GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	1 

SENATE BILL 860

Short Title:  APA Technical Changes.	(Public)
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Sponsors: Senator Johnson of Wake.
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Referred to:  Judiciary III.
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April 12, 1989

A BILL TO BE ENTITLED
AN ACT TO REQUIRE ADMINISTRATIVE LAW JUDGES TO MAKE FINAL DECISIONS IN CERTAIN CONTESTED CASES UNDER THE ADMINISTRATIVE PROCEDURE ACT AND TO MAKE UNIFORM THE JUDICIAL REVIEW OF ADMINISTRATIVE DECISIONS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 150B-1 reads as rewritten:
"§ 150B-1. Policy and scope.
(a)	The policy of the State is that the three powers of government, legislative, executive, and judicial, are, and should remain, separate. The intent of this Chapter is to prevent the commingling of those powers in any administrative agency and to ensure that the functions of rule making, investigation, advocacy, and adjudication are not all performed by the same person in the administrative process.
(b)	The purpose of this Chapter is to establish as nearly as possible a uniform system of administrative rule making and adjudicatory procedures for State agencies.
(c)	This Chapter shall apply to every agency, as defined in G.S. 150B-2(1), except to the extent and in the particulars that any statute, including subsection (d) of this section, makes specific provisions to the contrary.
(d)	The following are specifically exempted from the provisions of this Chapter except Article 5, which shall apply:  the Administrative Rules Review Commission, the Employment Security Commission, the Industrial Commission, the Occupational Safety and Health Review Board in all actions that do not involve agricultural employers, and the Utilities Commission.
	The North Carolina National Guard is exempt from the provisions of this Chapter in exercising its court-martial jurisdiction.
The Department of Human Resources is exempt from this Chapter in exercising its authority over the Camp Butner reservation granted in Article 6 of Chapter 122C of the General Statutes.
	The Department of Correction is exempt from the provisions of this Chapter, except for Article 5 of this Chapter and G.S. 150B-13 which shall apply.
	Articles 2 and 3 of this Chapter shall not apply to the Department of Revenue.  Except as provided in Chapter 136 of the General Statutes, Articles 2 and 3 of this Chapter do not apply to the Department of Transportation.
	Article 4 of this Chapter, governing judicial review of final administrative decisions, shall apply to The University of North Carolina and its constituent or affiliated boards, agencies, and institutions, but The University of North Carolina and its constituent or affiliated boards, agencies, and institutions are specifically exempted from the remaining provisions of this Chapter.  
	Except as provided in G.S. 150B-40(e), Article 3 of this Chapter shall not apply to agencies governed by the provisions of Article 3A of this Chapter, as set out in G.S. 150B-38(a).
Articles 3 and 3A of this Chapter shall not apply to the Governor's Waste Management Board in administering the provisions of G.S. 104E-6.2.
Article 2 of this Chapter shall not apply to the North Carolina Low-Level Radioactive Waste Management Authority in administering the provisions of G.S. 104G-10 and G.S. 104G-11.  Articles 3 and 3A of this Chapter shall not apply to the North Carolina Low-Level Radioactive Waste Management Authority in administering the provisions of G.S. 104G-9, 104G-10, and 104G-11."
Sec. 2.  G.S. 150B-2(2b) is repealed.
Sec. 3.  G.S. 150B-23(a) reads as rewritten:
"(a)	Except as provided in Article 3A, a contested case shall be commenced by filing a petition with the Office of Administrative Hearings and shall be conducted by that Office. The party who files the petition shall also serve a copy of the petition on all other parties and shall file a certificate of service together with the petition. Any petition filed by a party other than an agency shall be verified or supported by affidavit and shall state facts tending to establish that the agency named as the respondent has deprived the petitioner of property, has ordered the petitioner to pay a fine or civil penalty, or has otherwise substantially prejudiced the petitioner's rights and that the agency:
(1) 	Exceeded its authority or jurisdiction;
(2) 	Acted erroneously;
(3) 	Failed to use proper procedure;
(4) 	Acted arbitrarily or capriciously; or
(5) 	Failed to act as required by the Constitution, legislative enactment or rule.
The parties in a contested case shall be given an opportunity for a hearing without undue delay. Any person aggrieved may commence a contested case hereunder.
A local government employee, applicant for employment, or former employee to whom Chapter 126 of the General Statutes applies may commence a contested case under this Article in the same manner as any other petitioner. The case shall be conducted in the Office of Administrative Hearings in the same manner as other contested cases under this 	Article."
Sec. 4.  G.S. 150B-26 reads as rewritten:
"§ 150B-26. Consolidation.
When contested cases involving a common question of law or fact or multiple proceedings involving the same or related parties are pending, the Chief Administrative Law Judge of the Office of Administrative Hearings may order a joint hearing of any matters at issue in the cases, order the cases consolidated, or make other orders to reduce costs or delay in the proceedings."
Sec. 5.  G.S. 150B-32 reads as rewritten:
"§ 150B-32. Designation of administrative law judge.
(a)	The Chief Administrative Law Judge of the Office of Administrative Hearings shall assign himself or another administrative law judge to preside over a contested case.
(a1)	Repealed by Sessions Laws 1985 (Reg. Sess., 1986), c. 1022, s. 1(15), effective July 15, 1986.
(b)	On the filing in good faith by a party of a timely and sufficient affidavit of personal bias or disqualification of an administrative law judge, the administrative law judge shall determine the matter as a part of the record in the case, and this determination shall be subject to judicial review at the conclusion of the proceeding.
(c)	When an administrative law judge is disqualified or it is impracticable for him to continue the hearing, the Chief Administrative Law Judge shall assign another administrative law judge to continue with the case unless it is shown that substantial prejudice to any party will result, in which event a new hearing shall be held or the case dismissed without prejudice."
Sec. 6.  G.S. 150B-34 reads as rewritten:
"§ 150B-34.  Decision or order of administrative law judge.
(a)	In each contested case the administrative law judge shall make a final decision or order that contains findings of fact and conclusions of law.
(b)	A copy of the decision or order shall be served upon each party personally or by certified mail addressed to the party at the latest address given by the party and a copy shall be furnished to his attorney of record."
Sec. 7.  G.S. 150B-35 reads as rewritten:
"§ 150B-35. No ex parte communication; exceptions.
Unless required for disposition of an ex parte matter authorized by law, the administrative law judge assigned to a contested case may not communicate, directly or indirectly, in connection with any issue of fact, or question of law, with any person or party or his representative, except on notice and opportunity for all parties to participate. Nothing in this section shall be interpreted to prohibit necessary communication between the administrative law judge and any employee of the Office of Administrative Hearings regarding the contested case."
Sec. 8.  G.S. 150B-36 is repealed.
Sec. 9.  G.S. 150B-37 reads as rewritten:
"§ 150B-37. Official record.
(a)	In any contested case in which judicial review of a final decision made under G.S. 150B-34 is sought under Article 4 of this Chapter, the Office of Administrative Hearings shall prepare an official record of the case that includes:
(1)	Notices, pleadings, motions, and intermediate rulings;
(2)	Questions and offers of proof, objections, and rulings thereon;
(3)	Documentary evidence presented;
(4)	Matters officially noticed, except matters so obvious that a statement of them would serve no useful purpose; and
(5)	Repealed by Session Laws 1987, c. 878, s. 25, effective August 14, 1987.
(6)	The administrative law judge's decision, or order.
(b)	Proceedings at which oral evidence is presented shall be recorded, but need not be transcribed unless requested by a party. Each party shall bear the cost of the transcript or part thereof or copy of said transcript or part thereof which said party requests, and said transcript or part thereof shall be added to the official record as an exhibit.
	."
Sec. 10.  G.S. 150B-40(e) reads as rewritten:
"(e)	When a majority of an agency is unable or elects not to hear a contested case, the agency shall apply to the Chief Administrative Law Judge of the Office of Administrative Hearings for the designation of an administrative law judge to preside at the hearing of a contested case under this Article. Upon receipt of the application, the Chief Administrative Law Judge shall, without undue delay, assign an administrative law judge to hear the case.
Except as otherwise provided in this Article, the provisions of Article 3, and the hearing procedures in Chapter 3, Title 26 of the North Carolina Administrative Code, rather than this Article, shall govern a contested case in which the agency requests an administrative law judge from the Office of Administrative Hearings.
The administrative law judge assigned to hear a contested case under this Article shall sit in place of the agency and shall make a recommended decision which shall contain findings of fact and conclusions of law.
The administrative law judge shall stay any contested case under this Article on motion of an agency which is a party to the contested case, if the agency shows by supporting affidavits that it is engaged in other litigation or administrative proceedings, by whatever name called, with or before a federal agency, and this other litigation or administrative proceedings will determine the position, in whole or in part, of the agency in the contested case. At the conclusion of the other litigation or administrative proceedings, the contested case shall proceed and be determined as expeditiously as possible.
The agency may make its final decision only after the administrative law judge's recommended decision is served on the parties, and an opportunity is given to each party to file exceptions and proposed findings of fact and to present oral and written arguments to the agency."
Sec. 11.  G.S. 150B-45 reads as rewritten:
"§ 150B-45.  Procedure for seeking review; waiver.
(a)	To obtain judicial review of a final decision 
in a contested case in which an administrative law judge made the decision under Article 3 or a recommended decision under Article 3A, the person seeking review must file a notice of appeal in the Court of Appeals.
(b)	To obtain judicial review of a final agency decision in a contested case in which an administrative law judge did not make a final decision or a recommended decision the person seeking review must file a petition in the Superior Court of Wake County or in the superior court of the county where the person resides.
(c)	The person seeking review must file the notice of appeal or petition, within 30 days after the person is served personally or by certified mail with a written copy of the decision. A person who fails to file a notice of appeal or petition, within the required time waives the right to judicial review under this Article. For good cause shown, however, the Court of Appeals or the superior court, respectively, may accept an untimely notice of appeal or petition."
Sec. 12.  G.S. 150B-46 reads as rewritten:
"§ 150B-46. Contents of notice or petition; copies served on all parties; intervention.
(a)	A notice of appeal filed in the Court of Appeals shall be in the form and contain the information required by the rules of procedure governing practice in that Court.
(b)	A petition filed in superior court shall state explicitly the exceptions taken to the decision and the relief sought. Within 10 days after a petition is filed in superior court, the person seeking the review shall serve copies of the petition by personal service or by certified mail upon all who were parties of record to the administrative proceedings. Names and addresses of such parties shall be furnished to the petitioner by the agency upon request. Any party to the administrative proceeding may become a party to the review proceedings by notifying the court within 10 days after receipt of the copy of the petition.
Any person aggrieved may petition to become a party by filing a motion to intervene as provided in G.S. 1A-1, Rule 24."
Sec. 13.  G.S. 150B-47 reads as rewritten:
"§ 150B-47. Records forwarded to reviewing court; contents of records; costs.
Within 30 days after receipt of the copy of a petition for review in superior court of a final decision made under G.S. 150B-42(a), or within such additional time as the court may allow, the agency that made the final decision in the contested case shall transmit to the reviewing court the original or a certified copy of the official record in the contested case under review. With the permission of the court, the record may be shortened by stipulation of all parties to the review proceedings. Any party unreasonably refusing to stipulate to limit the record may be taxed by the court for such additional costs as may be occasioned by the refusal. The court may require or permit subsequent corrections or additions to the record when deemed desirable."
Sec. 14.  G.S. 150B-48 reads as rewritten:
"§ 150B-48. Stay of decision.
At any time before or during the review proceeding, a person aggrieved may apply to the reviewing court for an order staying the operation of the administrative decision pending the outcome of the review. The court may grant or deny the stay in its discretion upon such terms as it deems proper."
Sec. 15.  G.S. 150B-49 reads as rewritten:
"§ 150B-49.  New evidence.
An aggrieved person who files a petition in superior court for review of a final decision entered under G.S. 150B-42(a)	may apply to the court to present additional evidence.  If the court is satisfied that the evidence is material to the issues, is not merely cumulative, and could not reasonably have been presented at the administrative hearing, the court may remand the case so that additional evidence can be taken.  The court shall remand the case to the agency that conducted the administrative hearing.  After hearing the evidence, the agency may affirm or modify its previous findings of fact and final decision.  The additional evidence and any affirmation or modification of the final decision shall be made part of the official record."
Sec. 16.  G.S. 150B-51 reads as rewritten:
"§ 150B-51.  Scope of review.
		The court reviewing a final decision may affirm the decision or remand the case for further proceedings.  It may also reverse or modify the decision if the substantial rights of the petitioner may have been prejudiced because the findings, inferences, conclusions, or decisions are:
(1)	In violation of constitutional provisions;
(2)	In excess of statutory authority or jurisdiction;
(3)	Made upon unlawful procedure;
(4)	Affected by other error of law;
(5)	Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or
(6)	Arbitrary or capricious."
Sec. 17.  G.S. 150B-52 reads as rewritten:
"§ 150B-52.  Appeal; stay of court's decision.
A party to a review proceeding in a superior court may appeal to the appellate division from the final judgment of the superior court as provided in G.S. 7A-27.  A party to a review proceeding before the Court of Appeals may appeal to the Supreme Court as provided in G.S. 7A-31.  Pending the outcome of an appeal, an appealing party may apply to the court that issued the judgment under appeal for a stay of that judgment or a stay of the administrative decision that is the subject of the appeal, as appropriate."
Sec. 18.  G.S. 7A-29(a) reads as rewritten:
"(a)	From any final order or decision of the North Carolina Utilities Commission not governed by subsection (b), the North Carolina Industrial Commission, the North Carolina State Bar pursuant to G.S. 84-28, or the Property Tax Commission pursuant to G.S. 105-290 and 105-342, or from a final administrative decision in a contested case subject to G.S. 150B-32(a) or G.S. 150B-40(e), appeal as of right lies directly to the Court of Appeals."
Sec. 19.  G.S. 7A-31(a) reads as rewritten:
"(a)	In any cause in which appeal is taken to the Court of Appeals, except a cause appealed from the North Carolina Industrial Commission, the North Carolina State Bar pursuant to G.S. 84-28, or the Property Tax Commission pursuant to G.S. 105-345, or a motion for appropriate relief or valuation of exempt property pursuant to G.S. 7A-28, the Supreme Court may, in its discretion, on motion of any party to the cause or on its own motion, certify the cause for review by the Supreme Court,  either before or after it has been determined by the Court of Appeals. A cause appealed to the Court of Appeals from any of the administrative bodies listed in the preceding sentence may be certified in similar fashion, but only after determination of the cause in the Court of Appeals. The effect of such certification is to transfer the cause from the Court of Appeals to the Supreme Court for review by the Supreme Court. If the cause is certified for transfer to the Supreme Court before its determination in the Court of Appeals, review is not had in the Court of Appeals but the cause is forthwith transferred for review in the first instance by the Supreme Court. If the cause is certified for transfer to the Supreme Court after its determination by the Court of Appeals, the Supreme Court reviews the decision of the Court of Appeals.
Except in motions within the purview of G.S. 7A-28, the State may move for certification for review of any criminal cause, but only after determination of the cause by the Court of Appeals."
Sec. 20.  G.S. 53-215 reads as rewritten:
"§ 53-215. Appeal of Commissioner's decision.
A person aggrieved by a decision of the Commissioner in a proceeding under G.S. 53-211, 53-212(2)	or 53-227.1 may appeal the decision to the State Banking Commission by filing a notice of appeal with the Commission within 30 days after receiving the Commissioner's decision.  The State Banking Commission, within 30 days of receipt of the notice of appeal, shall approve, disapprove or modify the Commissioner's decision as provided in Article 3A of Chapter 150B. Failure of the State Banking Commission to act within 30 days of receipt of notice of appeal shall constitute a final decision of the State Banking Commission approving the decision of the Commissioner. Article 4 of Chapter 150B governs judicial review of a decision of the State Banking Commission."
Sec. 21.  G.S. 53-231 reads as rewritten:
"§ 53-231. Appeal of Commissioner's decision.
Article 4 of Chapter 150B governs judicial review of a decision of the Commission in a proceeding under this Article. Before seeking judicial review, a person aggrieved by a final decision of the Commissioner in a proceeding under G.S. 53-277.1 shall appeal the decision to the Commission as provided in G.S. 53-215."
Sec. 22.  G.S. 54B-48.7 reads as rewritten:
"§ 54B-48.7. Appeal of Administrator's decision.
	Article 4 of Chapter 150B governs judicial review of a final decision of the Administrator in a proceeding under G.S. 54B-48.3 or G.S 54B-48.4(2)."
Sec. 23.  G.S. 54B-71 reads as rewritten:
"§ 54B-71. Judicial review.
Article 4 of Chapter 150B governs judicial review of a cease and desist order issued under G.S. 54B-59 or a penalty imposed under this Article."
Sec. 24.  G.S. 58-9.3 reads as rewritten:
"§ 58-9.3. Court review of orders and decisions.
								Article 4 of Chapter 150B of the General Statutes governs judicial review of an order or decision of the Commissioner."
Sec. 25.  G.S. 58-9.4, 58-9.5, and 58-9.6 are repealed.
Sec. 26.  G.S. 131E-188 reads as rewritten:
"§ 131E-188. Administrative and judicial review.
(a)	After a decision of the Department to issue, deny or withdraw a certificate of need or exemption, any affected person, as defined in subsection (c) of this section, shall be entitled to a contested case hearing under Article 3 of Chapter 150B of the General Statutes.  A petition for a contested case shall be filed within 30 days after the Department makes its decision.  When a petition is filed, the Department shall send notification of the petition to the proponent of each application that was reviewed with the application for a certificate of need that is the subject of the petition.
A contested case shall be conducted in accordance with the following timetable:
(1)	An administrative law judge shall be assigned within 15 days after a petition is filed.
(2)	The parties shall complete discovery within 60 days after the assignment of the administrative law judge.
(3)	The hearing at which sworn testimony is taken and evidence is presented shall be commenced within 60 days after the end of the discovery period.
(4)	The administrative law judge shall make his decision within 45 days after the hearing.
	The administrative law judge assigned to a case may extend the deadlines in subdivisions (2)	or (3) and the Chief Administrative Law Judge may extend the deadline in subdivision (4) so long as the administrative law judge makes his decision in the case within 270 days after the petition is filed. 
(a1)	As a condition precedent to proceeding with a contested case hearing on the approval of an applicant for a certificate of need, the petitioner shall deposit a bond with the clerk of superior court where the new institutional health service that is the subject of the petition is proposed to be located. The bond shall be secured by cash or its equivalent in an amount equal to five percent (5%) of the cost of the proposed new institutional health service that is the subject of the petition, but may not be less than five thousand dollars ($5,000) and may not exceed fifty thousand dollars ($50,000). A petitioner who received approval for a certificate of need and is contesting only a condition in the certificate is not required to file a bond under this subsection.
The applicant who received approval for the new institutional health service that is the subject of the petition may bring an action against a bond filed under this subsection in the superior court of the county where the bond was filed. Upon finding that the petition for a contested case was frivolous or filed to delay the applicant, the court may award the applicant part or all of the bond filed under this subsection.
(b)	Article 4 of Chapter 150B governs judicial review of a final decision in a contested case.
(b1)	Before filing an appeal of a decision by the Department granting a certificate of need, the affected person shall deposit a bond with the Clerk of the Court of Appeals. The bond shall be secured by cash or its equivalent in an amount equal to five percent (5%) of the cost of the proposed new institutional health service that is the subject of the appeal, but may not be less than five thousand dollars ($5,000) and may not exceed fifty thousand dollars ($50,000). A holder of a certificate of need who is appealing only a condition in the certificate is not required to file a bond under this subsection.
If the Court of Appeals finds that the appeal was frivolous or filed to delay the applicant, the court shall remand the case to the superior court of the county where a bond was filed for the contested case hearing on the certificate of need. The superior court may award the holder of the certificate of need part or all of the bond. The court shall award the holder of the certificate of need reasonable attorney fees and costs incurred in the appeal to the Court of Appeals.
(c)	The term ‘affected persons' includes: the applicant; the health systems agency for the health service area in which the proposed project is to be located; health systems agencies serving contiguous health service areas or located within the same standard metropolitan statistical area; any person residing within the geographic area served or to be served by the applicant; any person who regularly uses health service facilities within that geographic area; health service facilities and health maintenance organizations (HMOs) located in the health service area in which the project is proposed to be located, which provide services similar to the services of the facility under review; health service facilities and HMOs which, prior to receipt by the agency of the proposal being reviewed, have formally indicated an intention to provide similar services in the future; third party payers who reimburse health service facilities for services in the health service area in which the project is proposed to be located; and any agency which establishes rates for health service facilities or HMOs located in the health service area in which the project is proposed to be located."
Sec. 27.  G.S. 18B-104 reads as rewritten:
"§ 18B-104. Administrative penalties.
(a)	Penalties. – For any violation of the ABC laws, the Commission may take any of the following actions against a permittee:
(1) 	Suspend the permittee's permit for a specified period of time not longer than three years;
(2) 	Revoke the permittee's permit;
(3) 	Fine the permittee up to five hundred dollars ($500.00) for the first violation, up to seven hundred fifty dollars ($750.00) for the second violation, and up to one thousand dollars ($1,000) for the third violation; or
(4) 	Suspend the permittee's permit under subdivision (1) and impose a fine under subdivision (3).
(b)	Compromise. – In any case in which the Commission is entitled to suspend or revoke a permit, the Commission may accept from the permittee an offer in compromise to pay a penalty of not more than five thousand dollars ($5,000). The Commission may either accept a compromise or revoke a permit, but not both. The Commission may accept a compromise and suspend the permit in the same case.
(c)	Fines and Penalties to Treasurer. – All fines and penalties collected under subsections (a) and (b) shall be remitted by the Commission to the State Treasurer for the General Fund.
(d)	Effect on Licenses. – Suspension or revocation of a permit includes automatic suspension or revocation of any related State or local revenue license.
(e)	Effect on Other Permits. – Unless some other disposition is ordered by the Commission, revocation or suspension of a permit under subsection (a) includes automatic revocation or suspension, respectively, of any other ABC permit held by the same permittee for the same establishment.
(f)	Review of Commission Action. – Commission action under this section shall be by informal procedures in accordance with G.S. 150B-22. A permittee who is dissatisfied with the action may commence a contested case under Article 3 of Chapter 150B."
Sec. 28.  G.S. 18B-906 reads as rewritten:
"§ 18B-906. Applicability of Administrative Procedure Act.
	An ABC permit is a ‘license' within the meaning of G.S. 150B-2, and a Commission action on issuance, suspension or revocation of an ABC permit, other than a temporary permit issued under G.S. 18B-905, is a ‘contested case' subject to the provisions of Chapter 150B.
	."
Sec. 29.  G.S. 95-135(j) reads as rewritten:
"(j)	Notwithstanding any other provision of this section, appeals from citations and abatement periods that involve agricultural employers and from all types of penalties that involve agricultural employers shall be subject to the provisions of Articles 3 and 4 of Chapter 150B. "
Sec. 30.  G.S. 95-138(a) reads as rewritten:
"(a)	Any employer who willfully or repeatedly violates the requirements of this Article, any standard, rule or order promulgated pursuant to this Article, or regulations prescribed pursuant to this Article, may upon the recommendation of the Director to the Commissioner be assessed by the Commissioner a civil penalty of not more than ten thousand dollars ($10,000) for each violation. Any employer who has received a citation for a serious violation of the requirements of this Article or any standard, rule, or order promulgated under this Article or of any regulation prescribed pursuant to this Article, shall be assessed by the Commissioner a civil penalty of up to one thousand dollars ($1,000) for each such violation. If the violation is adjudged not to be of a serious nature, then the employer may be assessed a civil penalty of up to one thousand dollars ($1,000) for each such violation. Any employer who fails to correct a violation for which a citation has been issued under this Article within the period allowed for its correction (which period shall not begin to run until the date of the final order in the case of any appeal proceedings in this Article initiated by the employer in good faith and not solely for the delay or avoidance of penalties), may be assessed a civil penalty of not more than one thousand dollars ($1,000). Such assessment shall be made to apply to each day during which such failure or violation continues. Any employer who violates any of the posting requirements, as prescribed under the provision of this Article, shall be assessed a civil penalty of not more than one thousand dollars ($1,000) for such violation. The Commissioner upon recommendation of the Director shall have authority to assess all civil penalties provided by this Article, giving due consideration to the appropriateness of the penalty with respect to the size of the business of the employer being charged, the gravity of the violation, the good faith of the employer and the record of previous violations. If the decision of the Director is appealed, the Board or an administrative law judge shall have such authority when making the final agency decision."
Sec. 31.  G.S. 115C-116 reads as rewritten:
"§ 115C-116.  Notice of decisions; mediation, administrative review, and judicial review of disagreements.
(a)	Notice. – The parent, guardian, or surrogate parent of a child shall be notified promptly when:
(1)	The local educational agency proposes to initiate or change, or refuses to initiate or change, the identification of a child as a child with special needs; or
(2)	The local educational agency proposes to initiate or change, or refuses to initiate or change, the child's individualized education program.
The notice shall be in writing and shall contain a statement advising the parent, guardian, or surrogate parent of the right to review the proposed decision; a statement offering the parent, guardian, or surrogate parent the opportunity for mediation; and a copy of this statute and G.S. 150B-23 through 150B-37 or an explanation of the rights afforded by these statutes.  It shall be hand-delivered to the parent, guardian, or surrogate parent or forwarded by certified or registered mail, return receipt requested.
(b)	Mediation. – Mediation of disputes or disagreements regarding the identification of children with special needs and the provision of special education for children with special needs prior to formal administrative review is encouraged.  If a request for formal administrative review has not been filed, the superintendent, upon the request of a parent, guardian, or surrogate parent, shall meet, or designate an assistant or associate superintendent to meet, with the parent, guardian, or surrogate parent to attempt to resolve the dispute or disagreement.  The meeting shall be informal and the General Assembly intends that the meeting shall be nonadversarial, as required by G.S. 150B-22.
(c)	Right of Review. – The parent, guardian, or surrogate parent may obtain review of proposed decisions on the following grounds:
(1)	The child has not been identified or has been incorrectly identified as a child with special needs;
(2)	The child's individualized education plan is not appropriate to meet his needs;
(3)	The child's individualized education plan is not being implemented; or
(4)	The child is otherwise being denied a free, appropriate education.
In addition, a local educational agency may obtain review as provided by this section if a parent, guardian, or surrogate parent refuses to consent to the evaluation of the child for the purpose of determining whether the child is a child with special needs or for the purpose of developing a free appropriate educational program for the child.
(d)	Administrative Review. – Except as otherwise provided in this section, the administrative review shall be initiated and conducted in accordance with Article 3 of Chapter 150B of the General Statutes, the Administrative Procedure Act.
(e)	Scope of Review. – Notwithstanding the provisions of G.S. 150B-23(a) and G.S. 150B-33(b)(9), the issues for review shall be limited to those set forth in subsection (c).
(f)	Venue of Hearing. – Notwithstanding the provisions of G.S. 150B-24, the hearing shall be conducted in the county where the child attends school or is entitled to enroll pursuant to G.S. 115C-366.
(g)	Hearing Closed. – Notwithstanding the provisions of G.S. 150B-23(e), the hearing shall be closed to the public unless the parent, guardian, or surrogate parent, prior to the beginning of the hearing, requests in writing that the hearing be open to the public.
		(j)	Power to Enforce Final Decision. –An administrative law judge shall have the power to enforce a final decision by ordering a local educational agency:
(1)	To provide a child with an appropriate education;
(2)	To place a child in a private school that is approved to provide special education and that can provide the child an appropriate education; or
(3)	To reimburse parents for reasonable private school placement costs in accordance with the provisions of G.S. 115C-115 in the event it determines that the local educational agency did not offer or provide the child with an appropriate education and the private school in which the parent, guardian, or surrogate parent placed the child was an approved school and did provide the child an appropriate education.
(k)	Judicial Review. – Any party aggrieved by the final decision may seek judicial review in the State courts as provided in Chapter 150B, Article 4 of the General Statutes, or in federal court as provided in 20 U.S.C. § 1415.
(l)	Change in Placement. – Upon the filing of a petition, no change may be made in the child's status or program by school officials during the period of the administrative review or subsequent judicial review, unless the parent, guardian, or surrogate parent gives written consent."
Sec. 32.  G.S. 126-4 reads as rewritten:
"§ 126-4. Powers and duties of State Personnel Commission.
Subject to the approval of the Governor, the State Personnel Commission shall establish policies and rules governing each of the following:
(1) 	A position classification plan which shall provide for the classification and reclassification of all positions subject to this Chapter according to the duties and responsibilities of the positions.
(2) 	A compensation plan which shall provide for minimum, maximum, and intermediate rates of pay for all employees subject to the provisions of this Chapter.
(3) 	For each class of positions, reasonable qualifications, as to age, character, physical condition, and other attributes pertinent to the work to be performed.
(4) 	A recruitment program to attract applicants to public employment and determine the relative fitness of applicants for the respective positions.
(5) 	Hours and days of work, holidays, vacation, sick leave, and other matters pertaining to the conditions of employment.  The legal public holidays established by the Commission as paid holidays for State employees shall include Martin Luther King, Jr.'s, Birthday for all years after 1987.  Provided, however, that the Commission shall not provide for a greater number of total paid holidays than were established for the year 1986.  The Commission shall not delete Veterans Day as a holiday.
(6) 	The appointment, promotion, transfer, demotion and               suspension.
(7) 	Cooperation with the Department of Public Instruction, the State Board of Education, the Board of Governors of the University of North Carolina, and the colleges and universities of the State in developing pre-service and in-service training programs.
(7a)	The separation of employees.
(8) 	The evaluation of employee performance, the granting of salary increments, and a program of meritorious service awards.
	(10)	Such other programs and procedures as may be necessary to promote efficiency of administration and provide for a fair and reasonable system of personnel administration. This subdivision may not be construed to authorize the establishment of an incentive pay program.
	(12)	Repealed by Session Laws 1987, c. 320, s. 2.
(13)	Repealed by Session Laws 1987, c. 320, s. 3.
(14)	The implementation of G.S. 126-5(e).
(15)	Recognition of State employees, public personnel management, and management excellence.
Such policies and rules shall not limit the power of any elected or appointed department head, in his discretion and upon his determination that it is in the best interest of the Department, to transfer, demote, or separate a State
(1) 	Employee in a grade 60 or lower position who has not been continuously employed by the State of North Carolina for the immediate 12 preceding months;
(2) 	Employee in a grade 61 to grade 65 position who has not been  continuously employed by the State of North Carolina for the immediate 36 preceding months;
(3) 	Employee in a grade 66 to grade 70 position who has not been continuously employed by the State of North Carolina for the immediate 48 preceding months; or
(4) 	Employee in a grade 71 or higher position who has not been continuously employed by the State of North Carolina for the immediate 60 preceding months."
Sec. 33.  G.S. 126-25 reads as rewritten:
"§ 126-25. Remedies of employee objecting to material in file.
An employee, former employee or applicant for employment who objects to material in his file may place in his file a statement relating to the material he considers to be inaccurate or misleading. An employee, former employee or applicant for employment who objects to material in his file because he considers it inaccurate or misleading may seek the removal of such material from his file in accordance with the grievance procedure of that department. The decision of the department is subject to appeal under Article 3 and judicial review under Article 4 of Chapter 150B. When a department, division, bureau, commission, or other agency agrees or is ordered by an administrative law judge or by the General Court of Justice of this State to remove inaccurate or misleading material from an employee's file, which information was placed in the file by the supervisor or other agent of management, it shall destroy the original and all copies of the material removed and may not retain any inaccurate or misleading information derived from the material removed."
Sec. 34.  G.S. 126-35 reads as rewritten:
"§ 126-35. Written statement of reason for disciplinary action.
No permanent employee subject to the State Personnel Act shall be discharged, suspended, or reduced in pay or position, except for just cause. In cases of such disciplinary action, the employee shall, before the action is taken, be furnished with a statement in writing setting forth in numerical order the specific acts or omissions that are the reasons for the disciplinary action and the employee's appeal rights. The employee shall be permitted 15 days from the date the statement is delivered to appeal to the head of the department. A copy of the written statement given the employee and the employee's appeal shall be filed by the department with the State Personnel Director within five days of their delivery. However, an employee may be suspended without warning for causes relating to personal conduct detrimental to State service, pending the giving of written reasons, in order to avoid undue disruption of work or to protect the safety of persons or property or for other serious reasons. The employee, if he is not satisfied with the final decision of the head of the department, or if he is unable, within a reasonable period of time, to obtain a final decision by the head of the department, may file a contested case as provided in Article 3 of Chapter 150B. The petition shall be filed not later than 30 days after receipt of notice of the department head's decision."
Sec. 35.  G.S. 126-36 reads as rewritten:
"§ 126-36. Appeal of unlawful State employment practice.
Any State employee or former State employee who has reason to believe that employment, promotion, training, or transfer was denied him or that demotion, layoff or termination of employment was forced upon him in retaliation for opposition to alleged discrimination or because of his age, sex, race, color, national origin, religion, creed, political affiliation, or handicapped [handicapping] condition as defined by G.S. 168A-3 except where specific age, sex or physical requirements constitute a bona fide occupational qualification necessary to proper and efficient administration, shall have the right to file a contested case as provided in Article 3 of Chapter 150B."
Sec. 36.  G.S. 126-36.1 reads as rewritten:
"§ 126-36.1. Appeal by applicant for employment.
Any applicant for State employment who has reason to believe that employment was denied in violation of G.S. 126-16 shall have the right to file a contested case as provided in Article 3 of Chapter 150B."
Sec. 37.  G.S. 126-36.2 reads as rewritten:
"§ 126-36.2.  Appeal by State employee denied notice of vacancy or priority consideration.
Any State employee who has reason to believe that he was denied promotion due to the failure of the agency, department, or institution that had a job vacancy to:
(1)	Post notice of the job vacancy pursuant to G.S. 126-7.1(a) or;
(2)	Give him priority consideration pursuant to G.S. 126-7.1(c) may file a contested case as provided in Article 3 of Chapter 150B."
Sec. 38.  G.S. 126-37 reads as rewritten:
"§ 126-37. Binding decisions.
(a)	The State Personnel Director or any other person or persons designated by the Commission shall investigate any disciplinary action or alleged discrimination which is appealed. Appeals involving a disciplinary action, alleged discrimination, or any other contested case arising under this Chapter shall be conducted in the Office of Administrative Hearings as provided in Article 3 of Chapter 150B; provided that no grievance may be appealed unless the employee has complied with G.S. 126-34. Nothing in this Chapter shall be construed to limit the right of an employee to initiate a contested case available to him under Chapter 150B. The State Personnel Commission may file a written recommendation in the contested case. An administrative law judge is hereby authorized to reinstate any employee to the position from which he has been removed, to order the employment, promotion, transfer, or salary adjustment of any individual to whom it has been wrongfully denied or to direct other suitable action to correct the abuse which may include the requirement of payment for any loss of salary which has resulted from the improperly discriminatory action of the appointing authority and of reasonable attorneys' fees and witnesses' fees.
	(b) The decisions of the administrative law judge shall be binding in appeals of local employees subject to this Chapter. 
		(c)	The employee must give the county notice of the appeal taken pursuant to subsection (a) of this section.  Notice must be given to the county manager or the chairman of the board of county commissioners by certified mail within 15 days of the filing of the notice of appeal.  If the local appointing authority is other than a board of county commissioners, the county may intervene in the appeal within 30 days of receipt of the notice.  The decision of the administrative law judge shall be binding on the county even if the county does not intervene."
Sec. 39.  G.S. 126-38 reads as rewritten:
"§ 126-38. Time limit for appeals.
Any employee appealing any personnel decision or action shall file petition as provided in G.S. 150B-23(a)	no later than 30 days after receipt of notice of the decision or action which triggers the right of appeal."
Sec. 40.  G.S. 126-41 reads as rewritten:
"§ 126-41. Attorney and witness fees.
The decision of an administrative law judge assessing or refusing to assess reasonable witness fees or a reasonable attorney's fee as provided in G.S. 	126-37 is a final agency decision appealable under Article 4 of Chapter 150B of the General Statutes. The reviewing court may reverse or modify the decision if the decision is unreasonable or the award is inadequate. The reviewing court shall award court costs and a reasonable attorney's fee for representation in connection with the appeal to an employee who obtains a reversal or modification of the decision in an appeal under this section."
Sec. 41.  This act shall become effective July 1, 1989.  Section 1 and Sections 11 through 27 shall apply to petitions for contested cases and to petitions for or notices of appeal filed on or after July 1, 1989.  Section 3, Sections 6 through 10 and Sections 27 through 40 shall apply to all petitions for contested cases filed in and to all contested cases pending in the Office of Administrative Hearings on or after July 1, 1989.