A BILL TO BE ENTITLED
AN ACT to clarify the licensing process for new group home facilities and for the reimbursement of educational costs by the home county to the host county.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 115C‑140.1 reads as rewritten:
"§ 115C‑140.1.  Cost of education of children in group homes, foster homes, etc.
(a)	(Effective until July 1, 2003) Notwithstanding the provisions of any other statute and without regard for the place of domicile of a parent or guardian, the cost of a free appropriate public education for a child with special needs who is placed in or assigned to a group home, foster home or other similar facility, pursuant to State and federal law, shall be borne by the local board of education in which the group home, foster home or other similar facility is located. Nothing in this section obligates any local board of education to bear any cost for the care and maintenance of a child with special needs in a group home, foster home or other similar facility.
(a)	(Effective July 1, 2003) Notwithstanding the provisions of any other statute and without regard for the place of domicile of a parent or guardian, the cost of a free appropriate public education for a child with disabilities who is placed in or assigned to a group home or foster home, pursuant to State and federal law, shall be borne by the local board of education in which the group home or foster home is located. Local administrative units may submit a Special State Reserve Program application for foster home or group home children whose special education and related services costs exceed the per child group home allocation.
(b)	The State Board of Education shall use State and federal funds appropriated for children with special needs to establish a reserve fund to reimburse local boards of education for the education costs of children assigned to group homes or other facilities as provided in subsection (a) of this section.
(c)	The Department shall review the current cost of children with disabilities served in the local school administrative units with group homes or foster homes to determine the actual cost of services.
(d)	Nothing in this section obligates any local board of education to bear any cost for the care and maintenance of a child with disabilities in a group home or foster home."
SECTION 2.  G.S. 112C‑23 reads as rewritten:
"§ 122C‑23.  Licensure.
(a)	No person shall establish, maintain, or operate a licensable facility for the mentally ill, developmentally disabled, or substance abusers without a current license issued by the Secretary.
(b)	Each license is issued to the person only for the premises named in the application and shall not be transferable or assignable except with prior written approval of the Secretary.
(c)	Any person who intends to establish, maintain, or operate a licensable facility shall apply to the Secretary for a license. The Secretary shall prescribe by rule the contents of the application forms.
(d)	The Secretary shall issue a license if the Secretary finds that the person complies with this Article and the rules of the Commission and Secretary.
(e)	Unless a license is provisional or has been suspended or revoked, it shall be valid for a period not to exceed two years from the date of issue. The expiration date of a license shall be specified on the license when issued. Renewal of a regular license is contingent upon receipt of information required by the Secretary for renewal and continued compliance with this Article and the rules of the Commission and the Secretary.
A provisional license for a period not to exceed six months may be granted by the Secretary to a person who is temporarily unable to comply with a rule or rules. During this period the licensable facility shall correct the noncompliance based on a plan submitted to and approved by the Secretary. The noncompliance may not present an immediate threat to the health and safety of the individuals in the licensable facility. A provisional license for an additional period of time to meet the noncompliance may not be issued.
(e1)	Except as provided in subsection (e2) of this section, the Secretary shall not enroll any new provider for Medicaid Home or Community Based services or other Medicaid services, as defined in 42 C.F.R. 440.90, 42 C.F.R. 440.130(d), and 42 C.F.R. 440.180, or issue a license for a new facility or a new service to any applicant meeting any of the following criteria:
(1)	Was the owner, principal, or affiliate of a licensable facility under Chapter 122C,  Chapter 131D or Article 7 of Chapter 110 that had its license revoked until 60 months after the date of the revocation.
(2)	Is the owner, principal, or affiliate of a licensable facility that was assessed a penalty for a Type A or Type B violation under Article 3 of this Chapter until:
a.	Six months from the date of the assessment of the violation.
b.	Twelve months from the date of the assessment of the second violation if two Type A or Type B violations, or combination thereof, have been assessed in a six-month period.
c.	Thirty-six months from the date of the assessment of the third violation if three Type A or Type B violations, or combination thereof, have been assessed in a 12-month period.
d.	Sixty months from the date of the assessment of the fourth violation if four Type A or Type B violations, or combination thereof, have been assessed in a 36 month period.
(3)	Is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under G.S. 122C‑24.1(a) until 60 months after the date of reinstatement or restoration of the license.
(4)	Is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under Article 1A of Chapter 131D until 60 months after the date of reinstatement or restoration of the license.
(5)	Is found by the Secretary to have a prior history as a provider under Chapter 122C, Chapter 130D, or Article 7 of Chapter 110 that indicates the applicant will not be able to comply with licensing or enrollment statutes and rules promulgated under those statutes and will probably place clients at high risk of danger if the applicant were granted enrollment.
(e1)	The Secretary may enroll a provider described in subsection (e1) of this section if any of the following circumstances apply:
(1)	The applicant is an area program or county program providing services under G.S. 122C-141, and there is no other provider of the service in the catchment area.
(2)	The Secretary finds that the area program or county program has shown good cause by clear and convincing evidence why the enrollment should be allowed.
(f)	Upon written application and in accordance with rules of the Commission, the Secretary may for good cause waive any of the rules implementing this Article, provided those rules do not affect the health, safety, or welfare of the individuals within the licensable facility. Decisions made pursuant to this subsection may be appealed to the Commission for a hearing in accordance with Chapter 150B of the General Statutes.
(g)	The Secretary may suspend the admission of any new clients to a facility licensed under this Article where the conditions of the facility are detrimental to the health or safety of the clients. This suspension shall be for the period determined by the Secretary and shall remain in effect until the Secretary is satisfied that conditions or circumstances merit removal of the suspension. In suspending admissions under this subsection, the Secretary shall consider the following factors:
(1)	The degree of sanctions necessary to ensure compliance with this section and rules adopted to implement this subsection, and
(2)	The character and degree of impact of the conditions at the facility on the health or safety of its clients.
A facility may contest a suspension of admissions under this subsection in accordance with Chapter 150B of the General Statutes. In contesting the suspension of admissions, the facility must file a petition for a contested case within 20 days after the Department mails notice of suspension of admissions to the licensee."SECTION 3.  G.S. 131D‑2 reads as rewritten:
"§ 131D‑2.  Licensing of adult care homes for the aged and disabled.
(a)	The following definitions will apply in the interpretation of this section:
(1)	"Abuse" means the willful or grossly negligent infliction of physical pain, injury or mental anguish, unreasonable confinement, or the willful or grossly negligent deprivation by the administrator or staff of an adult care home of services which are necessary to maintain mental and physical health.
(1a)	"Administrator" means a person approved by the Department of Health and Human Services who has the responsibility for the total operation of a licensed domiciliary home.
(1b)	"Adult care home" is an assisted living residence in which the housing management provides 24‑hour scheduled and unscheduled personal care services to two or more residents, either directly or, for scheduled needs, through formal written agreement with licensed home care or hospice agencies. Some licensed adult care homes provide supervision to persons with cognitive impairments whose decisions, if made independently, may jeopardize the safety or well‑being of themselves or others and therefore require supervision. Medication in an adult care home may be administered by designated, trained staff. Adult care homes that provide care to two to six unrelated residents are commonly called family care homes.
(1c)	"Amenities" means services such as meals, housekeeping, transportation, and grocery shopping that do not involve hands‑on personal care.
(1d)	"Assisted living residence" means any group housing and services program for two or more unrelated adults, by whatever name it is called, that makes available, at a minimum, one meal a day and housekeeping services and provides personal care services directly or through a formal written agreement with one or more licensed home care or hospice agencies. The Department may allow nursing service exceptions on a case‑by‑case basis. Settings in which services are delivered may include self‑contained apartment units or single or shared room units with private or area baths. Assisted living residences are to be distinguished from nursing homes subject to provisions of G.S. 131E‑102. Effective October 1, 1995, there are two types of assisted living residences: adult care homes and group homes for developmentally disabled adults. Effective July 1, 1996, there is a third type, multiunit assisted housing with services.
(1e)	"Compensatory agent" means a spouse, relative, or other caretaker who lives with a resident and provides care to a resident.
(1f)	"Department" means the Department of Health and Human Services unless some other meaning is clearly indicated from the context.
(2)	Repealed by Session Laws 2001‑209, s. 1(a).
(3)	Repealed by Session Laws 1995, c. 535, s. 8.
(4)	"Exploitation" means the illegal or improper use of an aged or disabled resident or his resources for another's profit or advantage.
(5)	"Family care home" means an adult care home having two to six residents. The structure of a family care home may be no more than two stories high and none of the aged or physically disabled persons being served there may be housed in the upper story without provision for two direct exterior ground‑level accesses to the upper story.
(6)	Repealed by Session Laws 2001‑209, s. 1(b).
(7)	Repealed by Session Laws 1995, c. 535, s. 8.
(7a)	Effective July 1, 1996, "multiunit assisted housing with services" means an assisted living residence in which hands‑on personal care services and nursing services which are arranged by housing management are provided by a licensed home care or hospice agency, through an individualized written care plan. The housing management has a financial interest or financial affiliation or formal written agreement which makes personal care services accessible and available through at least one licensed home care or hospice agency. The resident has a choice of any provider, and the housing management may not combine charges for housing and personal care services. All residents, or their compensatory agents, must be capable, through informed consent, of entering into a contract and must not be in need of 24‑hour supervision. Assistance with self‑administration of medications may be provided by appropriately trained staff when delegated by a licensed nurse according to the home care agency's established plan of care. Multiunit assisted housing with services programs are required to register with the Division of Facility Services and to provide a disclosure statement. The disclosure statement is required to be a part of the annual rental contract that includes a description of the following requirements:
a.	Emergency response system;
b.	Charges for services offered;
c.	Limitations of tenancy;
d.	Limitations of services;
e.	Resident responsibilities;
f.	Financial/legal relationship between housing management and home care or hospice agencies;
g.	A listing of all home care or hospice agencies and other community services in the area;
h.	An appeals process; and
i.	Procedures for required initial and annual resident screening and referrals for services.
Continuing care retirement communities, subject to regulation by the Department of Insurance under Chapter 58 of the General Statutes, are exempt from the regulatory requirements for multiunit assisted housing with services programs.
(8)	"Neglect" means the failure to provide the services necessary to maintain a resident's physical or mental health.
(9)	"Personal care services" means any hands‑on services allowed to be performed by In‑Home Aides II or III as outlined in Department rules.
(10)	"Registration" means the submission by a multiunit assisted housing with services provider of a disclosure statement containing all the information as outlined in subdivision (7a) of this subsection.
(11)	"Resident" means a person living in an assisted living residence for the purpose of obtaining access to housing and services provided or made available by housing management.
(12)	"Secretary" means the Secretary of Health and Human Services unless some other meaning is clearly indicated from the context.
(a1)	Persons not to be cared for in adult care homes. – Except when a physician certifies that appropriate care can be provided on a temporary basis to meet the resident's needs and prevent unnecessary relocation, adult care homes shall not care for individuals with any of the following conditions or care needs:
(1)	Ventilator dependency;
(2)	Individuals requiring continuous licensed nursing care;
(3)	Individuals whose physician certifies that placement is no longer appropriate;
(4)	Individuals whose health needs cannot be met in the specific adult care home as determined by the residence; and
(5)	Such other medical and functional care needs as the Medical Care Commission determines cannot be properly met in an adult care home.
(a2)	Persons not to be cared for in multiunit assisted housing with services. – Except when a physician certifies that appropriate care can be provided on a temporary basis to meet the resident's needs and prevent unnecessary relocation, multiunit assisted housing with services shall not care for individuals with any of the following conditions or care needs:
(1)	Ventilator dependency;
(2)	Dermal ulcers III and IV, except those stage III ulcers which are determined by an independent physician to be healing;
(3)	Intravenous therapy or injections directly into the vein, except for intermittent intravenous therapy managed by a home care or hospice agency licensed in this State;
(4)	Airborne infectious disease in a communicable state that requires isolation of the individual or requires special precautions by the caretaker to prevent transmission of the disease, including diseases such as tuberculosis and excluding infections such as the common cold;
(5)	Psychotropic medications without appropriate diagnosis and treatment plans;
(6)	Nasogastric tubes;
(7)	Gastric tubes except when the individual is capable of independently feeding himself and caring for the tube, or as managed by a home care or hospice agency licensed in this State;
(8)	Individuals requiring continuous licensed nursing care;
(9)	Individuals whose physician certifies that placement is no longer appropriate;
(10)	Unless the individual's independent physician determines otherwise, individuals who require maximum physical assistance as documented by a uniform assessment instrument and who meet Medicaid nursing facility level‑of‑care criteria as defined in the State Plan for Medical Assistance. Maximum physical assistance means that an individual has a rating of total dependence in four or more of the seven activities of daily living as documented on a uniform assessment instrument;
(11)	Individuals whose health needs cannot be met in the specific multiunit assisted housing with services as determined by the residence; and
(12)	Such other medical and functional care needs as the Medical Care Commission determines cannot be properly met in multiunit assisted housing with services.
(a3)	Hospice care. – At the request of the resident, hospice care may be provided in an assisted living residence under the same requirements for hospice programs as described in Article 10 of Chapter 131E of the General Statutes.
(b)	Licensure; inspections. – 
(1)	The Department of Health and Human Services shall inspect and license, under rules adopted by the Medical Care Commission, all adult care homes for persons who are aged or mentally or physically disabled except those exempt in subsection (c) of this section. Licenses issued under the authority of this section shall be valid for one year from the date of issuance unless revoked earlier by the Secretary for failure to comply with any part of this section or any rules adopted hereunder. Licenses shall be renewed annually upon filing and the Department's approval of the renewal application. A license shall not be renewed if outstanding fines and penalties imposed by the State against the home have not been paid. Fines and penalties for which an appeal is pending are exempt from consideration. The renewal application shall contain all necessary and reasonable information that the Department may by rule require. Except as otherwise provided in this subdivision, the Department may amend a license by reducing it from a full license to a provisional license for a period of not more than 90 days whenever the Department finds that:
a.	The licensee has substantially failed to comply with the provisions of Articles 1 and 3 of Chapter 131D of the General Statutes and the rules adopted pursuant to these Articles;
b.	There is a reasonable probability that the licensee can remedy the licensure deficiencies within a reasonable length of time; and
c.	There is a reasonable probability that the licensee will be able thereafter to remain in compliance with the licensure rules for the foreseeable future.
The Department may extend a provisional license for not more than one additional 90‑day period upon finding that the licensee has made substantial progress toward remedying the licensure deficiencies that caused the license to be reduced to provisional status.
The Department may revoke a license whenever:
a.	The Department finds that:
1.	The licensee has substantially failed to comply with the provisions of Articles 1 and 3 of Chapter 131D of the General Statutes and the rules adopted pursuant to these Articles; and
2.	It is not reasonably probable that the licensee can remedy the licensure deficiencies within a reasonable length of time; or
b.	The Department finds that:
1.	The licensee has substantially failed to comply with the provisions of Articles 1 and 3 of Chapter 131D of the General Statutes and the rules adopted pursuant to these Articles; and
2.	Although the licensee may be able to remedy the deficiencies within a reasonable time, it is not reasonably probable that the licensee will be able to remain in compliance with licensure rules for the foreseeable future; or
c.	The Department finds that the licensee has failed to comply with the provisions of Articles 1 and 3 of Chapter 131D of the General Statutes and the rules adopted pursuant to these Articles, and the failure to comply endangered the health, safety, or welfare of the patients in the facility.
The Department may also issue a provisional license to a facility, pursuant to rules adopted by the Medical Care Commission, for substantial failure to comply with the provisions of this section or rules adopted pursuant to this section. Any facility wishing to contest the issuance of a provisional license shall be entitled to an administrative hearing as provided in the Administrative Procedure Act, Chapter 150B of the General Statutes. A petition for a contested case shall be filed within 30 days after the Department mails written notice of the issuance of the provisional license.
(1a)	In addition to the licensing and inspection requirements mandated by subdivision (1) of this subsection, the Department shall ensure that adult care homes required to be licensed by this Article are monitored for licensure compliance on a regular basis. In carrying out this requirement, the Department shall work with county departments of social services to do the routine monitoring and to have the Division of Facility Services oversee this monitoring and perform any follow‑up inspection called for. The Department shall monitor regularly the enforcement of rules pertaining to air circulation, ventilation, and room temperature in resident living quarters. These rules shall include the requirement that air conditioning or at least one fan per resident bedroom and living and dining areas be provided when the temperature in the main center corridor exceeds 80 degrees Fahrenheit. The Department shall also keep an up‑to‑date directory of all persons who are administrators as defined in subdivision (1a) of subsection (a) of this section.
(1b)	No new license shall be issued for any adult care home to an applicant for licensure who:
a.	Was the owner, principal, or affiliate of a licensable facility under Chapter 122C, Chapter 131D or Article 7 of Chapter 110 that had its license revoked until one full year after the date of revocation;
b.	Is the owner, principal, or affiliate of an adult care home that was assessed a penalty for a Type A or Type B violation until the earlier of one year from the date the penalty was assessed or until the home has substantially complied with the correction plan established pursuant to G.S. 131D‑34 and substantial compliance has been certified by the Department; or
c.	Is the owner, principal, or affiliate of an adult care home that had its license summarily suspended or downgraded to provisional status as a result of Type A or B violations until six months from the date of reinstatement of the license, restoration from provisional to full licensure, or termination of the provisional license, as applicable.
d.	Is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under Chapter 122C or Article 1 of Chapter 131D or had its license summarily suspended or denied under Article 7 of Chapter 110 until six months from the date of the reinstatement of the license, restoration from provisional to full licensure, or termination of the provisional license, as applicable.
An applicant for new licensure may appeal a denial of certification of substantial compliance under subparagraph b. of this subdivision by filing with the Department a request for review by the Secretary within 10 days of the date of denial of the certification. Within 10 days of receipt of the request for review the Secretary shall issue to the applicant a written determination that either denies certification of substantial compliance or certifies substantial compliance. The decision of the Secretary is final.
(2)	Any individual or corporation that establishes, conducts, manages, or operates a facility subject to licensure under this section without a license is guilty of a Class 3 misdemeanor, and upon conviction shall be punishable only by a fine of not more than fifty dollars ($50.00) for the first offense and not more than five hundred dollars ($500.00) for each subsequent offense. Each day of a continuing violation after conviction shall be considered a separate offense.
(3)	In addition, the Department may summarily suspend a license pursuant to G.S. 150B‑3(c) whenever it finds substantial evidence of abuse, neglect, exploitation or any condition which presents an imminent danger to the health and safety of any resident of the home. Any facility wishing to contest summary suspension of a license shall be entitled to an administrative hearing as provided in the Administrative Procedure Act, Chapter 150B of the General Statutes. A petition for a contested case shall be filed within 20 days after the Department mails a notice of summary suspension to the licensee.
(4)	Notwithstanding G.S. 8‑53 or any other law relating to confidentiality of communications between physician and patient, in the course of an inspection conducted under subsection (b):
a.	Department representatives may review any writing or other record concerning the admission, discharge, medication, care, medical condition, or history of any person who is or has been a resident of the facility being inspected, and
b.	Any person involved in giving care or treatment at or through the facility may disclose information to Department representatives;
unless the resident objects in writing to review of his records or disclosure of such information.
The facility, its employees and any other person interviewed in the course of an inspection shall be immune from liability for damages resulting from disclosure of any information to the Department.
The Department shall not disclose:
a.	Any confidential or privileged information obtained under this subsection unless the resident or his legal representative authorizes disclosure in writing or unless a court of competent jurisdiction orders disclosure, or
b.	The name of anyone who has furnished information concerning a facility without that person's consent.
The Department shall institute appropriate policies and procedures to ensure that unauthorized disclosure does not occur. All confidential or privileged information obtained under this section and the names of persons providing such information shall be exempt from Chapter 132 of the General Statutes.
(5)	Notwithstanding any law to the contrary, Chapter 132 of the General Statutes, the Public Records Law, applies to all records of the State Division of Social Services of the Department of Health and Human Services and of any county department of social services regarding inspections of domiciliary care facilities except for information in the records that is confidential or privileged, including medical records, or that contains the names of residents or complainants.
(6)	Prior to issuing a new license or renewing an existing license, the Department shall conduct a compliance history review of the facility and its principals and affiliates. The Department may refuse to license a facility when the compliance history review shows a pattern of noncompliance with State law by the facility or its principals or affiliates, or otherwise demonstrates disregard for the health, safety, and welfare of residents in current or past facilities. The Department shall require compliance history information and make its determination according to rules adopted by the Medical Care Commission.
(c)	The following are excluded from the provisions of this section and are not required to be registered or obtain licensure under this section:
(1)	Facilities licensed under Chapter 122C or Chapter 131E of the General Statutes;
(2)	Persons subject to rules of the Division of Vocational Rehabilitation Services;
(3)	Facilities that care for no more than four persons, all of whom are under the supervision of the United States Veterans Administration;
(4)	Facilities that make no charges for housing, amenities, or personal care service, either directly or indirectly; and
(5)	Institutions that are maintained or operated by a unit of government and that were established, maintained, or operated by a unit of government and exempt from licensure by the Department on September 30, 1995.
(c1)	Although the contract obligation still remains to pay the housing management for any services covered by the contract between the resident and housing management, the resident of an assisted living facility has the right to obtain services not at the expense of the housing management, from providers other than the housing management.
(c2)	The Medical Care Commission shall adopt rules necessary to carry out this section. The Commission has the authority, in adopting rules, to specify the limitation of nursing services provided by assisted living residences. In developing rules, the Commission shall consider the need to ensure comparable quality of services provided to residents, whether these services are provided directly by a licensed assisted living provider, licensed home care agency, or hospice. In adult care homes, living arrangements where residents require supervision due to cognitive impairments, rules shall be promulgated to ensure that supervision is appropriate and adequate to meet the special needs of these residents.
(c3)	Nothing in this section shall be construed to supersede any federal or State antitrust, antikickback, or safe harbor laws or regulations.
(c4)	Housing programs for two or more unrelated adults that target their services to elderly or disabled persons in which the only services provided by the housing management, either directly or through an agreement or other arrangements, are amenities that include, at a minimum, one meal a day and housekeeping services, are exempt from licensure, but are required to be listed with the Division of Aging, providing information on their location and number of units operated. This type of housing is not considered assisted living.
(d)	Repealed by Session Laws 1995, c. 535, s. 8.
(e)	The Department shall ensure that facilities conduct and complete an assessment of each resident within seventy‑two hours of admitting the resident and annually thereafter. In conducting the assessment, the facility shall use an assessment instrument approved by the Secretary upon the advice of the Director of the Division of Aging. The Department shall provide ongoing training for facility personnel in the use of the approved assessment instrument.
The facility shall use the assessment to develop appropriate and comprehensive service plans and care plans and to determine the level and type of facility staff that is needed to meet the needs of residents. The assessment shall determine a resident's level of functioning and shall include, but not be limited to, cognitive status and physical functioning in activities of daily living. Activities of daily living are personal functions essential for the health and well‑being of the resident. The assessment shall not serve as the basis for medical care. The assessment shall indicate if the resident requires referral to the resident's physician or other appropriate licensed health care professional or community resource.
The Department as part of its inspection and licensing of adult care homes shall review assessments and related service plans and care plans for a selected number of residents. In conducting this review, the Department shall determine:
(1)	Whether the appropriate assessment instrument was administered and interpreted correctly;
(2)	Whether the facility is capable of providing the necessary services;
(3)	Whether the service plan or care plan conforms to the results of an appropriately administered and interpreted assessment; and
(4)	Whether the service plans or care plans are being implemented fully and in accordance with an appropriately administered and interpreted assessment.
If the Department finds that the facility is not carrying out its assessment responsibilities in accordance with this section, the Department shall notify the facility and require the facility to implement a corrective action plan. The Department shall also notify the resident of the results of its review of the assessment, service plans, and care plans developed for the resident. In addition to administrative penalties, the Secretary may suspend the admission of any new residents to the facility. The suspension shall be for the period determined by the Secretary and shall remain in effect until the Secretary is satisfied that conditions or circumstances merit removing the suspension.
(f)	If any provisions of this section or the application of it to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the section which can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
(g)	In order for an adult care home to maintain its license, it shall not hinder or interfere with the proper performance of duty of a lawfully appointed community advisory committee, as defined by G.S. 131D‑31 and G.S. 131D‑32.
(h)	Suspension of admissions to adult care home:
(1)	In addition to the administrative penalties described in subsection (b), the Secretary may suspend the admission of any new residents to an adult care home, where the conditions of the adult care home are detrimental to the health or safety of the residents. This suspension shall be for the period determined by the Secretary and shall remain in effect until the Secretary is satisfied that conditions or circumstances merit removing the suspension.
(2)	In imposing a suspension under this subsection, the Secretary shall consider the following factors:
a.	The degree of sanctions necessary to ensure compliance with this section and rules adopted hereunder; and
b.	The character and degree of impact of the conditions at the home on the health or safety of its residents.
(3)	The Secretary of Health and Human Services shall adopt rules to implement this subsection.
(4)	Any facility wishing to contest a suspension of admissions shall be entitled to an administrative hearing as provided in the Administrative Procedure Act, Chapter 150B of the General Statutes. A petition for a contested case shall be filed within 20 days after the Department mails a notice of suspension of admissions to the licensee.
(i)	Notwithstanding the existence or pursuit of any other remedy, the Department of Health and Human Services may, in the manner provided by law, maintain an action in the name of the State for injunction or other process against any person to restrain or prevent the establishment, conduct, management or operation of an adult care home without a license. Such action shall be instituted in the superior court of the county in which any unlicensed activity has occurred or is occurring.
If any person shall hinder the proper performance of duty of the Secretary or his representative in carrying out this section, the Secretary may institute an action in the superior court of the county in which the hindrance has occurred for injunctive relief against the continued hindrance, irrespective of all other remedies at law.
Actions under this subsection shall be in accordance with Article 37 of Chapter 1 of the General Statutes and Rule 65 of the Rules of Civil Procedure."
SECTION 4.  G.S. 131D‑10.3 reads as rewritten:
"§ 131D‑10.3.  Licensure required.
(a)	No person shall operate, establish or provide foster care for children or receive and place children in residential care facilities, family foster homes, or adoptive homes without first applying for a license to the Department and submitting the required information on application forms provided by the Department.
(b)	Persons licensed or seeking a license under this Article shall permit the Department access to premises and information required to determine whether the person is in compliance with licensing rules of the Commission.
(c)	Persons licensed pursuant to this Article shall be periodically reviewed by the Department to determine whether they comply with Commission rules and whether licensure shall continue.
(d)	This Article shall apply to all persons intending to organize, develop or provide foster care for children or receive and place children in residential child‑care facilities, family foster homes or adoptive homes irrespective of such persons having applied for or obtained a certification, registration or permit to carry on work not controlled by this Article except persons exempted in G.S. 131D‑10.4.
(e)	Unless revoked or modified to a provisional or suspended status, the terms of a license issued by the Department shall be in force for a period not to exceed 24 months from the date of issuance under rules adopted by the Commission.
(f)	Persons licensed or seeking a license who are temporarily unable to comply with a rule or rules may be granted a provisional license. The provisional license can be issued for a period not to exceed six months. The noncompliance with a rule or rules shall not present an immediate threat to the health and safety of the children, and the person shall have a plan approved by the Department to correct the area(s) of noncompliance within the provisional period. A provisional license for an additional period of time to meet the same area(s) of noncompliance shall not be issued.
(g)	In accordance with Commission rules, a person may submit to the Department documentation of compliance with the standards of a nationally recognized accrediting body, and the Department on the basis of such accreditation may deem the person in compliance with one or more Commission licensing rules.
(h)	Except as provided in subsection (i) of this section, the Secretary, shall not enroll any new provider for Medicaid Home or Community Based services or other Medicaid services, as defined in 42 C.F.R. 440.90, 42 C.F.R. 440.130(d), and 42 C.F.R. 440.180, or issue a license for a new facility or a new service to any applicant meeting any of the following criteria:
(1)	Was the owner, principal, or affiliate of a licensable facility under Chapter 122C, Chapter 131D or Article 7 of Chapter 110 that had its license revoked until 60 months after the date of the revocation.
(2)	Is the owner, principal, or affiliate of a licensable facility that was assessed a penalty for a Type A or Type B violation under Article 3 of Chapter 122C until:
a.	Six months from the date of the assessment of the violation.
b.	Twelve months from the date of the assessment of the second violation if two Type A or Type B violations, or combination thereof, have been assessed in a six-month period.
c.	Thirty-six months from the date of the assessment of the third violation if three Type A or Type B violations, or combination thereof, have been assessed in a 12-month period.
d.	Sixty months from the date of the assessment of the fourth violation if four Type A or Type B violations, or combination thereof, have been assessed in a 36-month period.
(3)	Is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under G.S. 122C‑ 24.1(a) until 60 months after the date of reinstatement or restoration of the license.
(4)	Is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under Article 1A of Chapter 131D or had its license summarily suspended or denied under Article 7 of Chapter 110 until 60 months after the date of reinstatement or restoration of the license.
(5)	Is found by the Secretary to have a prior history as a provider under Chapter 122C, Chapter 130D, or Article 7 of Chapter 110 that indicates the applicant will not be able to comply with licensing or enrollment statutes and rules promulgated under those statutes and will probably place clients at high risk of danger if the applicant were granted enrollment. 
(i)	The Secretary may enroll a provider described in subsection (e1) of this section if any of the following circumstances apply:
(1)	The applicant is an area program or county program providing services under G.S. 122C-141, and there is no other provider of the service in the catchment area.
(2)	The Secretary finds that the area program or county program has shown good cause by clear and convincing evidence why the enrollment should be allowed."
SECTION 5.  Section 3 of S.L. 2002‑164 reads as rewritten:
"SECTION 3. The State Board of Education shall provide for a local school administrative unit to request funds from the Group Homes Program for Children with Disabilities if a child assigned to that unit was not in that unit's April childcount for children with disabilities or the average daily membership for the previous schoolyear. The local school administrative unit shall receive full school year funding upon the local school unit's request for group home or foster home program funds. These funds may not be requested except by a local school administrative unit."
SECTION 6(a).  The Department of Health and Human Services, in conjunction with the Department of Juvenile Justice and Delinquency Prevention, and the Department of Public Instruction shall report on the following Program information:
(1)	The number and other demographic information of children served utilizing Comprehensive Treatment Services Program funds or who are placed out of their home under the auspices of one of the referenced agencies.
(2)	The amount and source of funds expended to implement the Program.
(3)	Information regarding the number of children screened for mental health, developmental disabilities, or substance abuse; specific placement of children including the placement of children in programs or facilities outside of the child's home county; and treatment needs of children served.
(4)	The average length of stay in residential treatment, transition, and return to home.
(5)	The number of children diverted from institutions or other out‑of‑home placements such as training schools and State psychiatric hospitals and a description of the services provided.
(6)	Recommendations on other areas that need to be improved.
(7)	Other information relevant to successfully maintaining children in their county of residence.
(8)	A method of identifying and reporting child placements outside of the family unit in group homes or therapeutic foster care home settings.
SECTION 6(b).  The Department of Health and Human Services, in conjunction with the Department of Juvenile Justice and Delinquency Prevention, and the Department of Public Instruction shall submit a report by April 1, 2004, on the method of identifying and reporting child placements outside of the family unit in group homes or therapeutic foster care home settings to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 7.  There is appropriated from the General Fund to the State Aid for Children with Disabilities in the Public School Fund the sum of five hundred thousand dollars ($500,000) for each year of the 2003‑2004 fiscal year.
SECTION 8.  This act is effective when it becomes law.