissolve.
17 (a) Prior to any action by the Environmental Management Commission under this
18 Article, for any unit to merge or dissolve all of the following information must be supplied to the
19 Environmental Management Commission:
20 (1) The name of the unit or units to be merged or dissolved.

21 (2) The names of the district board members of the unit or units to be merged or
22 dissolved.
23 (3) The proposed date of the merger or dissolution.
24 (4) A map or description of the jurisdiction of the unit or units to be merged or
25 dissolved.
26 (5) The name of the entity with whom the unit or units will be merged, if
27 applicable.

28 (6) The names of the governing board members or district board members of the
29 entity with which the unit is proposed to be merged, if applicable.
30 (7) A map or description of the jurisdiction of the entity with which the unit is
31 proposed to be merged.
32 (8) Resolutions adopted by each district board or governing board requesting the
33 merger or dissolution.
34 (9) Arequestfrom each chairofadistrictboardrequestingamerger ordissolution

35 that a representative of the Environmental Management Commission hold a
36 public hearing in that district to discuss the proposed merger or dissolution
37 and to receive public comment. The date, time, and place of the public hearing
38 shall be mutually agreed to by the chair of the Environmental Management
39 Commission and the chair of each requesting district board.
40 (10) A copyof the most recent audit performed in accordance with G.S. 159-34 for

41 the unit to be merged or dissolved.
42 (11) A copy of any permits issued by the Department of Environmental Quality to
43 the unit or units to be merged or dissolved.
44 (12) A copyof anygrant awarded under Article 2 of this Chapter involving the unit
45 or units to be merged or dissolved, and any conditions thereof, if applicable.
46 (13) AnyotherinformationdeemednecessarybytheDepartmentof Environmental
47 Quality, the Local Government Commission, or the Environmental

48 Management Commission.
49 (b) Upon receipt of a request to dissolve or merge, the Environmental Management
50 Commission shall provide a copy of all information submitted in accordance with this section to
51 the Department of Environmental Quality and the Local Government Commission.

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1 (c) Upon confirmation of the time and place of the public hearing, each district board of
2 an affected unit and any other governing board affected shall do all of the following:
3 (1) Cause notice of the public hearing to be posted, at least 30 days prior to the
4 hearing, at the courthouse in any county within which the affected unit lies.
5 (2) Publish the notice at least once a week for four successive weeks in a
6 newspaper having general circulation in the affected unit, the first publication
7 to be at least 30 days prior to the public hearing.

8 (3) Publish notice in any other manner required by the Environmental
9 Management Commission.
10 § 162A-860. Merger of units.
11 (a) Any unit may merge with any other unit, any county, any city, any consolidated
12 city-county, any sanitary district created pursuant to Part 2 of Article 2 of Chapter 130A of the
13 General Statutes, any joint agency created pursuant to Part 1 or Part 5 of Article 20 of Chapter
14 160A of the General Statutes, or any joint agency that was created by agreement between two

15 cities and towns to operate an airport pursuant to G.S. 63-56 and that provided drinking water
16 and wastewater services off the airport premises before January 1, 1995, if the merger is a
17 condition of receiving a grant from the Viable UtilityReserve as provided in Article 2 of Chapter
18 159G of the General Statutes. The Environmental Management Commission shall adopt a
19 resolution transferring the assets, liabilities, and other obligations to the entity with which the
20 unit is being merged and dissolving the unit as provided for in this Article.

21 (b) Any unit may merge with any other unit, any county, any city, any consolidated
22 city-county, any sanitary district created pursuant to Part 2 of Article 2 of Chapter 130A of the
23 General Statutes, any joint agency created pursuant to Part 1 or Part 5 of Article 20 of Chapter
24 160A of the General Statutes, or any joint agency that was created by agreement between two
25 cities and towns to operate an airport pursuant to G.S. 63-56 and that provided drinking water
26 and wastewater services off the airport premises before January 1, 1995, on approval by the
27 Environmental Management Commission, upon consultation with the Department of

28 Environmental Quality and the Local Government Commission. The Environmental
29 Management Commission may adopt a resolution transferring the assets, liabilities, and other
30 obligations to the entity with which the unit is being merged and dissolving the unit as provided
31 for in this Article, if the Environmental Management Commission deems the merger in the best
32 interest of the people of the State.
33 (c) The Environmental Management Commission shall adopt a resolution dissolving a
34 unit and transferring the assets, liabilities, and other obligations of the unit to another unit when

35 the procedures set forth in G.S. 162A-855 have been completed and all of the following apply:
36 (1) Both units are created pursuant to Article 5 of this Chapter.
37 (2) Both units are located in the same county.
38 (3) The jurisdiction of the units are contiguous.
39 (4) The unit to be merged and dissolved does not directly provide sewerage
40 services to any customers.

41 (5) The unit to be merged and dissolved leases its assets to the unit with which it
42 is proposed to be merged.
43 (6) The unit to be merged and dissolved has no outstanding debts.
44 § 162A-865. Dissolution of units.
45 (a) Any unit may be dissolved, if the dissolution is a condition of a grant from the Viable
46 Utility Reserve as provided in Article 2 of Chapter 159G of the General Statutes. The
47 Environmental Management Commission shall adopt a resolution transferring the assets,

48 liabilities, and other obligations as provided for in the grant conditions imposed under Article 2
49 of Chapter 159G of the General Statutes.
50 (b) Anyunit may be dissolved in order to merge that unit with anyother unit, any county,
51 any city, any consolidated city-county, any sanitary district created pursuant to Part 2 of Article

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1 2 of Chapter 130A of the General Statutes, any joint agency created pursuant to Part 1 or Part 5
2 of Article 20 of Chapter 160A of the General Statutes, or any joint agency that was created by
3 agreement between two cities and towns to operate an airport pursuant to G.S. 63-56 and that
4 provided drinking water and wastewater services off the airport premises before January 1, 1995,
5 and establish a new entity created under the General Statutes, on approval by the Environmental
6 Management Commission, upon consultation with the Department ofEnvironmental Qualityand
7 the Local Government Commission. The Environmental Management Commission may adopt a

8 resolutiontransferringtheassets,liabilities,andotherobligationstothe newentityanddissolving
9 the unit as provided for in this Article, if the Environmental Management Commission deems the
10 merger in the best interest of the people of the State.
11 § 162A-870. Effective date of merger or dissolution.
12 Upon the adoption of a resolution of merger or dissolution by the Environmental
13 Management Commission as provided in this Article, the effective date for merger and
14 dissolution shall be fixed as of June 30 following the adoption of the resolution or the second

15 June 30 following adoption of the resolution.
16 § 162A-875. Effect of merger or dissolution.
17 (a) Upon adoption of the resolution of merger or dissolution by the Environmental
18 Management Commission, all of the following shall apply on the effective date set forth in the
19 resolution:
20 (1) All property, real, personal, and mixed, including accounts receivable,

21 belonging to the dissolving unit shall be transferred, disposed of, or otherwise
22 accounted for as provided in the resolution of merger or dissolution.
23 (2) All judgments, liens, rights ofliens, andcauses of action ofanynaturein favor
24 of the dissolving unit shall vest in and remain and inure to the benefit of the
25 merged district.
26 (3) All taxes, assessments, sewer charges, and any other debts, charges, or fees
27 owing to the dissolving unit shall be owed to and collected as provided in the

28 resolution of merger or dissolution.
29 (4) All actions, suits, and proceedings pending against, or having been instituted
30 by, the dissolving unit shall not be abated by merger, but all such actions,
31 suits, and proceedings shall be continued and completed in the same manner
32 as if merger had not occurred, and the merged entity shall be a party to all
33 such actions, suits, and proceedings in the place and stead of the dissolving
34 unit and shall pay or cause to be paid any judgments rendered against the

35 dissolving unit in any such actions, suits, or proceedings. No new process is
36 required to be served in any such action, suit, or proceeding.
37 (5) All obligations of the dissolving unit, including outstanding indebtedness,
38 shall be assumed as provided in the resolution of merger or dissolution, and
39 all such obligations and outstanding indebtedness shall constitute obligations
40 and indebtedness as provided in the resolution of merger or dissolution.

41 (6) All ordinances, rules, regulations, and policies of the dissolving unit shall
42 continue in full force and effect until repealed or amended by the governing
43 body of the merged entity.
44 (7) The dissolving unit shall be abolished and shall no longer be constituted a
45 public body or a body politic and corporate, except for purposes of carrying
46 into effect the provisions and intent of this section.
47 (8) Governance of the district shall be as specified in the resolution of merger or

48 dissolution, which may be amended by the Environmental Management
49 Commission as needed.
50 (b) All governingboardsand district boardsareauthorizedto taketheactions andexecute
51 the documents necessary to effectuate the provisions and intent of this section.

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1 SECTION 12.15.(m) Article 20 of Chapter 160A of the General Statutes is amended
2 by adding a new Part to read:
3 Part 5. Water and Wastewater Systems.
4 § 160A-481.1. Definitions.
5 The words defined in this section shall have the meanings indicated when used in this Part:
6 (1) Local government unit. – Defined in G.S. 159G-20.
7 (2) Undertaking. – Defined in G.S. 160A-460.

8 (3) Unit of local government. – Defined in G.S. 160A-460.
9 § 160A-481.2. Interlocal cooperation authorized.
10 Interlocal cooperation, as provided in Part 1 of this Article, is authorized between any local
11 government unit and any other unit of local government in this State for any purpose. When two
12 or more local government units agree to contract for one or more undertakings under this Part,
13 the provisions of Part 1 of this Article apply.
14 SECTION 12.15.(n) The Department of Environmental Quality shall study the

15 statutes and rules governing subbasin transfers and make recommendations as to whether the
16 statutes and rules should be amended. The study shall specifically examine whether transfers of
17 water between subbasins within the same major river basin should continue to be required to
18 comply with all of the same requirements under G.S. 143-215.22L as transfers of water between
19 major river basins. In conducting this study, the Department shall consider whether the costs of
20 complying with specific requirements, including financial costs and time, are justified by the

21 benefits of the requirements, including the production of useful information and public notice
22 and involvement. No later than October 1, 2019, the Department of Environmental Quality shall
23 report its findings and recommendations to the Environmental Review Commission.
24 SECTION 12.15.(o) The Department of State Treasurer shall study and make
25 recommendations as to the feasibility of authorizing historical charters for units of local
26 government that have become, or are on the brink of becoming, defunct. The study shall
27 specifically examine whether these historical charters are needed, the impact of these charters on

28 the bond rating of the State and its political subdivisions, and the consequences of these historical
29 charters. No later than March 1, 2020, the Department of State Treasurer shall report its findings
30 and recommendations to the General Assembly.
31 SECTION 12.15.(p) Subsections (a) through (m) of this section become effective
32 October 1, 2019. The remainder of this section is effective when it becomes law.
33
34 COMMERCIAL FISHING LICENSE BUYBACK

35 SECTION 12.16.(a) Notwithstanding G.S. 143-215.73F or any other provision of
36 lawto thecontrary, the Division ofMarine Fisheries ofthe Department ofEnvironmentalQuality
37 may use up to one million dollars ($1,000,000) in each year of the 2019-2021 fiscal biennium
38 from the Shallow Draft Navigation Channel Dredging and Aquatic Weed Fund (Fund Code
39 24300-2182) to implement a voluntary fisheries license buyback program for holders of
40 underutilized commercial fishing licenses. The program shall provide that any Standard

41 Commercial Fishing Licenses repurchased with funds provided bythis Section shall revert to the
42 pool of available commercial fishing licenses established by Section 5.2 of S.L. 1997-400, as
43 amended by Section 4.24 of S.L. 1998-225.
44 SECTION 12.16.(b) The Division of Marine Fisheries shall report to the Joint
45 Legislative Oversight Committee on Agriculture and Natural and Economic Resources and the
46 Fiscal Research Division as follows:
47 (1) No later than December 1, 2019, on its plan for the voluntary license buyback

48 program, with consideration of a reverse auction model.
49 (2) NolaterthanApril 15,2020,oninterim progress in implementingthebuyback
50 program, including any required legislative changes.

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1 (3) No later than September 1, 2020, and September 1, 2021, on activities and
2 results of the buyback program during the prior fiscal year.
3
4 DELAY ANIMAL WASTE GENERAL PERMITS/STUDY
5 SECTION 12.19.(a) Notwithstanding 15A NCAC 02T .0111(e), the Department of
6 Environmental Quality, pursuant to the powers relative to general permits and to permits for
7 facilities not discharging to the surface waters of the State that are granted to the Environmental

8 Management Commission under G.S. 143-215.1 and G.S. 143-215.10C and delegated by the
9 Commission to the Department, shall extend the expiration of general permits AWG100000
10 (Swine), AWG200000 (Cattle), and AWG300000 (Poultry) until December 1, 2020. Subject to
11 the provisions of 40 Code of Federal Regulations, Part 123 and of subsections (g) and (h) of 15A
12 NCAC 02T .0111, the Department of Environmental Quality shall extend the expiration of
13 individual certificates of coverage issued under these general permits until December 1, 2020.
14 SECTION 12.19.(b) The Environmental Review Commission shall study the

15 Department of Environmental Quality's process for the development and adoption of general
16 permits for animal waste management systems for swine, cattle, and poultry operations. The
17 study shall specifically include consideration of whether the general permit process should
18 comply with the Administrative Procedure Act, Chapter 150B of the General Statutes. In
19 conducting this study, the Environmental Review Commission shall seek input from the
20 Department of Environmental Quality; the Department of Agriculture and Consumer Services;

21 the Office of Administrative Hearings; the College of Agriculture and Life Sciences at North
22 Carolina State University; representatives of swine, cattle, and poultry farmers; and
23 representatives of environmental protection and natural resource conservation groups. The
24 Environmental Review Commission shall report its findings and recommendations, including
25 any legislative proposals, to the 2020 Regular Session of the 2019 General Assembly upon its
26 convening.
27 SECTION 12.19.(c) This section is effective when it becomes law.

28
29 REPURPOSE PRE-REGULATORY LANDFILL FUNDS AMENDMENT
30 SECTION 12.20. Section 13.2 of S.L. 2018-5, as amended by Section 4.2 of S.L.
31 2018-97, reads as rewritten:
32 SECTION 13.2. Notwithstanding G.S. 130A-310.11(b), up to two million dollars
33 ($2,000,000) of the funds credited to the Inactive Hazardous Sites Cleanup Fund under
34 G.S. 105-187.63 for the assessment and remediation of pre-1983 landfills shall instead be used

35 by the Department of Environmental Quality's Division of Waste Management to provide a
36 matching grant to Charlotte Motor Speedway, LLC LLC, (CMS) for the purpose of remediation
37 activities at the Charlotte Motor Speedway in Cabarrus County. The Division shall provide one
38 dollar ($1.00) for every two non-State dollars ($2.00) one non-State dollar ($1.00) provided in
39 kind or otherwise, up to a maximum of two million dollars ($2,000,000) for the matching grant
40 described in this section. CMS may allocate all or a portion of the grant provided by this section

41 to an entity that controls CMS or an entity controlled by CMS. Entities receiving such an
42 allocation shall be considered a subgrantee as defined in 143C-6-23.G.S. 143C-6-23.
43
44 REGIONAL WATER AND SEWER FUNDING
45 SECTION 12.21.(a) Section 14.20A of S.L. 2016-94, as amended by Section 1 of
46 S.L. 2017-17, reads as rewritten:
47 REGIONAL WATER AND SEWER FUNDING

48 SECTION 14.20A.(a) Of the funds appropriated to the Department of Environmental
49 Quality, Division of Water Infrastructure, by this act, the sum of fourteen million five hundred
50 forty-eight thousand nine hundred eighty-one dollars ($14,548,981) shall be used to fund
51 interconnection, extension of water and sewer lines, and related water and wastewater system

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1 modification and expansion involving the Counties of Rockingham and Guilford and the
2 municipalities of Oak Ridge, Stokesdale, Summerfield, Reidsville, Madison, and Mayodan. Of
3 the funds allocated by this section, no more than twenty-five percent (25%) of the funds shall be
4 used for Guilford County and may include one or more of the municipalities listed in this section
5 located in Guilford County, and no more than seventy-five percent (75%) shall be used for
6 Rockingham County and may include one or more of the municipalities listed in this section
7 located in Rockingham County. The funds allocated by this section may be spent for planning,

8 design, survey, real property acquisition, construction, repair, and any other activities necessary
9 to improve the performance and reliability and expand the capacity and service footprint of
10 participating water and wastewater systems in Rockingham and Guilford Counties. The Counties
11 of Rockingham and Guilford and the municipalities participating in the interconnection and
12 extension of water and sewer lines within each county funded by this section shall agree on the
13 use of the funds allocated by this section through any combination of (i) interlocal agreements
14 under Article 20 of Chapter 160A of the General Statutes that specify, at a minimum, the

15 ownership of the water lines lines, sewer lines, and related infrastructure funded by this section
16 and long-term maintenance, repair, and replacement responsibility or (ii) one or more regional
17 water and sewer authorities under Article 1 of Chapter 162A of the General Statutes.
18 SECTION 14.20A.(b) Notwithstanding G.S. 143C-6-23(f1)(1) and G.S. 143C-1-2, funds
19 allocated by this section shall be held in reserve by the Office of State Budget and Management
20 and the allocations to each County shall be released when the County and one or more of the

21 municipalities specified in subsection (a) of this section reach agreement on the funds allocated
22 to that County by this section through interlocal agreements or the formation of regional water
23 and sewer authorities or a combination of interlocal agreements and regional water and sewer
24 authorities. Funds not spent or encumbered byJune 30, 2020, 2021, shall be returned bythe local
25 governments or regional water and sewer authority to the Office of State Budget and
26 Management and revert to the General Fund.
27 SECTION 12.21.(b) This section becomes effective June 30, 2019.

28
29 DEQ GRANTS-IN-AID
30 SECTION 12.22.(a) Section 13.9 of S.L. 2018-5, as amended by Section 2.9 of S.L.
31 2018-138, reads as rewritten:
32 DEQ GRANT-IN-AIDGRANTS-IN-AID
33 SECTION 13.9.(a) Of the funds appropriated in this act to the Department of
34 Environmental Quality, Division of Water Resources, the sum of five million dollars

35 ($5,000,000) shall be used to provide a grant-in-aid to Resource Institute, Inc., for the purpose of
36 working with local governments on Topsail Island and engineering firms to develop, plan, or
37 implement projects intended to mitigate the impacts of future hurricanes on Topsail
38 Island.allocated in equal amounts to the Towns of North Topsail Beach, Surf City, and Topsail
39 Beach for hurricane recovery projects in or benefitting the Towns and their adjoining coastline.
40 SECTION 13.9.(b) On or before October 1, 2019, Resource Institute, Inc., the recipients

41 of allocations under this section shall submit a report to the Joint Legislative Oversight
42 Committee on Agriculture and Natural and Economic Resources and the Fiscal Research
43 Division. The report shall contain at least all of the following:
44 (1) A list of participating local governments and engineering firms and other
45 partners in projects funded under this section.
46 (2) A list of projects funded on Topsail Island, funded, including a summary of
47 the costs and the scope of the project.

48 (3) Asummaryoftheemergingtechniquesdevelopedandimplementedasaresult
49 of the efforts of the collaboration between local governments, engineering
50 firms, and Resource Institute, Inc.
51 (4)(3) Documentationoftheimpactontheresilienceofbeachnourishmentprojects.

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1 SECTION 12.22.(b) This section becomes effective June 30, 2019.
2
3 COASTAL STORM DAMAGE MITIGATION GRANTS
4 SECTION 12.23. Funds allocated as provided in the Committee Report described in
5 Section 42.2 of this act to the Department of Environmental Quality for the Coastal Storm
6 Damage Mitigation Fund shall be used to provide grants in an amount not to exceed two million
7 five hundred thousand dollars ($2,500,000) for each unit of local government during the

8 2019-2021 fiscal biennium. Notwithstanding G.S. 143-215.73M, no cost-share shall be required
9 for these grants.
10
11 PART XIII. LABOR [RESERVED]
12
13 PART XIV. NATURAL AND CULTURAL RESOURCES
14

15 DNCR REPORT CHANGES
16 SECTION 14.1.(a) Part 1 of Article 2 of Chapter 143B of the General Statutes is
17 amended by adding a new section to read:
18 § 143B-53.10. Annual report on fees.
19 The Department of Natural and Cultural Resources shall submit a report by October 15 of
20 each yeartotheJoint LegislativeOversightCommitteeonAgricultureandNaturalandEconomic

21 Resources on fees charged in the previous fiscal year at all historic sites, museums, aquariums,
22 and State parks and at the North Carolina Zoological Park and the U.S.S. North Carolina
23 Battleship. The report shall include all of the following:
24 (1) For each site, the amount and type of fees charged.
25 (2) For each site, the total amount collected bytype of fee and how the funds were
26 expended.
27 (3) Visitorinformation foreachsite,includingabreakdownof fee-payingvisitors

28 and visitors whose fees were waived, such as visitors in school groups.
29 (4) Any fee changes and a justification for any increases or decreases.
30 (5) Number of days the site was open to visitors.
31 (6) Plans, if known, to change fees in the upcoming year.
32 SECTION 14.1.(b) G.S. 121-7.3 reads as rewritten:
33 § 121-7.3. Admission and related activity fees and operating hours.
34 The Department of Natural and Cultural Resources may charge a reasonable admission and

35 related activity fee to the Roanoke Island Festival Park and any historic site or museum
36 administered by the Department. Admission and related activity fees collected under this section
37 are receipts oftheDepartment and shall bedepositedin the appropriatespecial fund.The revenue
38 collected pursuant to this section shall be used only for the individual site or venue where the
39 receipts were generated. The Secretary may adopt rules necessary to carry out the provisions of
40 this section. The Department is exempt from the requirements of Chapter 150B of the General

41 Statutes and G.S. 12-3.1 when adopting, amending, or repealing rules for operating hours and
42 admission fees or related activity fees at the Roanoke Island Festival Park, historic sites, and
43 museums. The Department shall submit a report to the Joint Legislative Oversight Committee on
44 Agriculture and Natural and Economic Resources and the Fiscal Research Division on the
45 amount and purpose of a fee change within 30 days following its effective date.
46 SECTION 14.1.(c) G.S. 143B-71 reads as rewritten:
47 § 143B-71. Tryon Palace Commission – creation, powers powers, and duties.

48 There is hereby created the Tryon Palace Commission of the Department of Natural and
49 Cultural Resources with the power and duty to adopt, amend amend, and rescind rules and
50 regulations concerning the restoration and maintenance of the Tryon Palace complex, and with
51 other powers and duties as provided in Article 2 of Chapter 121 of the General Statutes of North

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1 Carolina, Statutes, including the authority to charge reasonable admission and related activity
2 fees. The Commission is exempt from the requirements of Chapter 150B of the General Statutes
3 and G.S. 12-3.1 when adopting, amending, or repealing rules for operating hours and admission
4 fees or related activity fees at Tryon Palace Historic Sites and Gardens. The Commission shall
5 submit a report to the Joint Legislative Oversight Committee on Agriculture and Natural and
6 EconomicResources and theFiscalResearchDivisionontheamountandpurposeofafee change
7 within 30 days following its effective date.

8
9 U.S.S. NORTH CAROLINA BATTLESHIP COMMISSION DYNAMIC PRICING
10 CONFORMING CHANGE AND DNCR ATTRACTION RULE-MAKING
11 EXEMPTIONS
12 SECTION 14.2.(a) G.S. 143B-73 reads as rewritten:
13 § 143B-73. U.S.S. North Carolina Battleship Commission – creation, powers, and duties.
14 There is hereby created the U.S.S. North Carolina Battleship Commission of the Department

15 of Natural and Cultural Resources with the power and duty to adopt, amend, and rescind rules
16 and regulations under and not inconsistent with the laws of this State necessary in carrying out
17 the provisions and purposes of this Part.Part, including the following:
18 (1) The U.S.S. North Carolina Battleship Commission is authorized and
19 empowered to adopt such rules and regulations not inconsistent with the
20 management responsibilities of the Secretary of the Department provided by

21 Chapter 143A of the General Statutes and laws of this State and this Chapter
22 that may be necessary and desirable for the operation and maintenance of the
23 U.S.S. North Carolina as a permanent memorial and exhibit commemorating
24 the heroic participation of the men and women of North Carolina in the
25 prosecution and victory of the Second World War and for the faithful
26 performance and fulfillment of its duties and obligations.
27 (2) The U.S.S. North Carolina Battleship Commission shall have the power and

28 duty to charge reasonable admission and related activity fees for admission to
29 the ship and to establish standards and adopt rules and regulations: (i)
30 establishing and providing for a proper charge for admission to the ship; and
31 (ii) for the maintenance and operation of the ship as a permanent memorial
32 and exhibit.
33 (3) The Commission shall adopt rules and regulations consistent with the
34 provisions of this Chapter. The Commission is exempt from the requirements

35 of Chapter 150B of the General Statutes and G.S. 12-3.1 when adopting,
36 amending, or repealing rules for operating hours and admission fees or related
37 activity fees at the U.S.S. North Carolina Battleship. The Commission shall
38 submit a report to the Joint Legislative Oversight Committee on Agriculture
39 and Natural and Economic Resources and the Fiscal Research Division on the
40 amount and purpose of a fee change within 30 days following its effective

41 date.
42 SECTION 14.2.(b) G.S. 150B-1(d) reads as rewritten:
43 § 150B-1. Policy and scope.
44 (d) Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the
45 following:
46 …
47 (23) The Department of Natural and Cultural Resources with respect to operating

48 hours, admission fees fees, or related activity fees at historic sites and
49 museums pursuant to G.S. 121-7.3.
50 (24) Tryon Palace Commission with respect to operating hours, admission fees
51 fees, or related activity fees pursuant to G.S. 143B-71.

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1 (25) U.S.S. Battleship Commission with respect to operating hours, admission fees
2 fees, or related activity fees pursuant to G.S. 143B-73.
3
4 SYMPHONY CHALLENGE GRANT
5 SECTION14.3.(a) Ofthefundsappropriatedin this act to theDepartmentofNatural
6 and Cultural Resources, the sum of two million dollars ($2,000,000) in recurring funds for the
7 2019-2020 fiscal year and two million dollars ($2,000,000) in recurring funds for the 2020-2021

8 fiscal year shall be allocated to the North Carolina Symphony in accordance with this section. It
9 is theintentoftheGeneral AssemblythattheNorth CarolinaSymphonyraiseat least ninemillion
10 dollars ($9,000,000) in non-State funds each year of the 2019-2021 fiscal biennium. The North
11 Carolina Symphony cannot use funds transferred from the organization's endowment to its
12 operating budget to achieve the fund-raising targets set out in subsections (b) and (c) of this
13 section.
14 SECTION 14.3.(b) For the 2019-2020 fiscal year, the North Carolina Symphony

15 shall receive the allocation from the Department of Natural and Cultural Resources under this
16 section as follows:
17 (1) Upon raising the initial sum of four million dollars ($4,000,000) in non-State
18 funding, the North Carolina Symphony shall receive the sum of six hundred
19 thousand dollars ($600,000).
20 (2) Upon raising an additional sum of two million dollars ($2,000,000) in

21 non-State funding for a total amount of six million dollars ($6,000,000) in
22 non-State funds, the North Carolina Symphony shall receive the sum of seven
23 hundred thousand dollars ($700,000).
24 (3) Upon raising an additional sum of three million dollars ($3,000,000) in
25 non-State funding for a total amount of nine million dollars ($9,000,000) in
26 non-State funds, the North Carolina Symphony shall receive the final sum of
27 seven hundred thousand dollars ($700,000) in the 2019-2020 fiscal year.

28 SECTION 14.3.(c) For the 2020-2021 fiscal year, the North Carolina Symphony
29 shall receive the allocation from the Department of Natural and Cultural Resources under this
30 section as follows:
31 (1) Upon raising the initial sum of four million dollars ($4,000,000) in non-State
32 funding, the North Carolina Symphony shall receive the sum of six hundred
33 thousand dollars ($600,000).
34 (2) Upon raising an additional sum of two million dollars ($2,000,000) in

35 non-State funding for a total amount of six million dollars ($6,000,000) in
36 non-State funds, the North Carolina Symphony shall receive the sum of seven
37 hundred thousand dollars ($700,000).
38 (3) Upon raising an additional sum of three million dollars ($3,000,000) in
39 non-State funding for a total amount of nine million dollars ($9,000,000) in
40 non-State funds, the North Carolina Symphony shall receive the final sum of

41 seven hundred thousand dollars ($700,000) in the 2020-2021 fiscal year.
42
43 REPORT ON ATTRACTIONS MARKETING
44 SECTION 14.4.(a) The Department of Natural and Cultural Resources shall study
45 and report on the marketing of the North Carolina Zoological Park, the North Carolina
46 Aquariums, and the North Carolina State Museum of Natural Sciences (the State Attractions),
47 including marketing conducted on behalf of the State Attractions by affiliated or independent

48 support or friends organizations. As part of its report, the Department shall assess and provide
49 the following for the 2018-2019 fiscal year:

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1 (1) All public and private funds spent on marketing the State Attractions,
2 including a breakdown of funding source and the particular marketing uses
3 for the funds from each source.
4 (2) Identification of new or innovative marketing techniques of the State
5 Attractions that could be utilized but currently lack funding.
6 (3) The scope and effectiveness of cooperative or collaborative marketing
7 activities with other State agencies or with the nonprofit corporation with

8 which the Department of Commerce contracts pursuant to
9 G.S. 143B-431.01(b).
10 (4) An explanation of measures of effectiveness or reach that are used to evaluate
11 current marketing programs, as well as effectiveness or reach data generated
12 by those measures.
13 SECTION 14.4.(b) The Department shall provide its report to the Joint Legislative
14 Oversight Committee on Agriculture and Natural and Economic Resources and the Fiscal

15 Research Division no later than October 15, 2019.
16
17 ADD MARKETING AS PERMISSIBLE USE OF NC ZOO FUND
18 SECTION 14.5. G.S. 143B-135.209(a) reads as rewritten:
19 (a) Fund. – The North Carolina Zoo Fund is created as a special fund. The North Carolina
20 Zoo Fund shall be used for the following types of projects and activities at the North Carolina

21 Zoological Park and to match private funds raised for these types of projects:projects and
22 activities:
23 (1) Repair, renovation, expansion, maintenance, and educational exhibit
24 construction. Funds used for repair, renovation, and expansion projects may
25 be transferred to a capital projects fund to account for use of the funds for each
26 project.
27 (2) Renovations of exhibits in habitat clusters, visitor services facilities, and

28 support facilities (including greenhouses and temporary animal holding
29 areas).
30 (3) The acquisition, maintenance, or replacement of tram equipment as required
31 to maintain adequate service to the public.
32 (4) Marketing of the zoo.
33
34 STATE LIAISON OFFICER FOR FEDERAL LAND AND WATER CONSERVATION

35 FUND
36 SECTION 14.6. G.S. 143B-50.1(c), as amended by Section 4(c) of S.L. 2019-20,
37 reads as rewritten:
38 (c) Federal Assistance. – The Department, with the approval of the Governor, may apply
39 for and accept grants from the federal government and its agencies and from any foundation,
40 corporation, association, or individual, and may comply with the terms, conditions, and

41 limitations of the grant, in order to accomplish any of the purposes of the Department. Grant
42 funds shall be expended pursuant to the State Budget Act. The Director of the Department's
43 Division of Parks and Recreation shall be designated as having the authority and responsibility
44 to accept and administer is designated as the State liaison officer with respect to funding through
45 the federal Land and Water Conservation Fund or any successor fund established for similar
46 purposes, and the Secretary may designate additional personnel to assist the Director in the
47 responsibilities imposed by this subsection.

48
49 PARTF PROJECTS
50 SECTION 14.7. Funds appropriated in this act to the Parks and Recreation Trust
51 Fund for the 2019-2020 fiscal year are allocated for various projects in the following amounts:

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1 (1) One million five hundred thousand dollars ($1,500,000) to the North Carolina
2 Freedom Monument Project, Inc., to build a public sculpture park on land
3 located between the Legislative Building and the Governor's Mansion in
4 downtown Raleigh to commemorate historic and ongoing struggles for
5 freedom in North Carolina and especially the enduring roles of
6 African-Americans in the struggle for freedom in this State. Notwithstanding
7 G.S. 143B-135.56(b)(2), these funds shall not be expended unless the North

8 Carolina Freedom Monument Project, Inc., raises the sum of one million
9 seven hundred thousand dollars ($1,700,000) in non-State funds to match the
10 funds allocated by this section.
11 (2) One million dollars ($1,000,000) to the Department of Natural and Cultural
12 Resources for stabilization or renovation of structures located on the Vade
13 Mecum tract at Hanging Rock State Park as set forth in the July2018 Hanging
14 Rock State Park Expansion Master Plan.

15 (3) One million dollars ($1,000,000) to provide a grant to the Town of Madison
16 for development of the Lindsey Bridge river landing and park.
17 (4) Two million dollars ($2,000,000) to the Department of Natural and Cultural
18 Resources for the development of Pisgah View Park in Buncombe and
19 Haywood Counties.
20 (5) Two million dollars ($2,000,000) to the Department of Natural and Cultural

21 ResourcesforthedevelopmentoftheWildernessGatewayTrailinMcDowell,
22 Rutherford, Burke, and Catawba Counties.
23 (6) One hundred thousand dollars ($100,000) to the City of Lumberton for the
24 Lumberton Riverwalk project.
25 (7) Four million dollars ($4,000,000) to the Department of Natural and Cultural
26 Resources for the expansion of the Lea Island State Natural Area.
27

28 CONSERVATION CORPS NAME CHANGE
29 SECTION 14.8. G.S. 143-58.7 reads as rewritten:
30 § 143-58.7. Contracts with Youth Conservation Corps.
31 State departments, institutions, and agencies may contract with the North Carolina Youth
32 Conservation Corps North Carolina to perform trail construction and maintenance, invasive
33 species removal, and other conservation projects in State parks, State forests, and other
34 State-owned facilities where the projects provide direct public benefits to the citizens of the State

35 and offer youth and young adults of the State a structured program that connects them to natural
36 resources and teaches job skills, leadership, community service, and personal responsibility.
37 Contracts under this section are exempt from the competitive bidding procedures described in
38 this Article and the rules adopted under it.
39
40 NATURAL HERITAGE PROGRAM FEE WAIVER

41 SECTION 14.9. G.S. 143B-135.272 reads as rewritten:
42 (a) The Secretary may establish fees to defray the costs associated with any of the
43 following:
44 (1) Responding to inquiries requiring customized environmental review services
45 orthecosts associatedwith developing,improving,ormaintainingtechnology
46 that supports an online interface for external users to access Natural Heritage
47 Program data. The Secretary may reduce or waive the fee established under

48 this subsection if the Secretary determines that a waiver or reduction of the
49 fee is in the public interest.
50 (2) Anyactivityauthorized underG.S. 143B-135.234(10),includingan inventory
51 of natural areas conducted under the Natural Heritage Program, conservation

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1 and protection planning, and informational programs for owners of natural
2 areas, as defined in G.S. 143B-135.254.
3 …
4 (c) The Secretarymayreduce or waive fees established under this section if the Secretary
5 determines that a reduction or waiver of the fees is in the public interest or serves the purposes
6 declared in the Nature Preserves Act, Part 42 of Article 2 of Chapter 143B of the General
7 Statutes.

8
9 NATURAL HERITAGE PROGRAM ADMINISTRATION AND FUND CORRECTION
10 SECTION 14.10.(a) G.S. 143B-135.272(b) reads as rewritten:
11 (b) Fees collected under this section are receipts of the Department of Natural and
12 Cultural Resources and shall be deposited in the Clean Water Management Trust Fund special
13 fund for the purpose of supporting the operations of the Natural Heritage Program.
14 SECTION 14.10.(b) Part 42 of Article 2 of Chapter 143B of the General Statutes is

15 amended by adding a new section to read:
16 § 143B-135.273. Administration of the Conservation Tax Credit program.
17 All duties and responsibilities related to stewardship and oversight of properties and interests
18 for which tax credits were granted under the Conservation Tax Credit program for tax years
19 beginning before January 1, 2014, and previously given to the Department of Environmental
20 Quality or its predecessors are transferred to the Department of Natural and Cultural Resources.

21 The Department of Natural and Cultural Resources shall exercise the duties and responsibilities
22 transferred by this section through the Natural Heritage Program.
23
24 REPURPOSE CERTAIN PLANNING FUNDS
25 SECTION 14.11.(a) Funds appropriated to the Division of North Carolina
26 Aquariums in theNorth CarolinaDepartment ofNatural and Cultural Resources bySection14.19
27 of S.L. 2017-57, as amended by Section 4.3 of S.L. 2017-197 and Section 4.9 of S.L. 2017-212,

28 and allocated for planning and permitting of a satellite aquarium area shall instead be used for
29 the following purposes:
30 (1) Ninety-eight thousand seven hundred ninety-four dollars ($98,794) to address
31 storm damage at the Core Sound Waterfowl Museum and Heritage Center in
32 Harkers Island, North Carolina.
33 (2) One hundred fifty-five thousand dollars ($155,000) to add the home of civil
34 rights leader Golden Frinks to the Historic Edenton State Historic Site.

35 SECTION 14.11.(b) This section becomes effective June 30, 2019.
36
37 HISTORIC SITES MAINTENANCE FUNDS
38 SECTION 14.11A. Funds appropriated to the Department of Natural and Cultural
39 Resources by this act and allocated for maintenance of State Historic Sites may be used at any
40 State Historic Site other than Tryon Palace, the North Carolina Transportation Museum, or the

41 Battleship U.S.S. North Carolina.
42
43 REPEAL OBSOLETE ONE MILLION ACRES PROGRAM
44 SECTION 14.11B.(a) G.S. 113A-240(a) and (b) are recodified as
45 G.S. 143B-135.230(a) and (c), respectively.
46 SECTION 14.11B.(b) G.S. 143B-135.230, as amended by subsection (a) of this
47 section, reads as rewritten:

48 § 143B-135.230. Purpose.
49 (a) It is the intent of the General Assembly to continue to support and accelerate the
50 State's programs of land conservation and protection, protection and farmland and open space
51 preservation and coordination to find means to assure and increase funding for these programs,

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1 to support thelong-term managementof conservation landsacquired bythe State, and to improve
2 the coordination, efficiency, and implementation of the various State and local land protection
3 programs operating in North Carolina.
4 (b) It is the further intent of the General Assembly that moneys from the Fund created
5 under this Part shall be used to help finance projects that enhance or restore degraded surface
6 waters; protect and conserve surface waters, including drinking supplies, and contribute toward
7 a network of riparian buffers and greenways for environmental, educational, and recreational

8 benefits; provide buffers around military bases to protect the military mission; acquire land that
9 represents the ecological diversity of North Carolina; and acquire land that contributes to the
10 development of a balanced State program of historic properties.
11 (c) It is the further intent of the General Assembly that the State's lands should be
12 protected in a manner that minimizes any adverse impacts on the ability of local governments to
13 carry out their broad mandates.
14 SECTION 14.11B.(c) Article 17 of Chapter 113A of the General Statutes, as

15 amended by subsection (a) of this section, is repealed.
16
17 BATH HIGH SCHOOL PRESERVATION FUNDS
18 SECTION 14.11C. The funds appropriated by this act to the Department of Natural
19 and Cultural Resources for the 2019-2020 fiscal year and allocated for a grant to Bath High
20 School Preservation, a nonprofit corporation, shall be matched byBath High School Preservation

21 onthebasis ofonedollar($1.00)in allocatedStatefundsforeveryonedollar ($1.00)in non-State
22 funds. The State funds shall remain available until June 30, 2023, and the Department shall only
23 allocate the State funds upon Bath High School Preservation providing the required match. If the
24 Department has not allocated these funds to Bath High School Preservation by the end of the
25 2022-2023 fiscal year, the funds shall revert to the General Fund.
26
27 SCIENCE MUSEUM AND GRASSROOTS ARTS MUSEUM GRANTS

28 SECTION 14.11D. Notwithstanding G.S. 143B-135.227 and Part 2 of Article 2 of
29 Chapter 143B of the General Statutes, nonrecurring funds appropriated by this act to the
30 Department of Natural and Cultural Resources for the 2019-2021 fiscal biennium and allocated
31 as provided in the Committee Report described in Section 42.2 of this act for Science Museum
32 grants and Grassroots Arts grants are reserved for grants to eligible recipients located in (i)
33 economic development tier one counties, (ii) economic development tier two counties, and (iii)
34 economic development tier three counties with a population of less than 130,000, according to

35 the latest population estimate of the Office of State Budget and Management.
36
37 WRC REPORT CHANGE
38 SECTION 14.12. G.S. 143-250 reads as rewritten:
39 § 143-250. Wildlife Resources Fund.
40 …

41 All moneys credited to the Wildlife Resources Fund shall be made available to carry out the
42 intent and purposes of this Article in accordance with plans approved by the North Carolina
43 Wildlife Resources Commission, and all such of these funds are hereby appropriated, reserved,
44 set aside aside, and made available until expended, for the enforcement and administration of this
45 Article, Chapter 75A, Article 1, and Chapter 113, Subchapter IV of the General Statutes of North
46 Carolina. Article 1 of Chapter 75A of the General Statutes, and Subchapter IV of Chapter 113 of
47 the General Statutes. No later than October 1 of each year, the Wildlife Resources Commission

48 shall report to the Joint Legislative Commission on Governmental Operations Joint Legislative
49 Oversight Committee on Agriculture and Natural and Economic Resources on the expenditures
50 from the Wildlife Resources Fund during the fiscal year that ended the previous July 1 of that
51 year and on the planned expenditures for the current fiscal year.

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1 ….
2
3 OUTDOOR HERITAGE AMENDMENTS
4 SECTION 14.13.(a) G.S. 126-5(c1) reads as rewritten:
5 (c1) Except as to the provisions of Articles 6 and 7 of this Chapter, the provisions of this
6 Chapter shall not apply to:
7 …

8 (36) Employees of the Outdoor Heritage Advisory Council.
9 SECTION 14.13.(b) The introductory language of Section 13A.1(a) of S.L. 2018-5
10 reads as rewritten:
11 SECTION 13A.1.(a) G.S. 143B-344.62 G.S. 143B-344.60 reads as rewritten:
12 SECTION 14.13.(c) Funds appropriated to the Outdoor Heritage Advisory Council
13 by this act for grants shall not be used for the Council's administrative expenses. The Council
14 shall report annually on the grant program until the funds have been expended. The report shall

15 be submitted by April 1 of each fiscal year to the Joint Legislative Oversight Committee on
16 Agriculture and Natural and Economic Resources and the Fiscal Research Division, and shall
17 include,ataminimum,alistingofgrantees,awardamounts,andabriefdescriptionofthepurpose
18 or use of each award.
19
20 HABITAT OPTIMIZATION PLAN

21 SECTION 14.14. The Wildlife Resources Commission and the North Carolina
22 Forest Service shall coordinate with the United States Forest Service to formulate a plan to
23 optimize habitats to reverse declines in wildlife populations on State lands managed bythe North
24 Carolina Forest Service and federal lands in the State managed by the United States Forest
25 Service. The Commission and the North Carolina Forest Service shall report regarding this plan
26 to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic
27 Resources no later than July 1, 2020.

28
29 PART XV. ADMINISTRATIVE OFFICE OF THE COURTS
30
31 COLLECTION OF WORTHLESS CHECKS
32 SECTION 15.1. Notwithstanding the provisions of G.S. 7A-308(c), the Judicial
33 Department may use any balance remaining in the Collection of Worthless Checks Fund on June
34 30, 2019, for the purchase or repair of office or information technology equipment during the

35 2019-2020 fiscal year and mayuse anybalance remaining in the Collection of Worthless Checks
36 Fund on June 30, 2020, for the purchase or repair of office or information technology equipment
37 during the 2020-2021 fiscal year. Prior to using any funds under this section, the Judicial
38 Department shall report to the chairs of the House of Representatives and Senate Appropriations
39 Committees on Justice and Public Safety and the Office of State Budget and Management on the
40 equipment to be purchased or repaired and the reasons for the purchases.

41
42 E-COURTS SYSTEM
43 SECTION 15.2.(a) Notwithstanding G.S. 143C-1-2(b), for the 2019-2020 fiscal
44 year, the Judicial Department shall transfer any unexpended, unencumbered funds to Budget
45 Code 22006-2006 to be used to implement an integrated information technology system
46 (e-Courts) in accordance with G.S. 7A-343.2(b). The cumulative sum transferred shall not
47 exceed three percent (3%) of the Judicial Department's certified budgets for Budget Code 12000,

48 Administrative Office of the Courts, and Budget Code 12001, Office of Indigent Defense
49 Services, for the 2018-2019 fiscal year.

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1 SECTION 15.2.(b) The Administrative Office of the Courts shall report to the Joint
2 Legislative Oversight Committee on Justice and Public Safety by October 1 of each fiscal year
3 of the biennium all of the following information:
4 (1) The specific budgetary actions taken that resulted in unexpended or
5 unencumbered funds that were transferred pursuant to subsection (a) of this
6 section.
7 (2) The specific fund codes impacted by the actions that resulted in unexpended

8 or unencumbered funds.
9
10 MAGISTRATE/CLERK STAFFING PILOT PROJECT
11 SECTION 15.3.(a) Notwithstanding the minimum staffing number in
12 G.S. 7A-133(c), the clerk of superior court in a county, with the written or e-mailed consent of
13 thechiefdistrict courtjudge,mayhireonedeputyorassistantclerkinlieuofoneofthemagistrate
14 positions allocated to that county. To provide accessibility for law enforcement and citizens, the

15 clerk of superior court's office shall provide some of the services traditionally provided by the
16 magistrates' office during some or all of the regular courthouse hours.
17 SECTION 15.3.(b) The Administrative Office of the Courts shall report by March
18 1, 2020, to the chairs of the House of Representatives Appropriations Committee on Justice and
19 Public Safety and the Senate Appropriations Committee on Justice and Public Safety regarding
20 all hires made pursuant to subsection (a) of this section.

21
22 DISTRICT ATTORNEYS/NO TRANSFER OF FUNDS AND STUDY FEASIBILITY OF
23 OFFICE OF PROSECUTORIAL SERVICES
24 SECTION 15.5.(a) No Transfer of Funds. – For the 2019-2020 fiscal year, no funds
25 may be transferred from Fund Code 12000-1600 (Office – District Attorney) without the consent
26 of the Conference of District Attorneys as communicated bythe Conference's Executive Director
27 to the Administrative Office of the Courts.

28 SECTION 15.5.(b) Study. – The School of Government at the University of North
29 Carolina at Chapel Hill (School of Government), in consultation with the Conference of District
30 Attorneys, the Administrative Office of the Courts, the Office of Indigent Defense Services, and
31 any other stakeholders the School of Government deems relevant, shall study the feasibility and
32 cost of creating an Office of Prosecutorial Services. The study shall compare North Carolina's
33 judicial branch structure to that of other states in terms of organizational placement of
34 prosecutorial services within the context of the unified court system and shall also determine the

35 necessary resources and costs required to make an Office of Prosecutorial Services viable as an
36 independent agency. The School of Government shall submit the report required under this
37 subsection by April 1, 2020, to the House of Representatives Appropriations Committee on
38 Justice and Public Safetyand the Senate Appropriations Committee on Justice and Public Safety.
39
40 ALLOCATION OF ASSISTANT DISTRICT ATTORNEYS

41 SECTION 15.6.(a) G.S. 7A-60(a1) reads as rewritten:
42 (a1) The counties of the State are organized into prosecutorial districts, and each district
43 has the counties and the number of full-time assistant district attorneys set forth in the following
44 table:
45 No. of Full-Time
46 Prosecutorial Asst. District
47 District Counties Attorneys

48 1 Camden, Chowan, Currituck, 11
49 Dare, Gates, Pasquotank,
50 Perquimans
51 2 Beaufort, Hyde, Martin, 8

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1 Tyrrell, Washington
2 3 Pitt 12
3 4 Carteret, Craven, Pamlico 13
4 5 Duplin, Jones, Onslow, 1920
5 Sampson
6 6 New Hanover, Pender 1920
7 7 Bertie, Halifax, Hertford, 11

8 Northampton
9 8 Edgecombe, Nash, Wilson 19
10 9 Greene, Lenoir, Wayne 1415
11 10 Wake 42
12 11 Franklin, Granville, Person 15
13 Vance, Warren
14 12 Harnett, Lee 11

15 13 Johnston 1011
16 14 Cumberland 25
17 15 Bladen, Brunswick, Columbus 14
18 16 Durham 18
19 17 Alamance 12
20 18 Orange, Chatham 10

21 19 Scotland, Hoke 10
22 20 Robeson 1213
23 21 Anson, Richmond 6
24 22 Caswell, Rockingham 8
25 23 Stokes, Surry 8
26 24 Guilford 3435
27 25 Cabarrus 910

28 26 Mecklenburg 58
29 27 Rowan 9
30 28 Montgomery, Stanly 6
31 29 Moore 5
32 30 Union 11
33 31 Forsyth 27
34 32 Alexander, Iredell 12

35 33 Davidson, Davie 12
36 34 Alleghany, Ashe, Wilkes, 9
37 Yadkin
38 35 Avery, Madison, Mitchell, 8
39 Watauga, Yancey
40 36 Burke, Caldwell, Catawba 1920

41 37 Randolph 10
42 38 Gaston 1516
43 39 Cleveland, 12
44 Lincoln
45 40 Buncombe 14
46 41 McDowell, Rutherford 8
47 42 Henderson, Polk, Transylvania 9

48 43 Cherokee, Clay, Graham, 12
49 Haywood, Jackson, Macon,
50 Swain.

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1 SECTION 15.6.(b) G.S. 7A-60(a1) as amended by subsection (a) of this section,
2 reads as rewritten:
3 (a1) The counties of the State are organized into prosecutorial districts, and each district
4 has the counties and the number of full-time assistant district attorneys set forth in the following
5 table:
6 No. of Full-Time
7 Prosecutorial Asst. District

8 District Counties Attorneys
9 1 Camden, Chowan, Currituck, 1112
10 Dare, Gates, Pasquotank,
11 Perquimans
12 2 Beaufort, Hyde, Martin, 8
13 Tyrrell, Washington
14 3 Pitt 12

15 4 Carteret, Craven, Pamlico 13
16 5 Duplin, Jones, Onslow, 20
17 Sampson
18 6 New Hanover, Pender 20
19 7 Bertie, Halifax, Hertford, 11
20 Northampton

21 8 Edgecombe, Nash, Wilson 19
22 9 Greene, Lenoir, Wayne 15
23 10 Wake 42
24 11 Franklin, Granville, Person 15
25 Vance, Warren
26 12 Harnett, Lee 1112
27 13 Johnston 11

28 14 Cumberland 25
29 15 Bladen, Brunswick, Columbus 1415
30 16 Durham 18
31 17 Alamance 12
32 18 Orange, Chatham 10
33 19 Scotland, Hoke 10
34 20 Robeson 13

35 21 Anson, Richmond 6
36 22 Caswell, Rockingham 89
37 23 Stokes, Surry 8
38 24 Guilford 35
39 25 Cabarrus 10
40 26 Mecklenburg 58

41 27 Rowan 9
42 28 Montgomery, Stanly 6
43 29 Moore 5
44 30 Union 11
45 31 Forsyth 27
46 32 Alexander, Iredell 1213
47 33 Davidson, Davie 12

48 34 Alleghany, Ashe, Wilkes, 9
49 Yadkin
50 35 Avery, Madison, Mitchell, 8
51 Watauga, Yancey

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1 36 Burke, Caldwell, Catawba 20
2 37 Randolph 10
3 38 Gaston 16
4 39 Cleveland, 1213
5 Lincoln
6 40 Buncombe 14
7 41 McDowell, Rutherford 8

8 42 Henderson, Polk, Transylvania 9
9 43 Cherokee, Clay, Graham, 1213
10 Haywood, Jackson, Macon,
11 Swain.
12 SECTION 15.6.(c) G.S. 7A-60(a1), as amended by subsections (a) and (b) of this
13 section, reads as rewritten:
14 (a1) The counties of the State are organized into prosecutorial districts, and each district

15 has the counties and the number of full-time assistant district attorneys set forth in the following
16 table:
17 No. of Full-Time
18 Prosecutorial Asst. District
19 District Counties Attorneys
20 …

21 36 Burke, Caldwell 910
22 ….
23 SECTION 15.6.(d) Subsection (a) of this section becomes effective July 1, 2019.
24 Subsection (b) of this section becomes effective July 1, 2020. Subsection (c) of this section
25 becomes effective January 1, 2023.
26
27 INNOVATIVE COURT PILOT PROJECT REPORT

28 SECTION 15.7. The Administrative Office of the Courts, in conjunction with
29 Cumberland County, Harnett County, Haywood County, Pitt County, and Robeson County, shall
30 report to the chairs of the Joint Legislative Oversight Committee on Justice and Public Safety by
31 March 1, 2020, on the results of the innovative court pilot projects in each county.
32
33 IMPLEMENT RECOMMENDATIONS MADE BY NORTH CAROLINA HUMAN
34 TRAFFICKING COMMISSION

35 SECTION 15.8.(a) G.S. 14-43.13 reads as rewritten:
36 § 14-43.13. Sexual servitude.
37 (a) A person commits the offense of sexual servitude when that person knowingly or in
38 reckless disregard of the consequences of the action subjects or maintains subjects, maintains, or
39 obtains another in for the purposes of sexual servitude.
40 ….

41 SECTION 15.8.(b) Article 27 of Chapter 14 of the General Statutes is amended by
42 adding a new section to read:
43 § 14-208.1. Promoting travel for unlawful sexual conduct.
44 (a) Definition. – For purposes of this section, the term travel services means
45 transportation by air, sea, or ground; hotel or other lodging accommodations; package tours, or
46 the provision of vouchers or coupons to be redeemed for future travel; or accommodations for a
47 fee, commission, or other valuable consideration.

48 (b) Offense. – A person commits the offense of promoting travel for unlawful sexual
49 conduct if the person sells or offers to sell travel services that the person knows to include travel
50 for the purpose of engaging in conduct that would constitute any one of the following offenses if
51 occurring within this State:

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1 (1) An offense under Article 7B of Chapter 14 of the General Statutes.
2 (2) Any of the following offenses involving the sexual exploitation of a minor:
3 a. G.S. 14-190.16.
4 b. G.S. 14-190.17.
5 c. G.S. 14-190.17A.
6 (3) Any of the following offenses involving indecent liberties with a minor:
7 a. G.S. 14-202.1.

8 b. G.S. 14-202.4.
9 (4) Any of the following prostitution offenses:
10 a. G.S. 14-204.
11 b. G.S. 14-205.1.
12 c. G.S. 14-205.2.
13 d. G.S. 14-205.3.
14 (c) Punishment. – A violation of this section is a Class G felony.

15 SECTION 15.8.(c) Article 10A of Chapter 14 of the General Statutes is amended by
16 adding a new section to read:
17 § 14-43.18. Civil cause of action; damages and attorneys' fees; limitation.
18 (a) Cause of Action. – An individual who is a victim may bring a civil action against a
19 person who violates this Article or a person who knowingly benefits financially or by receiving
20 anything of value from participation in a venture which that person knew or should have known

21 violates this Article.
22 (b) Relief and Damages. – The victim may seek and the court may award any or all of
23 the following types of relief:
24 (1) An injunction to enjoin continued violation of this Article.
25 (2) Compensatory damages, which include the following:
26 a. The greater of (i) the gross income or value to the defendant of the
27 victim's labor or (ii) the value of the victim's labor as guaranteed under

28 the Minimum Wage Law and overtime provisions of the Fair Labor
29 Standards Act (FLSA).
30 b. Any costs reasonably incurred by the victim for medical care,
31 psychological treatment, temporary housing, transportation, and any
32 other services designed to assist a victim in recovering from any
33 injuries or loss resulting from a violation of this Article.
34 (3) General damages for noneconomic losses.

35 (c) Attorneys' Fees. – The court may award to the plaintiff and assess against the
36 defendant the reasonable costs and expenses, including attorneys' fees, of the plaintiff in bringing
37 an action pursuant to this section. If the court determines that the plaintiff's action is frivolous, it
38 may award to the defendant and assess against the plaintiff the reasonable costs and expenses,
39 including attorneys' fees, of the defendant in defending the action brought pursuant to this
40 section.

41 (d) Stay Pending Criminal Action. – Any civil action filed under this section shall be
42 stayed during the pendency of any criminal action arising out of the same occurrence in which
43 the plaintiff is the victim. The term criminal action includes investigation and prosecution and
44 is pending until final adjudication in the trial court.
45 (e) Statute of Limitations. – No action may be maintained under subsection (a) of this
46 section unless it is commenced no later than either of the following:
47 (1) 10 years after the cause of action arose.

48 (2) 10 years after the victim reaches 18 years of age if the victim was a minor at
49 the time of the alleged offense.
50 (f) Jury Trial. – Parties to a civil action brought pursuant to this section shall have the
51 right to a jury trial as provided under G.S. 1A-1, Rules of Civil Procedure.

Page 258 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 SECTION 15.8.(d) G.S. 15A-145.6(b) reads as rewritten:
2 (b) A person who has been convicted of a prostitution offense may file a petition in the
3 court of the county where the person was convicted for expunction of the prostitution offense
4 from the person's criminal record provided that all the following criteria are met:
5 (1) The person has not previously been convicted of any violent felony or violent
6 misdemeanor under the laws of the United States or the laws of this State or
7 any other state.

8 (2) The person satisfies any one of the following criteria:
9 a. The person's participation in the prostitution offense was a result of
10 having been a trafficking victim under G.S. 14-43.11 (human
11 trafficking) or G.S. 14-43.13 (sexual servitude) or a victim of a severe
12 form of trafficking under the federal Trafficking Victims Protection
13 Act (22 U.S.C. § 7102(13)).
14 b. The person has no prior convictions for a prostitution offense and at

15 least three years have passed since the date of conviction or the
16 completion of any active sentence, period of probation, and
17 post-release supervision, whichever occurs later.
18 c. The person received was discharged, and the charge was dismissed
19 upon completion of a conditional discharge pursuant to under
20 G.S. 14-204(b).

21 SECTION 15.8.(e) Article 5 of Chapter 15A of the General Statutes is amended by
22 adding a new section to read:
23 § 15A-145.9. Expunctions of certain offenses committed by human trafficking victims.
24 (a) Definition. – For purposes of this section, the following terms apply:
25 (1) Nonviolent offense. – Any misdemeanor or felony except the following:
26 a. A Class A through G felony.
27 b. An offense that includes assault as an essential element of the offense.

28 c. An offense requiring registration pursuant to Article 27A of Chapter
29 14 of the General Statutes, whether or not the person is currently
30 required to register.
31 d. Any of the following sex-related or stalking offenses:
32 G.S. 14-27.25(b), 14-27.30(b), 14-190.7, 14-190.8, 14-190.9, 14-202,
33 14-208.11A, 14-208.18, 14-277.3A, or 14-321.1.
34 e. An offense under G.S. 14-12.12(b), 14-12.13, or 14-12.14, or any

35 offense for which punishment was determined pursuant to
36 G.S. 14-3(c).
37 f. An offense under G.S. 14-401.16.
38 g. A traffic offense.
39 h. Any offense that is an attempt to commit an offense described in
40 sub-subdivisions a. through g. of this subdivision.

41 (2) Trafficking victim. – A person that meets the definition for the term victim
42 set forth in G.S. 14-43.10 or a victim of a severe form of trafficking under the
43 federal Trafficking Victims Protection Act (22 U.S.C. § 7102(13)).
44 (b) Expunction Authorized. – A person who has been convicted of a nonviolent offense
45 may file a petition in the court of the county where the person was convicted for expunction of
46 the nonviolent offense from the person's criminal record if the court finds that the person was
47 coerced or deceived into committing the offense as a direct result of having been a trafficking

48 victim.
49 (c) Petition Requirements. – The petition shall contain all of the following:
50 (1) An affidavit by the petitioner that the petitioner: (i) is a victim of human
51 trafficking,(ii)wascoercedordeceivedintocommittingtheoffenseasadirect

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1 result of the person's status as a trafficking victim, and (iii) has been of good
2 moral character since the date of conviction of the offense in question.
3 (2) A statement that the petition is a motion in the cause in the case wherein the
4 petitioner was convicted.
5 (3) An application on a form approved bythe Administrative Office of the Courts
6 requesting and authorizing a search by the Department of Public Safety for
7 any outstanding warrants. The application shall be filed with the clerk of

8 superior court. The clerk of superior court shall forward the application to the
9 Department of Public Safety, which shall conduct the search and report its
10 findings to the court.
11 (4) An affidavit by the petitioner that no restitution orders or civil judgments
12 representing amounts ordered for restitution entered against the petitioner are
13 outstanding.
14 (d) Service of Petition. – The petition shall be served upon the district attorney of the

15 court wherein the case was tried resulting in conviction. The district attorney shall have 30 days
16 thereafter in which to file any objection thereto and shall be duly notified as to the date of the
17 hearing of the petition.
18 (e) Issues for Consideration. – The court in which the petition was filed may take the
19 following steps and may consider the following issues in rendering a decision upon a petition for
20 expunction of records of an offense under this section:

21 (1) Call upon a probation officer for additional investigation or verification of the
22 petitioner's conduct during the period since the date of conviction of the
23 offense in question.
24 (2) Review any other information the court deems relevant, including, but not
25 limited to, affidavits or other testimonyprovided bylaw enforcement officers,
26 district attorneys, or licensed social workers.
27 (f) Restoration of Status. – The court shall order that the person be restored, in the

28 contemplation of the law, to the status the person occupied before the arrest or indictment or
29 information if the court finds all of the following after a hearing:
30 (1) The criteria set out in subsection (b) of this section are satisfied.
31 (2) The petitioner has remained of good moral character.
32 (3) The petitioner has no outstanding warrants.
33 (4) The petitioner has no outstanding restitution orders or civil judgments
34 representing amounts ordered for restitution entered against the petitioner.

35 (g) Effect. – No person as to whom an order has been entered pursuant to subsection (f)
36 of this section shall be held thereafter under any provision of any laws to be guilty of perjury or
37 otherwise giving a false statement by reason of that person's failure to recite or acknowledge the
38 arrest, indictment, information, trial, or conviction. Persons required by State law to obtain a
39 criminal history record check on a prospective employee shall not be deemed to have knowledge
40 of any convictions expunged under this section.

41 (h) Law Enforcement Certification. – Persons pursuing certification under the provisions
42 ofArticle1 ofChapter17C or17EoftheGeneral Statutes,however,shall discloseall convictions
43 to the certifying Commission regardless of whether or not the convictions were expunged
44 pursuant to the provisions of this section.
45 (i) Records Expunged. – The court shall also order that the conviction of the offenses be
46 expunged from the records of the court and direct all law enforcement agencies bearing record
47 of the same to expunge their records of the conviction. The clerk shall notify State and local

48 agencies of the court's order as provided in G.S. 15A-150.
49 (j) Additional Records Expunged. – Any other applicable State or local government
50 agencyshallexpungefromitsrecordsentriesmadeasaresultoftheconvictionorderedexpunged
51 underthissection.Theagencyshallalsoreverseanyadministrativeactionstakenagainstaperson

Page 260 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 whose record is expunged under this section as a result of the charges or convictions expunged.
2 This subsection shall not applyto the Department of Justice for DNA records and samples stored
3 in the State DNA Database and the State DNA Databank.
4 (k) Costs Waived. – The costs of expunging the records shall not be taxed against the
5 petitioner.
6 SECTION 15.8.(f) G.S. 15A-151.5(a) reads as rewritten:
7 (a) Notwithstanding any other provision of this Article, the Administrative Office of the

8 Courts shall make all confidential files maintained under G.S. 15A-151 electronically available
9 to all prosecutors of this State if the criminal record was expunged on or after July1, 2018, under
10 any of the following:
11 …
12 (7a) G.S. 15A-145.8. Expunction of records of certain offenses committed by
13 human trafficking victims.
14 ….

15 SECTION 15.8.(f1) G.S. 7B-3200 reads as rewritten:
16 § 7B-3200. Expunction of records of juveniles alleged or adjudicated delinquent and
17 undisciplined.
18 …
19 (b) Anyperson who has attained the age of 18 years mayfile a petition in the court where
20 theperson was adjudicated delinquent for expunctionofall records ofthat adjudication provided:

21 (1) The offense for which the person was adjudicated would have been a crime
22 other than a Class A, B1, B2, C, D, or E felony if committed by an adult.
23 (1a) The person has been released from juvenile court jurisdiction.
24 (2) At least 18 months have elapsed since the person was released from juvenile
25 court jurisdiction, and the person has not subsequently been adjudicated
26 delinquent or convicted as an adult of any felony or misdemeanor other than
27 a traffic violation under the laws of the United States or the laws of this State

28 or any other state.
29 The requirements set forth in subdivision (2) of this subsection shall not apply to a person
30 whose participation in the offense was a result of having been a victim of human trafficking as
31 defined in G.S. 14-43.10 or a victim of a severe form of trafficking in persons as defined in the
32 federal Trafficking Victims Protection Act, 22 U.S.C. § 7102.
33 Records relating to an adjudication for an offense that would be a Class A, B1, B2, C, D, or
34 E felony if committed by an adult shall not be expunged.

35 (c) The petition shall contain, but not be limited to, all of the following:
36 (1) An affidavit by the petitioner that includes all of the following statements:
37 a. the That the petitioner has been of good behavior since the
38 adjudication and, in the case of a adjudication.
39 b. If the petition is based on a delinquency adjudication, that the
40 petitioner has been released from juvenile court jurisdiction and has

41 not subsequently been adjudicated delinquent or convicted as an adult
42 of any felony or misdemeanor other than a traffic violation under the
43 laws of the United States, or the laws of this State or any other
44 state;state.
45 c. If the petitioner is not subject to the requirements set forth in
46 subdivision(2)ofsubsection (b)ofthis section, the affidavit shall state
47 that the petitioner was adjudicated delinquent for an offense the

48 petitioner participated in as a result of having been a victim of human
49 trafficking as defined in G.S. 14-43.10 or a victim of a severe form of
50 trafficking in persons as defined in the federal Trafficking Victims
51 Protection Act, 22 U.S.C. § 7102.

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1 (2) Verified affidavits of two persons, who are not related to the petitioner or to
2 each other by blood or marriage, that they know the character and reputation
3 of the petitioner in the community in which the petitioner lives and that the
4 petitioner's character and reputation are good; andgood.
5 (3) A statement that the petition is a motion in the cause in the case wherein the
6 petitioner was adjudicated delinquent or undisciplined.
7 The petition shall be served upon the district attorney in the district wherein adjudication

8 occurred. The district attorneyshall have 10 days thereafter in which to file any objection thereto
9 and shall be duly notified as to the date of the hearing on the petition.
10 ….
11 SECTION 15.8.(g) G.S. 15A-1415(b) reads as rewritten:
12 (b) The following are the only grounds which the defendant may assert by a motion for
13 appropriate relief made more than 10 days after entry of judgment:
14 …

15 (10) The defendant was convicted of a first offense of prostitution under G.S.
16 14-204, and the court did not discharge the defendant and dismiss the charge
17 pursuant to G.S. 14-204(b); nonviolent offense as defined in G.S. 15A-145.9;
18 thedefendant'sparticipationintheoffensewas aresultofhavingbeenavictim
19 of human trafficking under G.S. 14-43.11, sexual servitude under
20 G.S. 14-43.13, or the federal Trafficking Victims Protection Act (22 U.S.C. §

21 7102(13)); and the defendant seeks to have the conviction vacated.
22 SECTION 15.8.(h) G.S. 15A-1416.1 reads as rewritten:
23 § 15A-1416.1. Motion by the defendant to vacate prostitution a nonviolent offense
24 conviction for sex human trafficking victim.
25 (a) A motion for appropriate relief seeking to vacate a conviction for prostitution a
26 nonviolent offense based on the grounds set out in G.S. 15A-1415(b)(10) shall be filed in the
27 court where the conviction occurred. The motion may be filed at any time following the entry of

28 a verdict or finding of guilty under G.S. 14-204. guilty. Any motion for appropriate relief filed
29 under this section shall state why the facts giving rise to this motion were not presented to the
30 trial court and shall be made with due diligence after the defendant has ceased to be a victim of
31 such trafficking or has sought services for victims of such offenses, subject to reasonable
32 concerns for the safety of the defendant, family members of the defendant, or other victims of
33 such trafficking that may be jeopardized by the bringing of such motion or for other reasons
34 consistent with the purpose of this section. Reasonable notice of the The motion shall be

35 contemporaneously served upon the State.the district attorney in the prosecutorial district in
36 which the conviction was entered. The district attorney shall have 30 days thereafter in which to
37 file any objection thereto and shall be duly notified as to the date of the hearing of the motion.
38 (b) The court may grant the motion if, in the discretion of the court, the defendant has
39 demonstrated, by the preponderance of the evidence, that the violation was a direct result of the
40 defendant having been a victim of human trafficking or sexual servitude. servitude and that the

41 offense would not have been committed but for the defendant having been a victim of human
42 trafficking or sexual servitude. Evidence of such may include any of the following documents
43 listed in subdivisions (1) through (3) (4) of this subsection; alternatively, the court may consider
44 such other evidence as it deems of sufficient credibility and probative value in determining
45 whether the defendant is a trafficking victim:
46 (1) Certified records of federal or State court proceedings which demonstrate that
47 the defendant was a victim of a person charged with an offense under

48 G.S. 14-43.11, G.S. 14-43.13, or under 22 U.S.C. Chapter 78.
49 (2) Certified records of approval notices or enforcement certifications
50 generated from federal immigration proceedings available to such victims.

Page 262 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (3) A sworn statement from a trained professional staff of a victim services
2 organization, an attorney, a member of the clergy, or a medical or other
3 professional from whom the defendant has sought assistance in addressingthe
4 trauma associated with being trafficked.
5 (4) A sworn statement or affidavit from a federal, State, or local law enforcement
6 officer who investigated the violation of G.S. 14-43.11, G.S. 14-43.13, or the
7 federal Trafficking Victims Protection Act, as stated within the defendant's

8 motion.
9 …
10 (d) A previous or subsequent conviction shall not affect a person's eligibility for relief
11 under this section.
12 SECTION 15.8.(h1) G.S. 90-628 reads as rewritten:
13 § 90-628. Expenses and fees.
14 (a) All salaries, compensation, and expenses incurred or allowed for the purposes of this

15 Article shall be paid bythe Board exclusivelyout of the fees received by the Board as authorized
16 by this Article or from funds received from other sources. In no case shall any salary, expense,
17 or other obligations of the Board be charged against the General Fund.
18 (b) The Board mayimpose the followingfees up to the amounts listed below for a license
19 to practice massage and bodywork therapy:
20 (1) Application for license..............................................................$20.00$30.00

21 (2) Initial license fee.......................................................................150.00200.00
22 (3) License renewal.........................................................................100.00150.00
23 (4) Late renewal penalty...................................................................75.00100.00
24 (5) Repealed by Session Laws 2008-224, s. 8, effective August 17, 2008.
25 (6) Duplicate license....................................................................................25.00
26 (7) Repealed by Session Laws 2008-224, s. 8, effective August 17, 2008.
27 SECTION 15.8.(i) Subsection (c) of this section becomes effective July1, 2019, and

28 applies to causes of action arising on or after that date. Subsection (h1) of this section becomes
29 effective July 1, 2019, and applies to applications received, renewals, and penalties assessed, on
30 or after that date. Subsections (a) and (b) of this section become effective December 1, 2019, and
31 apply to offenses committed on or after that date. Subsections (d) through (f1) of this section
32 become effective December 1, 2019, and applyto petitions filed on or after that date. Subsections
33 (g) and (h) of this section become effective December 1, 2019, and apply to motions filed on or
34 after that date.

35
36 EXPAND CIRCUMSTANCES UNDER WHICH EMERGENCY JUDGE MAY BE
37 ASSIGNED BY THE CHIEF JUSTICE OF THE NORTH CAROLINA SUPREME
38 COURT
39 SECTION 15.9.(a) G.S. 7A-52(a) reads as rewritten:
40 (a) Judges of the district court and judges of the superior court who have not reached the

41 mandatory retirement age specified in G.S. 7A-4.20, but who have retired under the provisions
42 of G.S. 7A-51, or under the Uniform Judicial Retirement Act after having completed five years
43 of creditable service, may apply as provided in G.S. 7A-53 to become emergency judges of the
44 court from which they retired. From the commissioned emergency district, superior, and special
45 superior court judges, the Chief Justice of the Supreme Court shall create two lists of active
46 emergency judges and two lists of inactive emergency judges. For emergency superior and
47 special superior court judges, the active list shall be limited to a combined total of 10 emergency

48 judges; all other emergencysuperior and special superior court judges shall be on an inactive list.
49 For emergency district court judges, the active list shall be limited to 25 emergency judges; all
50 other emergency district court judges shall be on an inactive list. There is no limit to the number
51 of emergency judges on either inactive list. In the Chief Justice's discretion, emergency judges

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1 may be added or removed from their respective active and inactive lists, as long as the respective
2 numerical limits on the active lists are observed. The Chief Justice is requested to consider
3 geographical distribution in assigning emergency judges to an active list but may utilize any
4 factor in determining which emergency judges are assigned to an active list. The Chief Justice of
5 the Supreme Court may order any emergency district, superior, or special superior court judge
6 on an active list who, in his opinion, is competent to perform the duties of a judge, to hold regular
7 or special sessions of the court from which the judge retired, as needed. Order of assignment

8 shall be in writing and entered upon the minutes of the court to which such emergency judge is
9 assigned. An emergency judge shall only be assigned in the event of a:
10 (1) Death of a sitting judge.
11 (2) Disability or medical leave of absence of a sitting judge.
12 (3) Recall to active military duty of a sitting judge.
13 (4) Retirement or removal of a sitting judge.
14 (5) Court case-management emergency.emergency or disaster declaration made

15 pursuant to G.S. 166A-19.3(3).
16 (6) Assignment by the Chief Justice of a Rule 2.1 exceptional case to an
17 emergency judge.
18 (7) Court coverage need created by holdover sessions, administrative
19 responsibilities of the chief district court judge, or cases in which a judge has
20 a conflict or judicial educational responsibilities.

21 SECTION 15.9.(b) This section is effective when it becomes law.
22
23 ADDITIONAL DISTRICT COURT JUDGES
24 SECTION 15.10.(a) G.S. 7A-133 reads as rewritten:
25 § 7A-133. Numbers of judges by districts; numbers of magistrates and additional seats of
26 court, by counties.
27 (a) Each district court district shall have the numbers of judges as set forth in the

28 following table:
29 District Judges County
30 1 5 Camden
31 Chowan
32 Currituck
33 Dare
34 Gates

35 Pasquotank
36 Perquimans
37 2 4 Martin
38 Beaufort
39 Tyrrell
40 Hyde

41 Washington
42 3A 56 Pitt
43 3B 6 Craven
44 Pamlico
45 Carteret
46 4 89 Sampson
47 Duplin

48 Jones
49 Onslow
50 5 9 New Hanover
51 Pender

Page 264 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 6 4 Northampton
2 Bertie
3 Hertford
4 Halifax
5 7 7 Nash
6 Edgecombe
7 Wilson

8 8 6 Wayne
9 Greene
10 Lenoir
11 9 5 Granville
12 (part of Vance
13 see subsection (b))
14 Franklin

15 Person
16 9B 2 Warren
17 (part of Vance
18 see subsection (b))
19 10A 3 (part of Wake
20 see subsection (b))

21 10B 3 (part of Wake
22 see subsection (b))
23 10C 3 (part of Wake
24 see subsection (b))
25 10D 65 (part of Wake
26 see subsection (b))
27 10E 3 (part of Wake

28 see subsection (b))
29 10F 3 (part of Wake
30 see subsection (b))
31 11 11 Harnett
32 Johnston
33 Lee
34 12 10 Cumberland

35 13 6 Bladen
36 Brunswick
37 Columbus
38 14 7 Durham
39 15A 4 Alamance
40 15B 5 Orange

41 Chatham
42 16A 4 Scotland
43 Anson
44 Richmond
45 16B 56 Robeson
46 17A 4 Caswell
47 Rockingham

48 17B 4 Stokes
49 Surry
50 18 14 Guilford
51 19A 56 Cabarrus

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1 19B 5 Randolph
2 19C 5 Rowan
3 19D 4 Hoke, Moore
4 20A 3 Montgomery, Stanly
5 20B 1 (part of Union
6 see subsection (b))
7 20C 2 (part of Union

8 see subsection (b))
9 20D 12 Union
10 21 11 Forsyth
11 22A 56 Alexander
12 Iredell
13 22B 6 Davidson
14 Davie

15 23 4 Alleghany
16 Ashe
17 Wilkes
18 Yadkin
19 24 4 Avery
20 Madison

21 Mitchell
22 Watauga
23 Yancey
24 25 910 Burke
25 Caldwell
26 Catawba
27 26A 3 (part of Mecklenburg

28 see subsection (b))
29 26B 3 (part of Mecklenburg
30 see subsection (b))
31 26C 2 (part of Mecklenburg
32 see subsection (b))
33 26D 2 (part of Mecklenburg
34 see subsection (b))

35 26E 3 (part of Mecklenburg
36 see subsection (b))
37 26F 3 (part of Mecklenburg
38 see subsection (b))
39 26G 2 (part of Mecklenburg
40 see subsection (b))

41 26H 3 (part of Mecklenburg
42 see subsection (b))
43 27A 7 Gaston
44 27B 6 Cleveland
45 Lincoln
46 28 7 Buncombe
47 29A 34 McDowell

48 Rutherford
49 29B 4 Henderson
50 Polk
51 Transylvania

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1 30 6 Cherokee
2 Clay
3 Graham
4 Haywood
5 Jackson
6 Macon
7 Swain.

8 ….
9 SECTION 15.10.(b) Section 2(b) of S.L. 2018-14 reads as rewritten:
10 SECTION 2.(b) In order to implement the district court districts as enacted bythis section,
11 the following shall apply:
12 (1) Judges in the following districts, as set out in this section, shall take office on
13 January 1, 2019, with elections in 2018, and every four years thereafter, to be
14 held accordingly:

15 a. District 10A – one judge.
16 b. District 10B – one judge.
17 c. District 10D – three judges.
18 d. District 10E – two judges.
19 e. District 10F – one judge.
20 f. District 26A – three judges.

21 g. District 26B – one judge.
22 h. District 26E – two judges.
23 i. District 26F – two judges.
24 j. District 26G – one judge.
25 (2) Judges in the following districts, as set out in this section, shall take office on
26 January 1, 2021, with elections in 2020, and every four years thereafter, to be
27 held accordingly:

28 a. District 10A – two judges.
29 b. District 10B – two judges.
30 c. District 10C – three judges.
31 d. District 10D – three two judges.
32 e. District 10E – one judge.
33 f. District 10F – two judges.
34 g. District 26B – two judges.

35 h. District 26C – two judges.
36 i. District 26D – two judges.
37 j. District 26E – one judge.
38 k. District 26F – one judge.
39 l. District 26G – one judge.
40 m. District 26H – three judges.

41 SECTION 15.10.(c) Subsection 15.10(b) of this section becomes effective July 1,
42 2019. Subsection 15.10(a) of this section becomes effective January 1, 2021, and elections
43 conducted in 2020 shall be conducted in accordance with the judgeships created in subsection
44 15.10(a) of this section.
45
46 MODIFY CERTAIN FEES/ESTATES/IN REM FORECLOSURES/MARRIAGE
47 CEREMONIES

48 SECTION 15.11.(a) G.S. 7A-307 reads as rewritten:
49 § 7A-307. Costs in administration of estates.
50 (a) In the administration of the estates of decedents, minors, incompetents, of missing
51 persons, in the administration of trusts under wills and under powers of attorney, in trust

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1 proceedings under G.S. 36C-2-203, in estate proceedings under G.S. 28A-2-4, in power of
2 attorney proceedings under G.S. 32C-1-116(a), and in collections of personal property by
3 affidavit, the following costs shall be assessed:
4 …
5 (2b) Notwithstanding subdivisions (1) and (2) of this subsection, no costs shall be
6 the only cost assessed when the estate is administered or settled pursuant to
7 G.S. 28A-25-6.G.S. 28A-25-6 shall be a fee of twenty dollars ($20.00) to be

8 assessed upon filing of the application.
9 …
10 (b1) The clerk shall assess the following miscellaneous fees:
11 (1) Filing and indexing a will with no probate
12 - first page ..............................................................................................$ 1.00
13 - each additional page or fraction thereof .....................................................25
14 (2) Issuing letters to fiduciaries, per letter over five letters issued..................1.00

15 (3) Inventory of safe deposits of a decedent, per box, per day......................15.00
16 (4) Taking a deposition..................................................................................10.00
17 (5) Docketing and indexing a will probated in another county in the State
18 - first page ..................................................................................................6.00
19 - each additional page or fraction thereof .....................................................25
20 (6) Hearing petition for year's allowance to surviving spouse or child, in cases not

21 assigned to a magistrate, and allotting the same...............................8.0020.00
22 ….
23 SECTION 15.11.(b) G.S. 7A-309 reads as rewritten:
24 § 7A-309. Magistrate's special fees.
25 The following special fees shall be collected by the magistrate and remitted to the clerk of
26 superior court for the use of the State in support of the General Court of Justice:
27 (1) Performing marriage ceremony $20.00$50.00

28 (2) Hearing petition for year's allowance to surviving spouse or
29 child, issuingnotices to commissioners, allottingthesame,and
30 making return 8.0020.00
31 (3) Taking a deposition 10.00
32 (4) Proof of execution or acknowledgment of any instrument 2.00
33 (5) Performing any other statutory function not incident to a civil
34 or criminal action $ 2.00.

35 SECTION 15.11.(c) G.S. 7A-308(a) reads as rewritten:
36 (a) The following miscellaneous fees and commissions shall be collected by the clerk of
37 superior court and remitted to the State for the support of the General Court of Justice:
38 (1) Foreclosure under power of sale in deed of trust or mortgage.............$300.00
39 If the property is sold under the power of sale, an additional amount
40 will be charged, determined by the following formula: forty-five

41 cents (.45) per one hundred dollars ($100.00), or major fraction
42 thereof, of the final sale price. If the amount determined by the
43 formula is less than ten dollars ($10.00), a minimum ten dollar
44 ($10.00) fee will be collected. If the amount determined by the
45 formula is more than five hundred dollars ($500.00), a maximum
46 five hundred-dollar ($500.00) fee will be collected.
47 (1a) In rem foreclosures conducted under G.S. 105-375, if the property is sold

48 under execution……………………………………..…………….…..$300.00
49 .…
50 SECTION 15.11.(d) G.S. 105-375 reads as rewritten:
51 § 105-375. In rem method of foreclosure.

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1 …
2 (b) Docketing Certificate of Taxes as Judgment. – In lieu of following the procedure set
3 forth in G.S. 105-374, the governing body of any taxing unit may direct the tax collector to file
4 with the clerk of superior court, no earlier than 30 days after the tax liens were advertised, a
5 certificate showing the following: the name of the taxpayer as defined in G.S. 105-273(17), for
6 each parcel on which the taxing unit has a lien for unpaid taxes, together with the amount of
7 taxes, penalties, interest, and costs that are a lien thereon; the year or years for which the taxes

8 aredue; and adescription ofthepropertysufficient to permit its identification byparoltestimony.
9 The fees for docketing and indexing the certificate assessed pursuant to G.S. 7A-308(a)(11) shall
10 be payable to the clerk of superior court at the time the taxes are collected or the propertyis sold.
11 …
12 (i1) Fee. – The fee assessed in G.S. 7A-308(a)(1a) shall be payable to the clerk of superior
13 court out of the sale proceeds at the time the property is sold.
14 ….

15 SECTION 15.11.(e) G.S. 28A-25-6(f) reads as rewritten:
16 (f) If no administrator has been appointed, the clerk of superior court shall shall, upon
17 motion of the clerk or upon the application of an interested party, disburse the money received
18 under this section for the following purposes and in the following order:
19 (1) To paythe survivingspouse's year's allowance and children's year's allowance
20 assigned in accordance with law;law.

21 (2), (3) Repealed by Session Laws 1981, c. 383, s. 3.
22 (4) All other claims shall be disbursed according to the order set out in
23 G.S. 28A-19-6.
24 Notwithstanding the foregoing provisions of this subsection, the clerk shall pay, out of funds
25 provided the deceased pursuant to G.S. 111-18 and Part 3 of Article 2 of Chapter 108A of the
26 General Statutes of North Carolina, any lawful claims for care provided by an adult care home
27 to the deceased, incurred not more than 90 days prior to the deceased's death. After the death of

28 a spouse who died intestate and after the disbursements have been made in accordance with this
29 subsection, the balance in the clerk's hands belonging to the estate of the decedent shall be paid
30 to the surviving spouse, and if there is no surviving spouse, the clerk shall pay it to the heirs in
31 proportion to their respective interests.
32 SECTION 15.11.(f) Subsections (a) and (b) of this section become effective January
33 1, 2020, and apply to petitions filed on or after that date. Subsections (c) and (d) of this section
34 become effective October 1, 2019, and apply to execution sales conducted on or after that date.

35
36 PILOT PROGRAM – ELECTION CRIMES INVESTIGATIVE CONSULTANT
37 SECTION 15.14.(a) Of the funds appropriated in this act to the Administrative
38 Office of the Courts (AOC), the sum of two hundred thousand dollars ($200,000) in nonrecurring
39 funds shall be allocated to the Conference of District Attorneys (Conference) for the 2019-2020
40 and the2020-2021 fiscal yearsto establishatwo-yearpilot program to strengthentheprosecution

41 of election law violations. The funds shall be used to hire and provide operational support for an
42 Investigative Consultant who, upon request of a district attorney, shall provide consultative
43 expertise for election law investigations and prosecutions.
44 SECTION 15.14.(b) The Executive Director of the Conference shall report on July
45 1, 2020, and July 1, 2021, to the chairs of the Joint Legislative Elections Oversight Committee,
46 the chairs of the Joint Legislative Oversight Committee on Justice and Public Safety, and the
47 Fiscal Research Division on the implementation of the pilot program.

48
49 PART XVI. INDIGENT DEFENSE SERVICES
50

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1 MINIMUM ALLOCATIONS FOR ASSISTANT PUBLIC DEFENDERS/CREATE NEW
2 PUBLIC DEFENDER DISTRICT IN CLEVELAND AND LINCOLN COUNTIES
3 SECTION 16.2.(a) G.S. 7A-498.7 reads as rewritten:
4 § 7A-498.7. Public Defender Offices.
5 (a) The following counties of the State are organized into the defender districts listed
6 below, and in each of those defender districts an office of public defender is
7 established:establishedwiththeminimumnumberoffull-timeassistantpublicdefenderssetforth

8 in the following table:
9 Defender District Counties No. of Full-Time
10 Asst. Public Defenders
11 1 Camden, Chowan, Currituck, 15
12 Dare, Gates, Pasquotank,
13 Perquimans
14 3A Pitt 13

15 3B Craven, Pamlico, Carteret 7
16 5 New Hanover 14
17 10 Wake 31
18 12 Cumberland 15
19 14 Durham 22
20 15B Orange, Chatham 9

21 16A Scotland, Hoke 6
22 16B Robeson 9
23 18 Guilford 28
24 21 Forsyth 18
25 26 Mecklenburg 55
26 27A Gaston 15
27 27B Cleveland, Lincoln 12

28 28 Buncombe 11
29 29A McDowell, Rutherford 9
30 29B Henderson, Polk, Transylvania 7
31 After notice to, and consultation with, the affected district bar, senior resident superior court
32 judge, and chief district court judge, the Commission on Indigent Defense Services may
33 recommend to the General Assembly that a district or regional public defender office be
34 established. A legislative act is required in order to establish a new office or to abolish an existing

35 office.
36 (b) For each new term, and to fill any vacancy, public defenders shall be appointed from
37 a list of not less than three one and not more than four three names nominated as follows:
38 (1) Not less than two and not more than three by written ballot of the attorneys
39 resident in the defender district who are licensed to practice law in North
40 Carolina. licensed to practice law in North Carolina who are voting members

41 of a district bar located in the defender district. The balloting shall be
42 conducted pursuant to rules adopted by the Commission on Indigent Defense
43 Services.
44 (2) One name submitted by the Administrative Officer of the Courts after
45 consultation with the Director of the Office of Indigent Defense Services.
46 (b1) The appointment required under subsection (b) of this section shall be made by the
47 senior resident superior court judge of the superior court district or set of districts as defined in

48 G.S. 7A-41.1 that includes the county or counties of the defender district for which the public
49 defender is being appointed. The appointment shall be made within 60 days from the date the
50 nominees are submitted to the senior resident superior court judge. If the resident superior court
51 judge fails to make an appointment within the required time, then the nominee who received the

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1 most votes from the local bar shall then be deemed appointed on the sixty-first day after the date
2 the nominees are submitted.
3 ….
4 SECTION 16.2.(a1) The amendments to G.S. 7A-498.7(b) and (b1) enacted in
5 subsection (a) of this section are effective when this act becomes law. The following applies to
6 any vacancies existing as of the effective date of this section:
7 (1) If the senior resident superior court judge received a list of nominees more

8 than 60 days before the effective date of this section, the nominee who
9 received the most votes from the local bar shall bedeemed appointed effective
10 immediately.
11 (2) If the senior resident superior court judge received a list of nominees less than
12 60 days before the effective date of this section, the senior resident superior
13 court judge shall have 60 days from the effective date of this act to make an
14 appointment.

15 (3) If the senior resident superior court judge has not received a list of nominees,
16 thenupon receipt of alist ofnominees, theseniorresident superior courtjudge
17 shall proceed as required under G.S. 7A-498.7(b) and (b1).
18 SECTION 16.2.(b) The Office of Indigent Defense Services may use up to the sum
19 of two million one hundred thirty-nine thousand five hundred twenty-one dollars ($2,139,521)
20 in funds appropriated to create new positions for the Public Defender District 27B, as provided

21 in subsection (a) of this section. These positions shall include the public defender, up to 12
22 assistant public defenders, and up to six and one-quarter support positions.
23
24 COURT COSTS FOR SUPPORT OF INDIGENT DEFENSE/REPORT/MODIFY
25 APPOINTED COUNSEL FEE APPLICATIONS
26 SECTION 16.3.(a) G.S. 7A-455.1 reads as rewritten:
27 § 7A-455.1. Appointment fee in criminal cases.

28 (a) In every criminal case in which counsel is appointed at the trial level, the judge shall
29 order the defendant to pay to the clerk of court an appointment fee of sixty dollars
30 ($60.00).seventy-five dollars ($75.00). No fee shall be due unless the person is convicted.
31 (b) The mandatory sixty-dollar ($60.00) seventy-five dollar ($75.00) fee may not be
32 remitted or revoked by the court and shall be added to any amounts the court determines to be
33 owed for the value of legal services rendered to the defendant and shall be collected in the same
34 manner as attorneys' fees are collected for such representation.

35 (c) Repealed by Session Laws 2005-250 s. 3, effective August 4, 2005.
36 (d) Inability, failure, or refusal to pay the appointment fee shall not be grounds for
37 denying appointment of counsel, for withdrawal of counsel, or for contempt.
38 (e) The appointment fee required by this section shall be assessed only once for each
39 attorney appointment, regardless of the number of cases to which the attorney was assigned. An
40 additional appointment fee shall not be assessed if the charges for which an attorney was

41 appointed were reassigned to a different attorney.
42 (f) Of each appointment fee collected under this section, the sum of fifty-five dollars
43 ($55.00) seventy dollars ($70.00) shall be credited to the Indigent Persons' Attorney Fee Fund
44 and the sum of five dollars ($5.00) shall be credited to the Court Information Technology Fund
45 under G.S. 7A-343.2. These fees shall not revert.
46 (g) The Office of Indigent Defense Services shall adopt rules and develop forms to
47 govern implementation of this section.

48 SECTION 16.3.(b) G.S. 7A-304(a) reads as rewritten:
49 (a) In every criminal case in the superior or district court, wherein the defendant is
50 convicted, or enters a plea of guilty or nolo contendere, or when costs are assessed against the
51 prosecuting witness, the following costs shall be assessed and collected. No costs may be

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1 assessed when a case is dismissed. Only upon entry of a written order, supported by findings of
2 fact and conclusions of law, determining that there is just cause, the court may (i) waive costs
3 assessed under this section or (ii) waive or reduce costs assessed under subdivision (7), (8), (8a),
4 (11), (12), or (13) of this section. No court may waive or remit all or part of any court fines or
5 costs without providing notice and opportunity to be heard by all government entities directly
6 affected. The court shall provide notice to the government entities directly affected of (i) the date
7 and time of the hearing and (ii) the right to be heard and make an objection to the remission or

8 waiver of all or part of the order of court costs at least 15 days prior to hearing. Notice shall be
9 made to the government entities affected by first-class mail to the address provided for receipt of
10 court costs paid pursuant to the order. The costs referenced in this subsection are listed below:
11 …
12 (3b) For the services, staffing, and operations of the Criminal Justice Education
13 and Standards Commission, the sum of two three dollars ($2.00) ($3.00) to be
14 remitted to the Department of Justice.

15 (3c) For legal representation to indigent defendants and others entitled to counsel
16 under North Carolina law, the sum of two dollars ($2.00) to be remitted to the
17 Office of Indigent Defense Services.
18 ….
19 SECTION 16.3.(c) The Office of Indigent Defense Services and the Administrative
20 Office of the Courts shall update all appointed counsel fee application forms in order to provide

21 space for the itemization of time spent on appointed cases.
22 SECTION 16.3.(d) TheOfficeof IndigentDefenseServices shall reportto thechairs
23 of the Joint Legislative Oversight Committee on Justice and Public Safety by March 1, 2020,
24 regarding the implementation of rate increases to the Private Assigned Counsel Fund and
25 modifications to appointed counsel fee application forms.
26 SECTION 16.3.(e) Subsections (a) and (b) of this section become effective
27 December 1, 2019, and applyto costs assessed on or after that date. Subsection (c) of this section

28 becomes effective December 1, 2019, and applies to all appointed counsel fee application forms
29 submitted on or after that date.
30
31 PART XVII. JUSTICE
32
33 NO HIRING OF SWORN STAFF POSITIONS FOR NC STATE CRIME LAB
34 SECTION 17.1. The Department of Justice shall not hire sworn personnel to fill

35 vacant positions in the North Carolina State Crime Laboratory. Nothing in this section shall be
36 construed to require the termination of sworn personnel or to affect North Carolina State Crime
37 Laboratory personnel who are sworn and employed by the Laboratory as of the effective date of
38 this section and whocontinue to meet thesworn status retention standards mandated bythe North
39 Carolina Criminal Justice Education and Standards Commission.
40

41 REQUIRE TESTING OF ALL SEXUAL ASSAULT EXAMINATION KITS
42 SECTION 17.2.(a) This act shall be known and may be cited as The Standing Up
43 for Rape Victims (SURVIVOR) Act of 2019.
44 SECTION 17.2.(b) Article 13 of Chapter 15A of the General Statutes is amended
45 by adding a new section to read:
46 § 15A-266.5A. Statewide sexual assault examination kit testing protocol.
47 (a) Legislative Intent. – The General Assembly finds that deoxyribonucleic acid (DNA)

48 evidence is a powerful law enforcement tool that can identify unknown suspects, create case
49 linkages, connect crimes to known perpetrators, and exonerate the innocent. Timely testing is
50 vital to solve cases, punish offenders, bring justice to victims, and prevent future crimes. It is the
51 intent of the General Assembly that every sexual assault examination kit reported to law

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1 enforcement in this State be tested and eliminate the inventory of untested sexual assault
2 examination kits located statewide. The purpose of this section is to address the manner in which
3 sexual assault examination kits are processed and the protocol for testing the statewide inventory
4 of untested sexual assault examination kits identified pursuant to the findings of the statewide
5 audit completed pursuant to Section 17.7 of S.L. 2017-57.
6 (b) Definitions. – The following definitions apply in this section:
7 (1) CODIS. – As defined in G.S. 15A-266.2.

8 (2) Collecting agency. – Anyagency, program, center, or other entitythat collects
9 a sexual assault examination kit.
10 (3) State DNA database. – As defined in G.S. 15A-266.2.
11 (4) Reported sexual assault examination kit. – A sexual assault examination kit
12 collected from a person who consented to the collection of the sexual assault
13 examination kit andhas consentedto participatein thecriminal justiceprocess
14 by reporting the crime to law enforcement.

15 (5) Unfounded sexual assault examination kit. – A reported sexual assault
16 examination kit, whereupon completion of the investigation it was concluded
17 by the investigating law enforcement agency, based on clear and convincing
18 evidence, that a crime did not occur.
19 (6) Unreported sexual assault examination kit. – A sexual assault examination kit
20 collected from a person who consented to the collection of the sexual assault

21 examination kit, but has not consented to participate in the criminal justice
22 process.
23 (c) Notification and Submission Requirements for Kits Completed On or After July 1,
24 2019.– Anycollectingagencythat collects asexual assault examination kit completedon orafter
25 July 1, 2019, shall preserve the kit according to guidelines established under G.S. 15A-268(a2)
26 and notify the appropriate law enforcement agency as soon as practicable, but no later than 24
27 hours after the collection occurred. A law enforcement agency notified under this subsection

28 shall do all of the following:
29 (1) Take custody of a sexual assault examination kit from the collecting agency
30 that collected the kit within seven days of receiving notification. The law
31 enforcement agency that takes custody of a kit under this subdivision shall
32 retain and preserve the kit in accordance with the requirements of
33 G.S. 15A-268.
34 (2) Submit a reported sexual assault examination kit to the State Crime

35 Laboratory, or a laboratoryapproved bythe State Crime Laboratory, not more
36 than 45 days after taking custody of the reported sexual assault examination
37 kit.
38 (3) Submit an unreported sexual assault examination kit to the Department of
39 Public Safety not more than 45 days after taking custody of the unreported
40 sexual assault examination kit. The Department of Public Safety shall store

41 any kit it receives under this subdivision pursuant to the authority set forth in
42 G.S. 143B-601(13).
43 (d) Notification and Submission Requirements for Kits Completed On or Before January
44 1,2018.–Anylawenforcementagencythatpossessesasexualassault examinationkitcompleted
45 on or before January 1, 2018, shall do the following:
46 (1) Establish a review team that may consist of prosecutors, active or retired law
47 enforcement officers, sexual assault nurse examiners, victim advocacy

48 groups, and representatives from a forensic laboratory. The review team
49 required under this subdivision shall be established as soon as practicable, but
50 no later than three months after the effective date of this section.

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1 (2) Utilize the review team established under subdivision (1) of this subsection to
2 survey the law enforcement agency's entire untested sexual assault
3 examination kit inventory and conduct a case review to determine each sexual
4 assault examination kit's testing priority. The survey and review required
5 under this subdivision shall be completed as soon as practicable, but no later
6 than six months after the effective date of this section. The review required
7 under this subdivision shall consider each of the following factors in

8 determining the submission priority of a sexual assault examination kit:
9 a. Investigative and evidentiary value for the individual case.
10 b. CODIS potential to link profiles and identifypossible serial offenders.
11 c. Potential for victim participation in the investigation and prosecution.
12 d. Potential value for admission as evidence under Rule 404(b) of the
13 North Carolina Rules of Evidence.
14 e. Age and health of victim.

15 f. Potential for exculpatory value for a convicted person.
16 g. Any other factor the review team deems to be relevant.
17 (3) Upon determination by the review team that a sexual assault examination kit
18 is of priority status and not subject to subsection (e) of this section, the law
19 enforcement agency shall notify the State Crime Laboratory, or a laboratory
20 approved bythe State Crime Laboratory, of the sexual assault examination kit

21 and submit a request for testing of the sexual assault examination kit. The law
22 enforcement agency shall continue the process set forth in subdivisions (2)
23 and (3) of this subsection until all untested sexual assault examination kits
24 eligible for submission within its inventory have been submitted for testing.
25 The following untested sexual assault examinations kits are not eligible for
26 submission for testing under this subdivision:
27 a. Unreported sexual assault examination kits. Unreported sexual assault

28 examination kits shall be sent within 45 days of the review required
29 under subdivision (2) of this subsection to the Department of Public of
30 Safety for storage pursuant to the authority set forth in
31 G.S. 143B-601(13).
32 b. Sexual assault examination kits that have been confirmed as
33 unfounded sexual assault examination kits after a comprehensive case
34 review by the law enforcement agency and complete review by the

35 review team established under subdivision (1) of this subsection. The
36 law enforcement agency shall track within the agency the number of
37 sexual assault examination kits which are concluded to be unfounded
38 along with a brief summary indicating the information and evidence
39 supporting the determination of an unfounded sexual assault
40 examination kit. If the law enforcement agency receives any

41 information or evidence that creates investigative or evidentiary value
42 for testing the unfounded sexual assault examination kit, the law
43 enforcement agency shall send the unfounded sexual assault
44 examination kit to the State Crime Laboratory, or a laboratory
45 approved by the State Crime Laboratory, as soon as practicable.
46 c. Sexual assault examination kits in which (i) a criminal prosecution has
47 resulted in conviction, (ii) the convicted person does not seek DNA

48 testing, and (iii) the convicted person's DNA profile is already in
49 CODIS.
50 (e) Submission Requirements for Other Kits. – Sexual assault examination kits that are
51 not subject to the requirements of subsections (c) or (d) of this section shall be submitted to the

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1 State Crime Laboratory, or a laboratory approved by the State Crime Laboratory, as soon as
2 practicable.
3 (f) Testing Requirements for Accepted Kits. – As soon as practicable after receiving a
4 written request for testing of a sexual assault examination kit subject to subsection (d) of this
5 section, the State Crime Laboratory, or a laboratory approved by the State Crime Laboratory,
6 shall notify the submitting law enforcement agency of the request's approval and provide
7 shipment instructions for the sexual assault examination kit. The State Crime Laboratory, or a

8 laboratory approved by the State Crime Laboratory, shall pursue DNA analysis of any sexual
9 assault examination kit accepted from a law enforcement agency under this section to develop
10 DNA profiles that are eligible for entry into CODIS and the State DNA Database pursuant to
11 G.S. 15A-266.5 and G.S. 15A-266.7. The State CODIS System Administrator, or the
12 Administrator's designee, shall enter a DNA profile developed under this subsection into the
13 CODIS database pursuant to G.S. 15A-266.8 and into the State DNA Database, provided that the
14 testing of the sexual assault examination kit resulted in an eligible DNA profile.

15 (g) Lack of Compliance. – Lack of compliance with the requirements set forth in this
16 section shall not result in any of the following:
17 (1) Constituting grounds upon which a person maychallenge in anyhearing, trial,
18 or other court proceeding the validity of DNA evidence in any criminal or
19 civil proceeding.
20 (2) Justification for the exclusion of evidence generated from a sexual assault

21 examination kit.
22 (3) Providing a person who is accused or convicted of committing a crime against
23 a victim a basis to request that the person's case be dismissed or conviction set
24 aside, or providing a cause of action or civil claim.
25 (h) Sexual Assault Response and Training. – The Department of Justice, the North
26 Carolina Coalition Against Sexual Assault, the North Carolina Victims Assistance Network, and
27 the Conference of District Attorneys shall jointly develop and provide response and training

28 programs to law enforcement and their sexual assault examination kit review teams regarding
29 sexual assault investigations, including victim interactions and kit collection, storage, tracking,
30 and testing.
31 SECTION 17.2.(c) G.S. 15A-266.8 is amended by adding a new subsection to read:
32 (d) AlawenforcementagencythatreceivesanactionableCODIShit onasubmittedDNA
33 sample shall provide electronic notice to the State Crime Laboratory as follows:
34 (1) Detailing any arrest of a person made in connection with the CODIS hit, no

35 later than 15 days after the arrest.
36 (2) Detailing any conviction of a person resulting from the CODIS hit, no later
37 than 15 days from the date of conviction.
38 SECTION 17.2.(d) The State Crime Lab shall report to the Joint Legislative
39 Oversight Committee on Justice and Public Safety by March 1, 2020, on the use of funds
40 appropriated in this act to test sexual assault evidence collection kits.

41 SECTION 17.2.(e) This section is effective when it becomes law and applies to
42 CODIS hits received on or after that date.
43
44 EXPAND CRIMINAL JUSTICE FELLOWS PROGRAM ELIGIBILITY
45 SECTION 17.3.(a) G.S. 17C-20 reads as rewritten:
46 § 17C-20. Definitions.
47 As used in this Article, the following definitions apply:

48 …
49 (5) Eligible county. – A county with a population of less than 75,000 125,000
50 according to the latest federal decennial census.census or a county designated
51 as a development tier one area pursuant to G.S. 143B-437.08, or both.

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1 ….
2 SECTION 17.3.(b) This section is effective when it becomes law and applies to
3 Criminal Justice Fellows Program recipients selected on or after that date.
4
5 PART XVIII. PUBLIC SAFETY
6
7 JPS GRANT REPORTING

8 SECTION 18.1. The Department of Public Safety, the Department of Justice, and
9 the Judicial Department shall each report by May 1 of each year to the chairs of the House of
10 Representatives Appropriations Committee on Justice and Public Safety and the Senate
11 Appropriations Committee on Justice and Public Safety on grant funds received or preapproved
12 for receipt by those departments. The report shall include information on the amount of grant
13 funds received or preapproved for receipt by each department, the use of the funds, the State
14 match expended to receive the funds, and the period to be covered by each grant. If a department

15 intends to continue the program beyond the end of the grant period, that department shall report
16 on the proposed method for continuing the funding of the program at the end of the grant period.
17 Each department shall also report on any information it may have indicating that the State will
18 be requested to provide future funding for a program presently supported by a local grant.
19
20 NO TRANSFER OF POSITIONS TO OTHER STATE AGENCIES

21 SECTION 18.2.(a) Notwithstanding any other provision of law, and except as
22 otherwise provided in subsection (b) of this section, the Office of State Budget and Management
23 shall not transfer any positions, personnel, or funds from the Department of Public Safety to any
24 other State agency during the 2019-2021 fiscal biennium unless the transfer was included in the
25 base budget for one or both fiscal years of the biennium.
26 SECTION 18.2.(b) This section shall not apply to consolidation of information
27 technology positions into the Department of Information Technology pursuant to

28 G.S. 143B-1325.
29
30 CODIFY LAPSED SALARY REPORT
31 SECTION 18.3. Part 1 of Article 13 of Chapter 143B of the General Statutes is
32 amended by adding a new section to read:
33 § 143B-605. Lapsed salary reports.
34 (a) The Department of Public Safety shall report the following information to the chairs

35 of the Joint Legislative Oversight Committee on Justice and Public Safety and the chairs of the
36 House of Representatives Appropriations Committee on Justice and Public Safety and the Senate
37 Appropriations Committee on Justice and Public Safety:
38 (1) The amount of lapsed salary generated by fund code for the previous six
39 months.
40 (2) An itemized accounting of the use of lapsed salary funds including:

41 a. Fund code.
42 b. Current certified budget.
43 c. Annual projected expenditure.
44 d. Annual projected shortfall.
45 e. Amount of lapsed salary funds transferred to date.
46 (b) The reports shall be submitted by February 1 and August 1 of each year. The August
47 report shall also include an annual accounting of this information for the previous fiscal year.

48
49 CONTINUE PILOT PROJECT TO TREAT OPIATE OVERDOSE
50 SECTION 18.4.(a) Pilot Project. – The Department of Public Safety, in conjunction
51 with the Cityof Wilmington, shall continue to develop and implement the pilot project known as

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1 Quick Response Team (QRT) to address the needs of opiate and heroin overdose victims who
2 are not getting follow-up treatment.
3 SECTION 18.4.(b) Report. – The Department of Public Safety and the City of
4 Wilmington shall report on the results of the pilot project to the chairs of the Joint Legislative
5 Oversight Committee on Justice and Public Safety by February 1, 2021.
6
7 STATE CAPITOL POLICE/CREATION OF RECEIPT-SUPPORTED POSITIONS

8 SECTION18.6.(a) CreationofReceipt-SupportedPositions Authorized. –TheState
9 Capitol Police may contract with State agencies for the creation of receipt-supported positions to
10 provide security services to the buildings occupied by those agencies.
11 SECTION 18.6.(b) Annual Report Required. – No later than September 1 of each
12 fiscal year, the State Capitol Police shall report to the Joint Legislative Oversight Committee on
13 Justice and Public Safety the following information for the fiscal year in which the report is due:
14 (1) A list of all positions in the State Capitol Police. For each position listed, the

15 report shall include at least the following information:
16 a. The position type.
17 b. The agency to which the position is assigned.
18 c. The source of funding for the position.
19 (2) For each receipt-supported position listed, the contract and any other terms of
20 the contract.

21 SECTION 18.6.(c) Additional Reporting Required Upon Creation of
22 Receipt-Supported Positions. – In addition to the report required bysubsection (b) of this section,
23 the State Capitol Police shall report the creation of any position pursuant to subsection (a) of this
24 section to the chairs of the House of Representatives Appropriations Committee on Justice and
25 Public Safety and the Senate Appropriations Committee on Justice and Public Safety and to the
26 Fiscal Research Division within 30 days of the position's creation. A report submitted pursuant
27 to this section shall include at least all of the following information:

28 (1) The position type.
29 (2) The agency to which the position is being assigned.
30 (3) The position salary.
31 (4) The total amount of the contract.
32 (5) The terms of the contract.
33 SECTION 18.6.(d) Format of Reports. – Reports submitted pursuant to this section
34 shall be submitted electronically and in accordance with any applicable General Assembly

35 standards.
36
37 USE OF SEIZED AND FORFEITED PROPERTY
38 SECTION 18.7.(a) Seized and forfeited assets transferred to the Department of
39 Justice or to the Department of Public Safety during the 2019-2021 fiscal biennium pursuant to
40 applicable federal law shall be credited to the budget of the recipient department and shall result

41 inanincreaseoflawenforcement resourcesforthatdepartment. TheDepartmentofPublicSafety
42 and the Department of Justice shall each make the following reports to the chairs of the House
43 of Representatives Appropriations Committee on Justice and Public Safety and the Senate
44 Appropriations Committee on Justice and Public Safety:
45 (1) A report upon receipt of any assets.
46 (2) A report that shall be made prior to use of the assets on their intended use and
47 the departmental priorities on which the assets may be expended.

48 (3) A report on receipts, expenditures, encumbrances, and availability of these
49 assets for the previous fiscal year, which shall be made no later than
50 September 1 of each year.

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1 SECTION 18.7.(b) The General Assembly finds that the use of seized and forfeited
2 assets transferred pursuant to federal law for new personnel positions, new projects, acquisition
3 of real property, repair of buildings where the repair includes structural change, and construction
4 of or additions to buildings mayresult in additional expenses for the State in future fiscal periods.
5 Therefore, the Department of Justice and the Department of Public Safety are prohibited from
6 using these assets for such purposes without the prior approval of the General Assembly.
7 SECTION 18.7.(c) Nothing in this section prohibits State law enforcement agencies

8 from receiving fundsfrom theUnited States Department ofJustice,the UnitedStates Department
9 of the Treasury, and the United States Department of Health and Human Services.
10 SECTION18.7.(d) TheJoint LegislativeOversightCommitteeonJusticeandPublic
11 Safety shall study the impact on State and local law enforcement efforts of the receipt of seized
12 and forfeited assets. The Committee shall report its findings and recommendations prior to the
13 convening of the 2020 Regular Session of the 2019 General Assembly.
14

15 REALLOCATION OF SEX OFFENSE REGISTRY FUNDS
16 SECTION 18.7A. The Department of Public Safety shall reallocate the sum of five
17 hundred thousand dollars ($500,000) previously allocated to the North Carolina Sheriffs'
18 Association in Section 16.7(a) of S.L. 2017-57, as amended by Section 16.1(a) of S.L. 2018-5,
19 to the State Bureau of Investigation to use for costs associated with upgrading the sex offender
20 registry.

21
22 CENTER FOR COMMUNITY TRANSITIONS/CONTRACT AND REPORT
23 SECTION 18.8. The Department of Public Safetymaycontinue to contract with The
24 Center for Community Transitions, Inc., a nonprofit corporation, for the purchase of prison beds
25 for minimum security female inmates during the 2019-2021 fiscal biennium. The Center for
26 Community Transitions, Inc., shall report by February 1 of each year to the chairs of the House
27 of Representatives Appropriations Committee on Justice and Public Safety and the Senate

28 Appropriations Committee on Justice and Public Safety on the annual cost per inmate and the
29 average daily inmate population compared to bed capacity using the same methodology as that
30 used by the Department of Public Safety.
31
32 INMATE CONSTRUCTION PROGRAM
33 SECTION 18.9. Article 3 of Chapter 148 of the General Statutes is amended by
34 adding a new section to read:

35 § 148-32.3. Inmate Construction Program.
36 Notwithstanding any other provision of law, but subject to the provisions of this Article, the
37 State Construction Office may utilize inmates in the custody of the Division of Adult Correction
38 of the Department of Public Safety through the Inmate Construction Program for repair and
39 renovation projects on State-owned facilities, with priority given to Department of Public Safety
40 construction projects. State agencies utilizing the Inmate Construction Program shall reimburse

41 theDivision ofAdult Correction oftheDepartment ofPublicSafetyforthecost oftransportation,
42 custody, and wages for the inmate crews.
43
44 STATEWIDE MISDEMEANANT CONFINEMENT PROGRAM REPORT
45 SECTION 18.10. G.S. 148-32.1(b2) reads as rewritten:
46 (b2) The Statewide Misdemeanant Confinement Program is established. The Program
47 shall provide for the housing of misdemeanants from all counties serving sentences imposed for

48 a period of more than 90 days and for all sentences imposed for impaired driving under
49 G.S. 20-138.1, regardless oflength. Thosemisdemeanants shall be confined in local confinement
50 facilities except as provided in subsections (b3) and (b4) of this section. The Program shall
51 address methods for the placement and transportation of inmates and reimbursement to counties

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1 for the housing of those inmates. Any county that voluntarily agrees to house misdemeanants
2 from that county or from other counties pursuant to the Program may enter into a written
3 agreement with the Division of Adult Correction and Juvenile Justice to do so.
4 The North Carolina Sheriffs' Association shall:
5 (1) Report no later than the fifteenth day of each month to the Office of State
6 Budget and Management and the Fiscal Research Division on the Statewide
7 Misdemeanant Confinement Program. Each monthly report shall include all

8 of the following:
9 a. The daily population delineated by misdemeanant or DWI monthly
10 housing.
11 b. The cost of housing prisoners under the Program.
12 c. The cost of transporting prisoners under the Program.
13 d. Personnel costs.
14 e. Inmate medical care costs.

15 f. The number of counties that volunteer to house inmates under the
16 Program.
17 g. The administrative costs paid to the Sheriffs' Association and to the
18 Department of Public Safety.
19 (2) Report no later than October 1 of each year to the chairs of the House of
20 Representatives Appropriations Committee on Justice and Public Safety and

21 the Senate Appropriations Committee on Justice and Public Safety and the
22 Joint Legislative Oversight Committee on Justice and Public Safety on the
23 Statewide Misdemeanant Confinement Program. The report shall include the
24 following with respect to the prior fiscal year:
25 a. The cost of housing prisoners by county under the Program.
26 b. The cost of transporting prisoners by county under the Program.
27 c. Personnel costs by county.

28 d. Inmate medical care costs by county.
29 e. The number of counties that volunteer to house inmates under the
30 Program.
31 f. The administrative costs paid to the Sheriffs' Association and to the
32 Department of Public Safety.
33
34 INTERSTATE COMPACT FEES TO SUPPORT TRAINING PROGRAMS AND

35 EQUIPMENT PURCHASES SECTIONS
36 SECTION18.11.(a) Notwithstandingtheprovisions ofG.S. 148-65.7, fees collected
37 for the Interstate Compact Fund during the 2019-2021 fiscal biennium may be used by the
38 Division of Adult Correction of the Department of Public Safety during the 2019-2021 fiscal
39 biennium to provide training programs and equipment purchases for the Section of Community
40 Corrections, but only to the extent sufficient funds remain available in the Fund to support the

41 mission of the Interstate Compact Program.
42 SECTION 18.11.(b) No later than October 1 of each fiscal year, the Department of
43 Public Safety shall report to the Joint Legislative Oversight Committee on Justice and Public
44 Safety on the amount of funds used pursuant to this section and for what purposes the funds were
45 used.
46
47 NURSE STAFFING AT STATE PRISONS REPORT

48 SECTION 18.12.(a) The Department of Public Safety shall report the following
49 information to the Joint Legislative Oversight Committee on Justice and Public Safety by
50 February 1, 2020, and by February 1, 2021:

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1 (1) The total number of permanent nursing positions allocated to the Department,
2 the number of filled positions, the number of positions that have been vacant
3 formore thansix months, andinformationregardingthe locationofboth filled
4 and vacant positions.
5 (2) The extent to which temporary contract services are being used to staff vacant
6 nursing positions, the method for funding the contract services, and any cost
7 differences between the use of permanent employees versus contract

8 employees.
9 (3) A progress report on the implementation of its plan to (i) reduce the use of
10 contract services to provide nursing in State prisons and (ii) attract and retain
11 qualified nurses for employment in permanent positions in State prisons.
12 SECTION 18.12.(b) Notwithstanding anyother provision of law, the Department of
13 Public Safety may, in its discretion and subject to the approval of the Office of State Budget and
14 Management, convert funds appropriated for contractual nursing services to permanent nursing

15 positions when it is determined to promotesecurity, generate cost savings, orimprovehealth care
16 quality. The Department shall report on any such conversions to the Fiscal Research Division.
17
18 DEPARTMENT REPORT ON PRISON PERSONNEL MATTERS
19 SECTION 18.13. The Department of Public Safety, Division of Adult Correction,
20 shall report the following information to the Joint Legislative Oversight Committee on Justice

21 and Public Safety by February 1, 2020, and by February 1, 2021:
22 (1) ThenumberofDivisionemployeeschargedwiththecommissionofacriminal
23 offense committed in a State prison and during the employee's work hours.
24 The information shall be provided by State facility and shall specify the
25 offense charged and the outcome of the charge.
26 (2) Thenumberofemployees disciplined,demoted,or separated fromservicedue
27 to personal misconduct. To the extent it does not disclose confidential

28 personnel records, the information shall be organized by type of misconduct,
29 nature of corrective action taken, and outcome of the corrective action.
30 (3) The hiring and screening process, including any required credentials or skills,
31 criminal background checks, and personality assessments. The information
32 shall also include the process the Division uses to verify the information
33 provided by an applicant.
34

35 STATEWIDEMISDEMEANANTCONFINEMENTPROGRAMFUNDINGTRANSFER
36 SECTION 18.14. Of the funds appropriated in this act for the Statewide
37 Misdemeanant Confinement Program:
38 (1) The sum of one million dollars ($1,000,000) shall be transferred each fiscal
39 year to the North Carolina Sheriffs' Association, Inc., a nonprofit corporation,
40 to support the Program and for administrative and operating expenses of the

41 Association and its staff.
42 (2) The sum of two hundred twenty-five thousand dollars ($225,000) shall be
43 allocated each fiscal year to the Division of Adult Correction for its
44 administrative and operating expenses for the Program.
45
46 PRISON REFORM REPORT
47 SECTION 18.15. The Department of Public Safety (Department) shall report

48 quarterly beginning November 1, 2019, and continuing quarterly until the end of the 2019-2021
49 fiscal biennium, to the Joint Legislative Oversight Committee on Justice and Public Safety on
50 the Department's prison reform initiatives, including:

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1 (1) All modifications to Department rules, policies, and procedures related to
2 disciplinary actions against correctional officers and other correctional staff.
3 (2) All modifications to Department rules, policies, and procedures related to
4 disciplinary actions against inmates.
5 (3) The amount, content, quality, and frequency of staff training.
6 (4) Modifications to inmate work assignments, including assessments of the
7 appropriateness of particular work assignments based on inmate

8 classification.
9 (5) Facility infrastructure improvements made to emergency communication,
10 location tracking capabilities, and installation of additional cameras.
11 (6) Increased availability of staff personal safety equipment and institutional
12 safety equipment.
13 (7) Adequacy of staffing of prison facilities and actions taken to increase staffing
14 levels.

15 (8) Actions taken to increase retention efforts of staff.
16 (9) Changes to the hiring and orientation processes and procedures for
17 correctional officers.
18 (10) Methods used to prevent delivery of contraband items to prisoners, including
19 illegal drugs and mobile phones, and an evaluation or summary of the
20 effectiveness of the methods.

21 (11) Modifications to housing capacity to meet prison staffing requirements.
22
23 PLAN TO ADDRESS STANDARD OPERATING CAPACITY OF THE DIVISION OF
24 ADULT CORRECTION AND JUVENILE JUSTICE
25 SECTION18.16.(a) TheDepartment ofPublicSafetyshall develop along-term plan
26 to meet Standard Operating Capacity requirements of the Division of Adult Correction and
27 Juvenile Justice. The long-term plan shall, at a minimum, include the following:

28 (1) An analysis of the required staffing to meet Standard Operating Capacity
29 requirements.
30 (2) Recommendations for reopening closed facilities.
31 (3) Recommendations for constructing new facilities.
32 (4) Recommendations to reduce the prison population.
33 SECTION 18.16.(b) The Department of Public Safety shall submit its long-term
34 plan required under subsection (a) of this section to the Joint Legislative Oversight Committee

35 on Justice and Public Safety no later than December 1, 2019.
36
37 REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL
38 EXPENSES
39 SECTION 18.17. Notwithstanding G.S. 143C-6-9, the Department of Public Safety
40 may use funds available to the Department for the 2019-2021 fiscal biennium to reimburse

41 counties for the cost of housing convicted inmates, parolees, and post-release supervisees
42 awaiting transfer to the State prison system, as provided in G.S. 148-29. The reimbursement may
43 not exceed forty dollars ($40.00) per day per prisoner awaiting transfer. Beginning October 1,
44 2019, the Department shall report quarterly to the chairs of the Joint Legislative Oversight
45 Committee on Justice and Public Safety and the chairs of the House of Representatives
46 Appropriations Committee on Justice and Public Safety and the Senate Appropriations
47 Committee on Justice and Public Safety on the expenditure of funds to reimburse counties for

48 prisoners awaiting transfer.
49
50 DOT CONTRACT OF INMATE LITTER CREW

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1 SECTION 18.17B. After the issuance of a request for information (RFI) and receipt
2 of bids by the Department of Transportation for litter pickup on State highways and roads, the
3 Department of Transportation shall first offer the contract to the Division of Adult Correction
4 upon the same terms and conditions as the most favorable bid received by the Department of
5 Transportation from a suitable contractor. The Division of Adult Correction shall have 30 days
6 to accept or decline the offered contract.
7

8 COMMUNITY COLLEGE ENROLLMENT GROWTH/PAMLICO CORRECTIONAL
9 INSTITUTION
10 SECTION 18.17C. When calculating the enrollment growth budget request for the
11 2020-2021 fiscal year, the North Carolina Community College System Office shall adjust the
12 full-time equivalent (FTE) enrollment to reflect the FTE lost due to the fire at Pamlico
13 Correctional Institution.
14

15 LIMIT USE OF COMMUNITY PROGRAM FUNDS
16 SECTION 18.18.(a) Funds appropriated in this act to the Department of Public
17 Safety for the 2019-2021 fiscal biennium for communityprogram contracts, that are not required
18 for or used for community program contracts, may be used only for the following:
19 (1) Other statewide residential programs that provide Level 2 intermediate
20 dispositional alternatives for juveniles.

21 (2) Statewide community programs that provide Level 2 intermediate
22 dispositional alternatives for juveniles.
23 (3) Regional programs that are collaboratives of two or more Juvenile Crime
24 Prevention Councils which provide Level 2 intermediate dispositional
25 alternatives for juveniles.
26 (4) The Juvenile Crime Prevention Council funds to be used for the Level 2
27 intermediate dispositional alternatives for juveniles listed in

28 G.S. 7B-2506(13) through (23).
29 SECTION 18.18.(b) Funds appropriated by this act to the Department of Public
30 Safety for the 2019-2021 fiscal biennium for community programs may not be used for staffing,
31 operations, maintenance, or any other expenses of youth development centers or detention
32 facilities.
33 SECTION 18.18.(c) The Department of Public Safety shall submit an electronic
34 report by October 1 of each year of the 2019-2021 fiscal biennium on all expenditures made in

35 the preceding fiscal year from the miscellaneous contract line in Fund Code 1230 to the chairs of
36 the House of Representatives Appropriations Committee on Justice and Public Safety and the
37 Senate Appropriations Committee on Justice and Public Safety and the Fiscal Research Division.
38 The report shall include all of the following: an itemized list of the contracts that have been
39 executed, the amount of each contract, the date the contract was executed, the purpose of the
40 contract, the number of juveniles that will be served and the manner in which theywill be served,

41 the amount of moneytransferred to the Juvenile Crime Prevention Council fund, and an itemized
42 list of grants allocated from the funds transferred to the Juvenile Crime Prevention Council fund.
43
44 CREATE HAZARDOUS MATERIALS FACILITY FUND
45 SECTION 18.20.(a) G.S. 166A-29.1 reads as rewritten:
46 § 166A-29.1. Hazardous materials facility fee.fee and fund.
47 …

48 (b1) Hazardous Materials Facility Fund. – The Hazardous Materials Facility Fund is
49 established as a special fund within the Department. All fees collected under this section shall be
50 credited to the Fund and shall be used to support the hazardous materials response programs
51 established pursuant to subsection (f) of this section.

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1 …
2 (f) Use of Fee Proceeds. – The proceeds of fees assessed pursuant to this section shall be
3 used for the following:
4 (1) To offset costs associated with the establishment and maintenance of a
5 hazardous materials database and a hazardous materials response application.
6 (2) To offset costs associated with the operations of the regional response
7 program for hazardous materials emergencies and terrorist incidents.

8 (3) To provide grants to counties for hazardous materials emergency response
9 planning, training, equipment, and related exercises.
10 (4) To offset Division costs that directly support hazardous materials emergency
11 preparedness and response.
12 SECTION 18.20.(b) This section becomes effective July1, 2019, and applies to fees
13 collected on or after that date.
14

15 RADIOLOGICAL EMERGENCY PLANNING
16 SECTION 18.21.(a) G.S. 166A-29 reads as rewritten:
17 § 166A-29. Emergency planning; charge.
18 (a) Every person, firm, corporation or municipality who is licensed to construct or who
19 is operating a fixed nuclear facility for the production of electricity shall pay to the Department
20 of Public Safety an annual fee of at least thirty thousand dollars ($30,000) for each fixed nuclear

21 facility which is located within this State or has a Plume Exposure Pathway Emergency Planning
22 Zone of which any part is located within this State. This fee is to be applied to the costs of
23 planning and implementing emergency response activities as are required by the Federal
24 Emergency Management Agency for the operation of nuclear facilities. Said fee is to be paid no
25 later than July 31 of each year. on a schedule set by the Department of Public Safety. This
26 minimum fee may be increased from time to time as the costs of such planning and
27 implementation increase. Such increases shall be by agreement between the State and the

28 licensees or operators of the fixed nuclear facilities.
29 (b) Every person, firm, corporation or municipality who is licensed to construct or who
30 is operating a fixed nuclear facility for the production of electricity shall pay to the Department
31 of Public Safety, for the use of the Radiation Protection Section of the Division of Public Health
32 Health Service Regulation of the Department of Health and Human Services, an annual fee of at
33 least thirty-six thousand dollars ($36,000) for each fixed nuclear facility that is located within
34 this State or that has a Plume Exposure Pathway Emergency Planning Zone any part of which is

35 located within this State. This fee shall be applied onlyto the costs of planning and implementing
36 emergency response activities as required by the Federal Emergency Management Agency for
37 the operation of nuclear facilities. This fee is to be paid no later than July 31 of each year.on a
38 schedule set by the Department of Public Safety.
39 ….
40 SECTION 18.21.(b) This section becomes effective July1, 2019, and applies to fees

41 assessed on or after that date.
42
43 PART XIX. ADMINISTRATION
44
45 DEPARTMENT OF ADMINISTRATION/MANAGE STATE PORTFOLIO OF REAL
46 PROPERTY AND UPDATE E-PROCUREMENT SYSTEM
47 SECTION 19.1.(a) Notwithstanding the provisions of G.S. 66-58.12(c), the sum of

48 one million five hundred thousand dollars ($1,500,000) in nonrecurring funds for the 2019-2020
49 fiscal yeartransferredinthisactfromtheE-CommerceFundintheDepartmentofAdministration
50 Budget Code 24100, Fund Code 2514, to the Department of Administration Budget Code 14100,

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1 Fund Code 1412, shall be used to develop a real estate information system as required bySection
2 31.2 of S.L. 2018-5.
3 SECTION19.1.(b) For purposes ofupdatingthe E-Procurement System (hereinafter
4 System), the Department of Administration shall do all of the following:
5 (1) Create a detailed plan for updating the System, including:
6 a. The ways in which the System will be improved.
7 b. The itemized costs of the improvements.

8 c. The length of time it will take to make the improvements.
9 (2) No later than October 1, 2019, submit a report which describes (i) the detailed
10 plan required bysubdivision (1) of this subsection and (ii) the funds expended
11 prior to October 1, 2019, for updating the System to the Joint Legislative
12 Oversight Committee on General Government and the Joint Legislative
13 Oversight Committee on Information Technology.
14

15 PROCUREMENT SIMPLIFICATION AND INCREASED ACCOUNTABILITY
16 SECTION 19.2.(a) G.S. 143-52.1 reads as rewritten:
17 § 143-52.1. Award recommendations; State Purchasing Officer action.
18 (a) Award Recommendation. – When the dollar value of a contract to be awarded under
19 Article 3 of Chapter 143 of the General Statutes exceeds the benchmark established pursuant to
20 G.S. 143-53.1, an award recommendation shall be submitted to the State Purchasing Officer for

21 approval or other action. The State Purchasing Officer shall promptly notify the agency or
22 institution making the recommendation, or for which the purchase is to be made, of the action
23 taken.
24 (b) through (d) Repealed by Session Laws 2013-234, s. 4, effective July 3, 2013.
25 (e) Reporting. – The State Procurement Officer shall provide a monthly report of all
26 contract awards greater than twenty-five thousand dollars ($25,000) the benchmark established
27 under G.S. 143-53.1 approved through the Division of Purchase and Contract to the Cochairs of

28 the Joint Legislative Committee on Governmental Operations. The report shall include the
29 amount of the award, the award recipient, the using agency, and a short description of the nature
30 of the award.
31 SECTION 19.2.(b) G.S. 143-53 reads as rewritten:
32 § 143-53. Rules.
33 (a) The Secretary of Administration may adopt rules governing the following:
34 (1) Prescribing the routine and procedures to be followed in canvassing bids and

35 awarding contracts, and for reviewing decisions made pursuant thereto, and
36 the decision of the reviewing body shall be the final administrative review.
37 The Division of Purchase and Contract shall review and decide a protest on a
38 contract valued at twenty-five thousand dollars ($25,000) or more. an amount
39 that exceeds the benchmark established under G.S. 143-53.1. The Secretary
40 shall adopt rules or criteria governing the review of and decision on a protest

41 on a contract of less than twenty-five thousand dollars ($25,000) valued at or
42 below the benchmark established under G.S. 143-53.1 by the agency that
43 awarded the contract.
44 …
45 (5) Prescribing conditions under which purchases and contracts for the purchase,
46 installment or lease-purchase, rental or lease of goods and services may be
47 entered into by means other than competitive bidding, including, but not

48 limited to, negotiation, reverse auctions, and acceptance of electronic bids.
49 Notwithstanding the provisions of subsections (a) and (b) of this section, any
50 waiver of competition for the purchase, rental, or lease of goods and services
51 is subject to prior review by the Secretary, if the expenditure exceeds ten

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1 thousand dollars ($10,000). the benchmark established under G.S. 143-53.1.
2 The Division may levy a fee, not to exceed one dollar ($1.00), for review of
3 each waiver application.
4 ….
5 SECTION 19.2.(c) G.S. 143-53.1 reads as rewritten:
6 § 143-53.1. Setting of benchmarks; increase by Secretary.
7 (a) On and after July 1, 2014, the procedures prescribed by G.S. 143-52 with respect to

8 competitive bids and the bid value benchmark authorized by G.S. 143-53(a)(2) with respect to
9 rule making by the Secretary of Administration for competitive bidding shall promote
10 compliance with the principles of procurement efficiency, transparency, and fair competition to
11 obtain the State's business. For State departments, institutions, and agencies, except the President
12 of The University of North Carolina or a special responsibility constituent institution of The
13 University of North Carolina and community colleges, the benchmark shall not be greater than
14 one hundred thousand dollars ($100,000). For the President of The University of North Carolina

15 or a special responsibility constituent institution of The University of North Carolina, the
16 benchmark prescribed in this section is as provided in G.S. 116-31.10. For community colleges,
17 the benchmark prescribed in this section is as provided in G.S. 115D-58.14.
18 ….
19 SECTION 19.2.(d) G.S. 143-57 reads as rewritten:
20 § 143-57. Purchases of articles in certain emergencies.

21 In case of any emergency or pressing need arising from unforeseen causes including but not
22 limitedtodelaybycontractors,delayintransportation,breakdowninmachinery,orunanticipated
23 volume of work, the Secretary of Administration shall have power to obtain or authorize
24 obtaining in the open market any necessary supplies, materials, equipment, printing or services
25 forimmediate deliveryto anydepartment, institutionor agencyoftheState government. A report
26 on the circumstances of such emergency or need and the transactions thereunder shall be made a
27 matter of record promptly thereafter. If the expenditure exceeds ten thousand dollars ($10,000),

28 thebenchmark established under G.S. 143-53.1,thereportshall also bemadepromptlythereafter
29 to the Division of Purchase and Contract.
30 SECTION 19.2.(e) This section is effective when it becomes law and applies to
31 contracts entered into on or after that date.
32
33 VACANT POSITION ELIMINATION FLEXIBILITY AND REPORT
34 SECTION 19.3. Notwithstanding any provision of this act to the contrary, the

35 Department of Administration, Department of Insurance, Department of Military and Veterans
36 Affairs, Department of Revenue, Department of State Treasurer, Department of the Secretary of
37 State, and State Board of Elections shall meet the personal services reduction required by this act
38 by eliminating positions, either vacant or filled, for each year of the 2019-2021 fiscal biennium.
39 By October 1, 2019, and October 1, 2020, each of the agencies listed in this section shall submit
40 a report to the Joint Legislative Oversight Committee on General Government, the House of

41 Representatives Appropriations Subcommittee on General Government, the Senate
42 Appropriations Committee on General Government and Information Technology, and the Fiscal
43 Research Division on the actions taken to achieve the budgeted reduction for vacant position
44 eliminations for the fiscal year. The report shall include a list of each alternative position
45 eliminated, along with its position number, title, and the amount of salary and fringe benefits
46 associated with each position.
47

48 PART XX. ADMINISTRATIVE HEARINGS [RESERVED]
49
50 PART XXI. AUDITOR [RESERVED]
51

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1 PART XXII. BUDGET AND MANAGEMENT
2
3 FUNDS FOR EASTERN TRIAD WORKFORCE DEVELOPMENT
4 SECTION22.2. The sum offourmillion five hundredthousand dollars ($4,500,000)
5 in nonrecurring funds appropriated in this act to the Office of State Budget and Management,
6 Special Appropriations, for each year of the 2019-2021 fiscal biennium for the Triad Workforce
7 Solutions Collaborative shall be allocated each fiscal year as follows:

8 (1) Alamance County $875,000
9 (2) Guilford County $2,250,000
10 (3) Rockingham County $625,000
11 (4) Randolph County $750,000.
12
13 PLAN FOR RESULTS FIRST BENEFIT-COST ANALYSIS OF DEPARTMENT OF
14 HEALTH AND HUMAN SERVICES PROGRAMS

15 SECTION 22.3. By January 15, 2020, the Office of State Budget and Management
16 (OSBM) shall submit to the Joint Legislative Oversight Committee on General Government, the
17 Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research
18 Divisionaplantoconduct,aspartofNorthCarolina'sResultsFirstproject,abenefit-costanalysis
19 of all Department of Health and Human Services (Department) programs funded by State
20 appropriations. OSBM shall include in the plan required by this section (i) an inventory of all

21 Department programs funded by State appropriations and (ii) an estimate of the cost to conduct
22 the Results First benefit-cost analysis for each Department program funded by State
23 appropriations. The Department shall cooperate with the OSBM in OSBM's development of the
24 plan required by this section.
25
26 OSBM/MATCHING FUNDS REQUIREMENT FOR NONPROFITS
27 SECTION22.4. GastonAquatics, Inc.,anonprofit organization,shall matchthesum

28 of two million dollars ($2,000,000) in nonrecurring funds appropriated in this act to the
29 organization for pool construction on a one-to-one basis. The organization shall have four years
30 in which to raise the matching funds, and no State funds shall be disbursed to the organization
31 until the matching funds have been raised. Funds appropriated in this act to the organization that
32 have not been disbursed by June 30, 2023, shall revert to the General Fund.
33
34 PART XXIII. BUDGET AND MANAGEMENT – SPECIAL APPROPRIATIONS

35 [RESERVED]
36
37 PART XXIV. CONTROLLER
38
39 OVERPAYMENTS AUDIT
40 SECTION 24.1.(a) During the 2019-2021 fiscal biennium, receipts generated bythe

41 collection of inadvertent overpayments by State agencies to vendors as a result of pricing errors,
42 neglected rebates and discounts, miscalculated freight charges, unclaimed refunds, erroneously
43 paid excise taxes, and related errors shall be deposited in Special Reserve Account 24172 as
44 required by G.S. 147-86.22(c).
45 SECTION 24.1.(b) Of the funds appropriated in this act from the Special Reserve
46 Account 24172, and for each year of the 2019-2021 fiscal biennium, two hundred fifty thousand
47 dollars ($250,000) of the funds shall be used by the Office of the State Controller for data

48 processing, debt collection, or e-commerce costs.
49 SECTION 24.1.(c) The State Controller shall report annuallyto the Joint Legislative
50 Commission on Governmental Operations and the Fiscal Research Division on the revenue
51 deposited into Special Reserve Account 24172 and the disbursement of that revenue.

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1
2 PART XXV. ELECTIONS
3
4 BOARD OF ELECTIONS/REPORT ON POST-ELECTION AUDITS
5 SECTION 25.1.(a) Article 20 of Chapter 163A of the General Statutes is amended
6 by adding a new section to read as follows:
7 § 163A-1180.1. Post-election audits.

8 After conducting a post-election audit, the Board of Elections shall produce a report which
9 summarizes the audit, including the rationale for and the findings of the audit. The report shall
10 be submitted to the Joint Legislative Elections Oversight Committee and the Joint Legislative
11 Oversight Committee on General Government within 10 business days of the date the audit is
12 completed.
13 SECTION 25.1.(b) This section is effective when it becomes law and applies to
14 post-election audits conducted on or after that date.

15
16 BOARD OF ELECTIONS/DESIGNATE EXISTING POSITION AS AGENCY
17 GENERAL COUNSEL
18 SECTION 25.2. The State Board of Elections shall designate one of its current
19 full-time employee positions as Agency General Counsel. The State Board of Elections shall
20 consult with the Office of State Human Resources and the Office of State Budget and

21 Management to ensure that the designation authorized by this section is made in accordance with
22 State policies and procedures.
23
24 PART XXVI. GENERAL ASSEMBLY [RESERVED]
25
26 PART XXVII. GOVERNOR [RESERVED]
27

28 PART XXVIII. HOUSING FINANCE AGENCY [RESERVED]
29
30 PART XXIX. INSURANCE
31
32 INSURANCE REGULATORY FEE
33 SECTION 29.1. The percentage rate to be used in calculating the insurance
34 regulatory charge under G.S. 58-6-25 is six and one-half percent (6.5%) for the 2020 calendar

35 year.
36
37 PART XXX. INSURANCE – INDUSTRIAL COMMISSION
38
39 INDUSTRIAL COMMISSION USE ELECTRONIC MAIL TO SEND DECISIONS
40 SECTION 30.1.(a) G.S. 143-293 reads as rewritten:

41 § 143-293. Appeals to Court of Appeals.
42 Either the claimant or the State may, within 30 days after receipt of the decision and order of
43 the full Commission, to be sent by registered or certified registered, certified, or electronic mail,
44 but not thereafter, appeal from the decision of the Commission to the Court of Appeals. Such
45 appeal shall be for errors of law only under the same terms and conditions as govern appeals in
46 ordinary civil actions, and the findings of fact of the Commission shall be conclusive if there is
47 any competent evidence to support them. The appellant shall cause to be prepared a statement of

48 the case as required bythe rules of the Court of Appeals. A copy of this statement shall be served
49 on the respondent within 45 days from the entry of the appeal taken; within 20 days after such
50 service, the respondent shall return the copy with his the respondent's approval or specified
51 amendments endorsed or attached; if the case be approved by the respondent, it shall be filed

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1 with the clerk of the Court of Appeals as a part of the record; if not returned with objections
2 within the time prescribed, it shall be deemed approved. The chairman chair of the Industrial
3 Commission shall have the power, in the exercise of his the chair's discretion, to enlarge the time
4 in which to serve statement of case on appeal and exceptions thereto or counterstatement of case.
5 If the case on appeal is returned by the respondent with objections as prescribed, or if a
6 countercase is served on appellant, the appellant shall immediately request the chairman chair of
7 the Industrial Commission to fix a time and place for settling the case before him.case. If the

8 appellant delays longer than 15 days after the respondent serves his the countercase or exceptions
9 to request the chairman chair to settle the case on appeal, and delays for such period to mail mail,
10 as provided in this section, the case and countercase or exceptions to the chairman,chair, then the
11 exceptions filed by the respondent shall be allowed; or the countercase served by him shall
12 constitute the case on appeal; but the time may be extended by agreement of counsel.
13 The chairman chair shall forthwith notifythe attorneys of the parties to appear before him the
14 chair for that purpose at a certain time and place, which time shall not be more than 20 days from

15 the receipt of the request. At the time and place stated, the chairman chair of the Industrial
16 Commission or his the chair's designee shall settle and sign the case and deliver a copy to the
17 attorneys of each party. The appellant shall within five days thereafter file it with the clerk of the
18 CourtofAppeals,andifhetheappellantfailstodosotherespondentmayfilehistherespondent's
19 copy.
20 No appeal bond or supersedeas bond shall be required of State departments or agencies.

21 SECTION 30.1.(b) This section becomes effective July 1, 2019, and applies to
22 decisions and orders sent on or after that date.
23
24 PART XXXI. LIEUTENANT GOVERNOR
25
26 LIEUTENANT GOVERNOR/COORDINATE STUDY ON EMERGING MODES OF
27 TRANSPORTATION AND CONVENE EVTOL SUMMIT

28 SECTION 31.1.(a) Of the funds appropriated in this act to the Office of the
29 Lieutenant Governor, the sum of one million five hundred thousand dollars ($1,500,000) in
30 nonrecurring funds for the 2019-2020 fiscal year shall be used as follows:
31 (1) Seven hundred fifty thousand dollars ($750,000) to study the feasibility and
32 economic impact of creating an Electric Vertical Takeoff and Landing
33 (eVTOL) and Unmanned Aircraft Systems (UAS) corridor in the State
34 focused on research, development, and commercialization and using that

35 technology to help improve the health, safety, and well-being of the State's
36 citizens. The study shall include:
37 a. Gathering information available in the eVTOL and UAS fields,
38 including commercial developments and technology initiatives, to
39 estimate the market potential.
40 b. Interviewing leaders in aviation, telecommunications, education,

41 healthcare,transportation,fueltechnologies,emergencymanagement,
42 military, agriculture, planning, and venture capital to determine
43 opportunities for using eVTOL and UAS technologies in the State.
44 c. Exploring suppliers of eVTOL and UAS technologies, sources of
45 demand for these technologies, and current and emerging competitors
46 in the eVTOL and UAS fields.
47 d. Determining the criteria for viable eVTOL vehicles in this State.

48 e. Identifying stakeholders that have verified Federal Aviation
49 Administration (FAA) proof-of-concept eVTOL vehicles.
50 f. Evaluating current trends and future projections in the eVTOL and
51 UAS fields.

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1 g. Considering the need for establishing a strategic advisory group to
2 advise and inform the State's leaders on current and emerging
3 technologies in the eVTOL and UAS fields, and the ways in which the
4 State can use these technologies to improve services and create job
5 opportunities.
6 (2) Seven hundred fifty thousand dollars ($750,000) to organize and convene an
7 eVTOL summit. The purpose of the summit shall be to facilitate dialogue

8 between leadersin the State,stakeholderswith verified FAAproof-of-concept
9 eVTOL vehicles, and the public about ways in which eVTOL vehicles can be
10 safely used to improve public and private services in the State, including
11 health care and transportation, and to create public and private jobs.
12 SECTION31.1.(b) Fundsappropriatedinthisact forthestudyandsummitdescribed
13 in subsection (a) of this section may also be used to hire staff, consultants, and qualified vendors
14 to conduct the study and organize and facilitate the summit. The Office of the Lieutenant

15 Governor may contract with consultants and qualified vendors under this subsection without
16 complying with the provisions of Article 3, Article 3C, and Article 3D of Chapter 143 of the
17 General Statutes.
18 SECTION 31.1.(c) By April 1, 2020, the Office of the Lieutenant Governor shall
19 submit an interim report on the study to the Joint Legislative Transportation Oversight
20 Committee, Joint Legislative Oversight Committee on General Government, and the Fiscal

21 Research Division which shall include the following:
22 (1) A detailed description of the items listed in subdivision (1) of subsection (a)
23 of this section that have been studied to date, and any findings and
24 recommendations related to these items.
25 (2) A list of the staff and consultants hired to date to conduct the study and
26 organize and facilitate the summit.
27 (3) A progress report on the planning and itinerary for the eVTOL summit,

28 including the estimated cost of the eVTOL summit.
29 SECTION 31.1.(d) By October 1, 2020, the Office of the Lieutenant Governor shall
30 report the findings of the study and the eVTOL summit, including any legislative
31 recommendations,totheJoint LegislativeTransportationOversightCommittee,Joint Legislative
32 Oversight Committee on General Government, and the Fiscal Research Division.
33 SECTION 31.1.(e) Funds appropriated for the purposes described in this section that
34 are unexpended or unencumbered on June 30, 2020, shall not revert to the General Fund, but

35 shall remain available to the Office of the Lieutenant Governor for the purposes authorized in
36 this section until October 1, 2020.
37 SECTION 31.1.(f) This section is effective when it becomes law and expires on
38 October 1, 2020.
39
40 PART XXXII. MILITARY AND VETERANS AFFAIRS

41
42 DMVA/TECHNICAL AMENDMENT TO DELETE OBSOLETE LANGUAGE FROM
43 STATUTE REGULATING SCHOLARSHIPS
44 SECTION 32.1. G.S. 143B-1225 reads as rewritten:
45 § 143B-1225. Scholarship.
46 (a) A scholarship granted pursuant to this Part shall consist of the following benefits in
47 either a State or private educational institution:

48 …
49 (4) No educational assistance shall be afforded a child under this Part after the
50 end of an eight-year period beginning on the date the scholarship is first
51 awarded. Those persons who have been granted a scholarship under this Part

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1 prior to the effective date of this act shall be entitled to the remainder of their
2 period of scholarship eligibility if used prior to August 1, 2010. Whenever a
3 child is enrolled in an educational institution and the period of entitlement
4 ends while enrolled in a term, quarter or semester, such period shall be
5 extended to the end of such term, quarter or semester, but not beyond the
6 entitlement limitation of four academic years.
7 ….

8
9 ESTABLISH NORTH CAROLINA VETERANS CEMETERY TRUST FUND
10 SECTION 32.3.(a) There is established the North Carolina Veterans Cemeteries
11 Trust Fund (hereinafter Fund), a special fund within the Department of Military and Veterans
12 Affairs. The Fund shall be maintained as a special fund and shall be administered by the
13 Department to carry out the provisions of this section. Interest accruing from the monies in the
14 Fund shall be credited to the Fund. The Fund shall consist of the following sources of funding:

15 (1) All interest and investment earnings received on monies in the Fund.
16 (2) Any other funds, as directed by the General Assembly.
17 SECTION 32.3.(b) The funds in the Fund shall be allowed to accumulate until they
18 have generated sufficient interest earnings to maintain the State's veterans' cemeteries once they
19 have reached full capacity. The interest earnings in the Fund shall be used to maintain existing
20 veterans' cemeteries once they have reached full capacity, but the principal shall not be spent.

21 The interest earnings in the Fund shall not be used to open new veterans' cemeteries. The
22 Veterans Affairs Commission shall have sole authority to approve the use of the Fund for the
23 purposes authorized in this subsection, and they shall, in exercising that authority, act without
24 direction from or supervision of the Secretary.
25
26 VETERANS AFFAIRS COMMISSION/AWARDING OF SERVICE MEDALS
27 SECTION 32.4. G.S. 143B-1220 reads as rewritten:

28 § 143B-1220. Veterans' Affairs Commission – creation, powers and duties.
29 There is hereby created the Veterans' Affairs Commission of the Department of Military and
30 Veterans Affairs. The Veterans' Affairs Commission shall have the following functions and
31 duties, as delegated by the Secretary of Military and Veterans Affairs:
32 …
33 (3) To promulgate rules and regulations concerning the awarding of scholarships
34 for children of North Carolina veterans as provided by this Article. The

35 Commission shall make rules and regulations consistent with the provisions
36 of this Article. All rules and regulations not inconsistent with the provisions
37 of this Chapter heretofore adopted by the State Board of Veterans' Affairs
38 shall remain in full force and effect unless and until repealed or superseded by
39 action of the Veterans' Affairs Commission. All rules and regulations adopted
40 by the Commission shall be enforced by the Department of Military and

41 Veterans Affairs; and
42 (4) To promulgate rules concerning the awarding of the North Carolina Services
43 Medal to all veterans who have served in any period of war as defined in 38
44 U.S.C.§101.Theawardshallbeself-financing;thosewhowishtobeawarded
45 the medal shall pay a fee to cover the expenses of producing the medal and
46 awarding the medal. All rules adopted by the Commission with respect to the
47 North Carolina Services Medal shall be implemented and enforced by the

48 Department of Military and Veterans Affairs; and
49 (5) To advise the Secretary on any matter the Secretary may refer to it.
50
51 FUNDS FOR NC VETERANS MEMORIAL PAVILION SHALL NOT REVERT

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1 SECTION 32.5.(a) Notwithstanding any provision of S.L. 2017-57, or of the
2 Committee Report described in Section 39.2 of that act to the contrary, the sum of two hundred
3 fifty thousand dollars ($250,000) in nonrecurring funds for the 2017-2018 fiscal year
4 appropriated in that act to the Department of Military and Veterans Affairs for the construction
5 of public facilities at the North Carolina Veterans Memorial Pavilion in Broadway, North
6 Carolina shall not revert on June 30, 2019, as required by Section 6.13(c) of that act, but shall
7 remain available for expenditure until June 30, 2020.

8 SECTION 32.5.(b) This section becomes effective June 30, 2019.
9
10 DMVA/MILITARY PRESENCE STABILIZATION FUND
11 SECTION 32.6. G.S. 143B-1217 reads as rewritten:
12 § 143B-1217. Military Presence Stabilization Fund.
13 (a) The Military Presence Stabilization Fund is established as a special fund in the
14 Department of Military and Veterans Affairs. Funds in the Military Presence Stabilization Fund

15 shall be used to fund actions designed to make the State less vulnerable to closure pursuant to
16 federal Base Realignment and Closure and related initiatives. The North Carolina Military
17 Affairs Commission shall approve the use of the Fund for this purpose.
18 (b) Notwithstanding the provisions of G.S. 143B-1214 and subsection (a) of this section,
19 funds appropriated to the Military Presence Stabilization Fund may be used for the following
20 purposes:

21 (1) Unless otherwise authorized by the General Assembly, up to two hundred
22 twenty-five thousand dollars ($225,000) to provide grants to local
23 communities or military installations for actual project expenses. Grant funds
24 shall not be used to pay for lobbying the General Assembly, salaries, travel,
25 or other administrative costs. The North Carolina Military Affairs
26 Commission shall establish guidelines for applying for these grants.
27 (2) Administrative expenses and reimbursements for members of the North

28 Carolina Military Affairs Commission.
29 (3) Federal advocacy and lobbying support.
30 (4) Updates to strategic planning analysis and strategic plan.
31 (5) Economic impact analyses.
32 (6) Public-public/public-private (P4) initiatives.
33 (7) Identification and implementation of innovative measures to increase the
34 military value of installations.

35 (8) Fully fund a position at the North Carolina Economic Development Center.
36 (c) The Department of Military and Veterans Affairs shall pay expenses authorized by
37 this section and approved by the North Carolina Military Affairs Commission within 30 days of
38 receiving a request from the Commission that payment be made. Notwithstanding the 30-day
39 time period provided for in this subsection, the Department shall make payment on a contract or
40 grant awarded by the Commission no later than the date payment is due according to the terms

41 of the contract or grant, and the Commission shall not be required to request that the Department
42 make the contract or grant payment. The chair may authorize a member of the Commission's
43 Executive Steering Group or another representative to make a request for payment. Upon receipt
44 of a request for payment, the Department shall issue a written acknowledgment of the request to
45 the Commission or duly authorized representative and shall, once payment has been made,
46 provide proof of payment to the Commission or duly authorized representative.
47 (d) The North Carolina Military Affairs Commission shall report to the Joint Legislative

48 Oversight Committee on General Government no later than February 15 of each year on
49 expenditures from the Military Presence Stabilization Fund.
50
51 DMVA/SUICIDE PREVENTION PROGRAM

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1 SECTION 32.7. The Department of Military and Veterans Affairs shall consult with
2 theDepartment ofHealth and HumanServices forthepurposeofdevelopingasuicideprevention
3 program for veterans. Not later than February 1, 2020, the Department of Military and Veterans
4 Affairs shall report to the Joint Legislative Oversight Committee on General Government on its
5 progress in developing the suicide prevention program.
6
7 PART XXXIII. REVENUE

8
9 DOR/ELIMINATE VACANT POSITIONS
10 SECTION 33.1. The Department of Revenue shall eliminate a sufficient number of
11 permanent or temporary vacant positions funded through the Collections Assistance Fee to
12 generate a recurring annual savings of five hundred thousand dollars ($500,000) for each year of
13 the 2019-2021 fiscal biennium. The Department shall report on the eliminated positions to the
14 Joint Legislative Oversight Committee on General Government by October 1, 2019.

15
16 DOR TAX FRAUD ANALYTICS
17 SECTION 33.2.(a) Of the funds appropriated in this act to the Department of
18 Revenue, the sum of four million four hundred thousand dollars ($4,400,000) in nonrecurring
19 funds for each year of the 2019-2021 fiscal biennium shall be used to continue and expand the
20 Department's tax fraud analysis contract. These funds shall be used in each fiscal year as follows:

21 (1) Three million three hundred thousand dollars ($3,300,000) to pay for fraud
22 detection analytics and information reporting.
23 (2) One million one hundred thousand dollars ($1,100,000) for hosting
24 infrastructure.
25 SECTION 33.2.(b) The Department of Revenue shall continue to coordinate with
26 the Government Data Analytics Center (GDAC) and utilize the subject matter expertise and
27 technical infrastructure available through existing GDAC public-private partnerships for fraud

28 detection analytics and infrastructure.
29
30 DOR/UPDATE ELECTRONIC TAX SYSTEMS TO SEND NOTICES TO TAXPAYER
31 AND TAXPAYER'S POWER OF ATTORNEY
32 SECTION 33.3. The Department of Revenue shall update its electronic tax systems
33 to store and recognize power of attorney registrations to ensure that notices generated by the
34 Department are simultaneously sent to both the taxpayer and the person designated in the

35 taxpayer's power of attorney registration. By January 31, 2020, the Department shall report to
36 the Joint Legislative Oversight Committee on General Government on its progress in updating
37 its electronic tax systems to store and recognize power of attorney registrations.
38
39 PART XXXIV. SECRETARY OF STATE [RESERVED]
40

41 PART XXXV. TREASURER
42
43 EXPANDTHE TYPE OFCANCERS COVEREDAS OCCUPATIONAL DISEASES FOR
44 FIREFIGHTERS' DEATH BENEFITS
45 SECTION 35.1.(a) G.S. 143-166.2 reads as rewritten:
46 § 143-166.2. Definitions.
47 The following definitions apply in this Article:

48 …
49 (6) Killed in theline ofduty. – This term shall applyto all ofthe followingdeaths:
50 …

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1 e. When the death of a firefighter occurs as a direct and proximate result
2 of any of the following cancers that are occupationally related to
3 firefighting, that firefighter is presumed to have been killed in the line
4 of duty:
5 1. Mesothelioma.
6 2. Testicular cancer.
7 3. Intestinal cancer.Cancer of the small intestine.

8 4. Esophageal cancer.
9 5. Oral cavity cancer.
10 6. Pharynx cancer.
11 ….
12 SECTION 35.1.(b) This section is effective when it becomes law and applies to
13 deaths occurring on or after that date.
14

15 TECHNICAL CHANGES TO THE STATE AND LOCAL RETIREMENT SYSTEMS
16 SECTION 35.2.(a) G.S. 128-21 is amended by adding a new subdivision to read:
17 (8a) Duly acknowledged means notarized, including electronic notarization, or
18 verified through an identity authentication service approved by the
19 Department of State Treasurer.
20 SECTION 35.2.(b) G.S. 135-1 is amended by adding a new subdivision to read:

21 (8a) Duly acknowledged means notarized, including electronic notarization, or
22 verified through an identity authentication service approved by the
23 Department of State Treasurer.
24
25 PART XXXVI. GENERAL GOVERNMENT
26
27 DEPARTMENT OF ADMINISTRATION

28 SECTION 36.1.(a) G.S. 116D-4 reads as rewritten:
29 § 116D-4. Minority and historically underutilized business participation.
30 (a) Minority Business Participation. – The goals set by G.S. 143-128 for participation in
31 projects byminoritybusinesses applyto projects funded bythe proceeds of bonds or notes issued
32 under this section. The following State agencies shall monitor compliance with this requirement
33 and shall report to the General Assembly Joint Legislative Oversight Committee on General
34 Government by January 1 of each year on the participation by minority businesses in these

35 projects.TheStateConstructionOffice,DepartmentofAdministration,shall monitorcompliance
36 with regard to projects funded by the proceeds of university improvement general obligation
37 bonds and notes and special obligation bonds and notes; the Board of Governors of The
38 University of North Carolina shall provide the State Construction Office any information
39 required by the State Construction Office to monitor compliance. The Community Colleges
40 System Office shall monitor compliance with regard to projects funded by the proceeds of

41 community college general obligation bonds and notes.
42 ….
43 SECTION 36.1.(b) G.S. 143-48 reads as rewritten:
44 § 143-48. State policy; cooperation in promoting the use of small contractors, minority
45 contractors, physically handicapped contractors, and women contractors;
46 purpose; required annual reports.
47 …

48 (d) The Department of Administration shall collect and compile the data described in this
49 section and report it annually to the General Assembly.Joint Legislative Oversight Committee
50 on General Government.
51 ….

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1 SECTION 36.1.(c) G.S. 143-128.3 reads as rewritten:
2 § 143-128.3. Minority business participation administration.
3 (a) All public entities subject to G.S. 143-128.2 shall report to the Department of
4 Administration, Office of HistoricallyUnderutilized Business, the following with respect to each
5 building project:
6 …
7 The reports shall be in the format and contain the data prescribed by the Secretary of

8 Administration. The University of North Carolina and the State Board of Community Colleges
9 shall report quarterly and all other public entities shall report semiannually. The Secretary of the
10 Department of Administration shall make reports every six months to the Joint Legislative
11 Committee on Governmental Operations and the Joint Legislative Oversight Committee on
12 General Government on information reported pursuant to this subsection.
13 …
14 (c) The Secretary shall study and recommend to the General Assembly Joint Legislative

15 Oversight Committee on General Government and other State agencies ways to improve the
16 effectiveness and efficiency of the State capital facilities development, minority business
17 participation program and good faith efforts in utilizing minority businesses as set forth in
18 G.S. 143-128.2, and other appropriate good faith efforts that may result in the increased
19 utilization of minority businesses.
20 (d) The Secretary shall appoint an advisory board to develop recommendations to

21 improve the recruitment and utilization of minority businesses. The Secretary, with the input of
22 its advisoryboard, shall reviewthe State's programs forpromotingthe recruitment and utilization
23 of minority businesses involved in State capital projects and shall recommend to the General
24 Assembly, Joint Legislative Oversight Committee on General Government, the State
25 Construction Office, The University of North Carolina, and the community colleges system
26 changes in the terms and conditions of State laws, rules, and policies that will enhance
27 opportunities for utilization of minoritybusinesses on these projects. The Secretary shall provide

28 guidanceto theseagencies on identifyingtypes of projects likelyto attract increasedparticipation
29 by minority businesses and breaking down or combining elements of work into economically
30 feasible units to facilitate minority business participation.
31 …
32 (g) The Annually, on or before September 1, beginning September 1, 2019, the Secretary
33 shall report findings and recommendations recommendations, as required under this section
34 section, to the Joint Legislative Committee on Governmental Operations annually on or before

35 June 1, beginning June 1, 2002.and the Joint Legislative Oversight Committee on General
36 Government and shall post the report findings and recommendations on the Department's Web
37 site.
38 SECTION 36.1.(d) G.S. 143-341 reads as rewritten:
39 § 143-341. Powers and duties of Department.
40 The Department of Administration has the following powers and duties:

41 …
42 (8) General Services:
43 …
44 i. To establish and operate a central motor fleet and such subsidiary
45 related facilities as the Secretarymaydeem necessary, and to that end:
46 …
47 11. To report annually to the General Assembly Joint Legislative

48 Oversight Committee on General Government on any rules
49 adopted, amended or repealed under sub-sub-subdivisions 3.,
50 7., or 7a. of this sub-subdivision.
51 …

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1 (12) Report on Vehicles Managed. – Beginning on September 1, 2019, and
2 semiannually thereafter, the Department of Administration shall provide a
3 report to the Joint Legislative Oversight Committee on General Government
4 and the Joint Legislative Oversight Committee on Justice and Public Safety
5 on the status of all motor vehicles managed by the Department of
6 Administration for the Department of Public Safety. The report shall include
7 all of the following information:

8 a. The number of motor vehicles managed by the Department of
9 Administration for the Department of Public Safety.
10 b. The condition of each motor vehicle, including the mileage on each
11 motor vehicle.
12 c. The average amount of time taken to repair or replace a motor vehicle.
13 d. The number and condition of any backup motor vehicles managed by
14 the Department of Administration and available for use by the

15 Department of Public Safety, including the location and condition of
16 each motor vehicle.
17 SECTION 36.1.(e) Section 27.6(c) of S.L. 2015-241 is repealed.
18 SECTION 36.1.(f) G.S. 143-341.2 reads as rewritten:
19 § 143-341.2. Proactive management of State-owned and State-leased real property
20 portfolio.

21 (a) Duties of the Department of Administration. – The Department of Administration
22 shall have the following powers and duties:
23 …
24 (7) Reporting. – The Department of Administration shall make the following
25 reports:
26 a. No later than December 1, 2018, and every five years thereafter, the
27 Department shall report the following to the Joint Legislative

28 Commission on Governmental Operations, to the Joint Legislative
29 Oversight Committee on General Government, the Fiscal Research
30 Division of the General Assembly, and to the Program Evaluation
31 Division of the General Assembly:
32 1. The plan developed pursuant to subdivision (1) of this
33 subsection.
34 2. A summary of the performance measurement procedures

35 developed pursuant to subdivision (2) of this subsection.
36 b. If any State agency fails to submit the information required by
37 subdivision (b)(1) of this section, the Department shall report the
38 failure to the chairs of the Joint Legislative Commission on
39 Governmental Operations Operations, the Joint Legislative Oversight
40 Committee on General Government, and to the chairs of the Joint

41 Legislative Program Evaluation Oversight Committee within 30 days.
42 c. No later than December 1, 2019, and each year thereafter, the
43 Department shall report to the Joint Legislative Commission on
44 Governmental Operations, to the Joint Legislative Oversight
45 Committee on General Government, the Fiscal Research Division of
46 the General Assembly, and to the Program Evaluation Division of the
47 General Assembly on the State's portfolio of real property. This report

48 shall include at least the following information:
49 ….
50 SECTION 36.1.(g) G.S. 143-747 reads as rewritten:
51 § 143-747. Council of Internal Auditing.

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1 …
2 (c) The Council shall:
3 …
4 (12) Issue an annual report including, but not limited to, No later than November
5 1 of each year, issue a report that shall include, but not be limited to, service
6 efforts and accomplishments of State agency internal auditors and to propose
7 proposed legislation for consideration by the Governor and General

8 Assembly. The annual report shall be prepared by the Office of State Budget
9 and Management and shall be submitted to the Joint Legislative Oversight
10 Committee on General Government.
11 SECTION 36.1.(h) G.S. 143B-394.16(b) reads as rewritten:
12 (b) Report. – The Commission shall report its findings and recommendations, including
13 any legislative or administrative proposals, to the General Assembly Joint Legislative Oversight
14 Committee on General Government no later than April 1 each year.

15 SECTION 36.1.(i) G.S. 143B-394.21 is amended by adding a new subsection to
16 read:
17 (c) The North Carolina Council for Women shall report on the quarterly distributions of
18 the grants from the Sexual Assault and Rape Crisis Center Fund to the House and Senate chairs
19 of the General Government Appropriations Committee within five business days of distribution.
20 The report shall include the date, amount, and recipients of the fund disbursements. The report

21 shallalsoincludeanyeligibleprogramswhichareineligibletoreceivefundingduringtherelative
22 reporting cycle as well as the reason of the ineligibility for that relative reporting cycle.
23 SECTION 36.1.(j) G.S. 143B-409 reads as rewritten:
24 § 143B-409. North Carolina State Commission of Indian Affairs – reports.
25 The Commission shall prepare a written annual report giving an account of its proceedings,
26 transactions, findings, and recommendations. This report shall be submitted to the Governor and
27 thelegislature.GovernorandtheJointLegislativeOversightCommitteeonGeneralGovernment.

28 The report will become a matter of public record and will be maintained in the State Historical
29 Archives. It may also be furnished to such other persons or agencies as the Commission may
30 deem proper.
31 SECTION 36.1.(k) G.S. 143B-410 reads as rewritten:
32 § 143B-410. North Carolina State Commission of Indian Affairs – fiscal records; clerical
33 staff.
34 Fiscal records shall be kept by the Secretary of Administration. The audit report will become

35 a part of the annual report and will be submitted in accordance with the regulations governing
36 preparation and submission of the annual report. The Commission shall submit the annual report
37 to the Joint Legislative Oversight Committee on General Government.
38 SECTION 36.1.(l) G.S. 143B-411.2 reads as rewritten:
39 § 143B-411.2. North Carolina Advisory Council on the Eastern Band of the Cherokee –
40 purpose or creation; powers and duties.

41 The purpose of the Council is to study on a continuing basis the relationship between the
42 Eastern Band of the Cherokee and the State of North Carolina in order to resolve any matters of
43 concern to the State or the Tribe. It shall be the duty of the Council:
44 (1) Identify existing and potential conflicts between the State of North Carolina
45 and the Eastern Band of Cherokee Indians;Indians.
46 (2) Propose State and federal legislation and agreements between the State of
47 North Carolina and the Cherokee Tribe to resolve existing and potential

48 conflicts;conflicts.
49 (3) To study and make recommendations concerning any issue referred to the
50 CouncilbyanyofficialoftheEasternBandoftheCherokee,theStateofNorth

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1 Carolina, or the government of Haywood, Jackson, Swain, Graham, or
2 Cherokee Counties.
3 (4) Study other issues of mutual concern to the Eastern Band of the
4 Cherokee;Cherokee.
5 (5) Make a report with recommendations as needed, but not less often than
6 biannually to the Governor, the Chief of the Eastern Band of the Cherokee,
7 the General Assembly, and the Tribal Council of the Eastern Band of the

8 Cherokee.
9 SECTION 36.1.(m) The North Carolina Farmworker Council, enacted as Part 26 of
10 Article 9 of Chapter 143B of the General Statutes, is repealed.
11 SECTION 36.1.(n) This section becomes effective July 1, 2019, and applies to
12 reports submitted on or after that date.
13
14 ETHICS COMMISSION

15 SECTION 36.2.(a) G.S. 138A-10 reads as rewritten:
16 § 138A-10. Powers and duties.
17 (a) In addition to otherpowers andduties specifiedin this Chapter, theCommission shall:
18 …
19 (11) Report annually to the General Assembly Joint Legislative Oversight
20 Committee on General Government and the Governor on the Commission's

21 activities and generally on the subject of public disclosure, ethics, and
22 conflicts of interest, including recommendations for administrative and
23 legislative action, as the Commission deems appropriate.
24 ….
25 SECTION 36.2.(b) This section becomes effective July 1, 2019, and applies to
26 reports submitted on or after that date.
27

28 OFFICE OF STATE HUMAN RESOURCES
29 SECTION 36.3.(a) G.S. 143-583 reads as rewritten:
30 § 143-583. Model program; technical assistance; reports.
31 …
32 (c) The Office of State Human Resources shall report annually to the Joint Legislative
33 Commission on Governmental Operations and the Joint Legislative Oversight Committee on
34 General Government on the safety, health, and workers' compensation activities of State

35 agencies, compliance with this Article, and the fines levied against State agencies pursuant to
36 Article 16 of Chapter 95 of the General Statutes.
37 SECTION 36.3.(b) This section becomes effective July 1, 2019, and applies to
38 reports submitted on or after that date.
39
40 OFFICE OF STATE AUDITOR

41 SECTION 36.4.(a) G.S. 147-64.11 reads as rewritten:
42 § 147-64.11. Review of office.
43 The Auditor may, on his the Auditor's own initiative and as often as he the Auditor deems
44 necessary, or as requested by the General Assembly Assembly or the Joint Legislative Oversight
45 Committee on General Government, cause to be made a quality review audit of the operations of
46 his the Auditor's office. Such a peer review shall be conducted in accordance with standards
47 prescribed by the accounting profession. Upon the recommendation of the Joint Legislative

48 Commission on Governmental Operations Operations, the Auditor may contract with an
49 independent public accountant, qualified management consultant, or other professional person to
50 conduct a financial and compliance, economy and efficiency, and program result audit of the
51 State Auditor.

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1 SECTION 36.4.(b) G.S. 147-64.6 reads as rewritten:
2 § 147-64.6. Duties and responsibilities.
3 …
4 (b) The duties of the Auditor are independentlyto examine into and make findings of fact
5 on whether State agencies:
6 …
7 (6) Are adhering to statutory requirements that include conditions precedent,

8 classifications, and similar eligibility or qualifying standards to assure that
9 statutory intent is carried out while the requirements are in effect.
10 (c) The Auditor shall be is responsible for the following acts and activities:
11 …
12 (22) Verification audits for compliance with statutory requirements, with or
13 without advance notice to the organization or State agency being audited,
14 which may be initiated at the discretion of the Auditor or as requested by the

15 Governor or General Assembly.
16 …
17 (e) Access to Records. – The Auditor may examine the accounts and records of any
18 organization or State agency relating to a verification audit for compliance with a statutory
19 condition precedent, classification, or other similar eligibility or qualifying standard.
20

21 OFFICE OF STATE BUDGET AND MANAGEMENT
22 SECTION 36.5.(a) Article 6 of Chapter 143C of the General Statutes is amended by
23 adding a new section to read:
24 § 143C-6-13. Results first annual report.
25 By October 1 of each year, the Office of State Budget and Management shall submit an
26 annual reportto theJointLegislativeCommissiononGovernmentalOperations,Joint Legislative
27 Oversight Committee on General Government, and Joint Legislative Program Evaluation

28 Oversight Committee on the progress in implementing the cost-benefit analysis model for use in
29 crafting policy and budget decisions. The report may include recommendations for legislation.
30 SECTION 36.5.(b) Section 26.3(c) of S.L. 2017-57 is repealed.
31 SECTION 36.5.(c) G.S. 143C-6-23 reads as rewritten:
32 § 143C-6-23. State grant funds: administration; oversight and reporting requirements.
33 …
34 (h) Report on Grant Recipients That Failed to Comply. – Not later than May 1, 2007, and

35 by May 1 of everysucceeding year, the The Office of State Budget and Management shall report
36 to the Joint Legislative Commission on Governmental Operations and the Fiscal Research
37 Division on post online at regular intervals a list of all grantees or subgrantees that failed to
38 comply with this section with respect to grant funds received in the prior fiscal year.
39 SECTION 36.5.(d) G.S. 143-194 is repealed.
40

41 OFFICE OF STATE CONTROLLER
42 SECTION 36.6. G.S. 143B-426.39 reads as rewritten:
43 § 143B-426.39. Powers and duties of the State Controller.
44 The State Controller shall:
45 …
46 (12a) Prepare and submit to the Joint Legislative Commission on Governmental
47 Operations, the Joint Legislative Oversight Committee on General

48 Government, and the Fiscal Research Division at the end of each quarter a
49 report on the revenue deposited in Special Reserve Account 24172 and the
50 disbursement of that revenue.
51 ….

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1
2 STATE BOARD OF ELECTIONS
3 SECTION 36.7.(a) G.S. 66-58 reads as rewritten:
4 § 66-58. Sale of merchandise or services by governmental units.
5 …
6 (c) The provisions of subsection (a) shall not prohibit:
7 …

8 (17) The sale by the Bipartisan State Board of Elections and Ethics Enforcement
9 to political committees and candidate committees of computer software
10 designed by or for the Bipartisan State Board of Elections and Ethics
11 Enforcement to provide a uniform system of electronic filing of the campaign
12 financereports requiredbyArticle23ofChapter163A Article22AofChapter
13 163 of the General Statutes and to facilitate the State Board's monitoring of
14 compliance with that Article. This computer software for electronic filing of

15 campaign finance reports shall not exceed a cost of one hundred dollars
16 ($100.00) to any political committee or candidate committee without the
17 Bipartisan State Board of Elections and Ethics Enforcement first notifying in
18 writing the Joint Legislative Commission on Governmental Operations.
19 SECTION 36.7.(b) G.S. 163-165.9 reads as rewritten:
20 § 163-165.9. Voting systems: powers and duties of county board of elections.

21 …
22 (b) After the acquisition of anyvoting system, the countyboard of elections shall comply
23 withanyrequirementsoftheStateBoardofElectionsregardingtrainingand supportofthevoting
24 system by completing all of the following:
25 …
26 (2) The county board of elections shall annually maintain software license and
27 maintenance agreements necessary to maintain the warranty of its voting

28 system. A county board of elections may employ qualified personnel to
29 maintain a voting system in lieu of entering into maintenance agreements
30 necessary to maintain the warranty of its voting system. State Board of
31 Elections is not required to provide routine maintenance to any county board
32 of elections that does not maintain the warranty of its voting system. If the
33 State Board of Elections provides any maintenance to a county that has not
34 maintained the warranty of its voting system, the county shall reimburse the

35 State for the cost. The State Board of Elections shall annually report annually
36 by January 15 to the House and Senate Committees on Appropriations, to the
37 Fiscal Research Division, to the Joint Legislative Oversight Committee on
38 General Government, and to the Joint Legislative Commission on
39 Governmental Operations on implementation of this subdivision. If requested
40 by the county board of elections, the State Board of Elections may enter into

41 contracts on behalf of that county under this subdivision, but such contracts
42 must also be approved by the county board of elections. Any contract entered
43 into under this subdivision shall be paid from non-State funds. Neither a
44 county nor the State Board of Elections shall enter into any contract with any
45 vendor for software license and maintenance agreements unless the vendor
46 agrees to (i) operate a training program for qualification of county personnel
47 under this subsection with training offered within the State of North Carolina

48 and (ii) not dishonor warranties merely because the county is employing
49 qualified personnel to maintain the voting system as long as the county:
50 ….

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1 SECTION 36.7.(c) Subsection (b) of this section becomes effective July 1, 2019,
2 and applies to reports submitted on or after that date.
3
4 HOUSING FINANCE AGENCY
5 SECTION 36.8.(a) G.S. 122A-5.14 reads as rewritten:
6 § 122A-5.14. Home Protection Program and Fund.
7 …

8 (d) Annual Report. – By April 1 of each year, the Agency shall report to the House
9 Appropriations Subcommittee on General Government and Senate Appropriations
10 Subcommittee on General Government and Information Technology on the effectiveness of the
11 Program in accomplishingits purposes andprovideanyother information theAgencydetermines
12 is pertinent or that the General Assembly requests.
13 SECTION 36.8.(b) G.S. 122A-5.15 reads as rewritten:
14 § 122A-5.15. Workforce Housing Loan Program.

15 …
16 (d) By February 1 of each year, the Agency shall report to the Joint Legislative
17 Commission on Governmental Operations Operations, the Joint Legislative Oversight
18 Committee on General Government, and the Fiscal Research Division on the number of loans
19 made under this section, the amount of each loan, and whether the low-income housing
20 development is located in a low-, moderate-, or high-income county, as designated by the

21 Agency.
22 SECTION 36.8.(c) G.S. 122A-16 reads as rewritten:
23 § 122A-16. Oversight by committees of General Assembly; annual reports.
24 (a) The Finance Committee of the House of Representatives and the Finance Committee
25 of the Senate shall exercise continuing oversight of the Agencyin order to assure that the Agency
26 is effectivelyfulfilling its statutorypurpose; provided, however, that nothing in this Chapter shall
27 be construed as required by the Agency to receive legislative approval for the exercise of any of

28 thepowers grantedbythis Chapter.TheAgencyshall,promptlyfollowingthecloseofeachfiscal
29 year, submit an annual report of its activities for the preceding year to the Governor, the Office
30 of State Budget and Management, State Auditor, the aforementioned committees of the General
31 Assembly and the Local Government Commission. Each such report shall set forth a complete
32 operating and financial statement of the Agency during such year. The Agency shall cause an
33 audit of its books and accounts to be made at least once in each year by an independent certified
34 public accountant and the cost thereof may be paid from any available moneys of the Agency.

35 The Agency shall on January 1 and July 1 at the end of each fiscal year submit a written report
36 of its activities to the Joint Legislative Commission on Governmental Operations. Operations
37 and the Joint Legislative Oversight Committee on General Government. The Agency shall also
38 at the end of each fiscal year submit a written report of its budget expenditures by line item to
39 the Joint Legislative Commission on Governmental Operations.Operations and the Joint
40 Legislative Oversight Committee on General Government.

41 (b) The Agency shall report to the Joint Legislative Oversight Committee on General
42 Government at the end of each fiscal year concerning the status of the HOME Program and shall
43 include in the report information on priorities met, types of activities funded, and types of
44 activities not funded.
45 (c) The Agency shall report to the Joint Legislative Oversight Committee on General
46 Government at the end of each fiscal year describing the operation of the Emergency Program to
47 ReduceHomeForeclosures establishedin S.L.2008-226until thefundsarecompletelydisbursed

48 from the State Home Foreclosure Prevention Trust Fund. Information in the report shall be
49 presented in aggregate form and may include the number of clients helped, the effectiveness of
50 the funds in preventing home foreclosures, and recommendations for further efforts needed to
51 reduce foreclosures. The report shall also provide any other aggregated information the Agency

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1 determines is pertinent or the Joint Legislative Oversight Committee on General Government
2 requests.
3 SECTION36.8.(d) Section 298(a) ofChapter321 ofthe Session Lawsof1993reads
4 as rewritten:
5 (a) Funds appropriated in this act to the Department of Commerce for the federal HOME
6 Program shall be transferred to the Housing Finance Agency in the Office of the Governor and
7 shall be used by the Agency to match federal funds appropriated for the HOME Program. In

8 allocating State funds appropriated to match federal HOME Program funds, the Agency shall
9 give priority to HOME Program projects, as follows:
10 (1) First priority to projects that are located in counties designated as severely
11 distressed counties under G.S. 105-130.40(c) or G.S. 105-151.17(c); and
12 (2) Second priority to projects that benefit persons and families whose incomes
13 are fifty percent (50%) or less of the median family income for the local area,
14 with adjustments for familysize, according to the latest figures available from

15 the U.S. Department of Housing and Urban Development.
16 The Housing Finance Agency shall report to the General Assembly by April 1 of each year
17 concerning the status of the HOME Program and shall include in the report information on
18 priorities met, types of activities funded, and types of activities not funded.
19 SECTION 36.8.(e) Section 5 of S.L. 2008-226, as amended by Section 2.17(f) of
20 S.L. 2012-79, is repealed.

21 SECTION 36.8.(f) This section becomes effective July 1, 2019, and applies to
22 reports submitted on or after that date.
23
24 DEPARTMENT OF INSURANCE
25 SECTION 36.9.(a) G.S. 58-2-120 reads as rewritten:
26 § 58-2-120. Reports of Commissioner to the Governor and General Assembly.
27 TheCommissionershall, from timeto time,reportto theGovernor and theGeneral Assembly

28 the Joint Legislative Oversight Committee on General Government any change or changes that
29 in theCommissioner's opinion shouldbemadein thelaws relatingto insuranceand othersubjects
30 pertaining to the Department.
31 SECTION 36.9.(b) G.S. 58-42-45 reads as rewritten:
32 § 58-42-45. Article subject to Administrative Procedure Act; legislative oversight of plans.
33 …
34 (b) At the same time the Commissioner issues a notice of hearing under G.S. 150B-38,

35 the Commissioner shall provide copies of the notice to the Joint Regulatory Reform Committee
36 and to Committee, the Joint Legislative Commission on Governmental Operations. Operations,
37 and the Joint Legislative Oversight Committee onGeneral Government. The Commissioner shall
38 provide the Committee Committees and Commission with copies of any plan promulgated by or
39 approved by the Commissioner under G.S. 58-42-1(1) or (2).
40 SECTION 36.9.(c) G.S. 58-79-20 reads as rewritten:

41 § 58-79-20. Inspection of premises; dangerous material removed.
42 The Commissioner of Insurance, or the chief of fire department or chief of police where there
43 isnochiefoffiredepartment,orthecityorcountybuildinginspector,electricalinspector,heating
44 inspector, or fire prevention inspector has the right at all reasonable hours, for the purpose of
45 examination, to enter into and upon all buildings and premises in their jurisdiction. When any of
46 such officers find in any building or upon any premises overcrowding in violation of occupancy
47 limits established pursuant to the North Carolina State Building Code, combustible material or

48 inflammable conditions dangerous to the safety of such building or premises they shall order the
49 same to be removed or remedied, and this order shall be forthwith complied with by the owner
50 oroccupantofsuchbuildingsorpremises.Theowneroroccupantmay,withintwenty-fourhours,
51 appeal to the Commissioner of Insurance from the order, and the cause of the complaint shall be

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1 at once investigated by his the Commissioner's direction, and unless by his the Commissioner's
2 authoritytheorderoftheofficerabovenamedisrevokeditremainsinforceandmustbeforthwith
3 complied with by the owner or occupant. The Commissioner of Insurance, fire chief, or building
4 inspector, electrical inspector, heating inspector, or fire prevention inspector shall make an
5 immediate investigation as to the presence of combustible material or the existence of
6 inflammable conditions in any building or upon any premises under their jurisdiction upon
7 complaint of any person having an interest in such building or premises or property adjacent

8 thereto. The Commissioner may, in person or by deputy, visit any municipality or county and
9 make such inspections alone or in company with the local officer. The Commissioner shall
10 submit annually, as early as consistent with full and accurate preparation, and not later than the
11 first day of June, a detailed report of his the Commissioner's official action under this Article,
12 and it shall be embodied in his the report to the General Assembly.Joint Legislative Oversight
13 Committee on General Government.
14 SECTION 36.9.(d) G.S. 58-87-1 reads as rewritten:

15 § 58-87-1. Volunteer Fire Department Fund.
16 …
17 (c) Report. – The Commissioner must submit a written report to the General Assembly
18 Joint Legislative Oversight Committee on General Government within 60 days after the grants
19 have been made. This report must contain the following:
20 ….

21 SECTION 36.9.(e) G.S. 58-87-5 reads as rewritten:
22 § 58-87-5. Volunteer Rescue/EMS Fund.
23 …
24 (e) Report. – The Commissioner must submit a written report to the General Assembly
25 Joint Legislative Oversight Committee on General Government within 60 days after the grants
26 have been made. This report must contain the following:
27 ….

28 SECTION 36.9.(f) G.S. 58-92-15(n) reads as rewritten:
29 (n) TheCommissionershallreviewtheeffectivenessofthissectionandreporteverythree
30 years to the General Assembly Joint Legislative Oversight Committee on General Government
31 the Commissioner's findings, and if appropriate, recommendations for legislation to improve the
32 effectiveness of this Article. The report and legislative recommendations shall be submitted no
33 later than June 30 following the conclusion of each three-year period.
34 SECTION 36.9.(g) This section becomes effective July 1, 2019, and applies to

35 reports submitted on or after that date.
36
37 INDUSTRIAL COMMISSION
38 SECTION 36.10.(a) G.S. 97-78 reads as rewritten:
39 § 97-78. Salaries and expenses; administrator, executive secretary, deputy commissioners,
40 and other staff assistance; annual report.

41 …
42 (e) No later than October 1 of each year, the Commission shall publish annually for free
43 distribution a report of the administration of this Article, together with such recommendations as
44 the Commission deems advisable. No later than October 1 of each year, the Commission shall
45 submit this report to the Joint Legislative Oversight Committee on Agriculture and Natural and
46 Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and
47 Economic Resources, and the chairs of the House of Representatives Appropriations Committee

48 on Agriculture and Natural and Economic Resources.General Government, the Senate
49 Appropriations Committee on General Government and Information Technology, and the House
50 Appropriations Committee on General Government.

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1 (f) No later than April 1, 2008, the Every four years beginning April 1, 2020, the
2 Commission shall prepare and implement a strategic plan for accomplishing all of the following:
3 …
4 (g) The Commission shall demonstrate its success in implementing its strategic plan
5 under subsection (f) of this section by including all of the following in its annual report under
6 subsection (e) of this section:
7 (1) The total number of claims made during the preceding calendar fiscal year,

8 the total number of claims in which compliance was not timely made, and, for
9 each claim, the date the claim was filed, the date by which compliance was
10 required, the date of actual compliance, and any sanctions or other remedial
11 action imposed by the Commission.
12 (2) The total number of requests for, and disputes involving, medical
13 compensation under G.S. 97-25 in which final disposition was not made
14 within 75 days of the filing of the motion with the Commission, and, for each

15 such request or dispute, the date the motion or other initial pleading was filed,
16 the date on which final disposition was made and, where reasonably
17 ascertainable, the date on which any ordered medical treatment was actually
18 provided.made.
19 SECTION 36.10.(b) G.S. 143-788(b) reads as rewritten:
20 (b) No later than October 1 of each year, the Section shall publish annually to the Office

21 of the Governor and to the Joint Legislative Commission on Governmental Operations a report
22 of the administration of this Article, together with any recommendations as the Section deems
23 advisable. This report shall include, at a minimum, the number of reports of employee
24 misclassification received, the number of cases referred to each State agency, the number and
25 amount of back taxes, wages, benefits, penalties, or other monies assessed, assessed and, where
26 reasonably ascertainable, the amount of back taxes, wages, benefits, penalties, or other monies
27 collected, and the number of cases referred to each State agency.collected.

28 SECTION 36.10.(c) This section becomes effective July 1, 2019, and applies to
29 reports submitted on or after that date.
30
31 DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
32 SECTION 36.11.(a) G.S. 144-9 reads as rewritten:
33 § 144-9. Retirement of a flag of the United States of America or the State of North
34 Carolina.

35 …
36 (b) The Division of Veterans Affairs shall accept, at no charge, a worn, tattered, or
37 otherwise damaged flag of the United States of America or the State of North Carolina from a
38 citizen of the State and shall make arrangements for its respectful disposal. The Division shall
39 establish a flag retirement program to encourage citizens to send in or drop off such flags at the
40 Division's office in Raleigh and at any Veterans Home or Veterans Cemetery in the State and

41 may establish other locations for flag drop-off as it deems appropriate. The Division shall
42 advertise the flag retirement program on its Web site and by printed posters placed at all flag
43 drop-off locations. On or before December 31, 2016, and annually thereafter, the Division shall
44 report the number of flags received under the program to the Joint Legislative Committee on
45 Governmental Operations.
46 ….
47 SECTION 36.11.(b) G.S. 143B-1300(a) reads as rewritten:

48 (a) The Assistant Secretary for Veterans Affairs shall report annually to the Secretary of
49 the Department of Military and Veterans Affairs and the Joint Legislative Oversight Committee
50 on General Government on the activities of the State Veterans Homes Program. This report shall
51 contain an accounting of all monies received and expended, statistics on residents in the homes

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1 during the year, recommendations to the Secretary, the Governor, and the General Assembly as
2 to the program, and such other matters as may be deemed pertinent.
3 SECTION 36.11.(c) G.S. 143B-1310 reads as rewritten:
4 § 143B-1310. Commission established; purpose; transaction of business.
5 …
6 (c) Transaction of Business. – The Commission shall meet, at a minimum, at least once
7 during each quarter and shall provide a report on military affairs to the Secretary of Military and

8 Veterans Affairs and to the General Assembly Affairs and the Joint Legislative Oversight
9 Committee on General Government at least every six months. Prior to the start of a Regular
10 Session of the General Assembly, the Commission shall report to the General Assembly Joint
11 Legislative Oversight Committee on General Government with recommendations, if any, for
12 legislation. Priority actions or issues may be submitted at any time.
13 ….
14 SECTION 36.11.(d) This section becomes effective July 1, 2019, and applies to

15 reports submitted on or after that date.
16
17 DEPARTMENT OF REVENUE
18 SECTION 36.12.(a) G.S. 105-256 reads as rewritten:
19 § 105-256. Publications prepared by Secretary of Revenue; report on fraud prevention
20 progress.

21 (a) Publications. – The Secretary shall prepare and publish the following:
22 …
23 (6) On an annual basis, a report on the quality of services provided to taxpayers
24 throughtheTaxpayerAssistanceCallCenter,walk-inassistance,andtaxpayer
25 education. The report must be submitted to the Joint Legislative Commission
26 on Governmental Operations.Operations and the Joint Legislative Oversight
27 Committee on General Government.

28 …
29 (8) ByJanuary1 andJuly1 February15andAugust 15 ofeach year,asemiannual
30 reporton the Department's activitieslistedin this subdivision. Thereportmust
31 be submitted to the Joint Legislative Commission on Governmental
32 Operations Operations, to the Joint Legislative Oversight Committee on
33 General Government, and to the Revenue Laws Study Committee.
34 ….

35 SECTION 36.12.(b) This section becomes effective July 1, 2019, and applies to
36 reports submitted on or after that date.
37
38 SECRETARY OF STATE
39 SECTION 36.13.(a) G.S. 64-1.1 is repealed.
40 SECTION 36.13.(b) G.S. 147-54.5 reads as rewritten:

41 § 147-54.5. Investor Protection and Education Trust Fund; administration; limitations on
42 use of the Fund.
43 …
44 (f) Beginning January 1, 1997, the Department of the Secretary of State shall report
45 annually to the General Assembly's Fiscal Research Division and to of the General Assembly,
46 the Joint Legislative Commission on Governmental Operations Operations, and the Joint
47 Legislative Oversight Committee on General Government on the expenditures from the Investor

48 Protection and Education Trust Fund and on the effectiveness of investor awareness education
49 efforts of the Department of the Secretary of State.
50 SECTION 36.13.(c) This section becomes effective July 1, 2019, and applies to
51 reports submitted on or after that date.

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1
2 DEPARTMENT OF STATE TREASURER
3 SECTION 36.14.(a) G.S. 147-68 reads as rewritten:
4 § 147-68. To receive and disburse moneys; to make reports.
5 …
6 (d2) After consulting with the Select Committee on Information Technology and the Joint
7 Legislative Commission on Governmental Operations and after consultation with and approval

8 of the Information Resources Management Commission, the Department of State Treasurer may
9 spend departmental receipts for the 2000-2001 fiscal year to continue improvement of the
10 Department's investment banking operations system, retirement payroll systems, and other
11 information technology infrastructure needs. The Department of State Treasurer shall report by
12 January 1, 2001, and annually thereafter to the following regarding the amount and use of the
13 departmental receipts:theJointLegislativeCommissiononGovernmentalOperations,theChairs
14 of the General Government Appropriations Subcommittees of both the House of Representatives

15 and the Senate, and the Joint Legislative Committee on Information Technology.
16 ….
17 SECTION 36.14.(b) G.S. 147-69.2A reads as rewritten:
18 § 147-69.2A. Investments; special funds held by the State Treasurer.
19 …
20 (b) Organization and Reporting. – All documents of the Governor or the State Treasurer

21 concerning the Fund are public records governed byChapter 132 of the General Statutes and any
22 applicable provisions of the General Statutes protecting confidential information.
23 The State Treasurer and the Governor shall jointly develop and adopt an investment policy
24 statement for the Fund.
25 The State Treasurer and Governor shall jointly adopt a common policy to prevent conflicts
26 of interests such that (i) the designees of the State Treasurer and Governor who selected the
27 third-partyinvestment management firm, (ii) the staff of the State Treasurer overseeing the Fund,

28 and (iii) the third-party investment management firm's employees selecting or overseeing Fund
29 investments do not provideservices forcompensation (as an employee,consultant, orotherwise),
30 within two years after the end of their service to the Fund, to any entity in which an investment
31 from the Fund was made.
32 By October 1, 2015, and at least semiannually thereafter, the State Treasurer shall submit a
33 report to the Governor, the Office of State Budget and Management, the Joint Legislative
34 Commission on Governmental Operations, and the Fiscal Research Division on investments

35 made from the Fund and any return on investment. This report shall be made for the Fund in lieu
36 of the reports required by G.S. 147-69.8 and G.S. 147-69.12(b).
37 ….
38 SECTION 36.14.(c) G.S. 147-69.3 reads as rewritten:
39 § 147-69.3. Administration of State Treasurer's investment programs.
40 …

41 (i1) The State Treasurer shall report the incentive bonus paid to the Chief Investment
42 Officer to the Joint Legislative Commission on Governmental Operations and the Joint
43 Legislative Oversight Committee on General Government by October 1 of each year.
44 ….
45 SECTION 36.14.(d) G.S. 147-69.12 reads as rewritten:
46 § 147-69.12. Reporting on the State Treasurer's investment programs.
47 (a) No later than the tenth day of February, May, August, and November of each year,

48 the State Treasurer shall report on all investments for which the State Treasurer is in any way
49 responsible. responsible, including investments made from the Escheat Fund and return on
50 investment as provided in G.S. 147-69.2A. This report shall be made for the Escheat Fund in lieu

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1 of the report required by G.S. 147-69.8. The State Treasurer's quarterly report shall include each
2 of the following:
3 …
4 (c) The Treasurer shall report to the Governor annually and to the General Assembly at
5 the beginning of each biennial session the exact balance in the treasury to the credit of the State,
6 with a summary of the receipts and payments of the treasury during the preceding fiscal year,
7 and so far as practicable an account of the same down to the termination of the current calendar

8 year.
9 ….
10 SECTION 36.14.(e) G.S. 147-86.45 is repealed.
11 SECTION 36.14.(f) G.S. 147-86.62 is repealed.
12 SECTION 36.14.(g) G.S. 147-86.84 is repealed.
13 SECTION 36.14.(h) This section becomes effective July 1, 2019, and applies to
14 reports submitted on or after that date.

15
16 PART XXXVII. INFORMATION TECHNOLOGY
17
18 CJLEADS REPORT CHANGE
19 SECTION37.1. Section6A.4ofS.L.2011-145,as amendedbyS.L. 2011-391,reads
20 as rewritten:

21 SECTION 6A.4.(a) The Office of the State Controller, in cooperation with the State Chief
22 Information Officer, Officer shall:
23 …
24 SECTION6A.4.(b) TheOfficeoftheStateControllerStateChief InformationOfficershall
25 administer CJLEADS with the assistance of a Leadership Council consisting of:
26 …
27 SECTION 6A.4.(e) Agencies shall use existing resources and shall not charge the Office

28 of the State Controller Department of Information Technology to provide required support for
29 CJLEADS.
30 ….
31
32 CYBERSECURITY PROCUREMENT BIDDING REQUIREMENTS
33 SECTION 37.2.(a) G.S. 143B-1350(i) reads as rewritten:
34 (i) Exceptions. – In addition to permitted waivers of competition, the requirements of

35 competitive bidding shall not apply to information technology contracts and procurements:
36 (1) In cases of pressing need or emergency arising from a security incident.
37 (2) In the use of master licensing or purchasing agreements governing the
38 Department's acquisition of proprietary intellectual property.
39 (3) In the procurement of cybersecurity and infrastructure security products,
40 consistent with Best Value procurement principles as provided in

41 G.S. 143-135.9.
42 SECTION 37.2.(b) This section is effective when it becomes law and applies to
43 product procurement occurring on or after that date.
44
45 COMMUNITY COLLEGES SYSTEM TRANSITION
46 SECTION 37.3.(a) G.S. 143B-1325(d) reads as rewritten:
47 (d) Report on Transition Planning. – The Community College System Office, the

48 Department of Public Instruction, Instruction and the Bipartisan State Board of Elections and
49 Ethics Enforcement shall work with the State CIO to plan their transition to the Department. The
50 information technology transfer and consolidation from the Department of Revenue to the
51 Department shall not take place until the Secretaryof the Department of Revenue determines that

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1 the system and data security of the Department meets the heightened security standards required
2 by the federal government for purposes of sharing taxpayer information. By October 1, 2018, the
3 Department of Public Instruction and the Bipartisan State Board of Elections and Ethics
4 Enforcement, in conjunction with the State CIO, shall report to the Joint Legislative Oversight
5 Committee on Information Technology and the Fiscal Research Division on their respective
6 transition plans. ByOctober 1, 2019, the CommunityCollege System Office, in conjunction with
7 the State CIO, shall report to the Joint Legislative Oversight Committee on Information

8 Technology and the Fiscal Research Division on its transition plan.
9 SECTION 37.3.(b) The Community College System Office shall enter into a
10 memorandum of understanding with the Department of Information Technology with respect to
11 coordinating information technology systems and policies. By October 1, 2019, the Community
12 College System Office, in conjunction with the State CIO, shall report to the Joint Legislative
13 Oversight Committee on Information Technology and the Fiscal Research Division on the
14 memorandum of understanding.

15
16 EXEMPT CERTAIN TRANSACTIONS FROM ACCOUNTS RECEIVABLE
17 PROGRAM
18 SECTION 37.4. G.S. 66-58.12 reads as rewritten:
19 § 66-58.12. Agencies may provide access to services through electronic and digital
20 transactions; fees authorized.

21 (a) Public agencies are encouraged to maximize citizen and business access to their
22 services through the use of electronic and digital transactions. A public agency may determine,
23 through program and transaction analysis, which of its services may be made available to the
24 public through electronic means, including the Internet. Any electronic payments established
25 pursuant to this section are exempt from G.S. 147-86.22. The agency shall identify anyinhibitors
26 to electronic transactions between the agency and the public, including legal, policy, financial,
27 orprivacyconcernsand specificinhibitorsuniqueto theagencyortypeoftransaction.Anagency

28 shall not provide a transaction through the Internet that is impractical, unreasonable, or not
29 permitted by laws pertaining to privacy or security.
30 (b) An agency may charge a fee to cover its costs of permitting a person to complete a
31 transaction through the World Wide Web or other means of electronic access. The fee may be
32 applied on a per transaction basis and may be calculated either as a flat fee or a percentage fee,
33 as determined under an agreement between a person and a public agency. The fee may be
34 collected by the agency or by its third party agent.

35 (c) The fee imposed under subsection (b) of this section must be approved by the Office
36 of State Budget and Management, in consultation with the State Chief Information Officer and
37 in consultation with theJoint LegislativeCommission onGovernmental Operations. The revenue
38 derived from the fee must be credited to a nonreverting agency reserve account. The funds in the
39 account may be expended only for e-commerce initiatives and projects approved by the State
40 Chief Information Officer, in consultation with the Joint Legislative Oversight Committee on

41 Information Technology. For purposes of this subsection, the term public agencies does not
42 include a county, unit, special district, or other political subdivision of government.
43 (d) This section does not apply to the Judicial Department.
44
45 PART XXXVIII. SALARIES AND BENEFITS
46
47 ELIGIBLE STATE-FUNDED EMPLOYEES AWARDED LEGISLATIVE SALARY

48 INCREASES/EFFECTIVE JULY 1, 2019, AND JULY 1, 2020
49 SECTION 38.1.(a) Effective July 1, 2019, except as provided by subsection (b) of
50 this section, a person (i) whose salary is set by this Part, pursuant to the North Carolina Human

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1 Resources Act, or as otherwise authorized in this act and (ii) who is employed in a State-funded
2 position on June 30, 2019, is awarded:
3 (1) A legislative salaryincrease in the amount of two and one-half percent (2.5%)
4 of annual salary in the 2019-2020 fiscal year.
5 (2) Any salary adjustment otherwise allowed or provided by law.
6 SECTION 38.1.(a1) Effective July 1, 2020, except as provided by subsection (b) of
7 this section, a person (i) whose salary is set by this Part, pursuant to the North Carolina Human

8 Resources Act, or as otherwise authorized in this act and (ii) who is employed in a State-funded
9 position on June 30, 2020, is awarded:
10 (1) A legislative salaryincrease in the amount of two and one-half percent (2.5%)
11 of annual salary in the 2020-2021 fiscal year.
12 (2) Any salary adjustment otherwise allowed or provided by law.
13 SECTION 38.1.(b) For the 2019-2021 fiscal biennium, the following persons are
14 not eligible to receive the legislative salary increases provided by subsections (a) and (a1) of this

15 section:
16 (1) Employees of local boards of education.
17 (2) Local community college employees.
18 (3) Employees of The University of North Carolina.
19 (4) Law enforcement officers paid according to Section 38.17 of this act.
20 (5) Clerks of superior court compensated under G.S. 7A-101.

21 SECTION 38.1.(c) Part-time employees shall receive the increases authorized by
22 this section on a prorated and equitable basis.
23 SECTION 38.1.(d) No eligible State-funded employee shall be prohibited from
24 receiving the full salary increases provided in this section solely because the employee's salary
25 after applying the legislative increase is above the maximum of the salary range prescribed by
26 the State Human Resources Commission.
27

28 GOVERNOR AND COUNCIL OF STATE
29 SECTION 38.2.(a) Effective July 1, 2019, G.S. 147-11(a) reads as rewritten:
30 (a) The salary of the Governor shall be one hundred forty-seven thousand two hundred
31 eighty-seven dollars ($147,287) one hundred fifty thousand nine hundred sixty-nine dollars
32 ($150,969) annually, payable monthly.
33 SECTION 38.2.(a1) Effective July 1, 2020, G.S. 147-11(a), as amended by
34 subsection (a) of this section, reads as rewritten:

35 (a) The salary of the Governor shall be one hundred fifty thousand nine hundred sixty-
36 nine dollars ($150,969) one hundred fifty-four thousand seven hundred forty-three dollars
37 ($154,743) annually, payable monthly.
38 SECTION 38.2.(b) Effective July 1, 2019, the annual salaries for members of the
39 Council of State, payable monthly, are set as follows:
40 Council of State Annual Salary

41 Lieutenant Governor $133,365
42 Attorney General 133,365
43 Secretary of State 133,365
44 State Treasurer 133,365
45 State Auditor 133,365
46 Superintendent of Public Instruction 133,365
47 Agriculture Commissioner 133,365

48 Insurance Commissioner 133,365
49 Labor Commissioner 133,365
50 SECTION 38.2.(b1) Effective July 1, 2020, the annual salaries for members of the
51 Council of State, payable monthly, are set as follows:

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1 Council of State Annual Salary
2 Lieutenant Governor $136,699
3 Attorney General 136,699
4 Secretary of State 136,699
5 State Treasurer 136,699
6 State Auditor 136,699
7 Superintendent of Public Instruction 136,699

8 Agriculture Commissioner 136,699
9 Insurance Commissioner 136,699
10 Labor Commissioner 136,699
11
12 CERTAIN EXECUTIVE BRANCH OFFICIALS
13 SECTION 38.3.(a) Effective July 1, 2019, the annual salaries, payable monthly, for
14 the following executive branch officials for the 2019-2020 fiscal year are as follows:

15
16 Executive Branch Officials Annual Salary
17 Chairman, Alcoholic Beverage
18 Control Commission $119,758
19 State Controller 166,758
20 Commissioner of Banks 134,410

21 Chair, Board of Review, Division
22 of Employment Security 131,842
23 Members, Board of Review,
24 Division of Employment Security 130,230
25 Chairman, Parole Commission 131,842
26 Full-Time Members of the Parole Commission 121,900
27 Chairman, Utilities Commission 149,451

28 Members of the Utilities Commission 134,410
29 Executive Director, North Carolina
30 Agricultural Finance Authority 116,625
31 SECTION 38.3.(a1) Effective July 1, 2020, the annual salaries, payable monthly,
32 for the following executive branch officials for the 2020-2021 fiscal year are as follows:
33
34 Executive Branch Officials Annual Salary

35 Chairman, Alcoholic Beverage
36 Control Commission $122,752
37 State Controller 170,927
38 Commissioner of Banks 137,770
39 Chair, Board of Review, Division
40 of Employment Security 135,138

41 Members, Board of Review,
42 Division of Employment Security 133,486
43 Chairman, Parole Commission 135,138
44 Full-Time Members of the Parole Commission 124,948
45 Chairman, Utilities Commission 153,187
46 Members of the Utilities Commission 137,770
47 Executive Director, North Carolina

48 Agricultural Finance Authority 119,541
49
50 JUDICIAL BRANCH

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1 SECTION 38.4.(a) Effective July 1, 2019, the annual salaries, payable monthly, for
2 the following judicial branch officials for the 2019-2020 fiscal year are as follows:
3
4 Judicial Branch Officials Annual Salary
5 Chief Justice, Supreme Court $156,915
6 Associate Justice, Supreme Court 152,843
7 Chief Judge, Court of Appeals 150,425

8 Judge, Court of Appeals 146,521
9 Judge, Senior Regular Resident Superior Court 142,568
10 Judge, Superior Court 138,617
11 Chief Judge, District Court 125,973
12 Judge, District Court 122,020
13 Chief Administrative Law Judge 123,066
14 District Attorney 134,048

15 Assistant Administrative Officer of the Courts 129,086
16 Public Defender 134,048
17 Director of Indigent Defense Services 138,158
18 SECTION 38.4.(a1) Effective July 1, 2020, the annual salaries, payable monthly,
19 for the following judicial branch officials for the 2020-2021 fiscal year are as follows:
20

21 Judicial Branch Officials Annual Salary
22 Chief Justice, Supreme Court $160,838
23 Associate Justice, Supreme Court 156,664
24 Chief Judge, Court of Appeals 154,186
25 Judge, Court of Appeals 150,184
26 Judge, Senior Regular Resident Superior Court 146,132
27 Judge, Superior Court 142,082

28 Chief Judge, District Court 129,122
29 Judge, District Court 125,071
30 Chief Administrative Law Judge 126,143
31 District Attorney 137,399
32 Assistant Administrative Officer of the Courts 132,313
33 Public Defender 137,399
34 Director of Indigent Defense Services 141,612

35 SECTION38.4.(b) The district attorneyorpublic defenderofa judicial district, with
36 the approval of the Administrative Officer of the Courts or the Commission on Indigent Defense
37 Services, respectively, shall set the salaries of assistant district attorneys or assistant public
38 defenders, respectively, in that district such that the average salaries of assistant district attorneys
39 or assistant public defenders in that district, for the 2019-2020 fiscal year, do not exceed eighty
40 thousand five hundred seventy-nine dollars ($80,579) and the minimum salary of any assistant

41 district attorney or assistant public defender is at least forty-three thousand two hundred
42 forty-eight dollars ($43,248), effective July 1, 2019.
43 SECTION 38.4.(b1) The district attorney or public defender of a judicial district,
44 with the approval of the Administrative Officer of the Courts or the Commission on Indigent
45 Defense Services, respectively, shall set the salaries of assistant district attorneys or assistant
46 public defenders, respectively, in that district such that the average salaries of assistant district
47 attorneysorassistantpublicdefendersin thatdistrict,forthe2020-2021fiscal year,donotexceed

48 eighty-two thousand five hundred ninety-three dollars ($82,593) and the minimum salary of any
49 assistant district attorneyor assistant public defender is at least forty-four thousand three hundred
50 twenty-nine dollars ($44,329), effective July 1, 2020.
51

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1 ASSISTANT DISTRICT ATTORNEYS' SALARY ADJUSTMENTS
2 SECTION 38.4A. Of the funds available to the Administrative Office of the Courts,
3 thesum ofeight hundred thousand dollars($800,000)is provided to increasethebudgetedannual
4 salary to seventy thousand dollars ($70,000) for each new Assistant District Attorney position
5 created in S.L. 2017-57.
6
7 CLERKS OF SUPERIOR COURT

8 SECTION 38.5.(a) Effective July 1, 2019, G.S. 7A-101 reads as rewritten:
9 § 7A-101. Compensation.
10 (a) The clerk of superior court is a full-time employee of the State and shall receive an
11 annual salary, payable in equal monthly installments, based on the population of the county as
12 determined in subsection (a1) of this section, number of State-funded assistant and deputy clerks
13 of court as determined by the Administrative Office of Court's workload formula, according to
14 the following schedule:

15 Assistants and Deputies Annual Salary
16 0-19 $95,000
17 20-29 105,000
18 30-49 115,000
19 50-99 125,000
20 100 and above 127,500.

21 Population Annual Salary
22 Less than 100,000 $90,972
23 100,000 to 149,999 101,831
24 150,000 to 249,999 112,690
25 250,000 and above 123,554
26 When a county changes from one population group to another, If the number of State-funded
27 assistant and deputy clerks of court as determined by the Administrative Office of Court's

28 workload formula changes, the salary of the clerk shall be changed, on July 1 of the fiscal year
29 for which the change is reported, to the salary appropriate for the that new population group,
30 number, except that the salary of an incumbent clerk shall not be decreased by any change in
31 population group that number during his the clerk's continuance in office.
32 (a1) For purposes of subsection (a) of this section, the population of a countyfor anyfiscal
33 year shall be the population for the beginning of that fiscal year as reported bythe Office of State
34 Budget and Management to the Administrative Office of the Courts prior to the beginning of that

35 fiscal year.
36 (b) The clerk shall receive no fees or commission by virtue of his the clerk's office. The
37 salary set forth in this section is the clerk's sole official compensation, but if, on June 30, 1975,
38 the salary of a particular clerk, by reason of previous but no longer authorized merit increments,
39 is higher than that set forth in the table, that higher salary shall not be reduced during his
40 continuance in office.compensation.

41 (c) In lieu of merit and other increment raises paid to regular State employees, a clerk of
42 superior court shall receive as longevity pay an amount equal to four and eight-tenths percent
43 (4.8%)ofthe clerk's annual salarypayablemonthlyafterfive yearsofservice, nineand six-tenths
44 percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years
45 of service, nineteen and two-tenths percent (19.2%) after 20 years of service, and twenty-four
46 percent (24%) after 25 years of service. Service shall mean service in the elective position of
47 clerk of superior court, as an assistant clerk of court and as a supervisor of clerks of superior

48 court with the Administrative Office of the Courts and shall not include service as a deputy or
49 acting clerk. Service shall also mean service as a justice, judge, or magistrate of the General
50 Court of Justice or as a district attorney.

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1 SECTION 38.5.(b) Effective July 1, 2020, G.S. 7A-101(a), as amended by
2 subsection (a) of this section, reads as rewritten:
3 (a) The clerk of superior court is a full-time employee of the State and shall receive an
4 annual salary, payable in equal monthly installments, based on the number of State-funded
5 assistant and deputy clerks of court as determined by the Administrative Office of Court's
6 workload formula, according to the following schedule:
7 Assistants and Deputies Annual Salary

8 0-19 $95,000$97,375
9 20-29 105,000107,625
10 30-49 115,000117,875
11 50-99 125,000128,125
12 100 and above 127,500.130,688.
13
14 ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT

15 SECTION 38.6.(a) Effective July 1, 2019, G.S. 7A-102(c1) reads as rewritten:
16 (c1) A full-time assistant clerk or a full-time deputy clerk, and up to one full-time deputy
17 clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the
18 following minimum and maximum rates:
19 Assistant Clerks and Annual Salary
20 Head Bookkeeper

21 Minimum $34,780
22 Maximum 61,16262,691
23
24 Deputy Clerks Annual Salary
25 Minimum $31,200
26 Maximum 48,034.49,235.
27 SECTION 38.6.(a1) Effective July 1, 2020, G.S. 7A-102(c1), as amended by

28 subsection (a) of this section, reads as rewritten:
29 (c1) A full-time assistant clerk or a full-time deputy clerk, and up to one full-time deputy
30 clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the
31 following minimum and maximum rates:
32 Assistant Clerks and Annual Salary
33 Head Bookkeeper
34 Minimum $34,780

35 Maximum 62,69164,258
36
37 Deputy Clerks Annual Salary
38 Minimum $31,200
39 Maximum 49,235.50,466.
40

41 MAGISTRATES
42 SECTION 38.7.(a) Effective July 1, 2019, G.S. 7A-171.1(a)(1) reads as rewritten:
43 (a) The Administrative Officer of the Courts, after consultation with the chief district
44 judge and pursuant to the following provisions, shall set an annual salary for each magistrate:
45 (1) A full-time magistrate shall be paid the annual salary indicated in the table set
46 out in this subdivision. A full-time magistrate is a magistrate who is assigned
47 to work an average of not less than 40 hours a week during the term of office.

48 The Administrative Officer of the Courts shall designate whether a magistrate
49 is full-time. Initial appointment shall be at the entry rate. A magistrate's salary
50 shall increase to the next step every two years on the anniversary of the date
51 the magistrate was originallyappointed for increases to Steps 1 through 3, and

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1 every four years on the anniversary of the date the magistrate was originally
2 appointed for increases to Steps 4 through 6.
3 Table of Salaries of Full-Time Magistrates
4
5 Step Level Annual Salary
6 Minimum Maximum
7 Entry Rate $38,620$39,586

8 Step 1 $40,309 $41,471$42,508
9 Step 2 $43,297 $44,546$45,660
10 Step 3 $46,459 $47,802$48,997
11 Step 4 $50,248 $51,704$52,997
12 Step 5 $54,814 $56,404$57,814
13 Step 6 $59,929 $61,670.$63,212.
14 SECTION 38.7.(a1) Effective July 1, 2020, G.S. 7A-171.1(a)(1), as amended by

15 subsection (a) of this section, reads as rewritten:
16 (a) The Administrative Officer of the Courts, after consultation with the chief district
17 judge and pursuant to the following provisions, shall set an annual salary for each magistrate:
18 (1) A full-time magistrate shall be paid the annual salary indicated in the table set
19 out in this subdivision. A full-time magistrate is a magistrate who is assigned
20 to work an average of not less than 40 hours a week during the term of office.

21 The Administrative Officer of the Courts shall designate whether a magistrate
22 is full-time. Initial appointment shall be at the entry rate. A magistrate's salary
23 shall increase to the next step every two years on the anniversary of the date
24 the magistrate was originallyappointed for increases to Steps 1 through 3, and
25 every four years on the anniversary of the date the magistrate was originally
26 appointed for increases to Steps 4 through 6.
27 Table of Salaries of Full-Time Magistrates

28
29 Step Level Annual Salary
30
31 Entry Rate $39,586$40,576
32 Step 1 $42,508$43,571
33 Step 2 $45,660$46,802
34 Step 3 $48,997$50,222

35 Step 4 $52,997$54,322
36 Step 5 $57,814$59,259
37 Step 6 $63,212.$64,792.
38
39 LEGISLATIVE EMPLOYEES
40 SECTION 38.8.(a) Effective July 1, 2019, the annual salaries of the Legislative

41 Services Officer and of nonelected employees of the General Assembly in effect on June 30,
42 2019, shall be legislatively increased by two and one-half percent (2.5%).
43 SECTION 38.8.(a1) Effective July 1, 2020, the annual salaries of the Legislative
44 Services Officer and of nonelected employees of the General Assembly in effect on June 30,
45 2020, shall be legislatively increased by two and one-half percent (2.5%).
46 SECTION 38.8.(b) Nothing in this act limits any of the provisions of G.S. 120-32.
47

48 GENERAL ASSEMBLY PRINCIPAL CLERKS
49 SECTION 38.9.(a) Effective July 1, 2019, G.S. 120-37(c) reads as rewritten:
50 (c) The principal clerks shall be full-time officers. Each principal clerk shall be entitled
51 to other benefits available to permanent legislative employees and shall be paid an annual salary

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1 ofonehundred elevenonehundredsevendollars($111,107),onehundredthirteenthousandeight
2 hundred eighty-five dollars ($113,885), payable monthly. Each principal clerk shall also receive
3 such additional compensation as approved by the Speaker of the House of Representatives or the
4 President Pro Tempore of the Senate, respectively, for additional employment duties beyond
5 those provided by the rules of their House. The Legislative Services Commission shall review
6 the salary of the principal clerks prior to submission of the proposed operating budget of the
7 General Assembly to the Governor and shall make appropriate recommendations for changes in

8 those salaries. Any changes enacted by the General Assembly shall be by amendment to this
9 paragraph.
10 SECTION 38.9.(a1) Effective July 1, 2020, G.S. 120-37(c), as amended by
11 subsection (a) of this section, reads as rewritten:
12 (c) The principal clerks shall be full-time officers. Each principal clerk shall be entitled
13 to other benefits available to permanent legislative employees and shall be paid an annual salary
14 of one hundred thirteen thousand eight hundred eighty-five dollars ($113,885), one hundred

15 sixteen thousand seven hundred thirty-two dollars ($116,732), payable monthly. Each principal
16 clerk shall also receive such additional compensation as approved by the Speaker of the House
17 of Representatives or the President Pro Tempore of the Senate, respectively, for additional
18 employment duties beyond those provided by the rules of their House. The Legislative Services
19 Commission shall review the salary of the principal clerks prior to submission of the proposed
20 operating budget of the General Assembly to the Governor and shall make appropriate

21 recommendations for changes in those salaries. Any changes enacted by the General Assembly
22 shall be by amendment to this paragraph.
23
24 SERGEANTS-AT-ARMS AND READING CLERKS
25 SECTION 38.10.(a) Effective July 1, 2019, G.S. 120-37(b) reads as rewritten:
26 (b) The sergeant-at-arms and the readingclerk in each house shall be paid a salaryof four
27 hundred thirty-eight dollars ($438.00) four hundred forty-nine dollars ($449.00) per week plus

28 subsistence at the same daily rate provided for members of the General Assembly, plus mileage
29 at the rate provided for members of the General Assembly for one round trip only from their
30 homes to Raleigh and return. The sergeants-at-arms shall serve during sessions of the General
31 Assembly and at such time prior to the convening of, and subsequent to adjournment or recess
32 of, sessions as may be authorized by the Legislative Services Commission. The reading clerks
33 shall serve during sessions only.
34 SECTION 38.10.(a1) Effective July 1, 2020, G.S. 120-37(b), as amended by

35 subsection (a) of this section, reads as rewritten:
36 (b) The sergeant-at-arms and the readingclerk in each house shall be paid a salaryof four
37 hundred forty-nine dollars ($449.00) four hundred sixty dollars ($460.00) per week plus
38 subsistence at the same daily rate provided for members of the General Assembly, plus mileage
39 at the rate provided for members of the General Assembly for one round trip only from their
40 homes to Raleigh and return. The sergeants-at-arms shall serve during sessions of the General

41 Assembly and at such time prior to the convening of, and subsequent to adjournment or recess
42 of, sessions as may be authorized by the Legislative Services Commission. The reading clerks
43 shall serve during sessions only.
44
45 COMMUNITY COLLEGES
46 SECTION 38.11.(a) For the 2019-2021 fiscal biennium, the community college
47 boards of trustees may provide personnel a salary increase pursuant to the policies adopted by

48 the State Board of Community Colleges. Funds for compensation increases may be used for any
49 one or more of the following purposes: (i) merit pay, (ii) across-the-board increases, (iii)
50 recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant
51 to policies adopted by the State Board of Community Colleges. The State Board of Community

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1 Colleges shall report to the General Assembly and the Fiscal Research Division on the use of
2 these funds by no later than March 1, 2020, and March 1, 2021.
3 SECTION 38.11.(b) Effective July 1, 2019, the minimum salaries for nine-month,
4 full-timecurriculumcommunitycollegefacultyforthe2019-2021fiscalbienniumareas follows:
5
6 Education Level Minimum Salary
7 Vocational Diploma/Certificate or Less $37,581

8 Associate Degree or Equivalent 38,103
9 Bachelor's Degree 40,371
10 Master's Degree or Education Specialist 42,382
11 Doctoral Degree 45,282
12 No full-time faculty member shall earn less than the minimum salary for his or her
13 education level.
14 The pro rata hourly rate of the minimum salary for each education level shall be used

15 to determine the minimum salary for part-time faculty members.
16
17 UNIVERSITY OF NORTH CAROLINA SYSTEM
18 SECTION38.12. For the2019-2021 fiscal biennium, the Board of GovernorsofThe
19 University of North Carolina may provide employees with salary increases pursuant to the
20 policies adopted by the Board. Funds for compensation increases may be used for any one or

21 more of the following purposes: (i) merit pay, (ii) across-the-board increases, (iii) recruitment
22 bonuses, (iv) retention increases, and (v) any other compensation increase pursuant to those
23 policies. The Board of Governors of The Universityof North Carolina shall report to the General
24 Assembly and the Fiscal Research Division on the compensation increases awarded by no later
25 than March 1, 2020, and March 1, 2021.
26
27 STATE AGENCY TEACHERS

28 SECTION 38.13. Employees of schools operated by the Department of Health and
29 Human Services, the Department of Public Safety, and the State Board of Education who are
30 paid on the Teacher Salary Schedule shall be paid as authorized under this act.
31
32 MOST STATE EMPLOYEES
33 SECTION 38.14. Unless otherwise expressly provided by this Part, the annual
34 salaries in effect for the following persons on June 30, 2019, and June 30, 2020, shall be

35 legislatively increased as provided by Section 38.1 of this act:
36 (1) Permanent, full-time State officials and persons whose salaries are set in
37 accordance with the State Human Resources Act.
38 (2) Permanent, full-time State officials and persons in positions exempt from the
39 State Human Resources Act.
40 (3) Permanent, part-time State employees.

41 (4) Temporary and permanent hourly State employees.
42
43 ALL STATE-SUPPORTED PERSONNEL
44 SECTION 38.15.(a) The legislative salary increases provided by this act in each
45 year of the 2019-2021 fiscal biennium do not apply to persons separated from service due to
46 resignation, dismissal, reduction in force, death, or retirement or whose last workday is prior to
47 June 30, 2019, for the 2019-2020 fiscal year or June 30, 2020, for the 2020-2021 fiscal year. For

48 the 2019-2021 fiscal biennium, payroll checks issued to employees after July 1, 2019, and July
49 1, 2020, respectively, that represent payment of services provided prior to July 1 of each year
50 shall not be eligible for salary increases provided for in this act.

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1 SECTION 38.15.(b) This section applies to all employees paid from State funds,
2 whether or not subject to or exempt from the North Carolina Human Resources Act, including
3 employees of public schools, community colleges, and The University of North Carolina.
4
5 USE OF FUNDS APPROPRIATED FOR LEGISLATIVELY MANDATED INCREASES
6 SECTION 38.16.(a) The appropriations set forth in Section 2.1 of this act include
7 appropriations for legislatively mandated salary increases and employee benefits in amounts set

8 forth in the Committee Report that accompanies this act. The Office of State Budget and
9 Management shall ensure that those funds are used only for the purposes of legislatively
10 mandated salary increases and employee benefits.
11 SECTION38.16.(b) IftheDirectoroftheBudget determines that fundsappropriated
12 to a State agency for legislatively mandated salary increases and employee benefits exceed the
13 amount required by that agency for those purposes, the Director may reallocate those funds to
14 other State agencies that received insufficient funds for legislatively mandated salary increases

15 and employee benefits.
16 SECTION 38.16.(c) Funds appropriated for legislatively mandated salary and
17 employee benefit increases may not be used to adjust the budgeted salaries of vacant positions,
18 to provide salary increases in excess of those required by the General Assembly, or to increase
19 the budgeted salary of filled positions to the minimum of the position's respective salary range.
20 SECTION 38.16.(d) Any funds appropriated for legislatively mandated salary and

21 benefits increases in excess of the amounts required to implement the increases shall be credited
22 to the Pay Plan Reserve.
23 SECTION 38.16.(e) No later than May 1, 2020, for the 2019-2020 fiscal year, and
24 subsequently May 1, 2021, for the 2020-2021 fiscal year, the Office of State Budget and
25 Management shall report to the Joint Legislative Commission on Governmental Operations and
26 the Fiscal Research Division on the expenditure of funds for legislatively mandated salary
27 increases and employee benefits. This report shall include at least the following information for

28 each State agency for each year of the biennium:
29 (1) The total amount of funds that the agency received for legislatively mandated
30 salary increases and employee benefits.
31 (2) The total amount of funds transferred from the agency to other State agencies
32 pursuant to subsection (b) of this section. This section of the report shall
33 identify the amounts transferred to each recipient State agency.
34 (3) Thetotalamountoffundsusedbytheagencyforlegislativelymandatedsalary

35 increases and employee benefits.
36 (4) The amount of funds credited to the Pay Plan Reserve.
37
38 LAW ENFORCEMENT PAY/STATE HIGHWAY PATROL/STATE BUREAU OF
39 INVESTIGATION/ALCOHOL LAW ENFORCEMENT
40 SECTION 38.17.(a) In order to maintain an experience-based pay structure

41 progression, the entry-level annual salary of members of the State Highway Patrol, agents of the
42 State Bureau of Investigation, and officers of Alcohol Law Enforcement is set in the amount of
43 forty-five thousand one hundred dollars ($45,100) for the 2019-2020 fiscal year and forty-six
44 thousand two hundred twenty-eight dollars ($46,228) for the 2020-2021 fiscal year.
45 SECTION 38.17.(b) During the 2019-2021 fiscal biennium, the State Bureau of
46 Investigation may pay salaries in excess of the scheduled amounts for supervisory
47 responsibilities.

48 SECTION 38.17.(c) During the 2019-2021 fiscal biennium, Alcohol Law
49 Enforcement may pay salaries in excess of the scheduled amounts for supervisory
50 responsibilities.
51

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1 SBI/ALE PAY SCHEDULE
2 SECTION 38.17A. Of the funds appropriated to the Department of Public Safetyfor
3 the 2019-2020 fiscal year, the sum of two million dollars ($2,000,000) shall be allocated to
4 establish a pay schedule for law enforcement officers in the State Bureau of Investigation (SBI)
5 and Alcohol Law Enforcement (ALE) that (i) increases the annual beginning officer salary to
6 forty-five thousand one hundred dollars ($45,100) and (ii) sets a stepped progression from
7 beginning officer pay to sixty-five thousand eight hundred seven dollars ($65,807) over a period

8 of six years byproviding increases of six and one-half percent (6.5%) per year. These funds shall
9 not be used to adjust the pay of other SBI or ALE employees. The pay schedule shall be adjusted
10 to effectuate any future across-the-board legislative or other authorized salary increases. The
11 State Human Resources Commission shall provide technical assistance to the SBIand ALE upon
12 request.
13
14 PAY PLAN RESERVE/LAW ENFORCEMENT OFFICERS

15 SECTION 38.18. G.S. 143C-4-9(a) reads as rewritten:
16 (a) Creation. – ThePayPlan Reserveis establishedwithin theGeneral Fund.TheGeneral
17 Assembly shall appropriate in the Current Operations Appropriations Act (Act) or other
18 appropriations act a specific amount to this reserve for allocation, on an as-needed basis only, to
19 fund statutory and scheduled pay expenses authorized by:
20 (1) G.S. 20-187.3.G.S. 20-187.3, for troopers of the State Highway Patrol

21 compensated pursuant to an experience-based salary schedule.
22 (2) G.S. 7A-102.
23 (3) G.S. 7A-171.1.
24 (4) Teacher Salary Schedule, as enacted by the General Assembly.
25 (5) Pay Plans for Principals and Assistant Principals, as enacted by the General
26 Assembly.
27 (6) The Act, for the law enforcement officers of the State Bureau of Investigation

28 and Alcohol Law Enforcement.
29
30 CONTINUE CORRECTIONAL OFFICERS/CUSTODY-BASED PAY DIFFERENTIAL
31 SECTION 38.19. Until otherwise provided by the General Assembly, whenever an
32 employee is in a Correctional Officer position assigned to a lower custody level facility and the
33 employee is required to staff a higher custody level facility for any period of time, the employee
34 shall receive a pay differential applied to their base salary for the period of time the employee

35 worked at the higher custody level facility, as follows:
36 (1) For employees assigned to minimum custody facilities that are required to
37 staff medium custody facilities, the pay differential is ten percent (10%).
38 (2) For employees assigned to medium custody facilities that are required to staff
39 close custody facilities, the pay differential is ten percent (10%).
40 (3) For employees assigned to minimum custody facilities that are required to

41 staff close custody facilities, the pay differential is twenty percent (20%).
42
43 CORRECTIONAL FACILITY HIGH-NEED SALARY SUPPLEMENTS
44 SECTION 38.19A.(a) Employees of the Department of Public Safety (Department)
45 serving in high-need correctional facilities having the highest numbers of vacant positions are
46 eligible to receive flat-dollar salary supplements, payable monthly, for up to a two-year period.
47 SECTION 38.19A.(b) The base supplement rate shall be an amount calculated by

48 the Department based on the requirements of this section. The minimum base supplement rate
49 that shall be provided to employees serving in a high-need correctional facility is two thousand
50 five hundred dollars ($2,500) annually.

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1 SECTION 38.19A.(c) There are three levels of high-need correctional facilities
2 based upon the facility's respective staffing difficulty:
3 (1) Level I – If the correctional facility has had a vacancy rate of at least twenty
4 percent (20%) for at least 12 months in the prior biennium, employees
5 assigned to this facility shall receive a salary supplement equal to the base
6 supplement rate.
7 (2) Level II – If the correctional facility has had a vacancy rate of at least

8 twenty-five percent (25%) for at least 12 months in the prior biennium,
9 employees assigned to this facility shall receive a salary supplement equal to
10 twice the base supplement rate.
11 (3) Level III – If the correctional facility has had a vacancy rate of at least thirty
12 percent (30%) for at least 12 months in the prior biennium, employees
13 assigned to this facility shall receive a salary supplement equal to three times
14 the base supplement rate.

15 SECTION 38.19A.(d) The salary supplement rates assigned to each high-need
16 correctional facility at the beginning of each fiscal biennium by the Department shall remain in
17 effect for the facility throughout the respective fiscal biennium. The Department shall
18 re-designate high-need facilities at the beginning of each subsequent fiscal biennium based on
19 the criteria in subsections (b) and (c) of this section.
20 SECTION 38.19A.(e) The Department may exclude a facility from eligibility to

21 prioritize larger supplements to greater-need facilities or if the vacancy rate does not accurately
22 reflect a facility's actual staffing needs. The Department may assign a lower level to a facility if
23 the assignment would more accurately reflect the facility's needs. The Department shall not
24 provide supplements in facilities that do not meet the minimum criteria specified in subsection
25 (c) of this section.
26 SECTION 38.19A.(f) Funds appropriated for high-need facility salary supplements
27 may only be expended for that purpose. At the end of each fiscal year, any remaining funding

28 appropriated for the supplements shall be distributed proportionally to employees at high-need
29 facilities who were employed at a designated facility for the entire fiscal year.
30 SECTION 38.19A.(g) Notwithstanding G.S. 135-1(7a), the supplements awarded
31 pursuant to this section are not compensation under Article 1 of Chapter 135 of the General
32 Statutes, the Teachers' and State Employees' Retirement System.
33
34 COUNCIL OF STATE AND CERTAIN AGENCIES/FLEXIBILITY

35 SECTION 38.19B. G.S. 126-5 is amended by adding a new subsection to read:
36 (c15) Notwithstanding any provision of this Chapter to the contrary, the Council of State,
37 the executive branch departments, the CommunityCollege System Office, the Office of the State
38 Controller, and The University of North Carolina are each authorized to do the following:
39 (1) Classify or reclassify their positions according to the classification system
40 established by the State Human Resources Commission (SHRC) as long as

41 the employee meets the minimum requirements of the classification.
42 (2) Set salaries for their employees within the salary ranges for the respective
43 position classification established by the SHRC.
44 Any nonlegislatively mandated salary increase, position reclassification, or reallocation
45 received by an employee that is authorized by an agencyhead under the authority granted bythis
46 section may be reduced or rescinded, prospectively, by action of a subsequent agency head for
47 nondisciplinary reasons.

48
49 SPECIAL ANNUAL LEAVE

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1 SECTION 38.21.(a) Any person who is (i) a full-time permanent employee of the
2 State or a community college institution on July 1, 2019, and (ii) eligible to earn annual leave
3 shall have a one-time additional five days of annual leave credited on July 1, 2019.
4 SECTION 38.21.(b) The additional leave granted in this section shall be accounted
5 for separately in the same manner as the leave provided by Section 35.26 of S.L. 2018-5, and
6 shall remain available during the length of the employee's employment, notwithstanding any
7 otherlimitationonthetotalnumberofdaysofannualleavethatmaybecarriedforward.Part-time

8 permanent employees shall receive a pro rata amount of the five days awarded by this section.
9 SECTION 38.21.(c) The additional leave awarded under this section has no cash
10 value and is not eligible for cash in. If not used prior to the time of separation or retirement, the
11 bonus leave cannot be paid out and is lost.
12 SECTION 38.21.(d) Notwithstanding any provision of G.S. 126-8 to the contrary,
13 any vacation leave remaining on December 31 of each year in excess of 30 days shall be reduced
14 by the number of days awarded in this section that were actually used by the employee during

15 the year, such that the calculation of vacation leave days that would convert to sick leave shall
16 reflect a deduction of those days of special annual leave awarded in this section that were used
17 by the employee during the year.
18 SECTION 38.21.(e) The number of days awarded by this section that carry forward
19 to each following year shall equal the number of days awarded in this section remaining on
20 December 31 of each year plus the number of days awarded in this section that were deducted

21 from vacation leave in excess of 30 days for the calculation of sick leave.
22 SECTION 38.21.(f) No employee may be required to take the additional leave
23 awarded by this section.
24
25 REPORT ON USE OF LAPSED SALARY FUNDS
26 SECTION 38.21A. Until otherwise provided by the General Assembly, the Office
27 of State Budget and Management (OSBM) in conjunction with State agencies, as defined in

28 G.S. 143C-1-1(d)(24), shall report on the use of lapsed salaryfunds at the end of each fiscal year.
29 StateagenciesshallreporttotheOSBMontheuseoflapsedsalary,includingallofthefollowing:
30 (1) The total amount of accrued lapsed salary funds by funding source.
31 (2) The total number of full-time equivalent positions comprising the lapsed
32 salary funds.
33 (3) The total expenditure of lapsed salaries by purpose.
34 (4) The legal authorization to expend lapsed salary funds.

35 The OSBM shall report by October 1 of each year on the use of lapsed salary funds to the Joint
36 Legislative Oversight Committees on Health and Human Services; Education; Justice and Public
37 Safety; Transportation; Information Technology; General Government; and Agriculture and
38 Natural and Economic Resources and the Fiscal Research Division.
39
40 ADMINISTRATIVE OFFICE OF THE COURTS COMPENSATION STUDY

41 SECTION 38.21B.(a) The Administrative Office of the Courts shall study the
42 compensation of administrators, coordinators, and judicial assistants in all district and superior
43 courts. At a minimum, the study shall evaluate the following in regard to these positions:
44 (1) Salaries and total compensation compared to employees with similar work
45 requirements in State government and in neighboring states.
46 (2) Staffing levels and workload requirements compared to neighboring states.
47 (3) Education and experience requirements compared to neighboring states.

48 (4) The process for setting salaries and how salary adjustments are made.
49 SECTION 38.21B.(b) The Administrative Office of the Courts shall report its
50 findings to the Joint Legislative Oversight Committee on Justice and Public Safety and the Fiscal
51 Research Division no later than March 1, 2020.

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1
2 SALARY-RELATED CONTRIBUTIONS
3 SECTION38.22.(a) Effective forthe 2019-2021 fiscal biennium, required employer
4 salary-related contributions for employees whose salaries are paid from department, office,
5 institution, or agency receipts shall be paid from the same source as the source of the employee's
6 salary. If an employee's salary is paid in part from the General Fund or Highway Fund and in
7 part from department, office, institution, or agency receipts, required employer salary-related

8 contributions may be paid from the General Fund or Highway Fund only to the extent of the
9 proportionate part paid from the General Fund or Highway Fund in support of the salary of the
10 employee, and the remainder of the employer's requirements shall be paid from the source that
11 supplies the remainder of the employee's salary. The requirements of this section as to source of
12 payment are also applicable to payments on behalf of the employee for hospital medical benefits,
13 longevity pay, unemployment compensation, accumulated leave, workers' compensation,
14 severance pay, separation allowances, and applicable disability income benefits.

15 SECTION 38.22.(b) Effective July 1, 2019, the State's employer contribution rates
16 budgeted for retirement and relatedbenefits as apercentageofcovered salaries forthe2019-2020
17 fiscal year for teachers and State employees, State law enforcement officers (LEOs), the
18 University and Community Colleges Optional Retirement Programs (ORPs), the Consolidated
19 Judicial Retirement System (CJRS),andthe LegislativeRetirementSystem (LRS)are as set forth
20 below:

21 Teachers State ORPs CJRS LRS
22 and State LEOs
23 Employees
24 Retirement 13.13% 13.13% 6.84% 33.91% 26.79%
25 Disability 0.10% 0.10% 0.10% 0.00% 0.00%
26 Death 0.16% 0.16% 0.00% 0.00% 0.00%
27 Retiree Health 6.47% 6.47% 6.47% 6.47% 6.47%

28 NC 401(k) 0.00% 5.00% 0.00% 0.00% 0.00%
29
30 Total Contribution
31 Rate 19.86% 24.86% 13.41% 40.38% 33.26%
32 Therate forteachersand Stateemployees andStatelawenforcementofficers includes
33 one one-hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement.
34 SECTION 38.22.(c) Effective July 1, 2020, the State's employer contribution rates

35 budgeted for retirement and related benefits as apercentageofcovered salaries forthe2020-2021
36 fiscal year for teachers and State employees, State law enforcement officers (LEOs), the
37 University and Community Colleges Optional Retirement Programs (ORPs), the Consolidated
38 Judicial Retirement System (CJRS),andthe LegislativeRetirementSystem (LRS)are as set forth
39 below:
40 Teachers State ORPs CJRS LRS

41 and State LEOs
42 Employees
43 Retirement 14.52% 14.52% 6.84% 36.31% 29.33%
44 Disability 0.10% 0.10% 0.10% 0.00% 0.00%
45 Death 0.16% 0.16% 0.00% 0.00% 0.00%
46 Retiree Health 6.82% 6.82% 6.82% 6.82% 6.82%
47 NC 401(k) 0.00% 5.00% 0.00% 0.00% 0.00%

48
49 Total Contribution
50 Rate 21.60% 26.60% 13.76% 43.13% 36.15%

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1 Therate forteachersand Stateemployees andStatelawenforcementofficers includes
2 one one-hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement.
3 SECTION 38.22.(d) Effective July 1, 2019, the maximum annual employer
4 contributions, payable monthly, by the State for each covered employee or retiree for the
5 2019-2020 fiscal year to the State Health Plan for Teachers and State Employees are (i) for
6 Medicare-eligible employees and retirees, four thousand nine hundred dollars ($4,900) and (ii)
7 for non–Medicare-eligible employees and retirees, six thousand three hundred six dollars

8 ($6,306).
9 SECTION 38.22.(e) Effective July 1, 2020, the maximum annual employer
10 contributions, payable monthly, by the State for each covered employee or retiree for the
11 2020-2021 fiscal year to the State Health Plan for Teachers and State Employees are (i) for
12 Medicare-eligible employees and retirees, five thousand one hundred sixty-five dollars ($5,165)
13 and (ii) for non–Medicare-eligible employees and retirees, six thousand six hundred forty-seven
14 dollars ($6,647).

15
16 PROVIDE ONE-TIME COST OF LIVING SUPPLEMENTS FOR RETIREES OF THE
17 TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE
18 CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE
19 RETIREMENT SYSTEM
20 SECTION 38.23.(a) G.S. 135-5 is amended by adding new subsections to read:

21 (xxx) On or before October 31, 2019, a one-time cost-of-living supplement payment shall
22 be made to or on account of beneficiaries who are living as of September 1, 2019, and whose
23 retirement commenced on or before September 1, 2019. The payment shall be one-half of one
24 percent (0.50%) of the beneficiary's annual retirement allowance payable as of September 1,
25 2019, and shall not be prorated for date of retirement commencement. If the beneficiary dies
26 before the payment is made, then the payment shall be payable to the member's legal
27 representative. No beneficiary shall be deemed to have acquired a vested right to any future

28 supplemental payments.
29 (yyy) After September 1, 2020, but on or before October 31, 2020, a one-time cost-of-living
30 supplement payment shall be made to or on account of beneficiaries who are living as of
31 September 1, 2020, and whose retirement commenced on or before September 1, 2020. The
32 payment shall be one-half of one percent (0.50%) of the beneficiary's annual retirement
33 allowance payable as of September 1, 2020, and shall not be prorated for date of retirement
34 commencement. If the beneficiary dies before the payment is made, then the payment shall be

35 payable to the member's legal representative. No beneficiary shall be deemed to have acquired a
36 vested right to any future supplemental payments.
37 SECTION 38.23.(b) G.S. 135-65 is amended by adding new subsections to read:
38 (ii) On or before October 31, 2019, a one-time cost-of-living supplement payment shall
39 be made to or on account of beneficiaries who are living as of September 1, 2019, and whose
40 retirement commenced on or before September 1, 2019. The payment shall be one-half of one

41 percent (0.50%) of the beneficiary's annual retirement allowance payable as of September 1,
42 2019, and shall not be prorated for date of retirement commencement. If the beneficiary dies
43 before the payment is made, then the payment shall be payable to the member's legal
44 representative. No beneficiary shall be deemed to have acquired a vested right to any future
45 supplemental payments.
46 (jj) After September 1, 2020, but on or before October 31, 2020, a one-time cost-of-living
47 supplement payment shall be made to or on account of beneficiaries who are living as of

48 September 1, 2020, and whose retirement commenced on or before September 1, 2020. The
49 payment shall be one-half of one percent (0.50%) of the beneficiary's annual retirement
50 allowance payable as of September 1, 2020, and shall not be prorated for date of retirement
51 commencement. If the beneficiary dies before the payment is made, then the payment shall be

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1 payable to the member's legal representative. No beneficiary shall be deemed to have acquired a
2 vested right to any future supplemental payments.
3 SECTION 38.23.(c) G.S. 120-4.22A is amended byadding new subsections to read:
4 (cc) In accordance with subsection (a) of this section, on or before October 31, 2019, a
5 one-time cost-of-living supplement payment shall be made to or on account of beneficiaries who
6 are living as of September 1, 2019, and whose retirement commenced on or before September 1,
7 2019. The payment shall be one-half of one percent (0.50%) of the beneficiary's annual

8 retirement allowance payable as of September 1, 2019, and shall not be prorated for date of
9 retirement commencement. If the beneficiary dies before the payment is made, then the payment
10 shall be payable to the member's legal representative. No beneficiary shall be deemed to have
11 acquired a vested right to any future supplemental payments.
12 (dd) In accordance with subsection (a) of this section, after September 1, 2020, but on or
13 before October 31, 2020, a one-time cost-of-living supplement payment shall be made to or on
14 account of beneficiaries who are living as of September 1, 2020, and whose retirement

15 commenced on or before September 1, 2020. The payment shall be one-half of one percent
16 (0.50%) of the beneficiary's annual retirement allowance payable as of September 1, 2020, and
17 shall not be prorated for date of retirement commencement. If the beneficiary dies before the
18 payment is made, then the payment shall be payable to the member's legal representative. No
19 beneficiary shall be deemed to have acquired a vested right to any future supplemental
20 payments.

21 SECTION 38.23.(d) Notwithstanding any other provision of law to the contrary, in
22 order to administer the one-time cost-of-living supplement for retirees provided for in
23 subsections (a), (b), and (c) of this section, the Retirement Systems Division of the Department
24 of State Treasurer may increase receipts from the retirement assets of the corresponding
25 retirement system or pay costs associated with the administration of the payment directly from
26 the retirement assets.
27

28 REHIRE HIGH-NEED TEACHERS
29 SECTION 38.25.(a) Article 20 of Chapter 115C of the General Statutes is amended
30 by adding a new section to read:
31 § 115C-302.4. High-need retired teachers.
32 (a) Definitions. – The following definitions apply in this section:
33 (1) High-need retired teacher. – A beneficiary of the Teachers' and State
34 Employees' Retirement System of North Carolina who meets both of the

35 following requirements:
36 a. Retired on or before February 1, 2019, after attaining (i) the age of at
37 least 65 with five years of creditable service, (ii) the age of at least 60
38 with 25 years of creditable service, or (iii) 30 years of creditable
39 service.
40 b. Is reemployed by a local board of education to teach at a high-need

41 school.
42 (2) High-need school. – A school that, at any point on or after July 1, 2017, meets
43 one of the following criteria:
44 a. Is a Title I school. As used in this sub-subdivision, a Title I school is a
45 school identified under Part A of Title I of the Elementary and
46 Secondary Education Act of 1965, as amended.
47 b. Receives an overall school performance grade of D or F, as calculated

48 by the State Board of Education pursuant to G.S. 115C-83.15(d).
49 (3) STEM. – Science, technology, engineering, and mathematics.
50 (b) Salary Level. – A high-need retired teacher shall be compensated as follows:

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1 (1) Except as provided in subdivision (2) of this subsection, a high-need retired
2 teacher shall be paid on the first step of the teacher salary schedule.
3 (2) If a high-need retired teacher serves as a teacher in any of the following
4 licensure areas, he or she shall be paid on the sixth step of the teacher salary
5 schedule:
6 a. STEM.
7 b. Special education.

8 (c) NoStateSalarySupplements or Increasein Salary. – Ahigh-need retired teachershall
9 not receive any State salary supplement or State bonus. A high-need retired teacher shall not
10 move beyond the salarysteps prescribed bysubsection (b) of this section, regardless of the length
11 of time spent as a high-need retired teacher.
12 (d) Local Salary Supplement. – A high-need retired teacher shall receive any local salary
13 supplements that are given to employees of the local board of education.
14 (e) Term of Contract. – A contract between the local board of education and a high-need

15 retired teacher shall be for a term of no more than one school year.
16 (f) IdentificationofSTEMandSpecialEducationLicensureAreas. –TheSuperintendent
17 of Public Instruction shall identify and provide to each local school administrative unit a list of
18 STEM and special education licensure areas that qualify for reemployment pursuant to
19 subdivision (b)(2) of this section. Local school administrative units shall make the list of STEM
20 and special education licensure areas available to high-need retired teachers.

21 SECTION 38.25.(b) G.S. 135-3(8) is amended by adding a new sub-subdivision to
22 read:
23 g. Notwithstanding sub-subdivisions c. and d. of this subdivision, the
24 computation of postretirement earnings of a beneficiary under this
25 subdivision, who retired on or before February 1, 2019, and who has
26 been retired at least six months, shall not include earnings while the
27 beneficiary is employed to teach as a high-need retired teacher, as

28 defined under G.S. 115C-302.4(a)(1). The Department of Public
29 Instruction shall certify to the Retirement System that a beneficiary is
30 employed to teach by a local board of education as a high-need retired
31 teacher, as defined under G.S. 115C-302.4(a)(1).
32 Beneficiaries employed under this sub-subdivision are not entitled
33 to anybenefits otherwise providedunderthis Chapteras a result ofthis
34 period of employment.

35 SECTION 38.25.(c) G.S. 135-3(8)c1. reads as rewritten:
36 c1. Within 90 days of the end of each month in which a beneficiary is
37 reemployed under the provisions of sub-subdivision sub-subdivisions
38 c. and g. of this subdivision, each employer shall provide a report for
39 that month on each reemployed beneficiary, including the terms of the
40 reemployment, the date of the reemployment, and the amount of the

41 monthly compensation. If such a report is not received within the
42 required 90 days, the Board mayassess the employer with a penaltyof
43 ten percent (10%) of the compensation of the unreported reemployed
44 beneficiaries during the months for which the employer did not report
45 the reemployed beneficiaries, with a minimum penalty of twenty-five
46 dollars ($25.00). If after being assessed a penalty, an employer
47 provides clear and convincing evidence that the failure to report

48 resulted from a lack of oversight or some other event beyond the
49 employer's control and was not a deliberate attempt to omit the
50 reporting of reemployed beneficiaries, the Board may reduce the
51 penalty to not less than two percent (2%) of the compensation of the

H966-PCCS30485-LRxr-3 House Bill 966 Page 323 General Assembly Of North Carolina Session 2019

1 unreported reemployed beneficiaries during the months for which the
2 employer failed to report, with a minimum penalty of twenty-five
3 dollars ($25.00). Upon receipt bythe employer of notice that a penalty
4 has been assessed under this sub-subdivision, the employer shall remit
5 thepayment ofthepenaltyto theRetirement System, in onelumpsum,
6 no later than 90 days from the date of the notice.
7 SECTION 38.25.(d) G.S. 135-1(10) reads as rewritten:

8 (10) Employee shall mean all full-time employees, agents or officers of the State
9 ofNorthCarolinaoranyofitsdepartments,bureausandinstitutionsotherthan
10 educational, whether such employees are elected, appointed or employed:
11 Provided that the term employee shall not include any person who is a
12 member of the Consolidated Judicial Retirement System, any member of the
13 General Assembly or Assembly, any part-time or temporary employee.
14 employee, or any high-need retired teacher as defined under

15 G.S. 115C-302.4(a)(1). Notwithstanding any other provision of law,
16 employee shall include all employees of the General Assembly except
17 participants in the Legislative Intern Program, pages, and beneficiaries in
18 receipt of a monthly retirement allowance under this Chapter who are
19 reemployed on a temporary basis. Employee also includes any participant
20 whose employment is interrupted by reason of service in the Uniformed

21 Services, asthattermisdefinedinsection4303(16)oftheUniformedServices
22 Employment and Reemployment Rights Act, Public Law 103-353, if that
23 participant was an employee at the time of the interruption; if the participant
24 does not return immediately after that service to employment with a covered
25 employerinthisSystem,thentheparticipantshallbedeemed inserviceuntil
26 the date on which the participant was first eligible to be separated or released
27 from his or her involuntary military service. In all cases of doubt, the Board

28 of Trustees shall determine whether any person is an employee as defined in
29 this Chapter. Employee shall also mean every full-time civilian employee
30 of the North Carolina National Guard who is employed pursuant to section
31 709 of Title 32 of the United States Code and paid from federal appropriated
32 funds, but held by the federal authorities not to be a federal employee:
33 Provided, however, that the authority or agency paying the salaries of such
34 employees shall deduct or cause to be deducted from each employee's salary

35 the employee's contribution in accordance with applicable provisions of
36 G.S. 135-8 and remit the same, either directly or indirectly, to the Retirement
37 System; coverage of employees described in this sentence shall commence
38 upon the first dayof the calendar year or fiscal year, whichever is earlier, next
39 following the date of execution of an agreement between the Secretary of
40 Defense of the United States and the Adjutant General of the State acting for

41 the Governor in behalf of the State, but no credit shall be allowed pursuant to
42 this sentence for any service previously rendered in the above-described
43 capacity as a civilian employee of the North Carolina National Guard:
44 Provided, further, that the Adjutant General, in the Adjutant General's
45 discretion, may terminate the Retirement System coverage of the
46 above-described North Carolina National Guard employees if a federal
47 retirement system is established for such employees and the Adjutant General

48 elects to secure coverage of such employees under such federal retirement
49 system. Anyfull-timecivilianemployeeoftheNorth CarolinaNational Guard
50 described above who is now or hereafter may become a member of the
51 Retirement System may secure Retirement System credit for such service as

Page 324 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 a North Carolina National Guard civilian employee for the period preceding
2 the time when such employees became eligible for Retirement System
3 coverage by paying to the Retirement System an amount equal to that which
4 would have constituted employee contributions if the employee had been a
5 member during the years of ineligibility, plus interest. Employees of State
6 agencies, departments, institutions, boards, and commissions who are
7 employed in permanent job positions on a recurring basis must work at least

8 30 hours per week for nine or more months per calendar year in order to be
9 covered by the provisions of this subdivision. subdivision, except that no
10 high-need retired teacher as defined under G.S. 115C-302.4(a)(1) shall be
11 considered an employee. On and after August 1, 2001, a person who is a
12 nonimmigrant alien and who otherwise meets the requirements of this
13 subdivision shall not be excluded from the definition of employee solely
14 because the person holds a temporary or time-limited visa.

15 SECTION 38.25.(e) G.S. 135-48.40(b)(1a) reads as rewritten:
16 (1a) All retirees who (i) are employed by an employing unit that elects to be
17 covered bythis subdivision, (ii) do not qualifyfor coverage under subdivision
18 (1) of this subsection, and (iii) are determined to be full-time by their
19 employing unit in accordance with section 4980H of the Internal Revenue
20 Code and the applicable regulations, as amended. amended, or are high-need

21 retired teachers, as defined under G.S. 115C-302.4(a)(1). The employing unit
22 shall pay the employer premiums for retirees who enroll under this
23 subdivision.
24 SECTION 38.25.(f) The State Treasurer shall seek a private letter ruling from the
25 Internal Revenue Service to determineiftheprovisions ofthis sectionrelatingto the computation
26 of postretirement earnings of retired teachers jeopardize the status of the Teachers' and State
27 Employees' Retirement System.

28 SECTION 38.25.(g) If the Internal Revenue Service determines that the provisions
29 of G.S. 135-3(8)g., as enacted by this section, relating to the computation of postretirement
30 earnings of retired teachers jeopardize the status of the Teachers' and State Employees'
31 Retirement System of North Carolina under the Internal Revenue Code, then this section is
32 repealed 30 days from receipt of that determination by the State Treasurer. Upon receipt of that
33 determination, the State Treasurer shall notify the Revisor of Statutes of the determination and
34 the date of receipt. Within three business days of receipt of the determination, the State Treasurer

35 shall notify all local school administrative units of the repeal of this section and shall publicly
36 notice the receipt of this information on the Department of State Treasurer's Web site. Within
37 three business days of receipt of the notice from the State Treasurer, a local school administrative
38 unit shall notify all high-need retired teachers employed by its local board of education of the
39 repeal of this section.
40 SECTION 38.25.(h) Notwithstanding any other provision of law to the contrary, in

41 order to pay costs associated with the administration of the provisions of this section, the
42 Retirement Systems Division of the Department of State Treasurer may increase receipts from
43 the retirement assets of the Teachers' and State Employees' Retirement System or pay costs
44 associated with the administration directly from the retirement assets. Costs associated with the
45 administration of the provisions of this section shall not exceed fifty thousand dollars ($50,000)
46 to obtain the private letter ruling from the Internal Revenue Service required under subsection (f)
47 of this section.

48 SECTION 38.25.(i) Any beneficiary that is employed to teach by a local board of
49 educationasahigh-need retiredteacher,asdefinedinG.S. 115C-302.4(a)(1),shallnotbeeligible
50 to elect into a position that would lead him or her to be eligible to accrue any additional benefits
51 under G.S. 135-3(8). Any failure of a local board of education or a beneficiary to comply with

H966-PCCS30485-LRxr-3 House Bill 966 Page 325 General Assembly Of North Carolina Session 2019

1 the foregoing shall be corrected by the Retirement System as it determines may be appropriate
2 underStateand federal law. Anycosts ofthecorrection, as determinedbythe RetirementSystem,
3 shall be the sole responsibility of the local board of education and shall be transferred to the
4 Pension Accumulation Fund under G.S. 135-8, under rules adopted by the Board of Trustees.
5 SECTION 38.25.(j) This section expires June 30, 2021.
6
7 AMEND SPECIAL INSURANCE BENEFITS PLAN OFFERINGS

8 SECTION 38.26. G.S. 143-166.60(d)(1) is repealed.
9
10 PART XXXIX. CAPITAL
11
12 PROCEDURES FOR DISBURSEMENT OF CAPITAL FUNDS
13 SECTION 39.1. The appropriations made bythe 2019 General Assembly for capital
14 improvements are for constructing, repairing, or renovating State buildings, utilities, and other

15 capital facilities, for acquiring sites for them where necessary, for acquiring buildings and land
16 for State government purposes and other purposes as set forth in G.S. 143C-4-3.1, and shall be
17 disbursed for the purposes provided by this act. Expenditure of funds shall not be made by any
18 State department, institution, or agency until an allotment has been issued by the Governor as
19 Director of the Budget, which shall not be unreasonably withheld. The allotment shall be issued
20 upon compliance with the State Budget Act, Chapter 143C of the General Statutes. Prior to the

21 award of construction contracts for projects to be financed in whole or in part with
22 self-liquidating appropriations, the Director of the Budget shall approve the elements of the
23 method of financing of those projects, including the source of funds, interest rate, and liquidation
24 period. Provided, however, that if the Director of the Budget approves the method of financing a
25 project, the Director shall report that action to the Joint Legislative Commission on
26 Governmental Operations at its next meeting.
27 Where direct capital improvement appropriations include the purpose of furnishing

28 fixed and movable equipment for any project, those funds for equipment shall not be subject to
29 transfer into construction accounts except as authorized by the Director of the Budget. The
30 expenditure of funds for fixed and movable equipment and furnishings shall be reviewed and
31 approved by the Director of the Budget prior to commitment of funds.
32 Capital improvement projects authorized by the 2019 General Assembly shall be
33 completed, including fixed and movable equipment and furnishings, within the limits of the
34 amounts of the direct or self-liquidating appropriations provided, except as otherwise provided

35 in this act. Capital improvement projects authorized bythe2019General Assemblyforthedesign
36 phase only shall be designed within the scope of the project as defined by the approved cost
37 estimate filed with the Director of the Budget, including costs associated with site preparation,
38 demolition, and movable and fixed equipment. Amounts contracted for projects authorized by
39 the General Assembly cannot exceed the total project cost authorization.
40 Disbursement of funds from the State Capital and Infrastructure Fund for projects

41 authorized by an act of the General Assembly shall be made as needed to initiate or advance a
42 capital project. Funds authorized for any particular project shall remain in the State Capital and
43 Infrastructure Fund until such time as disbursement is necessary to satisfy a financial obligation
44 for that project.
45
46 CAPITAL IMPROVEMENT AND REPAIRS AND RENOVATIONS
47 APPROPRIATIONS

48 SECTION 39.2.(a) The following agency capital improvement projects have been
49 assigned a project code for reference to allocations in this Part and for intended project support
50 by the General Assembly for future fiscal years:
51

Page 326 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Agency Capital Improvement Project Project Code
2
3 Department of Agriculture and Consumer Services
4 Eaddy Building—Addition & Renovation DACS19-1
5 Tidewater Research Station—Swine Unit Replacements DACS19-2
6 Mountain Island State Forest—Improvements DACS19-3
7 NCFS–County Offices DACS19-4

8
9 Department of Environmental Quality
10 Division of Water Resources–
11 Reedy Creek Environmental Lab/Equipment Storage & Workshop DEQ19-1
12 Water Resources Development Projects DEQ-WRD19
13
14 Department of Administration

15 DHHS/Dix Campus Relocation DOA19-1
16 State Gov't. Complex Chiller Plant DOA19-2
17
18 Department of Information Technology
19 Eastern Data Center Improvements DIT19-1
20 Western Data Center Improvements DIT19-2

21 Rural Broadband/GREAT Program DIT19-3
22
23 Department of Natural and Cultural Resources
24 NC Museum of History Renovation/Addition DNCR19-1
25 NC Museum of Art—Light Control DNCR19-2
26 Fort Fisher—New Visitor Center DNCR19-3
27 NC Zoo—Asia Continent Animal Exhibit DNCR19-4

28 NC Zoo—Australia Continent Exhibit DNCR19-5
29 NC Zoo—Parking/Trams DNCR19-6
30 NC Transportation Museum DNCR19-7
31 Thomas Day House DNCR19-9
32 Historical Commission Signage/Monuments DNCR19-10
33 NC Museum of Art—Amphitheater Restoration DNCR19-11
34

35 Department of Public Safety
36 Perquimans YDC—Raise the Age Renovations DPS19-1
37 Alcoholism & Chemical Dependency Program–
38 Black Mountain Modular Classrooms DPS19-3
39 Samarcand—Live Fire Training Bldg. DPS19-6
40 State Highway Patrol–

41 Renovate Troop B DPS19-9
42 Raise the Age–Juvenile Detention Beds-Moore County DPS19-10
43 Prison Information Technology Security DPS19-11
44 National Guard–
45 Federal Match Funding Pool NG19-1
46
47 General Assembly

48 Committee Renovations/Elevator Repair NCGA19-1
49
50 The University of North Carolina
51 Western Carolina University–

H966-PCCS30485-LRxr-3 House Bill 966 Page 327 General Assembly Of North Carolina Session 2019

1 Steam Plant Project UNC/WCU19-1
2 East Carolina University–
3 Brody School of Medicine UNC/ECU19-1
4 North Carolina Central University–
5 Lee Biology, Phase 2 UNC/NCC19-1
6 North Carolina State University–
7 S.T.E.M. Building UNC/NCS19-1

8 Apiculture Facility UNC/NCS19-2
9 Elizabeth City State University–
10 Library Replacement UNC/ECS19-1
11 HVAC System UNC/ECS19-2
12 Chiller UNC/ECS19-3
13 Crime Lab UNC/ECS19-4
14 Fayetteville State University–

15 Dormitory Demolition and Removal UNC/FSU19-1
16 Rosenthal/Chick Bldg. Renovation UNC/FSU19-2
17 North Carolina Agricultural and Technical State University–
18 Carver Hall Renovation UNC/A&T19-1
19 University of North Carolina at Charlotte–
20 Cameron/Burson Bldg. Renovation UNC/CLT19-1

21 University of North Carolina at Greensboro–
22 Jackson Library Renovation & Addition UNC/GRE19-1
23 Winston-Salem State University–
24 Hauser Bldg. Renovation UNC/WSS19-1
25 University of North Carolina at Pembroke–
26 Health Science Center UNC/PEM19-1
27

28 Repairs and Renovations R&R19
29 Carolina Museum of the Marine DG19-1
30 Guilford Mental Health DG19-2
31 Maritime Museum DG19-3
32 Civil War Museum DG19-4
33 Martin Luther King, Jr. Park—Fayetteville DG19-5
34 NCFFA Center DG19-6

35 Medical Examiner's Office – Forsyth DG19-7
36 LEA/K-12 Capital Projects K-12
37 Community College Capital Projects CC
38 SECTION 39.2.(b) This subsection authorizes the following capital projects and
39 allocates funding in the 2019-2021 fiscal biennium based upon projected cash flow needs for the
40 authorized projects. The authorizations provided in this subsection represent the maximum

41 amount of funding from the State Capital and Infrastructure Fund that may be expended on each
42 project. An additional action by the General Assembly is required to increase the maximum
43 authorization for any of the projects listed.
44 In each fiscal year, the Office of State Budget and Management may reallocate
45 appropriations from the State Capital and Infrastructure Fund between projects to meet cash flow
46 requirements for a project, provided that the following criteria are met:
47 (1) If the project for which funds have been appropriated in this Part is for one of

48 the constituent institutions of The University of North Carolina, then
49 unencumbered funds may be allocated from another project for a constituent
50 institution of The University of North Carolina for which funds have been
51 appropriated.

Page 328 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (2) If the project for which funds have been appropriated in this Part is for a State
2 agencythat is not TheUniversityofNorth Carolina,thenunencumberedfunds
3 maybe allocated from another project for a State agencyfor which funds have
4 been appropriated.
5 (3) The amount disbursed will not exceed amounts appropriated from the State
6 Capital and Infrastructure Fund.
7 (4) The amount disbursed on any project cannot exceed the amount authorized

8 for that project.
9 (5) The amount reallocated cannot be used to expand the scope of the project.
10 (6) A project shall not begin until the fiscal year authorized by the General
11 Assembly.
12 There is allocated from the State Capital and Infrastructure Fund for the 2019-2021
13 fiscal biennium the following amounts for capital improvement project codes, as defined in
14 subsection (a) of this section:

15
16 Capital Improvements –
17 State Capital and Total
18 Infrastructure Fund Project Authorization 2019-2020 2020-2021
19
20 DACS19-1 $967,000 $967,000 –

21 DACS19-2 1,429,000 1,429,000 –
22 DACS19-3 1,500,000 1,500,000 –
23 DACS19-4 7,314,000 7,314,000 –
24 DEQ19-1 30,008,000 – $3,000,800
25 DEQ-WRD19 N/A 11,007,000 –
26 DOA19-1 244,000,000 17,000,000 54,000,000
27 DOA19-2 12,523,000 12,523,000 –

28 DHHS19-1 15,021,000 15,021,000 –
29 DIT19-1 5,741,000 5,741,000 –
30 DIT19-2 3,150,000 3,150,000 –
31 DIT19-3 N/A 15,000,000 15,000,000
32 DNCR19-1 60,000,000 20,000,000 25,000,000
33 DNCR19-2 1,000,000 1,000,000 –
34 DNCR19-3 8,000,000 8,000,000 –

35 DNCR19-4 20,014,500 – 10,014,500
36 DNCR19-5 20,000,000 – –
37 DNCR19-6 4,900,000 – –
38 DNCR19-7 4,500,000 1,125,000 1,125,000
39 DNCR19-9 625,000 625,000 –
40 DNCR19-10 2,500,000 2,500,000 –

41 DNCR19-11 4,500,000 – –
42 DPS19-1 1,731,000 1,731,000 –
43 DPS19-3 1,013,000 1,013,000 –
44 DPS19-6 1,499,000 1,499,000 –
45 DPS19-9 2,152,000 2,152,000 –
46 DPS19-10 2,000,000 2,000,000 –
47 DPS19-11 2,448,102 2,448,102 –

48 NG19-1 N/A 2,000,000 –
49 NCGA19-1 2,097,635 2,097,635 –
50 UNC/WCU19-1 16,500,000 16,500,000 –
51 UNC/ECU19-1 215,000,000 15,000,000 13,000,000

H966-PCCS30485-LRxr-3 House Bill 966 Page 329 General Assembly Of North Carolina Session 2019

1 UNC/NCC19-1 8,100,000 810,000 2,025,000
2 UNC/NCS19-1 80,000,000 14,000,000 21,000,000
3 UNC/NCS19-2 2,000,000 2,000,000 –
4 UNC/ECS19-1 32,000,000 3,200,000 8,000,000
5 UNC/ECS19-2 4,000,000 4,000,000 –
6 UNC/ECS19-3 2,000,000 2,000,000 –
7 UNC/ECS19-4 2,500,000 2,500,000 –

8 UNC/FSU19-1 2,500,000 2,500,000 –
9 UNC/FSU19-2 13,700,000 13,700,000 –
10 UNC/A&T19-1 18,500,000 9,250,000 9,250,000
11 UNC/CLT19-1 45,000,000 4,500,000 11,250,000
12 UNC/GRE19-1 84,000,000 – 10,000,000
13 UNC/WSS19-1 15,100,000 – –
14 UNC/PEM19-1 91,000,000 6,500,000 20,000,000

15 DG19-1 26,000,000 – 26,000,000
16 DG19-2 7,700,000 7,700,000 –
17 DG19-3 2,000,000 2,000,000 –
18 DG19-4 46,000,000 12,100,000 3,000,000
19 DG19-5 1,500,000 1,500,000 –
20 DG19-6 500,000 500,000 –

21 DG19-7 15,021,000 15,021,000 –
22 R&R19 N/A 200,000,000 125,000,000
23
24 SECTION 39.2.(c) Of the funds in the State Capital and Infrastructure Fund for the
25 2019-2021 fiscal biennium, the following allocations are made to the following agencies for
26 repairs and renovations pursuant to G.S. 143C-8-13:
27 (1) Fortypercent (40%) of the amount allocated for project code R&R19 from the

28 State Capital and Infrastructure Fund shall be allocated for repairs and
29 renovations at theconstituent institutions ofTheUniversityofNorthCarolina,
30 as determined by the Board of Governors.
31 (2) Sixtypercent (60%) of the amount allocated for project code R&R19 from the
32 State Capital and Infrastructure Fund shall be allocated for repairs and
33 renovations for State agencies, excluding The University of North Carolina.
34 The Office of State Budget and Management shall consult with or report to the Joint

35 Legislative Commission on Governmental Operations, as appropriate, in accordance with
36 G.S. 143C-8-13(b). The Board of Governors shall report to the Joint Legislative Commission on
37 Governmental Operations in accordance with G.S. 143C-8-13(b). Notwithstanding
38 G.S. 143C-8-13, of the funds allocated in subdivision (2) of this subsection, three million six
39 hundred forty thousand dollars ($3,640,000) shall be allocated to the Department of Revenue for
40 security improvements at various locations throughout the State.

41 SECTION 39.2.(d) Funds allocated under this section that may be expended on
42 projects where the recipient intends or expects to receive insurance proceeds or State or federal
43 aid or assistance shall be used only to the extent that funds received from the settlement of a
44 claim for loss or damage covered under the recipient's applicable insurance policy, or other aid
45 or assistance, are insufficient to cover all damages sustained as a result of Hurricane Florence.
46 SECTION 39.2.(e) For project code UNC/NCS19-1, North Carolina State
47 University shall commit to providing funding of at least eighty million dollars ($80,000,000)

48 from non-State sources on or before June 30, 2021, as a match for the intended State allocations
49 totaling eighty million dollars ($80,000,000) for the project.
50 SECTION 39.2.(f) For project code UNC/ECU19-1, allocation of funds for the
51 project in the 2020-2021 fiscal year and subsequent fiscal years shall be conditioned upon the

Page 330 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 existence of and compliance with an affiliation agreement between The University of North
2 Carolina or East Carolina University and the primary affiliated teaching hospital for the East
3 Carolina University Brody School of Medicine. The affiliation agreement shall require that at
4 least forty-five percent (45%) of the members of the Board of Trustees of the primary affiliated
5 teaching hospital be appointed by the Board of Governors of The University of North Carolina.
6 SECTION 39.2.(g) For project code DG19-3, Carteret County shall commit to
7 providing funding of at least six hundred thousand dollars ($600,000) from non-State sources as

8 a match for the intended State allocations identified in subsection (b) of this section.
9 SECTION 39.2.(h) There is allocated from the State Capital and Infrastructure Fund
10 the following amounts for capital improvement projects at local school administrative units in
11 this State in the aggregate amount of one billion five hundred million dollars ($1,500,000,000).
12 TheGeneralAssemblyintendstoappropriateatleastfivehundredmilliondollars($500,000,000)
13 forlocal school administrativeunit capital projectsbytheendofthe2021-2022fiscal year.Funds
14 allocated pursuant to this subsection shall be used for the purpose of issuing allotted proceeds to

15 local school administrative units for new construction or rehabilitation of existing facilities and
16 repairs and renovations in accordance with the following:
17
18 Local School Administrative Unit Proceeds Allotment
19 Alamance-Burlington $18,428,823
20 Alexander County $12,411,156

21 Alleghany County $10,353,574
22 Anson County $11,884,154
23 Ashe County $10,775,162
24 Asheboro City $ 4,396,455
25 Asheville City $ 2,713,629
26 Avery County $10,511,929
27 Beaufort County $12,165,414

28 Bertie County $11,234,254
29 Bladen County $12,277,125
30 Brunswick County $13,315,336
31 Buncombe County $14,687,531
32 Burke County $15,756,422
33 Cabarrus County $17,220,503
34 Caldwell County $15,402,161

35 Camden County $10,666,626
36 Carteret County $12,158,044
37 Caswell County $11,332,269
38 Catawba County $11,116,803
39 Chapel Hill-Carrboro $ 9,532,195
40 Chatham County $12,337,946

41 Cherokee County $11,136,538
42 Clay County $10,335,402
43 Cleveland County $16,605,277
44 Clinton City $ 4,357,148
45 Columbus County $10,632,523
46 Craven County $14,384,993
47 Cumberland County $28,886,745

48 Currituck County $11,067,730
49 Dare County $11,381,585
50 Davidson County $14,998,456
51 Davie County $11,627,851

H966-PCCS30485-LRxr-3 House Bill 966 Page 331 General Assembly Of North Carolina Session 2019

1 Duplin County $15,498,144
2 Durham County $18,587,527
3 Edenton/Chowan $10,729,020
4 Edgecombe County $13,427,241
5 Elkin City $ 1,616,987
6 Forsyth County $24,142,940
7 Franklin County $14,047,855

8 Gaston County $20,416,874
9 Gates County $10,913,914
10 Graham County $10,336,858
11 Granville County $14,143,141
12 Greene County $12,000,632
13 Guilford County $28,758,346
14 Halifax County $ 5,201,993

15 Harnett County $21,892,627
16 Haywood County $11,889,100
17 Henderson County $13,511,592
18 Hertford County $11,524,488
19 Hickory City $ 2,861,982
20 Hoke County $15,821,609

21 Hyde County $10,156,538
22 Iredell-Statesville $13,034,411
23 Jackson County $10,974,793
24 Johnston County $27,659,803
25 Jones County $10,399,503
26 Kannapolis City $ 3,000,295
27 Lee County $14,032,240

28 Lenoir County $14,071,824
29 Lexington City $ 2,423,631
30 Lincoln County $13,071,054
31 Macon County $11,156,512
32 Madison County $10,666,773
33 Martin County $11,558,269
34 McDowell County $12,814,262

35 Mecklenburg County $48,448,911
36 Mitchell County $10,546,702
37 Montgomery County $11,488,434
38 Moore County $13,314,557
39 Mooresville City $ 3,829,900
40 Mount Airy City $ 2,259,667

41 Nash-Rocky Mount $16,943,741
42 New Hanover County $16,843,283
43 Newton-Conover $ 2,095,306
44 Northampton County $10,865,984
45 Onslow County $18,360,133
46 Orange County $ 5,612,793
47 Pamlico County $10,324,498

48 Pasquotank County $12,451,049
49 Pender County $13,872,281
50 Perquimans County $10,472,554
51 Person County $11,454,025

Page 332 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 Pitt County $19,856,962
2 Polk County $10,546,975
3 Randolph County $15,742,900
4 Richmond County $14,202,934
5 Roanoke Rapids City $ 6,041,637
6 Robeson County $25,780,597
7 Rockingham County $15,686,829

8 Rowan-Salisbury $17,608,410
9 Rutherford County $14,040,176
10 Sampson County $11,949,305
11 Scotland County $13,570,841
12 Stanly County $13,731,951
13 Stokes County $12,719,108
14 Surry County $10,800,912

15 Swain County $10,615,809
16 Thomasville City $ 1,796,180
17 Transylvania County $10,895,356
18 Tyrrell County $10,313,374
19 Union County $20,751,542
20 Vance County $13,614,718

21 Wake County $52,215,430
22 Warren County $10,668,056
23 Washington County $10,703,586
24 Watauga County $11,217,518
25 Wayne County $19,103,192
26 Weldon City $ 1,891,823
27 Whiteville City $ 4,312,611

28 Wilkes County $14,016,757
29 Wilson County $14,881,132
30 Yadkin County $12,532,520
31 Yancey County $10,572,504
32
33 SECTION 39.2.(i) There is created within the Office of State Budget and
34 Management theK-12 BuildingFundas aninterest-bearingcapital project fund.Atthebeginning

35 of each fiscal year, the Office of State Budget and Management shall transfer an amount equal
36 to the amount allocated for K-12 capital projects in the most recent Current Operations
37 Appropriations Act to the K-12 Building Fund. Proceeds disbursed from the Fund shall be used
38 for new construction or rehabilitation of existing facilities, repairs and renovations, building of
39 technology infrastructure, and the purchase of measures to ensure building security. Projects for
40 facilitiesforcentralized administration,trailers,relocatableclassrooms, or mobileclassrooms are

41 not eligible for funding. Any items purchased with such proceeds and installed or replaced as
42 part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend
43 the life of the facilityby at least 10 years once renovated or rehabilitated. As of the effective date
44 of this section, a county that is a development tier three area, as defined in G.S. 143B-437.08,
45 shall provide local matching funds from county funds, other non-State funds, or a combination
46 of these sources for such proceeds in the amount of one dollar ($1.00) of local matching funds
47 for every one dollar ($1.00) of such proceeds. No matching funds shall be required for proceeds

48 intended for rehabilitation of existing facilities and repairs and renovations.
49 Each local school administrative unit, along with the corresponding board of county
50 commissioners, shall jointly submit to the Department of Public Instruction a plan for the
51 expenditure of proceeds allocated to it under this section. The Department of Public Instruction

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1 shall develop a prioritylist of projects and capital needs to administer the proceeds from the K-12
2 BuildingFund and shall prioritizeprojects accordingto greatest needandthe abilityfordisbursed
3 funds to be expended and projects completed expeditiously. After the Department of Public
4 Instruction determines that a local school administrative unit's planned expenditure of part or all
5 of the proceeds allocated to it is within the purposes provided in this section, the Office of State
6 Budget and Management shall make the proceeds to which the plans apply available to the local
7 school administrative unit, based upon the priority list. Each local school administrative unit

8 receiving the proceeds allocated pursuant to subsection (h) of this section shall report by January
9 1, and quarterly thereafter, to the Department of Public Instruction on the projects funded from
10 those allocations, and the Department of Public Instruction shall combine the reports and submit
11 them in accordance with G.S. 143C-8-14. Allocations from the fund shall not be used to retire
12 debt issued or authorized prior to July 1, 2019. The amount distributed to any single local school
13 administrative unit shall not exceed the amount listed in the allocation schedule in subsection (h)
14 of this section. Interest credited to the K-12 Building Fund shall revert to the State Capital and

15 Infrastructure Fund.
16 SECTION 39.2.(j) There is allocated from the State Capital and Infrastructure Fund
17 the following amounts for capital improvement projects at community colleges in this State in
18 the aggregate amount of four hundred million dollars ($400,000,000). Funds allocated pursuant
19 to this section shall be used for the purpose of issuing allotted proceeds to community colleges
20 for new construction or rehabilitation of existing facilities and repairs and renovations in

21 accordance with the following:
22
23 Community College Proceeds Allotment
24 Alamance CC $ 7,938,704
25 Asheville-Buncombe TCC $ 8,265,643
26 Beaufort County CC $ 4,149,414
27 Bladen CC $ 3,520,119

28 Blue Ridge CC $ 2,905,574
29 Brunswick CC $ 2,278,736
30 Caldwell CC and TI $ 6,909,954
31 Cape Fear CC $ 9,986,372
32 Carteret CC $ 3,375,700
33 Catawba Valley CC $ 8,655,880
34 Central Carolina CC $10,031,233

35 Central Piedmont CC $20,000,000
36 Cleveland CC $ 7,598,247
37 Coastal Carolina CC $ 8,460,455
38 College of the Albemarle $ 6,376,529
39 Craven CC $ 5,765,056
40 Davidson County CC $ 6,755,089

41 Durham TCC $ 6,188,478
42 Edgecombe CC $ 5,417,837
43 Fayetteville TCC $20,000,000
44 Forsyth TCC $14,572,113
45 Gaston College $ 9,009,858
46 Guilford TCC $19,525,968
47 Halifax CC $ 2,996,526

48 Haywood CC $ 2,105,434
49 Isothermal CC $ 5,007,321
50 James Sprunt CC $ 3,144,017
51 Johnston CC $ 5,111,793

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1 Lenoir CC $11,826,322
2 Martin CC $ 2,190,242
3 Mayland CC $ 3,829,850
4 McDowell TCC $ 2,173,649
5 Mitchell CC $ 3,397,210
6 Montgomery CC $ 1,860,231
7 Nash CC $ 7,753,111

8 Pamlico CC $ 1,222,332
9 Piedmont CC $ 3,001,442
10 Pitt CC $14,535,241
11 Randolph CC $ 5,418,451
12 Richmond CC $ 7,526,958
13 Roanoke Chowan CC $ 2,217,281
14 Robeson CC $ 6,555,976

15 Rockingham CC $ 4,407,523
16 Rowan-Cabarrus CC $12,614,170
17 Sampson CC $ 5,203,976
18 Sandhills CC $ 4,970,448
19 Southeastern CC $ 6,701,009
20 South Piedmont CC $ 5,560,411

21 Southwestern CC $ 5,020,226
22 Stanly CC $ 5,610,190
23 Surry CC $ 7,888,312
24 Tri-County CC $ 2,055,656
25 Vance-Granville CC $ 7,394,217
26 Wake TCC $20,000,000
27 Wayne CC $ 9,149,360

28 Western Piedmont CC $ 3,947,229
29 Wilkes CC $ 5,514,320
30 Wilson CC $ 4,402,607
31
32 SECTION 39.2.(k) There is created within the Community Colleges System Office
33 the Community Colleges Building Fund as an interest-bearing capital project fund. At the
34 beginning of each fiscal year, the Office of State Budget and Management shall transfer an

35 amount equal to the amount allocated for community college capital projects in the most recent
36 Current Operations Appropriations Act to the Community Colleges Building Fund. Proceeds
37 disbursed from the Fund shall be used for new construction or rehabilitation of existing facilities,
38 repairs and renovations, building of technology infrastructure, and the purchase of measures to
39 ensure building security. Projects for facilities for centralized administration, trailers, relocatable
40 classrooms, or mobile classrooms are not eligible for funding. Any items purchased with such

41 proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life
42 of at least 10 years or must extend the life of the facility by at least 10 years once renovated or
43 rehabilitated.TheCommunityColleges System Officeshall develop a prioritylist of projects and
44 capital needs to administer the proceeds from the Community Colleges Building Fund and shall
45 prioritize allocation of funds among projects for new construction and repairs and renovations
46 by ranking the projects for the various community colleges according to greatest need and the
47 ability for disbursed funds to be expended and projects completed expeditiously.

48 As of the effective date of this section, a county that is a development tier three area,
49 as defined in G.S. 143B-437.08, shall provide local matching funds from county funds, other
50 non-State funds, or a combination of these sources for such proceeds in the amount of one dollar
51 ($1.00) of local matching funds for every one dollar ($1.00) of such proceeds. The provisions of

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1 G.S. 115D-31, or any other provision of law permitting prior expenditures to be used for match
2 purposes, do not apply for purposes of meeting the matching funds requirements of this section.
3 For rehabilitation of existing facilities and repairs and renovations, community colleges are not
4 required to match proceeds allocated in this section. Each community college receiving the
5 proceeds allocated pursuant to subsection (j) of this section shall report by January 1, and
6 quarterlythereafter, to the CommunityColleges System Office on the projects funded from those
7 allocations, and the Community Colleges System Office shall combine the reports and submit

8 them in accordance with G.S. 143C-8-14. Allocations from the fund shall not be used to retire
9 debt issued or authorized prior to July 1, 2019. The amount distributed to any single community
10 college shall not exceed the amount listed in the allocation schedule in subsection (j) of this
11 section. Interest credited to the Community Colleges Building Fund shall revert to the State
12 Capital and Infrastructure Fund.
13 SECTION 39.2.(l) Notwithstanding the application and prioritization requirements
14 in subsection (k) of this section, of the funds allocated to the CommunityColleges System Office

15 for the 2019-2020 fiscal year, the Office shall distribute the following amounts for the following
16 community colleges and projects:
17 (1) Cleveland Community College:
18 $500,000–Wright Complex
19 $2,000,000–Advanced Manufacturing Facility
20 (2) Carteret Community College:

21 $125,000–Aquaculture Facility
22 (3) Edgecombe Community College:
23 $2,500,000–Training Center
24 (4) Wayne Community College:
25 $100,000–Repairs and Renovations
26 (5) South Piedmont Community College:
27 $3,500,000–Aseptic Training Center

28 The funds distributed pursuant to this subsection shall be deducted from the total
29 allocation for each of the listed community colleges as provided in subsection (k) of this section.
30 The disbursements listed in this subsection shall not be deemed to increase the total allocation
31 provided in subsection (k) of this section. No matching funds shall be required for any of the
32 disbursements listed in this subsection.
33 SECTION 39.2.(m) The Department of Administration shall select land located in
34 Granville County suitable for the relocation of the Department of Health and Human Services

35 facilities at the Dix Campus in Raleigh.
36
37 SIX-YEAR INTENDED PROJECT ALLOCATION SCHEDULE
38 SECTION39.3. It is the intent oftheGeneral Assemblyto fundcapital improvement
39 projects on a cash flow basis and to plan for future project funding based upon projected
40 availabilityin theStateCapital and Infrastructure Fund.Nothingin this sectionshall beconstrued

41 (i) to appropriate funds or (ii) as an obligation by the General Assembly to appropriate funds for
42 the projects listed in future years. The following schedule lists capital improvement projects that
43 will begin or be completed in fiscal years outside of the 2019-2021 fiscal biennium and estimated
44 amounts (in thousands) needed for completion of those projects:
45
46 Project Code FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 FY24-25
47

48 DEQ19-1 – 3,000.8 7,502 12,003.2 7,502 –
49 DOA19-1 17,000 54,000 54,500 54,000 64,500 –
50 DNCR19-1 20,000 25,000 15,000 – – –
51 DNCR19-4 – 10,014.5 10,000 – – –

Page 336 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 DNCR19-5 – – – 10,000 10,000 –
2 DNCR19-6 – – 1,500 3,400 – –
3 DNCR19-7 1,125 1,125 1,125 1,125 – –
4 DNCR19-11 – – – 4,500 – –
5 UNC/ECU19-1 15,000 13,000 7,000 30,000 80,000 70,000
6 UNC/ECS19-1 3,200 8,000 12,080 8,000 – –
7 UNC/NCC19-1 810 2,025 3,240 2,025 – –

8 UNC/NCS19-1 14,000 21,000 25,000 20,000 – –
9 UNC/CLT19-1 4,500 11,250 18,000 11,250 – –
10 UNC/GRE19-1 – 10,000 26,000 25,000 23,000 –
11 UNC/PEM19-1 6,500 20,000 25,000 20,000 19,500 –
12 UNC/WSS19-1 – – – 6,100 9,000 –
13 DG19-4 12,100 3,000 14,400 16,500 – –
14 K12 281,340.3 172,502.3 53,805.4 101,566.7 96,135.2 125,795.2

15 CC 56,268.1 34,500.5 14,561.1 16,513.3 30,019.2 39,280.9
16
17 WATER RESOURCES DEVELOPMENT PROJECTS
18 SECTION 39.4.(a) The Department of Environmental Quality shall allocate funds
19 for water resources development projects in accordance with the schedule that follows. The
20 amounts set forth in the schedule include funds appropriated in this act for water resources

21 development projects and funds carried forward from previous fiscal years in accordance with
22 subsection (b) of this section. These funds will provide a State match for an estimated thirty-two
23 million three hundred fifty-five thousand dollars ($32,355,000) in federal funds.
24
25 Name of Project 2019-2020
26
27 (1) Princeville Flood Damage Reduction (Pre-Constr./Design) $1,400,000

28 (2) Carolina Beach CSRM –
29 (3) Kure Beach CSRM 14,000
30 (4) Wrightsville Beach CSRM –
31 (5) Ocean Isle CSRM –
32 (6) Planning Assistance to Communities 38,000
33 (7) Wilmington Harbor DA Maintenance 6,550,000
34 (8) Morehead City Maintenance 1,500,000

35 (9) Surf City/North Topsail CSRM (Pre-Constr./Design) 148,000
36 (10) West Onslow CSRM (Pre-Constr./Design) 148,000
37 (11) NRCS EQIP/Stream Restoration 1,500,000
38 (12) State-Local Projects (WRD Grant Pgm.) 2,320,000
39 (13) Bogue Banks CSRM –
40 (14) Neuse River-Goldsboro Sec. 1135, CAP, Project Mods. (50/50) 333,000

41 (15) Concord Streams, Sec. 206, CAP, Ecosystem Restoration,
42 Stricker Branch, Constr. (65/35) 619,000
43 (16) Manteo Old House Channel, Sec. 204, CAP, Design Comp. (65/35) 73,000
44 (17) Lumberton 205, CAP, Flood Damage Reduction (50/50) 125,000
45 (18) B. Everette Jordan Reservoir Water Supply 119,000
46 (19) Swannanoa Flood Mitigation Project 637,000
47 (20) North Topsail Beach Shoreline Protection – Phase 2 500,000

48 TOTALS $16,024,000
49
50 SECTION 39.4.(b) It is the intent of the General Assembly that funds carried
51 forward from previous fiscal years be used to supplement the eleven million seven thousand

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1 dollars ($11,007,000) allocated for water resources development projects in this section.
2 Therefore, the following funds carried forward from previous fiscal years shall be used for the
3 following projects:
4
5 Name of Project Amount Carried Forward
6
7 (1) Princeville Flood Damage Reduction (Pre-Constr./Design) $1,400,000

8 (2) Morehead City Maintenance 1,500,000
9 (3) Kure Beach CSRM 315,000
10 (4) Wrightsville Beach CSRM 2,206,000
11 (5) Carolina Beach CSRM 686,000
12 (6) Ocean Isle CSRM 1,040,000
13 (7) Planning Assistance to Communities 38,000
14 (8) Surf City/North Topsail CSRM (Pre-Constr./Design) 255,000

15 (9) West Onslow CSRM (Pre-Constr./Design) 220,000
16 (10) Neuse River-Goldsboro Sec. 1135, CAP, Project Mods. (50/50) 333,000
17 (11) Concord Streams, Sec. 206, CAP, Ecosystem Restoration,
18 Stricker Branch, Constr. (65/35) 1,023,000
19 (12) Manteo Old House Channel, Sec. 204, CAP, Design Comp. (65/35) 2,219,000
20 (13) Lumberton 205, CAP, Flood Damage Reduction (50/50) 125,000

21 (14) B. Everette Jordan Reservoir Water Supply 119,000
22 (15) North Topsail Beach Shoreline Protection – Phase 2 1,500,000
23 TOTALS $12,979,000
24
25 SECTION 39.4.(c) Where the actual costs are different from the estimated costs
26 under subsection (a) of this section, the Department may adjust the allocations among projects
27 asneeded. Ifanyprojectsfundedundersubsection(a)ofthissectionaredelayedandthebudgeted

28 State funds cannot be used during the 2019-2020 fiscal year or if the projects funded under
29 subsection (a) of this section are accomplished at a lower cost, the Department may use the
30 resulting fund availability to fund any of the following:
31 (1) U.S. Army Corps of Engineers project feasibility studies.
32 (2) U.S. Army Corps of Engineers projects whose schedules have advanced and
33 require State matching funds in the 2019-2020 fiscal year.
34 (3) State-local water resources development projects.

35 Funds subject to this subsection that are not expended or encumbered for the purposes
36 set forth in subdivisions (1) through (3) of this subsection shall revert to the State Capital and
37 Infrastructure Fund at the end of the 2019-2020 fiscal year.
38 SECTION 39.4.(d) The Department shall submit semiannual reports on the use of
39 these funds to the Joint Legislative Oversight Committee on Agriculture and Natural and
40 Economic Resources, the Fiscal Research Division, and the Office of State Budget and

41 Management on or before March 1 and September 1. Each report shall include all of the
42 following:
43 (1) All projects listed in this section.
44 (2) The estimated cost of each project.
45 (3) The date that work on each project began or is expected to begin.
46 (4) The date that work on each project was completed or is expected to be
47 completed.

48 (5) The actual cost of the project.
49 The semiannual reports also shall show those projects advanced in schedule, those
50 projects delayed in schedule, and an estimate of the amount of funds expected to revert to the
51 State Capital and Infrastructure Fund.

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1 SECTION 39.4.(e) Notwithstanding any provision of law to the contrary, funds
2 appropriated for a water resources development project shall be used to provide no more than
3 fifty percent (50%) of the nonfederal portion of funds for the project. This subsection applies to
4 funds appropriated in this act and to funds appropriated prior to the 2019-2021 fiscal biennium
5 that are unencumbered and proposed for reallocation to provide the nonfederal portion of funds
6 for water resources development projects. The limitation on fund usage contained in this
7 subsection applies onlyto projects in which a local government or local governments participate.

8 SECTION 39.4.(f) Notwithstanding subsection (e) of this section, of the funds
9 allocated for State-Local Projects in this section, the Department shall allocate the following
10 sums for the following projects, for which no local match is required:
11 (1) One hundred thousand dollars ($100,000) for the French Broad Paddle Trail.
12 (2) One hundred thousand dollars ($100,000) for the Watauga Paddle Trail.
13 (3) One hundred fifty thousand dollars ($150,000) for Green River access.
14 (4) One hundred thousand dollars ($100,000) for removal of Wards Mill Dam in

15 Watauga County.
16 (5) One hundred thousand dollars ($100,000) for Scotland CountySoil and Water
17 District for repairs to Fair Lake Dam.
18
19 NON-GENERAL FUND CAPITAL IMPROVEMENT AUTHORIZATIONS
20 SECTION 39.5.(a) The General Assembly authorizes the following capital projects

21 to be funded with receipts or from other non-General Fund and non-State Capital and
22 Infrastructure Fund sources available to the appropriate department:
23 Amount of Non-General Fund
24 Name of Project Funding Authorized
25 FY 2019-2020 FY 2020-2021
26
27 Department of Natural and Cultural Resources

28 NC Zoo–Gift Shop Material Warehouse $300,000 –
29 Department of Agriculture and Consumer Services
30 State Farmers Market Restaurant 1,250,000 –
31 Piedmont Triad Farmers Market Restaurant 200,000 –
32 State Fairgrounds Improvements 1,000,000 –
33 State Research Stations–Irrigation Improvements 200,000 –
34 State Research Stations–Pesticide Storage & Mixing 200,000 –

35 State Research Stations–Poultry Facilities Improvements1,500,000 –
36 State Research Stations–Animal Feed & Grain Storage 250,000 –
37 Department of Military and Veteran Affairs
38 Fayetteville Veterans Home Sprinklers 3,553,000 –
39 Wake County Veterans Home 5,208,500 –
40 Forsyth County Veterans Home 5,208,500 –

41 Department of Public Safety
42 Stonewall Jackson YDC Classroom & Kennel 677,000 –
43 Correction Enterprises–
44 Lanesboro Sewing Plant 388,877 –
45 Scotland Food Packaging Plant 248,451 –
46 Wildlife Resources Commission
47 Land Acquisition 8,000,000 8,000,000

48 McKinney Lake Residence 275,000 –
49 McCoy Road 325,000 –
50 New Bern Depot Boat Storage 250,000 –
51 Sandhills Depot Pole Shed 175,000 –

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1 District 7 Storage Building–Wilkesboro 125,000 –
2 Sykes Depot Greenhouse – 150,000
3 New Shooting Ranges – 1,000,000
4 Marion Aquaculture Building 330,000 –
5 McKinney Hatchery Building – 650,000
6 Caswell Depot Storage Building – 400,000
7 Rhems Depot Storage Building – 200,000

8 Troy Depot Replacement – 750,000
9 Boating Access Repair & Renovation 900,000 900,000
10
11 TOTAL AMOUNT OF NON-GENERAL
12 FUND CAPITAL PROJECTS
13 AUTHORIZED $42,280,359 $24,014,960
14

15 SECTION 39.5.(b) From funds deposited with the State Treasurer in a capital
16 improvement account to the credit of the Department of Agriculture and Consumer Services
17 pursuant to G.S. 146-30, the sum of seventy-five thousand dollars ($75,000) for the 2019-2020
18 fiscal year and the sum of seventy-five thousand dollars ($75,000) for the 2020-2021 fiscal year
19 shall be transferred to the Department of Agriculture and Consumer Services to be used,
20 notwithstandingG.S. 146-30, bythe Department forits plant conservation program underArticle

21 19B of Chapter 106 of the General Statutes for costs incidental to the acquisition of land, such as
22 land appraisals, land surveys, title searches, and environmental studies, and for the management
23 of the plant conservation program preserves owned by the Department.
24
25 NATIONAL GUARD PROJECTS
26 SECTION 39.6.(a) The Office of State Budget and Management may allocate from
27 the State Capital and Infrastructure Fund to the Department of Public Safety funds needed to

28 provide a State match for federal funds for projects included in the latest Armory and Facilities
29 Development Plan developed pursuant to G.S. 127A-210, or as needed for repairs of facilities
30 damaged during Hurricane Florence, and designated by the Adjutant General of the North
31 Carolina National Guard in an amount not exceeding two million dollars ($2,000,000) during the
32 2019-2020 fiscal year.
33 SECTION 39.6.(b) No later than June 1, 2021, and every two years thereafter, the
34 Department shall report on the use of these funds to the Joint Legislative Commission on

35 Governmental Operations, the Fiscal Research Division of the General Assembly, and the Office
36 of State Budget and Management. Each report shall include all of the following:
37 (1) The status of all projects undertaken pursuant to this section.
38 (2) The estimated total cost of each project.
39 (3) The date that work on each project began or is expected to begin.
40 (4) The date that work on each project was completed or is expected to be

41 completed.
42 (5) The actual cost of each project, including federal matching funds.
43 (6) Facilities planned for closure or reversion.
44 (7) A list of projects advanced in schedule, those projects delayed in schedule,
45 and an estimate of the amount of funds expected to revert to the General Fund.
46
47 REPORTING ON CAPITAL PROJECTS

48 SECTION 39.7.(a) Article 8 of Chapter 143C of the General Statutes is amended by
49 adding the following new section to read:
50 § 143C-8-14. Capital project reporting.
51 (a) Definitions. – The following definitions apply in this section:

Page 340 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (1) Capital project. – Any capital improvement, as that term is defined in
2 G.S. 143C-1-1, that is not complete and that is funded in whole or in part with
3 State funds, including receipts, non–General Fund sources, or statutorily or
4 constitutionally authorized indebtedness of any kind.
5 (2) Construction phase. – The status of a particular capital project as described
6 using the terms customarily employed in the design and construction
7 industries.

8 (3) New capital project. – A capital project that has been authorized by an act of
9 the General Assembly in the most recent Current Operations Appropriations
10 Act.
11 (b) Reporting. – The following reports are required:
12 (1) ByOctober1andApril1ofeach year,thefollowingreportsshallbesubmitted
13 to the Joint Legislative Oversight Committee on Capital Improvements and
14 the Fiscal Research Division:

15 a. The Office of State Budget and Management shall report on the status
16 of capital projects funded from the State Capital and Infrastructure
17 Fund or other State funds.
18 b. Each State agency shall report on the status of agency capital projects
19 funded from non-State funds.
20 (2) Beginning January 1, and quarterly thereafter, each State agency shall report

21 on the status of agency capital projects to the Office of State Budget and
22 Management.
23 (c) Report Contents. – The reports required bysubsection (b) of this section shall include
24 at least the following information about every agency capital project:
25 (1) The current construction phase of the project.
26 (2) The anticipated time line from the current construction phase to project
27 completion.

28 (3) Information about expenditures that have been made in connection with the
29 project, regardless of source of the funds expended.
30 (4) Information about the adequacy of funding to complete the project, including
31 estimates of how final expenditures will relate to initial estimates of
32 expenditures, and whether or not scope reductions will be necessary in order
33 to complete the project within its budget.
34 (5) For new capital projects only, an estimate of the operating costs for the project

35 for the first five fiscal years of its operation.
36 (d) Additional Requirements. – In addition to the other reports required by this section,
37 the State Construction Office shall submit a report on April 1 of each year to the Joint Legislative
38 Oversight Committee on Capital Improvements and the Fiscal Research Division that contains
39 the following:
40 (1) The status of the Facilities Condition Assessment Program (FCAP), including

41 (i) summaryinformation about the average length of time that passes between
42 FCAP assessments for an average State building, (ii) detailed information
43 about when the last FCAP assessment was for each State building complex,
44 and (iii) detailed information about the condition and repairs and renovations
45 needs of each State building complex.
46 (2) The status of plan review, approval, and permitting for each State capital
47 improvement project and community college capital improvement project

48 over which the Office exercises plan review, approval, and permitting
49 authority, including (i) summaryinformation about theworkloadofthe Office
50 during the previous quarter, including information about the average length of
51 timespent bytheStateConstructionOffice oneachmajorfunctionit performs

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1 that is related to capital project approval, and (ii) detailed information about
2 the amount of time spent engaged in those functions for each project that the
3 State Construction Office worked on during the previous quarter.
4
5 STATUTORY CHANGES–CAPITAL
6 SECTION 39.8.(a) G.S. 143C-8-13 is amended by adding the following new
7 subsection to read:

8 (d) In making campus allocations of funds allocated to the Board of Governors of The
9 University of North Carolina for the purposes described in subsection (a) of this section, the
10 Board of Governors shall negatively weight the availability of non-State resources and
11 carryforward funds available for repair and renovations and shall include information about the
12 manner in which this subsection was complied with in any report submitted pursuant to this
13 section.
14 SECTION 39.8.(b) G.S. 143C-8-13 reads as rewritten:

15 § 143C-8-13. Repairs and Renovations.
16 (a) Use of Funds. – Funds Except as otherwise provided for in this section, funds for
17 repairs and renovations shall be available for expenditure only upon an act of appropriation by
18 the General Assembly. Funds appropriated for repairs and renovations shall be used only for
19 State facilities and related infrastructure that are supported from the General Fund or the State
20 Capital and Infrastructure Fund and for Department of Information Technology facilities and

21 related infrastructure. Funds appropriated for repairs and renovations projects shall not be used
22 for new construction or the expansion of the building area (sq. ft.) of an existing facility unless
23 required in order to comply with federal or State codes or standards. Allowable projects include
24 any of the following:
25 …
26 (c) Notwithstanding any provision of G.S. 143C-8-7 to the contrary, the chancellor of a
27 constituent institution of The University of North Carolina may pay for projects for repairs and

28 renovations with funds available to the constituent institution according to the following:
29 (1) The project meets all of the following requirements:
30 a. The total project costs do not exceed one million dollars ($1,000,000).
31 b. The project is one of the types set forth in subdivisions (1) through
32 (13)ofsubsection(a)ofthis section,regardless ofwhethertherelevant
33 facilities and related infrastructure are supported from the General
34 Fund or the State Capital and Infrastructure Fund.

35 (2) The constituent institution reports on projects undertaken pursuant to this
36 subsection to the Board of Governors of The Universityof North Carolina and
37 the Fiscal Research Division on a quarterly basis. The report shall include all
38 of the following information for each project:
39 a. The facility at which the project is being undertaken.
40 b. The nature and scope of the project.

41 c. The source of funds for the project.
42 d. The category of projects set forth in subsection (a) of this section that
43 the project falls within.
44 (3) Any funds from a General Fund appropriation that are contractually obligated
45 for a project pursuant to this subsection shall not revert at the end of the fiscal
46 year but shall remain available to fund the completion of the project.
47 SECTION 39.8.(c) G.S. 143C-8-7 reads as rewritten:

48 § 143C-8-7. When a State agency may begin a capital improvement project.
49 (a) No State agency may expend funds for the construction or renovation of any capital
50 improvement project except as needed to comply with this Article or otherwise authorized bythe
51 General Assembly. Funds that become available by gifts, excess patient receipts above those

Page 342 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 budgeted at the University of North Carolina Hospitals at Chapel Hill, federal or private grants,
2 receipts becoming a part of special funds by act of the General Assembly, or any other funds
3 available to a State agency or institution may be utilized for advanced planning through the
4 working drawing phase of capital improvement projects, upon approval of the Director of the
5 Budget.
6 (b) Notwithstanding any other provision of law to the contrary, the Department of
7 Agriculture and Consumer Services is authorized to utilize the types of funds described in

8 subsection (a) of this section to build equipment structures that meet the description contained in
9 G.S. 143-138(b4)(1)c. on an as-needed basis, provided that the total project cost does not exceed
10 one hundred twenty-five thousand dollars ($125,000).
11 SECTION 39.8.(d) G.S. 143C-8-12(a) reads as rewritten:
12 (a) UniversityProjects. – Notwithstanding anyother provision of this Chapter, the Board
13 of Governors of The University of North Carolina may approve any of the following:
14 (1) ExpenditurestoplanacapitalimprovementprojectofTheUniversityofNorth

15 Carolina, the planning for which is to be funded entirely with non-General
16 Fund money.
17 (2) Expenditures for a capital improvement project of The University of North
18 Carolina that is to be funded and operated entirely with non-General Fund
19 money.
20 (3) Achangeinthescopeofanypreviouslyapprovedcapitalimprovementproject

21 of The Universityof North Carolina provided that both the project and change
22 in scope are funded entirely with non-General Fund money.
23 Nothing in this subsection shall be construed to prohibit expenditures for planning for a
24 project that has been authorized byan act of the General Assembly and funded with an allocation
25 from the State Capital and Infrastructure Fund.
26 SECTION 39.8.(e) G.S. 143C-3-3(b) reads as rewritten:
27 (b) University of North Carolina System Request. – Notwithstanding the requirement in

28 G.S. 116-11thattheBoardofGovernorsprepareaunifiedbudgetrequestforalloftheconstituent
29 institutions of The University of North Carolina, budget requests of the University shall be
30 subject to all of the following:
31 (1) Repairs and renovations requests, capital fund requests, and information
32 technology requests shall comply with subsections (c), (d), and (e) of this
33 section.
34 (2) The University of North Carolina shall not make a capital funds request

35 proposing to construct a new facility, expand the building area (square feet)
36 of an existing facility, or rehabilitate an existing facility to accommodate new
37 or expanded uses unless the University has completed advanced planning
38 through schematic design of the project with funds other than General Fund
39 appropriations. For purposes of this subdivision, funds other than General
40 Fund appropriations includes funds carried forward from one fiscal year to

41 another pursuant to G.S. 116-30.3 and G.S. 116-30.3B.
42 Nothing in this subsection shall be construed to prohibit expenditures for planning for a
43 project that has been authorized byan act of the General Assembly and funded with an allocation
44 from the State Capital and Infrastructure Fund.
45 SECTION 39.8.(f) G.S. 143C-4-3.1 reads as rewritten:
46 § 143C-4-3.1. State Capital and Infrastructure Fund.
47 …

48 (b) Creation and Source of Funds. – There is established in the General Fund the State
49 Capital and Infrastructure Fund, hereinafter referred to as the Fund. The Fund shall be
50 maintained as a special fund and administered by the Office of State Budget and Management to
51 carry out the provisions of this section. With the exception of debt service obligations,

H966-PCCS30485-LRxr-3 House Bill 966 Page 343 General Assembly Of North Carolina Session 2019

1 appropriations from the Fund may be administered by other State agencies as deemed necessary
2 by the Office of State Budget and Management. Interest accruing from the monies in the Fund
3 shall be credited to the Fund. The Fund shall consist of the following sources of funding:
4 (1) One-fourth of any unreserved fund balance, as determined on a cash basis,
5 remaining in the General Fund at the end of each fiscal year.
6 (2) Four percent (4%) of the net State tax revenues that are deposited in the
7 General Fund during the fiscal year.

8 (3) All monies appropriated bythe General Assemblyfor the purposes of General
9 Fund capital improvements, as defined in G.S. 143C-1-1(d).
10 (4) All interest and investment earnings received on monies in the Fund.
11 (5) Any other funds, as directed by the General Assembly.
12 …
13 (e) Use of Funds. – Monies in the Fund shall first be used to meet the debt service
14 obligations of the State. supported by the General Fund. In addition to meeting the State's debt

15 service obligations, obligations supported by the General Fund, monies in the Fund may be used
16 for the following purposes:
17 (1) New State and The University of North Carolina capital projects governed
18 pursuant to Article 8 of Chapter 143C of the General Statutes.
19 (2) Repair and renovation of existing capital assets, as provided in
20 G.S. 143C-8-13.

21 (3) Broadband infrastructure projects funded through appropriations to the
22 Growing Rural Economies with Access to Technology Fund established in
23 G.S. 143B-1373(b).
24 (4) Projects and grants identified in the Current Operations Appropriations Act.
25 (f) Funds Available Only Upon Appropriation. – Funds reserved to the Fund shall be
26 available for expenditure only upon an act of appropriation by the General Assembly.
27 (g) Unexpended Funds. – Funds appropriated for a project that are unspent and

28 unencumbered upon completion of the project shall revert to the Fund.
29 SECTION 39.8.(g) The recurring appropriation to the Growing Rural Economies
30 with Access to Technology Fund from the State Capital and Infrastructure Fund shall expire on
31 June 30, 2029.
32 SECTION 39.8.(h) G.S. 143-341(3)b1. reads as rewritten:
33 b1. To certify that a statement of needs pursuant to G.S. 143C-3-3, other
34 than for a project of The University of North Carolina for which

35 advance planning has not been completed, is feasible. For purposes of
36 this sub-subdivision, feasible means that the proposed project is
37 sufficiently defined in overall scope; building program; site
38 development; detailed design, construction, and equipment budgets;
39 and comprehensive project scheduling so as to reasonably ensure that
40 it may be completed with the amount of funds requested. At the

41 discretion of the General Assembly, advanced planning funds may be
42 appropriated in support of this certification. This sub-subdivision shall
43 not apply to requests for appropriations of less than one hundred
44 thousand dollars ($100,000).below the formal project limit, as set by
45 the State Building Commission.
46
47 GROWING G.R.E.A.T. PROGRAM

48 SECTION 39.10.(a) G.S. 143B-1373 reads as rewritten:
49 § 143B-1373. Growing Rural Economies with Access to Technology (GREAT) program.
50 (a) As used in this section, the following definitions apply:
51 …

Page 344 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 (6) Eligible project. – An eligible project is a discrete and specific project located
2 in an unserved area of an economically distressed county seeking to provide
3 broadband service to homes, businesses, and community anchor points not
4 currently served. Eligible projects do not include middle mile, backhaul, and
5 other similar projects not directed at broadband service to end users. If a
6 contiguous project area crosses from one eligible county into one or more
7 eligible adjacent counties, for the purposes of this section, the project shall be

8 deemed to be located in the county where the greatest number of unserved
9 households are proposed to be served.
10 (7) Eligible recipient. – Eligible grant recipients are private providers of
11 broadband services, including cooperatively organized entities, or any
12 partnerships formed between cooperatively organized entities, private
13 providers, or any combination thereof, on or after January 1, 2018.thereof.
14 …

15 (8a) Infrastructure. – Existing facilities, equipment, materials, and structures that
16 an entityhas installedeitherforits corebusiness orpublicenterprisepurposes.
17 Examples include, but are not limited to, copper wire, coaxial cable, optical
18 cable, loose tube cable, communication huts, conduits, vaults, patch panels,
19 mounting hardware, poles, generators, battery and cabinet, network nodes,
20 network routers, network switches, microwave relay, microwave receivers,

21 site routers, outdoor cabinets, towers, easements, rights-of-way, and buildings
22 or structures owned by the entity that are made available for location or
23 colocation purposes.
24 (9) Infrastructure costs. – Costs directly related to the construction of broadband
25 infrastructure for the extension of broadband service for an eligible project,
26 including installation, acquiring or updating easements, equipment, fiber,
27 construction, backhaul infrastructure, and testing costs. The term does not

28 include overhead or administrative costs.
29 …
30 (11a) Partnership. – A project for which an Internet service provider affirms that a
31 formalized agreement exists between the provider and one or more
32 unaffiliated partners where the partner is one of the following:
33 a. A separate Internet service provider.
34 b. A nonprofit or not-for-profit, or a for-profit subsidiary of either, and

35 the Internet service provider is being allowed access and use of the
36 partner's infrastructure, on special terms and conditions designed to
37 facilitate the provision of broadband services in unserved areas, or is
38 utilizing a financial contribution provided by one or more partners
39 where the total contribution is not less than ten percent (10%), but not
40 more than forty-nine percent (49%), of the match required by this

41 section. A county that is not engaged in providing consumer
42 broadband service may qualify as a nonprofit for the purpose of this
43 section.
44 …
45 (12a) Prospective broadband recipient. – A household, home, business, community
46 anchor point, agricultural operation, or agricultural processing facility that is
47 currently unserved and is identified in an application submitted in accordance

48 with this section.
49 …
50 (c) Project areas comprised of census blocks, or portions thereof, within which a
51 broadband provideris receivingStateor federal matchingfundsto deploytechnologicallyneutral

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1 scalable broadband service within the next 18 months are ineligible for the GREAT program. It
2 is essential for the Office to know the location of census blocks, or portions thereof, comprising
3 these areas so it can determine project eligibility. A private provider receiving State or federal
4 matching Universal Service or Connect America Phase II, or nonfederal funds to deploy
5 broadband service within may qualify such an area shall, for protection by submitting within 60
6 days of the effective date of this section, submit only application period a listing of the census
7 blocks, or portions thereof, comprising each of its the federally funded project areas meeting this

8 requirement and nothing more to the Office. In future program years, the cutoff date for
9 submitting this census block data shall be May 15. established by the Office, but shall be not less
10 than 60 days prior to the beginning date of the application period. This will enable the office to
11 update maps and advise applicants as to the unserved areas of the State that are eligible for
12 consideration in that program year. The Office shall only utilize this data to update maps of
13 census blocks to reflect these census blocks, or portions thereof, as being served. Failure on the
14 part of a provider to submit the listing of census blocks by the cutoff date shall result in those

15 areas being eligible for inclusion under this program during the upcoming program year. The
16 Office shall use the census block data provided only for mapping of unserved areas. Upon
17 expiration of the 18-month reservation period described in this subsection, a private provider that
18 has received a reservation of census blocks shall submit written documentation by April 30 of
19 the year following the program year that broadband deployment has begun or been completed in
20 the census blocks, or portions thereof, that have been deemed ineligible by the Office due to the

21 existence of a federally funded project area. Information provided to the Office pursuant to this
22 subsection is not a public record, as that term is defined in G.S. 132-1.
23 (d) Applications for grants will be submitted at times designated by the Secretary and
24 will include, at a minimum, the following information:
25 …
26 (5) An illustration or description of the area to be served and served, identifying
27 the number of homes, businesses, community anchor points, agricultural

28 operations, or agricultural processing facilities that will have access to
29 broadband as a result of the project.project, including anyavailable addresses,
30 or other identifying information satisfactory to the Office, for the foregoing.
31 In the event that the Office is unable to identifythe proposed project area with
32 specificity, the Office may require the applicant to submit additional
33 information. If construction of the proposed project would result in the
34 provision of broadband service to areas that are not eligible for funding, those

35 ineligible areas should be identified in the application along with the eligible
36 areas.
37 …
38 (d1) A provider submitting an application pursuant to this section shall bear the burden of
39 proof that the proposed area to be served can, in fact, be served using the proposed technology.
40 The burden of proof may be satisfied by the submission of data, maps, and any other information

41 satisfactory to the Office, demonstrating that the area and number of prospective broadband
42 recipients proposed to be served can be provided the minimum upload and download speeds
43 indicated in the application.
44 (e) Applications shall be made publicly available by posting on the Web site of the
45 Department of Information Technology for a period of at least 30 days prior to award. During
46 the 30-day period, any interested party may submit comments to the Secretary concerning any
47 pending application. A provider of broadband services may submit a protest of any application

48 on the grounds the proposed project covers an area that is not an eligible area under this section.
49 Protests shall be submitted in writing, accompanied by all relevant supporting documentation,
50 and shall be considered by the Office in connection with the review of the application. Upon
51 submission of evidence satisfactory to the Office that the proposed project area includes

Page 346 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 prospective broadband recipients that are served, as measured using a methodology satisfactory
2 to the Office, the Office may work with an applicant to amend an application to reduce the
3 number of unserved prospective broadband recipients in the project area to reflect an accurate
4 level of current broadband service. The Office may revise application scores in accordance with
5 amended applications. For applications with filed protests, the Secretary shall issue a written
6 decisiontotheprotestingpartyatleast15dayspriortotheapprovalofthatapplication. Following
7 a protest that is granted for a portion of the application, the Office may release to an applicant

8 the locations or areas declared ineligible. The information released to the applicant is not a public
9 record, as that term is defined under G.S. 132-1, and shall remain confidential. Any provider
10 submitting a protest shall verify that the information in the protest is accurate and that the protest
11 is submitted in good faith. The Office may deny any protest or application that contains
12 inaccurate information.
13 As a means of resolving a protest, the Office may utilize speed tests to determine if the
14 protested area or individual households or businesses currently have access to broadband service

15 as defined in this section. The Department shall publish the speed test methodology it uses to
16 assess speed levels pursuant to this section. All decisions regarding the speed test to be utilized
17 and the manner by which the speed tests are applied shall be made by the Secretary or the
18 Secretary's designee.
19 (f) The Office may consult with the Department of Commerce to determine if a
20 broadband project proposed under this section will benefit a potential economic development

21 project relevant to the proposed area outlined in the broadband project.
22 (g) Applicationsshallbescoredbaseduponasystemthatawardsasinglepointforcriteria
23 considered to be the minimum level for the provision of broadband service with additional points
24 awarded to criteria that exceed minimum levels. The Office shall score project applications in
25 accordance with the following:
26 (1) Partnership. – Projects involving partnership or affiliation by a private
27 provider with a nonprofit or not-for-profit, or a for-profit subsidiary of either

28 that is required to enable certain partnership activities, or any combination
29 thereof, shall be given five points in their application score where it is
30 documented to the satisfaction of the Office that the partnership or affiliation
31 will facilitate deployment and reduce cost per housing unit by utilizing the
32 resources, facilities, and infrastructure of the partner or where the nonprofit or
33 not-for-profit partner provides only financial support.score. For the purposes
34 ofscoringunderthis subdivision, acountythat providesaportion ofthematch

35 required by this section or that has entered into an agreement with the
36 applicant to make available its infrastructure that has been installed for the
37 county's enterprise, non-consumer broadband purposes, or any other property,
38 buildings, or structures owned bythe county, for a proposed project under this
39 section shall be considered a partnership. A county may provide a portion of
40 the match required by this section pursuant to G.S. 153A-349.60. Projects

41 involving partnerships shall be given six points in their application score.
42 (2) Unserved households. – The Office shall give additional points to projects
43 based upon the estimated number of unserved households within the eligible
44 economically distressed county, as determined by the most recent data
45 published by the Federal Communications Commission or any other
46 information available to the Office. Points shall be given to projects that will
47 be located in counties with estimated unserved households as follows:

48 Unserved Households Points Given
49 700 500 or less 1
50 700-1999501-1400 2
51 2000 and overOver 1400 3

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1 (3) Households Unserved households to be served. – The Office shall give
2 additional points to projects that will provide broadband service to based upon
3 the percentage of the total unserved households within the eligible
4 economically distressed county, as county that the project will serve. The
5 number of unserved households shall be determined by using the most recent
6 data published by the Federal Communications Commission or any other
7 information available to the Office. Points shall be given to projects that will

8 serve a percentage of unserved households within the project area as follows:
9 % Unserved Households To Be Served Points Given
10 Under 150Less than 15% 1
11 150-24915% to 25% 2
12 250 and upOver 25% 3
13 …
14 (6) Base speed multiplier. – Projects that will provide minimum download and

15 minimum upload speeds shall have the aggregate points given under
16 subdivisions (1) through (5) of this subsection multiplied by a factor at the
17 level indicated in the table below:
18 Minimum Download:
19 Minimum Upload Score Multiplier
20 At least 10:1 Mbps.Mbps. up to 25:3 Mbps. 0.95

21 25:3 Mbps. or greaterup to 100:10 Mbps. 1.35
22 100:10 Mbps. or greater 1.75
23 …
24 (i) Applications receiving the highest score shall receive priority status for the awarding
25 of grants pursuant this section. As a means of breaking a tie for applications receiving the same
26 score, the Office shall give priority to the application proposing to serve the highest number of
27 new households at the lowest cost per household. Applicants awarded grants pursuant to this

28 section shall enter into an agreement with the Office. The agreement shall contain all of the
29 elements outlined in subsection (d) of this section and any other provisions the Office may
30 require. The agreement shall contain a provision governing the time line and minimum
31 requirements and thresholds for disbursement of grant funds measured by the progress of the
32 project. Grant funds shall be disbursed only upon verification by the Office that the terms of the
33 agreement have been fulfilled according to the progress milestones contained in the agreement.
34 At project completion, the grant recipient shall certify and provide to the Office evidence

35 consistent with Federal Communications Commission attestation that either speeds greater than
36 those identified in the application guidelines or the proposed minimum upstream and minimum
37 downstreambroadbandspeedsidentifiedintheapplicationguidelines,andforwhichabasespeed
38 multiplier was awarded pursuant to subdivision (6) of subsection (g) of this section, are available
39 throughout the project area prior to any end user connections. A single grant award shall not
40 exceed two million dollars ($2,000,000). No more than one grant may be awarded per fiscal year

41 for a project in any one eligible economically distressed county.county; except that if funds
42 remain available after all top scoring projects have been awarded a grant, then the next highest
43 scoring projects may be awarded a grant even if the project is located in a county where a grant
44 has been awarded in that fiscal year provided the total award associated with that county does
45 not exceed two million dollars ($2,000,000) in that fiscal year.
46 (j) Grant recipients are required to provide matching funds based upon the application
47 scoring pursuant to this section in the following minimum amounts:

48 Score Matching Requirement
49 7.0 12.0 points or less 55%
50 Greater than 7.0, 12.0 points, but less than 14.0 17.5 poi50%
51 Greater than 14.0, but less than 21.0 17.5 points, up to 22.0 points 45%

Page 348 House Bill 966 H966-PCCS30485-LRxr-3 General Assembly Of North Carolina Session 2019

1 21.0 points or greaterGreater than 22.0 points 35%
2 Up to fifty percent (50%) of matching funds paid by the grant recipient may be comprised of
3 third-partyfundingandothergrantprograms.UniversalServiceFund, orConnectAmerica Fund,
4 or other grants awarded for broadband expansion through a separate State or federal program
5 Phase II Fund shall not be used for the required matching funds. Any other current or future
6 federal funds may be used, including any future phase of the Connect America Fund, for the
7 required matching funds within the parameters of this program.

8 ….
9 SECTION 39.10.(b) G.S. 143B-1373(a)(5) reads as rewritten:
10 (5) Eligible economically distressed county. – A county designated as a
11 development tier one or tier two area, as defined in G.S. 143B-473.08.
12 SECTION 39.10.(c) G.S. 143B-1373(i), as amended by subsection (a) of this
13 section, reads as rewritten:
14 (i) Applications receiving the highest score shall receive priority status for the awarding

15 of grants pursuant this section. As a means of breaking a tie for applications receiving the same
16 score, the Office shall give priority to the application proposing to serve the highest number of
17 new households at the lowest cost per household. Applicants awarded grants pursuant to this
18 section shall enter into an agreement with the Office. The agreement shall contain all of the
19 elements outlined in subsection (d) of this section and any other provisions the Office may
20 require. The agreement shall contain a provision governing the time line and minimum

21 requirements and thresholds for disbursement of grant funds measured by the progress of the
22 project. Grant funds shall be disbursed only upon verification by the Office that the terms of the
23 agreement have been fulfilled according to the progress milestones contained in the agreement.
24 At project completion, the grant recipient shall certify and provide to the Office evidence
25 consistent with Federal Communications Commission attestation that either speeds greater than
26 those identified in the application guidelines or the proposed upstream and downstream
27 broadband speeds identified in the application guidelines, and for which a base speed multiplier

28 wasawardedpursuanttosubdivision(6)ofsubsection(g)ofthissection, areavailablethroughout
29 the project area prior to any end user connections. A single grant award shall not exceed two
30 million dollars($2,000,000). Nomorethanone grant maybe awardedper fiscal year for aproject
31 in any one eligible economically distressed county; except that if funds remain available after all
32 top scoring projects have been awarded a grant, then the next highest scoring projects may be
33 awarded a grant even if the project is located in a county where a grant has been awarded in that
34 fiscal year provided the total award associated with that county does not exceed two million

35 dollars ($2,000,000) in that fiscal year.
36 No more than one-third of the funds appropriated to the fund established in subsection (b) of
37 this section shall be disbursed for projects located in a development tier two county.
38 SECTION 39.10.(d) G.S. 143B-1373(i), as amended by subsections (b) and (c) of
39 this section, reads as rewritten:
40 (i) Applications receiving the highest score shall receive priority status for the awarding

41 of grants pursuant this section. As a means of breaking a tie for applications receiving the same
42 score, the Office shall give priority to the application proposing to serve the highest number of
43 new households at the lowest cost per household. Applicants awarded grants pursuant to this
44 section shall enter into an agreement with the Office. The agreement shall contain all of the
45 elements outlined in subsection (d) of this section and any other provisions the Office may
46 require. The agreement shall contain a provision governing the time line and minimum
47 requirements and thresholds for disbursement of grant funds measured by the progress of the

48 project. Grant funds shall be disbursed only upon verification by the Office that the terms of the
49 agreement have been fulfilled according to the progress milestones contained in the agreement.
50 At project completion, the grant recipient shall certify and provide to the Office evidence
51 consistent with Federal Communications Commission attestation that either speeds greater than

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1 those identified in the application guidelines or the proposed upstream and downstream
2 broadband speeds identified in the application guidelines, and for which a base speed multiplier
3 wasawardedpursuanttosubdivision(6)ofsubsection(g)ofthissection,areavailablethroughout
4 the project area prior to any end user connections. A single grant award shall not exceed two
5 million dollars($2,000,000). Nomorethanone grant maybe awardedper fiscal year for aproject
6 in any one eligible economically distressed county; except that if funds remain available after all
7 top scoring projects have been awarded a grant, then the next highest scoring projects may be

8 awarded a grant even if the project is located in a county where a grant has been awarded in that
9 fiscal year provided the total award associated with that county does not exceed two million
10 dollars ($2,000,000) in that fiscal year.
11 No more than one-third one-half of the funds appropriated to the fund established in
12 subsection (b) of this section shall be disbursed for projects located in a development tier two
13 county. If the Office has not received enough grant applications for projects located in a
14 developmenttieronecountytodisburseone-halfofthefundsappropriatedtothefund established

15 in subsection (b) of this section as of March 1 of each year, then the Office may allocate any
16 unencumbered funds in the fund for projects located in a development tier two county.
17 SECTION 39.10.(e) G.S. 143B-1373 is amended by adding a new subsection to
18 read:
19 (p) The Department may use up to one percent (1.0%) of the appropriated funds to
20 administer the GREAT program.

21 SECTION 39.10.(f) The Department of Administration, in collaboration with the
22 Broadband Infrastructure Office within the Department of Information Technology shall
23 develop, by soliciting stakeholder input, a streamlined approval process for the negotiation and
24 executionofleaseagreementsforcollocation,installation,andoperationofbroadbandequipment
25 on State-owned property pursuant to G.S. 146-29.2. In developing the approval process, the
26 Office shall involve representatives from at least all of the following:
27 (1) The land grant universities.

28 (2) The Office of Attorney General.
29 (3) A telecommunications provider based in this State.
30 (4) An electric membership cooperative.
31 (5) A fixed wireless company.
32 (6) A cable provider.
33 (7) At least two regional or national Internet service providers.
34 The Broadband Infrastructure Office shall develop a streamlined approval process of

35 no more than 270 days from the date the formal lease proposal is submitted to a State agency.
36 The recommended process shall focus on significantly reducing or eliminating the need for
37 renegotiating primary lease terms, including lease amounts, once those terms have been initially
38 agreed upon by the provider and the State agency. In addition, the Department of Administration
39 shall establish a market-based rate for lease amounts that can be used as a basis for similar
40 agreements across the State.

41 The Department of Administration shall implement the streamlined approval process
42 on or before December 1, 2019, and shall submit a report detailing the streamlined approval
43 process, along with a list of the stakeholders and their input, to the Joint Legislative Oversight
44 Committee on Information Technology and the Fiscal Research Division on or before December
45 1, 2019.
46 SECTION 39.10.(g) Subsections (b) and (c) of this section become effective July 1,
47 2020. Subsection (d) of this section becomes effective July1, 2021. The remainder of this section

48 becomes effective July 1, 2019.
49
50 DHHS WORKSPACE EVALUATION

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1 SECTION 39.11.(a) Of the funds available to the Department of Administration
2 (Department), the Department, in coordination with the Department of Health and Human
3 Services (DHHS), shall use up to two hundred twenty-five thousand dollars ($225,000) for an
4 employee workspace analysis that conforms to this portion of the template for State agencies that
5 resulted thus far from the State Government Facilities Master Plan, created pursuant to S.L.
6 2018-5, that does the following:
7 (1) Analyzes employee functions to create a workspace design that adequately

8 and properly fits the business needs of the agency and its divisions.
9 (2) Diminishes any underutilized or unnecessary square footage in an effort to
10 right-size the necessary workspace for the agency and provide for the most
11 efficient use of available State funds.
12 SECTION 39.11.(b) The Department shall submit the results of the evaluation
13 described in this section to the Joint Legislative Oversight Committee on Capital Improvements
14 and the Fiscal Research Division on or before April 1, 2020.

15 SECTION 39.11.(c) The funds appropriated for the DHHS/Dix Campus Relocation
16 in this Part may not be used for preparing working drawings or any later phase until the
17 workspace evaluation has been completed and reported as described in this section and has been
18 formally incorporated into space programming efforts by the entity engaged by the Department
19 or to provide the design services for any new space to accommodate any portion of the DHHS
20 workforce.

21
22 DHHS PRIVATE DEVELOPMENT CHANGES
23 SECTION 39.12.(a) The Department of Administration may issue a request for
24 proposal pursuant to G.S. 143-128.1C(b) for a development contract to design and construct the
25 new Department of Health and Human Services Administrative Complex while undertaking
26 planning associated with funds appropriated in this act. For the purposes of this complex only,
27 the Department may accept submissions for review that include less than fifty percent (50%)

28 financing, but not less than thirty percent (30%) financing, as defined in G.S. 143-128.1C(a)(4).
29 SECTION 39.12.(b) G.S. 111-42(c) of the General Statutes reads as rewritten:
30 (c) State property or State building means building and land owned, leased, or
31 otherwise controlled by the State, exclusive of schools, colleges and universities, the North
32 Carolina State Fair, farmers markets and agricultural centers, the Legislative Office Building,
33 and the State Legislative Building.Building, and the new Health and Human Services
34 Administrative Complex.

35 SECTION 39.12.(c) Article 3 of Chapter 111 of the General Statutes is amended by
36 adding a new section to read:
37 § 111-47.5. Food service within the Capitol Complex.
38 Notwithstanding any other provision of this Article, the Department of Health and Human
39 Services may operate or contract for the operation of food or vending services at State property
40 or State facilities allocated to the Department of Administration. The net proceeds of revenue

41 generated by food and vending services at the State property or State facilities by the agency or
42 a vendor with whom the agency has contracted shall be credited to the Division of Services for
43 the Blind of the Department and Health and Human Services for the purposes specified in
44 G.S. 111-43. Nothing in this section shall be construed to remove an exemption granted under
45 State law for State property or State buildings, as defined in G.S. 111-42(c).
46 SECTION 39.12.(d) G.S. 66-58(c)(4) reads as rewritten:
47 (4) The operation of lunch counters by the Department of Health and Human

48 Services as blind enterprises of the type operated on January 1, 1951, in State
49 buildings in the City of Raleigh.food and vending services pursuant to Article
50 3 of Chapter 111 of the General Statutes.
51 SECTION 39.12.(e) G.S. 146-29.1 is amended by adding a new subsection to read:

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1 (i) This section shall not apply to leases entered into by the Department of Health and
2 Human Services for food and vending services pursuant to Article 3 of Chapter 111 of the
3 General Statutes.
4
5 REALLOCATION OF SPECIAL INDEBTEDNESS FUNDS FOR THE ECU SCHOOL
6 OF DENTISTRY
7 SECTION 39.13.(a) Section 27.8(a) of S.L. 2008-107, as amended by Section 2(a)

8 of S.L. 2009-209, reads as rewritten:
9 SECTION27.8.(a) TheState,withthepriorapprovaloftheStateTreasurerandtheCouncil
10 of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or
11 incur special indebtedness in order to provide funds to the State to be used, together with other
12 available funds, to pay the capital facility costs of the projects described in this subsection. In
13 accordance with G.S. 142-83, this subsection authorizes the issuance or incurrence of special
14 indebtedness:

15 (1) In the maximum aggregate principal amount of sixty-one million five hundred
16 ninety-nine thousand three hundred sixty-nine dollars ($61,599,369) to
17 finance the capital facility costs of completing a School of Dentistry building
18 building, life safety improvements to the Brody School of Medicine, and
19 renovation of space at the ECU Health Science Campus, Brody School of
20 Medicine, to accommodate the dental school at East Carolina University and

21 no more than 10 satellite dental clinics across the State. No more than a
22 maximum aggregate amount of twenty-one million dollars ($21,000,000) of
23 special indebtedness may be issued or incurred under this subdivision prior to
24 July 1, 2009. No more than a maximum aggregate amount of sixty million
25 dollars ($60,000,000) of special indebtedness maybe issued or incurred under
26 this subdivision prior to July 1, 2010.
27 ….

28 SECTION 39.13.(b) Nothing in this section shall be construed to authorize any
29 entity to issue or incur additional indebtedness.
30
31 MOUNTAIN ISLAND EDUCATIONAL FOREST VISITOR CENTER
32 SECTION 39.14. The North Carolina Forest Service within the Department of
33 Agriculture and Consumer Services shall rename the Visitor and Interpretive Center at Mountain
34 Island Educational State Forest The Laura Shidal Visitor and Interpretive Center at Mountain

35 Island Educational State Forest.
36
37 PART XL. TRANSPORTATION
38
39 CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
40 SECTION 40.1.(a) Subsections (b) and (c) of Section 34.1 of S.L. 2018-5 are

41 repealed.
42 SECTION 40.1.(b) The General Assembly authorizes and certifies anticipated
43 revenues for the Highway Fund as follows:
44 For Fiscal Year 2021-2022 $ 2,436 million
45 For Fiscal Year 2022-2023 $ 2,473 million
46 For Fiscal Year 2023-2024 $ 2,506 million
47 For Fiscal Year 2024-2025 $ 2,605 million

48 SECTION 40.1.(c) The General Assembly authorizes and certifies anticipated
49 revenues for the Highway Trust Fund as follows:
50 For Fiscal Year 2021-2022 $ 1,689 million
51 For Fiscal Year 2022-2023 $ 1,727 million

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1 For Fiscal Year 2023-2024 $ 1,760 million
2 For Fiscal Year 2024-2025 $ 1,811 million
3 SECTION 40.1.(d) The Department of Transportation, in collaboration with the
4 Office of State Budget and Management, shall develop a four-year revenue forecast. The first
5 fiscal year in the four-year revenue forecast shall be the 2025-2026 fiscal year. The four-year
6 revenue forecast developed under this subsection shall be used (i) to develop the four-year cash
7 flow estimates included in the biennial budgets, (ii) to develop the Strategic Transportation

8 Improvement Program, and (iii) by the Department of the State Treasurer to compute
9 transportation debt capacity.
10
11 CONTINGENCY FUNDS
12 SECTION 40.2. The funds appropriated in this act to the Department of
13 Transportation, Construction – Contingency Fund Code for the 2019-2021 fiscal biennium shall
14 be allocated statewide for rural or small urban highway improvements and related transportation

15 enhancements to publicroads and publicfacilities,industrial access roads, railroadinfrastructure,
16 and spot safety projects, including pedestrian walkways that enhance highway safety. Projects
17 funded pursuant to this section require prior approval by the Secretary of Transportation. Funds
18 allocatedunderthis section shall not revertat theendoftheapplicablefiscal yearbut shall remain
19 available until expended. The use of funds that do not revert under this section is not restricted
20 to the fiscal year in which the funds were allocated.

21
22 CAPITAL, REPAIRS, AND RENOVATIONS
23 SECTION 40.3. The funds appropriated in this act from the Highway Fund to the
24 Department of Transportation for the 2019-2021 fiscal biennium for capital, repairs, and
25 renovations are allocated as follows:
26 Capital – Highway Fund 2019-2020 2020-2021
27 Polk Maintenance Shop Replacement $1,738,882 $0

28 Ocracoke Ferry Quarters $833,000 $0
29 Currituck Maintenance & Storage $1,044,340 $0
30 Northampton Equipment Shop $0 $3,000,000
31 Repairs and Renovations – Highway Fund
32 Statewide Roof Repairs/Replacement $1,050,000 $1,050,000
33 Statewide Demolition of Obsolete Buildings $350,000 $350,000
34 Statewide Water and Sewer $525,000 $525,000

35 Statewide Asbestos Abatement $350,000 $350,000
36 Statewide ADA Compliance $525,000 $525,000
37 Statewide Small Office Repair and Renovation $1,225,000 $1,452,500
38 Statewide Security Upfits $280,000 $350,000
39 Replace 20 Rooftop HVAC Units at Century Center $105,000 $105,000
40 Art Museum Basement Concrete Repair $175,000 $0

41
42
43 END NORTH CAROLINA RAILROAD DIVIDEND
44 SECTION 40.3B.(a) G.S. 124-5.1 reads as rewritten:
45 § 124-5.1. North Carolina Railroad Company dividends deposited to Highway Fund.The
46 Freight Rail & Rail Crossing Safety Improvement Fund.
47 Any dividends of the North Carolina Railroad Company received by the State shall be

48 deposited into the The Freight Rail & Rail Crossing Safety Improvement Fund is a fund within
49 the Highway Fund and administered by the Rail Division of the Department of Transportation.
50 The Fund shall be used for the enhancement of freight rail service, short-line railroad assistance,
51 and railroad-roadway crossing safety, which may include the following project types:

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1 (1) Track and associated infrastructure improvements for freight service.
2 (2) Grade crossing protection, elimination, and hazard removal.
3 (3) Signalization improvements.
4 (4) Assistance for projects to improve rail access to industrial, port, and military
5 facilities and for freight intermodal facility improvements, provided that
6 funding assistance under this subdivision shall be subject to the same limits as
7 that for short-line railroads under G.S. 136-44.39.

8 (5) Corridor protection and reactivation.
9 (6) Subject to federal or other state law, improvements to rail lines and corridors
10 in this State and through portions of a bordering state for the purpose of
11 connecting with the national railroad system.
12 (7) Other short-line railroad projects.
13 The Fund may also be used to supplement funds allocated for freight rail or railroad-roadway
14 crossing safety projects approved as part of the Transportation Improvement Program.

15 SECTION 40.3B.(b) G.S. 124-18 is repealed.
16
17 ADDITIONAL POWELL BILL FUNDS FOR SMALLER MUNICIPALITIES
18 SECTION 40.4. The additional sum of seven million three hundred seventy-five
19 thousand dollars ($7,375,000) in recurring funds appropriated in this act for the 2020-2021 fiscal
20 year to the Department of Transportation for the Powell Bill Program (Fund Code 7836) shall be

21 allocated in accordance with the requirements of G.S. 136-41.1(a) only to municipalities with a
22 population of 200,000 or less according to the most recent federal decennial census completed
23 as of the effective date of this section. Nothing in this section shall be construed as (i) prohibiting
24 municipalities eligible for funds under this section from being eligible for recurring funds
25 appropriated in this act to the Department of Transportation for the State Aid–Powell Bill Fund
26 or (ii) otherwise modifying the allocation of recurring funds appropriated in this act to the
27 Department of Transportation for the State Aid–Powell Bill Fund.

28
29 REPORT ON MPO AND RPO VOTING POWER DISTRIBUTION
30 SECTION 40.4A. By March 15, 2020, the Department of Transportation shall
31 submit a report containing the following information to the Joint Legislative Transportation
32 Oversight Committee and the Fiscal Research Division:
33 (1) The process used and guidelines followed by Metropolitan Planning
34 Organizations and Rural Transportation Planning Organizations in

35 determining how to distribute voting power among their voting members.
36 (2) Other state laws to determine if and how other states regulate the distribution
37 of voting power among the voting members of Metropolitan Planning
38 Organizations and Rural Transportation Planning Organizations.
39 (3) Methods to ensure regional governance under a weighted voting structure.
40 (4) Quorum determination by members present instead of by weighted vote.

41 (5) Methods to accomplish redesignation in which each municipality has equal
42 voting power.
43 (6) Any other topic or issue the Department determines to be relevant to the
44 report.
45
46 AIRPORT IMPROVEMENT PROGRAM
47 SECTION 40.5.(a) Article 7 of Chapter 63 of the General Statutes is amended by

48 adding a new section to read:
49 § 63-74. Airport Improvement Program.
50 (a) Purpose. – There is established an Airport Improvement Program (AIP) that shall
51 serve to (i) fund improvements at eligible airports and (ii) pay debt service or related financing

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1 costs and expenses on revenue bonds or notes issued by eligible airports. The Department of
2 Transportation shall allocate funds appropriated to this program to eligible airports based on the
3 findings in the biennial economic impact study, as described in this section. The Department
4 shall adopt rules governing the distribution and use of these funds.
5 (b) Eligible Airport. – Any publicly owned, commercial service airport with more than
6 10,000 passenger boardings during the two calendar years preceding the fiscal year in which
7 funds are allocated is eligible for Airport Improvement Program funds.

8 (c) Economic Impact Study and Distribution Formula. – The Department of
9 Transportation shall conduct a biennial economic impact study that examines the annual
10 economic impact of each commercial service airport in North Carolina. The Department shall
11 disburse AIP funds appropriated in a year to each eligible airport in proportion to the total
12 economic impact of the airport, adjusted as provided in this subsection.
13 (1) For an eligible airport with one of the three largest economic impacts, the
14 airport's distribution amount shall be reduced by a percentage equal to the

15 lesser of twentypercent (20%) or five percent (5%) multiplied byeach full ten
16 percent (10%) of economic impact calculated for that airport. The aggregate
17 amount of the reduction to the eligible airports with the three largest economic
18 impacts is the amount to be redistributed to the remaining eligible airports as
19 provided in subdivision (2) of this subsection.
20 (2) For an eligible airport that does not have one of the three largest economic

21 impacts, the airport's distribution amount shall be increased based upon the
22 following formula:
23 a. Twenty-five percent (25%) of the redistribution amount shall be
24 distributed equally.
25 b. Seventy-fivepercent (75%) oftheredistributionamount shall bebased
26 upon the airport's share of passenger boardings compared to the total
27 number of passenger boardings used for all airports receiving a

28 distribution pursuant to this subdivision.
29 (d) Permissible Uses, Reporting, and Return of Funds. – The Department of
30 Transportation shall not allocate funds to an airport under this section until that airport has
31 provided a report outlining how the airport will use the funds in conformance with the purposes
32 of the program. No later than 45 days from the date the Department receives the report required
33 under this subsection, the Department shall make a determination whether the intended use of
34 the funds matches the purposes of the program and, if so, allocate funds under this section to the

35 compliant airport. An airport that receives funds under this section shall return the funds to the
36 Department if the funds are in the possession or control of the airport and not expended or
37 encumbered by August 31 of the year following the fiscal year in which the Department makes
38 the allocation. All funds returned to the Department under this section, or retained by the
39 Department for failure of an eligible airport to submit a report under this subsection, shall be
40 credited to the fund from which they were appropriated and shall remain unexpended and

41 unencumbered until appropriated by the General Assembly.
42 (e) Limitation. – Notwithstanding any provision of law to the contrary, the allocation of
43 funds under this section to eligible airports, the enactment of this section, and the issuance of
44 bonds or notes by the airports in reliance thereon shall not in any manner constitute a pledge of
45 the full faith and credit and taxing power of the State. Additionally, allocations under this section
46 are subject to the availability of funds appropriated to the Airport Improvement Program. A
47 security interest shall not be granted in funds allocated under this section.

48 SECTION 40.5.(b) Section 34.19(b) of S.L. 2017-57 is repealed.
49
50 GENERAL AIRPORT FUNDING

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1 SECTION 40.5A.(a) General Airport Allocations. – Of the funds appropriated in
2 this act to the Department of Transportation for General Airport Improvements, the following
3 sums in nonrecurring funds shall be allocated as follows:
4 General Airport 2019-2020 2020-2021
5 Johnston Regional Airport $2,650,000 $2,500,000
6 Lee County Executive Airport $1,500,000 $0
7 Laurinburg-Maxton Airport $4,000,000 $4,000,000

8 Statesville Regional Airport $250,000 $0
9 Cape Fear Regional Jetport $350,000 $150,000
10 Gastonia Municipal Airport $250,000 $250,000
11 Rockingham County NC Shiloh Airport $500,000 $0
12 SECTION 40.5A.(b) Permissible Uses, Reporting, and Return of Funds. – Each
13 airport receiving funds under this section may use the funds allocated to it under this section to
14 (i) fund improvements to the airport and (ii) pay debt service or related financing costs and

15 expenses on revenuebonds ornotesissuedbytheairport. TheDepartment ofTransportationshall
16 not allocate funds to an airport under this section until that airport has provided a report outlining
17 how the airport will use the funds in conformance with the purposes of the program. No later
18 than 45 days from the date the Department receives the report required under this subsection, the
19 Department shall make a determination whether the intended use of the funds matches the
20 purposes of the program and, if so, allocate funds under this section to the compliant airport. An

21 airport that receives funds under this section shall return the funds to the Department if the funds
22 are in the possession or control of the airport and not expended or encumbered by August 31 of
23 the year following the fiscal year in which the Department makes the allocation. All funds
24 returned to the Department under this section, or retained by the Department for failure of an
25 airport to submit a report under this subsection, shall be credited to the fund from which they
26 were appropriated and shall remain unexpended and unencumbered until appropriated by the
27 General Assembly.

28 SECTION 40.5A.(c) Limitation. – Notwithstanding any provision of law to the
29 contrary, theallocation of fundsunderthis section, theenactment ofthis section, andtheissuance
30 of bonds or notes by the airports in reliance thereon shall not in any manner constitute a pledge
31 of the full faith and credit and taxing power of the State. A security interest shall not be granted
32 in funds allocated under this section.
33 SECTION 40.5A.(d) Report. – The Department of Transportation shall provide a
34 report on the use or uses by each airport of funds allocated to the airport under this section. The

35 Department shall submit the report required under this subsection each year of the 2019-2021
36 fiscal biennium by March 15 to the Joint Legislative Transportation Oversight Committee and
37 the Fiscal Research Division.
38
39 BUDGETING DOT LEGISLATIVE SALARY INCREASES
40 SECTION40.7.(a) The amount offunds appropriatedforlegislativesalaryincreases

41 foremployeesoftheDepartmentofTransportation(Department)shallbebudgetedonarecurring
42 basis in the correct Fund Code that corresponds to the positions it supports. Any transfer and use
43 of the funds for any other purpose shall be done on a nonrecurring basis, except for the purpose
44 of retirement and health benefits.
45 SECTION 40.7.(b) The Department shall report to the Joint Legislative Oversight
46 Committee on Transportation the amount allocated to each division or unit no more than 30 days
47 after an allocation has occurred.

48
49 PURCHASE AND MAINTENANCE OF ELLERBE REST AREA
50 SECTION 40.7B.(a) Notwithstanding Article 6 of Chapter 146 of the General
51 Statutes and any other provision of law to the contrary, of the funds appropriated in this act to

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1 the Department of Transportation (Department), the Department shall purchase the real property
2 and buildings located in Richmond County at 2509 U.S. Highway 220 North, also known as the
3 Ellerbe Rest Area, for a commercially reasonable price from the Town of Ellerbe.
4 SECTION 40.7B.(b) Upon the purchase of the Ellerbe Rest Area, the Department
5 shall maintain the Ellerbe Rest Area, erect signage to notify the traveling public of its location,
6 and update applicable Department publications and its Web site.
7

8 DOT RECLASSIFICATION AUTHORITY FOR CERTAIN POSITIONS
9 SECTION 40.7C. Notwithstanding any other provision of law to the contrary, the
10 Department of Transportation may reclassifynine vacant positions, pursuant to the classification
11 system established by the State Human Resources Commission, to the following positions:
12 (1) Onefull-timeequivalent (FTE)positionin theOfficeofCivil Rights, anEqual
13 Employment Opportunity Program Specialist.
14 (2) Six FTEpositions in theDivision ofMotorVehicles forrecords adjudications,

15 maintenance, and integrity.
16 (3) Two FTE positions in the Office of Strategic Initiatives and Program Support,
17 an Engineer Manager I and an Engineer II.
18
19 BRIDGE NAMING
20 SECTION 40.8. Notwithstanding any provision of law to the contrary, the

21 Department of Transportation shall designate the bridges described in the subdivisions below as
22 follows:
23 (1) The bridge over Stanley Creek on Black Snake Road between Millman Road
24 and Chestnut Street Extension located in the Town of Stanley in Gaston
25 County as the Lance Corporal Nicholas S. O'Brien, U.S.M.C. Bridge.
26 (2) The bridge over Deep River on S. Carbonton Road between Harrington Road
27 and Alston House Road located in Moore County as the Corporal J. Ralph

28 Holder Bridge.
29
30 CODIFY MOBILITY/MODERNIZATION FUND
31 SECTION 40.9.(a) Chapter 136 of the General Statutes is amended byadding a new
32 Article to read:
33 Article 14C.
34 Mobility/Modernization Fund.

35 § 136-189.20. Spot Mobility Program.
36 (a) Of the funds appropriated to the Mobility/Modernization Fund in the Highway Fund,
37 forty percent (40%) of the funds shall be used for a Spot MobilityProgram that shall be managed
38 by the State Traffic Engineer of the Department of Transportation. The purpose of the Spot
39 Mobility Program is to provide funding for small projects that will reduce traffic congestion and
40 vehicular delay times. The Department shall develop a quantitative, evidence-based formula to

41 use in selecting projects to receive funding from the Spot Mobility Program. At a minimum, the
42 Department shall consider all of the following in developing the formula required by this section:
43 (1) The travel-time savings resulting from the proposed project.
44 (2) Reductions to motor vehicle queues resulting from the proposed project.
45 (3) The service life of the proposed project.
46 (4) The benefit-cost ratio of the proposed project.
47 (b) In selecting projects to receive funding from the Spot Mobility Program, the

48 Department shall give preference to projects that will improve access from the State highway
49 system to a school. For purposes of this section, the term school means any facility engaged in
50 the educational instruction of children in any grade or combination of grades from kindergarten

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1 through the twelfth grade at which attendance satisfies the compulsory attendance law and
2 includes charter schools as authorized under G.S. 115C-218.5.
3 § 136-189.21. Economic development; small construction; industrial access.
4 Of the funds appropriated to the Mobility/Modernization Fund in the Highway Fund, twelve
5 percent (12%) of the funds shall be used for the following purposes:
6 (1) For prioritized transportation improvements and infrastructure that expedite
7 commercial growth as well as either job creation or job retention.

8 (2) For small construction projects recommended by the Chief Engineer in
9 consultation with the Chief Operating Officer and approved by the Secretary
10 of Transportation. Funds used in accordance with this subdivision shall be
11 allocated equally among the 14 Highway Divisions for small construction
12 projects.
13 (3) To use for the development and expansion of access roads to industrial
14 facilities.

15 § 136-189.22. High-impact and low-cost construction projects.
16 Of the funds appropriated to the Mobility/Modernization Fund in the Highway Fund,
17 forty-eight percent (48%) of the funds shall be used for construction projects that are high impact
18 and low cost. The funds shall be allocated equally among the 14 Highway Divisions. Projects
19 funded under this section include intersection improvement projects, minor widening projects,
20 and operational improvement projects. The Department shall develop a quantitative,

21 evidence-based formula to use in selecting projects to receive funding under this section. At a
22 minimum, the Department shall consider all of the following in developing the formula required
23 by this section:
24 (1) The average daily traffic volume of a roadway and whether the proposed
25 project will generate additional traffic.
26 (2) Any restrictions on a roadway.
27 (3) Any safety issues with a roadway.

28 (4) The condition of the lanes, shoulders, and pavement on a roadway.
29 (5) The site distance and radius of any intersection on a roadway.
30 § 136-189.23. Annual report.
31 The Department shall submit to the Joint Legislative Transportation Oversight Committee
32 and to the Fiscal Research Division an annual report beginning March 1, 2020, detailing (i) the
33 types of projects funded under this Article and (ii) the total amount of funding allocated to each
34 project funded under this Article.

35 SECTION 40.9.(b) Conforming Repeal. – Subsections (a) through (d) of Section
36 34.7 of S.L. 2017-57 are repealed.
37
38 DMV/HEARINGS UNIT ALIGNMENT
39 SECTION 40.12.(a) Revised Budget. – The Office of State Budget and
40 Management, in consultation with the Division ofMotor Vehicles, shall adjust the HearingUnit's

41 certified budget for the 2019-2020 fiscal year to correctly align total requirements and receipts
42 to reflect the requirement set forth in Section 34.9 of S.L. 2014-100, as amended by Section
43 29.30A of S.L. 2015-241, Section 34.32 of S.L. 2017-57, and Section 34.23 of S.L. 2018-5, that
44 all functions, activities, and personnel associated with administering and conductingthe hearings
45 be fully receipt-supported from the fee proceeds collected by the Hearings Unit. This adjustment
46 shall be completed by October 1, 2019.
47 SECTION 40.12.(b) Report. – The Division of Motor Vehicles is required to report

48 on any organizational changes occurring October 1, 2018, through October 1, 2019, to the Joint
49 Legislative Transportation Oversight Committee, the House of Representatives Appropriations
50 Committee on Transportation, the Senate Appropriations Committee on the Department of

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1 Transportation, and the Fiscal Research Division. This report shall be submitted byNovember 1,
2 2019, and shall include the following:
3 (1) The role and responsibilities of each full-time equivalent (FTE) moved in or
4 out of Fund Code 1304.
5 (2) The budgeted salary and benefits of each FTE moved in or out of Fund Code
6 1304.
7 (3) Justification of movement in or out of Fund Code 1304.

8 (4) Funding source before and after move, including Fund Code.
9 (5) The certified budget for the 2019-2020 fiscal year with total requirements,
10 receipts, and FTEs.
11
12 DMV/ONLINE PERFORMANCE DASHBOARD TO INCLUDE DMV
13 REGISTRATIONS OF HYBRID AND ELECTRIC VEHICLES
14 SECTION 40.13.(a) Expand Performance Dashboard. – The Department of

15 Transportation shall expand its performance dashboard available on the Department's home page
16 of the Department's Web site to track the following information about the Division of Motor
17 Vehicles:
18 (1) The number of conventional hybrid vehicle new registrations issued per
19 month and year-to-date.
20 (2) The number of conventional hybrid vehicle registrations renewed per month

21 and year-to-date.
22 (3) The total number of conventional hybrid vehicles currently registered.
23 (4) The number of plug-in hybrid vehicle new registrations issued per month and
24 year-to-date.
25 (5) The number of plug-in hybrid vehicle registrations renewed per month and
26 year-to-date.
27 (6) The total number of plug-in hybrid vehicles currently registered.

28 (7) The number of plug-in electric vehicle new registrations issued per month and
29 year-to-date.
30 (8) The number of plug-in electric vehicle registrations renewed per month and
31 year-to-date.
32 (9) The total number of plug-in electric vehicles currently registered.
33 SECTION 40.13.(b) Definitions. – For purposes of this section: (i) a conventional
34 hybrid vehicle means a vehicle that uses both a motor fuel engine and an electric motor that

35 cannot be plugged in and recharged, (ii) a plug-in hybrid vehicle means a vehicle that uses both
36 a motor fuel engine and an electric motor with a battery that may be recharged by plugging into
37 an outlet or chargingstation, and (iii)a plug-in electricvehiclemeans a vehiclethat exclusively
38 uses an on-board battery that may be recharged by plugging into an outlet or charging station.
39 SECTION 40.13.(c) Implementation Date. – The expansion of the Department's
40 performance dashboard required under subsection (a) of this section shall be completed by

41 October 1, 2019.
42
43 DMV/REDUCE NUMBER OF YEARS FOR A VEHICLE TO QUALIFY FOR AN
44 ANTIQUE REGISTRATION PLATE
45 SECTION 40.14.(a) G.S. 20-79.4(b)(94) reads as rewritten:
46 (94) Historic Vehicle Owner. – Issuable for a motor vehicle that is at least 35 years
47 old 30 years old measured from the date of manufacture. The plate for an

48 historic vehicle shall bear the word Antique unless the vehicle is a model
49 year 1943 or older. The plate for a vehicle that is a model year 1943 or older
50 shall bear the word Antique or the words Horseless Carriage, at the option
51 of the vehicle owner.

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1 SECTION 40.14.(b) This section becomes effective July 1, 2019, and applies to
2 applications for Historic Vehicle Owner registration plates made on or after that date.
3
4 DMV/RFPFOR NEW OFFICE SPACE FOR DMVRALEIGH STATE LICENSE PLATE
5 AGENCY AND REPORTS RELATED TO MOVE FROM NEW BERN AVENUE
6 BUILDING
7 SECTION 40.17.(a) The Department of Administration (Department) is directed to

8 reviewthe inventoryofState-ownedofficespaceintheCityofRaleigh for purposes ofrelocating
9 the Division of Motor Vehicles State License Plate Agency located on New Bern Avenue. If by
10 November 1, 2019, the Department is unable to locate suitable office space, the Department shall
11 issue a request for proposal (RFP) within 30 days seeking new office space for lease or purchase
12 forthe State LicensePlateAgency. The geographicscope of theRFP shall betheCityof Raleigh.
13 SECTION 40.17.(b) By March 15, 2020, the Department, in consultation with the
14 Division of Motor Vehicles (Division), shall submit a report to the Joint Legislative

15 Transportation Oversight Committee, the House of Representatives Appropriations Committee
16 on Transportation, the Senate Appropriations Committee on the Department of Transportation,
17 and the Fiscal Research Division containing the following information: (i) results of the review
18 of State-owned office space in the City of Raleigh suitable for the State License Plate Agency,
19 (ii) the RFP issued and a summary of all responses to the RFP, and (iii) the estimated cost to
20 relocate the State License Plate Agency.

21 SECTION 40.17.(c) At least 30 days prior to approval by the Council of State of the
22 lease or purchase of new office space for the State License Plate Agency, the Department of
23 Administration shall submit a report detailing the agreement to the Joint Legislative
24 Transportation Oversight Committee, the House of Representatives Appropriations Committee
25 on Transportation, the Senate Appropriations Committee on the Department of Transportation,
26 and the Fiscal Research Division.
27 SECTION 40.17.(d) By January 15, 2021, the Division shall submit a report to the

28 Joint Legislative Transportation Oversight Committee, the House of Representatives
29 Appropriations Committee on Transportation, the Senate Appropriations Committee on the
30 Department of Transportation, and the Fiscal Research Division containing the following
31 information:(i)anitemizedlistofexpensesassociatedwiththeDivisionHeadquartersrelocation,
32 (ii) an itemized list of expenses associated with State License Plate Agency relocation, and (iii)
33 lease rates and agreements for both locations.
34

35 DMV/TOWN OF MARSHALL
36 SECTION 40.18. The Division of Motor Vehicles shall reopen a Division office in
37 the Town of Marshall, with the same hours of operation and services the office had provided
38 before it closed, by September 1, 2019.
39
40 DMV/ADJUSTMENT OF LPA COMPENSATION

41 SECTION 40.18B.(a) G.S. 20-63(h) reads as rewritten:
42 (h) Commission Contracts for Issuance of Plates and Certificates. – All registration
43 plates, registration certificates, and certificates of title issued by the Division, outside of those
44 issued from the office of the Division located in Wake, Cumberland, or Mecklenburg Counties
45 and thoseissued and handledthroughtheUnitedStatesmail, shall beissued insofaras practicable
46 and possible through commission contracts entered into by the Division for the issuance of the
47 plates and certificates in localities throughout North Carolina, including military installations

48 within this State, with persons, firms, corporations or governmental subdivisions of the State of
49 North Carolina. The Division shall make a reasonable effort in every locality, except as noted
50 above, to enter into a commission contract for the issuance of the plates and certificates and a
51 record of these efforts shall be maintained in the Division. In the event the Division is

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1 unsuccessful in making commission contracts, it shall issue the plates and certificates through
2 the regular employees of the Division. Whenever registration plates, registration certificates, and
3 certificates of title are issued by the Division through commission contract arrangements, the
4 Divisionshallprovidepropersupervisionofthedistribution.Nothingcontainedinthissubsection
5 allows or permits the operation of fewer outlets in any county in this State than are now being
6 operated.
7 The terms of a commission contract entered under this subsection shall specify the duration

8 of the contract and either include or incorporate by reference standards by which the Division
9 may supervise and evaluate the performance of the commission contractor. The duration of an
10 initial commission contract maynot exceed eight years and the durationof a renewal commission
11 contract maynot exceed two years. The Division mayaward monetary performance bonuses, not
12 to exceed an aggregate total of ninety thousand dollars ($90,000) annually, to commission
13 contractors based on their performance.
14 The amount of compensation payable to a commission contractor is determined on a per

15 transaction basis. The collection of the highwayuse tax and the removal of an inspection stop are
16 each considered a separate transaction for which one dollar and thirty cents ($1.30) one dollar
17 and fifty-six cents ($1.56) compensation shall be paid. The issuance of a limited registration T
18 sticker and the collection of property tax are each considered a separate transaction for which
19 compensation at the rate of one dollar and thirty cents ($1.30) and one dollar and eight cents
20 ($1.08) respectively, shall be paid bycounties and municipalities as a cost of the combined motor

21 vehicle registration renewal and property tax collection system. The performance at the same
22 time of one or more of the transactions below is considered a single transaction for which one
23 dollar and forty-six cents ($1.46) one dollar and seventy-five cents ($1.75) compensation shall
24 be paid:
25 (1) Issuance of a registration plate, a registration card, a registration sticker, or a
26 certificate of title.
27 ….

28 SECTION 40.18B.(b) This section becomes effective July 1, 2019, and applies to
29 transactions on or after that date.
30
31 DMV/DEVELOP DRIVERS LICENSE OFFICE STAFFING PLANS
32 SECTION 40.18C.(a) The Department of Transportation, Division of Motor
33 Vehicles (DMV) shall develop and evaluate plans to staff all Drivers License Offices currently
34 open a minimum of five days per week with a minimum of three full-time equivalent (FTE)

35 employees by considering the following options:
36 (1) The reallocation of existing staff in Drivers License Offices, including an
37 estimate of employee attrition, additional costs to the Division, an estimated
38 time line for employee reallocation, and any other factor deemed relevant by
39 the Division.
40 (2) An estimate of the costs of hiring additional FTE employees, including the

41 hiring, training, salaries, and other costs as deemed appropriate by the
42 Division. This option shall include an estimated time line for hiring, training,
43 and placing employees until all Drivers License Offices have a minimum of
44 three FTE employees.
45 (3) Staffing Drivers License Offices with part-time staff equivalent to three FTE
46 employees, including hiring, training, salaries, and other costs as deemed
47 appropriate by the Division. This option shall include an estimated time line

48 for hiring, training, and placing employees until all Drivers License Offices
49 have a minimum of three FTE employees.
50 (4) The reallocation of FTE employees from other units within the Department
51 of Transportation. This option shall include estimated costs and a time line

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1 for training and placing employees until all Drivers License Offices have a
2 minimum of three FTE employees.
3 SECTION 40.18C.(b) A report outlining these options and a final recommendation
4 shall be submitted to the Joint Legislative Transportation Oversight Committee, the House of
5 Representatives Appropriations Committee on Transportation, the Senate Appropriations
6 CommitteeonDepartmentofTransportation,andtheFiscalResearchDivisionbyMarch1,2020.
7

8 FERRY/PASSENGER FERRY FUNDS
9 SECTION 40.19. The Department of Transportation, Ferry Division, may enter into
10 a contract to lease a passenger ferry vessel for operation between Hatteras and Ocracoke from
11 May 20, 2019, to September 5, 2019, without complying with the provisions of Article 8 of
12 Chapter 143 of the General Statutes, G.S. 136-28.1, or any other provision of law to the contrary.
13 Of the funds appropriated in this act to the Department, any lease entered into pursuant to this
14 section shall not exceed one million dollars ($1,000,000).

15
16 FERRY TOLL STUDY
17 SECTION 40.19A.(a) The Department of Transportation shall study the feasibility
18 of raising ferry tolls for nonresidents. The study shall consider the following:
19 (1) The permissibility under the United States Constitution and any other
20 applicable law of charging higher ferry tolls to nonresidents than to residents.

21 If permissible, a summary of the legal justification the Department may need
22 to provide and any legal restrictions that may apply.
23 (2) An analysis of the current number, and future projection, of nonresidents that
24 use North Carolina ferries by ferry route and feasibility of creating a
25 differential of tolls for resident and nonresident users.
26 (3) An analysis of the cost of toll collection for each route versus revenues
27 collected.

28 (4) Exploration of different toll collection methods and streamlining current toll
29 collection processes.
30 (5) AnyothertopicorissuetheDepartment determines to berelevant to thestudy.
31 SECTION 40.19A.(b) By March 15, 2020, the Department shall report its findings
32 from the study, including any legislative recommendations, to the chairs of the Joint Legislative
33 Transportation Oversight Committee and the Fiscal Research Division.
34

35 REPORT ON FUNDS APPROPRIATED FOR USE ON RAIL INFRASTRUCTURE
36 SECTION 40.21.(a) On or before March 1, 2020, the Department of Transportation
37 shall submit an itemized report detailing the use of the funds appropriated in this act for the
38 Piedmont locomotives and cars to the Joint Legislative Transportation Oversight Committee, the
39 House of Representatives Appropriations Committee on Transportation, the Senate
40 Appropriations Committee on the Department of Transportation, and the Fiscal Research

41 Division. The report shall include the overhaul policy for locomotives, a locomotives overhaul
42 schedule with budget requirements, and amount of funds expended and committed for overhaul
43 activities.
44 SECTION 40.21.(b) On or before March 1, 2020, the Department of Transportation
45 shall submit an itemized report detailing the use of the funds appropriated in this act for the train
46 station maintenance needs to the Joint Legislative Transportation Oversight Committee, the
47 House of Representatives Appropriations Committee on Transportation, the Senate

48 Appropriations Committee on the Department of Transportation, and the Fiscal Research
49 Division. The report shall include the eligibility requirements of stations, methodology in
50 allocating funds to stations, allowed uses of funds, and amount of funds expended and committed
51 for projects.

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1
2 FUNDS FOR SELMA UNION STATION DEPOT
3 SECTION 40.22. Of the funds appropriated in this act to the Department of
4 Transportation for train station maintenance, the sum of two hundred fifty-seven thousand five
5 hundred dollars ($257,500) in nonrecurring funds shall be allocated to the Selma Union Station
6 Depot for train station maintenance.
7

8 PORTS/RAISING POWER LINES OVER CAPE FEAR RIVER
9 SECTION 40.23A.(a) The nonrecurring funds appropriated in this act to the NC
10 Ports Authority for the 2019-2021 fiscal biennium to raise the power lines over the Cape Fear
11 River near Wilmington shall only be used for this purpose. The Department of Transportation
12 shall only allocate these funds to the NC Ports Authority on a reimbursement basis after the NC
13 Ports Authority has provided a report that outlines the costs incurred in raising the power lines.
14 SECTION 40.23A.(b) The NC Ports Authority shall submit a status report on the

15 use of these funds to the Joint Legislative Transportation Oversight Committee by December 15,
16 2019, and quarterly thereafter until the project is completed. The status report shall include:
17 contract status, scope of work, work progress, and anticipated completion date.
18
19 PART XLI. FINANCE
20

21 INCREASE STANDARD DEDUCTION
22 SECTION 41.1.(a) G.S. 105-153.5(a)(1) reads as rewritten:
23 (1) Standard deduction amount. – The standard deduction amount is zero for a
24 person who is not eligible for a standard deduction under section 63 of the
25 Code. For all other taxpayers, the standard deduction amount is equal to the
26 amount listed in the table below based on the taxpayer's filing status:
27 Filing Status Standard Deduction

28 Married, filing jointly/surviving spouse $20,000$21,000
29 Head of Household 15,00015,750
30 Single 10,00010,500
31 Married, filing separately 10,000.10,500.
32 SECTION 41.1.(b) This section is effective for taxable years beginning on or after
33 January 1, 2021.
34

35 INCOME EXCLUSION FOR IRA DISTRIBUTIONS TO CHARITIES BY TAXPAYERS
36 AGE 70 1/2 OR OLDER
37 SECTION 41.2.(a) G.S. 105-153.5(a)(2)a. reads as rewritten:
38 a. Charitable Contribution. – The amount allowed as a deduction for
39 charitable contributions under section 170 of the Code for that taxable
40 year. For taxable years beginningon or after 2014, 2014 through 2018,

41 a taxpayer who elected to take the income exclusion under section
42 408(d)(8) of the Code for a qualified charitable distribution from an
43 individual retirement plan by a person who has attained the age of 70
44 1/2 may deduct the amount that would have been allowed as a
45 charitable deduction under section 170 of the Code had the taxpayer
46 not elected to take the income exclusion.
47 SECTION 41.2.(b) G.S. 105-153.5(c2)(3) reads as rewritten:

48 (3) For taxable years beginningon or after 2014, 2014 through 2018, the taxpayer
49 mustaddtheamountexcludedfromthetaxpayer's grossincomeforaqualified
50 charitable distribution from an individual retirement plan bya person who has
51 attained age 70 1/2 under section 408(d)(8) of the Code. The purpose of this

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1 subdivision is to decouple from the income exclusion available under federal
2 tax law.
3 SECTION 41.2.(c) This section is effective when it becomes law.
4
5 FRANCHISE TAX CHANGES
6 SECTION 41.3.(a) G.S. 105-120.2(b) and (c) read as rewritten:
7 (b) Tax Rate. – Every corporation taxed under this section shall annually pay to the

8 Secretary of Revenue, at the time the return is due, the greater of the following:
9 (1) A franchise or privilege tax at the rate of one dollar and fifty cents ($1.50) set
10 in G.S. 105-122(d2) per one thousand dollars ($1,000) of the amount
11 determined under subsection (a) of this section, but in section. In no case shall
12 the tax be more than one hundred fifty thousand dollars ($150,000) nor less
13 than two hundred dollars ($200.00).
14 (2) If the tax calculated under this subdivision exceeds the tax calculated under

15 subdivision (1)ofthis subsection,thenthe tax is leviedat the rate ofonedollar
16 and fifty cents ($1.50) set in G.S. 105-122(d2) per one thousand dollars
17 ($1,000) on the greater of the following:the total actual investment in tangible
18 propertyin this State of such corporation as computed under G.S. 105-122(d).
19 a. Fifty-five percent (55%) of the appraised value as determined for ad
20 valorem taxation of all the real and tangible personal property in this

21 State of each such corporation plus the total appraised value of
22 intangible property returned for taxation of intangible personal
23 property as computed under G.S. 105-122(d).
24 b. The total actual investment in tangible property in this State of such
25 corporation as computed under G.S. 105-122(d).
26 (c) For purposes of this section, a holding company is a corporation that satisfies at
27 least one of the following conditions:

28 (1) It has no assets other than ownership interests in corporations in which it
29 owns, directly or indirectly, more than fifty percent (50%) of the outstanding
30 voting stock or voting capital interests.
31 (2) It receives during its taxable year more than eighty percent (80%) of its gross
32 income from corporations in which it owns directly or indirectly more than
33 fifty percent (50%) of the outstanding voting stock, voting capital interests, or
34 ownership interests.

35 (3) It owns copyrights, patents, or trademarks that represent more than eighty
36 percent (80%) of its total assets, or receives royalties and license fees that
37 represent more than eighty percent (80%) of its gross income, and it is one
38 hundred percent (100%) directly owned by a corporation that meets all of the
39 following conditions:
40 a. Is a manufacturer, as defined by NAICS codes 31 through 33.

41 b. Generates revenues in excess of five billion dollars ($5,000,000,000)
42 for income tax purposes from goods that it manufactures.
43 c. Includes in its net worth, as determined under G.S. 105-122(b), an
44 investment in a subsidiary that owns copyrights, patents, or
45 trademarks.
46 SECTION 41.3.(b) G.S. 105-122(d)(2) is repealed.
47 SECTION 41.3.(c) G.S. 105-122(d2) reads as rewritten:

48 (d2) Tax Rate. – For an electric power company or a company that is a member of a
49 qualified group, thetax rateis one dollar and fiftycents ($1.50) per one thousand dollars ($1,000)
50 of the company's tax base as determined under subsection (d) of this section. For purposes of this
51 subsection, the term electric power company has the same meaning as defined in

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1 G.S. 105-130.4(s3) and the term qualified group means an affiliated group that has one or more
2 members that is an electric power company.
3 For a C Corporation, For all other C Corporations, as defined in G.S. 105-130.2, [the] the tax
4 rateisonedollarandfiftycents($1.50)onedollarandtwenty-ninecents($1.29)peronethousand
5 dollars ($1,000) of the corporation's tax base as determined under subsection (d) of this section.
6 For an S Corporation, as defined in G.S. 105-130.2, the tax rate is two hundred dollars ($200.00)
7 for the first one million dollars ($1,000,000) of the corporation's tax base as determined under

8 subsection (d) of this section and one dollar and fifty cents ($1.50) one dollar and twenty-nine
9 cents ($1.29) per one thousand dollars ($1,000) of its tax base that exceeds one million dollars
10 ($1,000,000).
11 In no event may the tax imposed by this section be less than two hundred dollars ($200.00).
12 SECTION 41.3.(d) G.S. 105-122(d2), as amended by subsection (c) of this section,
13 reads as rewritten:
14 (d2) Tax Rate. – For an electric power company or a company that is a member of a

15 qualified group, thetax rateis one dollar and fiftycents ($1.50) per one thousand dollars ($1,000)
16 of the company's tax base as determined under subsection (d) of this section. For purposes of this
17 subsection, the term electric power company has the same meaning as defined in
18 G.S. 105-130.4(s3) and the term qualified group means an affiliated group that has one or more
19 members that is an electric power company.
20 For all other C Corporations, as defined in G.S. 105-130.2, the tax rate is one dollar and

21 twenty-nine cents ($1.29)ninety-six cents ($0.96) per one thousand dollars ($1,000) of the
22 corporation's tax base as determined under subsection (d) of this section. For an S Corporation,
23 asdefinedinG.S. 105-130.2,thetaxrateistwohundreddollars($200.00)forthefirstonemillion
24 dollars ($1,000,000) of the corporation's tax base as determined under subsection (d) of this
25 section and one dollar and twenty-nine cents ($1.29)ninety-six cents ($0.96) per one thousand
26 dollars ($1,000) of its tax base that exceeds one million dollars ($1,000,000).
27 In no event may the tax imposed by this section be less than two hundred dollars ($200.00).

28 SECTION 41.3.(e) G.S. 105-122(d2), as amended by subsections (c) and (d) of this
29 section, reads as rewritten:
30 (d2) Tax Rate. – For an electric power company or a company that is a member of a
31 qualified group, thetax rateis one dollar and fiftycents ($1.50) per one thousand dollars ($1,000)
32 of the company's tax base as determined under subsection (d) of this section. For purposes of this
33 subsection, the term electric power company has the same meaning as defined in G.S. 105-
34 130.4(s3) and the term qualified group means an affiliated group that has one or more members

35 that is an electric power company.
36 For all other C Corporations, For a C Corporation, as defined in G.S. 105-130.2, the tax rate
37 is ninety-six cents ($0.96) per one thousand dollars ($1,000) of the corporation's tax base as
38 determined under subsection (d) of this section. For an S Corporation, as defined in
39 G.S. 105-130.2, the tax rate is two hundred dollars ($200.00) for the first one million dollars
40 ($1,000,000) of the corporation's tax base as determined under subsection (d) of this section and

41 ninety-six cents ($0.96) per one thousand dollars ($1,000) of its tax base that exceeds one million
42 dollars ($1,000,000).
43 In no event may the tax imposed by this section be less than two hundred dollars ($200.00).
44 SECTION41.3.(f) Subsections (a)through(c)of this sectionareeffectivefortaxable
45 years beginning on or after January 1, 2020, and applicable to the calculation of franchise tax
46 reported on the 2019 and later corporate income tax returns. Subsection (d) of this section is
47 effectivefortaxable years beginningonorafterJanuary1, 2021, and applicableto thecalculation

48 of franchise tax reported on the 2020 and later corporate income tax returns. Subsection (e) of
49 this section is effective for taxable years beginning on or after January 1, 2027, and applicable to
50 the calculation of franchise tax reported on the 2026 and later corporate income tax returns.
51 Except as otherwise provided, this section is effective when it becomes law.

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1
2 USE MARKET-BASED SOURCING FOR MULTISTATE INCOME TAX
3 APPORTIONMENT
4 SECTION 41.4.(a) G.S. 105-130.4 reads as rewritten:
5 § 105-130.4. Allocation and apportionment of income for corporations.
6 …
7 (l) (1)Sales Factor. – The sales factor is a fraction, the numerator of which is the total

8 sales of the corporation in this State during the income year, and the denominator of which is the
9 total sales of the corporation everywhere during the income year. Notwithstanding any other
10 provision under this Part, the receipts from any casual sale of property shall be excluded from
11 both the numerator and the denominator of the sales factor. Where a corporation is not taxable in
12 another state on its apportionable income but is taxable in another state only because of
13 nonapportionable income, all sales shall be treated as having been made in this State.
14 Receipts are in this State if the taxpayer's market for the receipts is in this State. If the market

15 for a receipt cannot be determined, the state or states of assignment shall be reasonably
16 approximated. In a case in which a taxpayer cannot ascertain the state or states to which receipts
17 of a sale are to be assigned through the use of a method of reasonable approximation, the receipts
18 must beexcludedfrom thedenominatorof a taxpayer's sales factor. Except as otherwiseprovided
19 by this section, a taxpayer's market for receipts is in this State as provided below:
20 (1) In the case of sale, rental, lease, or license of real property, if and to the extent

21 the property is located in this State.
22 (2) Sales of tangible personal property are in this State if the property is received
23 in this State by the purchaser. In the case of delivery of goods by common
24 carrier or by other means of transportation, including transportation by the
25 purchaser, the place at which the goods are ultimately received after all
26 transportation has been completed shall be considered as the place at which
27 the goods are received by the purchaser. Direct delivery into this State by the

28 taxpayer to a person or firm designated by a purchaser from within or without
29 the State shall constitute delivery to the purchaser in this State.In the case of
30 rental, lease, or license of tangible personal property, if and to the extent the
31 property is located in this State.
32 (3) Other sales are in this State if any of the following occur:In the case of sale of
33 tangible personal property, if and to the extent the property is received in this
34 State by the purchaser. In the case of delivery of goods by common carrier or

35 by other means of transportation, including transportation by the purchaser,
36 the place at which the goods are ultimately received after all transportation
37 has been completed is considered the place at which the goods are received
38 by the purchaser. Direct delivery into this State by the taxpayer to a person or
39 firm designated by a purchaser from within or without the State constitutes
40 delivery to the purchaser in this State.

41 a. The receipts are from real or tangible personal property located in this
42 State, and includes receipts from incidental services sold as part of, or
43 in connection with, the sale of tangible personal property in this State.
44 b. The receipts are from intangible property and are received from
45 sources within this State.
46 c. The receipts are from services and the income-producing activities are
47 in this State. For the purposes of this subdivision, an

48 income-producing activity means an activity directly performed by
49 the taxpayer or its agents for the ultimate purpose of generating the
50 sale of the service. Receipts from income-producing activities
51 performed within and without this State are attributed to this State in

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1 proportion to the income-producing activities performed in this State
2 to total income-producing activities performed everywhere that
3 generate the sale of service.
4 (4) In the case of sale of a service, if and to the extent the service is delivered to
5 a location in this State.
6 (5) In the case of intangible property that is rented, leased, or licensed, if and to
7 the extent the property is used in this State. Intangible property utilized in

8 marketing a good or service to a consumer is used in this State if that good
9 or service is purchased by a consumer who is in this State.
10 (6) In the case of intangible property that is sold, if and to the extent the property
11 is used in this State.A contract right, government license,or similarintangible
12 property that authorized the holder to conduct a business activity in a specific
13 geographic area is used in this State if the geographic area includes all or
14 part of this State. Receipts from a sale of intangible propertythat is contingent

15 on the productivity, use, or disposition of the intangible property shall be
16 treated as receipts from therental,lease,orlicensingof theintangibleproperty
17 as provided under subdivision (5) of this subsection. All other receipts from a
18 sale of intangible property shall be excluded from the numerator and
19 denominator of the sales factor.
20 (l1) Wholesale Content Distributors. – A whole content distributor's market for receipts

21 is in this State as provided in G.S. 105-130.4A. In no event may the amount of income
22 apportioned to this State be less than the amount determined under this subsection. The amount
23 determined under this subsection is the total domestic gross receipts of the wholesale content
24 distributorfrom advertising and licensingactivitiesmultiplied bytwopercent (2%). For purposes
25 of this section, the term wholesale content distributor has the same meaning as defined in
26 G.S. 105-130.4A.
27 (l2) Banks. – A bank's market for receipts is in this State as provided in G.S. 105-130.4B.

28 For purposes of this section, the term bank has the same meaning as defined in
29 G.S. 105-130.4B.
30 …
31 (s2) Pipeline Company. – Receipts from the transportation or transmission of a
32 petroleum-based liquids pipeline or natural gas by a company subject to rate regulation by the
33 Federal Energy Regulatory Commission shall be apportioned by multiplying the income by a
34 fraction, the numerator of which is the number of barrel miles traffic units in this State during

35 the tax year and the denominator of which is the total number of barrel miles traffic units
36 everywhere during the tax year. For purposes of this section, the term barrel mile means one
37 barrel of liquid property transported one mile.traffic unit means one or more of the following:
38 (1) Barrel mile. – One barrel of liquid property transported one mile.
39 (2) Cubic foot mile. – One cubic foot of gaseous property transported one mile.
40 (s3) Electric Power Company. – All apportionable income of an electric power company

41 shall be apportioned by a fraction, the numerator of which is the average value of the real and
42 tangible personal property owned or rented and used in this State by the electric power company
43 during the income year and the denominator of which is the average value of all the real and
44 tangible personal property owned or rented and used by the electric power company during the
45 income year. For purposes of this subsection, the term electric power company is a company,
46 including any of its wholly owned noncorporate limited liability companies, primarily engaged
47 in the business of supplying electricity for light, heat, current, or power to persons in this State

48 and that is subject to control of one or more of the following entities: the North Carolina Utilities
49 Commission or the Federal Energy Regulatory Commission.
50 For purposes of this subsection, the average value of real and tangible personal property
51 owned or rented by an electric power company is determined as follows:

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1 (1) The average value of property shall be determined by averaging the values at
2 the beginning and end of the income year, but in all cases the Secretary may
3 require the averaging of monthly or other periodic values during the income
4 year if reasonably required to reflect properly the average value of the
5 corporation's property.
6 (2) An electric power company that ceases its operations in this State before the
7 end of its income year because of its intention to dissolve or to relinquish its

8 certificate of authority, or because of a merger, conversion, or consolidation,
9 or for any other reason whatsoever shall use the real estate and tangible
10 personal property values as of the first day of the income year and the last day
11 of its operations in this State in determining the average value of property, but
12 the Secretary may require averaging of monthly or other periodic values
13 during the income year if reasonably required to reflect properly the average
14 value of the electric power company's property.

15 (3) Property owned by an electric power company is valued at its original cost.
16 (4) Property rented by an electric power company is valued at eight times the net
17 annual rental rate.
18 (5) Net annual rental rate is the annual rental rate paid by an electric power
19 company less any annual rental rate received by the electric power company
20 from sub-rentals except that sub-rentals shall not be deducted when they

21 constitute apportionable income.
22 (6) Any property under construction and any property the income from which
23 constitutes nonapportionable income shall be excluded from the computation
24 of the average value of an electric power company's real and tangible personal
25 property.
26 …
27 (t3) State Net Loss Apportionment Election. – Notwithstanding subsection (l)(4) of this

28 section, a taxpayer with a State net loss balance as of the end of its 2019 taxable year may elect
29 to apportion receipts from services based on the percentage of its income-producing activities
30 performed in this State. The election must be made on the 2020 tax year return and must be in
31 the form prescribed by the Secretary and contain any supporting documentation the Secretary
32 may require. The election is binding and irrevocable until the earlier of the tax year in which (i)
33 the existing State net loss balance is fully utilized or (ii) all of the existing State net loss balance
34 has expired, as determined by applying the limitations set forth in G.S. 105-130.8A(b). A

35 taxpayer must apportion receipts from services in accordance with subsection (l)(4) of this
36 section for tax years beginning on and after the tax year that the existing State net loss is fully
37 utilized.
38 For purposes of this subsection, a taxpayer's State net loss balance is the total amount of State
39 net losses computed under G.S. 105-130.8A for taxable years beginning before January 1, 2020,
40 and available to carry forward to taxable years beginning on or after January 1, 2020. A State net

41 loss balance does not include a State net loss created in a taxable year beginning on or after
42 January 1, 2020. A State net loss created in a taxable year beginning on or after January 1, 2020,
43 must be determined using the apportionment rules in G.S. 105-130.4(l).
44 SECTION 41.4.(b) Part 1 of Article 4 of Chapter 105 of the General Statutes is
45 amended by adding a new section to read:
46 § 105-130.4A. Market-based sourcing for wholesale content distributors.
47 (a) Definitions. – The definitions in G.S. 105-130.4 and the following definitions apply

48 to this section:
49 (1) Customer. – A person who has a direct contractual relationship with a
50 wholesale content distributor from whom the wholesale content distributor
51 derives gross receipts, including a business customer such as an advertiser or

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1 licensee and an individual customer that directly subscribes with the
2 wholesale content distributor for access to film programming.
3 (2) Gross receipts. – The same meaning as the term sales in G.S. 105-130.4.
4 (3) Wholesale content distributor. – A broadcast television network, a cable
5 program network, or any television distribution company owned by, affiliated
6 with, or under common ownership with any such network. The term does not
7 mean or include a multi-channel video programming distributor or a

8 distributor of subscription-based Internet programming services.
9 (b) Market for Receipts. – The receipts factor of a wholesale content distributor is a
10 fraction, the numerator of which is the sum of the wholesale content distributor's gross receipts
11 from transactions and activity in the regular course of its trade or business from sources within
12 the State and the denominator of which is the sum of the wholesale content distributor's gross
13 receipts from transactions and activity in the regular course of its trade or business everywhere.
14 A wholesale content distributor's receipts from transactions and activities in the regular course

15 of its business, including advertising, licensing, and distribution activities, but excluding receipts
16 from the sale of real property or tangible personal property, are in this State if derived from a
17 business customer whose commercial domicile is in this State. Receipts derived from an
18 individual customer are in this State if the billing address of the individual customer as listed in
19 the broadcaster's books and records is in this State.
20 SECTION 41.4.(c) Part 1 of Article 4 of Chapter 105 of the General Statutes is

21 amended by adding a new section to read:
22 § 105-130.4B. Market-based sourcing for banks.
23 (a) Definitions. – The definitions in G.S. 105-130.4 apply to this section and the
24 following definitions apply to this section:
25 (1) Bank. – Defined in G.S. 105-130.7B.
26 (2) Billing address. – The location indicated in the books and records of the
27 taxpayer on the first day of the taxable year, or on the date in the taxable year

28 when the customer relationship began, as the address where any notice,
29 statement, or billing relating to the customer's account is mailed.
30 (3) Borrower, cardholder, or payor located in this State. – A borrower, credit
31 cardholder, or payor whose billing address is in this State.
32 (4) Card issuer's reimbursement fee. – The fee a taxpayer receives from a
33 merchant's bank because one of the persons to whom the taxpayer has issued
34 a credit, debit, or similar type of card has charged merchandise or services to

35 the card.
36 (5) Credit card. – A card, or other means of providing information, that entitles
37 the holder to charge the cost of purchases, or a cash advance, against a line of
38 credit.
39 (6) Debit card. – A card, or other means of providing information, that enables
40 the holder to charge the cost of purchases, or a cash withdrawal, against the

41 holder's bank account or a remaining balance on the card.
42 (7) Loan. – Anyextension of credit resulting from direct negotiations between the
43 taxpayer and its customer, and/or the purchase, in whole or in part, of such an
44 extension of credit from another. The term includes participations,
45 syndications, and leases treated as loans for federal income tax purposes.
46 (8) Loan secured by real property. – A loan or other obligation of which fifty
47 percent (50%) or more of the aggregate value of the collateral used to secure

48 the loan or other obligation, when valued at fair market value as of the time
49 the original loan or obligation was incurred, was real property.
50 (9) Merchant discount. – The fee, or negotiated discount, charged to a merchant
51 by the taxpayer for the privilege of participating in a program whereby a

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1 credit, debit, or similar type of card is accepted in payment for merchandise
2 or services sold to the cardholder, net of any cardholder chargeback and
3 unreduced by any interchange transaction or issuer reimbursement fee paid to
4 another for charges or purchases made by its cardholder.
5 (10) Participation. – An extension of credit in which an undivided ownership
6 interest is held on a prorated basis in a single loan or pool of loans and related
7 collateral. In a loan participation, the credit originator initially makes the loan

8 and then subsequently resells all or a portion of it to other lenders. The
9 participation may or may not be known to the borrower.
10 (11) Payor. – The person who is legally responsible for making payment to the
11 taxpayer.
12 (12) Real property owned. – Real property (i) on which the taxpayer may claim
13 depreciation for federal income tax purposes or (ii) to which the taxpayer
14 holds legal title and on which no other person may claim depreciation for

15 federal income tax purposes or could claim depreciation if subject to federal
16 income tax. Real property does not include coin, currency, or property
17 acquired in lieu of or pursuant to a foreclosure.
18 (13) Syndication. – An extension of credit in which two or more persons fund and
19 each person is at risk only up to a specified percentage of the total extension
20 of credit or up to a specified dollar amount.

21 (14) Tangible personal property owned. – Tangible personal property (i) on which
22 the taxpayer may claim depreciation for federal income tax purposes or (ii) to
23 which the taxpayer holds legal title and on which no other person may claim
24 depreciation for federal income tax purposes could claim deprecation if
25 subject to federal income tax. Tangible personal property does not include
26 coin, currency, or property acquired in lieu of or pursuant to a foreclosure.
27 (15) Transportation property. –Vehicles and vessels capableof moving undertheir

28 own power as well as any equipment or containers attached to such property.
29 Examples of transportation property include aircraft, trains, water vessels,
30 motor vehicles, rolling stock, barges, and trailers.
31 (b) General Rule. – The receipts factor of a bank is a fraction, the numerator of which is
32 the total receipts of the taxpayer in this State during the income year, and the denominator of
33 which is the total receipts of the taxpayer everywhere during the income year. The method of
34 calculating receipts for purposes of the denominator is the same as the method used in

35 determining receipts for purposes of the numerator. The receipts factor includes only those
36 receipts described herein that are apportionableincomefor thetaxable year. Notwithstandingany
37 other provision under this Part, the receipts from the following are excluded from both the
38 numerator and the denominator of the receipts factor:
39 (1) Receipts from a casual sale of property.
40 (2) Receipts exempt from taxation.

41 (3) The portion of receipts realized from the sale or maturityof securities or other
42 obligations that represents a return of principal.
43 (4) Receipts in the nature of dividends subtracted under G.S. 105-130.5(b)(3a)
44 and (3b) and dividends excluded for federal tax purposes.
45 (5) The portion of receipts from financial swaps and other similar financial
46 derivatives that represent thenotional principalamount thatgeneratesthe cash
47 flow traded in the swap agreement.

48 (c) Receipts from the Sale, Lease, or Rental of Real Property. – The numerator of the
49 receipts factor includes receipts from the sale, lease, or rental of real property owned by the
50 taxpayer if the property is located within this State or receipts from the sublease of real property
51 if the property is located within this State.

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1 (d) Receipts from the Sale, Lease, or Rental of Tangible Personal Property. – The method
2 for calculating receipts from the sale, lease, or rental of tangible personal property is as follows:
3 (1) Tangible personal property. – Except as provided in subdivision (2) of this
4 subsection, thenumerator ofthereceipts factorincludes receipts from thesale,
5 lease, or rental of tangible personal property owned by the taxpayer if the
6 property is located within this State when it is first placed in service by the
7 lessee.

8 (2) Transportation property. – Receipts from the lease or rental of transportation
9 property owned by the taxpayer are included in the numerator of the receipts
10 factor to the extent that the propertyis used in this State. The extent an aircraft
11 will be deemed to be used in this State and the amount of receipts that is to be
12 included in the numerator of this State's receipts factor is determined by
13 multiplying all the receipts from the lease or rental of the aircraft bya fraction,
14 the numerator of which is the number of landings of the aircraft in this State

15 and the denominator of which is the total number of landings of the aircraft.
16 If the extent of the use of any transportation property within this State cannot
17 be determined, then the propertywill be deemed to be used wholly in the state
18 in which the propertyhas its principalbaseof operations. Amotorvehiclewill
19 be deemed to be used wholly in the state in which it is registered.
20 (e) Interest, Fees, and Penalties from Loans Secured by Real Property. – The numerator

21 of the receipts factor includes interest, fees, and penalties from loans secured by real property if
22 the property is located within this State. If the property is located both within this State and one
23 or more other states, the receipts described in this subsection are included in the numerator of the
24 receipts factor if more than fifty percent (50%) of the fair market value of the real property is
25 located within this State. If more than fifty percent (50%) of the fair market value of the real
26 property is not located within any one state, then the receipts described in this subsection are
27 included in the numerator of the receipts factor if the borrower is located in this State. The

28 determination of whether the real property securing a loan is located within this State is made as
29 ofthetimetheoriginal agreement was madeandanyandall subsequent substitutions ofcollateral
30 are disregarded.
31 (f) Interest, Fees, and Penalties from Loans Not Secured by Real Property. – The
32 numerator of the receipts factor includes interest, fees, and penalties from loans not secured by
33 real property if the borrower is located in this State.
34 (g) Net Gains from the Sale of Loans. – The numerator of the receipts factor includes net

35 gains from the sale of loans. Net gains from the sale of loans include income recorded under the
36 coupon stripping rules of section 1286 of the Code. The amount of net gains from the sale of
37 loans that is included in the numerator is determined as follows:
38 (1) Secured by real property. – The amount of net gains, but not less than zero,
39 from the sale of loans secured by real property is determined by multiplying
40 the net gains by a fraction, the numerator of which is the amount included in

41 the numerator of the receipts factor pursuant to subsection (e) of this section,
42 and the denominator of which is the total amount of interest, fees, and
43 penalties from loans secured by real property.
44 (2) Not secured byreal property. –The amount ofnet gains, but not lessthanzero,
45 from the sale of loans not secured by real property is determined by
46 multiplying the net gains by a fraction, the numerator of which is the amount
47 included in the numerator of the receipts factor pursuant to subsection (f) of

48 this section, and the denominator of which is the total amount of interest, fees,
49 and penalties from loans not secured by real property.

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1 (h) Receipts from Interest, Fees, and Penalties from Cardholders. – The numerator of the
2 receipts factor includes interest, fees, and penalties charged to credit, debit, or similar
3 cardholders, including annual fees and overdraft fees, if the cardholder is located in this State.
4 (i) Receipts from ATM Fees. – The numerator of the receipts factor includes receipts
5 from fees from the use of an ATM owned or rented by the taxpayer, if the ATM is located in this
6 State. The receipts factor includes all ATM fees that are not forwarded directly to another bank.
7 Receipts from ATM fees that are not sourced under this subsection are sourced pursuant to

8 subsection (l) of this section.
9 (j) Net Gains from the Sale of Credit Card Receivables. – The numerator of the receipts
10 factorincludesnet gains, but not lessthanzero, from thesaleofcredit card receivables multiplied
11 by a fraction, the numerator of which is the amount included in the numerator of the receipts
12 factor pursuant to subsection (h) of this section, and the denominator of which is the taxpayer's
13 total amount of interest, fees, and penalties charged to cardholders.
14 (k) Miscellaneous Receipts. – The numerator of the receipts factor includes all of the

15 following:
16 (1) Cardissuer'sreimbursementfees.–Receiptsfrom cardissuer'sreimbursement
17 fees if the payor is located in this State.
18 (2) Receipts from merchant's discount. – Receipts from a merchant discount if the
19 payor is located in this State.
20 (3) Loan servicing fees. – Receipts from loan servicing fees if the payor is located

21 in this State.
22 (4) Receipts from services. – Receipts from services not otherwise apportioned
23 under this section if the payor is located in this State.
24 (5) Receipts from investment assets and activity and trading assets and activity. –
25 Receipts from one or more of the following:
26 a. Interest and dividends from investment assets and activities and
27 trading assets and activities if the payor is located in this State.

28 b. Net gains and other income, but not less than zero, from investment
29 assets and activities and trading assets and activities multiplied by a
30 fraction, the numerator of which is the amount included in the
31 numerator of the receipts factor pursuant to sub-subdivision a. of this
32 subdivision, and the denominator of which is the taxpayer's total
33 amount of interest and dividends from investment assets and activities
34 and trading assets and activities.

35 (l) All Other Receipts. – All other receipts not specifically enumerated in this section are
36 included in the numerator of the receipts factor if the payor is located in this State.
37 SECTION 41.4.(d) G.S. 105-122(c1) reads as rewritten:
38 (c1) Apportionment. – A corporation that is doing business in this State and in one or more
39 other states must apportion its net worth to this State. A corporation must use the apportionment
40 method set out in subdivision (1) of this subsection unless the Department has authorized it to

41 use a different method under subdivision (2) of this subsection. A taxpayer that has made an
42 election under G.S. 105-130.4(t3) must use the apportionment method set out in subdivision (1)
43 of this subsection as if the election had not been made, unless the Department has authorized a
44 different methodundersubdivision(2)ofthissubsection.Theportionofacorporation'snetworth
45 determined by applying the appropriate apportionment method is considered the amount of net
46 worth the corporation uses in its business in this State:
47 (1) Statutory. – A corporation that is subject to income tax under Article 4 of this

48 Chapter must apportion its capital stock, surplus, and undivided profits by
49 using the fraction it applies in apportioning its income under that Article. A
50 corporation that is not subject to income tax under Article 4 of this Chapter
51 must apportion its capital stock, surplus, and undivided profits by using the

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1 fraction it would be required to apply in apportioning its income if it were
2 subject to that Article. The apportionment fraction for a wholesale content
3 distributor, as that term is defined in G.S. 105-130.4A, shall not be less than
4 two percent (2%). The apportionment method set out in this subdivision is
5 considered the statutory method of apportionment and is presumed to be the
6 best method of determining the amount of a corporation's capital stock,
7 surplus, and undivided profits attributable to the corporation's business in this

8 State.
9 ….
10 SECTION 41.4.(e) The Utilities Commission shall adjust the rates for public
11 utilities, excluding water public utilities with less than two hundred thousand dollars ($200,000)
12 in annual operating revenues, for the tax changes in subsection (a) of this section. Each utility
13 shall calculate the cumulative net effect of the tax changes and file the calculations with proposed
14 rate changes to reflect the net prospective tax changes in utility customer rates within 60 days of

15 the enactment of this act. Any adjustments required to existing tax assets or liabilities reflected
16 in the utility's books and records required by the tax changes shall be deferred and reflected in
17 customer rates in either the utility's next rate case or earlier if deemed appropriate by the
18 Commission.
19 SECTION 41.4.(f) Under Section 38.4 of S.L. 2016-94, the Department of Revenue
20 adopted and submitted to the Rules Review Commission rules regarding the implementation and

21 administration of market-based sourcing principles based on legislation proposed in that section.
22 The Department adopted the rules on January 4, 2017, and submitted the rules to the Rules
23 Review Commission on January 18, 2017. The Rules Review Commission approved and
24 delivered the rules to the Codifier of Rules on February 16, 2017. Pursuant to Section 38.4(b) of
25 S.L. 2016-94, the Codifier of Rules did not enter the rules into the Administrative Code. The
26 Codifier of Rules is hereby directed by the General Assembly to enter the rules into the
27 Administrative Code on the effective date of this act, and the rules apply to taxable years

28 beginning on or after January 1, 2020.
29 The Department of Revenue shall adopt and submit to the Rules Review Commission
30 on or before October 21, 2019, rules regarding the implementation and administration of
31 market-based sourcing principles, to the extent modifications are needed based on the statutory
32 changes enacted by this section. In adopting rules pursuant to this subsection, the following
33 provisions apply:
34 (1) The exemption provided in G.S. 150B-1(d)(4) applies.

35 (2) The provisions of G.S. 150B-21.3(b1) and (b2) do not apply.
36 (3) The provisions of G.S. 150B-21.4 do not apply.
37 SECTION 41.4.(g) Subsections (a) through (d) of this section are effective for
38 taxable years beginning on or after January 1, 2020. The remainder of this section is effective
39 when it becomes law.
40

41 MARKETPLACE FACILITATORS TO COLLECT SALES TAX
42 SECTION 41.5.(a) G.S. 105-164.3 reads as rewritten:
43 § 105-164.3. Definitions.
44 The following definitions apply in this Article:
45 …
46 (20a) Marketplace. – A physical or electronic place, forum, platform, application,
47 or other method by which a marketplace seller sells or offers to sell items, the

48 delivery of or first use of which is sourced to this State.
49 (20b) Marketplace-facilitated sale. – The sale of an item bya marketplace facilitator
50 on behalf of a marketplace seller that occurs through a marketplace.

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1 (20c) Marketplace facilitator. – A person that, directly or indirectly and whether
2 through one or more affiliates, does both of the following:
3 a. Lists or otherwise makes available for sale a marketplace seller's items
4 through a marketplace owned or operated by the marketplace
5 facilitator.
6 b. Does one or more of the following:
7 1. Collects the sales price or purchase price of a marketplace

8 seller's items or otherwise processes payment.
9 2. Makes payment processingservices available to purchasers for
10 the sale of a marketplace seller's items.
11 (20d) Marketplace seller. – A person that sells or offers to sell items through a
12 marketplace regardless of any of the following:
13 a. Whether the person has a physical presence in this State.
14 b. Whether the person is registered as a retailer in this State.

15 c. Whether the person would have been required to collect and remit
16 sales and use tax had the sales not been made through a marketplace.
17 d. Whether the person would not have been required to collect and remit
18 sales and use tax had the sales not been made through a marketplace.
19 ….
20 SECTION 41.5.(b) G.S. 105-164.8(b), as amended by S.L. 2019-6, reads as

21 rewritten:
22 (b) Remote Sales. – A retailer who makes a remote sale is engaged in business in this
23 State and is subject to the tax levied under this Article if at least one of the following conditions
24 is met:
25 …
26 (3) The retailer solicits or transacts business in this State by employees,
27 independent contractors, agents, or other representatives, whether the remote

28 sales thus subject to taxation by this State result from or are related in any
29 other way to the solicitation or transaction of business. A retailer is presumed
30 to be soliciting or transacting business by an independent contractor, agent, or
31 other representative if the retailer enters into an agreement with a resident of
32 this State under which the resident, person, for a commission or other
33 consideration, directly or indirectly refers potential customers, whether by a
34 link on an Internet Web site or otherwise, to the retailer. This presumption

35 applies only if the cumulative gross receipts from sales by the retailer to
36 purchasers in this State who are referred to the retailer by all residents persons
37 withthistypeofagreementwiththeretailerisinexcessoftenthousanddollars
38 ($10,000) during the preceding four quarterly periods. This presumption may
39 be rebutted by proof that the resident person with whom the retailer has an
40 agreement did not engage in anysolicitation in the State on behalf of the seller

41 that would satisfy the nexus requirement of the United States Constitution
42 during the four quarterly periods in question.
43 …
44 (9) The retailer, with respect to retailer makes remote sales into North Carolina
45 sourced to this State, including sales as a marketplace seller, for the previous
46 or the current calendar year, had one or more year that meet either of the
47 following:

48 a. Gross sales in excess of one hundred thousand dollars ($100,000).
49 b. Two hundred or more separate transactions.

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1 (10) The retailer is a marketplace facilitator that makes sales, including all
2 marketplace-facilitated sales for all marketplace sellers, sourced to this State
3 for the previous or the current calendar year that meet either of the following:
4 a. Gross sales in excess of one hundred thousand dollars ($100,000).
5 b. Two hundred or more separate transactions.
6 SECTION 41.5.(c) Part 2 of Article 5 of Chapter 105 of the General Statutes is
7 amended by adding a new section to read:

8 § 105-164.4J. Marketplace-facilitated sales.
9 (a) Scope. – This section applies to a marketplace facilitator that makes sales, including
10 all marketplace-facilitated sales for all marketplace sellers, sourced to this State for the previous
11 or the current calendar year that meet either of the following:
12 (1) Gross sales in excess of one hundred thousand dollars ($100,000).
13 (2) Two hundred or more separate transactions.
14 (b) Payment of Tax. – A marketplace facilitator that meets the threshold in subsection (a)

15 of this section is considered the retailer of each marketplace-facilitated sale it makes and is liable
16 for collecting and remitting the sales and use tax on all such sales. A marketplace facilitator is
17 required to comply with the same requirements and procedures as all other retailers registered or
18 whoarerequiredtoberegisteredtocollect andremitsalesandusetax inthisState.Amarketplace
19 facilitator is required to collect and remit sales tax as required by this section regardless of
20 whether a marketplace seller for whom it makes a marketplace-facilitated sale meets any of the

21 following conditions:
22 (1) Has a physical presence in this State.
23 (2) Is required to be registered to collect and remit sales and use tax in this State.
24 (3) Would have been required to collect and remit sales and use tax in this State
25 had the sale not been made through a marketplace.
26 (4) Would not have been required to collect and remit sales and use tax in this
27 State had the sale not been made through a marketplace.

28 (c) Report. – A marketplace facilitator must provide or make available to each
29 marketplacesellertheinformation listedin this subsection with respect to marketplace-facilitated
30 sales that are made on behalf of the marketplace seller and that are sourced to this State. The
31 information may be provided in any format and shall be provided or made available no later than
32 10 days after the end of each calendar month. The required information to be provided or made
33 available to each marketplace seller is as follows:
34 (1) Gross sales.

35 (2) The number of separate transactions.
36 (d) LiabilityRelief. – TheDepartment shall not assessamarketplacefacilitatorforfailure
37 to collect the correct amount of tax due if the marketplace facilitator can demonstrate to the
38 Secretary's satisfaction that all of the circumstances listed in this subsection apply. This
39 subsection does not apply with regard to a marketplace facilitated sale for which the marketplace
40 facilitator is the marketplace seller or if the marketplace facilitator and the marketplace seller are

41 affiliates. If a marketplace facilitator is not assessed for tax due under this section, the
42 marketplace seller is liable for the tax due under this section provided the marketplace seller is
43 engaged in business in this State. The circumstances that a marketplace facilitator must
44 demonstrate are as follows:
45 (1) The failure to collect the correct amount of tax was due to incorrect
46 information given to the marketplace facilitator by the marketplace seller.
47 (2) The marketplace facilitator did not receive specific written advice from the

48 Secretary for the transaction at issue.
49 (e) Refund of Tax. – If a purchaser receives a refund on any portion of the sales price
50 from a marketplace facilitator who collected and remitted the tax on the retail sale, the provisions
51 of G.S. 105-164.11A(a) apply.

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1 (f) Class Actions. – No class action may be brought against a marketplace facilitator in
2 any court of this State on behalf of customers arising from or in any way related to an
3 overpayment of sales or use tax collected on facilitated sales by a marketplace facilitator,
4 regardless of whether that claim is characterized as a tax refund claim. Nothing in this subsection
5 affects a customer's right to seek a refund as provided under G.S. 105-164.11.
6 (g) Agreements. – Nothing in this section shall be construed to interfere with the ability
7 of a marketplace facilitator and a marketplace seller to enter into an agreement with each other

8 regarding the fulfillment of the requirements of this Article, except that an agreement may not
9 requireamarketplacesellerto collect andremitsalesandusetaxonmarketplace-facilitatedsales.
10 (h) Use Tax Obligation. – Nothing in this section affects the obligation of any purchaser
11 to remit use tax for any taxable transaction for which a marketplace facilitator does not collect
12 and remit sales or use tax.
13 (i) Limitation. – This section does not apply to an accommodation facilitator, an
14 admission facilitator, or a service contract facilitator whose collection and remittance

15 requirements are set out in G.S. 105-164.4F, 105-164.4G, and 105-164.4I, respectively.
16 SECTION 41.5.(d) G.S. 105-164.3 reads as rewritten:
17 § 105-164.3. Definitions.
18 The following definitions apply in this Article:
19 (1) Accommodation. – A hotel room, a motel room, a residence, a cottage, or a
20 similar lodging facility for occupancy by an individual.

21 (1a) Accommodation facilitator. – A person that contracts, either directly or
22 indirectly, with a provider of an accommodation to perform, either directly or
23 indirectly, one or more of the activities listed in this subdivision. The term
24 includes a real estate broker as defined in G.S. 93A-2. The activities are:
25 a. Market the accommodation and accept payment or collect credit card
26 or other payment information for the rental of the accommodation.
27 b. List the accommodation for rental on a forum, platform, or other

28 application for a fee or other consideration.
29 ….
30 SECTION 41.5.(e) G.S. 105-164.4F reads as rewritten:
31 § 105-164.4F. Accommodation rentals.
32 (a) Definition. – The following definitions apply in this section:
33 (1) Accommodation. – A hotel room, a motel room, a residence, a cottage, or a
34 similar lodging facility for occupancy by an individual.

35 (2) Facilitator. – A person who is not a rental agent and who contracts with a
36 provider of an accommodation to market the accommodation and to accept
37 payment from the consumer for the accommodation.
38 (3) Rental agent. – The term includes a real estate broker, as defined in G.S.
39 93A-2.
40 (b) Tax. – The gross receipts derived from the rental of an accommodation are taxed at

41 the general rate set in G.S. 105-164.4. Gross receipts derived from the rental of an
42 accommodation include the sales price of the rental of the accommodation. The sales price of the
43 rental of an accommodation is determined as if the rental were a rental of tangible personal
44 property. The sales price of the rental of an accommodation marketed made by a an
45 accommodation facilitator includes any charges designated as facilitation fees and any other
46 charges or fees, by whatever name called, charged by the accommodation facilitator to the
47 purchaser of the accommodation that are necessary to complete the rental. The tax is due and

48 payable by the retailer in accordance with G.S. 105-164.16.
49 (b1) Retailer. – Except as otherwise provided in subsection (c) of this section, the retailer
50 of the rental of an accommodation is one or more of the persons listed below that collects the
51 payment, oraportion ofthepayment, fortherental ofthe accommodation. Intheevent theperson

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1 who collects the payment cannot be determined or is a third party that is not listed in this
2 subsection, and subsection (c) of this section does not apply, the provider of the accommodation
3 shall be considered the retailer of the transaction. The retailer is liable for reporting and remitting
4 the tax due on the portion of the gross receipts derived from the rental of the accommodation that
5 the retailer collects. The retailer may be one or more of the following:
6 (1) The provider of the accommodation.
7 (2) An accommodation facilitator.

8 (c) Certain Accommodation Facilitator Transactions. – A facilitator must report to the
9 retailer with whom it has a contract the sales price a consumer pays to the facilitator for an
10 accommodation rental marketed by the facilitator. A retailer must notify a facilitator when an
11 accommodation rental marketed by the facilitator is completed, and the This subsection applies
12 only to an accommodation facilitator that is operated by or on behalf of a hotel or a hotel
13 corporation, that facilitates the rental of hotel accommodations solely for the hotel or the hotel
14 corporation's owned or managed hotels and franchisees, and that collects payment, or a portion

15 of the payment, for the rental of an accommodation. An accommodation facilitator subject to this
16 subsection is not considered the retailer of the rental of the accommodation. The accommodation
17 facilitator must send the retailer the portion of the sales price the facilitator owes the retailer and
18 thetax dueon thesalespriceprice, ortheportion of thesalesprice, theaccommodationfacilitator
19 collected no later than 10 days after the end of each calendar month. A An accommodation
20 facilitator that does not send the retailer the tax due on the sales price price, or the portion of the

21 sales price the accommodation facilitator collected, is liable for the amount of tax the
22 accommodation facilitator fails to send. A An accommodation facilitator is not liable for tax sent
23 to a retailer but not remitted by the retailer to the Secretary. Tax payments received by a retailer
24 from a an accommodation facilitator are held in trust by the retailer for remittance to the
25 Secretary. A retailer that receives a tax payment from a an accommodation facilitator must remit
26 the amount received to the Secretary. A retailer is not liable for tax due but not received from a
27 an accommodation facilitator. The requirements imposed by this section on a retailer and a

28 facilitator are considered terms of the contract between the retailer and the facilitator.
29 (c1) Accommodation Facilitator Report. – An accommodation facilitator must file with
30 the Secretary an annual report by March 31 of each year for the prior calendar year for
31 accommodation rentals it makes. The annual report must be provided in electronic format and
32 include the property owner's name, the property owner's mailing address, the physical location
33 of the accommodation, and gross receipts information for the rentals. The report may only be
34 used by the Secretary, and any person receiving the report, pursuant to G.S. 105-259, for tax

35 compliance purposes.
36 (d) Rental Agent. – A person who, by written contract, agrees to be the rental agent for
37 the provider of an accommodation is considered a retailer under this Article and is liable for the
38 tax imposed by this section. The liability of a rental agent for the tax imposed by this section
39 relieves the provider of the accommodation from liability.
40 (e) Exemptions. – The tax imposed by this section does not apply to the following:

41 (1) Aprivateresidence,cottage,orsimilaraccommodationthatisrentedforfewer
42 than 15 days in a calendar year other than a private residence, cottage, or
43 similar accommodation listed with a real estate broker or agent.unless the
44 rental of the accommodation is made by an accommodation facilitator.
45 (2) An accommodation supplied to the same person for a period of 90 or more
46 continuous days.
47 (3) An accommodation arranged or provided to a person by a school, camp, or

48 similar entity where a tuition or fee is charged to the person for enrollment in
49 the school, camp, or similar entity.
50 SECTION 41.5.(f) G.S. 160A-215(c) reads as rewritten:

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1 (c) Collection. – A retailer who is required to remit to the Department of Revenue the
2 State sales tax imposed by G.S. 105-164.4(a)(3) on accommodations is required to remit a room
3 occupancytax to the taxing city on and after the effective date of the levyof the room occupancy
4 tax. The room occupancy tax applies to the same gross receipts as the State sales tax on
5 accommodations and is calculated in the same manner as that tax. A rental agent or a facilitator,
6 as defined in G.S. 105-164.4F, An accommodation facilitator, as defined in G.S. 105-164.3, has
7 the same responsibility and liability under the room occupancy tax as the rental agent or

8 accommodation facilitator has under the State sales tax on accommodations.
9 If a taxable accommodation is furnished as part of a package, the bundled transaction
10 provisions in G.S. 105-164.4D apply in determining the sales price of the taxable
11 accommodation. If those provisions do not address the type of package offered, the person
12 offering the package may determine an allocated price for each item in the package based on a
13 reasonable allocation of revenue that is supported by the person's business records kept in the
14 ordinary course of business and calculate tax on the allocated price of the taxable

15 accommodation.
16 A retailer must separately state the room occupancy tax. Room occupancy taxes paid to a
17 retailer are held in trust for and on account of the taxing city.
18 The taxing city shall design and furnish to all appropriate businesses and persons in the city
19 the necessary forms for filing returns and instructions to ensure the full collection of the tax. An
20 operator of a business who collects a room occupancy tax may deduct from the amount remitted

21 to the taxing city a discount equal to the discount the State allows the retailer for State sales and
22 use tax.
23 SECTION 41.5.(g) G.S. 153A-155(c) reads as rewritten:
24 (c) Collection. – A retailer who is required to remit to the Department of Revenue the
25 State sales tax imposed by G.S. 105-164.4(a)(3) on accommodations is required to remit a room
26 occupancy tax to the taxing county on and after the effective date of the levy of the room
27 occupancy tax. The room occupancy tax applies to the same gross receipts as the State sales tax

28 on accommodations and is calculated in the same manner as that tax. A rental agent or a
29 facilitator, as defined in G.S. 105-164.4F, An accommodation facilitator, as defined in
30 G.S. 105-164.3, has the same responsibility and liability under the room occupancy tax as the
31 rental agent or accommodation facilitator has under the State sales tax on accommodations.
32 If a taxable accommodation is furnished as part of a package, the bundled transaction
33 provisions in G.S. 105-164.4D apply in determining the sales price of the taxable
34 accommodation. If those provisions do not address the type of package offered, the person

35 offering the package may determine an allocated price for each item in the package based on a
36 reasonable allocation of revenue that is supported by the person's business records kept in the
37 ordinary course of business and calculate tax on the allocated price of the taxable
38 accommodation.
39 A retailer must separately state the room occupancy tax. Room occupancy taxes paid to a
40 retailer are held in trust for and on account of the taxing county.

41 The taxing county shall design and furnish to all appropriate businesses and persons in the
42 county the necessary forms for filing returns and instructions to ensure the full collection of the
43 tax. A retailer who collects a room occupancy tax may deduct from the amount remitted to the
44 taxing county a discount equal to the discount the State allows the retailer for State sales and use
45 tax.
46 SECTION 41.5.(h) G.S. 105-164.3 reads as rewritten:
47 § 105-164.3. Definitions.

48 The following definitions apply in this Article:
49 …
50 (1b) Admission charge. – Gross receipts derived for the right to attend an
51 entertainment activity. The term includes a charge for a single ticket, a

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1 multi-occasion ticket, a seasonal pass, and an annual pass; a membership fee
2 that provides for admission; a cover charge; a surcharge; a convenience fee, a
3 processing fee, a facility charge, a facilitation fee, or similar charge; or any
4 other charges included in gross receipts derived from admission.
5 (1c) Admission facilitator. – A person who accepts payment of an admission
6 charge to an entertainment activity and who is not the operator of the venue
7 where the entertainment activity occurs.

8 …
9 (1f) Amenity. – A feature that increases the value or attractiveness of an
10 entertainment activity that allows a person access to items that are not subject
11 to tax under this Article and that are not available with the purchase of
12 admission to the same event without the feature. The term includes parking
13 privileges, special entrances, access to areas other than general admission,
14 mascot visits, and merchandise discounts. The term does not include any

15 charge for food, prepared food, and alcoholic beverages subject to tax under
16 this Article.
17 …
18 (9a) Entertainment activity. – An activity listed in this subdivision:
19 a. A live performance or other live event of any kind, the purpose of
20 which is for entertainment.

21 b. A movie, motion picture, or film.
22 c. A museum, a cultural site, a garden, an exhibit, a show, or a similar
23 attraction.
24 d. A guided tour at anyof the activities listed in sub-subdivision c. of this
25 subdivision.
26 ….
27 SECTION 41.5.(i) G.S. 105-164.4G reads as rewritten:

28 § 105-164.4G. Entertainment activity.
29 (a) Definition. – The following definitions apply in this section:
30 (1) Admission charge. – Gross receipts derived for the right to attend an
31 entertainment activity. The term includes a charge for a single ticket, a
32 multi-occasion ticket, a seasonal pass, and an annual pass; a membership fee
33 that provides for admission; a cover charge; a surcharge; a convenience fee, a
34 processing fee, a facility charge, a facilitation fee, or similar charge; or any

35 other charges included in gross receipts derived from admission.
36 (2) Amenity. – A feature that increases the value or attractiveness of an
37 entertainment activity that allows a person access to items that are not subject
38 to tax under this Article and that are not available with the purchase of
39 admission to the same event without the feature. The term includes parking
40 privileges, special entrances, access to areas other than general admission,

41 mascot visits, and merchandise discounts. The term does not include any
42 charge for food, prepared food, and alcoholic beverages subject to tax under
43 this Article.
44 (3) Entertainment activity. – An activity listed in this subdivision:
45 a. A live performance or other live event of any kind, the purpose of
46 which is for entertainment.
47 b. A movie, motion picture, or film.

48 c. A museum, a cultural site, a garden, an exhibit, a show, or a similar
49 attraction.
50 d. A guided tour at anyof the activities listed in sub-subdivision c. of this
51 subdivision.

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1 (4) Facilitator. – A person who accepts payment of an admission charge to an
2 entertainment activity and who is not the operator of the venue where the
3 entertainment activity occurs.
4 (b) Tax. – The gross receipts derived from an admission charge to an entertainment
5 activity are taxed at the general rate set in G.S. 105-164.4. The tax is due and payable by the
6 retailer in accordance with G.S. 105-164.16. For purposes of the tax imposed by this section, the
7 retailer is the applicable person listed below:

8 (1) The operator of the venue where the entertainment activity occurs, unless the
9 retailer and the admission facilitator have a contract between them allowing
10 for dual remittance, as provided in subsection (d) of this section.
11 (2) The person that provides the entertainment and that receives admission
12 charges directly from a purchaser.
13 (3) A person other than a person listed in subdivision (1) or (2) of this subsection
14 that receives gross receipts derived from an admission charge sold at retail.

15 (c) Admission Facilitator. – A An admission facilitator must report to the retailer with
16 whom it has a contract the admission charge a consumer pays to the admission facilitator for an
17 entertainment activity. The admission facilitator must send the retailer the portion of the gross
18 receipts the admission facilitator owes the retailer and the tax due on the gross receipts derived
19 from an admission charge no later than 10 days after the end of each calendar month. A An
20 admission facilitator that does not send the retailer the tax due on the gross receipts derived from

21 an admission charge is liable for the amount of tax the admission facilitator fails to send to the
22 retailer. A An admission facilitator is not liable for tax sent to a retailer but not remitted by the
23 retailer to the Secretary. Tax payments received by a retailer from a an admission facilitator are
24 held in trust by the retailer for remittance to the Secretary. A retailer that receives a tax payment
25 from a an admission facilitator must remit the amount received to the Secretary. A retailer is not
26 liable for tax due but not received from a an admission facilitator. The requirements imposed by
27 this subsection on a retailer and a an admission facilitator are considered terms of the contract

28 between the retailer and the admission facilitator.
29 (d) Dual Remittance. – The tax due on the gross receipts derived from an admission
30 charge may be partially reported and remitted to the operator of the venue for remittance to the
31 Department and partially reported and remitted by the admission facilitator directly to the
32 Department. The portion of the tax not reported and remitted to the operator of the venue must
33 be reported and remitted directly by the admission facilitator to the Department. A An admission
34 facilitator that elects to remit tax under the dual remittance option is required to obtain a

35 certificate of registration in accordance with G.S. 105-164.29. A An admission facilitator is
36 subject to the provisions of Article 9 of this Chapter.
37 ….
38 SECTION 41.5.(j) G.S. 105-164.3 reads as rewritten:
39 § 105-164.3. Definitions.
40 The following definitions apply in this Article:

41 …
42 (38c) Service contract facilitator. – A person who contracts with the obligor of a
43 service contract to market the service contract and accepts payment from the
44 purchaser for the service contract.
45 ….
46 SECTION 41.5.(k) G.S. 105-164.4I reads as rewritten:
47 § 105-164.4I. Service contracts.

48 (a) Tax. – The sales price of or the gross receipts derived from a service contract or the
49 renewalofaservicecontractsoldat retailissubject tothegeneral rateoftaxsetin G.S. 105-164.4
50 and is sourced in accordance with the sourcing principles in G.S. 105-164.4B. The retailer of a

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1 service contract is required to collect the tax due at the time of the retail sale of the contract and
2 is liable for payment of the tax. The tax is due and payable in accordance with G.S. 105-164.16.
3 The retailer of a service contract is the applicable person listed below:
4 (1) When a service contract is sold at retail to a purchaser by the obligor under
5 the contract, the obligor is the retailer.
6 (2) When a service contract is sold at retail to a purchaser by a service contract
7 facilitator on behalf of the obligor under the contract, the service contract

8 facilitator is the retailer unless the provisions of subdivision (3) of this
9 subsection apply.
10 (3) When a service contract is sold at retail to a purchaser by a service contract
11 facilitatoron behalfoftheobligorunderthe contract and thereis anagreement
12 between the service contract facilitator and the obligor that states the obligor
13 will be liable for the payment of the tax, the obligor is the retailer. The service
14 contract facilitator must send the retailer the tax due on the sales price of or

15 gross receipts derived from the service contract no later than 10 days after the
16 end of each calendar month. A service contract facilitator that does not send
17 the retailer the tax due on the sales price or gross receipts is liable for the
18 amount of tax the service contract facilitator fails to send. A service contract
19 facilitator is not liable for tax sent to a retailer but not remitted by the retailer
20 to the Secretary. Tax payments received by a retailer from a service contract

21 facilitator are held in trust by the retailer for remittance to the Secretary. A
22 retailer that receives a tax payment from a service contract facilitator must
23 remit the amount received to the Secretary. A retailer is not liable for tax due
24 but not received from a service contract facilitator. The requirements imposed
25 by this subdivision on a retailer and a service contract facilitator are
26 considered terms of the agreement between the retailer and the service
27 contract facilitator.

28 …
29 (e) Definition. – For purposes of this section, the term facilitator means a person who
30 contracts with the obligor of the service contract to market the service contract and accepts
31 payment from the purchaser for the service contract.
32 SECTION 41.5.(l) G.S. 105-164.22 reads as rewritten:
33 § 105-164.22. Record-keeping requirements, inspection authority, and effect of failure to
34 keep records.

35 (a) Record Keeping Generally. – Retailers, wholesale merchants, facilitators, real
36 property contractors, and consumers must keep records that establish their tax liabilityunder this
37 Article. The Secretary or a person designated by the Secretary may inspect these records at any
38 reasonable time during the day.
39 (b) Retailers. – A retailer's records must include records of the retailer's gross income,
40 gross sales, net taxable sales, and all items purchased for resale. resale, and anyreports or records

41 related to transactions with a facilitator with whom it has a contract as provided in this Article.
42 Failure of a retailer to keep records that establish that a sale is exempt under this Article subjects
43 the retailer to liability for tax on the sale.
44 (c) Wholesale Merchants. – A wholesale merchant's records must include a bill of sale
45 for each customer that contains the name and address of the purchaser, the date of the purchase,
46 the item purchased, and the sales price at which the wholesale merchant sold of the item. A
47 wholesale merchant must also keep records that establish a sale is exempt from tax and any

48 reports or recordsrelated to transactions with afacilitatorwith whom it has a contract as provided
49 in this Article. Failure of a wholesale merchant to keep these records for the sale of an item that
50 establish a sale is exempt from tax under this Article subjects the wholesale merchant to liability
51 for tax at the rate that applies to the retail sale of the item.

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1 (d) Facilitators. – A facilitator's records must include records of the facilitator's gross
2 income, grosssales,nettaxablesales,allitemspurchasedforresale,anyreportsorrecordsrelated
3 to transactions with a retailer with whom it has a contract as provided in this Article, and any
4 other records that establish its tax liability. Failure of a facilitator to keep records that establish a
5 sale is exempt from tax under this Article subjects the facilitator to liability for tax on the sale.
6 (e) Real Property Contractors. – A real property contractor's records must include
7 substantiation that a transaction is a real property contract or a mixed transaction contract

8 pursuant to G.S. 105-164.4H(a1). Failure of a real property contractor to keep records that
9 establish a real property contract under this Article subjects the real property contractor to
10 liability for tax on the sale.
11 (f) Consumers. – A consumer's records must include an invoice or other statement of the
12 purchase price of an item the consumer purchased from inside or outside the State. State and any
13 sales and use tax paid thereon. Failure of the consumer to keep these records subjects the
14 consumer to liability for tax on the purchase price of the item, as determined by the Secretary.

15 SECTION 41.5.(m) G.S. 105-164.3, as amended by subsection (a) of this section,
16 reads as rewritten:
17 § 105-164.3. Definitions.
18 The following definitions apply in this Article:
19 …
20 (1)(1d)Advertising and promotional direct mail. – Printed material that meets the

21 definition of direct mail andtheprimarypurposeofwhich is to attract public
22 attention to a product, an item, person, business, or organization, or to attempt
23 to sell, popularize, or secure financial support for a product, an item, person,
24 business, or organization. As used in this subdivision, product means
25 tangible personal property, digital property, or a service.
26 (1e) Affiliate. – Defined in G.S. 105-130.2.
27 …

28 (1a)(1g) Analytical services. – Testing laboratories that are included in national
29 industry 541380 of NAICS or medical laboratories that are included in
30 national industry 621511 of NAICS.
31 (1b)(1h) Ancillary service. – A service associated with or incidental to the
32 provision of a telecommunications service. The term includes detailed
33 communications billing, directory assistance, vertical service, and voice mail
34 service. A vertical service is a service, such as call forwarding, caller ID,

35 three-way calling, and conference bridging, that allows a customer to identify
36 a caller or manage multiple calls and call connections.
37 (1f)(1i)Audio work. – A series of musical, spoken, or other sounds, including a
38 ringtone.
39 (1g)(1j) Audiovisual work. – A series of related images and any sounds
40 accompanying the images that impart an impression of motion when shown

41 in succession.
42 (1h)(1k) Aviation gasoline. – Defined in G.S. 105-449.60.
43 (1i)(1l)Bundled transaction. – A retail sale of two or more distinct and identifiable
44 products, items, at least one of which is taxable and one of which is exempt,
45 nontaxable, for one nonitemized price. The term does not apply to real
46 property and or services to real property. Products Items are not sold for one
47 nonitemized price if an invoice or another sales document made available to

48 the purchaser separately identifies the price of each product. item. A bundled
49 transaction does not include the retail sale of any of the following:
50 a. A product An item and any packaging item that accompanies the
51 product item and is exempt under G.S. 105-164.13(23).

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1 b. A sale of two or more products items whose combined price varies, or
2 is negotiable, depending on the products items the purchaser selects.
3 c. A sale of a product an item accompanied by a transfer of another
4 product item with no additional consideration.
5 d. A product An item and the delivery or installation of the product.item.
6 e. A product An item and any service necessary to complete the sale.
7 (1k)(1m) Business. – An activity a person engages in or causes another to engage in

8 with the object of gain, profit, benefit, or advantage, either direct or indirect.
9 The term does not include an occasional and isolated sale or transaction by a
10 person who does not claim to be engaged in business.
11 (1m)(1n) Cable service. – The one-way transmission to subscribers of video
12 programming or other programming service and any subscriber interaction
13 required to select or use the service.
14 …

15 (2c) Capital improvement. – One or more of the following:
16 …
17 k. An addition or alteration to real property that is permanently affixed
18 or installed to real property and is not an activity listed in subdivision
19 (33l) (33m) of this section as repair, maintenance, and installation
20 services.

21 …
22 (9) Engaged in business. – Any of the following:
23 a. Maintaining, occupying, or using permanentlyor temporarily, directly
24 or indirectly, or through a subsidiary or agent, by whatever name
25 called, any office, place of distribution, sales or sample room,
26 warehouse or storage place, or other place of business for selling or
27 delivering tangible personal property, digital property, or a service for

28 storage, use, or consumption in this State, or permanently or
29 temporarily, directly or through a subsidiary, having any
30 representative, agent, sales representative, marketplace facilitator
31 subject to the requirements of G.S. 105-164.4J, or solicitor operating
32 or transacting business by mobile phone application or other
33 applications in this State in the selling or delivering. State. The fact
34 that any corporate retailer, agent, or subsidiary engaged in business in

35 this State may not be legally domesticated or qualified to do business
36 in this State is immaterial.
37 …
38 e. Making marketplace-facilitated sales subject to the requirements of
39 G.S. 105-164.4J.
40 …

41 (9e) Facilitator. – An accommodation facilitator, an admission facilitator, or a
42 service contract facilitator.
43 …
44 (20b)(20e) Mixed transaction contract. – A contract that includes both a real property
45 contract for a capital improvement and repair, maintenance, and installation
46 services for real property that are not related to the capital improvement.
47 …

48 (33j) Remote sale. – A sale of tangible personal property or digital property an item
49 ordered by mail, by telephone, via the Internet, mobile phone application, or
50 by another similar method, to a purchaser who is in this State at the time the
51 order is remitted, from method by a retailer who receives the order in another

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1 state and delivers the property item or makes it accessible to a person in this
2 State or causes it the item to be delivered or made accessible to a person in
3 this State. State or performs a service sourced to this State. It is presumed that
4 a resident of this State who remits makes an order was in this State at the time
5 the order was remitted.made.
6 …
7 (33l)(33m)Repair, maintenance, and installation services. – The term includes the

8 activities listed in this subdivision and applies to tangible personal property,
9 motor vehicle, vehicles, certain digital property, and real property. The term
10 does not include services a service used to fulfill a real property contract taxed
11 in accordance with G.S. 105-164.4H:G.S. 105-164.4H. The included
12 activities are:
13 …
14 (35) Retailer. – Any of the following persons:

15 a. A person engaged in business of making sales at retail, offering to
16 make sales at retail, or soliciting sales at retail of tangible personal
17 property, digital propertyforstorage,use,orconsumption inthisState,
18 or services items sourced to this State. When the Secretary finds it
19 necessary for the efficient administration of this Article to regard any
20 sales representatives, solicitors, representatives, consignees, peddlers,

21 or truckers as agents of the dealers, distributors, consignors,
22 supervisors, employers, or persons under whom they operate or from
23 whom they obtain the items sold by them regardless of whether they
24 are making sales on their own behalf or on behalf of these dealers,
25 distributors, consignors, supervisors, employers, or persons, the
26 Secretarymayso regard them and mayregard the dealers, distributors,
27 consignors, supervisors, employers, or persons as retailers for the

28 purpose of this Article.
29 b. A person, other than a real property contractor, engaged in business of
30 delivering, erecting, installing, or applying tangible personal property
31 or digital property for use in this State.
32 c. A person engaged in business of making a remote sale, if one of the
33 conditions listed in G.S. 105-164.8(b) is met.
34 d. A person, other than a facilitator, person required to collect the State

35 tax levied under this Article or the local taxes levied under Subchapter
36 VIIIofthisChapterandunderChapter1096ofthe 1967SessionLaws.
37 e. A marketplace facilitator that is subject to the requirements of
38 G.S. 105-164.4J or a facilitator that is required to collect and remit the
39 tax under this Article.
40 ….

41 SECTION 41.5.(n) There is no obligation to collect the sales and use tax required
42 by this section retroactively.
43 SECTION 41.5.(o) If any provision of this section, or the application of any
44 provision to apersonorcircumstance,is held to beinvalid orunconstitutional, thentheremainder
45 of this section, and the application of the provisions to any person or circumstance, shall not be
46 affected thereby.
47 SECTION 41.5.(p) The Revisor of Statutes is authorized to renumber the

48 subdivisions of G.S. 105-164.3 to ensure that the subdivisions are listed in alphabetical order and
49 in a manner that reduces the current use of alphanumeric designations, to make conforming
50 changes, and to reserve sufficient space to accommodate future additions to the statutorysection.

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1 SECTION 41.5.(q) This section becomes effective September 1, 2019, and applies
2 to sales occurring on or after that date.
3
4 DEDUCTION FOR AMOUNTS RECEIVED AS ECONOMIC INCENTIVES
5 SECTION 41.6.(a) G.S. 105-130.5(b) reads as rewritten:
6 (b) The following deductions from federal taxable income shall be made in determining
7 State net income:

8 …
9 (31) To the extent included in federal taxable income, the amount received by a
10 taxpayer as an economic incentive pursuant to G.S. 143B-437.012 or Part 2G
11 or Part 2H of Article 10 of Chapter 143B of the General Statutes.
12 SECTION 41.6.(b) G.S. 105-153.5(b) reads as rewritten:
13 (b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may
14 deduct from the taxpayer's adjusted gross income any of the following items that are included in

15 the taxpayer's adjusted gross income:
16 …
17 (14) The amount received by a taxpayer as an economic incentive pursuant to
18 G.S. 143B-437.012 or Part 2G or Part 2H of Article 10 of Chapter 143B of
19 the General Statutes.
20 SECTION 41.6.(c) This section is effective for taxable years beginning on or after

21 January1,2019, andappliestoamountsreceivedbyataxpayerpursuanttoaneconomicincentive
22 agreement entered into on or after that date.
23
24 EXTENDHISTORICREHABILITATIONTAXCREDIT ANDREINSTATETHEMILL
25 REHABILITATION TAX CREDIT
26 SECTION 41.7.(a) G.S. 105-129.110 reads as rewritten:
27 § 105-129.110. Sunset.

28 This Article expires for qualified rehabilitation expenditures and rehabilitation expenses
29 incurred on or after January 1, 2020. January 1, 2024. For qualified rehabilitation expenditures
30 andrehabilitationexpensesincurredpriortoJanuary1,2020,January1,2024,thisArticleexpires
31 for property not placed in service by January 1, 2028.January 1, 2032.
32 SECTION 41.7.(b) G.S. 105-129.70, 105-129.71, 105-129.73, 105-129.74,
33 105-129.75, and 105-275A are reenacted as Article 3H of Chapter 105 of the General Statutes.
34 SECTION 41.7.(c) Article 3H of Chapter 105 of the General Statutes, as reenacted

35 by subsection (b) of this section, reads as rewritten:
36 Article 3H.
37 Mill Rehabilitation Tax Credit.
38 § 105-129.70. Definitions.
39 The following definitions apply in this Article:
40 (1) Certified historic structure. – Defined in section 47 of the Code.

41 (2) Certified rehabilitation. – Defined in G.S. 105-129.36.
42 (3) Cost certification. – The certification obtained by the State Historic
43 Preservation Officer from the taxpayer of the amount of the qualified
44 rehabilitationexpendituresortherehabilitationexpensesincurredwithrespect
45 to a certified rehabilitation of an eligible site.
46 (3a) Development tier area. – Defined in G.S. 143B-437.08.
47 (4) Eligibility certification. – The certification obtained from the State Historic

48 Preservation Officer that the applicable facility comprises an eligible site.
49 (5) Eligible site. – A site located in this State that satisfies all of the following
50 conditions:

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1 a. It was used as a manufacturing facility or for purposes ancillary to
2 manufacturing, as a warehouse for selling agricultural products, or as
3 a public or private utility.and either (i) was used as a railroad station
4 or (ii) is located adjacent to a site that is or was used as a railroad
5 station.
6 b. It is a certified historic structure or a State-certified historic structure.
7 c. It has been at least eighty percent (80%) vacant for a period of at least

8 two years immediately preceding the date the eligibility certification
9 is made.
10 d. Repealed by Session Laws 2008-107, s. 28.4(a), effective for taxable
11 years beginning on or after January 1, 2008.
12 e. It is adesignated local landmarkas certifiedbya cityon or before June
13 30, 2019.
14 f. It is located in a development tier one or tier two area, determined as

15 of the date of the eligibility certification.
16 g. It is located in a designated qualified opportunity zone under sections
17 1400Z-1 and 1400Z-2 of the Code, determined as of the date of the
18 eligibility certification.
19 h. It is issued a certificate of occupancyon or before December 31, 2021.
20 (6) Repealed by Session Laws 2006-252, s. 2.22, effective January 1, 2007.

21 (7) Pass-through entity. – Defined in G.S. 105-228.90.
22 (8) Qualified rehabilitation expenditures. – Defined in section 47 of the Code.
23 (9) Rehabilitation expenses. – Defined in G.S. 105-129.36.
24 (10) State-certified historic structure. – Defined in G.S. 105-129.36.
25 (11) State Historic Preservation Officer. – Defined in G.S. 105-129.36.
26 § 105-129.71. Credit for income-producing rehabilitated mill property.
27 (a) Credit. – A taxpayer who is allowed a credit under section 47 of the Code for making

28 qualified rehabilitation expenditures of at least three million dollars ($3,000,000) ten million
29 dollars ($10,000,000) with respect to a certified rehabilitation of an eligible site is allowed a
30 credit equal to a percentage of the expenditures that qualify for the federal credit. The credit may
31 be claimed in the year in which the eligible site is placed into service. When the eligible site is
32 placed into service in two or more phases in different years, the amount of credit that may be
33 claimed in a year is the amount based on the qualified rehabilitation expenditures associated with
34 the phase placed into service during that year. The amount of the credit is equal to forty percent

35 (40%) of the qualified rehabilitation expenditures. In order to be eligible for a credit allowed by
36 this Article, the taxpayer must provide to the Secretary a copy of the eligibility certification and
37 the cost certification. The amount of the credit is as follows:
38 (1) For an eligible site located in a development tier one or two area, determined
39 as of the date of the eligibility certification, the amount of the credit is equal
40 to forty percent (40%) of the qualified rehabilitation expenditures.

41 (2) For an eligible site located in a development tier three area, determined as of
42 thedateoftheeligibilitycertification,theamountofthecreditisequaltothirty
43 percent (30%) of the qualified rehabilitation expenditures.
44 (a1) Delay of Credit. – The tax credit cannot be claimed for a taxable year beginning prior
45 to January 1, 2021. The tax credit must be taken in two equal installments on returns filed for
46 taxable years 2021 and 2022. The sum of the two installments is equal to the credit amount
47 allowed for qualified rehabilitation expenditures incurred in taxable years 2019, 2020, and 2021.

48 …
49 § 105-129.74. Coordination with Article 3D of this Chapter.

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1 A taxpayer that claims a credit under this Article may not also claim a credit under Article
2 3D Article 3L of this Chapter with respect to the same activity. The rules and fee schedule
3 adopted under G.S. 105-129.36A G.S. 105-129.107 apply to this Article.
4 § 105-129.75. Sunset.Applicable Expenditures and Sunset.
5 This Article expires January 1, 2015, for rehabilitation projects for which an application for
6 an eligibility certification is submitted on or after that date. Eligibility certifications under this
7 Article expire January 1, 2023. This Article applies only to qualified rehabilitation expenditures

8 incurred on or after January 1, 2019, and before January 1, 2022. This Article expires, and a tax
9 credit allowed under this Article may not be claimed, for rehabilitation projects not completed
10 and placed in service prior to January 1, 2022.
11 ….
12 SECTION 41.7.(d) Subsections (b) and (c) of this section become effective for
13 taxable years beginning on or after January 1, 2019. The remainder of this section is effective
14 when it becomes law.

15
16 EXTEND SALES TAX EXEMPTION FOR QUALIFYING AIRLINES
17 SECTION 41.8.(a) G.S. 105-164.13(11b) reads as rewritten:
18 (11b) Sales of aviation gasoline and jet fuel to an interstate air business for use in a
19 commercial aircraft. For purposes of this subdivision, the term commercial
20 aircraft has the same meaning as defined in subdivision (45a) of this section.

21 This exemption also applies to aviation gasoline and jet fuel purchased for use
22 in a commercial aircraft in interstate or foreign commerce by a person whose
23 primary business is scheduled passenger air transportation. This subdivision
24 expires January 1, 2020.January 1, 2024.
25 SECTION 41.8.(b) This section is effective when it becomes law.
26
27 EXTEND SALES TAX EXEMPTIONS FOR PROFESSIONAL MOTORSPORTS

28 TEAMS
29 SECTION 41.9.(a) G.S. 105-164.13(65) and (65a) read as rewritten:
30 (65) This subdivision expires January 1, 2020. January 1, 2024. Sales of the
31 following to a professional motorsports racing team or a related member of a
32 team for use in competition in a sanctioned race series:
33 a. The sale, lease, or rental of an engine.
34 b. The sales price of or gross receipts derived from a service contract on,

35 or repair, maintenance, and installation services for, a transmission, an
36 engine, rear-end gears, and any other item that is purchased, leased, or
37 rented and that is exempt from tax under this subdivision or that is
38 allowed a sales tax refund under G.S. 105-164.14A(a)(5).
39 c. The gross receipts derived from an agreement to provide an engine to
40 a professional motorsports racing team or related member of a team

41 for use in competition in a sanctioned race series, where such
42 agreement does not meet the definition of a service contract as
43 defined in G.S. 105-164.3 but may meet the definition of the term
44 lease or rental as defined in G.S. 105-164.3.
45 (65a) An engine or a part to build or rebuild an engine for the purpose of providing
46 an engine under an agreement to a professional motorsports racing team or a
47 related member of a team for use in competition in a sanctioned race series.

48 This subdivision expires January 1, 2020.January 1, 2024.
49 SECTION 41.9.(b) G.S. 105-164.14A(a)(4) and (a)(5) read as rewritten:
50 (4) Motorsports team or sanctioning body. – A professional motorsports racing
51 team, a motorsports sanctioning body, or a related member of such a team or

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1 body is allowed a refund of the sales and use tax paid by it in this State on
2 aviation gasolineorjetfuel thatis usedto travel toorfrom amotorsports event
3 in this State, to travel to a motorsports event in another state from a location
4 in this State, or to travel to this State from a motorsports event in another state.
5 For purposes of this subdivision, a motorsports event includes a motorsports
6 race, a motorsports sponsor event, and motorsports testing. This subdivision
7 is repealed for purchases made on or after January 1, 2020.January 1, 2024.

8 (5) Professional motorsports team. – A professional motorsports racing team or a
9 related member of a team is allowed a refund of fifty percent (50%) of the
10 sales and use tax paid by it in this State on tangible personal property, other
11 than tires or accessories, that comprises anypart of a professional motorsports
12 vehicle. For purposes of this subdivision, motorsports accessories includes
13 instrumentation, telemetry, consumables, and paint. This subdivision is
14 repealed for purchases made on or after January 1, 2020.January 1, 2024.

15 SECTION 41.9.(c) This section is effective when it becomes law.
16
17 FACILITATE RESPONSE TO DISASTERS
18 SECTION 41.10.(a) Part 8 of Article 1A of Chapter 166A of the General Statutes is
19 amended by adding a new section to read:
20 § 166A-19.70A. Facilitate critical infrastructure disaster relief.

21 (a) Purpose. – The State finds that it is appropriate to exclude nonresident businesses and
22 nonresident employees who temporarily come to this State at the request of a critical
23 infrastructure company solely to perform disaster-related work during a disaster response period
24 from the following tax and regulatory requirements:
25 (1) Corporate and individual income tax, as provided under G.S. 105-130.1 and
26 G.S. 105-153.2.
27 (2) Franchise tax, as provided under G.S. 105-114.

28 (3) Unemployment tax, as provided under G.S. 96-1(b)(12).
29 (4) Certificate of Authority from the Secretary of State to transact business in
30 this State, as provided under G.S. 55-15-01(d) and G.S. 57D-1-24(d).
31 (b) Definitions. – In addition to the definitions in G.S. 166A-19.3, the following
32 definitions apply in this section:
33 (1) Corporation. – Defined in G.S. 105-130.2.
34 (2) Critical infrastructure. – Property and equipment owned or used by a critical

35 infrastructure company for utility or communications transmission services
36 provided to the public in the State. Examples of critical infrastructure include
37 communications networks, electric generation, transmission and distribution
38 systems, natural gas transmission and distribution systems, water pipelines,
39 and related support facilities. Related support facilities mayinclude buildings,
40 offices, lines, poles, pipes, structures, and equipment.

41 (3) Critical infrastructure company. – One of the following:
42 a. A registered public communications provider.
43 b. A registered public utility.
44 (4) Disaster-related work. – Repairing, renovating, installing, building, or
45 performing services on critical infrastructure that has been damaged,
46 impaired, ordestroyedas aresult ofadisasteroremergencyin anarea covered
47 by the disaster declaration.

48 (5) Disaster response period. – A period that begins 10 days prior to the first day
49 of a disaster declaration and expires on the earlier of the following:
50 a. Sixty days following the expiration of the disaster declaration, as
51 provided under G.S. 166A-19.21(c).

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1 b. One hundred eighty days following the issuance of the disaster
2 declaration.
3 (6) Employee. – Defined in G.S. 105-163.1.
4 (7) Nonresident business. – An entity that has not been required to file an income
5 or franchise tax return with the State for three years prior to the disaster
6 response period, other than those arising from the performance of
7 disaster-related work during a tax year prior to the enactment of this section,

8 and that meets one or more of the following conditions:
9 a. Is a nonresident entity.
10 b. Is a nonresident individual who owns an unincorporated business as a
11 sole proprietor.
12 (8) Nonresident employee. – A nonresident individual who is one of the
13 following:
14 a. An employee of a nonresident business.

15 b. An employee of a critical infrastructure company who is temporarily
16 inthisStatetoperformdisaster-relatedworkduringadisasterresponse
17 period.
18 (9) Nonresident entity. – Defined in G.S. 105-163.1.
19 (10) Nonresident individual. – Defined in G.S. 105-153.3.
20 (11) Registered public communications provider. – A corporation doing business

21 in this State prior to the disaster declaration that provides the transmission to
22 the public of one or more of the following:
23 a. Broadband.
24 b. Mobile telecommunications.
25 c. Telecommunications.
26 d. Wireless Internet access.
27 (12) Registered public utility. – A corporation doing business in this State prior to

28 the disaster declaration that is subject to the control of one or more of the
29 following entities:
30 a. North Carolina Utilities Commission.
31 b. North Carolina Rural Electrification Authority.
32 c. Federal Communications Commission.
33 d. Federal Energy Regulatory Commission.
34 (c) Critical Infrastructure Company Notification. – A critical infrastructure company

35 must provide notification to the Department of Revenue within 90 days of the expiration of the
36 disaster response period. The notification must be in the form and manner required by the
37 Department. The notification must include the following:
38 (1) A list of all nonresident businesses who performed disaster-related work in
39 this State during a disaster response period at the request of the critical
40 infrastructure company.

41 (2) A list of nonresident employees who performed disaster-related work in this
42 State for the critical infrastructure company during a disaster response period.
43 The notification must include the amount of compensation paid to the
44 nonresident employee performing disaster-related work in this State.
45 (d) Nonresident Business Notification. – A nonresident business must provide
46 notification to the Department of Revenue within 90 days of the date the nonresident business
47 concludes its disaster-related work in the State. The notification must be in the form and manner

48 required by the Department. The notification must include a list of nonresident employees who
49 performed disaster-related work in this State during a disaster response period, along with the
50 amount of compensation paid to the nonresident employee performing disaster-related work in

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1 this State. Failure to submit a timely notification forfeits the relief provided by this section for
2 the nonresident business.
3 (e) Limitation. – The intent of this section is to provide relief to nonresident businesses
4 and nonresident employees who would not otherwise be subject to this State's tax and regulatory
5 requirements if theyhad not performed disaster-related work during the disaster response period.
6 The relief provided under this section does not apply to any tax year that is part of the disaster
7 response period if the nonresident business or nonresident employee continues to perform

8 disaster-related work following the end of the disaster response period. The relief provided under
9 this section does not apply to a tax year that is part of the disaster response period if the
10 nonresident business or nonresident employee is required to file an income tax return for that tax
11 year with the Department of Revenue for reasons other than the performance of disaster-related
12 work.
13 SECTION 41.10.(b) G.S. 55-15-01 is amended by adding a new subsection to read:
14 (e) The following foreign corporations are not required to obtain a certificate of authority

15 from the Secretary of State:
16 (1) A nonresident business solely performing disaster-related work in this State
17 during a disaster response period at the request of a critical infrastructure
18 company. The definitions and provisions of G.S. 166A-19.70A apply to this
19 subdivision.
20 (2) A person issued a temporary license by the Department of Revenue under

21 G.S. 105-449.69A to import, export, distribute, or transport motor fuel in this
22 State in response to a disaster declaration.
23 SECTION 41.10.(c) G.S. 57D-1-24 reads as rewritten:
24 § 57D-1-24. Certificate of existence; certificate of authorization.
25 …
26 (d) A nonresident business solely performing disaster-related work in this State during a
27 disaster response period at the request of a critical infrastructure company is not required to

28 obtain a certificate of authority from the Secretary of State. The definitions and provisions of
29 G.S. 166A-19.70A apply to this subsection.
30 SECTION 41.10.(d) G.S. 96-1(b)(12) reads as rewritten:
31 (b) Definitions. – The following definitions apply in this Chapter:
32 …
33 (12) Employment. – Defined in section 3306 of the Code, with the following
34 additions and exclusions:

35 …
36 b. Exclusions. – The term excludes all of the following:
37 …
38 5. Service performed by a nonresident employee for a
39 nonresident business performing disaster-related work in this
40 State during a disaster response period at the request of a

41 critical infrastructure company. The definitions and provisions
42 of G.S. 166A-19.70A apply to this exclusion.
43 SECTION 41.10.(e) G.S. 105-114 is amended by adding a new subsection to read:
44 (d) Critical Infrastructure Disaster Relief. – A nonresident business that solely performs
45 disaster-related work in this State during a disaster response period at the request of a critical
46 infrastructure company is not considered to be doing business in this State for purposes of this
47 Article. The definitions and provisions in G.S. 166A-19.70A apply in this subsection.

48 SECTION 41.10.(f) G.S. 105-130.1 reads as rewritten:
49 § 105-130.1. Purpose.

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1 (a) Purpose. – The general purpose of this Part is to impose a tax for the use of the State
2 government upon the net income of every domestic corporation and of every foreign corporation
3 doing business in this State.
4 The tax imposed upon the net income of corporations in this Part is in addition to all other
5 taxes imposed under this Subchapter.
6 (b) Critical Infrastructure Disaster Relief. – A nonresident business that solely performs
7 disaster-related work in this State during a disaster response period at the request of a critical

8 infrastructure company is not considered to be doing business in this State for purposes of this
9 Part. The definitions and provisions in G.S. 166A-19.70A apply in this subsection.
10 SECTION 41.10.(g) G.S. 105-130.5(a) reads as rewritten:
11 (a) The following additions to federal taxable income shall be made in determining State
12 net income:
13 …
14 (30) Payments made to an affiliate or subsidiary that is not subject to tax under this

15 Article pursuant to the exceptions for critical infrastructure disaster relief
16 provided under G.S. 166A-19.70A, to the extent the payments are deducted in
17 determining federal taxable income. The definitions and provisions of
18 G.S. 166A-19.70A apply to this subdivision.
19 SECTION 41.10.(h) G.S. 105-131.7 reads as rewritten:
20 § 105-131.7. Returns; shareholder agreements; mandatory withholding.

21 …
22 (f) Critical Infrastructure Disaster Relief. – An S Corporation that is not doing business
23 in this State because it is a nonresident business performing disaster-related work during a
24 disaster response period at the request of a critical infrastructure company is not required to file
25 a return with the Department. However, the corporation must furnish to each shareholder who
26 would be entitled to share in the corporation income any information necessary for that person
27 to properly file a State income tax return. The definitions and provisions in G.S. 166A-19.70A

28 concerning disaster-related work apply to this subsection.
29 SECTION 41.10.(i) G.S. 105-154(c) reads as rewritten:
30 § 105-154. Information at the source returns.
31 …
32 (c) Information Returns of Partnerships. – A partnership doing business in this State and
33 required to file a return under the Code shall file an information return with the Secretary. A
34 partnership that the Secretary believes to be doing business in this State and to be required to file

35 a return under the Code shall file an information return when requested to do so bythe Secretary.
36 The information return shall contain all information required by the Secretary. It shall state
37 specifically the items of the partnership's gross income, the deductions allowed under the Code,
38 each partner's distributive share of the partnership's income, and the adjustments required by this
39 Part. A partner's distributive share of partnership net income includes any guaranteed payments
40 made to the partner. The information return shall also include the name and address of each

41 person who would be entitled to share in the partnership's net income, if distributable, and the
42 amount each person's distributive share would be. The information return shall be signed by one
43 of the partners under affirmation in the form required by the Secretary.
44 A partnership that files an information return under this subsection shall furnish to each
45 person who would be entitled to share in the partnership's net income, if distributable, any
46 information necessary for that person to properly file a State income tax return. The information
47 shall be in the form prescribed by the Secretary and must be furnished on or before the due date

48 of the information return.
49 A partnership that is not doing business in this State because it is a nonresident business
50 performing disaster-related work during a disaster response period at the request of a critical
51 infrastructure company is not required to file an information return with the Secretary. However,

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1 the partnership must furnish to each person who would be entitled to share in the partnership's
2 net income, if distributable, any information necessary for that person to properly file a State
3 income tax return. The definitions and provisions in G.S. 166A-19.70A apply to this paragraph.
4 SECTION 41.10.(j) G.S. 105-153.2 reads as rewritten:
5 § 105-153.2. Purpose.
6 The general purpose of this Part is to impose a tax for the use of the State government upon
7 the taxable income collectible annually:

8 (1) Of every resident of this State.
9 (2) Of everynonresident individual deriving income from North Carolina sources
10 attributable to the ownership of any interest in real or tangible personal
11 property in this State, deriving income from a business, trade, profession, or
12 occupation carried on in this State, or deriving income from gambling
13 activities in this State. This subdivision does not apply to a nonresident
14 business or a nonresident employee who solely derives income from North

15 Carolina sources attributable to a business, trade, profession, or occupation
16 carried on in this State to perform disaster-related work during a disaster
17 response period at the request of a critical infrastructure company. The
18 definitions and provisions in G.S. 166A-19.70A apply to this subdivision.
19 SECTION 41.10.(k) G.S. 105-153.8(a) reads as rewritten:
20 (a) Who Must File. – The following individuals must file with the Secretary an income

21 tax return under affirmation:
22 (1) Every resident who for the taxable year has gross income under the Code that
23 exceeds the standard deduction amount provided in G.S. 105-153.5(a)(1).
24 (2) Every nonresident individual who meets all of the following requirements:
25 a. Receives during the taxable year gross income that is derived from
26 North Carolina sources and is attributable to the ownership of any
27 interest in real or tangible personal property in this State, is derived

28 from a business, trade, profession, or occupation carried on in this
29 State, or is derived from gambling activities in this State. This
30 sub-subdivision does not apply to a nonresident business or a
31 nonresident employee who solelyderives income from North Carolina
32 sources attributable to a business, trade, profession, or occupation
33 carried on in this State to perform disaster-related work during a
34 disaster response period at the request of a critical infrastructure

35 company. The definitions and provisions in G.S. 166A-19.70A apply
36 to this sub-subdivision.
37 b. Has gross income under the Code that exceeds the applicable standard
38 deduction amount provided in G.S. 105-153.5(a)(1).
39 (3) Any individual whom the Secretary believes to be liable for a tax under this
40 Part, when so notified by the Secretary and requested to file a return.

41 SECTION 41.10.(l) G.S. 105-163.1(13) reads as rewritten:
42 § 105-163.1. Definitions.
43 The following definitions apply in this Article:
44 …
45 (13) Wages. – Theterm has thesamemeaningas in section 3401 ofthe Code.Code,
46 except the term does not include amounts paid to a nonresident employee for
47 a business, trade, profession, or occupation carried on in this State to perform

48 disaster-related work during a disaster response period at the request of a
49 critical infrastructure company. The definitions and provisions of
50 G.S. 166A-19.70A apply to this subdivision.
51 ….

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1 SECTION 41.10.(m) G.S. 105-163.3(b) reads as rewritten:
2 (b) Exemptions. – The withholding requirement does not apply to the following:
3 …
4 (5) Compensation paid by a nonresident business or a critical infrastructure
5 company to an ITIN contractor who is a nonresident individual for a business,
6 trade, profession, or occupation carried on in this State to perform
7 disaster-related work during a disaster response period at the request of a

8 critical infrastructure company. The definitions and provisions of
9 G.S. 166A-19.70A apply to this subdivision.
10 SECTION 41.10.(n) G.S. 105-163.7(b) reads as rewritten:
11 (b) Informational Return to Secretary. – Every employer shall annually file an
12 informational return with the Secretary that contains the information given on each of the
13 employer's written statements to an employee. The Secretary may require additional information
14 to be included on the informational return, provided the Secretary has given a minimum of 90

15 days' notice of the additional information required. The informational return is due on or before
16 January 31 of the succeeding year and must be filed in an electronic format as prescribed by the
17 Secretary. If the employer terminates its business or permanentlyceases paying wages during the
18 calendar year, the informational return must be filed within 30 days of the last payment of
19 remuneration.Theinformationalreturnrequiredbythissubsectionisin lieuofthereportrequired
20 by G.S. 105-154.

21 An employer that is not doing business in this State because it is a nonresident business
22 performing disaster-related work during a disaster response period at the request of a critical
23 infrastructure company is not required to file an information return with the Secretary. However,
24 the employer must furnish to an employee, upon request, any information necessary for that
25 person to properly file a State income tax return. The definitions and provisions in
26 G.S. 166A-19.70A apply to this paragraph.
27 SECTION 41.10.(o) Part 2 of Article 36C of Chapter 105 of the General Statutes is

28 amended by adding a new section to read:
29 § 105-449.69A. Temporary license during disaster response period.
30 (a) Temporary License. – The Secretary may grant a temporary license to an applicant to
31 import,export,distribute,ortransportmotorfuelin thisStateinresponsetoadisasterdeclaration.
32 The term disaster declaration has the same meaning as defined in G.S. 166A-19.3. The
33 temporary license expires upon the expiration of the disaster declaration. A temporary license
34 issued under this section may not be renewed or a new temporary license granted if the licensee

35 failed to file the required returns or make payments of the required taxes.
36 (b) Requirements. – To obtain a temporarylicense, a person must file an application with
37 the Secretary on a form prescribed by the Secretary within seven calendar days from the date of
38 the disaster declaration. An application must include all of the following information:
39 (1) The legal name of the business and the trade name, if applicable, under which
40 the person will transact business within the State.

41 (2) The federal identification number of the business or, if such number is
42 unavailable, the Social Security number of the owner.
43 (3) The location, with a street number address, of the principal office or place of
44 business and the location where records will be made available for inspection.
45 (4) Any other information required by the Secretary.
46 (c) Exceptions. – The Secretary may issue a temporary license under this section as an
47 importer, exporter, distributor, or transporter without requiring the applicant to file with the

48 Secretarya bond or an irrevocable letter of credit, as otherwise required by G.S. 105-449.72, and
49 without requiring the applicant to be authorized to transact business in this State with the
50 Secretary of State.

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1 SECTION 41.10.(p) This section is effective when it becomes law and applies to
2 disaster declarations on or after that date.
3
4 REVENUE LAWS STUDY OF TAX SUNSET PROVISIONS
5 SECTION 41.11.(a) G.S. 120-70.106(a) reads as rewritten:
6 (a) The Revenue Laws Study Committee may:
7 (1) StudytherevenuelawsofNorthCarolinaandtheadministrationofthoselaws.

8 (2) Review the State's revenue laws to determine which laws need clarification,
9 technical amendment, repeal, or other change to make the laws concise,
10 intelligible, easy to administer, and equitable.
11 (2a) Review any tax provision set to sunset within one year of the beginning of
12 next regular session of the General Assembly to determine whether the sunset
13 needs to be extended.
14 (3) Call upon the Department of Revenue to cooperate with it in the study of the

15 revenue laws.
16 (4) Report to the General Assembly at the beginning of each regular session
17 concerning its determinations of needed changes in the State's revenue laws.
18 These powers, which are enumerated by way of illustration, shall be liberally construed to
19 provide for the maximum review by the Committee of all revenue law matters in this State.
20 SECTION 41.11.(b) This section is effective when it becomes law.

21
22 PART XLII. MISCELLANEOUS
23
24 STATE BUDGET ACT APPLIES
25 SECTION 42.1. The provisions of the State Budget Act, Chapter 143C of the
26 General Statutes, are reenacted and shall remain in full force and effect and are incorporated in
27 this act by reference.

28
29 COMMITTEE REPORT
30 SECTION 42.2.(a) The Joint Conference Committee Report on the Current
31 Operations Appropriations Act of 2019, House Bill 966, dated June 25, 2019, which was
32 distributed in the House of Representatives and the Senate and used to explain this act, shall
33 indicate action by the General Assembly on this act and shall, therefore, be used to construe this
34 act, as provided in the State Budget Act, Chapter 143C of the General Statutes, and for these

35 purposes shall be considered apartofthis act and, as such,shall beprintedas apartof theSession
36 Laws.
37 SECTION 42.2.(b) The budget enacted by the General Assembly is for the
38 maintenance of the various departments, institutions, and other spending agencies of the State
39 for the 2019-2021 biennial budget as provided in G.S. 143C-3-5. This budget includes the
40 appropriations of State funds as defined in G.S. 143C-1-1(d)(25).

41 The Director of the Budget submitted a recommended base budget to the General
42 Assembly in the Governor's Recommended Budget for the 2019-2021 fiscal biennium, dated
43 March 2019, and in the Budget Support Document for the various departments, institutions, and
44 other spending agencies of the State. The adjustments to the recommended base budget made by
45 the General Assembly are set out in the Committee Report.
46 SECTION 42.2.(c) The budget enacted by the General Assembly shall also be
47 interpreted in accordance with G.S. 143C-5-5, the special provisions in this act, and other

48 appropriate legislation. In the event that there is a conflict between the line-item budget certified
49 by the Director of the Budget and the budget enacted by the General Assembly, the budget
50 enacted by the General Assembly shall prevail.

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1 SECTION 42.2.(d) Notwithstanding subsection (a) of this section, the following
2 portions of the Committee Report are for reference, and do not expand, limit, or define the text
3 of the Committee Report:
4 (1) Summary pages setting forth the enacted budget, the legislative changes, the
5 revised budget, and the related FTE information for a particular budget code
6 and containing no other substantive information.
7 (2) Summary pages setting forth the enacted budget, the legislative changes, the

8 revised budget, and the related FTE information for multiple fund codes
9 within a single budget code and containing no other substantive information.
10
11 REPORT BY FISCAL RESEARCH DIVISION
12 SECTION 42.3. The Fiscal Research Division shall issue a report on budget actions
13 taken by the 2019 Regular Session of the General Assembly. The report shall be in the form of a
14 revision oftheCommitteeReportdescribedin Section42.2 ofthis act pursuant to G.S. 143C-5-5.

15 The Director of the Fiscal Research Division shall send a copy of the report issued pursuant to
16 this section to the Director of the Budget. The report shall be published on the General
17 Assembly's Internet Web site for public access.
18
19 APPROPRIATIONS LIMITATIONS AND DIRECTIONS APPLY
20 SECTION 42.4. Except where expressly repealed or amended by this act, the

21 provisions of S.L. 2019-9, S.L. 2019-15, and any other enactments affecting the State budget
22 during the 2019 Regular Session of the General Assembly, shall remain in effect.
23
24 MOST TEXT APPLIES ONLY TO THE 2019-2021 FISCAL BIENNIUM
25 SECTION42.5. Exceptforstatutorychangesorotherprovisionsthatclearlyindicate
26 an intention to have effects beyond the 2019-2021 fiscal biennium, the textual provisions of this
27 act apply only to funds appropriated for, and activities occurring during, the 2019-2021 fiscal

28 biennium.
29
30 EFFECT OF HEADINGS
31 SECTION 42.6. The headings to the Parts, subparts, and sections of this act are a
32 convenience to the reader and are for reference only. The headings do not expand, limit, or define
33 the text of this act, except for effective dates referring to a Part or subpart.
34

35 SEVERABILITY CLAUSE
36 SECTION 42.7. If any section or provision of this act is declared unconstitutional
37 or invalid by the courts, it does not affect the validity of this act as a whole or any part other than
38 the part so declared to be unconstitutional or invalid.
39
40 EFFECTIVE DATE

41 SECTION 42.8. Except as otherwise provided, this act becomes effective July 1,
42 2019.

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