A BILL TO BE ENTITLED
AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERATIONS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.
The General Assembly of North Carolina enacts:

PART I. INTRODUCTION AND TITLE OF ACT

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

TITLE OF ACT
SECTION 1.2.  This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2009."

PART II. CURRENT OPERATIONS AND EXPANSION/GENERAL FUND

CURRENT OPERATIONS AND EXPANSION/GENERAL FUND
SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for the biennium ending June 30, 2011, according to the following schedule:

Current Operations – General Fund	2009‑2010	2010‑2011

EDUCATION

Community Colleges System Office	$   1,059,888,269	$   1,104,442,194

Department of Public Instruction	7,629,717,045	7,784,909,413

University of North Carolina – Board of Governors
	Appalachian State University	149,364,470	150,008,736
	East Carolina University
		Academic Affairs	241,853,905	244,133,225
		Health Affairs	55,190,729	55,027,390
	Elizabeth City State University	37,906,689	38,291,383
	Fayetteville State University	60,424,635	60,745,385
	North Caroline Agricultural and Technical University	103,280,528	103,283,850
	North Carolina Central University	94,300,645	94,193,246
	North Carolina School of the Arts	28,632,307	28,786,620
	North Carolina State University
		Academic Affairs	421,258,378	428,566,200
		Agricultural Extension	61,941,281	60,787,417
		Agricultural Research	46,237,503	45,963,661
	University of North Carolina at Asheville	40,024,437	40,158,837
	University of North Carolina at Chapel Hill
		Academic Affairs	315,711,172	318,502,587
		Health Affairs	224,910,569	228,028,319
		Area Health Education Centers	52,346,018	52,363,857
	University of North Carolina at Charlotte	200,230,007	200,765,231
	University of North Carolina at Greensboro	172,612,251	173,265,711
	University of North Carolina at Pembroke	61,015,439	61,316,418
	University of North Carolina at Wilmington	104,921,437	106,343,768
	Western Carolina University	96,273,475	96,370,613
	Winston‑Salem State University	73,730,343	73,401,502
	General Administration	43,643,644	43,627,674
	University Institutional Programs	14,772,089	72,744,268
	Related Educational Programs	120,250,131	119,595,220
	UNC Financial Aid Private Colleges	104,888,915	104,922,915
	North Carolina School of Science and Mathematics	19,304,837	19,362,188
	UNC Hospitals at Chapel Hill	46,011,882	46,011,882
Total University of North Carolina – 
	Board of Governors	$ 2,991,037,716	$ 3,066,568,103

HEALTH AND HUMAN SERVICES

Department of Health and Human Services
	Division of Central Management and Support	$      57,334,182	$     59,306,912
	Division of Aging	35,927,363	38,697,945
	Division of Blind Services/Deaf/HH	11,354,295	11,279,296
	Division of  Child Development	282,156,867	346,847,558
	Division of Education Services	38,827,103	33,879,011
	Division of Health Service Regulation	18,196,075	18,201,413
	Division of Medical Assistance	2,528,381,854	3,171,953,118
	Division of Mental Health	784,669,194	787,653,305
	NC Health Choice	82,928,252	82,828,189
	Division of Public Health	182,067,661	183,194,026
	Division of Social Services	212,492,287	223,486,076
	Division of Vocation Rehabilitation	41,765,979	41,779,037
Total Health and Human Services	$  4,276,101,112	$  4,999,105,886

NATURAL AND ECONOMIC RESOURCES

Department of Agriculture and Consumer Services	$       61,599,458	$       61,185,805

Department of Commerce
	Commerce	44,395,214	37,178,108
	Commerce State‑Aid	18,804,673	20,304,673
	NC Biotechnology Center	15,119,010	15,119,010
	Rural Economic Development Center	24,019,453	24,019,453

Department of Environment and Natural Resources	207,284,998	200,464,914

Clean Water Management Trust Fund	95,000,000	95,000,000

Department of Labor	17,700,104	17,728,165

JUSTICE AND PUBLIC SAFETY

Department of Correction	$   1,292,633,348	$   1,334,385,357

Department of Crime Control and Public Safety	31,338,905	30,900,591

Judicial Department	470,467,471	471,839,612
Judicial Department – Indigent Defense	134,934,064	121,403,270

Department of Justice	92,102,712	91,344,576

Department of Juvenile Justice and
	Delinquency Prevention	147,114,599	143,487,981

GENERAL GOVERNMENT

Department of Administration	$    69,163,419	$    69,106,137

Office of Administrative Hearings	    3,967,455	    3,980,290

Department of State Auditor	13,224,512	13,240,784

Office of State Controller	23,361,150	23,993,456

Department of Cultural Resources
	Cultural Resources	70,522,789	71,919,361
	Roanoke Island Commission	1,961,296	1,961,296

State Board of Elections	4,683,822	6,187,615

General Assembly	57,661,786	59,371,264

Office of the Governor
	Office of the Governor	6,113,531	6,119,712
	Office of State Budget and Management	6,561,015	6,564,463
	OSBM – Reserve for Special Appropriations	5,023,000	4,273,000
	Housing Finance Agency	14,608,417	14,608,417

Department of Insurance
	Insurance	31,644,853	31,707,037
	Insurance – Volunteer Safety Workers' Compensation	2,000,000	2,000,000

Office of Lieutenant Governor	932,179	932,179

Department of Revenue	84,920,596	85,013,566

Department of Secretary of State	11,364,455	11,438,329

Department of State Treasurer
	State Treasurer	17,272,124	17,285,912
	State Treasurer – 
		Retirement for Fire and Rescue Squad Workers	10,804,671	10,804,671

TRANSPORTATION

Department of Transportation	$                     0	$                     0

RESERVES, ADJUSTMENTS AND DEBT SERVICE

Reserve for Compensation Increases	$     65,440,496	$     56,765,776

Salary Adjustment Fund:  2009‑2011 Biennium	0	0

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

Reserve for Teachers' and 
	State Employees' Retirement Contribution	21,000,000	21,000,000

Judicial Retirement System Contributions	1,300,000	1,300,000

Reserve for State Health Plan	128,410,208	267,904,114

Information Technology Fund	9,361,985	9,361,985

Reserve for Job Development Investment Grants (JDIG)	19,000,000	27,400,000

Adjust Debt Service	(7,500,000)	7,307,323

Statewide Administrative Support	(3,000,000)	(4,000,000)

Federal Economic Recovery Management	1,000,000	1,000,000

E‑Procurement Receipts		(10,000,000)

Biomedical Research Imaging Center (BRIC)	0	0
Biomedical Research Imaging Center (BRIC)	74,000,000	100,000,000
Contingency Reserve

Debt Service
	General Debt Service	670,494,697	739,878,445
	Federal Reimbursement	1,616,380	1,616,380

TOTAL CURRENT OPERATIONS – 
	GENERAL FUND	$  20,031,173,017	$  21,284,428,623

Capital Improvements ‑General Fund	2009‑2010	2010‑2011

Water Resources Development Projects	$         17,600,000	$                        0

TOTAL CAPITAL IMPROVEMENTS – 
	GENERAL FUND	$         17,600,000	$                        0

GENERAL FUND AVAILABILITY STATEMENT
SECTION 2.2.(a)  The General Fund availability used in developing the 2009‑2011 biennial budget is shown below:
	FY 2009‑2010	FY 2010‑2011

Unappropriated Balance Remaining from Previous Year	0	104,982,016
Projected Reversions FY 2006‑2007	0	0
Projected Overcollections FY 2006‑2007	0	0
Less Earmarkings of Year End Fund Balance		
	Savings Reserve Account	0	0
	Repairs and Renovations Reserve Account	0	0
Beginning Unreserved Fund Balance	0	104,982,016

Revenues Based on Existing Tax Structure	18,030,500,000	19,072,800,000

Nontax Revenues		
	Investment Income	136,400,000	153,800,000
	Judicial Fees	200,300,000	208,400,000
	Disproportionate Share	100,000,000	100,000,000
	Insurance	72,500,000	76,500,000
	Other Nontax Revenues	195,700,000	201,500,000
	Tobacco Trust Fund Transfer	0	0
	Highway Trust Fund/Use Tax Reimbursement Transfer	108,500,000	72,800,000
	Highway Fund Transfer	17,600,000	17,600,000
		Subtotal Nontax Revenues	831,000,000	830,600,000

Total General Fund Availability	18,861,500,000	20,008,382,016

Adjustments to Availability:  2009 Session		
Reserve for Tax Adjustments	500,400,000	667,100,000
Federal Fiscal Stabilization Funds – Education	580,966,000	580,966,000
Federal Fiscal Stabilization Funds – General Purpose	129,261,500	129,261,500
IRA Distribution Suspended	(44,000,000)	0
Department of Revenue Improved Enforcement	50,000,000	75,000,000
Transfer from Disproportionate Share Reserve	24,994,954	0
Adjust Transfer from Insurance Regulatory Fund	(2,179,969)	(2,179,969)
Adjust Transfer from Treasurer's Office	(885,321)	(885,321)
Scrap Tire Disposal Account Funds	3,000,000	0
Increase DHHS/HSR Fees	1,122,990	1,122,990
Increase SOS Fees	3,632,700	3,632,700 
Administrative Office of the Courts	32,942,179	38,899,425
Reduce Fund Balance – Nurse Educators for Tomorrow 	1,000,000	0
Inmate Work Release Fund Increase	500,000	500,000
Reduce Fund Balance – Telecommunications Relay Trust Fund	5,000,000	0
Reduce Fund Balance – Teaching Fellows Trust Fund	4,500,000	0
Reduce Fund Balance – DPI Legacy Funds	2,000,000	0
		Subtotal Adjustments to 
			Availability:  2009 Session	1,292,255,033	1,493,417,325

Revised General Fund Availability	20,153,755,033	21,501,799,341

Less: General Fund Appropriations 	(20,048,773,017)	(21,284,428,623)

Unappropriated Balance Remaining	$104,982,016	$217,370,718

SECTION 2.2.(b)  Notwithstanding the provisions of G.S. 143C‑4‑3, the State Controller shall not transfer funds to the Repairs and Renovations Reserve Account on June 30, 2009.  This subsection becomes effective June 30, 2009.
SECTION 2.2.(c)  Notwithstanding 143C‑4‑2, the State Controller shall not transfer funds to the Savings Reserve Account on June 30, 2009.  This subsection becomes effective June 30, 2009.
SECTION 2.2.(d)  Notwithstanding the provisions of G.S. 105‑187.9(b)(1), the sum to be transferred under that subdivision for the 2009‑2010 fiscal year is one hundred six million ($106,000,000) and for the 2010‑2011 fiscal year is seventy‑one million ($71,000,000).
SECTION 2.2.(e)  Pursuant to G.S. 105‑187.9(b)(2), the sum to be transferred under that subdivision for the 2009‑2010 fiscal year is two million five hundred thousand dollars ($2,500,000) and for the 2010‑2011 fiscal year is one million eight hundred thousand dollars ($1,800,000).
SECTION 2.2.(f)  The appropriation made in this act to the Clean Water Management Trust Fund for the 2009‑2010 fiscal year is ninety‑five million dollars ($95,000,000).  The provisions of G.S. 113A‑253.1 do not apply for the 2009‑2010 fiscal year.

PART III. CURRENT OPERATIONS/HIGHWAY FUND

Current Operations and Expansion/Highway Fund
SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2011, according to the following schedule:

Current Operations – Highway Fund	2009‑2010	2010‑2011
Department of Transportation
	Administration	$	80,810,522	$	81,897,273

Division of Highways
	Administration	32,938,983	32,993,177
	Construction	38,910,000	125,110,551
	Maintenance	909,957,588	791,660,215
	Planning and Research	4,055,402	4,055,402
	OSHA Program	355,389	355,389

Ferry Operations	30,126,209	29,726,209

State Aid
	Municipalities	87,071,264	86,200,551
	Public Transportation	71,595,962	71,631,962
	Airports	17,349,592	17,291,543
	Railroads	17,101,153	17,101,153

Governor's Highway Safety	351,779	352,325
Division of Motor Vehicles	101,732,813	101,747,629
Other State Agencies, Reserves,
	and Transfers	291,143,334	298,336,621

TOTAL		$	1,683,500,000		$1,658,460,000

Highway Fund Availability Statement
SECTION 3.2.  The Highway Fund availability used in developing the 2009‑2011 biennial budget is shown below:

Highway Fund Availability Statement	2009‑2010	2010‑2011

Unappropriated Balance From Previous Year	$	0	$	0
Beginning Credit Balance	0	0
Estimated Revenue	1,683,500,000	1,658,460,000

Total Highway Fund Availability	$	1,683,500,000	$	1,658,460,000

Unappropriated Balance	$	0	$	0

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

Highway Trust Fund Appropriations
SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the biennium ending June 30, 2011, according to the following schedule:

Current Operations – Highway Trust Fund	2009‑2010	2010‑2011
Intrastate System	$	352,674,316	$	369,455,555
Urban Loops	110,759,502	118,440,179
Aid to Municipalities	39,893,942	41,549,515
Secondary Roads	57,777,091	60,531,355
Program Administration	41,092,320	42,373,920
Turnpike Authority	64,000,000	99,000,000
Transfer to General Fund	108,561,829	72,846,726

Grand Total Current Operations 
	AND EXPANSION	$ 857,490,000	$ 884,190,000 

Highway Trust Fund Availability Statement
SECTION 4.2.  The Highway Trust Fund availability used in developing the 2009‑2011 biennial budget is shown below:

Total Highway Trust Fund Availability	$ 857,490,000	$ 884,190,000

PART V. OTHER appropriations

civil forfeiture funds
SECTION 5.1.(a)  Appropriations. – Appropriations are made from the Civil Penalty and Forfeiture Fund for the fiscal  biennium ending June 30, 2011, as follows:

	FY 2009‑2010	FY 2010‑2011
School Technology Fund	$	18,000,000	$	18,000,000
State Public School Fund	138,546,041	120,362,790
Total Appropriation	$156,546,041	$138,362,790

SECTION 5.1.(b)  All University of North Carolina campuses shall remit all parking fines held in escrow in the amount of eighteen million one hundred eighty‑three thousand two hundred fifty‑one dollars ($18,183,251) to the Civil Penalties and Forfeitures Fund for appropriation.

EDUCATION LOTTERY
SECTION 5.2.(a)  Notwithstanding G.S. 18C‑164, the revenue used to support appropriations made in this act is transferred from the State Lottery Fund in the amount of three hundred sixty‑eight million seventy thousand two hundred eight dollars ($368,070,208) for the 2009‑2010 fiscal year.
SECTION 5.2.(b)  Notwithstanding G.S. 18C‑164, the appropriations made from the Education Lottery Fund for the 2009‑2010 fiscal year are as follows:

Teachers in Early Grades	99,399,395
Prekindergarten Program	84,635,709
Public School Building Capital Fund	147,228,083
Scholarships for Needy Students	    36,807,021
Total Appropriation			  $368,070,208
SECTION 5.2.(c)  Notwithstanding G.S. 18C‑164, the North Carolina State Lottery Commission shall not transfer funds to the Education Lottery Reserve Fund for the 2009‑2010 fiscal year or the 2010‑2011 fiscal year.

INFORMATION TECHNOLOGY FUND AVAILABILITY AND APPROPRIATION
SECTION 5.3.(a)  The availability used to support appropriations made in this act from the Information Technology Fund established in G.S. 147‑33.72H is as follows:

				FY 2009‑2010	FY 2010‑2011

	Interest Income	$100,000	$100,000

	IT Fund Balance June 30	$3,359,419	$100,000

	Appropriation from General Fund	$9,361,985	$9,361,985

	Total Funds Available	$12,821,404	$9,561,985

SECTION 5.3.(b)  Appropriations are made from the Information Technology Fund for the 2009‑2011 fiscal biennium as follows:

Office of Information Technology Services	FY 2009‑2010	FY 2010‑2011

	Information Technology Operations	$7,891,607	$7,891,607

	Information Technology Projects	$4,829,797	$4,829,797

Total			$12,721,404	$12,721,404

APPROPRIATION OF CASH BALANCES
SECTION 5.4.(a)  State funds, as defined in G.S. 143C‑1‑1(d)(25), are appropriated and authorized as provided in G.S. 143C‑1‑2 for the 2009‑2011 fiscal biennium as follows:
(1)	For all budget codes listed in the Base Budget and Performance Management Information sections of "North Carolina State Budget, Recommended Operating Budget 2009‑2011, Volumes 1 through 6," cash balances and receipts are appropriated up to the amounts specified in Volumes 1 through 6, as adjusted by the General Assembly, for the 2009‑2010 fiscal year and the 2010‑2011 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items specified in Volumes 1 through 6, or otherwise authorized by the General Assembly. Expansion budget funds listed in those documents are appropriated only as otherwise provided in this act.
(2)	For all budget codes that are not listed in "North Carolina State Budget, Recommended Operating Budget 2009‑2011, Volumes 1 through 6," cash balances and receipts are appropriated for each year of the 2009‑2011 fiscal biennium up to the level of actual expenditures for the 2008‑2009 fiscal year, unless otherwise provided by law. Funds may be expended only for the programs, purposes, objects, and line items authorized for the 2008‑2009 fiscal year.
(3)	Notwithstanding subdivisions (1) and (2) of this subsection, any receipts that are required to be used to pay debt service requirements for various outstanding bond issues and certificates of participation are appropriated up to the actual amounts received for the 2009‑2010 fiscal year and the 2010‑2011 fiscal year and shall be used only to pay debt service requirements. 
(4)	Notwithstanding subdivisions (1) and (2) of this subsection, cash balances and receipts of funds that meet the definition issued by the Governmental Accounting Standards Board of a trust or agency fund are appropriated for and in the amounts required to meet the legal requirements of the trust agreement for the 2009‑2010 fiscal year and the 2010‑2011 fiscal year.
SECTION 5.4.(b)  Receipts collected in a fiscal year in excess of the amounts authorized by this section shall remain unexpended and unencumbered until appropriated by the General Assembly in a subsequent fiscal year, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by the State Budget Act.
Overrealized receipts are appropriated up to the amounts necessary to implement this subsection.
In addition to the consultation and reporting requirements set out in G.S. 143C‑6‑4, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on any overrealized receipts approved for expenditure under this subsection by the Director of the Budget. The report shall include the source of the receipt, the amount overrealized, the amount authorized for expenditure, and the rationale for expenditure.
SECTION 5.4.(c)  Notwithstanding subsections (a) and (b) of this section, there is appropriated from the Reserve for Reimbursements to Local Governments and Shared Tax Revenues for each fiscal year an amount equal to the amount of the distributions required by law to be made from that reserve for that fiscal year.

American Recovery and Reinvestment Act of 2009
SECTION 5.5.(a)  Appropriations of funds received under the American Recovery and Reinvestment Act of 2009 are made for the 2009‑2011 fiscal biennium, according to the following schedule:

				2009‑2010	2010‑2011

Fiscal Stabilization: Education	$	580,965,782	$	580,965,782
Fiscal Stabilization: General	129,261,335 	129,261,335
Medicaid Disproportionate Share	7,314,833	7,314,833

Title I Grants	128,728,180	128,728,180
Title I School Improvement	38,336,500	38,336,500
IDEA: Part B	157,205,000	157,205,000
IDEA: Part B (Preschool)	6,035,500	6,035,500
Homeless Assistance	645,000	645,000
Education Technology	8,179,529	8,179,529
School Lunch Equipment	3,313,727	‑

State Energy Programs	37,994,500	37,994,500
HOME Investment Partnership Program	26,076,344	26,076,344
Homelessness Prevention Fund	14,539,194	14,539,194

IDEA: Part C	6,365,500	6,365,500
TANF Supplemental Grants	27,075,000	9,025,000
Community Services Block Grant	8,748,333	11,664,444
Child Care and Development Block Grants	67,543,000	‑
Vocational Rehabilitation Agency Funding	9,014,504	9,014,504
Older Blind Individuals/VR	521,182	521,182
Child Support Enforcement (Incentive Payments)	2,214,542	330,000
Weatherization Assistance Grants	131,954,536	‑
Medicaid FMAP Increase	920,377,105	514,514,239
Medicaid FMAP Increase‑local administration	‑	‑
Foster Care and Adoption FMAP Increase	2,840,410	726,309
Prevention and Wellness Fund Grants (Immunization)	5,689,500	5,689,500
Senior Meals Programs	1,384,392	1,384,392

Byrne/Justice Assistance Grants	17,245,779	17,245,779
Violence Against Women: Services‑Training‑
	Officers‑Prosecutors (STOP) Grants	3,784,000	‑
Victims of Crime Act (VOCA) Grants: Victim
	Compensation	647,906	‑
Victims of Crime Act (VOCA) Grants: Victim
	Assistance	1,110,000	‑
Internet Crimes Against Children Task Force Program	879,040	‑
Unemployment Insurance: Administration	7,323,699	7,323,699
Employment Services Grants (Wagner‑Peyser)	11,091,396	‑
Community Service Employment for Older Americans	1,583,153	1,583,153
Energy Efficiency and Conservation Block Grants	29,025,150	29,025,150
Clean  Water State Revolving Funds	71,443,500	‑
Drinking Water Revolving Funds	65,625,000	‑
State Clean Diesel Program	1,730,000	‑
Community Development Block Grant: Non‑Entitlement
	Funds		6,040,307	6,040,307
Workforce Investment Act: Youth Activities	12,535,349	12,535,349
Workforce Investment Act: Adult Activities	5,168,583	5,168,583
Workforce Investment Act: Dislocated Worker
	Activities	22,209,637	22,209,637

Transit Capital Assistance	103,304,242	‑
Highway Infrastructure Investment	$	735,527,000	$	‑

TOTAL		$	3,418,597,166	$	1,795,648,421
SECTION 5.5.(b)  If funds received from the American Recovery and Reinvestment Act of 2009 exceed the amount set out in subsection (a) of this section, such additional funds are hereby appropriated for the appropriate fiscal year.

OTHER RECEIPTS FROM PENDING GRANT AWARDS
SECTION 5.6.  Notwithstanding G.S. 143C‑6‑4, State agencies may, with approval of the Director of the Budget and after consultation with the Joint Legislative Committee on Governmental Operations, spend funds received from grants awarded subsequent to the enactment of this act. The Office of State Budget and Management shall work with the recipient State agencies to budget grant awards according to the annual program needs and within the parameters of the respective granting entities. Depending on the nature of the award, additional State personnel may be employed on a permanent or time‑limited basis. The Office of State Budget and Management shall consult with the Joint Legislative Commission on Governmental Operations prior to expending any funds received from grant awards. Funds received from such grants are hereby appropriated and shall be incorporated into the certified budget of the recipient State agency.

PART VI. GENERAL PROVISIONs

EXPENDITURES OF FUNDS IN RESERVES LIMITED
SECTION 6.1.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

BUDGET CODE CONSOLIDATIONS
SECTION 6.2.  Notwithstanding G.S. 143C‑6‑4, the Office of State Budget and Management may adjust the enacted budget by making transfers among purposes or programs for the purpose of consolidating budget and fund codes or eliminating inactive budget and fund codes. The Office of State Budget and Management shall change the authorized budget to reflect these adjustments.

BUDGET REALIGNMENT
SECTION 6.3.  Notwithstanding G.S. 143C‑6‑4(b), the Office of State Budget and Management, in consultation with the Office of the State Controller and the Fiscal Research Division, may adjust the enacted budget by making transfers among purposes or programs for the sole purpose of correctly aligning authorized positions and associated operating costs with the appropriate purposes or programs as defined in G.S. 143C‑1‑1(d)(23).  The Office of State Budget and Management shall change the certified budget to reflect these adjustments only after reporting the proposed adjustments to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division.  Under no circumstances shall total General Fund expenditures for a State department exceed the amount appropriated to that department from the General Fund for the fiscal year.

ESTABLISHING OR INCREASING FEES PURSUANT TO this ACT
SECTION 6.4.(a)  Notwithstanding G.S. 12‑3.1, an agency is not required to consult with the Joint Legislative Commission on Governmental Operations prior to establishing or increasing a fee as authorized or anticipated in this act.
SECTION 6.4.(b)  In establishing or increasing a fee as authorized or anticipated in this act, if adoption of a rule would otherwise be required under Article 2A of Chapter 150B of the General Statutes, an agency may adopt a temporary rule as this constitutes a "recent act of the General Assembly" under G.S. 150B-21.1(a)(2).

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

Fiscal Crisis/Furlough flexibility
SECTION 6.6.(a)  Findings. – The General Assembly finds that:
(1)	The extreme fiscal crisis affecting North Carolina's economy, the national economy, and global economic markets has substantially reduced the State's revenue projections for the 2009‑2011 biennium.
(2)	Economies in State expenditures and maximized efficiencies in State operations must be effected immediately and systematically in order to meet the compelling State interest of enacting a balanced budget in accordance with the State Constitution and to protect the interests of the people of North Carolina.
(3)	Given the broad scope and depth of other budget reduction and efficiency measures required by this act, allowing voluntary furloughs and requiring mandatory furloughs of public employees, when necessary, is a reasonable measure to avoid disruptive mass layoffs and the elimination of positions in public employment, to preserve the public health, safety, and welfare and to continue the effective administration of important governmental functions in the interest of the people of North Carolina.
SECTION 6.6.(b)  To achieve savings identified in the management flexibility reserves established in this act, State agencies may:
(1)	Reduce salary‑related expenditures by (i) reductions in purchased services and contractual services, (ii) reductions in force, and (iii) with the approval of the Director of the Budget, implementation of furloughs in accordance with subsections (c) through (g) of this section; and
(2)	Reduce non‑salary expenditures such as purchases of supplies and equipment, maintenance expenses, rental and lease expenses, and any other allowable reductions in non‑salary expenditures.
SECTION 6.6.(c)  Definitions. – The following definitions apply in this section:
(1)	Compensation. – Base rate of compensation, not including pay for shift premiums, overtime, or other types of extraordinary pay.
(2)	Essential positions. – Any position deemed by the head of an agency to be necessary to perform the critical functions of that agency to protect the health or safety of the agency's employees, students, clients, or patients of the public agency or to protect the general public.
(3)	Furlough. – A temporary period of leave from employment without pay.
(4)	Nonessential positions. – Any position in a public agency that is not designated as essential positions by the head of that agency.
(5)	Public employee. – Any person employed (i) in the executive, legislative, or judicial branch of State government, (ii) by The University of North Carolina, (iii) by the North Carolina Community College System, or (iv) by a local school administrative unit. The term includes public officers.
(6)	Public agency. – Any State agency, department, or institution; and the executive, legislative, and judicial branches of State government; The University of North Carolina; the North Carolina Community College System; and local school administrative units.
SECTION 6.6.(d)  Furlough Flexibility. – For the 2009‑2010 and 2010‑2011 fiscal years, public agencies have management flexibility to allow voluntary furloughs and to require mandatory furloughs of public employees to generate necessary economies and efficiencies in budgeting.
SECTION 6.6.(e)  Compensation and Benefits. – A period of furlough shall only affect or reduce a public employee's base salary or compensation. A period of furlough shall not affect or diminish a public employee's continuous service, length of aggregate service, retirement service credits, anniversary date, eligibility for authorized holiday leave, longevity pay, or the accrual of vacation and sick leave. Periods of furlough shall be applied equitably to all essential and nonessential positions regardless of the funding source of the position. A furloughed public employee who is a member of:
(1)	Any of the State‑supported retirement plans administered by the Retirement Systems Division of the Department of the State Treasurer shall be considered in active service during any period of furlough and shall be entitled to all of the same benefits to which the employee was entitled on the workday immediately preceding the furlough. During a furlough period, the public agency shall pay both the employee and employer contributions to the Retirement Systems Division on behalf of the furloughed public employee as though that employee were in active service.
(2)	The State Health Plan for Teachers and State Employees shall be considered eligible for coverage under the Plan on the same basis as on the workday immediately preceding the furlough. The employing public agency shall pay contributions on behalf of the furloughed employee as though the employee were in active service.
SECTION 6.6.(f)  Policies. – The Office of State Budget and Management (OSBM) and the State Board of Education (SBE) shall each adopt policies necessary for the implementation of this section. The policies shall govern (i) the scheduling of furloughs, (ii) the amount of notice that must be given to a public employee prior to the effective date of a period of furlough, (iii) whether furloughs may be taken in increments of full days, (iv) the continued accrual of annual and sick leave, (v) treatment of part‑time employees, and (vi) any other matter related to the implementation of this section. The OSBM and SBE shall provide maximum flexibility to public agencies and public employees in the scheduling of furlough days to provide public agencies the ability to effectively manage furloughs of employees employed in essential positions so as not to affect critical functions. The policies shall provide that a public employee whose normal workday exceeds eight hours per day will sustain the same proportionate reduction as a public employee who works eight hours per day. The Office of State Personnel shall provide technical assistance to OSBM, as requested, in developing a plan for the implementation of furloughs.
SECTION 6.6.(g)  The OSBM and SBE shall adopt emergency rules for the implementation of this section in accordance with G.S. 150B‑21.1A, except that notwithstanding G.S. 150B‑21.1A(d) those emergency rules may remain in effect until the expiration of this subsection. This subsection expires June 30, 2011.
SECTION 6.6.(h)  Subsection (b) of this section is effective July 1, 2009. The remainder of this section is effective when it becomes law.

Information Technology Operations
SECTION 6.7.(a)  Office of Information Technology Services Budget. – Notwithstanding G.S. 147‑33.88, the Office of Information Technology Services shall develop an annual budget for review and approval by the Office of State Budget and Management in accordance with a schedule prescribed by the Director of the Office of State Budget and Management. The approved Office of Information Technology Services budget shall be included in the Governor's budget recommendations to the General Assembly.
The Office of State Budget and Management shall ensure that State agencies have an opportunity to adjust their budgets based on any rate changes proposed by the Office of Information Technology Services.
SECTION 6.7.(b)  Enterprise Projects. – The State Chief Information Officer shall consult the respective State agency chief information officers to identify specific State agency requirements prior to the initiation of any enterprise project.  State agency requirements shall be incorporated into any enterprise agreement signed by the State Chief Information Officer.  Enterprise projects shall not exceed the participating State agencies' ability to financially support the contracts.
The State Chief Information Officer shall not enter into any information technology contracts without obtaining written agreements from participating State agencies regarding apportionment of funding. State agencies agreeing to participate in a contract shall:
(1)	Ensure that sufficient funds are budgeted to support their agreed shares of enterprise agreements throughout the life of the contract.
(2)	Transfer the agreed‑upon funds to the Office of Information Technology Services in sufficient time for the Office of Information Technology Services to meet contract requirements.
SECTION 6.7.(c)  Notwithstanding the cash management provisions of G.S. 147‑86.11, the Office of Information Technology Services may procure information technology goods and services for periods of up to a total of three years where the terms of the procurement contract require payment of all, or a portion, of the contract purchase price at the beginning of the agreement.  All of the following conditions shall be met before payment for these agreements may be disbursed:
(1)	Any advance payment complies with the Office of Information Technology Services budget.
(2)	The State Controller receives conclusive evidence that the proposed agreement would be more cost‑effective than a multiyear agreement that complies with G.S. 147‑86.11.
(3)	The procurement complies in all other aspects with applicable statutes and rules.
(4)	The proposed agreement contains contract terms that protect the financial interests of the State against contractor nonperformance or insolvency through the creation of escrow accounts for funds, source codes, or both, or by any other reasonable means that have legally binding effect.
The Office of State Budget and Management shall ensure the savings from any authorized agreement shall be included in the Office of Information Technology Services calculation of rates before the Office of State Budget and Management annually approves the proposed rates. The Office of Information Technology Services shall report to the Office of State Budget and Management on any State agency budget impacts resulting from multiyear contracts.
The Office of Information Technology Services shall submit a quarterly written report of any authorizations granted under this subsection to the Joint Legislative Oversight Committee on Information Technology and to the Fiscal Research Division.
SECTION 6.7.(d)  State agencies developing and implementing information technology projects shall use the State infrastructure to host their projects.  The State Chief Information Officer may grant an exception if the State agency can demonstrate any of the following:
(1)	Using an outside contractor would be more cost‑effective for the State.
(2)	The Office of Information Technology Services does not have the technical capabilities required to host the application.
(3)	Valid security requirements preclude the use of State infrastructure, and a contractor can provide a more secure environment.

Geographic information consolidation
SECTION 6.8.(a)  Findings. – The General Assembly finds that there is a critical need for consolidating the investments made in geographic information systems and developing common infrastructures in order for the State to reap all the potential benefits of geographic information systems at the lowest cost.
SECTION 6.8.(b)  Implementation Plan. – The recommendations outlined in the 2008 legislative report prepared by the State Chief Information Officer, the Geographic Information Coordinating Council, and the Office of State Budget and Management, made pursuant to Section 6.13 of S.L. 2008‑107, entitled "State Geographic Information Consolidation Implementation Plan," shall be implemented in four distinct work streams, as follows:
(1)	Transferring the Center for Geographic Information and Analysis to the Office of the State Chief Information Officer and establishing appropriated funding for staff activities supporting the Geographic Information Coordinating Council, statewide standards, and the coordination of data acquisition.
(2)	Reestablishing the professional services component and refocusing that effort toward current needs of the community while reducing those overhead costs.
(3)	Revitalizing the NC OneMap project by leveraging new technology in the market to reduce costs while increasing utility of the service.
(4)	Establishing a geographic information systems Reserve Fund for the acquisition of data layers which may be useful to multiple organizations and through which data acquisition may be procured to reduce cost.
SECTION 6.8.(c)  Transfers of Agencies, Powers, Duties. – The statutory authority, powers, duties, functions, records, personnel, property, and unexpended balances of appropriations, allocations, or other funds of the State agencies and subunits listed in this subsection are transferred from those entities to the State Chief Information Officer, Office of Information Technology Services, with all of the elements of a Type II transfer as defined by G.S. 143A‑6:
(1)	The North Carolina Geographic Information Coordinating Council.
(2)	The Center for Geographic Information and Analysis.
The Center for Geographic Information and Analysis shall remain in its current office space unless the State Chief Information Officer determines otherwise.
SECTION 6.8.(d)  Center for Geographic Information and Analysis Coordination. – The State Chief Information Officer shall coordinate a professional services component for geographic information systems coordination with the Center for Geographic Information and Analysis that is refocused toward current community needs.
SECTION 6.8.(e)  North Carolina Geographic Information Coordinating Council  Coordination. – The State Chief Information Officer, in cooperation with the North Carolina Geographic Information Coordinating Council shall coordinate the refocusing of the NC OneMap geographic information systems infrastructure project to leverage new technology, to increase the utility of geographic information systems services, and to reduce geographic information systems data layer costs through singly managed contracts.
SECTION 6.8.(f)  Geographic Information Systems Reserve Fund. – There is established in the Office of State Budget and Management the Geographic Information Systems Reserve Fund, which shall be nonreverting, for the purpose of acquiring and managing, at the lowest cost, data layers useful to multiple State and local organizations, according to the priorities set by the North Carolina Geographic Information Coordinating Council. The Geographic Information Systems Reserve Fund may receive private grants and may include State, federal, local, and matching funds.
SECTION 6.8.(g)  Information Technology Fund. – Of the funds appropriated in this act to the Information Technology Fund, the sum of six hundred fifty thousand dollars ($650,000) for the 2009‑2010 fiscal year and the sum of six hundred fifty thousand dollars ($650,000) for the 2010‑2011 fiscal year shall be used to effectuate the transfer of the Center for Geographic Information and Analysis, including the cost of moving personnel positions, as provided by this act. 

BEACON Data Integration
SECTION 6.9.(a)  The Office of the State Controller, in cooperation with the State Chief Information Officer, shall continue the implementation of the BEACON Strategic Plan for Data Integration, issued in April 2008. The plan shall be implemented under the governance of the BEACON Project Steering Committee and in conjunction with leadership in appropriate State agencies and with the support and cooperation of the Office of State Budget and Management.
While it is the intent that this initiative provide broad access to information across State government, the plan shall comply with all necessary security measures and restrictions to ensure that access to any specific information held confidential under federal or State law shall be limited to appropriate and authorized persons.
SECTION 6.9.(b)  The Office of State Controller shall give the Criminal Justice Data Integration Pilot Program first priority for funding and for system development and implementation.
The Office of State Controller shall determine the amount of funding required to (i) fully support the Criminal Justice Data Integration Pilot Program effort and (ii) develop full operational capability in Wake County during the 2009‑2010 fiscal year. The Office of State Controller shall not otherwise obligate these funds.
SECTION 6.9.(c)  By September 1, 2009, the Office of State Controller shall report to the Joint Legislative Oversight Committee on Information Technology and to the Fiscal Research Division on (i) funding requirements and sources of funds for the Criminal Justice Data Integration Pilot Program for the 2009‑2010 fiscal year and (ii) the anticipated uses of any remaining funds for the BEACON Data Integration Program. The Office of State Controller shall spend funds to support the BEACON Data Integration Program only as is specifically authorized in Section 6.16(d) of S.L. 2008‑107.
By October 1, 2009, the Office of State Controller, in coordination with the State Chief Information Officer, shall also report on future costs for implementing the BEACON Data Integration Program, including outside vendor costs. This report shall include a detailed explanation of potential costs and the efforts participating agencies are making to reduce these costs. This report shall be presented to the Joint Legislative Oversight Committee on Information Technology and written reports shall be provided to the House of Representatives and Senate Appropriations Committees and to the Fiscal Research Division.

Criminal Justice Data Integration Pilot Program
SECTION 6.10.(a)  The Office of the State Controller, in cooperation with the State Chief Information Officer and under the governance of the BEACON Project Steering Committee, shall continue the development of the Criminal Justice Data Integration Pilot Program in Wake County as specified in Section 6.15 of S.L. 2008‑107.  The Office of State Controller shall achieve and demonstrate full operational capability of the pilot program in Wake County before the system is expanded to other areas of the State.
SECTION 6.10.(b)  The Criminal Justice Data Integration Pilot Program shall continue to comply with all necessary security measures and restrictions to ensure that access to any specific information held confidential under federal and State law shall be limited to authorized persons.
SECTION 6.10.(c)  The Office of State Controller shall develop a detailed plan for the statewide expansion of the Criminal Justice Data Integration Pilot Program.  This plan shall include the following:
(1)	An implementation schedule;
(2)	The requirements individual users must meet to participate in the program;
(3)	Detailed cost information for the development and implementation of a statewide system, including any user costs;
(4)	A governance structure for management and oversight of the system; and
(5)	Any other issues associated with the implementation of the system.
The Office of State Controller shall submit this plan to the House of Representatives and Senate Appropriations Committees, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division by January 31, 2010.
SECTION 6.10.(d)  The Office of State Controller shall work with the data integration software vendor to ensure that licenses are obtained at the least possible cost.
SECTION 6.10.(e)  A State agency data center shall host the Criminal Justice Data Integration Pilot Program. The Office of State Controller shall identify a State data center to host the program and shall report its recommendation to the Joint Legislative Oversight Committee on Information Technology by August 31, 2009.
SECTION 6.10.(f)  Funds appropriated for the Criminal Justice Data Integration Pilot Program shall only be used for that program.  The Criminal Justice Data Integration Pilot Program shall have first priority for funds available to the BEACON Data Integration Program.
SECTION 6.10.(g)  The Office of State Controller shall continue to provide quarterly written reports on the program's progress to the House of Representatives and Senate Appropriations Committees, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division beginning October 1, 2009.

Office of Information Technology Services/UNC Bulk Purchasing of Information Technology
SECTION 6.11.  The General Administration of The University of North Carolina, with assistance from the Office of Information Technology Services and the Office of State Budget and Management, shall consolidate information technology infrastructure purchasing which includes, but is not limited to, personal computer and printer purchases for all 16 State universities, the North Carolina School of Science and Mathematics, and General Administration, by creating a bulk purchasing process that will realize savings through efficiencies. General Administration may choose to utilize the Office of Information Technology Services' existing bulk contracts. Information technology infrastructure expenditure shall not be authorized without complying with this section.

Joint Legislative oversight Committee On Information Technology/ Review and report on current law
SECTION 6.12.  By April 1, 2010, the Joint Legislative Oversight Committee on Information Technology shall review State information technology‑related legislation and develop recommendations for amendment of current laws and shall submit its written report of recommendations for legislative action to the Appropriations Committees of the Senate and the House of Representatives. The Joint Legislative Oversight Committee on Information Technology shall provide interested parties with the opportunity to identify and define pertinent information technology issues by offering testimony on (i) issues associated with current legislation, (ii) the impact of information technology laws on specific entities; and, (iii) recommendations for improving information technology organization and operations within the State.

Office of Information Technology Services/Network Integration/feasibility study and coordination plan
SECTION 6.13.(a)  The State Chief Information Officer shall negotiate and coordinate with MCNC to identify efficiencies that might be achieved through increased cooperation and elimination of duplicative efforts in management of the State's network infrastructure operated by the Office of Information Technology Services and by the North Carolina Research and Education Network operated by MCNC.  Potential efficiencies include, but are not limited to, shared infrastructure, personnel, contracted services, and support.
SECTION 6.13.(b)  Office of Information Technology Services and the Office of State Budget and Management, in conjunction with MCNC, shall conduct a study to determine the feasibility of coordinating the operation of the North Carolina Research and Education Network and the State network infrastructure. The feasibility study shall define the capabilities and limitations of the Office of Information Technology Services and MCNC and document services currently provided by Office of Information Technology Services and MCNC. Further, the feasibility study shall identify:
(1)	Current and potential State agency network requirements.
(2)	The organization currently supporting each network requirement.
(3)	Requirements that are currently unsupported by either organization.
(4)	Costs associated with each requirement.
(5)	Potential cost savings resulting from network integration.
(6)	Policy and operational issues associated with the coordination.
The study shall be reviewed by the Office of State Budget and Management, which shall validate and certify the identified efficiencies and cost savings. Office of Information Technology Services and MCNC shall complete the feasibility study and present it to the Joint Legislative Oversight Committee on Information Technology by October 31, 2009.
SECTION 6.13.(c)  Following review of the feasibility study by Office of State Budget and Management, and if Office of State Budget and Management certifies that the efficiencies and savings identified in the study are valid, accurate, and substantial enough to justify increased coordination, then Office of Information Technology Services and MCNC shall develop a plan to coordinate their operations.  The coordination plan shall include at least the following:
(1)	Definition of requirements to achieve Statewide integration.
(2)	Detailed information on the allocation of responsibility for each requirement and component.
(3)	An estimate of the associated costs with each requirement or component, including what the costs to each agency would be without coordination.
(4)	Priorities for integration.
(5)	A schedule for implementation.
(6)	Detailed cost information for the development and integration of a single network.
(7)	A governance structure for management and oversight of the network.
(8)	A means for resolution of any issues identified during the feasibility study.
The coordination plan shall be completed by February 28, 2010, and shall be presented to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Oversight Committee on Information Technology.
SECTION 6.13.(d)  Prior to implementation of the plan, Office of Information Technology Services and MCNC shall complete a memorandum of agreement that specifies their respective roles and responsibilities and defines payment schedules.  By January 1 each year, Office of State Budget and Management shall report to the Joint Legislative Oversight Committee on Information Technology regarding the status of the coordination plan and the cost savings realized during the previous fiscal year.

Upgrade state Portal
SECTION 6.14.(a)  The Office of State Budget and Management, in coordination with the Office of the State Chief Information Officer, shall develop a detailed plan to upgrade the State portal.  The upgrade plan shall include consideration of the need to (i) improve State services for citizens and businesses; (ii) offer online services; (iii) provide crucial, up‑to‑the‑minute emergency information; and (iv) provide a multipurpose, interactive Web portal.
SECTION 6.14.(b)  Prior to developing the plan, the Office of State Budget and Management shall obtain the advice and assistance of State and local government agencies, businesses operating within the State, and private citizens to ensure that all potential users have the opportunity to submit recommendations for inclusion in the final plan.  
The Office of State Budget and Management shall also conduct an inventory of capabilities that are available on other states' portals. With the assistance of State agencies, the Office of State Budget and Management shall prioritize potential capabilities. Based on these priorities, the Office of State Budget and Management shall develop a phased plan to allow incremental implementation that includes a detailed time line for each phase and shall include the cost associated with each phase. 
SECTION 6.14.(c)  The interactive Web portal shall include the capability for citizens, businesses, and State and local government agencies to complete online transactions, obtain live help from State agencies, and access emergency information in real time. The portal shall include appropriate security measures and devices to include encryption, enterprise‑class firewalls/gateway security, real‑time intrusion prevention and detection, virtual private networks, vulnerability management, and virus protection.
SECTION 6.14.(d)  By December 1, 2009, the Office of State Budget and Management shall submit the upgrade plan to the Joint Legislative Oversight Committee on Information Technology and to the Fiscal Research Division. The report shall include an explanation of any recommendations that were not included in the final plan with an explanation as to why each was not included and the cost associated with implementation of those items.

IT GSA Schedules/Study
SECTION 6.15.  The Office of State Budget and Management shall conduct a study to determine the feasibility of using General Services Administration schedules for the acquisition of information technology products and services.  The study shall include review of the following:
(1)	Any cost savings resulting from the use of General Services Administration schedules for the acquisition of information technology goods and services. This shall include any reductions in overhead that could be realized from the use of General Services Administration schedules.
(2)	Any benefits resulting from implementation. 
(3)	Any negative impacts resulting from implementation. 
(4)	Any legislative changes required to implement General Services Administration schedules.
By February 1, 2010, the Office of State Budget and Management shall submit the results of the study to the Joint Legislative Oversight Committee on Information Technology and to the Fiscal Research Division.

Use of Electronic Forms and Digital Signatures
SECTION 6.16.(a)  The Office of State Budget and Management shall develop a plan to increase the use of electronic forms and digital signatures throughout State government.  In developing the plan, first the Office of State Budget and Management shall conduct an inventory of all paper or electronic forms currently in use by executive branch agencies. The Office of State Budget and Management may hire temporary help for the collection and compiling of the data for the inventory.
SECTION 6.16.(b)  After completing the inventory, the Office of State Budget and Management shall develop a plan for converting one or more paper forms to an electronic format.  The plan shall include a detailed business case for the conversion, including cost, cost savings, cost avoidance, and any impact on productivity. 
SECTION 6.16.(c)  The Office of State Budget and Management shall assess the potential cost of converting all identified forms in the inventory to an electronic format and establish a timetable for achieving conversion as soon as practicable.
SECTION 6.16.(d)  The Office of Information Technology Services shall provide technical assistance to the Office of State Budget and Management in the development of the plan to increase the use of electronic forms and digital signatures.
SECTION 6.16.(e)  Executive branch State agencies shall provide all information requested by Office of State Budget and Management in conducting the inventory and in all other issues related to the development of this plan.
SECTION 6.16.(f)  The Office of State Budget and Management shall submit the plan to the Joint Legislative Oversight Committee on Information Technology on or before March 1, 2010.

Position transfer Reports/Office of Information Technology Services/OSC
SECTION 6.17.(a)  By November 1, 2009, the Office of Information Technology Services shall submit a written report to the Appropriation Committees of the Senate and the House of Representatives, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division regarding the transfer of information technology (IT) positions associated with IT consolidation. The report shall include the following:
(1)	The numbers and types of positions transferred to the Office of Information Technology Services from other State agencies, an explanation as to why each position was moved to Office of Information Technology Services, the cost associated with each position, and how that cost is allocated.
(2)	The number and types of information technology positions remaining with each State agency, an explanation as to why the positions were retained by the agency, and the total cost for each position.
(3)	The number and location of positions eliminated as a result of IT consolidation and the associated cost savings.
(4)	Any new positions created within Office of Information Technology Services to support IT consolidation, the reason each position was created, and the associated cost.
SECTION 6.17.(b)  By November 1, 2009, the Office of the State Controller shall submit a written report to the Appropriations Committees of the Senate and House of Representatives, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division on the transfer of positions associated with the implementation of the BEACON (HR)/Payroll project.  The report shall include the following:
(1)	The numbers and types of positions transferred to the Office of the State Controller from other State agencies, an explanation as to why each position was moved to the Office of the State Controller, the cost associated with each position, and how that cost is allocated.
(2)	The number and types of positions remaining with each State agency, an explanation as to why the positions were retained by the agency, and the total cost for each position.
(3)	The number and location of positions eliminated as a result of the implementation of the BEACON HR/Payroll system and the associated cost savings.
(4)	Any new positions created within the Office of the State Controller to support BEACON HR/Payroll, the reason each position was created, and the associated cost.

PART VII. PUBLIC SCHOOLS

CHILDREN WITH DISABILITIES
SECTION 7.1.  The State Board of Education shall allocate funds for children with disabilities on the basis of three thousand five hundred dollars and seventy‑seven cents ($3,500.77) per child for a maximum of 173,249 children for the 2009‑2010 school year. Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities, or (ii) twelve and five‑tenths percent (12.5%) of the 2009‑2010 allocated average daily membership in the local school administrative unit.
The dollar amounts allocated under this section for children with disabilities shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve children with disabilities.

FUNDS FOR ACADEMICALLY GIFTED CHILDREN
SECTION 7.2.  The State Board of Education shall allocate funds for academically or intellectually gifted children on the basis of one thousand one hundred sixty‑three dollars and seven cents ($1,163.07) per child. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2009‑2010 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The State Board shall allocate funds for no more than 58,597 children for the 2009‑2010 school year.
The dollar amounts allocated under this section for academically or intellectually gifted children shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.

USE OF SUPPLEMENTAL FUNDING IN LOW‑WEALTH COUNTIES
SECTION 7.3.(a)  Use of Funds for Supplemental Funding. – All funds received pursuant to this section shall be used only: (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, school computer technicians, instructional supplies and equipment, staff development, and textbooks; (ii) for salary supplements for instructional personnel and instructional support personnel; and (iii) to pay an amount not to exceed ten thousand dollars ($10,000) of the plant operation contract cost charged by the Department of Public Instruction for services. Local boards of education are encouraged to use at least twenty‑five percent (25%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades 3‑8 and children who are performing at Level I or II in grades 4 and 7.
SECTION 7.3.(b)  Definitions. – As used in this section:
(1)	"Anticipated county property tax revenue availability" means the county‑adjusted property tax base multiplied by the effective State average tax rate. 
(2)	"Anticipated total county revenue availability" means the sum of the:
a.	Anticipated county property tax revenue availability, 
b.	Local sales and use taxes received by the county that are levied under Chapter 1096 of the 1967  Session Laws or under Subchapter VIII of Chapter 105 of the General Statutes, 
c.	Sales tax hold harmless reimbursement received by the county under G.S. 105‑521, and 
d.	Fines and forfeitures deposited in the county school fund for the most recent year for which data are available. 
(3)	"Anticipated total county revenue availability per student" means the anticipated total county revenue availability for the county divided by the average daily membership of the county. 
(4)	"Anticipated State average revenue availability per student" means the sum of all anticipated total county revenue availability divided by the average daily membership for the State.
(5)	"Average daily membership" means average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education. If a county contains only part of a local school administrative unit, the average daily membership of that county includes all students who reside within the county and attend that local school administrative unit. 
(6)	"County‑adjusted property tax base" shall be computed as follows: 
a.	Subtract the present‑use value of agricultural land, horticultural land, and forestland in the county, as defined in G.S. 105‑277.2, from the total assessed real property valuation of the county, 
b.	Adjust the resulting amount by multiplying by a weighted average of the three most recent annual sales assessment ratio studies,
c.	Add to the resulting amount the: 
1.	Present‑use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105‑277.2, 
2.	Value of property of public service companies, determined in accordance with Article 23 of Chapter 105 of the General Statutes, and 
3.	Personal property value for the county. 
(7)	"County‑adjusted property tax base per square mile" means the county‑adjusted property tax base divided by the number of square miles of land area in the county. 
(8)	"County wealth as a percentage of State average wealth" shall be computed as follows: 
a.	Compute the percentage that the county per capita income is of the State per capita income and weight the resulting percentage by a factor of five‑tenths, 
b.	Compute the percentage that the anticipated total county revenue availability per student is of the anticipated State average revenue availability per student and weight the resulting percentage by a factor of four‑tenths, 
c.	Compute the percentage that the county‑adjusted property tax base per square mile is of the State‑adjusted property tax base per square mile and weight the resulting percentage by a factor of one‑tenth, 
d.	Add the three weighted percentages to derive the county wealth as a percentage of the State average wealth. 
(9)	"Effective county tax rate" means the actual county tax rate multiplied by a weighted average of the three most recent annual sales assessment ratio studies. 
(10)	"Effective State average tax rate" means the average of effective county tax rates for all counties. 
(11)	"Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447. 
(12)	"Per capita income" means the average for the most recent three years for which data are available of the per capita income according to the most recent report of the United States Department of Commerce, Bureau of Economic Analysis, including any reported modifications for prior years as outlined in the most recent report. 
(13)	"Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105‑289(h). 
(14)	"State average current expense appropriations per student" means the most recent State total of county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447. 
(15)	"State average adjusted property tax base per square mile" means the sum of the county‑adjusted property tax bases for all counties divided by the number of square miles of land area in the State. 
(16)	"Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year. 
(17)	"Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
SECTION 7.3.(c)  Eligibility for Funds. – Except as provided in subsection (g) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%). 
SECTION 7.3.(d)  Allocation of Funds. – Except as provided in subsection (f) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools. (To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county's wealth as a percentage of State average wealth by the State average current expense appropriations per student.) The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit located in whole or in part in the county based on the average daily membership of the county's students in the school units. If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.
SECTION 7.3.(e)  Formula for Distribution of Supplemental Funding Pursuant to This Section Only. – The formula in this section is solely a basis for distribution of supplemental funding for low‑wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low‑wealth counties.
SECTION 7.3.(f)  Minimum Effort Required. – Counties that had effective tax rates in the 1996‑1997 fiscal year that were above the State average effective tax rate but that had effective rates below the State average in the 1997‑1998 fiscal year or thereafter shall receive reduced funding under this section. This reduction in funding shall be determined by subtracting the amount that the county would have received pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws from the amount that the county would have received if qualified for full funding and multiplying the difference by ten percent (10%). This method of calculating reduced funding shall apply one time only. This method of calculating reduced funding shall not apply in cases in which the effective tax rate fell below the statewide average effective tax rate as a result of a reduction in the actual property tax rate. In these cases, the minimum effort required shall be calculated in accordance with Section 17.1(g) of Chapter 507 of the 1995 Session Laws. If the county documents that it has increased the per student appropriation to the school current expense fund in the current fiscal year, the State Board of Education shall include this additional per pupil appropriation when calculating minimum effort pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws.
SECTION 7.3.(g)  Nonsupplant Requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2009‑2011 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if: 
(1)	The current expense appropriation per student of the county for the current year is less than ninety‑five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and
(2)	The county cannot show: (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section. The State Board of Education shall adopt rules to implement this section.
SECTION 7.3.(h)  Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2010, if it determines that counties have supplanted funds.
SECTION 7.3.(i)  Department of Revenue Reports. – The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year. The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present‑use value of agricultural land, horticultural land, and forestland as defined in G.S. 105‑277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.

SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
SECTION 7.4.(a)  Funds for Small School Systems. – Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of fewer than 3,175 students and (ii) to each county school administrative unit with an average daily membership from 3,175 to 4,000 students if the county in which the local school administrative unit is located has a county‑adjusted property tax base per student that is below the State‑adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,175 to 4,000 students. The allocation formula shall:
(1)	Round all fractions of positions to the next whole position.
(2)	Provide five and one‑half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or fewer. 
(3)	Provide additional program enhancement teachers adequate to offer the standard course of study. 
(4)	Change the duty‑free period allocation to one teacher assistant per 400 average daily membership.
(5)	Provide a base for the consolidated funds allotment of at least seven hundred eighty‑eight thousand seven hundred eighty‑nine dollars ($788,789), excluding textbooks, for the 2009‑2010 fiscal year and a base of seven hundred eighty‑eight thousand seven hundred eighty‑nine dollars ($788,789) for the 2010‑2011 fiscal year.
(6)	Allot vocational education funds for grade 6 as well as for grades 7‑12. If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fully fund the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis. This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units.
SECTION 7.4.(b)  Nonsupplant Requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2009‑2011 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if: 
(1)	The current expense appropriation per student of the county for the current year is less than ninety‑five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and 
(2)	The county cannot show: (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section. The State Board of Education shall adopt rules to implement this section.
SECTION 7.4.(c)  Phase‑Out Provisions. – If a local school administrative unit becomes ineligible for funding under this formula because of (i) an increase in the population of the county in which the local school administrative unit is located or (ii) an increase in the county‑adjusted property tax base per student of the county in which the local school administrative unit is located, funding for that unit shall be continued for nine years after the unit becomes ineligible.
SECTION 7.4.(d)  Definitions. – As used in this section:  
(1)	"Average daily membership" means within two percent (2%) of the average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual adopted by the State Board of Education. 
(2)	"County‑adjusted property tax base per student" means the total assessed property valuation for each county, adjusted using a weighted average of the three most recent annual sales assessment ratio studies, divided by the total number of students in average daily membership who reside within the county. 
(3)	"Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447. 
(4)	"Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105‑289(h). 
(5)	"State‑adjusted property tax base per student" means the sum of all county‑adjusted property tax bases divided by the total number of students in average daily membership who reside within the State. 
(6)	"Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year. 
(7)	"Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued during the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
SECTION 7.4.(e)  Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2010, if it determines that counties have supplanted funds.
SECTION 7.4.(f)  Use of Funds. – Local boards of education are encouraged to use at least twenty percent (20%) of the funds they receive pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades 3‑8 and children who are performing at Level I or II on the writing tests in grades 4 and 7.

REPLACEMENT SCHOOL BUSES/FUNDS
SECTION 7.5.(a)  The State Board of Education may impose any of the following conditions on allotments to local boards of education for replacement school buses:
(1)	The local board of education shall use the funds only to make the first, second, third, or fourth year's payment on a financing contract entered into pursuant to G.S. 115C‑528.
(2)	The term of a financing contract entered into under this section shall not exceed four years. 
(3)	The local board of education shall purchase the buses only from vendors selected by the State Board of Education and on terms approved by the State Board of Education. 
(4)	The Department of Administration, Division of Purchase and Contract, in cooperation with the State Board of Education, shall solicit bids for the direct purchase of school buses and activity buses and shall establish a statewide term contract for use by the State Board of Education. Local boards of education and other agencies shall be eligible to purchase from the statewide term contract. The State Board of Education shall also solicit bids for the financing of school buses. 
(5)	A bus financed pursuant to this section shall meet all federal motor vehicle safety regulations for school buses.
(6)	Any other condition the State Board of Education considers appropriate.
SECTION 7.5.(b)  Any term contract for the purchase or lease‑purchase of school buses or school activity buses shall not require vendor payment of the electronic procurement transaction fee of the North Carolina E‑Procurement Service.

DISCREPANCIES BETWEEN ANTICIPATED AND ACTUAL ADM
SECTION 7.6.(a)  If the State Board of Education does not have sufficient resources in the ADM Contingency Reserve line item to make allotment adjustments in accordance with the Allotment Adjustments for ADM Growth provisions of the North Carolina Public Schools Allotment Policy Manual, the State Board of Education may use funds appropriated to State Aid for Public Schools for this purpose. 
SECTION 7.6.(b)  If the higher of the first or second month average daily membership in a local school administrative unit is at least two percent (2%) or 100 students lower than the anticipated average daily membership used for allotments for the unit, the State Board of Education shall reduce allotments for the unit. The reduced allotments shall be based on the higher of the first or second month average daily membership plus one‑half of the number of students overestimated in the anticipated average daily membership. 
The allotments reduced pursuant to this subsection shall include only those allotments that may be increased pursuant to the Allotment Adjustments for ADM Growth provisions of the North Carolina Public Schools Allotment Policy Manual.

LITIGATION RESERVE FUNDS
SECTION 7.7.  The State Board of Education may expend up to five hundred thousand dollars ($500,000) each year for the 2009‑2010 and 2010‑2011 fiscal years from unexpended funds for certified employees' salaries to pay expenses related to litigation.

LEA FLEXIBILITY
SECTION 7.8.(a)  The State Board of Education shall implement temporary modifications to the limitations on budget flexibility set out in G.S. 115C‑105.25.  For the 2009‑2010 and 2010‑2011 fiscal years, local school administrators shall make every effort to reduce spending whenever and wherever such budget reductions are appropriate as long as the targeted reductions do not directly impact classroom services or any services for students at risk or children with special needs.
SECTION 7.8.(b)  Within 14 days of the date this act becomes law, the State Board of Education shall notify each local school administrative unit and charter school of the amount the unit shall reduce from the State General Fund appropriations. The State Board shall determine the amount of the reduction for each unit on the basis of average daily membership.
SECTION 7.8.(c)  Each unit shall report to the Department of Public Instruction on the flexibility budget reductions it has identified for the unit within 30 days of the date this act becomes law.

NORTH CAROLINA VIRTUAL PUBLIC SCHOOLS
SECTION 7.9.(a)  Beginning with the 2010‑2011 fiscal year, the State Board of Education shall implement an allotment formula for e‑learning developed pursuant to Section 7.16(d) of S.L. 2006‑66.
The North Carolina Virtual Public School (NCVPS) shall be available at no cost to all high school students in North Carolina who are enrolled in North Carolina's public schools, Department of Defense schools, and schools operated by the Bureau of Indian Affairs.
The Department of Public Instruction shall communicate to local school administrative units all applicable guidelines regarding the enrollment of nonpublic school students in these courses.
SECTION 7.9.(b)  In order to ensure funds are available to operate NCVPS for the 2009‑2010 fiscal year, the State Board of Education shall use funding sources in the following order:
(1)	The General Fund appropriation for NCVPS;
(2)	Available funds received under the American Recovery and Reinvestment Act;
(3)	Up to six million dollars ($6,000,000) of funds appropriated for school technology;
(4)	Funds from the State Public School Fund.
SECTION 7.9.(c)  NCVPS courses shall be available only to high school students.
SECTION 7.9.(d)  The State Board of Education shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division by December 15, 2009, on its implementation of this section.

LEARN AND EARN ONLINE
SECTION 7.10.(a)  Funds are appropriated in this act for the Learn and Earn Online program.  This program will allow high school students to enroll in college courses to qualify for college credit. Online courses shall be made available to students through The University of North Carolina and the North Carolina Community College System. 
SECTION 7.10.(b)  Funds shall be used for:
(1)	Course tuition and only those technology and course fees and textbooks required for course participation; and
(2)	A liaison position in the Department of Public Instruction to coordinate with The University of North Carolina and the North Carolina Community College System and to communicate course availability and related information to high school administrators, teachers, and counselors.
SECTION 7.10.(c)  The State Board of Education shall determine the allocation of Learn and Earn Online course offerings across the State.
SECTION 7.10.(d)  The State Board of Education shall allot funds for tuition, fees, and textbooks on the basis of and after verification of the credit hour enrollment of high school students in Learn and Earn Online courses. The Office of State Budget and Management shall transfer sufficient funds from the State Public School Fund to the Community Colleges System Office for courses offered by community colleges.
SECTION 7.10.(e)  The University of North Carolina program shall report to The University of North Carolina Board of Governors, and the North Carolina Community College program shall report to the State Board of Community Colleges.  The Department of Public Instruction shall report to the State Board of Education. 
SECTION 7.10.(f)  Both The University of North Carolina and the North Carolina Community College System shall provide oversight and coordination, including coordination with the Department of Public Instruction and with the North Carolina Virtual Public School (NCVPS), to avoid course duplication.
SECTION 7.10.(g)  The programs shall establish course quality and rigor standards and shall conduct course evaluations to ensure that the online courses meet the established standards.
SECTION 7.10.(h)  Local school administrative units may purchase textbooks for Learn and Earn Online courses through the Department of Public Instruction's textbook warehouse in the same manner as textbooks that have been adopted for public school students by the State Board of Education.
SECTION 7.10.(i)  Funds appropriated for Learn and Earn Online that are unexpended or unencumbered at the end of each fiscal year shall not revert but shall remain available for expenditure.
SECTION 7.10.(j)  Subsection (i) of this section becomes effective June 30, 2009.

ABCS OF PUBLIC EDUCATION
SECTION 7.11.  Notwithstanding G.S. 115C‑105.36, the State Board of Education shall place a one‑year moratorium on financial awards paid to school personnel in the 2009‑2010 fiscal year based on 2008‑2009 student academic performance.
The State Board of Education shall develop a plan to restructure the ABCs Accountability System and report the restructuring plan to the Governor and General Assembly by January 31, 2010.

SCHOOL CONNECTIVITY INITIATIVE
SECTION 7.12.(a)  Up to three hundred thousand dollars ($300,000) may be transferred annually to the Office of the Governor for NC Virtual (NCV) within the Education Cabinet.  These funds may be used for services to coordinate e‑learning activities across all State educational agencies.
SECTION 7.12.(b)  Of the funds allocated for the School Connectivity Initiative, the sum of two hundred fifty thousand dollars ($250,000) may be used annually to sustain the Education E‑Learning Portal.
SECTION 7.12.(c)  Section 7.6(a) of S.L. 2008‑107 reads as rewritten:
"SECTION 7.6.(a)  Up to three hundred thousand dollars ($300,000) may be transferred annually through June 30, 2013, to the Friday Institute at North Carolina State University to evaluate the effectiveness of using technology and its impact on 21st Century Teaching and Learning outcomes approved by the State Board of Education. The Friday Institute shall report annually to the State Board of Education on the evaluation results."
SECTION 7.12.(d)  Funds allocated to the School Connectivity Initiative shall carry forward to the next fiscal year until the project is fully implemented by June 30, 2010.
SECTION 7.12.(e)  Subsection (d) of this section becomes effective on June 30, 2009.

DROPOUT PREVENTION GRANTS 
SECTION 7.13.(a)  Dropout Prevention Grants. – The Committee on Dropout Prevention, as reestablished in Section 7.14 of S.L. 2008‑107, may use funds appropriated in this act to provide grants to new recipients or to extend additional funding to organizations that received funding previously.
SECTION 7.13.(b)  Criteria for Dropout Prevention Grants. – The following criteria apply to all types of dropout prevention grants approved by the Committee:
(1)	Grants shall be issued in varying amounts up to a maximum of one hundred fifty thousand dollars ($150,000).
(2)	These grants shall be provided to innovative programs and initiatives that target students at risk of dropping out of school and that demonstrate the potential to (i) be developed into effective, sustainable, and coordinated dropout prevention and reentry programs in middle schools and high schools and (ii) serve as effective models for other programs.
(3)	Grants shall be distributed geographically throughout the State and throughout the eight educational districts as defined in G.S. 115C‑65. No more than three grants shall be awarded in any one county under this section in a single fiscal year.
(4)	Grants may be made to local school administrative units, schools, local agencies, or nonprofit organizations.
(5)	Grants shall be to programs and initiatives that hold all students to high academic and personal standards.
(6)	Grant applications shall state (i) how grant funds will be used, (ii) what, if any, other resources will be used in conjunction with the grant funds, (iii) how the program or initiative will be coordinated to enhance the effectiveness of existing programs, initiatives, or services in the community, and (iv) a process for evaluating the success of the program or initiative.
(7)	Programs and initiatives that receive grants under this section shall be based on best practices for helping at‑risk students achieve successful academic progress, preventing students from dropping out of school, or for increasing the high school completion rate for those students who already have dropped out of school.
(8)	Priority for grants shall be given to proposals that demonstrate input from the local community and coordination with other available programs or resources.
(9)	Grantees shall assure their compliance with applicable laws and rules regulating conflicts of interest.
(10)	Priority for grants shall be given to programs that would serve students in local schools that have a four‑year cohort graduation rate of less than sixty‑five percent (65%). The Committee shall establish a grant rating cutoff score at such a level as to allow for consideration of all viable grants in this priority category. The Committee may require grantees to provide supplemental information in response to any prior reviewer comments.
(11)	The demonstrated need for a grant, level of collaboration, ability to increase attendance, persistence, academic success, ability to increase parental involvement, and graduation shall be given more weight than the quality of the written grant.
(12)	Grants shall be made no later than November 1, 2009.
The Committee shall report to the Joint Legislative Commission on Dropout Prevention and High School Graduation and the Joint Legislative Education Oversight Committee on the grants awarded under this section by March 1, 2010.
SECTION 7.13.(c)  Evaluation. – The Committee shall evaluate the impact of the dropout prevention grants awarded under this section.  In evaluating the impact of the grants, the Committee shall consider:
(1)	How grant funds were used, including the services provided for teen pregnancy prevention and for pregnant and parenting teens;
(2)	The success of the program or initiative, as indicated by the evaluation process stated in its grant application;
(3)	The extent to which the program or initiative has improved students' attendance, test scores, persistence, and graduation rates;
(4)	How the program or initiative was coordinated to enhance the effectiveness of existing programs, initiatives, or services in the community;
(5)	What, if any, other resources were used in conjunction with the grant funds;
(6)	The sustainability of the program;
(7)	The number, gender, ethnicity, and grade level of students being served as well as whether the students left school due to pregnancy or parenting responsibilities;
(8)	The potential for the program to serve as a model for achieving successful academic progress for at‑risk students; and
(9)	Other indicators of the impact of the grant on dropout prevention.
The recipients of the dropout prevention grants awarded under this section shall report to the Committee on Dropout Prevention by January 31, 2011, and by September 30, 2011. The reports shall provide information to assist the Committee in conducting its evaluation. The reports shall include a statement that the recipients used grant funds for the purposes appropriated by the General Assembly and complied with applicable laws, regulations, and terms and conditions of the grant documents. The Committee shall make an interim report of the results of its evaluation of the grants awarded under this section by March 31, 2011, to the Joint Legislative Commission on Dropout Prevention and High School Graduation and to the Joint Legislative Education Oversight Committee. The Committee shall make a final report of the results of its evaluation of the grants awarded under subsection (c) of this section by November 15, 2011, to the Joint Legislative Commission on Dropout Prevention and High School Graduation and to the Joint Legislative Education Oversight Committee.
SECTION 7.13.(d)  Of the funds appropriated in this act for the Committee on Dropout Prevention, the sum of one million dollars ($1,000,000) for the 2009‑2010 and 2010‑2011 fiscal years shall be used to award new grants, as well as additional grants to previous grant recipients, in accordance with subsection (b) of this section.
SECTION 7.13.(e)  Funds appropriated for the dropout prevention grants for the 2009‑2010 fiscal year and the 2010‑2011 fiscal year shall not revert but shall remain available for expenditure until August 31, 2011.
SECTION 7.13.(f)  Of the funds appropriated for the dropout prevention grants, the sum of one hundred thousand dollars ($100,000) for the 2009‑2010 and 2010‑2011 fiscal years may be used to issue a request for proposals from qualified vendors on a competitive basis to contract as a consultant to assist with the evaluation.  The factors to be considered in awarding the contract shall be identified in the request for proposals.
SECTION 7.13.(g)  Of the funds appropriated for the dropout prevention grants, the Department of Public Instruction may use up to fifty thousand dollars ($50,000) in fiscal years 2009‑2010 and 2010‑2011 for its administrative assistance to the Committee and provide technical assistance under this section.

DEPARTMENT OF PUBLIC INSTRUCTION/budget flexibility
SECTION 7.14.  Notwithstanding G.S. 143C‑6‑4, the Department of Public Instruction may reorganize, if necessary, to implement the budget reductions set out in this act. The Department shall report to the Joint Legislative Commission on Governmental Operations on any reorganization.

BUSINESS EDUCATION TECHNOLOGY ALLIANCE
SECTION 7.15.  G.S. 115C‑102.15 is repealed.

CRITICAL FOREIGN LANGUAGE PILOT FUNDS DO NOT REVERT
SECTION 7.16.(a)  Funds appropriated for the Critical Foreign Language Pilot that are unexpended or unencumbered shall not revert but shall remain available for expenditure through June 30, 2010.
SECTION 7.16.(b)  This section becomes effective June 30, 2009.

north carolina 1:1 learning project
SECTION 7.17.(a)  Funds appropriated for the North Carolina 1:1 Learning Project that are unexpended or unencumbered at the end of the 2008‑2009 fiscal year shall not revert but shall remain available for expenditure through June 30, 2010.
SECTION 7.17.(b)  This section becomes effective June 30, 2009.

ASSESSMENT AND ACCOUNTABILITY
SECTION 7.18.(a)  Funds appropriated in this act for assessment and accountability shall be used to develop new end‑of‑course and end‑of‑grade tests, identify national assessments, or both, as determined by the State Board of Education.  The development of any new tests replacing end‑of‑course and end‑of‑grade tests shall be aligned with the new essential standards and included in the State Board of Education's new accountability restructuring plan.
SECTION 7.18.(b)  Notwithstanding G.S. 115C‑174.11, the State Board of Education shall investigate and pilot a developmentally appropriate diagnostic assessment for students in elementary grades during the 2009‑2010 school year. This assessment will (i) enable teachers to determine student learning needs and individualize instruction and (ii) ensure that students are adequately prepared for the next level of coursework as set out by the standard course of study.
The State Board of Education shall report the results of the pilot to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management, by December 1, 2010. 
SECTION 7.18.(c)  Funds appropriated for assessment and accountability that remain unexpended and unencumbered at the end of the 2009‑2010 fiscal year shall not revert but shall remain available for expenditure through June 30, 2011.

DEVELOPMENT OF A PREK‑20 DATA SYSTEM
SECTION 7.19.(a)  The Department of Public Instruction, the North Carolina Community College System, and The University of North Carolina shall collaboratively develop and systematically determine the technical specifications and data standards for a PreK‑20 data system to centralize student data collected about students enrolled in prekindergarten programs through doctoral programs. The PreK‑20 data system shall build upon the current capacity, programs, and initiatives of the Department of Public Instruction, the North Carolina Community College System, and The University of North Carolina.
The Department of Public Instruction, the North Carolina Community College System, and The University of North Carolina shall also collaboratively develop a strategy for tracking students for five years after they complete their education at a North Carolina public educational institution.
SECTION 7.19.(b)  The PreK‑20 data standards and specifications shall include:
(1)	The types and forms of data to be included in a PreK‑20 data system, including longitudinal data and the use of a unique student identifier;
(2)	The capacity of a shared PreK‑20 data system;
(3)	The degree and extent of cooperation between a shared PreK‑20 data system and the current data collection systems of the Department of Public Instruction, the North Carolina Community College System, and The University of North Carolina;
(4)	The minimum capacity and technical specifications needed for each data system to feed into a shared PreK‑20 data system; and
(5)	The ability for data in a shared PreK‑20 data system to be understood and used by interested stakeholders, including federal and other State agencies.
SECTION 7.19.(c)  Standards and specifications shall conform to the guidelines and instructions governing any funds received through the American Recovery and Reinvestment Act of 2009 for this purpose.
SECTION 7.19.(d)  Standards and specifications shall be submitted to the Education Cabinet no later than January 1, 2010. The Education Cabinet shall review these standards and submit its recommendations regarding them to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management by March 1, 2010.

ELIMINATE CERTAIN TESTS
SECTION 7.20.(a)  The State Board of Education shall identify and eliminate certain unnecessary or duplicative tests not required by the federal government for No Child Left Behind (NCLB) to determine Adequate Yearly Progress (AYP).
SECTION 7.20.(b)  G.S. 115C‑174.10 reads as rewritten:
"§ 115C‑174.10.  Purposes of the Statewide Testing Program.
The testing programs in this Article have three purposes: (i) to assure that all high school graduates possess those minimum skills and that knowledge thought necessary to function as a member of society; (ii) to provide a means of identifying strengths and weaknesses in the education process in order to improve instructional delivery; and (iii) to establish additional means for making the education system at the State, local, and school levels accountable to the public for results."
SECTION 7.20.(c)  G.S. 115C‑174.11 reads as rewritten:
"§ 115C‑174.11.  Components of the testing program.
(a)	Assessment Instruments for First and Second Grades. – The State Board of Education shall adopt and provide to the local school administrative units developmentally appropriate individualized assessment instruments consistent with the Basic Education Program for the first and second grades, rather than standardized tests. Local school administrative units may use these assessment instruments provided to them by the State Board for first and second grade students, and shall not use standardized tests except as required as a condition of receiving a federal grant under the Reading First Program.
							(4)	Repealed by Session Laws 1996, Second Extra Session, c. 18, s. 18.14.
(c)	Annual Testing Program.
(1)	The State Board of Education shall adopt the tests for grades three through 12 that are required by federal law or as a condition of a federal grant. These tests shall be designed to measure progress toward reading, communication skills, and mathematics for grades three through eight, and toward competencies for grades nine through 12. Students who do not pass the tests adopted for eighth grade shall be provided remedial instruction in the ninth grade. (2)	If the State Board of Education finds that additional testing in grades three through 12 is desirable to allow comparisons with national indicators of student achievement, that testing shall be conducted with the smallest size sample of students necessary to assure valid comparisons with other states.
(d)	The State Board of Education shall not require the public schools to administer any standardized tests except for those required by federal law or as a condition of a federal grant. 
The State Board of Education shall adopt and provide to local school administrative units all tests required by federal law or as a condition of a federal grant."
SECTION 7.20.(d)  G.S. 115C‑174.12 reads as rewritten:
"§ 115C‑174.12.  Responsibilities of agencies.
(a)	The State Board of Education shall establish policies and guidelines necessary for minimizing the time students spend taking tests administered through State and local testing programs, for minimizing the frequency of field testing at any one school, and for otherwise carrying out the provisions of this Article. These policies and guidelines shall include the following:
(1)	Schools shall devote no more than two days of instructional time per year to the taking of practice tests that do not have the primary purpose of assessing current student learning;
(2)	Students in a school shall not be subject to field tests or  other standardized tests during the two‑week period preceding the administration of end‑of‑grade tests, end‑of‑course tests, or the school's regularly scheduled final exams; and
(3)	No school shall participate in more than two field tests at any one grade level during a school year unless that school volunteers, through a vote of its school improvement team, to participate in an expanded number of field tests.
These policies shall reflect standard testing practices to insure reliability and validity of the sample testing. The results of the field tests shall be used in the final design of each test. The State Board of Education's policies regarding the testing of children with disabilities shall (i) provide broad accommodations and alternate methods of assessment that are consistent with a child's individualized education program and section 504 (29 U.S.C. § 794) plans, (ii) prohibit the use of statewide tests as the sole determinant of decisions about a child's graduation or promotion, and (iii) provide parents with information about the Statewide Testing Program and options for students with disabilities. The State Board shall report its proposed policies and proposed changes in policies to the Joint Legislative Education Oversight Committee prior to adoption.
The State Board of Education may appoint an Advisory Council on Testing to assist in carrying out its responsibilities under this Article.
(b)	The Chief Executive Officer shall be responsible, under policies adopted by the State Board of Education, for the statewide administration of the testing program provided by this Article.
(b1)	The Chief Executive Officer shall notify local boards of education by October 1 of each year of any field tests that will be administered in their schools during the school year, the schools at which the field tests will be administered, and the specific field tests that will be administered at each school.
(c)	Local boards of education shall cooperate with the State Board of Education in implementing the provisions of this Article, including the regulations and policies established by the State Board of Education. Local school administrative units shall use the annual tests to fulfill the purposes set out in this Article. Local school administrative units are encouraged to continue to develop local testing programs designed to diagnose student needs."

reMove barriers to lateral entry into teaching
SECTION 7.21.(a)  The State Board of Education shall:
(1)	Review the lateral entry program and identify and remove from it barriers to the lateral entry of skilled individuals from the private sector into the teaching profession;
(2)	Reduce the coursework requirements for lateral entry by consolidating the required competencies into fewer courses and fewer semester hours of coursework; and
(3)	Provide additional opportunities for individuals to complete coursework online and at community colleges.
SECTION 7.21.(b)  The State Board of Education shall report to the Joint Legislative Education Oversight Committee by January 15, 2010, on its implementation of this section.

no pay decrease for teachers who become assistant principals
SECTION 7.22.(a)  G.S. 115C‑285(a) is amended by adding a new subdivision to read:
"§ 115C‑285.  Salary.
(a)	Principals and supervisors shall be paid promptly when their salaries are due provided the legal requirements for their employment and service have been met. All principals and supervisors employed by any local school administrative unit who are to be paid from local funds shall be paid promptly as provided by law and as State‑allotted principals and supervisors are paid.
Principals and supervisors paid from State funds shall be paid as follows:
…
(8)	A teacher who becomes an assistant principal without a break in service shall be paid, on a monthly basis, at least as much as he or she would earn as a teacher employed by that local school administrative unit."
SECTION 7.22.(b)  This section becomes effective July 1, 2009, and applies to all persons initially employed as assistant principals on or after that date.

Increase Class Size
SECTION 7.23.  Notwithstanding any other provision of law, the allotment ratios, the maximum class size, and the maximum average class size limits for each grade level in the public schools shall be two students higher beginning with the 2009‑2010 school year than they were for the 2008‑2009 school year.
It is the intent of the General Assembly that this increase remain in effect for a maximum of two years and that lower class sizes be restored as soon as State revenues make it fiscally responsible to do so.

deposit public school building capital funds into state public school fund
SECTION 7.25.  Notwithstanding the provisions of G.S. 115C‑546.1(b), the Secretary of Revenue shall not remit any funds for credit to the Public School Building Capital Fund during the 2009‑2011 fiscal biennium but shall deposit in the State Public School Fund the funds that would have otherwise been deposited in the Public School Building Capital Fund pursuant to G.S. 115C‑546.1(b).  The Department of Public Instruction may continue to use these funds to support six positions in the School Planning Division.

teachers for geographically isolated K‑12 schools
SECTION 7.26.  The State Board of Education shall modify its policy on the allotment of additional classroom teachers to schools containing grades K‑12 when consolidation is not feasible due to the geographic isolation of the school.  In administering this policy with regard to a school located in a local school administrative unit in which the average daily membership is less than 1.5 per square mile, the State Board of Education shall, at a minimum:
(1)	Allot teachers to the geographically isolated school on the basis of one classroom teacher per grade level; and
(2)	Allot teachers to the remainder of the local school administrative unit under the regular teacher allotment formula.
The State Board of Education may allot additional teachers to the local school administrative unit if demographic conditions warrant.

ensure access to the evaas system
SECTION 7.27.  The State Board of Education shall use funds appropriated to the State Public School Fund for the 2009‑2011 fiscal biennium to ensure that all local school administrative units and charter schools have access to SAS EVAAS (Education Value Added Assessment System).

local boards must inform public about school report cards
SECTION 7.28.  G.S. 115C‑47 is amended by adding a new subdivision to read:
"§ 115C‑47.  Powers and duties generally.
In addition to the powers and duties designated in G.S. 115C‑36, local boards of education shall have the power or duty:
…
(53)	To Inform the Public About the North Carolina School Report Cards Issued by the State Board of Education. – Each local board of education shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or otherwise."

plan for statewide motor coach permit
SECTION 7.29.(a)  The State Board of Education, in conjunction with the Division of Motor Vehicles, shall develop a plan for a Statewide permit for commercial motor coach companies that seek to contract with local school systems to transport students, school personnel, and other persons authorized by the school system on school‑sponsored trips.  The purpose of the permit shall be (i) to ensure student safety, (ii) to ensure safe operations by motor coach companies, (iii) to minimize paperwork, (iv) to minimize visits to the motor coach companies by local school systems, and (v) to minimize the need for motor coach companies to respond to multiple requests for information from multiple local school systems.
SECTION 7.29.(b)  In developing the plan for a permit, the State Board of Education and the Division of Motor Vehicles shall consult with the North Carolina School Boards Association, the State Highway Patrol, the North Carolina Pupil Transportation Association, the North Carolina Motor Coach Association, the Federal Motor Carrier Safety Administration, and other interested parties.
SECTION 7.29.(c)  The components of the plan shall include, but not be limited to, all of the following:
(1)	Scope of the permit.
(2)	Standards for issuing the permit.
(3)	Duration of the permit.
(4)	Process for required inspections.
(5)	Entity to conduct required inspections.
(6)	Conditions for revoking the permit.
(7)	Renewal process.
(8)	Schedule of fees to cover the cost of implementation and administration.
(9)	Application form and other required documentation.
(10) 	Dissemination of current permit holders to school systems.
(11)	Estimate of costs to implement and number of new positions required. 
(12)	Impact on motor coach companies that have interstate operations.
(13)	Other related issues.
SECTION 7.29.(d)  The State Board of Education and the Division of Motor Vehicles shall consult on the proposed plan to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division by January 1, 2010.  Before the plan is implemented, the Commission shall make any recommendations, including proposed legislation, to the 2010 General Assembly.

PART VIII. COMMUNITY COLLEGES

COMMUNITY COLLEGE FACULTY SALARY PLAN
SECTION 8.1.(a)
(1)	It is the intent of the General Assembly to encourage community colleges to make faculty salaries a priority and to reward colleges that have taken steps to achieve the national average community collage faculty salary, therefore:
a.	If the average faculty salary at a community college is one hundred percent (100%) or more of the national average community college faculty salary, the college may transfer up to eight percent (8%) of the State funds allocated to it for faculty salaries.
b.	If the average faculty salary at a community college is at least ninety‑five percent (95%) but less than one hundred percent (100%) of the national average community college faculty salary, the college may transfer up to six percent (6%) of the State funds allocated to it for faculty salaries.
c.	If the average faculty salary at a community college is at least ninety percent (90%) but less than ninety‑five percent (95%) of the national average community college faculty salary, the college may transfer up to five percent (5%) of the State funds allocated to it for faculty salaries.
d.	If the average faculty salary at a community college is at least eighty‑five percent (85%) but less than ninety percent (90%) of the national average community college faculty salary, the college may transfer up to three percent (3%) of the State funds allocated to it for faculty salaries.
e.	If the average faculty salary at a community college is eighty‑five percent (85%) or less of the national average community college faculty salary, the college may transfer up to two percent (2%) of the State funds allocated to it for faculty salaries.
Except as provided by subdivision (2) of this subsection, a community college shall not transfer a greater percentage of the State funds allocated to it for faculty salaries than is authorized by this subsection.
(2)	With the approval of the State Board of Community Colleges, a community college at which the average faculty salary is eighty‑five percent (85%) or less of the national average may transfer a greater percentage of the State funds allocated to it for faculty salaries than is authorized by sub‑subdivision e. of subdivision (1) of this subsection. The State Board shall approve the transfer only for purposes that directly affect student services.
The State Board of Community Colleges shall adopt guidelines to implement the provisions of this subdivision.
(3)	A local community college may use all State funds allocated to it except for Literacy Funds and Funds for Customized Training to increase faculty salaries.
SECTION 8.1.(b)  As used in this section:
(1)	"Average faculty salary at a community college" means the total nine‑month salary from all sources of all nine‑month, full‑time, curriculum faculty at the college, as determined by the North Carolina Community College System on October 1 of each year.
(2)	"National average community college faculty salary" means the nine‑month, full‑time, curriculum salary average, as published by the Integrated Postsecondary Education Data System (IPEDS), for the most recent year for which data are available.
SECTION 8.1.(c)  The State Board of Community Colleges shall adopt guidelines to implement the provisions of this section.

USE OF BASIC SKILLS FUNDS
SECTION 8.2.  Notwithstanding any other provision of law, a local community college may use up to five percent (5%) of the Literacy Funds allocated to it by the State Board of Community Colleges to procure instructional technology for literacy labs. This technology may include computers, instructional software and software licenses, scanners for testing, and classroom projection equipment.

FUNDS FOR CAMPUS SECURITY
SECTION 8.3.  Notwithstanding G.S. 115D‑32 or any other provision of law, a community college may use up to two percent (2%) of the noninstructional State funds allocated to it through the institutional support allotment for the 2009‑2010 and 2010‑2011 fiscal years for campus security. This may include the hiring of personnel, contracted professional services, surveillance cameras, call boxes, alert systems, and other equipment‑related expenditures.
These funds shall be used to supplement and shall not be used to supplant existing local funding for campus security.

FINANCIAL AID PROGRAM ADMINISTRATIVE COSTS
SECTION 8.4.  G.S. 115D‑40.1(c) reads as rewritten:
"(c)	Administration of Program. – The State Board shall adopt rules and policies for the disbursement of the financial assistance provided in this section. Degree, diploma, and certificate students must complete a Free Application for Federal Student Aid (FAFSA) to be eligible for financial assistance. The State Board may contract with the State Education Assistance Authority for administration of these financial assistance funds. These funds shall not revert at the end of each fiscal year but shall remain available until expended for need‑based financial assistance.
The State Board shall ensure that at least one counselor is available at each college to inform students about federal programs and funds available to assist community college students including, but not limited to, Pell Grants and HOPE and Lifetime Learning Tax Credits and to actively encourage students to utilize these federal programs and funds. The interest earned on the funds provided in this section may be used to support the costs of administering the Community College Grant Program."

CARRYFORWARD OF NORTH CAROLINA RESEARCH CAMPUS BIOTECHNOLOGY TRAINING FUNDS
SECTION 8.5.(a)  Funds appropriated in S.L. 2006‑66, S.L. 2007‑323, and S.L. 2008‑103 for the Rowan‑Cabarrus Community College Biotechnology Training Center and Greenhouse at the North Carolina Research Campus in Kannapolis shall not revert, but shall remain available until expended. 
SECTION 8.5.(b)  This section becomes effective June 30, 2009.

LEARN AND EARN ONLINE FUNDS
SECTION 8.6.(a)  Funds reimbursed to the Community College System for full‑time equivalent students participating in Learn and Earn Online courses during the 2008‑2009 and 2009‑2010 fiscal years shall not revert at the end of the fiscal year, but shall remain available for expenditure up to 12 months after the close of a fiscal year.
SECTION 8.6.(b)  Community college student enrollments in Learn and Earn Online shall be considered regular budget full‑time equivalent in the curriculum enrollment formula regardless of the term during which the instruction is provided. The North Carolina Community College System may only seek reimbursement from the Department of Public Instruction for technology, course fees, and textbooks required for course participation.
SECTION 8.6.(c)  The Office of State Budget and Management shall transfer sufficient funds from the State Public School Fund to the Community Colleges System Office to implement subsection (b) of this section.
SECTION 8.6.(d)  Subsection (a) of this section becomes effective June 30, 2009.

CARRYFORWARD OF COLLEGE INFORMATION SYSTEM FUNDS
SECTION 8.7.(a)  Funds appropriated in this act to the Community Colleges System Office for the College Information System shall not revert at the end of the 2008‑2009 fiscal year but shall remain available until expended.  These funds may be used to purchase periodic system upgrades.
SECTION 8.7.(b)  Notwithstanding G.S. 143C‑6‑4, the Community Colleges System Office may, subject to the approval of the Office of State Budget and Management and in consultation with the Office of Information Technology Services, use funds appropriated in this act for the College Information System to create a maximum of three positions if doing so is cost‑effective.  Personnel positions created pursuant to this subsection shall be dedicated to maintaining and administering information technology and software upgrades to the College Information System.
SECTION 8.7.(c)  Subsection (a) of this section becomes effective July 1, 2009.

MODIFY MULTICAMPUS AND OFF CAMPUS CENTER REPORT DATE
SECTION 8.8.  G.S. 115D‑5(o) reads as rewritten:
"(o)	The General Assembly finds that additional data are needed to determine the adequacy of multicampus and off‑campus center funds; therefore, multicampus colleges and colleges with off‑campus centers shall report annually, beginning September 1, 2005, to the Community Colleges System Office on all expenditures by line item of funds used to support their multicampuses and off‑campus centers. The Community Colleges System Office shall report on these expenditures to the Education Appropriation Subcommittees of the House of Representatives and the Senate, the Office of State Budget and Management, and the Fiscal Research Division by December 1 of each year."

REPEAL REPORT ON THE USE OF COMM COLL FACILITIES BY PRIVATE BUSINESSES
SECTION 8.9.  G.S. 115D‑5(q) is repealed.

MAINTENANCE OF PLANT FLEXIBILITY
SECTION 8.10.  Notwithstanding any other provision of law, a community college that received State funds for maintenance of plant pursuant to G.S. 115D‑31.2 for the 2008‑2009 fiscal year may use noninstructional State funds allocated to it through the institutional support allotment for maintenance of plant for the 2009‑2010 and 2010‑2011 fiscal years.
The amount of these funds used for the 2009‑2010 fiscal year for maintenance of plant shall not exceed the total amount of maintenance of plant funds received for the 2008‑2009 fiscal year. The amount of these funds used for the 2010‑2011 fiscal year for maintenance of plant shall not exceed fifty percent (50%) of the amount of maintenance of plant funds received for the 2008‑2009 fiscal year.

ELIMINATE SOME TUITION WAIVERS
SECTION 8.11.(a)  G.S. 115D‑5(b) reads as rewritten:
"(b)	In order to make instruction as accessible as possible to all citizens, the teaching of curricular courses and of noncurricular extension courses at convenient locations away from institution campuses as well as on campuses is authorized and shall be encouraged. A pro rata portion of the established regular tuition rate charged a full‑time student shall be charged a part‑time student taking any curriculum course. In lieu of any tuition charge, the State Board of Community Colleges shall establish a uniform registration fee, or a schedule of uniform registration fees, to be charged students enrolling in extension courses for which instruction is financed primarily from State funds; provided, however, that the State Board of Community Colleges may provide by general and uniform regulations for waiver of tuition and registration fees for persons not enrolled in elementary or secondary schools taking courses leading to a high school diploma or equivalent certificate, for training courses for volunteer firemen, local fire department personnel, volunteer rescue and lifesaving department personnel, local rescue and lifesaving department personnel, Radio Emergency Associated Citizens Team (REACT) members when the REACT team is under contract to a county as an emergency response agency, local law‑enforcement officers, patients in State alcoholic rehabilitation centers, all full‑time custodial employees of the Department of Correction, employees of the Department's Division of Community Corrections and employees of the Department of Juvenile Justice and Delinquency Prevention required to be certified under Chapter 17C of the General Statutes and the rules of the Criminal Justice and Training Standards Commission, trainees enrolled in courses conducted under the Customized Training Program, clients of sheltered workshops, clients of adult developmental activity programs, students in Health and Human Services Development Programs, juveniles of any age committed to the Department of Juvenile Justice and Delinquency Prevention by a court of competent jurisdiction, members of the North Carolina State Defense Militia as defined in G.S. 127A‑5 and as administered under Article 5 of Chapter 127A of the General Statutes, and elementary and secondary school employees enrolled in courses in first aid or cardiopulmonary resuscitation (CPR). 
(b1)	The State Board shall waive tuition and fees for courses taken by high school students at community colleges, including students in early college and middle college high school programs, in accordance with G.S. 115D‑20(4) and this section.
The State Board also shall waive tuition and fees for persons not enrolled in elementary or secondary schools taking courses leading to a high school diploma or equivalent certificate.
SECTION 8.11.(b)  G.S. 115B‑2 reads as rewritten:
"§ 115B‑2.  Tuition waiver authorized.
(a)	The constituent institutions of The University of North Carolina and shall permit the following persons to attend classes for credit or noncredit purposes without the required payment of tuition:
(1)	Legal residents of North Carolina who have attained the age of 65.
(2)	Any person who is the survivor of a law enforcement officer, firefighter, volunteer firefighter, or rescue squad worker killed as a direct result of a traumatic injury sustained in the line of duty.
(3)	The spouse of a law enforcement officer, firefighter, volunteer firefighter, or rescue squad worker who is permanently and totally disabled as a direct result of a traumatic injury sustained in the line of duty.
(4)	Any child, if the child is at least 17 years old but not yet 23 years old, whose parent is a law enforcement officer, firefighter, volunteer firefighter, or rescue squad worker who is permanently and totally disabled as a direct result of a traumatic injury sustained in the line of duty. However, a child's eligibility for a waiver of tuition under this Chapter shall not exceed: (i) 48 months, if the child is seeking a baccalaureate degree, or (ii) if the child is not seeking a baccalaureate degree, the number of months required to complete the educational program to which the child is applying.
(5)	Any child, if the child (i) is at least 17 years old but not yet 23 years old, (ii) is a ward of North Carolina or was a ward of the State at the time the child reached the age of 18, (iii) is a resident of the State; and (iv) is eligible for services under the Chaffee Education and Training Vouchers Program; but the waiver shall only be to the extent that there is any tuition still payable after receipt of other financial aid received by the student.
The community colleges as defined in G.S. 115D‑2(2) shall permit the persons listed in subdivisions (2) through (5) of this subsection to attend classes for credit or noncredit purposes without the required payment of tuition.
(b)	Persons eligible for the tuition waiver under subsection (a) of this section must meet admission and other standards considered appropriate by the educational institution. In addition, the constituent institutions of The University of North Carolina shall accept these persons only on a space available basis."
SECTION 8.11.(c)  G.S. 115B‑5(a) is repealed.

continuing education fees
SECTION 8.12.  The fees charged for community college continuing education courses shall be based on the number of hours of class time. The fees shall be:
Class Hours	Cost
1‑20		$65.00;
21‑50		$120.00;
51‑100+	$175.00.

CONSOLIDATE NURSING AND ALLIED HEALTH ALLOTMENTS
SECTION 8.13.  The State Board of Community Colleges shall consolidate the Nursing categorical allotment into the Allied Health categorical allotment before distributing funds appropriated in this act.  These funds shall be awarded to community colleges based on the full‑time equivalent (FTE) enrollment in allied health programs.

CUSTOMIZED TRAINING PROGRAM
SECTION 8.14.(a)  Funds appropriated in this act for the Customized Training Program that unexpended and unencumbered on June 30, 2010, may, subject to cash availability and the approval of the Office of State Budget and Management, be carried forward into the 2010‑2011 fiscal year for equipment purchases.  These funds shall be distributed through the Educational Equipment Reserve.
SECTION 8.14.(b)  Projects that create or retain jobs in North Carolina shall receive first priority for funds appropriated for the Customized Training Program.
SECTION 8.14.(c)  G.S. 115D‑5.1(f) is amended by adding a new subsection to read:
"(f)	The State Board shall report on an annual basis to the Joint Legislative Education Oversight Committee on:
…
(1a)	The types of services sought by the company, whether for new, expanding, or existing industry."

COMMUNITY COLLEGE FINANCIAL ASSISTANCE FUND BALANCE SHALL BE USED TO OFFER NEED‑BASED AID
SECTION 8.15.  The balance remaining in Budget Code 66801, Fund 6102 (CCS Financial Assistance) shall be used in the 2009‑2010 fiscal year to offer need‑based assistance to displaced workers and qualified students. This balance has accumulated due to financial aid refunds received from students in fiscal year 2008‑2009 and prior fiscal years.

north carolina military business center
SECTION 8.16.  The funds appropriated in this act to the Community Colleges System Office for the NC Military Business Center shall be used for the continued operations of the NC Military Business Center. The Military Business Center shall provide services to residents and businesses throughout the State. The purpose of the business center is to serve as a coordinator and facilitator for small‑ and medium‑sized businesses throughout the State seeking to win and complete federal contracts, with a focus on military‑related contracts. Activities of the business center shall include:
(1)	Training and mentoring eligible businesses on effectively marketing their products and services to military and other federal clients and contracting offices.
(2)	Assisting eligible businesses with any required accreditations and qualifications for government contracting.
(3)	Teaching eligible businesses about federal set‑aside programs and how to take advantage of these programs directly or through partnering with other eligible businesses.
(4)	Training and assisting clients with the registration, proposal development, and bidding processes related to military and other federal contracts.
(5)	Training eligible businesses on legal and regulatory compliance.
(6)	Designing and implementing mentoring programs to facilitate the development of interrelationships between eligible businesses.
(7)	Forecasting the need for and assisting eligible businesses in obtaining advanced certifications and accreditations and advanced manufacturing skills and technologies.
(8)	Working with Small Business Centers throughout the State to carry out these activities on a statewide basis.
(9)	The maintenance of an Internet‑based system to match the knowledge, skills, and abilities of active‑duty military personnel, veterans, and their families throughout the State with the needs of North Carolina businesses.
(10)	The study of community resources and existing business capacity to meet the current and future needs of the military and the development of proposals for further developing community resources and developing or recruiting new businesses to meet those needs.
(11)	The marketing of the services provided by the Military Business Center.

PART IX. UNIVERSITIES

USE OF ESCHEAT FUNDS FOR NEED‑BASED FINANCIAL AID PROGRAMS
SECTION 9.1.(a)  There is appropriated from the Escheat Fund income to the Board of Governors of The University of North Carolina the sum of one hundred twenty‑three million six hundred forty‑one thousand forty dollars ($123,641,040) for fiscal years 2009‑2010 and 2010‑2011, to the State Board of Community Colleges the sum of thirteen million nine hundred eighty‑one thousand two hundred two dollars ($13,981,202) for 2009‑2010 and 2010‑2011, and to the Department of Administration, Division of Veterans Affairs, the sum of six million five hundred twenty thousand nine hundred sixty‑four dollars ($6,520,964) for years 2009‑2010 and 2010‑2011. These funds shall be allocated by the State Educational Assistance Authority (SEAA) for need‑based student financial aid in accordance with G.S. 116B‑7. If the interest income generated from the Escheat Fund is less than the amounts referenced in this section, the difference may be taken from the Escheat Fund principal to reach the appropriations referenced in this section; however, under no circumstances shall the Escheat Fund principal be reduced below the sum required in G.S. 116B‑6(f).
SECTION 9.1.(b) The State Education Assistance Authority shall perform all of the administrative functions necessary to implement this program of financial aid. The SEAA shall conduct periodic evaluations of expenditures of the Scholarship Programs to determine if allocations are utilized to ensure access to institutions of higher learning and to meet the goals of the respective programs. SEAA may make recommendations for redistribution of funds to The University of North Carolina, Department of Administration, and the President of the Community College System regarding their respective scholarship programs, who then may authorize redistribution of unutilized funds for a particular fiscal year.
SECTION 9.1.(c) There is appropriated from the Escheat Fund to the Board of Governors of The University of North Carolina the sum of one million one hundred fifty‑seven thousand dollars ($1,157,000) for the 2010‑2011 fiscal year to be allocated to the SEAA for need‑based student financial aid to be used in accordance with G.S. 116B‑7 and this act. The SEAA shall use these funds only to provide scholarship loans (known as the Millennium Teaching Scholarship Loan Program) to North Carolina high school seniors interested in preparing to teach in the State's public schools who also enroll at any of the Historically Black Colleges and Universities that do not have Teaching Fellows. An allocation of 20 grants of six thousand five hundred dollars ($6,500) each shall be given to the three universities without any Teaching Fellows for the purposes specified in this subsection. The SEAA shall administer these funds and shall establish any additional criteria needed to award these scholarship loans, the conditions for forgiving the loans, and the collection of the loan repayments when necessary.
SECTION 9.1.(d)  The State Education Assistance Authority shall transfer to the Escheat Fund the balance of any monies appropriated by this section that are not disbursed for need‑based student financial aid; however, the State Education Assistance Authority may retain the interest on those monies that is paid to the State Education Assistance Authority at the beginning of the 2009‑2010 fiscal year and at the beginning of the 2010‑2011 fiscal year.

THE EDUCATION ACCESS REWARDS NORTH CAROLINA SCHOLARS FUND (EARN)
SECTION 9.2.(a)  Of the funds appropriated by this act from the General Fund to the State Education Assistance Authority the sum of sixty million dollars ($60,000,000) for the 2009‑2010 fiscal year and the sum of sixty million dollars ($60,000,000) for the 2010‑2011 fiscal year shall be allocated to the Education Access Rewards North Carolina Scholars Fund (EARN).
SECTION 9.2.(b)  There is appropriated from the Escheat Fund to the State  Education Assistance Authority the sum of forty million dollars ($40,000,000) for the 2009‑2010 fiscal year and the sum of forty million dollars ($40,000,000) for the 2010‑2011 fiscal year to be allocated to the Education Access Rewards North Carolina Scholars Fund (EARN).
SECTION 9.2.(c)  The funds appropriated in subsections (a) and (b) of this section shall be used only to fund Education Access Rewards North Carolina Scholars Fund (EARN) grants for academic years beginning on or after July 1, 2009.

TRANSFERS OF CASH BALANCES TO THE GENERAL FUND
SECTION 9.3.(a)  Notwithstanding any other provision of law, the unencumbered cash balance remaining in the Future Teachers Financial Aid fund on June 30, 2009, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers).
SECTION 9.3.(b)  Notwithstanding any other provision of law, the unencumbered cash balance of the General Fund appropriation remaining in the Education Access Rewards North Carolina (EARN) Scholars fund on June 30, 2009, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers).

TRANSFER FUNDING TO ROANOKE ISLaND COMMISSION FOR performing ARTS
SECTION 9.4.  The General Assembly finds that in order to expand opportunities for students involved in the performing arts, existing funding for the Summer Institute on Roanoke Island should not be allocated to one specific University of North Carolina institution, but instead be allocated directly to the Roanoke Island Commission, so that any interested University of North Carolina institution may have the opportunity to participate in summer arts enrichment and education programs. Therefore, of the funds appropriated by this act to the Board of Governors of The University of North Carolina and allocated to the Summer Institute of the North Carolina School of the Arts on Roanoke Island program for the 2009‑2011 fiscal biennium, the sum of four hundred sixty‑one thousand six hundred forty‑six dollars ($461,646) shall be transferred for the 2009‑2010 fiscal year to the Roanoke Island Commission and the sum of four hundred sixty‑one thousand six hundred forty‑six dollars ($461,646) shall be transferred for the 2010‑2011 fiscal year to the Roanoke Island Commission. The Roanoke Island Commission may use these funds to contract with any of the constituent institutions of The University of North Carolina System to provide music and drama students an education in a professional performing environment while providing a public service to the State.

UNC CENTER FOR ALCOHOL STUDIES
SECTION 9.5.(a)  G.S. 20‑7(i1) reads as rewritten:
"(i1)	Restoration Fee. – Any person whose drivers license has been revoked pursuant to the provisions of this Chapter, other than G.S. 20‑17(a)(2) shall pay a restoration fee of fifty dollars ($50.00). A person whose drivers license has been revoked under G.S. 20‑17(a)(2) shall pay a restoration fee of seventy‑five dollars ($75.00). The fee shall be paid to the Division prior to the issuance to such person of a new drivers license or the restoration of the drivers license. The restoration fee shall be paid to the Division in addition to any and all fees which may be provided by law. This restoration fee shall not be required from any licensee whose license was revoked or voluntarily surrendered for medical or health reasons whether or not a medical evaluation was conducted pursuant to this Chapter. The fifty‑dollar ($50.00) fee, and the first fifty dollars ($50.00) of the seventy‑five‑dollar ($75.00) fee, shall be deposited in the Highway Fund. The remaining twenty‑five dollars ($25.00) of the seventy‑five‑dollar ($75.00) fee shall be deposited in the General Fund of the State. The Office of State Budget and Management shall annually report to the General Assembly the amount of fees deposited in the General Fund under this subsection.
It is the intent of the General Assembly to annually appropriate from the funds deposited in the General Fund under this subsection the sum of five hundred thousand dollars ($500,000) to the Board of Governors of The University of North Carolina to be used for the operating expenses of the Bowles Center for Alcohol Studies at the University of North Carolina at Chapel Hill."
SECTION 9.5.(b)  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina the sum of five hundred thousand dollars ($500,000) for the 2009‑2010 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2010‑2011 fiscal year shall be used for the operating expenses of the Bowles Center for Alcohol Studies at the University of North Carolina at Chapel Hill.

REPEAL FULL TUITION GRANT FOR GRADUATES OF NORTH CAROLINA SCHOOL OF SCIENCE AND MATHematics WHO ATTEND A STATE UNIVERSITY
SECTION 9.6.(a)  G.S. 116‑238.1(a) reads as rewritten:
"(a)	There is granted to each State resident who graduates from the North Carolina School of Science and Mathematics and who enrolls as a full‑time student in a constituent institution of The University of North Carolina a sum to be determined by the General Assembly as a tuition grant. The tuition grant shall be for four consecutive academic years and shall cover the tuition cost at the constituent institution in which the student is enrolled. The tuition grant shall be distributed to the student as provided by this section. The grant provided by this section is only available to a student enrolled at the North Carolina School of Science and Mathematics for the 2007‑2008 academic year or earlier."
SECTION 9.6.(b)  Effective July 1, 2013, G.S. 116‑238.1, as amended by this section, is repealed.

CLOSING THE ACHIEVEMENT GAP/GRANTS
SECTION 9.7.(a)  Funds appropriated by this act for the 2009‑2010 fiscal year and for the 2010‑2011 fiscal year to the Board of Governors of The University of North Carolina and allocated to the North Carolina Historically Minority Colleges and Universities Consortium (HMCUC) for "Closing the Achievement Gap," shall be used for the sole purpose of supporting the operations and program activities of the HMCUC.  These funds shall be used by the HMCUC members for the public purposes of developing and implementing after‑school programs designed to close the academic achievement gap and improving the academic performance of youth at risk of academic failure and school dropout.  The HMCUC may also allocate funds to a community‑based and faith‑based organization that is located in close proximity to the HMCUC member institution for the public purposes stated in this section.
SECTION 9.7.(b)  The North Carolina Historically Minority Colleges and Universities Consortium shall report to the Joint Legislative Education Oversight Committee and to the Fiscal Research Division by May 1 of each year, regarding the number of programs funded by the Consortium to Close the Achievement Gap, the location and program structure of the programs, the amount allocated to the program, and purposes for which the funds were awarded, the cost of administering and managing the funds, and any other information requested by the Committee or Fiscal Research Division.  The grants awarded pursuant to this section shall also include as a term of the grant that the recipient of the grant report to the Joint Legislative Education Oversight Committee and to the Fiscal Research Division regarding the amount of the grant received, the program and purposes for which the grant was requested, the methodology used to implement the grant program and purposes, the results of the program funded by the grant, and any other information requested by the Joint Legislative Education Oversight Committee and the Fiscal Research Division.

Amend LEGISLATIVE Tuition Grant For Part‑time Students
SECTION 9.8.(a)  G.S. 116‑21.2 reads as rewritten:
"§ 116‑21.2.  Legislative tuition grants to aid students and licensure students attending private institutions of higher education.
(a)	Grants for Students. – In addition to any funds appropriated pursuant to G.S. 116‑19 and in addition to all other financial assistance made available to institutions, or to persons attending these institutions, there is granted to each North Carolina undergraduate student attending an approved institution as defined in G.S. 116‑22, a sum, to be determined by the General Assembly for each academic year which shall be distributed to the undergraduate student as provided by this subsection. A full‑time North Carolina undergraduate student shall be awarded the full amount of the tuition grant provided by this section. A part‑time North Carolina undergraduate student who is enrolled to take at least nine hours of academic credit per semester shall be awarded a tuition grant in an amount that is calculated on a pro rata basis.
(a1)	Grants for Licensure Students. – The legislative tuition grant provided by this section shall also be granted to each full‑time licensure student who is enrolled in a program intended to result in a license in teaching or nursing at an approved institution. The legislative tuition grant provided by this section shall be awarded on a pro rata basis to any part‑time licensure student who is enrolled to take at least nine hours of undergraduate academic credit per semester in a program intended to result in a license in teaching or nursing at an approved institution. The legislative tuition grant and prorated legislative tuition grant authorized under this subsection shall be paid for undergraduate courses only. If a course is required for licensure, but is designated as both an undergraduate and graduate course, for purposes of this subsection, the course shall be considered an undergraduate course.
(b)	Administration of Grants. – The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section. The State Education Assistance Authority shall not approve any grant until it receives proper certification from an approved institution that the student or licensure student applying for the grant is eligible. Upon receipt of the certification, the State Education Assistance Authority shall remit at the times as it prescribes the grant to the approved institution on behalf, and to the credit, of the student or licensure student.
(c)	Student or Licensure Student Change of Status; Audits. – In the event a full‑time student on whose behalf a grant has been paid in accordance with subsection (a) of this section or a full‑time licensure student on whose behalf a grant has been paid in accordance with subsection (a1) of this section is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority. If a part‑time student on whose behalf a prorated grant has been paid in accordance with subsection (a) of this section or a part‑time licensure student on whose behalf a prorated grant has been paid in accordance with subsection (a1) of this section is not enrolled and carrying a minimum academic load of nine credit hours per semester in the undergraduate class as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority. If the matriculated status of a full‑time student or a full‑time licensure student changes to a matriculated status of part‑time student or part‑time licensure student by the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund only the difference between the amount of the full‑time grant awarded and the amount of the part‑time grant that is awarded pursuant to this section. Each approved institution shall be subject to examination by the State Auditor for the purpose of determining whether the institution has properly certified eligibility and enrollment of students and licensure students and credited grants paid on behalf of them.
(d)	Shortfall. – In the event there are not sufficient funds to provide each eligible student or licensure student with a full or prorated grant as provided by subsection (a) of this section or a full or a prorated grant as provided by subsection (a1) of this section:
(1)	The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a), (a1), and (b) of this section; and
(2)	Each eligible student and licensure student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.
(e)	Reversions. – Any remaining funds shall revert to the General Fund."
SECTION 9.8.(b)  This section applies to academic semesters beginning on or after July 1, 2009.

GRADUATE NURSE SCHOLARSHIP PROGRAM FOR FACULTY PRODUCTION/Revert Part OF FUND BALANCE
SECTION 9.9.  Effective July 1, 2009, the sum of one million dollars ($1,000,000) shall transfer from the fund balance of the Graduate Nurse Scholarship Program for Faculty Production (also known as Nurse Educators of Tomorrow Scholarship Loan) to the General Fund.

INCREASE UNC UNDERGRADUATE TUITION SURCHARGE
SECTION 9.10.(a)  Subsection (b) of Section 89 of Chapter 321 of the 1993 Session Laws as amended by Section 17.10 of  Chapter 769 of the 1993 Session Laws reads as rewritten:
"(b)	The Board of Governors of The University of North Carolina shall ensure that procedures are established that are necessary to impose a fifty percent (50%) tuition surcharge on students who take more than 140 degree credit hours to complete a baccalaureate degree in a four‑year program or more than one hundred ten percent (110%) of the credit hours necessary to complete a baccalaureate degree in any program officially designated by the Board of Governors as a five‑year program. The calculation of these credit hours taken at a constituent institution or accepted for transfer shall exclude hours earned through the College Board's Advanced Placement or CLEP examinations, through institutional advanced placement or course validation, or through summer term or extension programs. No surcharge shall be imposed on any student who exceeds the degree credit hour limits within the equivalent of four academic years of regular term enrollment, or within five academic years of regular term enrollment in a degree program officially designated by the Board of Governors as a five‑year program. "
SECTION 9.10.(b)  The Board of Governors shall report to the Joint Legislative Education Oversight Committee by September 1, 2009, regarding the implementation of the increased surcharge.
SECTION 9.10.(c)  This section applies to all students who will be sophomores or freshman in the 2009‑2010 fall academic semester and to all students who are new undergraduates on or after the effective date of this act.

ENROLLMENT GROWTH REPORTING
SECTION 9.11.  G.S. 116‑30.7 reads as rewritten:
"§ 116‑30.7.  Biennial projection of enrollment growth for The University of North Carolina.
By October 15 of each even‑numbered year, the General Administration of The University of North Carolina shall provide to the Joint Education Legislative Oversight Committee and to the Office of State Budget and Management a projection of the total student enrollment in The University of North Carolina that is anticipated for the next biennium. The enrollment projection shall be divided into the following categories and shall include the projected growth for each year of the biennium in each category at each of the constituent institutions: undergraduate students, graduate students (students earning master's and doctoral degrees), first professional students, and any other categories deemed appropriate by General Administration. The projection shall also distinguish between on‑campus and distance education students. The projections shall be considered by the Director of the Budget when determining the amount the Director proposes to fund as the continuation requirement for the enrollment increase in the university system pursuant to G.S. 143C‑3‑5(b)."

UNC Board of Governors Study and Develop Plan to Transfer UNC Center for Public Television To UNC School of the Arts
SECTION 9.12.  The Board of Governors of The University of North Carolina shall study the feasibility of transferring the University of North Carolina Center for Public Television to the University of North Carolina School of the Arts and shall develop a plan to implement such a transfer.  The Board of Governors shall report its findings and recommendations along with the plan by March 1, 2010, to the Joint Education Legislative Oversight Committee and to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Education.

North Carolina Center for Advancement of Teaching (NCCAT)/Property settlement if NCCAT transferred from UNC system or ceases to exist
SECTION 9.13.(a)  If the North Carolina Center for the Advancement of Teaching (NCCAT) is transferred from The University of North Carolina to another State government agency or department, then all of the following shall occur:
(1)	The University of North Carolina and Western Carolina University shall both be released and relieved:  (i) of any and all responsibilities, duties, and powers related to the administration or management functions of NCCAT, and (ii) of any and all responsibilities and duties arising from any fiduciary relationship existing between Western Carolina University and NCCAT.
(2)	Neither The University of North Carolina nor Western Carolina University shall be the fiscal agent for NCCAT.
(3)	Western Carolina University shall be granted a permanent easement 40 feet in width over and upon the NCCAT campus for the purpose of providing Western Carolina University and its assignees, agents, joint venturers, lessees, partners, and invitees access to that portion of Western Carolina University's campus currently undeveloped and adjacent to NCCAT. Western Carolina University shall use existing roads across the NCCAT campus, to the extent possible. If any road is required, it shall be built at Western Carolina University's expense.
SECTION 9.13.(b)  If the North Carolina Center for Advancement of Teaching ceases to exist as a State agency or entity, or if NCCAT closes its offices and operation in Jackson County, North Carolina, then the following real property in Jackson County shall be transferred to Western Carolina University and become part of Western Carolina University's campus to be used for any purpose, at Western Carolina University's discretion, appropriate to its mission:  all land in Jackson County that (i) was used or under the control of NCCAT at the time it ceased to exist or closed its operations and (ii) was transferred to NCCAT from The University of North Carolina, including all improvements located thereon.

Coastal Demonstration wind turbines
SECTION 9.14.(a)  The University of North Carolina shall continue the coastal sounds wind energy study set forth in Section 9.12 of S.L. 2008‑107 and, pursuant to Section 9.12, shall apply for federal grants to continue the study. Funds appropriated by United States Public Law 111‑005, the American Recovery and Reinvestment Act of 2009 (the Federal Act), for renewable energy and allocated to the State of North Carolina shall be used for the development, design, and construction of at least three demonstration wind turbines and necessary support facilities in the sounds or off the coast of North Carolina, and the Director of the Budget shall ensure any available federal funds are secured. The actual placement of the wind turbines and necessary support facilities shall be determined by the coastal sounds wind energy study. The Director of the Budget shall ensure that any available federal funding is secured by the State to construct the wind turbines. The University, in collaboration with the Director of the Budget, shall enter into a contract with a third party by October 1, 2009, to construct, establish, and operate the demonstration turbines and necessary support facilities on or before April 1, 2010.
SECTION 9.14.(b)  With respect to the demonstration wind turbines and necessary support facilities authorized by subsection (a) of this section, the facilities authorized under this act shall be constructed in accordance with the provisions of general law applicable to the construction of State facilities. The Department of Environment and Natural Resources is directed to expedite permitting of the project to the extent allowed by law.

PART X. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Child Care Subsidy Rates
SECTION 10.1.(a)  The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be seventy‑five percent (75%) of the State median income, adjusted for family size.
SECTION 10.1.(b)  Fees for families who are required to share in the cost of care shall be established based on a percent of gross family income and adjusted for family size. Fees shall be determined as follows:
FAMILY SIZE	PERCENT OF GROSS FAMILY INCOME
1‑3	10%
4‑5	9%
6 or more	8%.
SECTION 10.1.(c)  Payments for the purchase of child care services for low‑income children shall be in accordance with the following requirements:
(1)	Religious‑sponsored child care facilities operating pursuant to G.S. 110‑106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the one‑star county market rate or the rate they charge privately paying parents, whichever is lower.
(2)	Licensed child care centers and homes with two or more stars shall receive the market rate for that rated license level for that age group or the rate they charge privately paying parents, whichever is lower.
(3)	Nonlicensed homes shall receive fifty percent (50%) of the county market rate or the rate they charge privately paying parents, whichever is lower.
(4)	Maximum payment rates shall also be calculated periodically by the Division of Child Development for transportation to and from child care provided by the child care provider, individual transporter, or transportation agency, and for fees charged by providers to parents. These payment rates shall be based upon information collected by market rate surveys.
SECTION 10.1.(d)  Provisions of payment rates for child care providers in counties that do not have at least 50 children in each age group for center‑based and home‑based care are as follows:
(1)	Except as applicable in subdivision (2) of this subsection, payment rates shall be set at the statewide or regional market rate for licensed child care centers and homes.
(2)	If it can be demonstrated that the application of the statewide or regional market rate to a county with fewer than 50 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low‑income children, then the county market rate may be applied.
SECTION 10.1.(e)  A market rate shall be calculated for child care centers and homes at each rated license level for each county and for each age group or age category of enrollees and shall be representative of fees charged to parents for each age group of enrollees within the county. The Division of Child Development shall also calculate a statewide rate and regional market rates for each rated license level for each age category.
SECTION 10.1.(f)  Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes and facilities operated pursuant to G.S. 110‑106 may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families. No separate licensing requirements shall be used to select facilities to participate. In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations. Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.
County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.
SECTION 10.1.(g)  Payment for subsidized child care services provided with Work First Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.
SECTION 10.1.(h)  Noncitizen families who reside in this State legally shall be eligible for child care subsidies if all other conditions of eligibility are met. If all other conditions of eligibility are met, noncitizen families who reside in this State illegally shall be eligible for child care subsidies only if at least one of the following conditions is met:
(1)	The child for whom a child care subsidy is sought is receiving child protective services or foster care services.
(2)	The child for whom a child care subsidy is sought is developmentally delayed or at risk of being developmentally delayed.
(3)	The child for whom a child care subsidy is sought is a citizen of the United States.

Child Care Allocation Formula
SECTION 10.2.(a)  The Department of Health and Human Services shall allocate child care subsidy voucher funds to pay the costs of necessary child care for minor children of needy families. The mandatory thirty percent (30%) Smart Start subsidy allocation under G.S. 143B‑168.15(g) shall constitute the base amount for each county's child care subsidy allocation. The Department of Health and Human Services shall use the following method when allocating federal and State child care funds, not including the aggregate mandatory thirty percent (30%) Smart Start subsidy allocation:
(1)	Funds shall be allocated to a county based upon the projected cost of serving children under age 11 in families with all parents working who earn less than seventy‑five percent (75%) of the State median income.
(2)	No county's allocation shall be less than ninety percent (90%) of its State fiscal year 2001‑2002 initial child care subsidy allocation.
SECTION 10.2.(b)  The Department of Health and Human Services may reallocate unused child care subsidy voucher funds in order to meet the child care needs of low‑income families. Any reallocation of funds shall be based upon the expenditures of all child care subsidy voucher funding, including Smart Start funds, within a county.
SECTION 10.2.(c)  Notwithstanding subsection (a) of this section, the Department of Health and Human Services shall allocate up to twenty million dollars ($20,000,000) in federal block grant funds and State funds appropriated for fiscal years 2009‑2010 and 2010‑2011 for child care services. These funds shall be allocated to prevent termination of child care services. Funds appropriated for specific purposes, including market rate adjustments, may also be allocated by the Department separately from the allocation formula described in subsection (a) of this section.

Child Care Funds Matching Requirement
SECTION 10.3.  No local matching funds may be required by the Department of Health and Human Services as a condition of any locality's receiving its initial allocation of child care funds appropriated by this act unless federal law requires a match. If the Department reallocates additional funds above twenty‑five thousand dollars ($25,000) to local purchasing agencies beyond their initial allocation, local purchasing agencies must provide a twenty percent (20%) local match to receive the reallocated funds. Matching requirements shall not apply when funds are allocated because of a disaster as defined in G.S. 166A‑4(1).

Facilitate and Expedite Use of Child Care Subsidy Funds
SECTION 10.4.  The Division of Child Development of the Department of Health and Human Services shall adopt temporary policies that facilitate and expedite the prudent expenditure of child care subsidy funds.  These policies will address the following:
(1)	Permitting the local purchasing agencies to issue time‑limited vouchers to assist counties in managing onetime, nonrecurring subsidy funding.
(2)	Extending the current 30/60 day job search policy to six months when a recipient experiences a loss of employment.
(3)	Providing an upfront job search period of six months for former recipients who have lost employment since October 1, 2008.
(4)	Providing a job search period of six months for recipients that complete school and are entering the job market.
(5)	Notwithstanding any other provision of law, extending the 24‑month education time limit for an additional 12 months for a child care recipient who has lost a job since October 1, 2008, or otherwise needs additional training to enhance his or her marketable skills for job placement due to the economic downturn and who has depleted his or her 24‑month allowable education time.
(6)	Lowering the number of hours a parent must be working in order to be eligible for subsidy to assist parents who are continuing to work but at reduced hours.

Child Care Revolving Loan
SECTION 10.5.  Notwithstanding any law to the contrary, funds budgeted for the Child Care Revolving Loan Fund may be transferred to and invested by the financial institution contracted to operate the Fund. The principal and any income to the Fund may be used to make loans, reduce loan interest to borrowers, serve as collateral for borrowers, pay the contractor's cost of operating the Fund, or pay the Department's cost of administering the program.

Child Care Market Rate Adjustments
SECTION 10.6.  Not later than October 1, 2009, the Department shall implement an adjustment to child care market rates, by region, based upon the 2009 Child Care Market Rate Study.

Early Childhood Education and Development Initiatives Enhancements
SECTION 10.7.(a)  Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships. For purposes of this subsection, administrative costs shall include costs associated with partnership oversight, business and financial management, general accounting, human resources, budgeting, purchasing, contracting, and information systems management.
SECTION 10.7.(b)  The North Carolina Partnership for Children, Inc., and all local partnerships shall use competitive bidding practices in contracting for goods and services on contract amounts as follows:
(1)	For amounts of five thousand dollars ($5,000) or less, the procedures specified by a written policy to be developed by the Board of Directors of the North Carolina Partnership for Children, Inc.
(2)	For amounts greater than five thousand dollars ($5,000), but less than fifteen thousand dollars ($15,000), three written quotes.
(3)	For amounts of fifteen thousand dollars ($15,000) or more, but less than forty thousand dollars ($40,000), a request for proposal process.
(4)	For amounts of forty thousand dollars ($40,000) or more, a request for proposal process and advertising in a major newspaper.
SECTION 10.7.(c)  The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than fifty percent (50%) of the total amount budgeted for the program in each fiscal year of the biennium as follows:  contributions of cash equal to at least fifteen percent (15%) and in‑kind donated resources equal to no more than five percent (5%) for a total match requirement of twenty percent (20%) for each fiscal year. The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of the required match for a fiscal year in order to meet the match requirement of the succeeding fiscal year. Only in‑kind contributions that are quantifiable shall be applied to the in‑kind match requirement. Volunteer services may be treated as an in‑kind contribution for the purpose of the match requirement of this subsection. Volunteer services that qualify as professional services shall be valued at the fair market value of those services. All other volunteer service hours shall be valued at the statewide average wage rate as calculated from data compiled by the Employment Security Commission in the Employment and Wages in North Carolina Annual Report for the most recent period for which data are available. Expenses, including both those paid by cash and in‑kind contributions, incurred by other participating non‑State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships, also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:
(1)	Be verifiable from the contractor's records.
(2)	If in‑kind, other than volunteer services, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations.
(3)	Not include expenses funded by State funds.
(4)	Be supplemental to and not supplant preexisting resources for related program activities.
(5)	Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives.
(6)	Be otherwise allowable under federal or State law.
(7)	Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership.
(8)	Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.
Failure to obtain a twenty percent (20%) match by June 30 of each fiscal year shall result in a dollar‑for‑dollar reduction in the appropriation for the Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in‑kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly.
SECTION 10.7.(d)  The Department of Health and Human Services shall continue to implement the performance‑based evaluation system.
SECTION 10.7.(e)  The Department of Health and Human Services and the North Carolina Partnership for Children, Inc., shall ensure that the allocation of funds for Early Childhood Education and Development Initiatives for State fiscal years 2009‑2010 and 2010‑2011 shall be administered and distributed in the following manner:
(1)	Capital expenditures are prohibited for fiscal years 2009‑2010 and 2010‑2011. For the purposes of this section, "capital expenditures" means expenditures for capital improvements as defined in G.S. 143C‑1‑1(d)(5).
(2)	Expenditures of State funds for advertising and promotional activities are prohibited for fiscal years 2009‑2010 and 2010‑2011.
SECTION 10.7.(f)  A county may use the county's allocation of State and federal child care funds to subsidize child care according to the county's Early Childhood Education and Development Initiatives Plan as approved by the North Carolina Partnership for Children, Inc. The use of federal funds shall be consistent with the appropriate federal regulations. Child care providers shall, at a minimum, comply with the applicable requirements for State licensure pursuant to Article 7 of Chapter 110 of the General Statutes.
SECTION 10.7.(g)  For fiscal years 2009‑2010 and 2010‑2011, the local partnerships shall spend an amount for child care subsidies that provides at least fifty‑two million dollars ($52,000,000) for the TANF maintenance of effort requirement and the Child Care Development Fund and Block Grant match requirement. The North Carolina Partnership for Children, Inc., shall not spend less on child care subsidies than the spending level for fiscal year 2008‑2009.

Continue More At Four Program for 2009‑2010 Fiscal Year
SECTION 10.8.(a)  The Department of Public Instruction and Division of Child Development of the Department of Health and Human Services shall continue the implementation of the More at Four prekindergarten program for at‑risk four‑year‑olds who are at risk of failure in kindergarten through the 2009‑2010 fiscal year. The program is available statewide to all counties that choose to participate, including underserved areas. The goal of the program is to provide quality prekindergarten services to a greater number of at‑risk children in order to enhance kindergarten readiness for these children. The program shall be consistent with standards and assessments established jointly by the Department of Health and Human Services and the Department of Public Instruction.
SECTION 10.8.(b)  The Office of School Readiness of the Department of Instruction shall reduce the reimbursement rates per slot statewide. The program funding is reduced by forty million dollars ($40,000,000) recurring beginning for the 2009‑2010 fiscal year. The Office of School Readiness, in conjunction with Division of Child Development, shall plan to minimize the number of slots eliminated by reducing the amount of funds paid per slot statewide.
SECTION 10.8.(c)  A child whose parent is deployed in the military shall be eligible for participation in the More at Four program.

More At Four Program
SECTION 10.9.(a)  The More at Four program is transferred to the Department of Health and Human Services, effective July 1, 2009.
SECTION 10.9.(b)  The star rating system currently in place for licensure shall have an additional Plus (+) designation identifying those programs offering a high quality four‑year‑old classroom. The Plus program shall be administered within the Regulatory Services Section of the Division of Child Development as a high quality four‑year‑old classroom operated within private child care centers and public schools and will be designated as a Plus program.
SECTION 10.9.(c)  The Plus program shall be no less stringent than current standards of the More at Four program in place for the 2008‑2009 fiscal year and shall ensure lower ratios of teachers to students and require higher teacher qualifications. The Plus program shall offer a curriculum approved by the Division of Child Development.
SECTION 10.9.(d)  Eligibility requirements for the Plus program shall be in accordance with current child care subsidy eligibility requirements as established by the General Assembly. The new reimbursement rate plan shall be in accordance with the child care subsidy program implemented for the 2010‑2011 fiscal year.
SECTION 10.9.(e)  Public school systems shall be allowed reimbursement through the Division of Child Development for students qualifying for subsidy for its Plus programs. Beginning in school year 2010‑2011, the screening process for children applying for subsidy for a Plus program shall occur through the regular subsidy application process in collaboration with local partnerships of the North Carolina Partnership for Children, Inc., county departments of social services, and local school administrative units. Counties are encouraged to develop a single application process for child care subsidy accepted in many locations throughout the county.
SECTION 10.9.(f)  Parent payments for the Plus program shall be in accordance with child care subsidy rules adopted by the Division of Child Development for the 2010‑2011 fiscal year.
SECTION 10.9.(g)  On or before December 1, 2009, the Division of Child Development shall report on the star‑rated system and the incorporation of the Plus program.  The report will include an analysis of the star‑rated system and identify the standards for each and the differences between the various levels.

Administrative Allowance for County Departments of Social Services
SECTION 10.10.  The Division of Child Development of the Department of Health and Human Services shall increase the allowance that county departments of social services may use for administrative costs from four percent (4%) to five percent (5%) of the county's total child care subsidy funds allocated in the Child Care Development Fund Block Grant plan. The increase shall be effective for the 2009‑2010 fiscal year.

Increase Child Care Licensing Fees for Child Care Facilities
SECTION 10.11.  G.S. 110‑90(1a) reads as rewritten:
"§ 110‑90.  Powers and duties of Secretary of Health and Human Services.
The Secretary shall have the following powers and duties under the policies and rules of the Commission:
…
(1a)	To establish a fee for the licensing of child care facilities. The fee does not apply to a religious‑sponsored child care facility operated pursuant to a letter of compliance. The amount of the fee may not exceed the amount listed in this subdivision.
Capacity of Facility	Maximum Fee
12 or fewer children	$52.00
13‑50 children	$187.00
51‑100 children	$375.00
101 or more children	$600.00
…."

MENTAL HEALTH CHANGES
SECTION 10.12.(a)  For the purpose of mitigating cash flow problems that many non‑single‑stream local management entities (LMEs) experience at the beginning of each fiscal year, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall adjust the timing and method by which allocations of service dollars are distributed to each non‑single‑stream LME.  To this end, the allocations shall be adjusted such that at the beginning of the fiscal year the Department shall distribute not less than one‑twelfth of the LME's continuation allocation and subtract the amount of the adjusted distribution from the LME's total reimbursements for the fiscal year.
SECTION 10.12.(b)  Onetime funds appropriated for the Dorothea Dix Hospital overflow unit shall be used to support the temporary operation of the hospital unit on the Dorothea Dix campus.
SECTION 10.12.(c)  The Department shall evaluate the need to continue the temporary operation of the hospital unit for one additional year and provide a recommendation to the Governor no later than February 15, 2010.  Notwithstanding any other provision of law to the contrary, the Office of State Budget and Management shall establish the positions for the hospital unit on the Dorothea Dix campus as time‑limited positions.
SECTION 10.12.(d)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of twenty million one hundred twenty‑one thousand six hundred forty‑four dollars ($20,121,644) for the 2009‑2010 fiscal year and the sum of twenty million one hundred twenty‑one thousand six hundred forty‑four dollars ($20,121,644) for the 2010‑2011 fiscal year shall be allocated for the purchase of local inpatient psychiatric beds or bed days.  These beds or bed days shall be distributed across the State according to need as determined by the Department. The Department shall enter into contracts with the LMEs and community hospitals for the management of these beds or bed days. Local inpatient psychiatric beds or bed days shall be managed and controlled by the LME, including the determination of which local or State hospital the individual should be admitted to pursuant to an involuntary commitment order. Funds shall not be allocated to LMEs but shall be held in a statewide reserve at the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to pay for services authorized by the LMEs and billed by the hospitals through the LMEs.  LMEs shall remit claims for payment to the Division within 15 working days of receipt of a clean claim from the hospital and shall pay the hospital within 30 working days of receipt of payment from the Division.  If the Department determines (i) that an LME is not effectively managing the beds or bed days for which it has responsibility, as evidenced by beds or bed days in the local hospital not being utilized while demand for services at the State psychiatric hospitals has not reduced, or (ii) the LME has failed to comply with the prompt payment provisions of this subsection, the Department may contract with another LME to manage the beds or bed days, or, notwithstanding any other provision of law to the contrary, may pay the hospital directly.  The Department shall develop reporting requirements for LMEs regarding the utilization of the beds or bed days.  Funds appropriated in this section for the purchase of local inpatient psychiatric beds or bed days shall be used to purchase additional beds or bed days not currently funded by or through LMEs and shall not be used to supplant other funds available or otherwise appropriated for the purchase of psychiatric inpatient services under contract with community hospitals, including beds or bed days being purchased through Hospital Utilization Pilot funds appropriated in S.L. 2007‑323.  Not later than March 1, 2010, the Department shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division on a uniform system for beds or bed days purchased (i) with local funds, (ii) from existing State appropriations, (iii) under the Hospital Utilization Pilot, and (iv) purchased using funds appropriated under this subsection.
SECTION 10.12.(e)  The Secretary of the Department of Health and Human Services shall not take any action prior to January 1, 2010, that would result in the merger or consolidation of LMEs operating on January 1, 2008, or that would establish consortia or regional arrangements for the same purpose, except that LMEs that do not meet the catchment area requirements of G.S. 122C‑115 as of January 1, 2010, may initiate, continue, or implement the LMEs' merger or consolidation plans to overcome noncompliance with G.S. 122C‑115.  This subsection does not prohibit LME's from voluntarily merging if they are contiguous or consolidating administrative functions.
SECTION 10.12.(f)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for mobile crisis teams, the sum of five million seven hundred fifty‑five thousand dollars ($5,755,000) shall be distributed to LMEs to support 30 mobile crisis teams.  The new mobile crisis units shall be distributed over the State according to need as determined by the Department.

REENACT 2007 SPECIAL PROVISION ON COLLABORation ON SCHOOL‑BASED CHILD AND FAMILY TEAM INITIATIVE
SECTION 10.13.  Section 10.9 of S.L. 2007‑323 is reenacted for the 2009‑2011 fiscal biennium.

CLOSURE OF WRIGHT AND WHITAKER SCHOOLS
SECTION 10.14.  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall close the Wright School and the Whitaker School, effective December 31, 2009.
The Division shall prepare a transition plan for each student currently attending these schools, which shall include assisting in the location of community services for the student, working with the public school system in preparing or updating the student's individualized education plan, and working with the local management entity (LME) to ensure that the needs of the student are met. The LME shall conduct a six‑month follow‑up on each of these students.
The Division shall report on student transitions, student participation in any community or residential programs, and student progress six months after the school closures. The Division shall submit the report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division not later than August 30, 2010.
The Department shall ensure that  all possible measures are taken to provide a State job for employees of these schools.

SUBSTANCE ABUSE TASK FORCE RECOMMENDATIONS/availability of substance abuse treatment
SECTION 10.15.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of one million dollars ($1,000,000) shall be used to implement one or more priority recommendations of the North Carolina Institute of Medicine (NCIOM) Substance Abuse Task Force, which include:
(1)	Development of a comprehensive substance abuse prevention plan for use at the State and local levels.
(2)	Providing funding for the establishment of six pilot projects to implement county or multicounty comprehensive prevention plans.
(3)	Supporting efforts to reduce high‑risk drinking on college campuses.
(4)	Development of a pilot program to provide chronic disease management services to substance abuse clients and former clients. The purpose of the pilot is to decrease the number of short‑term hospital admissions and to provide discharge planning and follow‑up to reduce substance abuse client recidivism.
(5)	Educating and encouraging health care professionals to use the screening, brief intervention, and referral to treatment (SBIRT) model promoted by the federal government.SECTION 10.15.(b)  Consistent with G.S. 122C‑2, the General Assembly strongly encourages Local Management Entities (LMEs) to use a portion of the funds appropriated for substance abuse treatment services to support prevention and education activities.
SECTION 10.15.(c)  An LME may use up to one percent (1%) of funds allocated to it for substance abuse treatment services to provide nominal incentives for consumers who achieve specified treatment benchmarks, in accordance with the federal substance abuse and mental health services administration best practice model entitled Contingency Management.
SECTION 10.15.(d)  In providing treatment and services for adult offenders and increasing the number of Treatment Accountability for Safer Communities (TASC) case managers, local management entities shall consult with TASC to improve offender access to substance abuse treatment and match evidence‑based interventions to individual needs at each stage of substance abuse treatment. Special emphasis should be placed on intermediate punishment offenders, community punishment offenders at risk for revocation, and Department of Correction (DOC) releasees who have completed substance abuse treatment while in custody.
In addition to the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, to provide substance abuse services for adult offenders and to increase the number of TASC case managers, the Department shall allocate up to three hundred thousand dollars ($300,000) to TASC. These funds shall be allocated to TASC before funds are allocated to LMEs for mental health services, substance abuse services, and crisis services.
SECTION 10.15.(e)  In providing drug treatment court services, LMEs shall consult with the local drug treatment court team and shall select a treatment provider that meets all provider qualification requirements and the drug treatment court's needs. A single treatment provider may be chosen for non‑Medicaid‑eligible participants only. A single provider may be chosen who can work with all of the non‑Medicaid‑eligible drug treatment court participants in a single group. During the 52‑week drug treatment court program, participants shall receive an array of treatment and aftercare services that meets the participant's level of need, including step‑down services that support continued recovery. 
SECTION 10.15.(f)  Not later than October 1, 2009, the Department of Health and Human Services shall complete the development of a Uniform Screening Tool (UST) to determine the mental health of any individual admitted to any long‑term care facility.  The Department shall report on the status of UST development on or before January 1, 2010, to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services.

TOTAL QUALITY MANAGEMENT
SECTION 10.16.  The Secretary of the Department of Health and Human Services shall implement a Total Quality Management Program in hospitals and other State facilities for the purpose of providing a high level of customer service by well‑trained staff throughout the organization.  The focus of this management approach shall be on meeting customer needs by providing high‑quality services.
The Department shall involve staff at all levels of the organization by soliciting suggestions and input into decision making by managers. The Department shall create staff committees composed of a representative distribution of rank and file employees, to evaluate policy changes and identify training opportunities and other necessary improvements.
The Department shall submit a report on the status of the Total Quality Management Program, including any activities associated with its implementation within State facilities, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division not later than December 1, 2009.

BUDGET REDUCTIONS FOR division of MH/DD/SA
SECTION 10.17.  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall reduce its budget in the following areas for the 2009‑2010 and 2010‑2011 fiscal years:
Facility	Fund Code	FY 2009‑2010	FY 2010‑2011
Broughton Hospital	4541	$	(34,220)
Broughton Hospital	4541			$	(136,550)
Broughton Hospital	4549	$	(7,000)
Longleaf Neuro‑Medical	4541	$	(64,000)
Longleaf Neuro‑Medical	4541	$	(24,000)
Longleaf Neuro‑Medical	4541			$	(72,500)
Black Mountain Neuro‑Medical	4541			$	(25,796)
Caswell Developmental Center	4541	$	(210,632)
Caswell Developmental Center	4541			$	(320,500)
Caswell Developmental Center	4549	$	(16,500)
Murdoch Center	3210	$	(14,447)	$	(14,447)
Murdoch Center	4541	$	(200,750)
Murdoch Center	4541			$	(93,200)
O‑Berry Neuro‑Medical	4521	$	(60,702)	$	(21,102)
O‑Berry Neuro‑Medical	4541	$	(22,103)
Iverson Riddle Center	3110	$	(12,153)	$	(12,153)
Walter Jones ADATC	3110	$	(5,852)	$	(5,852)
Walter Jones ADATC	4541	$	(24,500)
Walter Jones ADATC	4549	$	(8,800)

TOTAL REDUCTIONS		$	(705,659)	$	(709,100)

New purchases of vehicles for the regional maintenance facilities are subject to approval by the Secretary.

Study The Availability Of Community MH/DD/SA Services For Military Families
SECTION 10.18.  Funds appropriated in this act to the Department of Health and Human Services for North Carolina Institute of Medicine (NCIOM) shall be used to study the availability of Medicaid and State‑funded mental health, developmental disability, and substance abuse services to active duty, reserve, and veteran members of the military and National Guard. The study should discuss the current availability of services, the extent of use, and any gaps in services. The NCIOM shall submit a report of its findings and any recommended legislation to the Governor's Office, the Joint Legislative Commission on Governmental Operations, and the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services by February 15, 2010.

Funds for Local Management Entity (LME) Service Gaps
SECTION 10.19.  Funds appropriated in this act for mental health services and supported employment shall be allocated to local management entities such that each local management entity receives a percentage of the total allocation that is equal to that local management entity's percentage of the State's total population that is below the federal poverty level.  Funds appropriated to the Department of Health and Human Services for the 2009‑2010 and 2010‑2011 fiscal years for mental health services, substance abuse services, and crisis services and allocated based on the poverty level shall continue to be allocated by the Department to local management entities such that each local management entity receives a percentage of the total allocation that is equal to that local management entity's percentage of the State's total population that is below the federal poverty level.

Transition Of Utilization Management Of Community‑Based Services To Local Management Entities
SECTION 10.20.  Consistent with the findings of the Mercer evaluation of Local Management Entities (LMEs), the Department of Health and Human Services shall collaborate with LMEs to enhance their administrative capabilities to assume utilization management responsibilities for the provision of community‑based mental health, developmental disabilities, and substance abuse services.  The Department may, with approval of the Office of State Budget and Management, use funds available to implement this section.

MENTAL HEALTH TRUST FUND ALLOCATIONS
SECTION 10.21.  Notwithstanding any other provision of law to the contrary, funds allocated from the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs (Fund) in the 2007 fiscal biennium shall not revert to the Fund nor otherwise be withheld but shall be allocated to those programs for which the funds were originally obligated.

Vital Records Fees
SECTION 10.22.  G.S. 130A‑93.1 reads as rewritten:
"§ 130A‑93.1.  Fees for vital records copies or search; automation fund.
(a)	The State Registrar shall collect, process, and utilize fees for services as follows:
(1)	A fee not to exceed twenty dollars ($20.00) shall be charged for issuing a first copy of a vital record or for conducting a routine search of the files for the record when no copy is made. A fee of fifteen dollars ($15.00) shall be charged for each additional certificate copy requested from the same search. When certificates are issued or searches conducted for statewide issuance by local agencies using databases maintained by the State Registrar, the local agency shall charge these fees and shall retain ten dollars ($10.00) of these fees to cover local administrative costs and forward the remaining fees to the State Registrar for the purposes established in subsection (b) of this section.
(2)	A fee not to exceed fifteen dollars ($15.00) for in‑State requests and not to exceed twenty dollars ($20.00) for out‑of‑state requests shall be charged in addition to the fee charged under subdivision (1) of this subsection and to all shipping and commercial charges when expedited service is specifically requested.
(2a)	The fee for a copy of a computer or microform database shall not exceed the cost to the agency of making and providing the copy.
(3)	Except as provided in subsection (b) of this section, fees collected under this subsection shall be used by the Department for public health purposes.
(b)	The Vital Records Automation Account is established as a nonreverting account within the Department. Five dollars ($5.00) of each fee collected pursuant to subdivision (a)(1) shall be credited to this Account. The Department shall use the revenue in the Account to fully automate and maintain the vital records system. When funds sufficient to fully automate and maintain the system have accumulated in the Account, fees shall no longer be credited to the Account but shall be used as specified in subdivision (a)(3) of this section."

Changes To Community‑Focused Eliminating Health Disparities Initiative
SECTION 10.23.(a)  Funds appropriated in this act from the General Fund to the Department of Health and Human Services for the Community‑Focused Eliminating Health Disparities Initiative (CFEHDI) shall be used to provide grants‑in‑aid to local public health departments, American Indian tribes, and faith‑based and community‑based organizations to close the gap in the health status of African‑Americans, Hispanics/Latinos, and American Indians as compared to the health status of white persons. These grants shall focus on the use of preventive measures to support healthy lifestyles. The areas of focus on health status shall be infant mortality, HIV‑AIDS and sexually transmitted infections, cancer, diabetes, and homicides and motor vehicle deaths.
SECTION 10.23.(b)  Funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, for the CFEHDI shall be awarded as a grant‑in‑aid to honor the memory of the following recently deceased members of the General Assembly: Bernard Allen, John Hall, Robert Holloman, Howard Hunter, Jeanne Lucas, and William Martin. These funds shall be used for concerted efforts to address large gaps in health status among North Carolinians who are African‑American, as well as disparities among other minority populations in North Carolina. 
SECTION 10.23.(c)  The Department of Health and Human Services shall report on the following with respect to funds appropriated to the CFEHDI for the 2009‑2010  fiscal year. The report shall address the following:
(1)	Which community programs and local health departments received CFEHDI grants.
(2)	The amount of funding each program or local  health department received.
(3)	Which of the minority populations were served by the programs or local health departments.
(4)	Which counties were served by the programs or local health departments.
(5)	What activities were planned and implemented by the programs or local health departments to fulfill the community focus of the CFEHDI program.
(6)	How the activities implemented by the programs or local health departments fulfilled the goal of reducing health disparities among minority populations.
The report shall also include specific activities undertaken pursuant to subsection (a) of this section to address large gaps in health status among North Carolinians who are African‑American and other minority populations in this State. The Department shall submit the report not later than March 15, 2010, 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.

Funds For School Nurses
SECTION 10.24.(a)  All funds appropriated for the school nurse initiative shall be used to supplement and not supplant other State, local, or federal funds appropriated or allocated for this purpose. Communities shall maintain their current level of effort and funding for school nurses.  These funds shall not be used for funding nurses for State agencies.  All funds shall be used for direct services.
SECTION 10.24.(b)  All school nurses funded with State funds shall participate, as needed, in child and family teams.
SECTION 10.24.(c)  Of the funds appropriated to the Department of Health and Human Services, Division of Public Health, for the 2009‑2010 and 2010‑2011 fiscal years, the sum of one million dollars ($1,000,000) in each fiscal year shall be used to hire 20 additional school health nurses bringing the total number of school nurses supported by DHHS to 232.  The distribution of additional school nurses shall be made according to the criteria established by the Department in 2006.

AIDS Drug Assistance Program
SECTION 10.25.  For the 2009‑2010 and 2010‑2011 fiscal years, the Department may, within existing Aids Drug Assistance Program (ADAP) resources, adjust the financial eligibility criterion of the ADAP up to an amount not exceeding three hundred percent (300%) of the federal poverty level in order to serve as many eligible North Carolinians living with HIV disease as possible within existing resources plus any new federal resources. If a waiting list develops as a result of the eligibility criterion being raised, the Department shall give first priority to those individuals on the waiting list with income at or below one hundred twenty‑five percent (125%) of the federal poverty level, and second priority to those individuals with income above one hundred twenty‑five percent (125%) and at or below two hundred fifty percent (250%) of federal poverty guidelines.

PUBLIC HEALTH IMPROVEMENT PLAN
SECTION 10.26.(a)  The Department of Health and Human Services (DHHS) shall develop a five‑year Public Health Improvement Plan (Plan) by March 31, 2010. In developing the Plan the Secretary shall:
(1)	Adopt a list of services and activities performed by local health departments that qualify as core public health functions of statewide significance.
(2)	Adopt a list of performance measures with the intent of improving health status indicators applicable to core public health functions of statewide significance that local health departments (LHDs) must provide.
(3)	Identify a set of health status indicators to be given priority by LHDs.
Under the Plan, all priorities and health status indicators must incorporate as an essential activity the disparity of diseases amongst populations and locales.
SECTION 10.26.(b)  In order for measurable benefits to be realized through the implementation of the Plan, the Plan shall include the adoption of levels of performance necessary to promote:
(1)	Uniformity across local health departments,
(2)	Best evidence‑based services,
(3)	National standards of performance,
(4)	Innovations in public health practice, and
(5)	Reduction of geographic and racial health disparities.
LHDs shall have the flexibility and opportunity to use the resources available to achieve the required performance measures in a manner that best suits the LHD.
SECTION 10.26.(c)  The Plan will address the need to provide county health departments with financial incentives to encourage and increase local investment in public health functions. County governments shall not supplant existing local funding with State incentive resources. The Secretary may revise the list of activities and performance measures as appropriate, but before doing so, the Secretary shall provide a written explanation of the rationale for the addition, deletion, or revision.
SECTION 10.26.(d)  In developing the Plan the Secretary shall establish and chair the Public Health Improvement Plan Task Force (Task Force), the members and expertise of which shall include:
(1)	Local health departments,
(2)	Department staff,
(3)	Individuals and entities with expertise in the development of performance measures, accountability, and systems management,
(4)	Experts in development of evidence‑based medical guidelines or public health practice guidelines, and
(5)	Individuals and entities that will be affected by the performance measures.
SECTION 10.26.(e)  The implementation schedule for the Plan shall be as follows:
(1)	July 1, 2009, establish the Task Force to develop the Plan,
(2)	March 31, 2010, submit the Plan to the 2010 Regular Session of the 2009 General Assembly,
(3)	July 1, 2010, implement the Plan, and
(4)	November 15, 2011, and annually thereafter, report on Plan implementation.
SECTION 10.26.(f)  The Department will identify the programmatic activities and funding in the Division of Public Health associated with the core functions and activities in the Plan. Funds associated with these activities shall be subject to a flexible spending formula adopted by the Department, as follows:
(1)	Beginning in SFY 2010‑2011, the flexible spending formula will begin to replace the current spending with a more effective method of funding public health activities at the local level and achieving the results expected.
(2)	The Task Force shall identify a reliable and consistent source of State revenue to fund the flexible spending formula.
(3)	If sufficient additional revenue is available to implement the Plan, a separate set‑aside of available funds would be created. This set‑aside would be available to contiguous LHDs that seek to address a specific women's health, child health, or adult health disease or chronic condition, and in doing so, choose to merge into a single Local Health District, thus saving administrative dollars to be focused on public health issues.
SECTION 10.26.(g)  Funds appropriated to the Department for flexible spending shall be distributed to county health departments as follows:
(1)	Each of the county health departments will receive a base amount to be determined by the DHHS.
(2)	The balance of funds in the Flexible Spending Account is to be distributed to the counties on the basis of a formula that takes into consideration the following elements:
a.	Population,
b.	Per capita income,
c.	Rates of:
1.	Infant mortality,
2.	Teenage pregnancy,
3.	Tobacco use,
4.	Cancer,
5.	Heart disease,
6.	Diabetes, and
7.	Stroke.
d.	Percent of minorities in the county,
e.	Body Mass Index (BMI) of public school students, and
f.	Other factors as the Secretary may find necessary to achieve the goals of the Plan.
(3)	The use of the funds by the LHD would reflect the core public health functions. It will be incumbent upon the LHD to use the funds in a manner that assures its achievement of the performance measures adopted by the Secretary.
SECTION 10.26.(h)  To ensure compliance with Department directives, the Task Force shall consider requiring each county health department to submit to the Secretary such data as the Secretary determines is necessary to allow the Secretary to assess whether the county health department has used the funds in a manner consistent with achieving the performance measures associated with this Plan. 
SECTION 10.26.(i)  Beginning November 15, 2011, and biannually thereafter, the Secretary shall report to the Governor and the General Assembly on:
(1)	The distribution of funds to LHDs,
(2)	The use of these funds by LHDs,
(3)	The specific effect the funding from this Plan has had on:
a.	LHDs' performance,
b.	Health status indicators, and
c.	Health disparities.
The Secretary's initial report will focus on implementation. Subsequent reports will evaluate trends in performance and expenditures.

Health Information Technology
SECTION 10.27.(a)  The Department of Health and Human Services, in cooperation with the State Chief Information Officer and the North Carolina Office of Economic Recovery and Investment, shall coordinate health information technology (HIT) policies and programs within the State of North Carolina.  The Department's goal in coordinating State HIT policy and programs shall be to avoid duplication of efforts and to ensure that each State agency, public entity, and private entity that undertakes health information technology activities associated with the American Recovery and Reinvestment Act of 2009 (ARRA) does so within the area of its greatest expertise and technical capability, and in a manner that supports coordinated State and national goals, which shall include at least all of the following:
(1)	Ensuring that patient health information is secure and protected, in accordance with applicable law.
(2)	Improving health care quality, reducing medical errors, reducing health disparities, and advancing the delivery of patient‑centered medical care.
(3)	Providing appropriate information to guide medical decisions at the time and place of care.
(4)	Ensuring meaningful public input into HIT infrastructure development.
(5)	Improving the coordination of information among hospitals, laboratories, physician offices, and other entities through an effective infrastructure for the secure and authorized exchange of health care information.
(6)	Improving public health services and facilitating early identification and rapid response to public health threats and emergencies, including bioterrorist events and infectious disease outbreaks.
(7)	Facilitating health and clinical research.
(8)	Promoting early detection, prevention, and management of chronic diseases.
SECTION 10.27.(b)  The Department of Health and Human Services shall establish and direct a HIT management structure that is efficient and transparent and that is compatible with the Office of the National Health Coordinator for Information Technology (National Coordinator) governance mechanism.  The HIT management structure shall be responsible for all of the following:
(1)	Developing a State plan for implementing and ensuring compliance with national HIT standards, and for the most efficient, effective, and widespread adoption of HIT.
(2)	Ensuring that (i) specific populations are effectively integrated into the State plan, including aging populations, populations requiring mental health services, and populations utilizing the public health system; and (ii) unserved and underserved populations receive priority consideration for HIT support.
(3)	Identifying all HIT stakeholders and soliciting feedback and participation from each stakeholder in the development of the State plan.
(4)	Ensuring that existing HIT capabilities are considered and incorporated into the State plan.
(5)	Identifying and eliminating conflicting HIT efforts where necessary.
(6)	Identifying available resources for the implementation, operation, and maintenance of health information technology, including, but not limited to, the ARRA, with emphasis on identifying resources and available opportunities for North Carolina institutions of higher learning.
(7)	Ensuring that the appropriate State entities receive all the necessary information and support to successfully compete for funding included in the ARRA.
(8)	Ensuring that potential State plan participants are aware of HIT policies and programs and the opportunity for improved health information technology.
(9)	Monitoring HIT efforts and initiatives in other States and replicating successful efforts and initiatives in North Carolina.
(10)	Monitoring the development of the National Coordinator's strategic plan and ensuring that all stakeholders are aware of and in compliance with its requirements.
(11)	Monitoring the progress and recommendations of the HIT Policy and Standards Committees and ensuring that all stakeholders remain informed of the Committee's recommendations.
(12)	Monitoring all studies and reports provided to the United States Congress and reporting to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the impact of report recommendations on State efforts to implement coordinated HIT.
SECTION 10.27.(c)  Beginning October 1, 2009, the Department of Health and Human Services shall provide quarterly written reports on the status of HIT efforts to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The report shall include the following:
(1)	Current status of federal HIT initiatives.
(2)	Current status of State HIT efforts and initiatives among both public and private entities.
(3)	A breakdown of current public and private funding sources and dollar amounts for State HIT initiatives.
(4)	Department efforts to coordinate HIT initiatives within the State, and any obstacles or impediments to coordination.
(5)	HIT research efforts being conducted within the State, and sources of funding for research efforts.
(6)	Opportunities for stakeholders to participate in HIT funding and other efforts and initiatives during the next quarter.
(7)	Issues associated with the implementation of HIT in North Carolina and recommended solutions to these issues.

HOSPITAL‑ACQUIRED INFECTIONS
SECTION 10.28.  The Department of Health and Human Services shall apply for federal funds that are available through P.L. 111‑15, the American Recovery and Reinvestment Act, to develop and implement a mandatory statewide hospital‑acquired infections surveillance and reporting system, as recommended by the Joint Study Committee on Hospital Infection Control and Disclosure.

MEN'S HEALTH
SECTION 10.29.  The Department of Health and Human Services, Division of Public Health, shall use funds available to delegate to the Chronic Disease Prevention and Control Office the responsibility for ensuring attention to the prevention of disease and improvement in the quality of life for men over their entire lifespan.  The Department shall develop strategies for achieving these goals, which shall include (i) developing a strategic plan to improve health care services, (ii) build public heath awareness, and (iii) develop initiatives within existing programs.

FACILITATION OF ENROLLMENT AND REENROLLMENT OF ELIGIBLE CHILDREN IN MEDICAID AND NC HEALTH CHOICE
SECTION 10.30.  The Department of Health and Human Services shall increase its efforts to simplify the eligibility determination and recertification process to facilitate the enrollment and reenrollment of eligible Medicaid and NC Health Choice individuals.  The Department shall also:
(1)	Explore various opportunities through public awareness campaigns and enlisting community organizations to alert families of the opportunities of Medicaid and NC Health Choice to provide preventive health care to their children; and
(2)	Pursue opportunities in the federal Children's Health Insurance Program Reauthorization Act (CHIPRA) to enhance outreach efforts and enrollment for children in Medicaid and NC Health Choice. These enhancements include funding for outreach and enrollment activities and implementation of the "Express Lane" option that uses agencies that determine eligibility for TANF, IV‑D SNAP, Head Start, and School Lunch programs to enroll children. 
The Department shall also submit a Medicaid State Plan Amendment to take advantage of recent federal legislation (CHIPRA) allowing states to provide medical assistance to children and pregnant women who are lawfully residing in the United States.

NC HEALTH CHOICE TRANSITION
SECTION 10.31.(a)  The Secretary of the Department of Health and Human Services shall develop and implement a plan for assuming administrative responsibility for the North Carolina Health Choice for Children program by transitioning all administrative oversight and claims processing activities from the Executive Administrator and Board of Trustees of the State Health Plan for Teachers and State Employees to the Division of Medical Assistance.  The transition of all administrative oversight and claims processing from the State Health Plan to the Division of Medical Assistance shall be completed not later than July 1, 2010.  The Secretary shall report to the Joint Legislative Health Care Oversight Committee and the Committee on Employee Hospital and Medical Benefits at least 30 days prior to effecting the transition of the responsibilities for the administration and processing of claims for benefits provided under the North Carolina Health Choice for Children program from the Executive Administrator and Board of Trustees of the State Health Plan for Teachers and State Employees to the Department.
SECTION 10.31.(b)  In consultation with the Department of Health and Human Services, Division of Medical Assistance, and other appropriate organizations, the Office of State Budget and Management (OSBM) shall conduct an independent analysis of the cost to determine appropriate staffing levels to manage and implement the transition of NC Health Choice from the State Health Plan to the Division to ensure that the transition of NC Health Choice occurs with minimal disruption and that the Division has adequate staffing and an organizational structure that fits with its existing structure.  The Office of State Budget and Management shall report with staffing recommendations by March 1, 2010, to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

NC HEALTH CHOICE/PROCEDURES FOR CHANGING MEDICAL POLICY
SECTION 10.32.  Chapter 108A of the General Statutes is amended by adding a new section to read:
"§ 108A‑54.3.  Procedures for changing medical policy.
The Department shall develop, amend, and adopt medical coverage policy in accordance with the following:
(1)	During the development of new medical coverage policy or amendment to existing medical coverage policy applicable to the North Carolina Health Choice Program for Children, consult with and seek the advice of the Physician Advisory Group of the North Carolina Medical Society and other organizations the Secretary deems appropriate. The Secretary shall also consult with and seek the advice of officials of the professional societies or associations representing providers who are affected by the new medical coverage policy or amendments to existing medical coverage policy.
(2)	At least 45 days prior to the adoption of new or amended medical coverage policy, the Department shall:
a.	Publish the proposed new or amended medical coverage policy on the Department's Web site;
b.	Notify all North Carolina Health Choice Program for Children providers of the proposed, new, or amended policy; and
c.	Upon request, provide persons copies of the proposed medical coverage policy.
(3)	During the 45‑day period immediately following publication of the proposed new or amended medical coverage policy, accept oral and written comments on the proposed new or amended policy.
(4)	If, following the comment period, the proposed new or amended medical coverage policy is modified, then the Department shall, at least 15 days prior to its adoption:
a.	Notify all North Carolina Health Choice Program for Children providers of the proposed policy;
b.	Upon request, provide persons notice of amendments to the proposed policy; and
c.	Accept additional oral or written comments during this 15‑day period."

NC HEALTH CHOICE MEDICAL POLICY
SECTION 10.33.  Unless required for compliance with federal law, the Department shall not change medical policy affecting the amount, sufficiency, duration, and scope of NC Health Choice health care services and who may provide services until the Division of Medical Assistance has prepared a five‑year fiscal analysis documenting the increased cost of the proposed change in medical policy and submitted it for Departmental review. If the fiscal impact indicated by the fiscal analysis for any proposed medical policy change exceeds one million dollars ($1,000,000) in total requirements for a given fiscal year, then the Department shall submit the proposed medical policy change with the fiscal analysis to the Office of State Budget and Management and the Fiscal Research Division. The Department shall not implement any proposed medical policy change exceeding one million dollars ($1,000,000) in total requirements for a given fiscal year unless the source of State funding is identified and approved by the Office of State Budget and Management. For medical policy changes exceeding one million dollars ($1,000,000) in total requirements for a given fiscal year that are required for compliance with federal law, the Department shall submit the proposed medical policy or policy interpretation change with a five‑year fiscal analysis to the Office of State Budget and Management prior to implementing the change. The Department shall provide the Office of State Budget and Management and the Fiscal Research Division a quarterly report itemizing all medical policy changes with total requirements of less than one million dollars ($1,000,000).

NC HEALTH CHOICE ENROLLMENT
SECTION 10.34.  The Department of Health and Human Services may, in the NC Health Choice Program for the 2009‑2010 fiscal year, allow enrollment to grow by not more than 15,583 children.

NCHC FUNDS REDUCTION/CCNC
SECTION 10.35.(a)  The last paragraph of G.S. 108A‑70.21(b) reads as rewritten:
"§ 108A‑70.21.  Program eligibility; benefits; enrollment fee and other cost‑sharing; coverage from private plans; purchase of extended coverage.
…
The Department shall provide services to children enrolled in the NC Health Choice Program through Community Care of North Carolina (CCNC) and shall pay Community Care of North Carolina providers for these services as allowed under Medicaid. The Department shall pay for these services only if sufficient information is available to the Department for utilization management of the services provided through CCNC."
SECTION 10.35.(b)  The Department of Health and Human Services, Division of Medical Assistance, shall reduce or eliminate funding for per member/per month fees paid to Community Care of North Carolina (CCNC) if sufficient information is not available to the Department for utilization management of the provider services.

COMMUNITY CARE OF NORTH CAROLINA
SECTION 10.36.(a)  Given the primary care case management foundation established by Community Care of North Carolina, the Department shall build upon that foundation to ensure quality care and cost control of CCNC by implementing the activities listed in subsection (b) of this section.
SECTION 10.36.(b)  The Department shall contract with CCNC to manage the care of Medicaid recipients, through a per member, per month reimbursement. In the contract DHHS shall ensure that CCNC adheres to the following tenets, adapted from the National Committee of Quality Assurance's (NCQA) national measures for Medical Homes Models. The CCNC networks must demonstrate proficiency in:
(1)	Written standards for patient access and patient communication;
(2)	Use of data to show patients are meeting this standard;
(3)	Adoption and implementation of evidenced‑based guidelines for priority diseases and conditions as identified by DHHS;
(4)	Active support, monitoring, follow‑up, and documentation on patient self‑management;
(5)	Tracking system to test and identify abnormal results, and follow‑up in a timely manner;
(6)	Tracking referrals from and to other acute and long‑term care facilities and providers, so as to provide continuous management of patient care;
(7)	Measurement of clinical and/or service performance by physician or across a practice; and
(8)	Reporting performance according to baseline data and performance measure established by the DHHS Independent Advisory Group across CCNC networks, practices, and physicians to achieve the maximum savings possible through the improvement in the quality of care.
SECTION 10.36.(c)  By July 1, 2009, or as soon a possible thereafter, the Department shall establish an Independent Advisory Group (IAG) for the purpose of developing targeted (i) baseline data, (ii) clinically acceptable performance measures that recognize nationally accredited treatment protocols, and (iii) patient, physician, and practice goals that improve quality of care, and realize necessary savings within Medicaid. The members of the Independent Advisory Group shall have demonstrated experience in actuarial analysis, health policy analysis, medical practice, hospital administration, or management of long‑term chronic conditions.  The Independent Advisory Group and the Department shall ensure the following:
(1)	The IAG shall begin work immediately so that baseline data, clinically acceptable performance measures, and practice goals to improve quality and cost savings can be implemented no later than January 1, 2010. 
(2)	The Department shall prepare a report to the General Assembly on the baseline data, clinically acceptable performance measures, and practice goals adopted by the IAG, and the improved quality and cost savings expected as a result of their implementation. This report will be due January 31, 2010. 
(3)	The IAG shall establish baseline information and performance measures for the diseases and conditions listed in this subdivision, the focus of which shall be on Medicaid recipients who are children, adults, and among those who are aged, blind, or disabled. The diseases and conditions shall include:
a.	Asthma,
b.	Diabetes,
c.	Heart disease,
d.	Chronic Obstructive Pulmonary Disease,
e.	Mental illness,
f.	Substance abuse,
g.	Obesity, and
h.	High risk maternity care
(4)	The baseline information, performance measures, and practice and physician goals developed for the continuing care of Medicaid recipients, who are also eligible for Medicare shall include attention to this population's:
a.	Increased primary care visit rate,
b.	Hospital admission rate,
c.	Hospital readmission rate,
d.	Emergency department visit rate,
e.	Mortality rate, and
f.	Prescription drug management, including:
1.	Number of prescriptions prescribed,
2.	Number of generic versus brand‑name prescriptions, and
3.	Reconciliation of a patient's prescriptions between hospital, nursing facility, and primary care physician.
SECTION 10.36.(d)  The Department shall conduct a Request for Proposal (RFP) process to solicit bids from qualified outside entities with proven experience in conducting actuarial and health care studies and evaluations to:
(1)	Report, assess, and evaluate the CCNC networks proficiency in fulfilling the eight tenets described above,
(2)	Report, assess, and evaluate the CCNC networks implementation and achievement of the baseline data, clinically acceptable performance measures, and practice goals to improve quality and cost savings established by the IAG, and
(3)	Report on the Medicaid cost savings achieved by the CCNC networks during a 12‑month period.
SECTION 10.36.(e)  The contractor's report, information, and data shall be in a format that allows the Department to manipulate and assess the performance of CCNC as a whole and for its 14 networks individually. Not later than November 1, 2010, the Department shall provide to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division copies of the contractor's report for CCNC activities conduced during the 2009‑2010 fiscal year.
SECTION 10.36.(f)  Under the Children's Health Insurance Program Reauthorization Act, P.L. 111‑1, the U.S. Secretary of Health and Human Services is directed to:
(1)	Develop a standardized reporting format that encourages states to report information regarding the quality of pediatric health care delivered through the State Children's Health Insurance Program, and 
(2)	Establish a set of pediatric quality measures not later than January 1, 2011. 
Given this directive, the IAG shall develop targeted baseline data, clinically acceptable performance measures that recognize nationally accredited treatment protocols, and patient, physician, and practice goals that improve quality of care, in order to realize necessary savings within North Carolina's Health Choice program. The IAG shall begin this effort so that baseline data, clinically acceptable performance measures, and practice goals to improve quality and cost savings can be implemented by July 1, 2010, the date on which the Department of Health and Human Services' Division of Medical Assistance assumes management responsibility of the Health Choice program from the State Health Plan.

COMMUNITY HEALTH CENTER CHANGES
SECTION 10.37.  Of the funds appropriated in this act for Community Health Grants, the sum of seven million eight hundred sixty thousand dollars ($7,860,000) in recurring funds for the 2009‑2010 fiscal year and the sum of seven million eight hundred sixty thousand dollars ($7,860,000) for the 2010‑2011 fiscal year.  These funds shall be allocated as grants on a competitive basis to rural health centers, free clinics, public health departments, school‑based health centers, qualified health centers, and other nonprofit organizations that provide primary care and preventive health services to uninsured and indigent persons.  Community health centers that have received federal funds through the American Recovery and Reinvestment Act to provide new, expanded, or continuing health services are not eligible to receive funds under this section.

Liability Insurance
SECTION 10.38.(a)  The Secretary of the Department of Health and Human Services, the Secretary of the Department of Environment and Natural Resources, and the Secretary of the Department of Correction may provide medical liability coverage not to exceed one million dollars ($1,000,000) per incident on behalf of employees of the Departments licensed to practice medicine or dentistry, on behalf of all licensed physicians who are faculty members of The University of North Carolina who work on contract for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for incidents that occur in Division programs, and on behalf of physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Health and Human Services.  This coverage may include commercial insurance or self‑insurance and shall cover these individuals for their acts or omissions only while they are engaged in providing medical and dental services pursuant to their State employment or training.
SECTION 10.38.(b)  The coverage provided under this section shall not cover any individual for any act or omission that the individual knows or reasonably should know constitutes a violation of the applicable criminal laws of any state or the United States or that arises out of any sexual, fraudulent, criminal, or malicious act or out of any act amounting to willful or wanton negligence.
SECTION 10.38.(c)  The coverage provided pursuant to this section shall not require any additional appropriations and shall not apply to any individual providing contractual service to the Department of Health and Human Services, the Department of Environment and Natural Resources, or the Department of Correction, with the exception that coverage may include physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Health and  Human  Services  and  licensed physicians who are faculty members of The University of North Carolina who work for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

Funds for Jim "Catfish" Hunter Chapter Of The ALS Association
SECTION 10.39.  Funds appropriated in this act for the Jim "Catfish" Hunter Chapter of the ALS Association shall be expended only for services provided within North Carolina.

DHHS Payroll Deduction for Child Care Services
SECTION 10.40.  Subject to rules adopted by the State Controller, an employee of the Department of Health and Human Services may authorize, in writing, the periodic deduction from the employee's salary or wages for employment by the State, a designated lump sum to be paid to satisfy the cost of services received for child care provided by the Department.

medicaid management information system (MMIS) funds/IMPLEMENTATION OF MMIS
SECTION 10.41.(a)  Of the funds appropriated in this act to the Department of Health and Human Services (Department) from prior year earned revenues received by the Department for the Medicaid Management Information System (MMIS), the sum of eleven million seventy‑one thousand five hundred two dollars ($11,071,502) for fiscal year 2009‑2010 and the sum of nine million eight hundred twenty thousand six hundred eighty‑nine dollars ($9,820,689) for fiscal year 2010‑2011 shall be (i) deposited to the Department's information technology budget code and (ii) used to match federal funds for the procurement, design, development, and implementation of the new MMIS system and to fund the central management of the project. In the event that the Department does not receive prior year earned revenues in these amounts, the Department is authorized with approval of the Office of State Budget and Management to use other over‑realized receipts to the level appropriated in this act for MMIS expenditures.
SECTION 10.41.(b)  The Department shall make full development of the replacement MMIS a top priority. During the development and implementation of MMIS, the Department shall develop plans to ensure the timely and effective implementation of enhancements to the system to provide the following capabilities:
(1)	Receiving and tracking premium or other payments required by law.
(2)	Compatibility with the administration of  the Health Information System.
The Department shall make every effort to expedite the implementation of the enhancements. The Office of Information Technology Services shall work in cooperation with the Department to ensure the timely and effective implementation of the MMIS and enhancements. The contract between the Department and the contract vendor shall contain an explicit provision requiring that the MMIS have the capability to fully implement the administration of NC Health Choice, NC Kids' Care, Ticket to Work, Families Pay Part of the Cost of Services under the CAP‑MR/DD, CAP Children's Program, and all relevant Medicaid waivers and the Medicare 646 waiver as it applies to Medicaid eligibles. The Department must have detailed cost information for each requirement before signing the contract. Any contract between the Department and a vendor for the MMIS that does not contain the explicit provision required under this subsection is void on its face. Notwithstanding any other provision of law to the contrary, the Secretary of the Department does not have the authority to sign a contract for the MMIS if the contract does not contain the explicit provision required under this section.
SECTION 10.41.(c)  Notwithstanding G.S. 114‑2.3, the Department shall engage the services of private counsel with the pertinent information technology and computer law expertise to review requests for proposals and to negotiate and review contracts associated with MMIS. The counsel engaged by the Department shall review the MMIS contract between the Department and the vendor to ensure that the requirements of subsection (a) of this section are met in their entirety.
SECTION 10.41.(d)  The Department shall develop a comprehensive schedule for the development and implementation of the MMIS that fully incorporates federal and State project management and review requirements.  The Department shall ensure that the schedule is as accurate as possible. Any changes to the design, development, and implementation schedule shall be reported as part of the Department's quarterly MMIS reporting requirements.  The Department shall submit the schedule to the Chairs of the House of Representatives Committee on Appropriations and the House of Representatives Subcommittee on Health and Human Services, the Chairs of the Senate Committee on Appropriations and the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.  Any change to key milestones in either schedule shall be immediately reported to the Chairs of the House of Representatives Committee on Appropriations and the House of Representatives Subcommittee on Health and Human Services, the Chairs of the Senate Committee on Appropriations and the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division with a full explanation of the reason for the change. 
SECTION 10.41.(e)  Beginning July 1, 2009, the Department shall make quarterly reports on changes in the functionality and projected costs of the MMIS.  The first quarterly submission shall contain a final report on the contract award to include total costs and functionality of the MMIS.  Each report shall be made to the Chairs of the House of Representatives Committee on Appropriations and the House of Representatives Subcommittee on Health and Human Services, the Chairs of the Senate Committee on Appropriations and the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.  A copy of the final report on the contract award shall also be submitted to the Joint Legislative Commission on Governmental Operations.
SECTION 10.41.(f)  Upon initiation of the NC MMIS Program Reporting and Analytics Project and the Division of Health Services Regulation Project, the Department shall submit all reports regarding functionality, schedule, and cost in the next regular cycle of reporting identified in subsections (d) and (e) of this section.  The Department shall ensure that the solution developed in the Reporting and Analytics Project supports the capability, in its initial implementation, to interface with the North Carolina Teachers' and State Employees' Health Plan.  The costs for this capability shall be negotiated prior to the award of the Reporting and Analytics contract.  The Reporting and Analytics solution must be completed simultaneously with the replacement MMIS.

North Carolina Families Accessing Services Through Technology (NC FAST) Funds
SECTION 10.42.  The sum of eighteen million three hundred twenty‑seven thousand four hundred seventy‑eight dollars ($18,327,478) is appropriated from Budget Code 24441, Fund Code 2006, to the Department of Health and Human Services, Division of Central Management Services, for the 2009‑2010 fiscal year.  These funds shall be used for the development and implementation of North Carolina Families Accessing Services Through Technology (NC FAST).  Funds will be placed in the Department's information technology budget code and will match federal funds for project implementation.

PROGRAM ON PREVENTION OF ABUSE AND NEGLECT
SECTION 10.43.(a)  The Children's Trust Fund, a program on prevention of abuse and neglect, is transferred from the Department of Public Instruction to the Division of Social Services in the Department of Health and Human Services, as if by a Type I transfer as defined in G.S. 143A‑6, with all the elements of such a transfer.
SECTION 10.43.(b)  G.S. 7B‑1301 reads as rewritten: 
"§ 7B‑1301.  Program on Prevention of Abuse and Neglect.
(a)	The  Department of Health and Human Services, through the  Division of Social Services, shall implement the Program on Prevention of Abuse and Neglect. The  Division of Social Services  shall provide the staff and support services for implementing this program.
(b)	In order to carry out the purposes of this Article:
(1)	The  Division of Social Services shall review applications and make recommendations  concerning the awarding of contracts under this Article.
(2)	The  Division of Social Services shall contract with public or private nonprofit organizations, agencies, schools, or with qualified individuals to operate community‑based educational and service programs designed to prevent the occurrence of abuse and neglect. Every contract entered into by the  Division of Social Services shall contain provisions that at least twenty‑five percent (25%) of the total funding required for a program be provided by the administering organization in the form of in‑kind or other services and that a mechanism for evaluation of services provided under the contract be included in the services to be performed. In addition, every proposal to the  Division of Social Services for funding under this Article shall include assurances that the proposal has been forwarded to the local department of social services for comment so that the  Division of Social Services may consider coordination and duplication of effort on the local level as criteria in making recommendations.
(3)	The  Division of Social Services, with the assistance of the Department of  Health and Human Services, shall develop appropriate guidelines and criteria for awarding contracts under this Article. These criteria shall include, but are not limited to: documentation of need within the proposed geographical impact area; diversity of geographical areas of programs funded under this Article; demonstrated effectiveness of the proposed strategy or program for preventing abuse and neglect; reasonableness of implementation plan for achieving stated objectives; utilization of community resources including volunteers; provision for an evaluation component that will provide outcome data; plan for dissemination of the program for implementation in other communities; and potential for future funding from private sources.
(4)	The  Division of Social Services, with the assistance of the Department of  Health and Human Services, shall develop guidelines for regular monitoring of contracts awarded under this Article in order to maximize the investments in prevention programs by the Children's Trust Fund and to establish appropriate accountability measures for administration of contracts.
(5)	The  Division of Social Services shall develop a State plan for the prevention of abuse and neglect for submission to the Governor, the President of the Senate, and the Speaker of the House of Representatives.
(c)	To assist in implementing this Article, the  Division of Social Services may accept contributions, grants, or gifts in cash or otherwise from persons, associations, or corporations. All monies received by the  Division of Social Services from contributions, grants, or gifts and not through appropriation by the General Assembly shall be deposited in the Children's Trust Fund. Disbursements of the funds shall be on the authorization of the  Department of Health and Human Services. In order to maintain an effective expenditure and revenue control, the funds are subject in all respects to State law and regulations, but no appropriation is required to permit expenditure of the funds.
(d)	Programs contracted for under this Article are intended to prevent abuse and neglect of juveniles. Abuse and neglect prevention programs are defined to be those programs and services which impact on juveniles and families before any substantiated incident of abuse or neglect has occurred. These programs may include, but are not limited to:
(1)	Community‑based educational programs on prenatal care, perinatal bonding, child development, basic child care, care of children with special needs, and coping with family stress; and
(2)	Community‑based programs relating to crisis care, aid to parents, and support groups for parents and their children experiencing stress within the family unit.
(e)	No more than twenty percent (20%) of each year's total awards may be utilized for funding State‑level programs to coordinate community‑based programs."
SECTION 10.43.(c)  G.S. 7B‑1302 reads as rewritten:
"§ 7B‑1302.  Children's Trust Fund.
(a)	There is established a fund to be known as the "Children's Trust Fund," in the Department of State Treasurer, which shall be funded by a portion of the marriage license fee under G.S. 161‑11.1 and a portion of the special license plate fee under G.S. 20‑81.12. The money in the Fund shall be used by the  Division of Social Services to fund abuse and neglect prevention programs so authorized by this Article.
(b)	The Department of  Health and Human Services shall report annually on revenues and expenditures of the Children's Trust Fund to the Joint Legislative Commission on Governmental Operations."

Intensive Family Preservation Services Funding And Performance Enhancements
SECTION 10.44.(a)  Notwithstanding the provisions of G.S. 143B‑150.6, the Intensive Family Preservation Services (IFPS) Program shall provide intensive services to children and families in cases of abuse, neglect, and dependency where a child is at imminent risk of removal from the home and to children and families in cases of abuse where a child is not at imminent risk of removal. The Program shall be developed and implemented statewide on a regional basis. The IFPS shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out‑of‑home placement.
SECTION 10.44.(b)  The Department of Health and Human Services shall require that any program or entity that receives State, federal, or other funding for the purpose of Intensive Family Preservation Services shall provide information and data that allows for:
(1)	An established follow‑up system with a minimum of six months of follow‑up services.
(2)	Detailed information on the specific interventions applied, including utilization indicators and performance measurement.
(3)	Cost‑benefit data.
(4)	Data on long‑term benefits associated with Intensive Family Preservation Services. This data shall be obtained by tracking families through the intervention process.
(5)	The number of families remaining intact and the associated interventions while in IFPS and 12 months thereafter.
(6)	The number and percentage by race of children who received Intensive Family Preservation Services compared to the ratio of their distribution in the general population involved with Child Protective Services.
SECTION 10.44.(c)  The Department shall establish performance‑based funding protocol and shall only provide funding to those programs and entities providing the required information specified in subsection (b) of this section. The amount of funding shall be based on the individual performance of each program.
SECTION 10.44.(d)  The Department shall publish an annual report on the Intensive Family Preservation Services Program, including the information and data under subdivisions (b)(2) through (b)(6) of this section.

Foster Care and Adoption Assistance Payments
SECTION 10.45.(a)  The maximum rates for State participation in the foster care assistance program are established on a graduated scale as follows:
(1)	$475.00 per child per month for children aged birth through 5;
(2)	$581.00 per child per month for children aged 6 through 12; and
(3)	$634.00 per child per month for children aged 13 through 18.
SECTION 10.45.(b)  The maximum rates for the State adoption assistance program are established consistent with the foster care rates as follows:
(1)	$475.00 per child per month for children aged birth through 5;
(2)	$581.00 per child per month for children aged 6 through 12; and
(3)	$634.00 per child per month for children aged 13 through 18.
SECTION 10.45.(c)  In addition to providing board payments to foster and adoptive families of HIV‑infected children, as prescribed in Section 23.28 of Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated for this purpose shall be used to provide medical training in avoiding HIV transmission in the home.
SECTION 10.45.(d)  The maximum rates for the State participation in HIV foster care and adoption assistance are established on a graduated scale as follows:
(1)	$800.00 per child per month with indeterminate HIV status;
(2)	$1,000 per child per month confirmed HIV‑infected, asymptomatic;
(3)	$1,200 per child per month confirmed HIV‑infected, symptomatic; and
(4)	$1,600 per child per month terminally ill with complex care needs.
SECTION 10.45.(e)  The State and a county participating in foster care and adoption assistance shall each contribute fifty percent (50%) of the nonfederal share of the cost of care for a child placed by a county department of social services or child placing agency in a family foster home or residential child care facility. A county shall be held harmless from contributing fifty percent (50%) of the nonfederal share of the cost for a child currently in a family foster home or residential child care facility until the child leaves foster care or experiences a placement change.
SECTION 10.45.(f)  The Department of Health and Human Services may establish foster care and adoption assistance rates based on the United States Department of Agriculture (USDA) "Expenditures on Children by Families" index subject to State appropriations for each fiscal year.

Child Support Program/Enhanced Standards
SECTION 10.46.  G.S. 110‑129.1(a) is amended by adding the following new subdivision to read:
"(a)	In addition to other powers and duties conferred upon the Department of Health and Human Services, Child Support Enforcement Program, by this Chapter or other State law, the Department shall have the following powers and duties:
...
(8)	Implement and maintain performance standards for each of the State and county child support enforcement offices across the State. The performance standards shall include the following:
a	Cost per collections.
b.	Consumer satisfaction.
c.	Paternity establishments.
d.	Administrative costs.
e.	Orders established.
f.	Collections on arrearages.
g.	Location of absent parents.
h.	Other related performance measures.
	The Department shall monitor the performance of each office and shall implement a system of reporting that allows each local office to review its performance as well as the performance of other local offices. The Department shall publish an annual performance report that includes the statewide and local office performance of each child support office."

Child Caring Institutions
SECTION 10.47.  Until the Social Services Commission adopts rules setting standardized rates for child caring institutions as authorized under G.S. 143B‑153(8), the maximum reimbursement for child caring institutions shall not exceed the rate established for the specific child caring institution by the Department of Health and Human Services, Office of the Controller. In determining the maximum reimbursement, the State shall include county and IV‑E reimbursements.

Special Children Adoption Fund
SECTION 10.48.  Part 4 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new section to read:
"§ 108A‑50.2.  Special Children Adoption Fund.
(a)	Funds appropriated by the General Assembly in the Current Operations Appropriations Act shall be used to support the Special Children Adoption Fund. The Division of Social Services of the Department of Health and Human Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A‑50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services. No local match shall be required as a condition for receipt of these funds. In accordance with State rules for allowable costs, the Special Children Adoption Fund may be used for post‑adoption services for families whose income exceeds two hundred percent (200%) of the federal poverty level.
(b)	Of the total funds appropriated for the Special Children Adoption Fund each year, twenty percent (20%) of the total funds available shall be reserved for payment to participating private adoption agencies. If the funds reserved in this subsection for payments to private agencies have not been spent on or before March 31 of each State fiscal year, the Division of Social Services may reallocate those funds, in accordance with this section, to other participating adoption agencies.
(c)	The Division of Social Services shall monitor the total expenditures in the Special Children Adoption Fund and redistribute unspent funds to ensure that the funds are used in accordance with the guidelines established in subsection (a) of this section. The Division of Social Services shall implement strategies to ensure that funds that have historically reverted for this program are used for the intended purpose."

Limitation on State Abortion Fund
SECTION 10.49.  The limitations on funding of the performance of abortion established in Section 23.27 of Chapter 324 of the 1995 Session Laws, as amended by Section 23.8A of Chapter 507 of the 1995 Session Laws, apply to the 2009‑2010 and 2010‑2011 fiscal years.

Child Welfare Postsecondary Support Program/Use of Escheat Fund
SECTION 10.50.(a)  There is appropriated from the Escheat Fund income to the Department of Health and Human Services the sum of three million one hundred sixty‑eight thousand two hundred fifty dollars ($3,168,250) for the 2009‑2010 fiscal year. These funds shall be used to support the child welfare postsecondary support program for the educational needs of foster youth aging out of the foster care system and special needs children adopted from foster care after age 12 by providing assistance with the "cost of attendance" as that term is defined in 20 U.S.C. § 1087ll.  The Department shall collaborate with the State Education Assistance Authority to develop policies and procedures for the distribution of these funds.
If the interest income generated from the Escheat Fund is less than the amounts referenced in this section, the difference may be taken from the Escheat Fund principal to reach the appropriations referenced in this section; however, under no circumstances shall the Escheat Fund principal be reduced below the sum required in G.S. 116B‑6(f).
Funds appropriated by this section shall be allocated by the State Education Assistance Authority.
The purpose for which funds are appropriated under this section is in addition to other purposes for which Escheat Fund income is distributed under G.S. 116B‑7 and shall not be construed to otherwise affect the distribution of funds under G.S. 116B‑7.
SECTION 10.50.(b)  Of the funds appropriated from the General Fund to the Department of Health and Human Services the sum of fifty thousand dollars ($50,000) for the 2009‑2010 fiscal year and the sum of fifty thousand dollars ($50,000) for the 2010‑2011 fiscal year shall be allocated to the North Carolina State Education Assistance Authority (SEAA). The SEAA shall use these funds only to perform administrative functions necessary to manage and distribute scholarship funds under the child welfare postsecondary support program.
SECTION 10.50.(c)  Of the funds appropriated from the General Fund to the Department of Health and Human Services the sum of five hundred thousand dollars ($500,000) for the 2009‑2010 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2010‑2011 fiscal year shall be used to contract with an entity to develop and administer the child welfare postsecondary support program described under subsection (a) of this section, which development and administration shall include the performance of case management services.
SECTION 10.50.(d)  Funds appropriated to the Department of Health and Human Services for the child welfare postsecondary support program shall be used only for students attending public institutions of higher education in this State.
SECTION 10.50.(e)  It is the intent of the General Assembly that for the 2010‑2011 fiscal year and beyond, support for the child welfare postsecondary support program shall be appropriated from the General Fund.

TANF Benefit Implementation
SECTION 10.51.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2009‑2011," prepared by the Department of Health and Human Services and presented to the General Assembly. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2009, through September 30, 2011. The Department shall submit the State Plan, as revised in accordance with subsection (b) of this section, to the United States Department of Health and Human Services, as amended by this act or any other act of the 2009 General Assembly.
SECTION 10.51.(b)  The counties approved as Electing Counties in North Carolina's Temporary Assistance for Needy Families State Plan FY 2009‑2011, as approved by this section are:  Beaufort, Caldwell, Catawba, Iredell, Lenoir, Lincoln, Macon, and Wilson.
SECTION 10.51.(c)  Counties that submitted the letter of intent to remain as an Electing County or to be redesignated as an Electing County and the accompanying county plan for fiscal years 2009 through 2011, pursuant to G.S. 108A‑27(e), shall operate under the Electing County budget requirements effective July 1, 2009. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2009.

Evaluation of Consolidation of Administrative Functions of County Departments of Social Services
SECTION 10.52.(a)  The Department of Health and Human Services, Division of Social Services, shall study the consolidation of administrative functions among county departments of social services.
SECTION 10.52.(b)  The Department shall collaborate with counties to identify opportunities for functional consolidation, affected administrative functions, estimated cost savings, and requisite policy changes, if applicable, to accommodate the consolidation.  The Department shall not consolidate administrative functions except as directed by an act of the General Assembly.
SECTION 10.52.(c)  The Department shall report its findings and recommendations to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Education/Higher Education, the House of Representatives Appropriations Subcommittee on Education, and the Fiscal Research Division by April 1, 2010.

Enhance marketing of public assistance availability
SECTION 10.53.  To ensure that working families are aware of the availability of assistance from Food and Nutrition Services programs and Medical Assistance, the Office of Economic Opportunity, Division of Social Services, and county departments of social services shall enhance the marketing of available services, including Food and Nutrition Services, and Medical Assistance, for prospective recipients.

EVALUATION AND IMPLEMENTATION OF COST‑EFFECTIVE EDUCATION FOR STUDENTS WHO ARE DEAF OR HEARING‑IMPAIRED
SECTION 10.54.(a)  The Department of Health and Human Services, in collaboration with the Department of Public Instruction and the Free Appropriate Public Education Task Force (Task Force), shall develop a plan to reduce the costs of residential instruction for students who are deaf or hearing‑impaired.  The Plan shall include:
(1)	The transitioning, as appropriate, of students served by the Western North Carolina School for the Deaf and Eastern North Carolina School for the Deaf to local education agencies (LEAs), and the identification of LEA resource requirements for the provision of appropriate instruction; and
(2)	Additional instructional alternatives.
SECTION 10.54.(b)  The Department of Health and Human Services, the Department of Public Instruction, and the Task Force shall report their findings and reduction plan to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Education/Higher Education, the House of Representatives Appropriations Subcommittee on Education, and the Fiscal Research Division no later than April 1, 2010.

NON‑MEDICAID REIMBURSEMENT CHANGES
SECTION 10.55. Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no higher than those under the North Carolina Medical Assistance Program.
The Department of Health and Human Services may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days. When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non‑Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.
Notwithstanding the provisions of this section, the Department of Health and Human Services may negotiate with providers of medical services under the various Department of Health and Human Services programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes:  contracts or agreements for medical services and purchases of medical equipment and other medical supplies. These negotiated rates are allowable only to meet the medical needs of its non‑Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.
Maximum net family annual income eligibility standards for services in these programs shall be as follows:
DSB Medical Eye Care	125% FPL
DSB Independent Living <55	125% FPL
DSB Independent Living 55>	200% FPL
DSB Vocational Rehabilitation	125% FPL
DVR Independent Living	125% FPL
DVR Vocational Rehabilitation	125% FPL
The Department of Health and Human Services shall contract at, or as close as possible to, Medicaid rates for medical services provided to residents of State facilities of the Department.

DIVISION OF SERVICES FOR THE DEAF AND HARD OF HEARING/FUNDS TRANSFER and appropriation
SECTION 10.56.(a)  Notwithstanding G.S. 62‑157, on July 1, 2009, the State Controller shall transfer five million dollars ($5,000,000) from the Special Account for Telecommunications Relay Service to Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2009‑2010 fiscal year.
SECTION 10.56.(b)  Of funds appropriated with Budget Code 67425, Fund Code 6725, and Fund Code 6726 the sum of one million five hundred thousand dollars ($1,500,000) shall be transferred to Budget Code 24410 for Information Technology Projects in the Department of Health and Human Services, Division of Central Management and Support for the Data Collection and Case Management Systems initiative.  This initiative shall also be supported with federal funds from the Rehabilitation Act.  Funds made available under this section shall be used for the development and implementation of a data collection and case management information system to replace the current system in use by the Division of Services for the Blind, Division of Services for the Deaf and Hard of Hearing, and the Division of Vocational Rehabilitation Services.  The Department shall use federal funds first and then State funds, only as necessary, from Budget Code 67425.  In accordance with G.S. 143C‑1‑2(b), funds appropriated for this project shall not revert to the fund from which they came until the project is complete.
SECTION 10.56.(c) If, upon the transfer and appropriation of funds under this section, available funds are insufficient to support recurring services the Division of Services for the Deaf and Hard of Hearing is authorized to provide, the Department of Health and Human Services, shall, pursuant to G.S. 62‑157, file a petition with the North Carolina Utilities Commission to reset the surcharge provided for in G.S. 62‑157 to maintain a reasonable margin for reserve for the operation of the statewide telecommunications relay service.

State‑County Special Assistance
SECTION 10.57.(a)  The eligibility of Special Assistance recipients residing in adult care homes on August 1, 1995, shall not be affected by an income reduction in the Special Assistance eligibility criteria resulting from adoption of the Rate Setting Methodology Report and Related Services, providing these recipients are otherwise eligible. The maximum monthly rate for these residents in adult care home facilities shall be one thousand two hundred thirty‑one dollars ($1,231) per month per resident.
SECTION 10.57.(b)  Effective January 1, 2009, the maximum monthly rate for residents in adult care home facilities shall be one thousand two hundred seven dollars ($1,207) per month per resident unless adjusted by the Department in accordance with subsection (d) of this section.
SECTION 10.57.(c)  The maximum monthly rate for residents in Alzheimer/Dementia special care units shall be one thousand five hundred fifteen dollars ($1,515) per month per resident unless adjusted by the Department in accordance with subsection (d) of this section.
SECTION 10.57.(d)  Notwithstanding any other provision of this section, the Department of Health and Human Services shall review activities and costs related to the provision of care in adult care homes and shall determine what costs may be considered to properly maximize allowable reimbursement available through Medicaid personal care services for adult care homes (ACH‑PCS) under federal law.  As determined, and with any necessary approval from the Centers for Medicare and Medicaid Services (CMS), and the approval of the Office of State Budget and Management, the Department may transfer necessary funds from the State‑County Special Assistance program within the Division of Social Services to the Division of Medical Assistance and may use those funds as State match to draw down federal matching funds to pay for such activities and costs under Medicaid's personal care services for adult care homes (ACH‑PCS), thus maximizing available federal funds. The established rate for State‑County Special Assistance set forth in subsections (b) and (c) of this section shall be adjusted by the Department to reflect any transfer of funds from the Division of Social Services to the Division of Medical Assistance and related transfer costs and responsibilities from State‑County Special Assistance to the Medicaid personal care services for adult care homes (ACH‑PCS). Subject to approval by the Centers for Medicare and Medicaid Services (CMS) and prior to implementing this section, the Department may disregard a limited amount of income for individuals whose countable income exceeds the adjusted State‑County Special Assistance rate. The amount of the disregard shall not exceed the difference between the Special Assistance rate prior to the adjustment and the Special Assistance rate after the adjustment and shall be used to pay a portion of the cost of the ACH‑PCS and reduce the Medicaid payment for the individual's personal care services provided in an adult care home. In no event shall the reimbursement for services through the ACH‑PCS exceed the average cost of the services as determined by the Department from review of cost reports as required and submitted by adult care homes. The Department shall report any transfers of funds and modifications of rates to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 10.57.(e)  The Department of Health and Human Services shall recommend rates for State‑County Special Assistance and for Adult Care Home Personal Care Services.  The Department may recommend rates based on appropriate cost methodology and cost reports submitted by adult care homes that receive State‑County Special Assistance funds and shall ensure that cost reporting is done for State‑County Special Assistance and Adult Care Home Personal Care Services to the same standards as apply to other residential service providers.

MEDICAID
SECTION 10.58.(a)  Use of Funds, Allocation of Costs, Other Authorizations.
(1)	Use of funds. – Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy.
(2)	Allocation of nonfederal cost of Medicaid. – The State shall pay one hundred percent (100%) of the nonfederal costs of all applicable services listed in this section. In addition, the State shall pay one hundred percent (100%) of the federal Medicare Part D clawback payments under the Medicare Modernization Act of 2004.
(3)	Use of funds for development and acquisition of equipment and software. – If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Health and Human Services, may use funds that are identified to support the cost of development and acquisition of equipment and software and related operational costs through contractual means to improve and enhance information systems that provide management information and claims processing. The Department of Health and Human Services shall identify adequate funds to support the implementation and first year's operational costs that exceed funds allocated for the 2009‑2010 and 2010‑2011 fiscal years for the new contract for the fiscal agent for the Medicaid Management Information System.
(4)	Reports. – Unless otherwise provided, whenever the Department of Health and Human Services is required by this section to report to the General Assembly, the report shall be submitted to the House of Representatives Appropriations Subcommittee for Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division of the Legislative Services Office. Reports shall be submitted on the date provided in the reporting requirement.
SECTION 10.58.(b)  Policy.
(1)	Volume purchase plans and single source procurement. – The Department of Health and Human Services, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other contracting processes in order to improve cost containment.
(2)	Cost containment programs. – The Department of Health and Human Services, Division of Medical Assistance, may undertake cost containment programs, including contracting for services, preadmissions to hospitals, and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.
(3)	Fraud and abuse. – The Division of Medical Assistance, Department of Health and Human Services, shall provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.
(4)	Medical policy. – Unless required for compliance with federal law, the Department shall not change medical policy affecting the amount, sufficiency, duration, and scope of health care services and who may provide services until the Division of Medical Assistance has prepared a five‑year fiscal analysis documenting the increased cost of the proposed change in medical policy and submitted it for Departmental review. If the fiscal impact indicated by the fiscal analysis for any proposed medical policy change exceeds three million dollars ($3,000,000) in total requirements for a given fiscal year, then the Department shall submit the proposed medical policy change with the fiscal analysis to the Office of State Budget and Management and the Fiscal Research Division. The Department shall not implement any proposed medical policy change exceeding three million dollars ($3,000,000) in total requirements for a given fiscal year unless the source of State funding is identified and approved by the Office of State Budget and Management. For medical policy changes exceeding three million dollars ($3,000,000) in total requirements for a given fiscal year that are required for compliance with federal law, the Department shall submit the proposed medical policy or policy interpretation change with the five‑year fiscal analysis to the Office of State Budget and Management prior to implementing the change. The Department shall provide the Office of State Budget and Management and the Fiscal Research Division a quarterly report itemizing all medical policy changes with total requirements of less than three million dollars ($3,000,000).
SECTION 10.58.(c)  Eligibility. – Eligibility for Medicaid shall be determined in accordance with the following:
(1)	Medicaid and Work First Family Assistance.
a.	Income eligibility standards. – The maximum net family annual income eligibility standards for Medicaid and Work First Family Assistance and the Standard of Need for Work First Family Assistance shall be as follows:

	CATEGORICALLY	MEDICALLY
	NEEDY – WFFA*	 NEEDY

	Standard of Need
		&
	Families and
	Families and	WFFA*	Children &
Family	Children	Payment	AA, AB, AD*
Size	Income Level	Level	Income Level
1	$4,344	$2,172	$2,900
2	5,664	2,832	3,800
3	6,528	3,264	4,400
4	7,128	3,564	4,800
5	7,776	3,888	5,200
6	8,376	4,188	5,600
7	8,952	4,476	6,000
8	9,256	4,680	6,300

*Work First Family Assistance (WFFA); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).
b.	The payment level for Work First Family Assistance shall be fifty percent (50%) of the standard of need. These standards may be changed with the approval of the Director of the Budget.
c.	The Department of Health and Human Services shall provide Medicaid coverage to 19‑ and 20‑year‑olds in accordance with federal rules and regulations.
d.	Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.
(2)	For the following Medicaid eligibility classifications for which the federal poverty guidelines are used as income limits for eligibility determinations, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines. The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to the following:
a.	All elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines.
b.	Pregnant women with incomes equal to or less than one hundred eighty‑five percent (185%) of the federal poverty guidelines and without regard to resources. Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy.
c.	Infants under the age of one with family incomes equal to or less than two hundred percent (200%) of the federal poverty guidelines and without regard to resources.
d.	Children aged one through five with family incomes equal to or less than two hundred percent (200%) of the federal poverty guidelines and without regard to resources.
e.	Children aged six through 18 with family incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines and without regard to resources.
f.	Family planning services to men and women of childbearing age with family incomes equal to or less than one hundred eighty‑five percent (185%) of the federal poverty guidelines and without regard to resources.
g.	Workers with disabilities described in G.S. 108A‑54.1 with unearned income equal to or less than one hundred fifty percent (150%) of the federal poverty guidelines.
(3)	The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to adoptive children with special or rehabilitative needs regardless of the adoptive family's income.
(4)	The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to "independent foster care adolescents," ages 18, 19, and 20, as defined in section 1905(w)(1) of the Social Security Act [42 U.S.C. § 1396d(w)(1)], without regard to the adolescent's assets, resources, or income levels.
(5)	ICF and ICF/MR work incentive allowances. – The Department of Health and Human Services may provide an incentive allowance to Medicaid‑eligible recipients of ICF and ICF/MR services, who are regularly engaged in work activities as part of their developmental plan, and for whom retention of additional income contributes to their achievement of independence. The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department. The incentive allowances may be as follows:
Monthly Net Wages	Monthly Incentive Allowance
$1.00 to $100.99	Up to $50.00
$101.00 to $200.99	$80.00
$201.00 to $300.99	$130.00
$301.00 and greater	$212.00
(6)	The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to women who need treatment for breast or cervical cancer and who are defined in 42 U.S.C. § 1396a.(a)(10)(A)(ii)(XVIII).
SECTION 10.58.(d)  Services and Payment Bases. – The Department shall spend funds appropriated for Medicaid services in accordance with the following schedule of services and payment bases. All services and payments are subject to the language at the end of this subsection. Unless otherwise provided, services and payment bases will be as prescribed in the State Plan as established by the Department of Health and Human Services and may be changed with the approval of the Director of the Budget.
(1)	Hospital inpatient. – Payment for hospital inpatient services will be prescribed by the State Plan as established by the Department of Health and Human Services.
(2)	Hospital outpatient. – Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Health and Human Services.
(3)	Nursing facilities. – Nursing facilities providing services to Medicaid recipients who also qualify for Medicare must be enrolled in the Medicare program as a condition of participation in the Medicaid program. State facilities are not subject to the requirement to enroll in the Medicare program. Residents of nursing facilities who are eligible for Medicare coverage of nursing facility services must be placed in a Medicare‑certified bed. Medicaid shall cover facility services only after the appropriate services have been billed to Medicare.
(4)	Physicians, certified nurse midwife services, certified registered nurse anesthetists, nurse practitioners. – Fee schedules as developed by the Department of Health and Human Services.
(5)	Community Alternative Program, EPSDT Screens. – Payments in accordance with rate schedule developed by the Department of Health and Human Services.
(6)	Home health and related services, durable medical equipment. – Payments according to reimbursement plans developed by the Department of Health and Human Services.
(7)	Hearing aids. – Wholesale cost plus dispensing fee to provider.
(8)	Rural health clinical services. – Provider‑based, reasonable cost, nonprovider‑based, single‑cost reimbursement rate per clinic visit.
(9)	Family planning. – Negotiated rate for local health departments. For other providers see specific services, e.g., hospitals, physicians.
(10)	Independent laboratory and X‑ray services. – Uniform fee schedules as developed by the Department of Health and Human Services.
(11)	Ambulatory surgical centers.
(12)	Private duty nursing, clinic services, prepaid health plans.
(13)	Intermediate care facilities for the mentally retarded.
(14)	Chiropractors, podiatrists, optometrists, dentists.
(15)	Limitations on dental coverage. – Dental services shall be provided on a restricted basis in accordance with criteria adopted by the Department to implement this subsection. 
(16)	Medicare Buy‑In. – Social Security Administration premium.
(17)	Ambulance services. – Uniform fee schedules as developed by the Department of Health and Human Services. Public ambulance providers will be reimbursed at cost.
(18)	Optical supplies. – Payment for materials is made to a contractor in accordance with 42 C.F.R. § 431.54(d). Fees paid to dispensing providers are negotiated fees established by the State agency based on industry charges.
(19)	Medicare crossover claims. – The Department shall apply Medicaid medical policy to Medicare claims for dually eligible recipients. The Department shall pay an amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Health and Human Services. The Department may disregard application of this policy in cases where application of the policy would adversely affect patient care.
(20)	Physical therapy, occupational therapy, and speech therapy. – Services limited to EPSDT‑eligible children. Payments are to be made only to qualified providers at rates negotiated by the Department of Health and Human Services.
(21)	Personal care services. – Payment in accordance with the State Plan developed by the Department of Health and Human Services.
(22)	Case management services. – Reimbursement in accordance with the availability of funds to be transferred within the Department of Health and Human Services.
(23)	Hospice.
(24)	Medically necessary prosthetics or orthotics. – In order to be eligible for reimbursement, providers must be licensed or certified by the occupational licensing board or the certification authority having authority over the provider's license or certification. Medically necessary prosthetics and orthotics are subject to prior approval and utilization review.
(25)	Health insurance premiums.
(26)	Medical care/other remedial care. – Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates.
(27)	Pregnancy‑related services. – Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.
(28)	Drugs. – Reimbursements. Reimbursements shall be available for prescription drugs as allowed by federal regulations plus a professional services fee per month, excluding refills for the same drug or generic equivalent during the same month. Payments for drugs are subject to the provisions of this subdivision or in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. The professional services fee shall be five dollars and sixty cents ($5.60) per prescription for generic drugs and four dollars ($4.00) per prescription for brand‑name drugs. Adjustments to the professional services fee shall be established by the General Assembly. In addition to the professional services fee, the Department may pay an enhanced fee for pharmacy services.
Limitations on quantity. – The Department of Health and Human Services may establish authorizations, limitations, and reviews for specific drugs, drug classes, brands, or quantities in order to manage effectively the Medicaid pharmacy program, except that the Department shall not impose limitations on brand‑name medications for which there is a generic equivalent in cases where the prescriber has determined, at the time the drug is prescribed, that the brand‑name drug is medically necessary and has written on the prescription order the phrase "medically necessary."
Dispensing of generic drugs. – Notwithstanding G.S. 90‑85.27 through G.S. 90‑85.31, or any other law to the contrary, under the Medical Assistance Program (Title XIX of the Social Security Act), and except as otherwise provided in this subsection for drugs listed in the narrow therapeutic index, a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber has determined, at the time the drug is prescribed, that the brand‑name drug is medically necessary and has written on the prescription order the phrase "medically necessary." An initial prescription order for a drug listed in the narrow therapeutic drug index that does not contain the phrase "medically necessary" shall be considered an order for the drug by its established or generic name, except that a pharmacy shall not substitute a generic or established name prescription drug for subsequent brand or trade name prescription orders of the same prescription drug without explicit oral or written approval of the prescriber given at the time the order is filled. Generic drugs shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand‑name drugs. As used in this subsection, "brand name" means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and "established name" has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act, as amended, 21 U.S.C. § 352(e)(3).
Prior authorization. – The Department of Health and Human Services shall not impose prior authorization requirements or other restrictions under the State Medical Assistance Program on medications prescribed for Medicaid recipients for the treatment of HIV/AIDS.
(29)	Other mental health services. – Unless otherwise covered by this section, coverage is limited to:
a.	Services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) when provided in agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services and reimbursement is made in accordance with a State Plan developed by the Department of Health and Human Services not to exceed the upper limits established in federal regulations, and
b.	For children eligible for EPSDT services provided by:
1.	Licensed or certified psychologists, licensed clinical social workers, certified clinical nurse specialists in psychiatric mental health advanced practice, nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, licensed psychological associates, licensed professional counselors, licensed marriage and family therapists, licensed clinical addictions specialists, and certified clinical supervisors, when Medicaid‑eligible children are referred by the Community Care of North Carolina primary care physician, a Medicaid‑enrolled psychiatrist, or the area mental health program or local management entity, and
2.	Institutional providers of residential services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) for children and Psychiatric Residential Treatment Facility services that meet federal and State requirements as defined by the Department.
c.	For Medicaid‑eligible adults, services provided by licensed or certified psychologists, licensed clinical social workers, certified clinical nurse specialists in psychiatric mental health advanced practice, and nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, licensed psychological associates, licensed professional counselors, licensed marriage and family therapists, certified clinical addictions specialists, and licensed clinical supervisors, Medicaid‑eligible adults may be self‑referred.
d.	Payments made for services rendered in accordance with this subdivision shall be to qualified providers in accordance with approved policies and the State Plan. Nothing in sub‑subdivision b. or c. of this subdivision shall be interpreted to modify the scope of practice of any service provider, practitioner, or licensee, nor to modify or attenuate any collaboration or supervision requirement related to the professional activities of any service provider, practitioner, or licensee. Nothing in sub‑subdivision b. or c. of this subdivision shall be interpreted to require any private health insurer or health plan to make direct third‑party reimbursements or payments to any service provider, practitioner, or licensee.
Notwithstanding G.S. 150B‑21.1(a), the Department of Health and Human Services may adopt temporary rules in accordance with Chapter 150B of the General Statutes further defining the qualifications of providers and referral procedures in order to implement this subdivision. Coverage policy for services defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services under sub‑subdivisions a. and b.2. of this subdivision shall be established by the Division of Medical Assistance.
SECTION 10.58.(e)  Provider Performance Bonds and Visits. –
(1)	Subject to the provisions of this subdivision, the Department may require Medicaid‑enrolled providers to purchase a performance bond in an amount not to exceed one hundred thousand dollars ($100,000) naming as beneficiary the Department of Health and Human Services, Division of Medical Assistance, or provide to the Department a validly executed letter of credit or other financial instrument issued by a financial institution or agency honoring a demand for payment in an equivalent amount. The Department may require the purchase of a performance bond or the submission of an executed letter of credit or financial instrument as a condition of initial enrollment, reenrollment, or reinstatement if:
a.	The provider fails to demonstrate financial viability,
b.	The Department determines there is significant potential for fraud and abuse,
c.	The Department otherwise finds it is in the best interest of the Medicaid program to do so.
The Department shall specify the circumstances under which a performance bond or executed letter of credit will be required.
(1a)	The Department may waive or limit the requirements of this paragraph for individual Medicaid‑enrolled providers or for one or more classes of Medicaid‑enrolled providers based on the following:
a.	The provider's or provider class's dollar amount of monthly billings to Medicaid. 
b.	The length of time an individual provider has been licensed, endorsed, certified, or accredited in this State to provide services.
c.	The length of time an individual provider has been enrolled to provide Medicaid services in this State.
d.	The provider's demonstrated ability to ensure adequate record keeping, staffing, and services.
e.	The need to ensure adequate access to care.
	In waiving or limiting requirements of this paragraph, the Department shall take into consideration the potential fiscal impact of the waiver or limitation on the State Medicaid Program. The Department shall provide to the affected provider written notice of the findings upon which its action is based and shall include the performance bond requirements and the conditions under which a waiver or limitation apply. The Department may adopt temporary rules in accordance with G.S. 150B‑21.1 as necessary to implement this provision.
(2)	Reimbursement is available for up to 30 visits per recipient per fiscal year for the following professional services: hospital outpatient providers, physicians, nurse practitioners, nurse midwives, clinics, health departments, optometrists, chiropractors, and podiatrists. The Department of Health and Human Services shall adopt medical policies in accordance with G.S. 108A‑54.2 to distribute the allowable number of visits for each service or each group of services consistent with federal law. In addition, the Department shall establish a threshold of some number of visits for these services. The Department shall ensure that primary care providers or the appropriate CCNC network are notified when a patient is nearing the established threshold to facilitate care coordination and intervention as needed.
Prenatal services, all EPSDT children, emergency room visits, and mental health visits subject to independent utilization review are exempt from the visit limitations contained in this subdivision. Subject to appropriate medical review, the Department may authorize exceptions when additional care is medically necessary. Routine or maintenance visits above the established visit limit will not be covered unless necessary to actively manage a life threatening disorder or as an alternative to more costly care options.
SECTION 10.58.(f)  Exceptions and Limitations on Services; Authorization of Co‑Payments and Other Services. – 
(1)	Exceptions to service limitations, eligibility requirements, and payments. – Service limitations, eligibility requirements, and payment bases in this section may be waived by the Department of Health and Human Services, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, contracting for services, managed care plans, or community‑based services programs in accordance with plans approved by the United States Department of Health and Human Services or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient. 
(2)	Co‑payment for Medicaid services. – The Department of Health and Human Services may establish co‑payments up to the maximum permitted by federal law and regulation.
SECTION 10.58.(g)  Rules, Reports, and Other Matters. – 
(1)	Rules. – The Department of Health and Human Services may adopt temporary or emergency rules according to the procedures established in G.S. 150B‑21.1 and G.S. 150B‑21.1A when it finds that these rules are necessary to maximize receipt of federal funds within existing State appropriations, to reduce Medicaid expenditures, and to reduce fraud and abuse. The Department of Health and Human Services shall adopt rules requiring providers to attend training as a condition of enrollment and may adopt temporary or emergency rules to implement the training requirement.
Prior to the filing of the temporary or emergency rules authorized under this subsection with the Rules Review Commission and the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary or emergency rule and its effect on State appropriations and local governments.
(2)	Changes to Medicaid program; reports. – The Department shall report on any change it anticipates making in the Medicaid program that impacts the type or level of service, reimbursement methods, or waivers, any of which require a change in the State Plan or other approval by the Centers for Medicare and Medicaid Services (CMS). The reports shall be provided at the same time they are submitted to CMS for approval. In addition to the entities listed in subdivision (a)(4) of this section, the report shall be submitted to the Joint Legislative Health Care Oversight Committee.

DMA CONTRACT SHORTFALL
SECTION 10.59.(a)  Budget approval is required by the Office of State Budget and Management prior to the Department of Health and Human Services, Division of Medical Assistance, entering into any new contract or the renewal or amendment of existing contracts that exceed the current contract amounts.  
SECTION 10.59.(b)  The Division of Medical Assistance shall make every effort to effect savings within its operational budget and use those savings to offset its contract shortfall. Notwithstanding G.S. 143C‑6‑4(b)(3), the Department may use funds appropriated in this act to cover the contract shortfall in the Division of Medical Assistance if insufficient funds exist within the Division.

MEDICAID COST CONTAINMENT ACTIVITIES
SECTION 10.60.(a)  The Department of Health and Human Services may use up to five million dollars ($5,000,000) in the 2009‑2010 fiscal year and up to five million dollars ($5,000,000) in the 2010‑2011 fiscal year in Medicaid funds budgeted for program services to support the cost of administrative activities when cost‑effectiveness and savings are demonstrated.  The funds shall be used to support activities that will contain the cost of the Medicaid Program, including contracting for services, hiring additional staff, or providing grants through the Office of Rural Health and Community Care to plan, develop, and implement cost containment programs.
Medicaid cost containment activities may include prospective reimbursement methods, incentive‑based reimbursement methods, service limits, prior authorization of services, periodic medical necessity reviews, revised medical necessity criteria, service provision in the least costly settings, plastic magnetic stripped Medicaid identification cards for issuance to Medicaid enrollees, fraud detection software or other fraud detection activities, technology that improves clinical decision making, credit balance recovery and data mining services, and other cost containment activities. Funds may be expended under this section only after the Office of State Budget and Management has approved a proposal for the expenditure submitted by the Department. Proposals for expenditure of funds under this section shall include the cost of implementing the cost containment activity and documentation of the amount of savings expected to be realized from the cost containment activity. 
SECTION 10.60.(b)  The Department shall provide a copy of proposals for expenditures under this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division. On or before April 1, 2010, the Department shall report on the methods used to achieve savings and the amount saved by these methods. If the Department deploys fraud detection software, a report on the software implementation and fraud detection results shall be submitted to the House and Senate Appropriations Subcommittees on Health and Human Services and the Fiscal Research Division of the General Assembly not later than April 1, 2010.

MEDICAID SPECIAL FUND TRANSFER
SECTION 10.61.  Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143C‑9‑1, there is appropriated from the Medicaid Special Fund to the Department of Health and Human Services the sum of forty‑three million dollars ($43,000,000) for the 2009‑2010 fiscal year and the sum of forty‑three million dollars ($43,000,000) for the 2010‑2011 fiscal year.  These funds shall be allocated as prescribed by G.S. 143C‑9‑1(b) for Medicaid programs. Notwithstanding the prescription in G.S. 143C‑9‑1(b) that these funds not reduce State general revenue funding, these funds shall replace the reduction in general revenue funding effected in this act. The Department may also use funds in the Medicaid Special Fund to fund the settlement of the Disproportionate Share Hospital payment audit issues between the Department of Health and Human Services and the federal government related to fiscal years 1997‑2002, and funds are appropriated from the Fund for the 2009‑2010 fiscal year for this purpose.

EXTEND IMPLEMENTATION OF COMMUNITY ALTERNATIVES PROGRAMS REIMBURSEMENT SYSTEM
SECTION 10.62.  Full implementation for the Community Alternatives Programs reimbursement system shall be not later than 12 months after the date on which the replacement Medicaid Management Information System becomes operational and stabilized.

DMA REDUCTION OPTION FLEXIBILITY
SECTION 10.63.(a)  The Department of Health and Human Services, Division of Medical Assistance, shall, in consultation with provider groups and other interested parties, review ways to improve health care quality, ensure appropriate use of services, improve clinical outcomes, and reduce the cost of care for beneficiaries with medically complex conditions as well as to strengthen fraud and abuse oversight efforts.  In the review the Division shall explore all viable options to improve the quality of care and to control health care costs, including, but not limited to, the following options: 
(1)	Increasing utilization review and management practices to improve value and quality internally or with private vendors with proven records in other states' Medicaid programs;
(2)	Expanding and enhancing programs that increase Aged, Blind, and Disabled (ABD) Medicaid eligibles participation within CCNC's medical home efforts and/or encourage single physician care management;
(3)	Developing and enhancing incentives for increased provider participation in CCNC; 
(4)	Requiring inpatient and outpatient care management for select Medicaid enrollees; 
(5)	Adopting specific network and physician performance and compliance standards within the Community Care of North Carolina (CCNC) that are tied to any enhanced reimbursement structure;
(6)	Initiative to address State nursing home payment methods and to offer incentives in payment methods to achieve certain quality and cost goals;
(7)	Initiative to control drug cost and utilization as well as to maximize collection of supplemental rebates;
(8)	Increasing third‑party recovery and/or cost avoidance efforts, including enhancing Medicaid fraud and abuse oversight initiatives;
(9)	Reducing or eliminating the occurrence of hospital "never events" – nonreimbursement for serious and costly errors in the provision of health care services that should never happen. 
SECTION 10.63.(b)  In order to consider all proposals prior to preparing adjustments to the fiscal year 2010‑2011 budget, the Division shall report its recommendations on methods to better manage and save Medicaid costs to the Governor's Office by January 15, 2010.  All proposals shall include the steps necessary for implementation, including time frames, and the amount of projected savings over a five‑year period.

ACCOUNTING FOR MEDICAID RECEIVABLES AS NONTAX REVENUE
SECTION 10.64.(a)  Receivables reserved at the end of the 2009‑2010 and 2010‑2011 fiscal years shall, when received, be accounted for as nontax revenue for each of those fiscal years.  
SECTION 10.64.(b)  For the 2009‑2010 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred twenty‑four million nine hundred ninety‑four thousand nine hundred fifty‑four dollars ($124,994,954) with the Department of State Treasurer to be accounted for as nontax revenue.  For the 2010‑2011 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred million dollars ($100,000,000) with the Department of State Treasurer to be accounted for as nontax revenue.  Any revenue collected in each of the fiscal years in excess of one of the amounts listed above shall be reserved by the State Treasurer in the Department's account for future appropriations by the General Assembly. These deposits shall represent the return of General Fund appropriations provided to the Department of Health and Human Services to provide indigent care services at State‑owned and operated mental hospitals.  The treatment of any revenue derived from federal programs shall be in accordance with the requirements specified in the Code of Federal Regulations, Volume 2, Part 225.

Families Pay Part Of The Cost Of Services Under The CAP‑MR/DD Program And The CAP‑Children's Program Based On Family Income
SECTION 10.65.(a) Subject to approval from the Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services, Division of Medical Assistance, shall, in consultation with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, and Community Alternatives Program (CAP) stakeholders, develop a schedule of cost‑sharing requirements for families of children with incomes above the Medicaid allowable limit to share in the costs of their child's Medicaid expenses under the CAP‑MR/DD (Community Alternatives Program for Mental Retardation and Developmentally Disabled) and the CAP‑C (Community Alternatives Program for Children). The cost‑sharing amounts shall be based on a sliding scale of family income and shall take into account the impact on families with more than one child in the CAP programs. In developing the schedule, the Department shall also take into consideration how other states have implemented cost‑sharing in their CAP programs. The Division of Medical Assistance may establish monthly deductibles as a means of implementing this cost‑sharing. The Department shall provide for at least one public hearing and other opportunities for individuals to comment on the imposition of cost‑sharing under the CAP program schedule.
SECTION 10.65.(b) The Division of Medical Assistance shall also, in collaboration with the Controller's Office of the Department of Health and Human Services, the Division of Information Resource Management (DIRM), and the new vendor of the replacement Medicaid Management Information System, develop business rules, program policies and procedures, and define relevant technical requirements.
SECTION 10.65.(c) Prior to seeking approval from CMS, but not later than October 1, 2009, the Department shall report to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs, and to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The report shall include a summary of comments the Department has received at the public hearing, business rules, policies and procedures, and technical requirements of the initiative and shall also indicate any barriers to implementing the cost‑sharing.

Preferred Drug List Program
SECTION 10.66.(a)  In the event insufficient savings are realized from enhancing the utilization management of the Prescription Advantage List, increasing the utilization of generic drugs in place of brand‑name drugs and increasing rebate collections on generic drugs, the Department of Health and Human Services shall establish and implement a preferred drug list program under the Division of Medical Assistance. The Department shall submit a medical assistance State Plan amendment to the Centers for Medicare and Medicaid Services (CMS) of the United States Department of Health and Human Services to implement the program.
SECTION 10.66.(b) The pharmaceutical and therapeutics committee of the Physician's Advisory Group (PAG) shall provide ongoing review of the preferred drug list. Members of the committee shall submit conflict of interest disclosure statements to the Department and shall have an ongoing duty to disclose conflicts of interest not included in the original disclosure.
SECTION 10.66.(c) The Department, in consultation with the PAG, shall adopt and publish policies and procedures relating to the preferred drug list, including:
(1)	Guidelines for the presentation and review of drugs for inclusion on the preferred drug list,
(2)	The manner and frequency of audits of the preferred drug list for appropriateness of patient care and cost‑effectiveness,
(3)	An appeals process for the resolution of disputes, and
(4)	Such other policies and procedures as the Department deems necessary and appropriate.
The Department and the pharmaceutical and therapeutics committee shall consider all therapeutic classes of prescription drugs for inclusion on the preferred drug list, except medications for treatment of human immunodeficiency virus or acquired immune deficiency syndrome shall not be subject to consideration for inclusion on the preferred drug list.
The Department shall maintain an updated preferred drug list in electronic format and shall make the list available to the public on the Department's Internet Web site.
The Department shall: (i) enter into a multistate purchasing pool; (ii) negotiate directly with manufacturers or labelers; (iii) contract with a pharmacy benefit manager for negotiated discounts or rebates for all prescription drugs under the medical assistance program; or (iv) effectuate any combination of these options in order to achieve the lowest available price for such drugs under such program.
The Department may negotiate supplemental rebates from manufacturers that are in addition to those required by Title XIX of the federal Social Security Act. The committee shall consider a product for inclusion on the preferred drug list if the manufacturer provides a supplemental rebate. The Department may procure a sole source contract with an outside entity or contractor to conduct negotiations for supplemental rebates.
SECTION 10.66.(d) This section becomes effective if the Department cannot demonstrate by June 1, 2010, that twenty million seven hundred ninety‑one thousand two hundred sixty‑four dollars ($20,791,264) in prescription drug savings have been realized by employing the methods outlined in subsection (a) of this section.

MEDICAID APPEALS/FUNDS DO NOT REVERT
SECTION 10.67. Funds transferred from the Department of Health and Human Services to the Office of Administrative Hearings in the 2008‑2009 fiscal year for mediation services shall not revert to the General Fund on June 30, 2009, but shall remain in the Office of Administrative Hearings for the purposes for which the funds were transferred.

CLARIFYING CHANGES TO STATE MEDICAID RESPONSIBILITIES
SECTION 10.68.  Consistent with Sections 31.16.1(c) and (d) of S.L. 2007‑323 that require the State to assume responsibility for the nonfederal share of the costs of medical services provided under the Medicaid Program starting June 1, 2009, the counties shall neither bear any responsibility for settlement payments to providers nor refunds of expenditures for program service claims paid on or before June 1, 2009.  Counties will continue to participate in their share of administrative costs.

CO‑PAYMENTS FOR TICKET TO WORK
SECTION 10.69.  G.S. 108A‑54.1(d) reads as rewritten:
"§ 108A‑54.1.  Medicaid buy‑in for workers with disabilities.
…
(d)	Fees, Premiums, and Co‑Payments. – Individuals who participate in HCWD and have countable income greater than one hundred fifty percent (150%) of FPG shall pay an annual enrollment fee of fifty dollars ($50.00) to their county department of social services. Individuals who participate in HCWD and have countable income greater than or equal to two hundred percent (200%) of FPG shall pay a monthly premium in addition to the annual fee. The Department shall set a sliding scale for premiums, which is consistent with applicable federal law. An individual with countable income equal to or greater than four hundred fifty percent (450%) of FPG shall pay not less than one hundred percent (100%) of the cost of the premium, as determined by the Department. The premium shall be based on the experience of all individuals participating in the Medical Assistance Program. Individuals who participate in HCWD are subject to co‑payments equal to those required under the  Medical Assistance Program."

MEDICAID FALSE CLAIMS
SECTION 10.70.(a)  G.S. 108A‑70.11(5) reads as rewritten:
"(5)	"Medical Assistance Program" means the Medical Assistance Program established pursuant to G.S. 108A‑54 and includes the North Carolina Division of Medical Assistance and or its fiscal agent."
SECTION 10.70.(b)  G.S. 108A‑70.12(a) reads as rewritten:
"§ 108A‑70.12. Liability for certain acts; damages; effect of repayment.
(a)	Liability for Certain Acts. – It shall be unlawful for any provider of medical assistance under the Medical Assistance Program to do any of the following:
(1)	Knowingly present, or cause to be presented to the Medical Assistance Program a false or fraudulent claim for payment or  approval.
(2)	Knowingly make, use, or cause to be made or used a false record or statement to get a false or fraudulent claim paid or approved by the Medical Assistance Program.
(3)	Conspire to defraud the Medical Assistance Program by obtaining a false or fraudulent claim allowed or paid.
(4)	Knowingly make, use, or cause to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Medical Assistance Program. Each claim presented or caused to be presented in violation of this section is a separate violation."
SECTION 10.70.(c)  G.S. 108A‑70.12(b)(1) reads as rewritten:
"(b)	Damages. –
(1)	Except as provided in subdivision (2) of this subsection, a court shall assess against any provider of medical assistance under the Medical Assistance Program who violates this section a civil penalty of not less than five thousand five hundred dollars ($5,500) and not more than eleven thousand dollars ($11,000) plus three times the amount of damages which the  Medical Assistance Program sustained because of the act of the provider."
SECTION 10.70.(d)  Article 2 of Chapter 108A of the General Statutes is amended by adding the following new Part to read:
"Part 7A. Civil Action by Private Persons for Provider False Claims.
"§ 108A‑70.17.  Civil action filed by private persons.
(a)	A person may initiate a civil action for a violation of G.S. 108A‑70.12 on behalf of the person and the State. The action shall be brought in the name of the State. The action may be dismissed prior to service of the complaint upon the defendant under subsection (c) of this section only if the court and the Attorney General have given written consent to the dismissal and their reasons for consenting.
(b)	A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the State. The complaint shall be filed in camera, shall remain under seal for at least 120 days, and shall not be served on the defendant until the court so orders. The State may elect to intervene and proceed with the action within 120 days after it receives both the complaint and the material evidence and information. The State may, for good cause shown, move the court for a partial lifting of the seal to facilitate the investigative process or settlement.
(c)	The State may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal. Any of these motions may be supported by affidavits or other submission in camera. The time period to respond to any complaint filed under this section shall commence 21 days after the complaint is unsealed and served upon the defendant.
(d)	Before the expiration of the 120‑day period or any extensions obtained under subsection (c) of this section, the State shall either proceed with the action, in which case the action shall be conducted by the State, or notify the court that it declines to take over the action, in which case the person initiating the action shall have the right to prosecute the action.
(e)	When a person initiates an action under this section, no person other than the State may intervene or bring a related action based on the facts underlying the pending action. If another action is filed based on the facts underlying the pending action while the complaint is sealed under subsections (b) and (c) of this section, the court may consolidate the actions or dismiss the subsequent action.
"§ 108A‑70.17A. Rights of private plaintiff and State.
(a)	If the State proceeds with the action, it shall have the primary responsibility for prosecuting the action and shall not be bound by any act of the person initiating the action. The person bringing the action shall have the right to continue as a party to the action, subject to the limitations of this section.
(b)	The State may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the State of the filing of the motion, and the court has provided the person with an opportunity for a hearing on the motion.
(c)	The State may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, such hearing may be held in camera.
(d)	If the State proceeds with the action, the court may, in its discretion, impose limitations on the person's participation in the litigation as set forth in subsection (e) of this section. Such limitations must be imposed after any of the following:
(1)	A showing by the State that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the State's prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment.
(2)	A showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense.
(e)	Limitations on participation of the person initiating the action shall include all of the following:
(1)	Limiting the number of witnesses the person may call.
(2)	Limiting the length of the testimony of such witnesses.
(3)	Limiting the person's cross‑examination of witnesses.
(4)	Other limits on the participation by the person initiating the action in the litigation as the court deems appropriate.
(f)	If the State elects not to proceed with the action, the person who initiated the action shall have the right to conduct the action. If the State so requests, it shall be served with copies of all pleadings filed in the action and shall be supplied with copies of all deposition transcripts at the State's expense. When a person initiating the action proceeds with the action, the court, without limiting the status and rights of the person initiating the action, may nevertheless permit the State to intervene at a later date upon a showing of good cause.
(g)	Whether or not the State proceeds with the action, upon a showing by the State that certain actions of discovery by the person initiating the action would interfere with the State's investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay the discovery for a period of not more than 60 days. The showing by the State shall be conducted in camera. The court may extend the 60‑day period upon a further showing in camera that the State has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or prosecution of the criminal or civil matter.
(h)	Notwithstanding G.S. 108A‑70.17(b), the State may elect to pursue its claim through any alternate remedy available to the State, including any administrative proceeding to determine a civil money penalty. Any finding of fact or conclusion of law made in the alternate proceeding that has become final shall be conclusive on all parties to an action under this Part. For purposes of this subsection, a finding or conclusion is final if it has been finally determined on appeal by a court of competent jurisdiction of the State, if the time for filing an appeal with respect to the finding or conclusion has expired, or if the finding or conclusions are not subject to judicial review.
"§ 108A‑70.17B.  Award to qui tam plaintiff.
(a)	Except as otherwise provided in this section, if the State proceeds with an action brought by a person under G.S. 108A‑70.17, the person shall receive at least fifteen percent (15%) but not more than twenty‑five percent (25%) of the proceeds of the action or settlement of the claim, if any, depending upon the extent to which the person substantially contributed to the prosecution of the action. The plaintiff's share in the proceeds of the action or settlement is administrative costs of the action. A share of the proceeds of an action or settlement of the claim shall not be awarded to the person initiating the action in State court under this Part if the person has received or may receive a share of the proceeds or settlement of an action or claim on the same facts brought in federal court. Where the action is one that the court finds to be based primarily on disclosures of specific information, other than information proved by the person initiating the action, relating to allegations or transactions in a criminal, civil, or administrative hearing, in a legislative, administrative, or State Auditor's report, hearing, audit, or investigation, or from the news media, the court may reduce the award under this subsection to such sums as it considers appropriate, but in no case more than ten percent (10%) of the proceeds of the action, taking into account the significance of the information and the role of the person initiating the action in advancing the case to litigation.
(b)	If the State does not proceed with an action, the person initiating the action or settling the claim shall receive an amount that the court decides is reasonable for  collecting the civil penalty and damages, if awarded. The amount shall be not less than twenty‑five percent (25%) and not more than thirty percent (30%) of the proceeds of the action or settlement and shall be paid out of the proceeds.
(c)	Notwithstanding subsections (a) and (b) of this section, if the person initiating the action is a person who primarily planned and initiated the violation of G.S. 108A‑70.12 upon which the action was brought, that person shall be dismissed as a qui tam plaintiff and shall not receive any share of the proceeds of the action. If the person initiating the action is convicted of criminal conduct arising from the person's role in the violation of G.S. 108A‑70.12, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. The dismissal shall not prejudice the right of the State to continue the action.
(d)	If the State does not proceed with the action and the person initiating the action conducts the action, the court may award to the defendant its reasonable attorneys' fees and expenses if the defendant prevails in the action and if the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.
"§ 108A‑70.17C.  Certain actions barred.
(a)	No court shall have jurisdiction over an action brought under this Part based on information discovered by a present or former employee of the State or a political subdivision of the State during the course of the present or former employee's employment unless that employee first, in good faith, exhausted existing internal procedures for reporting and seeking recovery of the falsely claimed sums through official channels, and unless the State or political subdivision failed to act on the information provided within a reasonable period of time.
(b)	In no event may a person bring an action under this Part that is based upon allegations or transactions that are the subject of a criminal action, civil action, or an administrative proceeding in which the State is already a party.
(c)	No court shall have jurisdiction over an action under this Part based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a legislative, administrative, or State Auditor's report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General, or the person initiating the action is an original source of the information. For purposes of this section, "original source" means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the State before filing an action under this Part that is based on the information.
(d)	The State is not liable for expenses a person incurs in bringing an action under this Part.
(e)	G.S. 108A‑70.14 and G.S. 108A‑70.15 apply to this Part.
"§ 108A‑70.17D.  Procedure; statute of limitations.
(a)	A civil action under this Part may not be brought after the later of either of the following:
(1)	More than six years after the date on which the violation is committed.
(2)	More than three years after the date when facts material to the right of the action are known or reasonably should have been known by the official of the State charged with responsibility to act in the circumstances.
(b)	If the civil action is brought under subdivision (a)(2) of this section, it may not be brought more than 10 years after the date on which the violation is committed."
SECTION 10.70.(e)  G.S. 108A‑70.15 reads as rewritten:
"§ 108A‑70.15. Employee remedies.
(a)	In the absence of fraud or malice, no person who furnishes information to officials of the State responsible for investigating false claims violations shall be liable for damages in a civil action for any oral or written statement made or any other action that is necessary to supply information required pursuant to this  Part or Part 7A of this Article.
(b)	Any employee of a provider who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by the employee's employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under  G.S. 108A‑70.12, or Part 7A of this Article, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under  G.S. 108A‑70.12, or Part 7A of this Article, shall be entitled to all relief necessary to make the employee whole. Relief shall include reinstatement with the same seniority status as the employee would have had but for the discrimination, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees. An employee may bring an action in the appropriate court for the relief provided in this section."
SECTION 10.70.(f)  Provided that the Medicaid False Claims State legislation is adopted, and the State legislation meets federal Center for Medicare and Medicaid Services criteria to receive ten percent (10%) bonuses subject to the False Claims Act, the Department of Health and Human Services, Division of Medical Assistance, shall transfer three hundred fifty‑two thousand one hundred thirty‑six dollars ($352,136) in fiscal year 2010‑2011, and each year thereafter, to fund five permanent staff positions at the Attorney General's Office necessary to implement the Medicaid False Claims Act.
SECTION 10.70.(g)  Subsection (b) of this section becomes effective December 1, 2009, and applies to offenses committed on or after that date. The remainder of this section becomes effective July 1, 2009, and applies to civil actions that accrue on or after that date. 

PROVIDER RATES
SECTION 10.71.  The Department of Health and Human Services shall freeze rates for fiscal year 2009‑2010 for most Medicaid providers at the level authorized in fiscal year 2008‑2009. The rate freeze applies to all Medicaid private and public providers with the following exceptions:  federally qualified health clinics, rural health centers, State institutions, outpatient hospital, pharmacy, and the noninflationary components of the case‑mix reimbursement system for nursing facilities.  Medicaid rates predicated upon Medicare fee schedules shall follow Medicare reductions but not Medicare increases unless federally required.  Inflationary increases for Medicaid providers paying provider fees (private ICF‑MRs and nursing facilities) can occur if the State share of the increases can be funded with provider fees.

MEDICAID WAIVER FOR LOW‑INCOME PERSONS WITH HIV
SECTION 10.72. The Department of Health and Human Services, Division of Medical Assistance, shall study whether to apply to the Centers for Medicare and Medicaid Services (CMS) for a 1115 waiver to permit individuals who test positive for HIV and have incomes at or below two hundred percent (200%) of the federal poverty level to access Medicaid services.  The study shall determine the number of people who may be eligible, and the financial, programmatic, and technical impact of the waiver. The Department shall report on the results of its study of the waiver to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than December 31, 2009.

maintain MEDICAID ELIGIBIlITY
SECTION 10.73. The Department of Health and Human Services, Division of Medical Assistance, shall study policies that will prevent a Medicaid recipient from losing Medicaid eligibility when the annual Social Security and Railroad Retirement Cost of Living Adjustments (COLAs) and the annual Federal Poverty Level adjustment cause a Medicaid recipient to become income‑ineligible for Medicaid.  The policies shall apply only in cases where Medicaid income eligibility is affected only by Social Security and Railroad Retirement COLAs and Federal Poverty Level adjustments and shall not render a Medicaid recipient eligible if all other eligibility requirements are not met.  The Department shall report the results of the study to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on or before December 31, 2009.  The Department shall also study policies that allow individuals who are at or marginally above Medicaid income limits to buy‑in to Medicaid coverage on a sliding fee scale.

REDUCE INFANT MORTALITY AND PRETERM BIRTHS
SECTION 10.74.(a)  The Department of Health and Human Services, Division of Medical Assistance, shall seek a Medicaid 1115 waiver or implement other available Medicaid options to provide interconceptional coverage to low‑income women with incomes below one hundred eighty‑five percent (185%) of the federal poverty guidelines who have given birth to a high‑risk infant. A high‑risk infant is defined as weighing less than 1500 grams, is born less than 34 weeks gestation, is born with a congenital anomaly, or who has died within the first 28 days of life.
SECTION 10.74.(b)  Interconceptional care shall be limited to two years following the birth of a high‑risk infant, or until a subsequent birth, whichever comes first.
SECTION 10.74.(c)  The Division is authorized to develop a benefit package to improve interconceptional care to decrease poor birth outcomes in subsequent pregnancies.
SECTION 10.74.(d)  The Division shall provide estimates of the cost savings from improved birth outcomes that will offset the cost of providing Medicaid coverage to this targeted population.  The Division shall report the status of the waiver to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on or before October 1, 2009.  The Division shall not implement the waiver unless authorized by an act of the General Assembly.

MEDICAID WAIVER TO PROVIDE HOME AND COMMUNITY-BASED MEDICAID SERVICES FOR CERTAIN INDIVIDUALS
SECTION 10.74A.  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall apply to the Centers for Medicare and Medicaid Services for a 1915(c) waiver to permit individuals who sustain traumatic brain injury after age 22 to access home and community‑based Medicaid services. If approved, the Department shall not implement the waiver except as authorized by an act of the General Assembly appropriating funds for this purpose. The Department shall report on the status of the waiver to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than  March 1, 2010.

NC NOVA
SECTION 10.75.  The Department of Health and Human Services, Division of Health Services Regulation, may use up to eighty‑eight thousand dollars ($88,000) for fiscal year 2009‑2010 and ninety‑three thousand seven hundred dollars ($93,700) for fiscal year 2010‑2011 of existing resources to continue the NC New Organizational Vision Award certification program. The Division shall use federal civil monetary penalty receipts as a source of support for this initiative, when appropriate.

DHSR LICENSE FEE INCREASES
SECTION 10.76.(a)  G.S. 131D‑2(b) reads as rewritten:
"§ 131D‑2.  Licensing of adult care homes for the aged and disabled.
(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. The Department shall charge each adult care home with six or fewer beds a nonrefundable annual license fee in the amount of three hundred fifteen dollars ($315.00). The Department shall charge each adult care home with more than six beds a nonrefundable annual license fee in the amount of three hundred sixty dollars ($360.00) plus a nonrefundable annual per‑bed fee of seventeen dollars and fifty cents ($17.50)."
SECTION 10.76.(b)  G.S. 131E‑147 reads as rewritten:
"§ 131E‑147.  Licensure requirement.
(a)	No person shall operate an ambulatory surgical facility without a license obtained from the Department.
(b)	Applications shall be available from the Department, and each application filed with the Department shall contain all necessary and reasonable information that the Department may by rule require. A license shall be granted to the applicant upon a determination by the Department that the applicant has complied with the provisions of this Part and the rules promulgated by the Commission under this Part. The Department shall charge the applicant a nonrefundable annual base license fee in the amount of eight hundred fifty dollars ($850.00) plus a nonrefundable annual per‑operating room fee in the amount of seventy‑five dollars ($75.00)." 
SECTION 10.76.(c)  G.S. 131E‑167(a) reads as rewritten:
"§ 131E‑167.  Certificate requirement.
(a)	Applications for certification shall be available from the Department, and each application filed with the Department shall contain all necessary and reasonable information that the Department may by rule require. A certificate shall be granted to the applicant for a period not to exceed one year upon a determination by the Department that the applicant has substantially complied with the provisions of this Article and the rules promulgated by the Department under this Article. The Department shall charge the applicant a nonrefundable annual certification fee in the amount of three hundred eighty‑five dollars ($385.00)."
SECTION 10.76.(d)  G.S. 131E‑138(c) reads as rewritten:
"§ 131E‑138.  Licensure requirements.
(c)	An application for a license shall be available from the Department, and each application filed with the Department shall contain all information requested by the Department. A license shall be granted to the applicant upon a determination by the Department that the applicant has complied with the provisions of this Part and the rules promulgated by the Commission under this Part. The Department shall charge the applicant a nonrefundable annual license fee in the amount of five hundred ten dollars ($510.00)."
SECTION 10.76.(e)  G.S. 131E‑77 reads as rewritten:
"§ 131E‑77.  Licensure requirement.
(a)	No person or governmental unit shall establish or operate a hospital in this state without a license. An infirmary is not required to obtain a license under this Part.
(b)	The Commission shall prescribe by rule that any licensee or prospective applicant seeking to make specified types of alteration or addition to its facilities or to construct new facilities shall submit plans and specifications before commencement to the Department for preliminary inspection and approval or recommendations with respect to compliance with the applicable rules under this Part.
(c)	An applicant for licensing under this Part shall provide information related to hospital operations as requested by the Department. The required information shall be submitted by the applicant on forms provided by the Department and established by rule.
(d)	The Department shall renew each license in accordance with the rules of the Commission. The Department shall charge the applicant a nonrefundable annual base license fee plus a nonrefundable annual per‑bed fee as follows:

Facility Type	Number of Beds	Base Fee	Per‑Bed Fee
General Acute Hospitals:	 1‑49 beds	$250.00		$17.50
	50‑99 beds	$350.00		$17.50
	100‑199 beds	$450.00		$17.50
	200‑399 beds	$550.00		$17.50
	400‑699 beds	$750.00		$17.50
	700+ beds	$950.00		$17.50
Other Hospitals:		$500.00		$17.50

(e)	The Department shall issue the license to the operator of the hospital who shall not transfer or assign it except with the written approval of the Department. The license shall designate the number and types of inpatient beds, the number of operating rooms, and the number of gastrointestinal endoscopy rooms.
(f)	The operator shall post the license on the licensed premises in an area accessible to the public."
SECTION 10.76.(f)  G.S. 122C‑23(h) reads as rewritten:
"(h)	The Department shall charge facilities licensed under this Chapter a nonrefundable annual base license fee plus a nonrefundable annual per‑bed fee as follows:

Type of Facility	Number of Beds 	Base Fee 	Per‑Bed Fee

Facilities (non‑ICF/MR):	0 beds 	 $215.00	$0
	1 to 6 beds	 $305.00	$0
	More than 6 beds 	 $475.00	$17.50
ICF/MR Only: 	1 to 6 beds 	 $845.00	$0
	More than 6 beds	 $800.00	$17.50"
SECTION 10.76.(g)  G.S. 131E‑102(b) reads as rewritten:
"(b)	Applications shall be available from the Department, and each application filed with the Department shall contain all necessary and reasonable information that the Department may by rule require. A license shall be granted to the applicant upon a determination by the Department that the applicant has complied with the provisions of this Part and the rules promulgated under this Part. The Department shall charge the applicant a nonrefundable annual license fee in the amount of four hundred twenty dollars ($420.00) plus a nonrefundable annual per‑bed fee of seventeen dollars and fifty cents ($17.50)."

DHSR initial LICENSURE FEES NEW FACILITIES
SECTION 10.77.  Article 16 of Chapter 131E of the General Statutes is amended by adding the following new section to read:
"§ 131E‑272.  Initial licensure fees for new facilities.
The following fees are initial licensure fees for new facilities and are applicable as follows:

	Number	Initial	Initial
Facility Type	of Beds	License Fee	Bed Fee
Adult Care Licensure	More than 6	$400.00	$19.00
	6 or Fewer	$350.00	$ ‑
Acute and Home Care
General Acute Hospitals	1‑49	$550.00	$19.00
	50‑99	$750.00	$19.00
	100‑199	$950.00	$19.00
	200‑399	$1150.00	$19.00
	400‑699	$1550.00	$19.00
	700+	$1950.00	$19.00
Other Hospitals		$1050.00	$19.00

Home Care	‑	$560.00	$ ‑
Ambulatory Surgical Ctrs.	‑	$900.00	$85.00
Hospice (Free Standing)	‑	$450.00	$ ‑
Abortion Clinics	‑	$750.00	$ ‑
Cardiac Rehab. Centers	‑	$425.00	$ ‑

Nursing Home & L&C
	Nursing Homes		$470.00	$19.00
	All Others		$ ‑	$19.00

Mental Health Facilities
Nonresidential		$265.00	$ ‑
Non ICF‑MR	6 or fewer	$350.00	$ ‑
ICF‑MR only	6 or fewer	$900.00	$ ‑
Non ICF‑MR	More than 6	$525.00	$19.00
ICF‑MR only	More than 6	$850.00	$19.00."

DHHS Block Grants
SECTION 10.78.(a)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2010, according to the following schedule:

TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT

Local Program Expenditures

Division of Social Services

01.	Work First Family Assistance (Cash Assistance)	$87,518,579

02.	Work First County Block Grants	94,453,315

03.	Child Protective Services – Child Welfare
	Workers for Local DSS	14,452,391

04.	Work First – Boys and Girls Clubs	800,000

05.	Work First – Connect, Inc.	67,523

06.	Child Welfare Collaborative	887,517

Division of Child Development

07.	Subsidized Child Care Program	61,087,077

Division of Public Health

08.	Teen Pregnancy Prevention Initiatives	450,000

DHHS Administration

09.	Division of Social Services	1,093,176

10.	Office of the Secretary	75,392

11.	Office of the Secretary/DIRM – TANF
	Automation Projects	720,000

12.	Office of the Secretary/DIRM – NC FAST
	Implementation	1,200,000

Transfers to Other Block Grants

Division of Child Development

13.	Transfer to the Child Care and
	Development Fund	84,330,900

Division of Social Services

14.	Transfer to Social Services Block Grant for Child
	Protective Services – Child Welfare Training in
	Counties	2,550,000

15.	Transfer to Social Services Block Grant for
	Maternity Homes	60,503

16.	Transfer to Social Services Block Grant for Teen
	Pregnancy Prevention Initiatives	2,500,000

17.	Transfer to Social Services Block Grant for County
	Departments of Social Services for Children's Services	4,500,000

18.	Transfer to Social Services Block Grant for
	Foster Care Services	390,000

19.	Transfer to Social Services Block Grant for
	Medically Fragile Children	260,000

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT	$357,396,373

TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) CONTINGENCY FUNDS BLOCK GRANT

Local Program Expenditures

Division of Social Services

01.	Work First Family Assistance (Cash Assistance)	$1,857,193

02.	Work First – Boys and Girls Clubs	1,200,000

03.	Work First – Afterschool Services
	For At‑Risk Children	1,229,785

04.	Work First – Afterschool Programs
	For At‑Risk Youth in Middle Schools	300,000

05.	Work First – Connect, Inc. (Work Central)	301,025

06.	Work First – Citizens Schools Program	360,000

07.	County Demonstration Grants	3,239,789

08.	Adoption Services – Special Children's Adoption Fund	3,000,000

09.	Family Violence Prevention	2,200,000

10.	Child Welfare Collaborative	987,995

11.	Work First Functional Assessment	600,000

12.	Electing County State Funding Swap Out	2,378,213

13.	State Subsidized Child Care Funding Swap	12,452,484

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) CONTINGENCY FUNDS BLOCK GRANT	$30,106,484

SOCIAL SERVICES BLOCK GRANT

Local Program Expenditures

Divisions of Social Services and Aging and Adult Services

01.	County Departments of Social Services	$ 28,868,189
(Transfer from TANF – $4,500,000)

02.	State In‑Home Services Fund	2,101,113

03.	State Adult Day Care Fund	2,155,301

04.	Child Protective Services/CPS Investigative
	Services‑Child Medical Evaluation Program	243,121

05.	Foster Care Services	2,372,619
	(Transfer from TANF – $390,000)

06.	Maternity Homes (Transfer from TANF – $60,503)	943,002

07.	Special Children Adoption Incentive Fund	500,000

08.	Child Protective Services‑Child Welfare Training
	for Counties	2,550,000
(Transfer from TANF)

Division of Aging and Adult Services

09.	Home and Community Care Block Grant (HCCBG)	1,834,077

Division of Mental Health, Developmental Disabilities, and Substance
	Abuse Services

10.	Mental Health Services Program	422,003

11.	Developmental Disabilities Services Program	5,000,000

12.	Mental Health Services‑Adult and
Child/Developmental Disabilities Program/
	Substance Abuse Services‑Adult	3,234,601

Division of Child Development

13.	Subsidized Child Care Program	3,150,000

Division of Vocational Rehabilitation

14.	Vocational Rehabilitation Services – Easter Seal
	Society/UCP Community Health Program	188,263

Division of Public Health

15.	Teen Pregnancy Prevention Initiatives	2,500,000
(Transfer from TANF)

16.	Services for Medically Fragile Children
	(Transfer from TANF – $260,000)	360,000

DHHS Program Expenditures

Division of Aging and Adult Services

17.	UNC‑CARES Training Contract	247,920

Division of Services for the Blind

18.	Independent Living Program	3,714,211

Division of Health Service Regulation

19.	Adult Care Licensure Program	411,897

20.	Mental Health Licensure and Certification Program	205,668

DHHS Administration

21.	Division of Aging and Adult Services	688,436

22.	Division of Social Services	892,624

23.	Office of the Secretary/Controller's Office	138,058

24.	Office of the Secretary/DIRM	87,483

25.	Division of Child Development	15,000

26.	Division of Mental Health, Developmental
	Disabilities, and Substance Abuse Services	29,665

27.	Division of Health Service Regulation	235,625

28.	Office of the Secretary‑NC Inter‑Agency Council
	For Coordinating Homeless Programs	250,000

29.	Office of the Secretary	48,053

Transfers to Other State Agencies

Department of Administration

30.	NC Commission of Indian Affairs In‑Home
	Services for the Elderly	203,198

Transfers to Other Block Grants

Division of Public Health

31.	Transfer to Preventive Health Services Block Grant
	For HIV/STD Prevention and Community Planning	145,819

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 63,735,946

LOW‑INCOME HOME ENERGY ASSISTANCE BLOCK GRANT

Local Program Expenditures

Division of Social Services

01.	Low‑Income Energy Assistance Program (LIEAP)	$ 25,909,124

02.	Crisis Intervention Program (CIP)	20,224,269

Office of the Secretary – Office of Economic Opportunity

03.	Weatherization Program	1,000,000

04.	Heating Air Repair & Replacement Program (HARRP)	3,385,583

Local Administration

Division of Social Services

05.	County DSS Administration	3,608,360

Office of the Secretary – Office of Economic Opportunity

06.	Local Residential Energy Efficiency Service
	Providers – Weatherization	420,035

07.	Local Residential Energy Efficiency Service
	Providers – HARRP	195,910

DHHS Administration

08.	Division of Social Services	275,000

09.	Division of Mental Health, Developmental
	Disabilities, and Substance Abuse Services	8,128

10.	Office of the Secretary/DIRM	269,935

11.	Office of the Secretary/Controller's Office	12,332

12.	Office of the Secretary/Office of Economic
	Opportunity – Weatherization	294,874

13.	Office of the Secretary/Office of Economic
	Opportunity – HARRP	137,574

Transfers to Other State Agencies

14.	Department of Administration – 
N.C. State Commission of Indian Affairs	67,042

TOTAL LOW‑INCOME HOME ENERGY ASSISTANCE
BLOCK GRANT	$ 55,808,166

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

Local Program Expenditures

Division of Child Development

01.	Subsidized Child Care Services (CCDF)	$144,097,307

02.	Contract Subsidized Child Care Services Support	507,617

03.	Subsidized Child Care Services
	(Transfer from TANF)	84,330,900

04.	Quality and Availability Initiatives	20,760,876

05.	T.E.A.C.H. Program	3,800,000

Division of Social Services

06.	Local Subsidized Child Care Services Support	$16,594,417

DHHS Administration

Division of Child Development

07.	DCD Administrative Expenses	6,539,277

Division of Central Administration

08.	DHHS Central Administration – DIRM
	Technical Services	763,356

TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT	$277,393,750

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT RECEIVED THROUGH THE AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA)

Local Program Expenditures

Division of Child Development

01.	Subsidized Child Care Services (CCDF)
	(High Quality Four‑Year‑Old Classrooms)	$53,993,329

02.	Contract Subsidized Child Care Services Support	29,030

DHHS Program Expenditures

Division of Child Development

03.	Quality and Availability Initiatives	11,519,144

Local Administration

Division of Social Services

04.	Subsidy Services Support	2,001,631

TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT RECEIVED THROUGH ARRA	$67,543,143

MENTAL HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

01.	Mental Health Services – Adult	$ 5,977,762

02.	Mental Health Services – Child	3,921,991

03.	Comprehensive Treatment Service Program	1,500,000

04.	Mental Health Services – UNC School of Medicine,
	Department of Psychiatry	300,000

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT	$ 11,699,753

SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT

Local Program Expenditures

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

01.	Substance Abuse Services – Adult	$ 22,258,080

02.	Substance Abuse Treatment Alternative for
	Women	8,069,524

03.	Substance Abuse – HIV and IV Drug	5,116,378

04.	Substance Abuse Prevention – Child	7,186,857

05.	Substance Abuse Services – Child	4,940,500

06.	Implementation – Institute of Medicine's
	Study Recommendations	250,000

Division of Public Health

07.	Risk Reduction Projects	633,980

08.	Aid‑to‑Counties	209,576

09.	Maternal Health	37,779

TOTAL SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT	$ 48,702,674

MATERNAL AND CHILD HEALTH BLOCK GRANT

Local Program Expenditures

Division of Public Health

01.	Children's Health Services	7,534,865

02.	Women's Health	7,701,691

03.	Oral Health	38,041

DHHS Program Expenditures

Division of Public Health

04.	Children's Health Services	1,359,636

05.	Women's Health	135,452

06.	State Center for Health Statistics	179,483

07.	Quality Improvement in Public Health	14,646

08.	Health Promotion	88,746

09.	Office of Minority Health	55,250

10.	Immunization Program – Vaccine Distribution	382,648

DHHS Administration

Division of Public Health

11.	Division of Public Health Administration	631,966

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 18,122,424

PREVENTIVE HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

Division of Public Health

01.	NC Statewide Health Promotion	$1,730,653

02.	Services to Rape Victims	197,112

03.	HIV/STD Prevention and Community Planning
	(Transfer from Social Services Block Grant)	145,819

DHHS Program Expenditures

Division of Public Health

04.	NC Statewide Health Promotion	1,699,044

05.	Oral Health	70,000

06.	State Laboratory of Public Health	16,600

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT	$3,859,228

COMMUNITY SERVICES BLOCK GRANT

Local Program Expenditures

Office of Economic Opportunity

01.	Community Action Agencies	$ 16,673,336

02.	Limited Purpose Agencies	926,297

DHHS Administration

03.	Office of Economic Opportunity	926,296

TOTAL COMMUNITY SERVICES BLOCK GRANT	$ 18,525,929

COMMUNITY SERVICES BLOCK GRANT RECEIVED THROUGH THE AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA)

Local Program Expenditures

Office of Economic Opportunity

01.	Community Action Agencies	$ 20,558,585

02.	Limited Purpose Agencies	1,093,541

DHHS Administration

03.	Office of Economic Opportunity	218,709

TOTAL COMMUNITY SERVICES BLOCK GRANT
RECEIVED THROUGH ARRA	$ 21,870,834

GENERAL PROVISIONS
SECTION 10.78.(b)  Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall allocate the increase proportionally across the program and activity appropriations identified for that Block Grant in this section.  In allocating an increase in federal fund availability, the Department shall not propose funding for new programs or activities not appropriated in this section.
If the Congress of the United States decreases the federal fund availability for any of the Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall reduce State administration by at least the percentage of the reduction in federal funds. After determining the State administration, the remaining reductions shall be allocated proportionately across the program and activity appropriations identified for that Block Grant in this section.
Prior to allocating the change in federal fund availability, the proposed allocation must be approved by the Office of State Budget and Management. If the Department adjusts the allocation of any Block Grant due to changes in federal fund availability, then a report shall be made to the Joint Legislative Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 10.78.(c)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2010, according to the schedule enacted for State fiscal year 2009‑2010 or until a new schedule is enacted by the General Assembly.
SECTION 10.78.(d)  All changes to the budgeted allocations to the Block Grants administered by the Department of Health and Human Services that are not specifically addressed in this section shall be approved by the Office of State Budget and Management, and a report shall be submitted to the Joint Legislative Commission on Governmental Operations for review prior to implementing the changes. All changes to the budgeted allocations to the Block Grants shall be reported immediately to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division. This subsection does not apply to Block Grant changes caused by legislative salary increases and benefit adjustments.

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES BLOCK GRANT (TANF)
SECTION 10.78.(e)  The sum of one million ninety‑three thousand one hundred seventy‑six dollars ($1,093,176) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2009‑2010 fiscal year shall be used to support administration of TANF‑funded programs.
SECTION 10.78.(f)  The sum of two million two hundred thousand dollars ($2,200,000) appropriated under this section in TANF Contingency funds to the Department of Health and Human Services, Division of Social Services, for the 2009‑2010 fiscal year shall be used to provide domestic violence services to Work First recipients.  These funds shall be used to provide domestic violence counseling, support, and other direct services to clients.  These funds shall not be used to establish new domestic violence shelters or to facilitate lobbying efforts.  The Division of Social Services may use up to seventy‑five thousand dollars ($75,000) in TANF funds to support one administrative position within the Division of Social Services to implement this subsection.
Each county department of social services and the local domestic violence shelter program serving the county shall jointly develop a plan for utilizing these funds. The plan shall include the services to be provided and the manner in which the services shall be delivered. The county plan shall be signed by the county social services director or the director's designee and the domestic violence program director or the director's designee and submitted to the Division of Social Services by December 1, 2009. The Division of Social Services, in consultation with the Council for Women, shall review the county plans and shall provide consultation and technical assistance to the departments of social services and local domestic violence shelter programs, if needed.
The Division of Social Services shall allocate these funds to county departments of social services according to the following formula:  (i) each county shall receive a base allocation of five thousand dollars ($5,000); and (ii) each county shall receive an allocation of the remaining funds based on the county's proportion of the statewide total of the Work First caseload as of July 1, 2009, and the county's proportion of the statewide total of the individuals receiving domestic violence services from programs funded by the Council for Women as of July 1, 2009. The Division of Social Services may reallocate unspent funds to counties that submit a written request for additional funds.
SECTION 10.78.(g)  The sum of one million two hundred twenty‑nine thousand seven hundred eighty‑five dollars ($1,229,785) appropriated in this section in TANF Contingency funds to the Department of Health and Human Services, Division of Social Services, for the 2009‑2010 fiscal year shall be used to expand after‑school programs and services for at‑risk children. The Department shall develop and implement a grant program to award grants to community‑based programs that demonstrate the ability to reach children at risk of teen pregnancy, school dropout, and gang participation. The Department shall award grants to community‑based organizations that demonstrate the ability to develop and implement linkages with local departments of social services, area mental health programs, schools, and other human services programs in order to provide support services and assistance to the child and family. These funds may be used to fund one position within the Division of Social Services to coordinate at‑risk after‑school programs and shall not be used for other State administration.
SECTION 10.78.(h)  The sum of fourteen million four hundred fifty‑two thousand three hundred ninety‑one dollars ($14,452,391) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant for the 2009‑2010 fiscal year for child welfare improvements shall be allocated to the county departments of social services for hiring or contracting staff to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post‑adoption services for eligible families.
SECTION 10.78.(i)  The sum of three million dollars ($3,000,000) appropriated in this section in TANF Contingency funds to the Department of Health and Human Services, Special Children Adoption Fund, for the 2009‑2010 fiscal year shall be used in accordance with G.S. 108A‑50.2, as enacted in Section 10.48 of this act.  The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A‑50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.
SECTION 10.78.(j)  The sum of one million two hundred thousand dollars ($1,200,000) in this section appropriated to the Department of Health and Human Services in the TANF Block Grant for the 2009‑2010 fiscal year shall be used to implement N.C. FAST (North Carolina Families Accessing Services through Technology). The N.C. FAST Program involves the entire automation initiative through which families access services and local departments of social services deliver benefits, supervised by the Department of Health and Human Services, Divisions of Social Services, Aging and Adult Services, Medical Assistance, and Child Development. The statewide automated initiative shall be implemented in compliance with federal regulations in order to ensure federal financial participation in the project. The Department of Health and Human Services shall report on its compliance with this subsection to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than January 1, 2010.
SECTION 10.78.(k)  The sum of three hundred thousand dollars ($300,000) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in TANF Contingency funds for the 2009‑2010 fiscal year shall be used to expand after‑school programs for at‑risk children attending middle school. The Department shall develop and implement a grant program to award funds to community‑based programs demonstrating the capacity to reach children at risk of teen pregnancy, school dropout, and gang participation. These funds shall not be used for training or administration at the State level. All funds shall be distributed to community‑based programs, focusing on those communities where similar programs do not exist in middle schools.
SECTION 10.78.(l)  In implementing the TANF Block Grants, the Department of Health and Human Services shall review policies, programs, and initiatives to ensure that they support men in their role as fathers and strengthen fathers' involvement in their children's lives.  The Department shall encourage county departments of social services to ensure their Work First programs emphasize responsible fatherhood and increased participation by noncustodial fathers.
SECTION 10.78.(m)  The sum of sixty‑seven thousand five hundred twenty‑three dollars ($67,523) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant and the sum of three hundred one thousand twenty‑five dollars ($301,025) appropriated in this section to the Department in TANF Contingency funds for the 2009‑2010 fiscal year shall be transferred to Connect, Inc. Connect, Inc., shall report on the number of people served and the services received as a result of the receipt of funds. The report shall contain expenditure data, including the amount of funds used for administration and direct training. The report shall also include the number of people who have been employed as a direct result of services provided by Connect, Inc., including the length of employment in the new position. The Department of Health and Human Services shall evaluate the program and ensure that services provided are not duplicative of local employment security commissions in the nine counties served by Connect, Inc. The evaluation report shall be submitted to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than May 1, 2010.
SECTION 10.78.(n)  The sum of eight hundred thousand dollars ($800,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant and the sum of one million two hundred thousand dollars ($1,200,000) appropriated in this section to the Department in TANF Contingency funds for Boys and Girls Clubs for the 2009‑2010 fiscal year shall be used to make grants for approved programs. The Department of Health and Human Services, in accordance with federal regulations for the use of TANF Block Grant funds, shall administer a grant program to award funds to the Boys and Girls Clubs across the State in order to implement programs that improve the motivation, performance, and self‑esteem of youths and to implement other initiatives that would be expected to reduce gang participation, school dropout, and teen pregnancy rates. The Department shall encourage and facilitate collaboration between the Boys and Girls Clubs and Support Our Students, Communities in Schools, and similar programs to submit joint applications for the funds if appropriate.
SECTION 10.78.(o)  The Department of Health and Human Services, Division of Social Services, shall continue implementing county demonstration grants that began in the 2006‑2007 fiscal year. The county demonstration grants may be awarded for up to three years with all projects ending no later than the end of fiscal year 2009‑2010. The purpose of the county demonstration grants is to identify best practices that can be used by counties to improve the work participation rates. The Division of Social Services is authorized to establish two time‑limited positions to manage the grant award process and monitor the demonstration projects through fiscal year 2009‑2010.
Funding provided under the county demonstration grants shall not be used to supplant local funds, and counties shall be required to maintain the current level of effort and funding for the Work First program.
The Department of Health and Human Services, Division of Social Services, shall report on the status of county demonstration grants implemented pursuant to this subsection to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than February 1, 2010.
SECTION 10.78.(p)  The sum of one million eight hundred seventy‑five thousand five hundred twelve dollars ($1,875,512) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant and in TANF Contingency funds for the 2009‑2010 fiscal year shall be used to continue support for the Child Welfare Collaborative.

SOCIAL SERVICES BLOCK GRANT
SECTION 10.78.(q)  Social Services Block Grant funds appropriated to the North Carolina Inter‑Agency Council for Coordinating Homeless Programs and the North Carolina Housing Coalition are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.78.(r)  The sum of two million five hundred fifty thousand dollars ($2,550,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2009‑2010 fiscal year to support various child welfare training projects as follows:
(1)	Provide a regional training center in southeastern North Carolina.
(2)	Provide training for residential child caring facilities.
(3)	Provide for various other child welfare training initiatives.
SECTION 10.78.(s)  The sum of nine hundred forty‑three thousand two dollars ($943,002) appropriated in this section to the Department of Health and Human Services in the Social Services Block Grant for the 2009‑2010 fiscal year shall be used to support payments to maternity home providers.
SECTION 10.78.(t)  The sum of three hundred sixty thousand dollars ($360,000) appropriated in this section to the Department of Health and Human Services, Division of Public Health, in the Social Services Block Grant for the 2009‑2010 fiscal year shall be used to continue support for the Medically Fragile Children program.
SECTION 10.78.(u)  The sum of two million three hundred seventy‑two thousand six hundred nineteen dollars ($2,372,619) appropriated in this section in the Social Services Block Grant for child caring agencies for the 2009‑2010 fiscal year shall be allocated to the State Private Child Caring Agencies Fund.
SECTION 10.78.(v)  The Department of Health and Human Services is authorized, subject to the approval of the Office of State Budget and Management, to transfer Social Services Block Grant funding allocated for departmental administration between divisions that have received administrative allocations from the Social Services Block Grant.
SECTION 10.78.(w)  Social Services Block Grant funds appropriated for the Special Children's Adoption Incentive Fund will require fifty percent (50%) local match.

LOW‑INCOME HOME ENERGY ASSISTANCE BLOCK GRANT
SECTION 10.78.(x)  Additional emergency contingency funds received may be allocated for Energy Assistance Payments or Crisis Intervention Payments without prior consultation with the Joint Legislative Commission on Governmental Operations. Additional funds received shall be reported to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division upon notification of the award. The Department of Health and Human Services shall not allocate funds for any activities, including increasing administration, other than assistance payments, without prior consultation with the Joint Legislative Commission on Governmental Operations.
In addition to funds available for weatherization appropriated within the Low‑Income Home Energy Assistance Block Grant, funds available through the American Recovery and Reinvestment Act shall be used to continue to enhance weatherization activities coordinated by local agencies.

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
SECTION 10.78.(y)  Payment for subsidized child care services provided with federal TANF funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.
SECTION 10.78.(z)  If funds appropriated through the Child Care and Development Fund Block Grant for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order to use the federal funds fully.
SECTION 10.78.(aa)  Funds from the Child Care and Development Fund Block Grant and Child Care and Development Fund Block Grant received through the American Recovery and Reinvestment Act shall be used to increase access to child care subsidy. To help address the economic downturn and increasing unemployment in North Carolina, the Department of Health and Human Services, Division of Child Development shall adopt temporary policies that facilitate and expedite the prudent expenditure of these funds as follows:
(1)	Permit the local purchasing agencies to issue time‑limited vouchers to assist counties in managing one‑time, nonrecurring subsidy funding.
(2)	Extend the current 30/60 day job search policy to six months when a recipient experiences a loss of employment.
(3)	Provide an upfront job search period of six months for former recipients who have lost employment since October 1, 2008.
(4)	Provide a job search period of six months for recipients that complete school and are entering the job market.
(5)	Notwithstanding any other provision of law, extend the 24‑month education time limit for an additional 12 months for a child care recipient who has lost a job since October 1, 2008, or otherwise needs additional training to enhance his or her marketable skills for job placement due to the economic downturn and who has depleted his or her 24‑month allowable education time.
(6)	Lower the number of hours a parent must be working in order to be eligible for subsidy to assist parents who are continuing to work but at reduced hours.
SECTION 10.78.(bb)  If American Recovery and Reinvestment Act funds appropriated through the Child Care and Development Fund Block Grant for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order to use the federal funds fully.

MENTAL HEALTH BLOCK GRANT
SECTION 10.78.(cc)  The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this section in the Mental Health Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2009‑2010 fiscal year and the sum of four hundred twenty‑two thousand three dollars ($422,003) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2009‑2010 fiscal year shall be used to continue a Comprehensive Treatment Services Program for Children.

MATERNAL AND CHILD HEALTH BLOCK GRANT
SECTION 10.78.(dd)  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104‑193 (42 U.S.C. § 710), for the 2009‑2010 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an Abstinence Until Marriage Education Program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C‑81(e1)(4). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.
SECTION 10.78.(ee)  The Department of Health and Human Services shall ensure that there will be follow‑up testing in the Newborn Screening Program.

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT
SECTION 10.78.(ff)  The sum of two hundred fifty thousand dollars ($250,000) appropriated in this section in the Substance Abuse Prevention and Treatment Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2009‑2010 fiscal year shall be used to implement one or more priority recommendations of the North Carolina Institute of Medicine (NCIOM) Substance Abuse Task Force, which include:
(1)	Development of a comprehensive substance abuse prevention plan for use at the State and local levels.
(2)	Providing funding for the establishment of six pilot projects to implement county or multicounty comprehensive prevention plans.
(3)	Supporting efforts to reduce high‑risk drinking on college campuses.
(4)	Development of a pilot program to provide chronic disease management services to substance abuse clients and former clients. The purpose of the pilot is to decrease the number of short‑term hospital admissions and to provide discharge planning and follow‑up to reduce substance abuse client recidivism.
(5)	Educating and encouraging health care professionals to use the screening, brief intervention, and referral to treatment (SBIRT) model promoted by the federal government.

COMMUNITY SERVICES BLOCK GRANT
SECTION 10.78.(gg)  In accordance with the intent of the American Recovery and Reinvestment Act, the North Carolina General Assembly strongly encourages recipients of Community Services Block Grant and Community Services Block Grant Recovery funds to enhance cooperation with county departments of social services and regional food banks to increase benefits enrollment for eligible persons, including Food and Nutrition Services and Medical Assistance.

PART XI. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

Commercial Fertilizer Fees
SECTION 11.1.  G.S. 106‑671(a) reads as rewritten:
"(a)	For the purpose of defraying expenses on the inspection and of otherwise determining the value of commercial fertilizers in this State, there shall be paid to the Department of Agriculture and Consumer Services a charge of fifty cents (50¢) per ton on all commercial fertilizers other than packages of five pounds or less. Inspection fees shall be paid on all tonnage distributed into North Carolina to any person not having a valid reporting permit. On individual packages of five pounds or less there shall be paid in lieu of the tonnage fee an annual registration fee of twenty‑five dollars ($25.00) for each brand offered for sale, sold, or distributed; provided that any per annum (fiscal) tonnage of any brand sold in excess of one hundred tons may be subject to the charge of fifty cents (50¢) per ton on any amount in excess of one hundred tons as provided herein. Whenever any manufacturer of commercial fertilizer shall have paid the charges required by this section his goods shall not be liable to further tax, whether by city, town, or county; provided, this shall not exempt the commercial fertilizers from an ad valorem tax."

Increase Pesticide Registration Fee
SECTION 11.2.  G.S. 143‑442(b) reads as rewritten:
"(b)	The applicant shall pay an annual registration fee of  one hundred fifty dollars ($150.00) plus an additional annual assessment for each brand or grade of pesticide registered. The annual assessment shall be fifty dollars ($50.00) if the applicant's gross sales of the pesticide in this State for the preceding 12 months for the period ending September 30th were more than five thousand dollars ($5,000.00) and twenty‑five dollars ($25.00) if gross sales were less than five thousand dollars ($5,000.00). An additional two hundred dollars ($200.00) delinquent registration penalty shall be assessed against the registrant for each brand or grade of pesticide which is marketed in North Carolina prior to registration as required by this Article. In the case of multi‑year registration, the annual fee and additional assessment for each year shall be paid at the time of the initial registration. The Board shall give a pro rata refund of the registration fee and additional assessment to the registrant in the event that registration is canceled by the Board or by the United States Environmental Protection Agency."

Board of Agriculture Review of Fee Schedules
SECTION 11.3.  G.S. 106‑6.1 reads as rewritten:
"§ 106‑6.1.  Fees.
(a)	A board or commission within the Department of Agriculture and Consumer Services may establish fees or charges for the services it provides. The Board of Agriculture, subject to the provisions of Chapter 146 of the General Statutes, may establish a rate schedule for the use of facilities operated by the Department of Agriculture and Consumer Services.
(b)	No later than February 1 of each odd numbered year, the Board of Agriculture shall review the fees it established under this section to determine whether any of these fees should be changed and report to the Fiscal Research Division the amount of each fee reviewed, when the fee was last changed, the number of times the fee was collected during the prior fiscal year, the total receipts from the fee during the prior fiscal year, and any recommendations for increasing or decreasing the amount of any such fees. This report shall also include for each fee an evaluation of any inflationary change since the last change to the amount of the fee and any other information deemed relevant to this evaluation."

PART XII. DEPARTMENT OF Labor

DEPARTMENT OF LABOR/APPRENTICESHIP PROGRAM
SECTION 12.1.  Chapter 94 of the General Statutes is amended by adding a new section to read as follows:
"§ 94‑12.  Fees.
A fee of twenty-five dollars ($25.00) is imposed on each apprentice who is covered by a written apprenticeship agreement entered into under this Chapter.  The fee is payable by the apprentice unless the employer who enters into the agreement pays the fee on behalf of the apprentice.  The fees are departmental receipts and must be applied to the costs of administering the apprenticeship program.  The Commissioner may adopt rules pursuant to Chapter 150B of the General Statutes to implement this section."

PART XIII. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Revise Clean Water Management Trust Fund Operations Limit
SECTION 13.1.  Notwithstanding G.S. 113A‑253(d), of the funds appropriated to the Clean Water Management Trust Fund for each fiscal year of the 2009‑2011 fiscal biennium, no more than three million dollars ($3,000,000) may be used for administrative and operating expenses of the Board of Trustees of the Clean Water Management Trust Fund and its staff.

Food and Lodging Inspection Fees Increases
SECTION 13.2.(a)  G.S. 130A‑248(d) reads as rewritten:
"(d)	The Department shall charge each establishment subject to this section, except nutrition programs for the elderly administered by the Division of Aging of the Department of Health and Human Services, establishments that prepare and sell meat food products or poultry products, and public school cafeterias, an annual fee of sixty dollars ($60.00). The Commission shall adopt rules to implement this subsection. Fees collected under this subsection shall be used for State and local food, lodging, and institution sanitation programs and activities. No more than thirty‑three and one‑third percent (33 1/3%) of the fees collected under this subsection may be used to support State health programs and activities."
SECTION 13.2.(b)  G.S. 130A‑248(e) reads as rewritten:
"(e)	In addition to the fees under subsection (d) of this section, the Department may charge a fee of two hundred thirty‑five dollars ($235.00) for plan review of plans for prototype franchised or chain facilities for food establishments subject to this section. All of the fees collected under this subsection may be used to support the State food, lodging, and institution sanitation programs and activities under this Part."
SECTION 13.2.(c)  G.S. 130A‑248(f) reads as rewritten:
"(f)	Any local health department may charge a fee not to exceed two hundred thirty‑five dollars ($235.00) for plan review by that local health department of plans for food establishments subject to this section that are not subject to subsection (e) of this section. All of the fees collected under this subsection may be used for local food, lodging, and institution sanitation programs and activities. No food establishment that pays a fee under subsection (e) of this section is liable for a fee under this subsection."

Radiation Protection Section Supported by Fees
SECTION 13.3.(a)  G.S. 104E-19 reads as rewritten:
"§ 104E‑19.  Fees.
(a)	 An annual fee in the amount set by the Department is imposed on a person who is required to be registered or licensed under this Chapter.  The Department must set the fees at amounts that provide revenue to offset its costs in performing its duties under this Chapter.
(b)	Repealed by Session Laws 1987, c. 850, s. 13."
SECTION 13.3.(b)  G.S. 104E-9(a)(8) is rewritten to read:
"(8)	To establish fees in accordance with G.S. 104E-19."

Scrap Tire Disposal Account Funds
SECTION 13.4. Notwithstanding the provisions of G.S. 105‑187.19(b), effective for taxes levied during the 2009‑2010 fiscal year, the Secretary of Revenue shall credit to the General Fund three million dollars ($3,000,000) of the net tax proceeds that G.S. 105‑187.19(b) directs the Secretary to credit to the Scrap Tire Disposal Account.

Marine Fisheries Funds for the Fishery Resources Grant Program
SECTION 13.5.  Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Division of Marine Fisheries for the Fishery Resource Grant Program established under G.S. 113‑200, the sum of one hundred forty‑six thousand three hundred twelve dollars ($146,312) for the 2009‑2010 fiscal year and the sum of one hundred forty‑six thousand three hundred twelve dollars ($146,312) for the 2010‑2011 fiscal year shall be used for river herring research in the Department.  The remaining funds appropriated in this act to the Department for the Fishery Resource Grant Program for the 2009‑2011 biennium shall be used for research related to the Sea Grant College Program only and shall not be used for any other purpose.

New Lease Purchase/Installment Contracts for Forestry Equipment
SECTION 13.6.  Prior to the Division of Forest Resources of the Department of Environment and Natural Resources entering into either a new lease purchase contract for the purchase of forestry equipment or a new installment contract for the purchase of forestry equipment, the Division of Forest Resources shall submit a detailed list of the forestry equipment to be purchased under the contract to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division.  Prior to the Department of Administration entering into either a new lease purchase contract for the purchase of forestry equipment or a new installment contract for the purchase of forestry equipment on behalf of the Division of Forest Resources, the Department of Administration shall submit a detailed list of the forestry equipment to be purchased under the contract to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division.  If a list is modified after it is submitted under this section, the modified list shall be submitted to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division prior to entering into the contract.

Grassroots Science Program
SECTION 13.7.(a)  Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Grassroots Science Program, the sum of three million four hundred eleven thousand seven hundred thirteen dollars ($3,411,713) for the 2009‑2010 fiscal year and the sum of three million four hundred eleven thousand seven hundred thirteen dollars ($3,411,713) for the 2010‑2011 fiscal year is allocated as grants‑in‑aid for each fiscal year as follows:
	2009‑2010	2010‑2011

Aurora Fossil Museum	$57,875	$57,875
Cape Fear Museum	$157,787	$157,787
Carolina Raptor Center	$109,931	$109,931
Catawba Science Center	$143,429	$143,429
Colburn Earth Science Museum, Inc.	$73,054	$73,054
Core Sound Waterfowl Museum	$49,000	$49,000
Discovery Place	$649,608	$649,608
Eastern NC Regional Science Center	$49,000	$49,000
Fascinate‑U	$79,451	$79,451
Granville County Museum Commission,
Inc.–Harris Gallery	$55,294	$55,294
Greensboro Children's Museum	$132,374	$132,374
The Health Adventure Museum of Pack
Place Education, Arts and
Science Center, Inc.	$152,499	$152,499
Highlands Nature Center	$77,683	$77,683
Imagination Station	$84,313	$84,313
The Iredell Museums, Inc.	$60,080	$60,080
Kidsenses	$79,656	$79,656
Museum of Coastal Carolina	$76,460	$76,460
The Natural Science Center 
of Greensboro, Inc.	$182,627	$182,627
North Carolina Museum of Life
and Science	$372,229	$372,229
Pisgah Astronomical Research Institute	$49,000	$49,000
Port Discover: Northeastern
North Carolina's Center for
Hands‑On Science, Inc.	$49,000	$49,000
Rocky Mount Children's Museum	$70,809	$70,809
Schiele Museum of Natural History
and Planetarium, Inc.	$224,956	$224,956
Sci Works Science Center and
Environmental Park of Forsyth County	$143,569	$143,569
Sylvan Heights Waterfowl Park
and Eco‑Center	$49,000	$49,000
Western North Carolina Nature Center	$110,621	$110,621
Wilmington Children's Museum	$72,408	$72,408

Total	$3,411,713	$3,411,713
SECTION 13.7.(b)  No later than March 1, 2010, the Department of Environment and Natural Resources shall report to the Fiscal Research Division all of the following information for each museum that receives funds under this section:
(1)	The actual operating budget for the 2008‑2009 fiscal year.
(2)	The proposed operating budget for the 2009‑2010 fiscal year.
(3)	The total attendance at the museum during the 2009 calendar year.
SECTION 13.7.(c)  No later than March 1, 2011, the Department of Environment and Natural Resources shall report to the Fiscal Research Division all of the following information for each museum that receives funds under this section:
(1)	The actual operating budget for the 2009‑2010 fiscal year.
(2)	The proposed operating budget for the 2010‑2011 fiscal year.
(3)	The total attendance at the museum during the 2010 calendar year.
SECTION 13.7.(d)  As a condition for qualifying to receive funding under this section, all of the following documentation shall, no later than November 1 of each year of the 2009‑2011 biennium, be submitted for each museum under this section to the Department of Environment and Natural Resources for fiscal years ending between July 1, 2007, and June 30, 2008, and only those costs that are properly documented under this subsection are allowed by the Department in calculating the distribution of funds under this section:
(1)	Each museum under this section shall submit its IRS (Internal Revenue Service) Form 990 to show its annual operating expenses, its annual report, and a reconciliation that explains any differences between expenses as shown on the IRS Form 990 and the annual report.
(2)	Each friends association of a museum under this section shall submit its IRS Form 990 to show its reported expenses for the museum, its annual report, and a reconciliation that explains any differences between expenses as shown on the IRS Form 990 and the annual report, unless the association does not have both an IRS Form 990 and an annual report available, in which case, it shall submit either an IRS Form 990 or an annual report.
(3)	The chief financial officer of each county or municipal government that provides funds for the benefit of the museum shall submit a detailed signed statement of documented costs spent for the benefit of the museum that includes documentation of the name, address, title, and telephone number of the person making the assertion that the museum receives funds from the county or municipality for the benefit of the museum.
(4)	The chief financial officer of each county or municipal government or each friends association that provides indirect or allocable costs that are not directly charged to a museum under this section but that benefit the museum shall submit in the form of a detailed statement enumerating each cost by type and amount that is verified by the financial officer responsible for the completion of the documentation and that includes the name, address, title, and telephone number of the person making the assertion that the county, municipality, or association provides indirect or allocable costs to the museum.
SECTION 13.7.(e)  As used in subsection (d) of this section, "friends association" means a nonprofit corporation established for the purpose of supporting and assisting a museum that receives funding under this section.

Timber assessment despite appropriation
SECTION 13.8.  G.S. 113A‑192(c) is repealed.

Forest Development Fund/Forest Products Assessment Rates
SECTION 13.9.(a)  G.S. 113A‑192(c) through G.S. 113A‑192(e) are repealed. 
SECTION 13.9.(b)  G.S. 113A‑193(b) is amended by adding a new subdivision to read:
"(6)	Determine the appropriate assessment to be levied on primary forest products in accordance with G.S. 113A‑194."
SECTION 13.9.(c)  G.S. 113A‑194(b) reads as rewritten:
"(b)	The assessment levied on primary forest products shall not exceed the following rates:
(1)	One dollar ($1.00) per thousand board feet for softwood sawtimber, veneer logs and bolts, and all other softwood products normally measured in board feet.
(2)	Eighty cents (80¢) per thousand board feet for hardwood and bald cypress sawtimber, veneer, and all other hardwood and bald cypress products normally measured in board feet.
(3)	Forty cents (40¢) per cord for softwood pulpwood and other softwood products normally measured in cords.
(4)	Twenty‑four cents (24¢) per cord for hardwood pulpwood and other hardwood and bald cypress products normally measured in cords.
(5)	All material harvested within North Carolina for shipment outside the State for primary processing will be assessed at a percentage of the invoice value. This percentage will be established to yield rates equal to those if the material were processed within the State."

Beaver Damage Control Program Funds
SECTION 13.10.  G.S. 113‑291.10(f) reads as rewritten:
"(f)	Each county that volunteers to participate in this program for a given fiscal year shall provide written notification of its wish to participate no later than September 30 of that year and shall commit the sum of four thousand dollars ($4,000) in local funds no later than September 30 of that year. At least three hundred forty‑nine thousand dollars ($349,000) each fiscal year of the biennium shall be paid from funds available to the Wildlife Resources Commission to provide the State share necessary to support this program, provided the sum of at least twenty‑five thousand dollars ($25,000) in federal funds is available each fiscal year of the biennium to provide the federal share."

PART XIV. DEPARTMENT OF COMMERCE

ONE NORTH CAROLINA FUND
SECTION 14.1.  Of the funds appropriated in this act to the One North Carolina Fund for the 2009‑2010 fiscal year, the Department of Commerce may use up to three hundred thousand dollars ($300,000) to cover its expenses in administering the One North Carolina Fund and other economic development incentive grant programs during the 2009‑2010 fiscal year.

ONE NORTH CAROLINA FUNDS/USE OF CASH BALANCE
SECTION 14.2.(a)  Of the funds appropriated to the One North Carolina Fund in prior fiscal years that are unencumbered and unexpended as of June 30, 2009, or that become unencumbered or unexpended thereafter, the Department of Commerce shall use the sum of one million dollars ($1,000,000) in the 2009‑2010 fiscal year to market the State as a business destination.  
SECTION 14.2.(b)  Of the funds appropriated to the One North Carolina Fund in prior fiscal years that are unencumbered and unexpended as of June 30, 2009, or that become unencumbered or unexpended thereafter, the sum of two million dollars ($2,000,000) shall be transferred to the One North Carolina Small Business Fund for the 2009‑2010 fiscal year.
SECTION 14.2.(c)  Of the funds appropriated to the One North Carolina Fund in prior fiscal years that are unencumbered and unexpended as of June 30, 2009, or that become unencumbered or unexpended thereafter, the Department of Commerce shall allocate the sum of one million dollars ($1,000,000) for the 2009‑2010 fiscal year to the North Carolina Minority Support Center, Inc., to expand economic development lending.  The funds allocated under this subsection shall be used to assist small businesses having difficulty accessing credit due to a lack of liquidity in financial markets.  It is the General Assembly's intent that these funds be used to further community economic development lending and support in low‑wealth communities and to make capital accessible to small businesses in a way that will have an economic stimulus impact.
SECTION 14.2.(d)  Of the funds appropriated to the One North Carolina Fund in prior fiscal years that are unencumbered and unexpended as of June 30, 2009, or that become unencumbered or unexpended thereafter, the sum of two million dollars ($2,000,000) shall be transferred for the 2009-2010 fiscal year to the Regional Economic Development Commissions.

Small Business Assistance Fund
SECTION 14.3.(a)  Part 2I of Article 10 of Chapter 143B of the General Statutes reads as rewritten:
"Part 2I. North Carolina Small Business Assistance.
"Subpart A. One North Carolina Small Business Program."
SECTION 14.3.(b)  Part 2I of Article 10 of Chapter 143B of the General Statutes is amended by adding a new Subpart to read:
"Subpart B. Small Business Assistance Fund.
"§ 143B‑437.89.  Establishment of fund; use of moneys; application for moneys from the fund; disbursal; repayment; inspections; rules; reports.
(a)	Fund Established. – A revolving, special revenue fund to be known as the Small Business Jobs Preservation and Emergency Assistance Fund is established in the Department of Commerce. This Fund shall be administered by the Department. The Department shall be responsible for receipt and disbursement of all moneys as provided in this section. Interest earnings shall be credited to the Fund. The Fund consists of revenue resulting from funds appropriated by the State, repayments of principal of and interest on loans, fees, and other amounts received by the Department with respect to financial assistance provided by the Department, and any other public or private funds made available to the Fund.
(b)	Department Authority; Loan Terms. – The Department may approve for disbursements of moneys in the Fund to small businesses in accordance with the provisions of this section. The Department shall develop criteria, technical specifications, policies, and procedures to be used in determining whether the conditions of this section are satisfied and whether the activities described in the application are otherwise consistent with the purposes of this section. As used in this section, "moneys" means a disbursement from the Fund in the form of a loan, and "small business" means a business whose annual receipts and number of full‑time employees, combined with the annual receipts and full‑time employees of all related persons, did not exceed one million dollars ($1,000,000) or 100 full‑time employees. A small business may apply for a loan for:
(1)	Up to eighty percent (80%) of the projected cost of the proposed activities, subject to repayment within five years at the prime rate plus four percent (4%).
(2)	Up to eighty percent (80%) of the projected cost of the proposed activities, subject to repayment within 10 years at the prime rate plus six percent (6%).
(3)	Up to eighty percent (80%) of the projected cost of the proposed activities, subject to repayment within 15 years at the prime rate plus eight percent (8%).
(c)	Eligible Purposes. – Moneys in the Fund shall be used for any of the following eligible purposes:
(1)	To guarantee commercial loans.
(2)	To provide emergency bridge loans where clear and apparent ability to repay has been established but credit remains unavailable.
(3)	To lend for other purposes related to small business job preservation as approved or recommended by the Department.
(d)	Application. – Any small business may apply for moneys from the Fund by submitting an application to the Department. The application shall list each of the following:
(1)	The proposed activities for which the moneys are to be used.
(2)	The amount of moneys requested for these activities.
(3)	Projections of the dollar amount of private investment that is expected to occur as a direct result of the proposed activities.
(4)	An explanation of the nature of the private investment that will result from the proposed activities.
(5)	A requirement for any reports, disclosures, or information required by this section or necessary for the Department to fulfill its duties under this section.
(6)	The total compensation received for the previous year from the small business and all related persons for each of the five highest‑compensated employees of the small business.
(7)	Any additional or supplemental information required by the Department upon written request.
(e)	Determination. – The Department shall review an application submitted by a small business, determine whether the activities listed in the application are activities that are eligible for moneys from the Fund, and determine which applicants are selected to receive moneys from the Fund. A small business whose application is denied may file a new or amended application.
(f)	Limitation. – A small business that is selected may not receive moneys from the Fund pursuant to this section with an aggregate total of more than thirty‑five thousand dollars ($35,000).
(g)	Disbursements of Moneys. – The Department shall not disburse moneys for any loans until the small business has confirmed a method of repayment for the loan. The terms for repayment established for a given loan shall apply through the period of that loan. A small business that has been selected to receive moneys shall use the full amount of the moneys for the activities that were approved pursuant to subsection (b) of this section. Moneys are deemed used if the small business is legally committed to spend the moneys on the approved activities. For purposes of this section, approved activities do not include an increase in the total compensation of any employee identified in the application under subdivision (d)(6) of this section. A small business shall lose any moneys that have not been used within three years of being selected. These unused moneys shall be credited to the Fund. A small business that loses moneys pursuant to this subsection may file a new application. Any moneys repaid or credited to the Fund pursuant to this subsection shall be available to other applicants as long as the Fund exists.
(h)	Cost Report. – After activities financed in whole or in part pursuant to this section have been completed, the small business shall report the actual cost of the project to the Department. If the actual costs of the activities exceed the projected cost upon which the moneys were based, the small business may submit an application to the Department for additional moneys for the difference. If the actual costs of the activities are less than the projected cost, the small business shall arrange to pay the difference to the Fund according to terms set by the Department.
(i)	Inspection. – Inspection of a project for which moneys have been awarded may be performed by personnel of the Department. No person may be approved to perform inspections who is an officer or employee of the small business to which the moneys were disbursed or who is an owner, officer, employee, or agent of a contractor or subcontractor engaged in the activities for which the moneys were disbursed.
(j)	Administration. – The Department may adopt, modify, and repeal rules establishing the procedures to be followed in the administration of this section and interpreting and applying the provisions of this section, as provided in the Administrative Procedure Act.
(k)	Legislative Reports. – The Department shall prepare and file on or before September 1 of each year with the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division a consolidated report for the preceding fiscal year concerning the allocation of moneys authorized by this section, including a separate listing of the moneys disbursed to historically underutilized businesses. The report shall set forth for the preceding fiscal year itemized and total allocations from the Fund. The Department shall also prepare a summary report of all allocations made from the Fund for each fiscal year; the total funds received and allocations made; the total amount of moneys repaid to the Fund; and the total unallocated funds in the Fund.
Small businesses that have been selected to receive moneys from the Fund shall prepare and file a report that shall include the following information:
(1)	The total amount of private funds that was committed and the amount that was invested in activities for which moneys from the Fund were made available during the preceding fiscal year.
(2)	The total amount and character of moneys received from the Fund during the preceding fiscal year.
(3)	The total amount of moneys repaid to the Fund during the preceding fiscal year.
(4)	A description of how moneys from the Fund and funds from private investors were used during the preceding fiscal year.
(5)	Details regarding the types of private investment created or stimulated, the dates of this activity, the amount of public money involved, and any other pertinent information, including any jobs created, businesses started, and number of jobs retained due to the approved activities."
SECTION 14.3.(c)  This act becomes effective July 1, 2009.

WANCHESE SEAFOOD INDUSTRIAL PARK/OREGON INLET FUNDS
SECTION 14.4.(a)  Funds appropriated to the Department of Commerce for the 2009‑2010 fiscal year for the Wanchese Seafood Industrial Park that are unexpended and unencumbered as of June 30, 2009, shall not revert to the General Fund on June 30, 2009, but shall remain available to the Department to be expended by the Wanchese Seafood Industrial Park for operations, maintenance, repair, and capital improvements in accordance with Article 23C of Chapter 113 of the General Statutes. These funds shall be in addition to funds available to the North Carolina Seafood Industrial Park Authority for operations, maintenance, repair, and capital improvements under Article 23C of Chapter 113 of the General Statutes.
SECTION 14.4.(b) Funds appropriated to the Department of Commerce for the 2009‑2010 fiscal year for the Oregon Inlet Project that are unexpended and unencumbered as of June 30, 2009, shall not revert to the General Fund on June 30, 2009, but shall remain available to the Department to be expended by the Wanchese Seafood Industrial Park for securing adequate channel maintenance of the Oregon Inlet and for operations, maintenance, repair, and capital improvements in accordance with Article 23C of Chapter 113 of the General Statutes. These funds shall be in addition to funds available to the North Carolina Seafood Industrial Park Authority for operations, maintenance, repair, and capital improvements under Article 23C of Chapter 113 of the General Statutes.
SECTION 14.4.(c)  This section becomes effective June 30, 2009.

NER BLOCK GRANTS
SECTION 14.5.(a)   Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2010, according to the following schedule:

COMMUNITY DEVELOPMENT BLOCK GRANT

	01.	State Administration	$	1,000,000

	02.	Urgent Needs and Contingency	1,000,000

	03.	Scattered Site Housing	13,200,000

	04.	Economic Development	8,710,000

	05.	Small Business/Entrepreneurship	1,000,000

	06.	Community Revitalization	13,000,000

	07.	State Technical Assistance	450,000

	08.	Housing Development	1,500,000

	09.	Infrastructure	5,140,000

TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT – 2009 Program Year	$	45,000,000

SECTION 14.5.(b)  Decreases in Federal Fund Availability. – If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.
SECTION 14.5.(c)  Increases in Federal Fund Availability for Community Development Block Grant. – Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows: each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.
SECTION 14.5.(d)  Limitations on Community Development Block Grant Funds. – Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State Administration; not less than one million dollars ($1,000,000) may be used for Urgent Needs and Contingency; up to thirteen million two hundred thousand dollars ($13,200,000) may be used for Scattered Site Housing; eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development; up to one million dollars ($1,000,000) may be used for Small Business/Entrepreneurship; not less than thirteen million dollars ($13,000,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to one million five hundred thousand dollars ($1,500,000) may be used for Housing Development; up to five million one hundred forty thousand dollars ($5,140,000) may be used for Infrastructure. If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.
SECTION 14.5.(e)  Increase Capacity for Nonprofit Organizations. – Assistance to nonprofit organizations to increase their capacity to carry out CDBG‑eligible activities in partnership with units of local government is an eligible activity under any program category in accordance with federal regulations. Capacity building grants may be made from funds available within program categories, program income, or unobligated funds.
SECTION 14.5.(f)  The Department of Commerce shall consult with the Joint Legislative Commission on Governmental Operations prior to reallocating Community Development Block Grant Funds. Notwithstanding the provisions of this subsection, whenever the Director of the Budget finds that:
(1)	A reallocation is required because of an emergency that poses an imminent threat to public health or public safety, the Director of the Budget may authorize the reallocation without consulting the Commission. The Department of Commerce shall report to the Commission on the reallocation no later than 30 days after it was authorized and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency.
(2)	The State will lose federal block grant funds or receive less federal block grant funds in the next fiscal year unless a reallocation is made. The Department of Commerce shall provide a written report to the Commission on the proposed reallocation and shall identify the reason that failure to take action will result in the loss of federal funds. If the Commission does not hear the issue within 30 days of receipt of the report, the Department may take the action without consulting the Commission.
SECTION 14.5.(g)  By September 1, 2009, the Division of Community Assistance, Department of Commerce, shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the use of Community Development Block Grant Funds appropriated in the prior fiscal year.

Main Street Grant Funds
SECTION 14.6.(a)  Part 15 of Article 10 of Chapter 143B of the General Statutes reads as rewritten:
"Part 15. Main Street Solutions.
"§ 143B‑472.35.  Establishment of fund; use of funds; application for grants; disbursal; repayment; inspections; rules; reports.
(a)	A fund to be known as the Main Street Solutions Fund is established in the Department of Commerce. This Fund shall be administered by the Department of Commerce. The Department of Commerce shall be responsible for receipt and disbursement of all funds as provided in this section. Interest earnings shall be credited to the Main Street Solutions Fund.
(b)	Funds in the Main Street Solutions Fund shall be available to micropolitan cities in development tier two and three counties in the State. For purposes of this section, a "micropolitan city" is a city located within the State with a population, according to the most recent U.S. census, of between 10,000 and 50,000 people. Funds in the Main Street Solutions Fund shall be used for any of the following eligible activities:
(1)	The acquisition or rehabilitation of properties in connection with private investment in a designated downtown area.
(2)	The establishment of revolving loan programs for private investment in a designated downtown area.
(3)	The subsidization of interest rates for these revolving loan programs.
(4)	The establishment of facade incentive grants in connection with private investment in a designated downtown area.
(5)	Market studies, design studies, design assistance, or strategic planning efforts, provided the activity can be shown to lead directly to private investment in a designated downtown area.
(6)	Any approved project that provides construction or rehabilitation in a designated downtown area and can be shown to lead directly to private investment in the designated downtown area.
(7)	Public improvements and public infrastructure within a designated downtown area, provided these improvements are necessary to create or stimulate private investment in the designated downtown area.
(c)	Any micropolitan city located within a development tier two or three county may apply for assistance from the Main Street Solutions Fund by submitting an application to the Main Street Center in the Division of Community Assistance, Department of Commerce. Any city affiliated with the North Carolina Main Street Center Program may apply for a grant for a proposed project. 			
(c1)	The application shall include each of the following:
(1)	A copy of the consensus local economic development plan developed by the micropolitan city in conjunction with the Department's Main Street Program  and the city's regional economic development commission or its local council of government or both.
(1a)	The proposed activities for which the funds are to be used and the projected cost of the project.
(2)	The amount of grant funds requested for these activities.
(3)	Projections of the dollar amount of private investment that is expected to occur in the designated downtown area as a direct result of the city's proposed activities.
(4)	Whether local public dollars are required to match any grant funds according to the provisions of subdivision (g)(2) of this section, and if so, the amount of local public funds required.
(5)	An explanation of the nature of the private investment in the designated downtown area that will result from the city's proposedactivities.
(6)	Projections of the time needed to complete the city's proposed activities.
(7)	Projections of the time needed to realize the private investment that is expected to result from the city's proposed activities.
(8)	Identification of the proposed source of funds to be used for repayment of any loan obligations.
(9)	Any additional or supplemental information requested by the Division.
(d)	A committee, comprised of representatives of: the Division of Community Assistance of the Department of Commerce, the North Carolina Main Street Program, the Local Government Commission, and the League of Municipalities shall do each of the following:
(1)	Review a city's application.
(2)	Determine whether the activities listed in the application are activities that are eligible for a grant.
(3)	Determine which applicants are selected to receive funds from the Main Street Solutions Fund.
A city whose application is denied may file a new or amended application.
(e)	A Main Street City that is selected may not receive a grant pursuant to this section totaling less than twenty thousand dollars ($20,000) or more than three hundred thousand dollars ($300,000).
	(g)	(1)	A city that has been selected to receive a grant  shall use the full amount of the grant for the activities that were approved pursuant to subsection (d) of this section. Funds are deemed used if the city is legally committed to spend the funds on the approved activities.
(2)	If a city has received approval to use the grant for public improvements or public infrastructure, that city shall be required to raise, before funds for these public improvements may be drawn from the city's account, local public funds to match the amount of the grant from the Main Street Solutions Fund on the basis of at least one local public dollar ($1.00) for every one dollar ($1.00) from the Main Street Solutions Fund. This match requirement applies only to those funds received for public improvements or public infrastructure and is in addition to the requirement set forth in subdivision (1) of this subsection.
(3)	A city that fails to satisfy the condition set forth in subdivision (1) of this subsection shall lose any funds that have not been used within three years of being selected. These unused funds shall be credited to the Main Street Solutions Fund. A city that fails to satisfy the conditions set forth in subdivisions (1) and (2) of this subsection may file a new application.
(4)	Any funds repaid or credited to the Main Street Solutions Fund pursuant to subdivision (3) of this subsection shall be available to other applicants as long as the Main Street Solutions Fund is in effect.
			(i)	After a project financed in whole or in part pursuant to this section has been completed, the city shall report the actual cost of the project to the Department of Commerce. If the actual cost of the project exceeds the projected cost upon which the grant was based, the city may submit an application to the Department of Commerce for a grant for the difference. If the actual cost of the project is less than the projected cost, the city shall arrange to pay the difference to the Main Street Solutions Fund according to terms set by the Department.
(j)	Inspection of a project for which a grant has been awarded may be performed by personnel of the Department of Commerce. No person may be approved to perform inspections who is an officer or employee of the unit of local government to which the grant was made or who is an owner, officer, employee, or agent of a contractor or subcontractor engaged in the construction of any project for which the grant was made.
(k)	The Department of Commerce may adopt, modify, and repeal rules establishing the procedures to be followed in the administration of this section and regulations interpreting and applying the provisions of this section, as provided in the Administrative Procedure Act.
(l)	The Department of Commerce and cities that have been selected to receive a grant from the Main Street Solutions Fund shall prepare and file on or before September 1 of each year with the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division a consolidated report for the preceding fiscal year concerning the allocation of grants authorized by this section.
The portion of the annual report prepared by the Department of Commerce shall set forth for the preceding fiscal year itemized and total allocations from the Main Street Solutions Fund for grants. The Department of Commerce shall also prepare a summary report of all allocations made from the fund for each fiscal year; the total funds received and allocations made and the total unallocated funds in the Fund.
The portion of the report prepared by the city shall include each of the following:
(1)	The total amount of private funds that was committed and the amount that was invested in the designated downtown area during the preceding fiscal year.
(2)	The total amount of local public matching funds that was raised, if required by subdivision (g)(2) of this section.
(3)	The total amount of grants received from the Main Street Solutions Fund during the preceding fiscal year.
	(5)	A description of how the grant funds and funds from private investors were used during the preceding fiscal year.
(6)	Details regarding the types of private investment created or stimulated, the dates of this activity, the amount of public money involved, and any other pertinent information, including any jobs created, businesses started, and number of jobs retained due to the approved activities."
SECTION 14.6.(b)  This act becomes effective July 1, 2009.

INDUSTRIAL COMMISSION FEES/COMPUTER SYSTEM REPLACEMENT
SECTION 14.7.  The North Carolina Industrial Commission may retain the additional revenue generated as a result of an increase in the fee charged to parties for the filing of compromised settlements. These funds shall be used for the purpose of replacing existing computer hardware and software used for the operations of the Commission. These funds may also be used to prepare any assessment of hardware and software needs prior to purchase and to develop and administer the needed databases and new Electronic Case Management System, including the establishment of two time‑limited positions for application development and support and mainframe migration. The Commission may not retain any fees under this section unless they are in excess of the former two‑hundred‑dollar ($200.00) fee charged by the Commission for filing a compromised settlement.

INDUSTRIAL COMMISSION/SAFETY EDUCATION SECTION
SECTION 14.8.  G.S. 97-73 reads as rewritten:
"§ 97‑73.  Fees.
(a)	Claims. – The Industrial Commission may establish by rule a schedule of fees for examinations conducted, reports made, documents filed, and agreements reviewed under this Article. The fees shall be collected in accordance with rules adopted by the Industrial Commission.
(b),	(c) Repealed by Session Laws 2003‑284, s. 10.33(d), effective July 1, 2003.
(d)	Safety. – A fee in the amount set by the Industrial Commission is imposed on an employer for whom the Industrial Commission provides an educational training program on how to prevent or reduce accidents or injuries that result in workers' compensation claims or a person for whom the Industrial Commission provides other educational services.  The fees are departmental receipts."

EMPLOYMENT SECURITY COMMISSION FUNDS
SECTION 14.9.(a)  Funds from the Employment Security Commission Reserve Fund shall be available to the Employment Security Commission of North Carolina to use as collateral to secure federal funds and to pay the administrative costs associated with the collection of the Employment Security Commission Reserve Fund surcharge. The total administrative costs paid with funds from the Reserve in the 2009‑2010 fiscal year shall not exceed two million five hundred thousand dollars ($2,500,000).
SECTION 14.9.(b)  There is appropriated from the Employment Security Commission Reserve Fund to the Employment Security Commission of North Carolina the sum of twenty million dollars ($20,000,000) for the 2009‑2010 fiscal year to be used for the following purposes:
(1)	Nineteen million seven hundred thousand dollars ($19,700,000) for the operation and support of local Employment Security Commission offices.
(2)	Two hundred thousand dollars ($200,000) for the State Occupational Information Coordinating Committee to develop and operate an interagency system to track former participants in State education and training programs.
(3)	One hundred thousand dollars ($100,000) to maintain compliance with Chapter 96 of the General Statutes, which directs the Commission to employ the Common Follow‑Up Management Information System to evaluate the effectiveness of the State's job training, education, and placement programs.
SECTION 14.9.(c)  There is appropriated from the Employment Security Commission Reserve Fund to the Employment Security Commission of North Carolina an amount not to exceed one million dollars ($1,000,000) for the 2009‑2010 fiscal year to fund State initiatives not currently funded through federal grants.

EMPLOYMENT SECURITY COMMISSION/USE OF federal UNEMPLOYMENT TRUST FUNDS
SECTION 14.10.  Of the funds credited to and held in the State of North Carolina's account in the Unemployment Trust Fund by the Secretary of the Treasury of the United States pursuant to and in accordance with section 903 of the Social Security Act, the Employment Security Commission of North Carolina may expend the sum of fourteen million dollars ($14,000,000) for the 2009‑2011 biennium for the following purposes:
(1)	Implementing and administering the provisions of State law that qualify the State for the incentive payments.
(2)	Improved outreach to individuals who might be eligible by virtue of these provisions.
(3)	The improvement of unemployment benefits and tax operations, including responding to increased demand for unemployment benefits.
(4)	Staff‑assisted reemployment services for unemployment claimants.

COUNCIL OF GOVERNMENT FUNDS
SECTION 14.11.(a)  Of the funds appropriated in this act to the Department of Commerce, eight hundred seven thousand three hundred fifty‑one dollars ($807,351)for the 2009‑2010 fiscal year and eight hundred seven thousand three hundred fifty‑one dollars ($807,351) for the 2010‑2011 fiscal year shall only be used as provided by this section.  Each regional council of government or lead regional organization is allocated up to forty‑seven thousand four hundred ninety‑two dollars ($47,492) for the 2009‑2010 and the 2010‑2011 fiscal years.
SECTION 14.11.(b)  A regional council of government may use funds allocated to it by this section only to assist local governments in grant applications, economic development, community development, support of local industrial development activities, and other activities as deemed appropriate by the member governments.
SECTION 14.11.(c)  Funds allocated by this section shall be paid by electronic transfer in two equal installments.  Upon receipt of the report required by subsection (e) of this section, the first installment shall be paid no later than September 15, 2009. 
SECTION 14.11.(d)  Funds allocated by this section shall not be used for payment of dues or assessments by the member governments and shall not supplant funds appropriated by the member governments.
SECTION 14.11.(e)  By September 1 of each year, and more frequently as requested, each council of government or lead regional organization shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division of the General Assembly on prior State fiscal year program activities, objectives, and accomplishments, and prior State fiscal year itemized expenditures and fund sources.  Each council of government or lead regional organization shall provide to the Fiscal Research Division of the General Assembly a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

NONPROFIT REPORTING REQUIREMENTS
SECTION 14.12.(a)  The North Carolina Institute of Minority Economic Development, Inc., Land Loss Prevention Project, North Carolina Minority Support Center, North Carolina Community Development Initiative, Inc., North Carolina Association of Community Development Corporations, Inc., North Carolina Biotechnology Center, and Partnership for the Sounds, Inc., shall do the following:
(1)	By September 1 of each year, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on prior State fiscal year program activities, objectives, and accomplishments, and prior State fiscal year itemized expenditures and fund sources.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.
SECTION 14.12.(b)  Remaining allotments after September 1 shall not be released to any nonprofit organization that does not satisfy the reporting requirements provided in subsection (a) of this section.

REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS
SECTION 14.13.(a)  Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Partnership, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, North Carolina's Eastern Region Economic Development Partnership, and Carolinas Partnership, Inc.
SECTION 14.13.(b)  Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:
(1)	First, the Department shall establish each commission's allocation by determining the sum of allocations to each county that is a member of that commission. Each county's allocation shall be determined by dividing the county's development factor by the sum of the development factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation. As used in this subdivision, the term "development factor" means a county's development factor as calculated under G.S. 143B‑437.08; and
(2)	Next, the Department shall subtract from funds allocated to the North Carolina's Eastern Region Economic Development Partnership the sum of three hundred eight thousand six hundred sixty‑six dollars ($308,666) in the 2009‑2010 fiscal year, which sum represents: (i) the total interest earnings in the prior fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and (ii) the total interest earnings in the prior fiscal year on loans made from the seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and
(3)	Next, the Department shall redistribute the sum of three hundred eight thousand six hundred sixty‑six dollars ($308,666) in the 2009‑2010 fiscal year to the seven regional economic development commissions named in subsection (a) of this section. Each commission's share of this redistribution shall be determined according to the development factor formula set out in subdivision (1) of this subsection. This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection.
SECTION 14.13.(c)  Of the funds appropriated for the Southeastern North Carolina Regional Economic Development Commission, the sum of two hundred fifty-four thousand dollars ($254,000) for the 2009-2010 fiscal year and the sum of two hundred fifty-four thousand dollars ($254,000) for the 2010-2011 fiscal year shall be transferred to BRAC Regional Task Force, Inc., for economic development including defense procurement capabilities in the 11‑county region it serves.
SECTION 14.13.(d)  No more than one hundred twenty thousand dollars ($120,000) in State funds shall be used for the annual salary of any one employee of a regional economic development commission.
SECTION 14.13.(e)  The General Assembly finds that successful economic development requires the collaboration of the State, regions of the State, counties, and municipalities.  Therefore, the regional economic development commissions are encouraged to seek supplemental funding from their county and municipal partners to continue and enhance their efforts to attract and retain business in the State.

SET REGULATORY FEE FOR UTILITIES COMMISSION
SECTION 14.14.(a)  The percentage rate to be used in calculating the public utility regulatory fee under G.S. 62‑302(b)(2) is twelve one‑hundredths of one percent (0.12%) for each public utility's North Carolina jurisdictional revenues earned during each quarter that begins on or after July 1, 2009.
SECTION 14.14.(b)  The electric membership corporation regulatory fee imposed under G.S. 62‑302(b1) for the 2009‑2010 fiscal year is two hundred thousand dollars ($200,000).
SECTION 14.14.(c)  This section becomes effective July 1, 2009.

RURAL ECONOMIC DEVELOPMENT CENTER
SECTION 14.15.(a)  Of the funds appropriated in this act to the North Carolina Rural Economic Development Center, Inc. (Rural Center), the sum of four million three hundred sixty‑four thousand seven hundred eighty‑five dollars ($4,364,785) for the 2009‑2010 fiscal year and the sum of four million three hundred sixty‑four thousand seven hundred eighty‑five dollars ($4,364,785) for the 2010‑2011 fiscal year shall be allocated as follows:
	2009‑2010	2010‑2011
Technical Assistance and Center
Administration of Research
and Demonstration Grants	$431,156	$431,156
Center Administration, Oversight,
and Other Programs	$586,290	$586,290
Water/Wastewater Administration
and Technical Assistance	$449,203	$449,203
Research and Demonstration Grants	$366,300	$366,300
Institute for Rural Entrepreneurship	$142,560	$142,560
Community Development Grants	$987,436	$987,436
Community Development Grants
Administration	$	48,510	$	48,510
Microenterprise Loan Program	$193,050	$193,050
Water/Sewer/Business Development
Matching Grants	$874,170	$874,170
Statewide Water/Sewer Database			      $  99,000		      $  99,000
Agricultural Advancement Consortium	$114,345	$114,345
Agricultural Advancement Consortium
Operating	$	72,765	$	72,765
SECTION 14.15.(b)  Funds allocated in subsection (a) of this section for community development grants shall support development projects and activities within the State's minority communities. Any new or previously funded community development corporation, as that term is defined in subsection (c) of this section, is eligible to apply for community development grant funds. However, no community development grant funds shall be released to a community development corporation unless the corporation can demonstrate that there are no outstanding or proposed assessments or other collection actions against the corporation for any State or federal taxes, including related penalties, interest, and fees.
SECTION 14.15.(c)  For purposes of this section, the term "community development corporation" means a nonprofit corporation:
(1)	Chartered pursuant to Chapter 55A of the General Statutes;
(2)	Tax‑exempt pursuant to section 501(c)(3) of the Internal Revenue Code of 1986;
(3)	Whose primary mission is to develop and improve low‑income communities and neighborhoods through economic and related development;
(4)	Whose activities and decisions are initiated, managed, and controlled by the constituents of those local communities; and
(5)	Whose primary function is to act as deal maker and packager of projects and activities that will increase their constituencies' opportunities to become owners, managers, and producers of small businesses, affordable housing, and jobs designed to produce positive cash flow and curb blight in the targeted community.
SECTION 14.15.(d)  The Rural Center shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management in the same manner as State departments and agencies in preparation for biennium budget requests.
SECTION 14.15.(e)  By September 1 of each year, and more frequently as requested, the Rural Center shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on prior State fiscal year program activities, objectives, and accomplishments and prior State fiscal year itemized expenditures and fund sources.

RURAL ECONOMIC DEVELOPMENT CENTER/INFRASTRUCTURE PROGRAM
SECTION 14.16.(a)  Of the funds appropriated in this act to the North Carolina Rural Economic Development Center, Inc. (Rural Center), the sum of nineteen million two hundred ninety‑seven thousand two hundred and seventy‑eight dollars ($19,297,278) for the 2009‑2010 fiscal year and the sum of nineteen million two hundred ninety‑seven thousand two hundred and seventy‑eight dollars ($19,297,278) for the 2010‑2011 fiscal year shall be allocated as follows: 
(1)	To continue the North Carolina Infrastructure Program. The purpose of the Program is to provide grants to local governments to construct critical water and wastewater facilities and to provide other infrastructure needs, including technology needs, to sites where these facilities will generate private job‑creating investment. At least fourteen million eight hundred and fifty thousand dollars ($14,850,000) of the funds appropriated in this act for each year of the biennium must be used to provide grants under this Program.
(2)	To provide matching grants to local governments in distressed areas and equity investments in public‑private ventures that will productively reuse vacant buildings and properties, with priority given to towns or communities with populations of less than 5,000.
(3)	To provide economic development research and demonstration grants.
SECTION 14.16.(b)  The Rural Center may contract with other State agencies, constituent institutions of The University of North Carolina, and colleges within the North Carolina Community College System for certain aspects of the North Carolina Infrastructure Program, including design of Program guidelines and evaluation of Program results.
SECTION 14.16.(c)  During each year of the 2009‑2011 biennium, the Rural Center may use up to three hundred seventy‑eight thousand three hundred seventy‑eight dollars ($378,378) of the funds appropriated in this act to cover its expenses in administering the North Carolina Economic Infrastructure Program.
SECTION 14.16.(d)   By September 1 of each year, and more frequently as requested, the Rural Center shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division concerning the progress of the North Carolina Economic Infrastructure Program in the prior State fiscal year.

OPPORTUNITIES INDUSTRIALIZATION CENTERS fUNDS
SECTION 14.17.(a)  Of the funds appropriated in this act to the North Carolina Rural Economic Development Center, Inc. (Rural Center), the sum of three hundred fifty‑seven thousand three hundred ninety dollars ($357,390) for the 2009‑2010 fiscal year and the sum of three hundred fifty‑seven thousand three hundred ninety dollars ($357,390) for the 2010‑2011 fiscal year shall be equally distributed among the certified Opportunities Industrialization Centers (OI Centers).
SECTION 14.17.(b)  By September 1 of each year, and more frequently as requested, the Rural Center shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on prior fiscal year program activities, objectives, and accomplishments for each of the OI Centers receiving funds pursuant to subsection (a) of this section.  This report shall include data for each OI Center on itemized expenditures and fund sources for the prior State fiscal year.
SECTION 14.17.(c)  The Rural Center shall ensure that each OI Center files annually with the State Auditor a financial statement in the form and on the schedule prescribed by the State Auditor. The financial statements must be audited in accordance with standards prescribed by the State Auditor to assure that State funds are used for the purposes provided by law.
SECTION 14.17.(d)  No funds appropriated under this act shall be released to an OI Center listed in subsection (a) of this section if the OI Center has any overdue tax debts, as that term is defined in G.S. 105‑243.1, at the federal or State level.

RURAL ECONOMIC DEVELOPMENT CENTER/CLEAN WATER PARTNERS FUNDING
SECTION 14.18.  By September 1 of each year, and more frequently as requested, the North Carolina Rural Economic Development Center, Inc., shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division concerning the progress of the water/sewer improvement grants (commonly referred to as funding for Clean Water Partners) as appropriated in Section 13.13A of S.L. 2007‑323 and Section 13.8 of S.L. 2008‑107.  Each report shall include a list of grants made since the last report, the total amount contracted, and the amount of funds remaining. This reporting requirement shall replace all previous reporting requirements and shall remain in effect until all funds from this program are expended.

RURAL ECONOMIC DEVELOPMENT CENTER/AMERICAN RECOVERY AND REINVESTMENT ACT FUNDS
SECTION 14.19.  If the North Carolina Rural Economic Development Center, Inc., (Rural Center) finds that North Carolina will not maximize the amount of funding for water and wastewater projects the State could receive under the American Recovery and Reinvestment Act of 2009, the Rural Center shall use funds appropriated to the Rural Center in this act to maximize such funding.

PART XV. JUDICIAL DEPARTMENT

TRANSFER OF EQUIPMENT AND SUPPLY FUNDS
SECTION 15.1.  Funds appropriated to the Judicial Department in the 2009‑2011 fiscal biennium for equipment and supplies shall be certified in a reserve account. The Administrative Office of the Courts may transfer these funds to the appropriate programs and between programs as the equipment priorities and supply consumptions occur during the operating year. These funds shall not be expended for any other purpose.

GRANT FUNDS
SECTION 15.2.  Notwithstanding G.S. 143C‑6‑9, the Administrative Office of the Courts may use up to the sum of one million five hundred thousand dollars ($1,500,000) from funds available to the Department to provide the State match needed in order to receive grant funds. Prior to using funds for this purpose, the Department shall report to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and to the Joint Legislative Commission on Governmental Operations on the grants to be matched using these funds.

death penalty litigation FUNDS
SECTION 15.3.  Of the funds appropriated in this act to the Office of Indigent Defense Services for the 2009‑2011 fiscal biennium, the Office may use up to the sum of five hundred thirty‑one thousand dollars ($531,000) for the 2009‑2010 fiscal year and up to the sum of five hundred thirty‑one thousand dollars ($531,000) for the 2010‑2011 fiscal year to contract with the Center for Death Penalty Litigation to provide training, consultation, brief banking, and other assistance to attorneys representing indigent capital defendants. The Office of Indigent Defense Services shall report by February 1, of each year in the biennium, to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the activities funded by this section.

REPORT ON BUSINESS COURTS
SECTION 15.4.  The Administrative Office of the Courts shall report to the Chairs of the House of Representatives and Senate Appropriations Committees and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by March 1 of each year on the activities of each North Carolina Business Court site, including the number of new, closed, and pending cases, average age of pending cases, and annual expenditures for the prior fiscal year.

COLLECTION OF WORTHLESS CHECK FUNDS
SECTION 15.5.  Notwithstanding the provisions of G.S. 7A‑308(c), the Judicial Department may use any balance remaining in the Collection of Worthless Checks Fund on June 30, 2009, for the purchase or repair of office or information technology equipment during the 2009‑2010 fiscal year.  Prior to using any funds under this section, the Judicial Department shall report to the Joint Legislative Commission on Governmental Operations and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the equipment to be purchased or repaired and the reasons for the purchases.

DISPUTE RESOLUTION FEES
SECTION 15.6.  Notwithstanding the provisions of G.S. 143C‑1‑2(b), certification and renewal fees collected by the Dispute Resolution Commission are nonreverting and are only to be used at the direction of the Commission.

REIMBURSEMENT FOR USE OF PERSONAL VEHICLES
SECTION 15.7.  Notwithstanding the provisions of G.S. 138‑6(a)(1), the Judicial Department, during the 2009‑2011 fiscal biennium, may elect to establish a per‑mile reimbursement rate for transportation by privately owned vehicles at a rate less than the business standard mileage rate set by the Internal Revenue Service.

GUIDELINES FOR MAXIMIZING EFFICIENCY OF PROCEEDINGS
SECTION 15.9.  By December 1, 2009, the Administrative Office of the Courts shall develop guidelines to be applied to maximize efficient use of the time of probation officers and court personnel participating in probation revocation proceedings. The Administrative Office of the Courts may also adopt guidelines for maximizing the efficient use of the time of law enforcement personnel participating in the Criminal District Courts.

ELIMINATE special ALLOWANCE for SUPERIOR COURT JUDGES
SECTION 15.10.  G.S. 7A‑44(a) reads as rewritten:
"(a)	A judge of the superior court, regular or special, shall receive the annual salary set forth in the Current Operations Appropriations Act, and in addition shall be paid the same travel allowance as State employees generally by G.S. 138‑6(a)(1) and (2), provided that no travel allowance be paid for travel within his county of residence.  The Administrative Officer of the Courts may also reimburse superior court judges, in addition to the above funds for travel, for travel and subsistence expenses incurred for professional education."

clarify that DWI treatment courts are a type of drug treatment court under the drug treatment court act
SECTION 15.11.  G.S. 7A‑791 reads as rewritten:
"§ 7A‑791.  Purpose.
The General Assembly recognizes that a critical need exists in this State for judicial programs that will reduce the incidence of alcohol and other drug abuse or dependence and crimes, including the offense of driving while impaired, delinquent acts, and child abuse and neglect committed as a result of alcohol and other drug abuse or dependence, and child abuse and neglect where alcohol and other drug abuse or dependence are significant factors in the child abuse and neglect. It is the intent of the General Assembly by this Article to create a program to facilitate the creation of local drug treatment court  programs and driving while impaired (DWI) treatment court programs."

OFFICE OF INDIGENT DEFENSE SERVICES EXPANSION FUNDS
SECTION 15.12.  The Judicial Department, Office of Indigent Defense Services, may use up to the sum of two million five hundred one thousand one hundred fifty dollars ($2,501,150) in appropriated funds during the 2009‑2010 fiscal year and up to the sum of two million four hundred thirty‑three thousand seven hundred dollars ($2,433,700) in appropriated funds during the 2010‑2011 fiscal year for the expansion of existing or new public defender offices currently providing legal services to the indigent population under the oversight of the Office of Indigent Defense Services by creating up to 20 new attorney positions and 10 new support staff positions. These funds may be used for salaries, benefits, equipment, and related expenses. Prior to using funds for this purpose, the Office of Indigent Defense Services shall report to the Chairs of the House of Representatives and the Senate Appropriations Subcommittees on Justice and Public Safety on the proposed expansion. 

OFFICE OF INDIGENT DEFENSE SERVICES REPORT
SECTION 15.13.(a)  The Office of Indigent Defense Services shall report to the Chairs of the House of Representatives and Senate Appropriations Committees and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by March 1 of each year on:
(1)	The volume and cost of cases handled in each district by assigned counsel or public defenders;
(2)	Actions taken by the Office to improve the cost‑effectiveness and quality of indigent defense, including the capital case program;
(3)	Plans for changes in rules, standards, or regulations in the upcoming year; and
(4)	Any recommended changes in law or funding procedures that would assist the Office in improving the management of funds expended for indigent defense services, including any recommendations concerning the feasibility and desirability of establishing regional public defender offices.
SECTION 15.13.(b)  In its March 1, 2010 report, the Office of Indigent Defense Services shall provide a progress report on the pilot program for alternative scheduling authorized by Section 14.1 of S.L. 2008‑107. In its March 1, 2011 report, the Office of Indigent Defense Services shall provide a final report on that pilot program.
SECTION 15.13.(c)  In its March 1, 2010 report, the Office of Indigent Defense Services shall provide a progress report on the feasibility study directed by Section 14.7 of S.L. 2008‑107 on developing a statewide system for obtaining indigent case information when counsel is first appointed. In its March 1, 2011 report, the Office of Indigent Defense Services shall provide a final report on that feasibility study.

INDIGENT DEFENSE SERVICES/STATE MATCH FOR GRANTS
SECTION 15.14.  Notwithstanding G.S. 143C‑6‑9, the Office of Indigent Defense Services may use the sum of up to fifty thousand dollars ($50,000) from funds available to provide the State matching funds needed to receive grant funds.  Prior to using funds for this purpose, the Office shall report to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Commission on Governmental Operations on the grants to be matched using these funds.

OFFICE OF INDIGENT DEFENSE SERVICES FLEXIBILITY
SECTION 15.15.  Notwithstanding the provisions of G.S. 143C‑6‑9, in implementing reductions to the 2009‑2011 budget for legal training and resources, the Office of Indigent Defense Services may use available funds as needed for registration fees, academic services, travel, and book purchases.

sentencing SERVICES FLEXIBILITY
SECTION 15.16.  In implementing the reduction to Sentencing Services' budget, the Director of the Office of Indigent Defense Services may close programs in certain districts in the State based on current and historical performance, local support and interest, the amount of funding to be saved, and other relevant factors.  The Director may choose not to contract with certain nonprofit programs or to eliminate certain State‑funded programs and associated positions.

STUDY STRATEGIES TO REDUCE DEMAND FOR SERVICES OF OFFICE OF INDIGENT DEFENSE SERVICES
SECTION 15.17.  The Office of Indigent Defense Services shall consult with the Administrative Office of the Courts, the Conference of District Attorneys, the North Carolina Sentencing and Policy Advisory Commission, and other court system actors in formulating proposals aimed at reducing future costs, including the possibility of decriminalizing minor misdemeanor offenses for which jail sentences are rarely or never imposed and improving the manner in which potentially capital cases are screened and processed.  The Office shall include any proposals in its reports during the 2009‑2011 fiscal biennium.

New Fee For Costs of Sheriffs' Education and Training Standards Commission and the Criminal Justice Education and Training Standards Commission
SECTION 15.18.  G.S. 7A‑304 is amended by adding a new subsection to read:
"(3b)	For the services, staffing, and operations of the Criminal Justice Education and Standards Commission and the Sheriffs' Education and Training Standards Commission, the sum of two dollars ($2.00) to be remitted to the Department of Justice. One dollar and sixty‑five cents ($1.65) of this sum shall be used exclusively for the Criminal Justice Education and Standards Commission, and thirty‑five cents (35¢) shall be used exclusively for the Sheriffs' Education and Training Standards Commission."

Increase Convicted Criminal Lab Analysis Fee
SECTION 15.19.(a)  G.S. 7A‑304(a)(7) reads as rewritten:
"(7)	For the services of the State Bureau of Investigation laboratory facilities, the district or superior court judge shall, upon conviction, order payment of the sum of six hundred dollars ($600.00) to be remitted to the Department of Justice for support of the State Bureau of Investigation. This cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratories have performed DNA analysis of the crime, tests of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The court may waive or reduce the amount of the payment required by this subdivision upon a finding of just cause to grant such a waiver or reduction."
SECTION 15.19.(b)  G.S. 7A‑304(a)(8) reads as rewritten:
"(8)	For the services of any crime laboratory facility operated by a local government or group of local governments, the district or superior court judge shall, upon conviction, order payment of the sum of six hundred dollars ($600.00) to be remitted to the general fund of the local governmental unit that operates the laboratory to be used for law enforcement purposes. The cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratory has performed DNA analysis of the crime, test of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The costs shall be assessed only if the court finds that the work performed at the local government's laboratory is the equivalent of the same kind of work performed by the State Bureau of Investigation under subdivision (7) of this subsection. The court may waive or reduce the amount of the payment required by this subdivision upon a finding of just cause to grant such a waiver or reduction."

Increase Certain Court Fees
SECTION 15.20.(a)  G.S. 7A‑304(a) reads as rewritten:
"(a)	In every criminal case in the superior or district court, wherein the defendant is convicted, or enters a plea of guilty or nolo contendere, or when costs are assessed against the prosecuting witness, the following costs shall be assessed and collected, except that when the judgment imposes an active prison sentence, costs shall be assessed and collected only when the judgment specifically so provides, and that no costs may be assessed when a case is dismissed.
(1)	For each arrest or personal service of criminal process, including citations and subpoenas, the sum of five dollars ($5.00), to be remitted to the county wherein the arrest was made or process was served, except that in those cases in which the arrest was made or process served by a law‑enforcement officer employed by a municipality, the fee shall be paid to the municipality employing the officer.
(2)	For the use of the courtroom and related judicial facilities, the sum of twelve dollars ($12.00) in the district court, including cases before a magistrate, and the sum of thirty dollars ($30.00) in superior court, to be remitted to the county in which the judgment is rendered. In all cases where the judgment is rendered in facilities provided by a municipality, the facilities fee shall be paid to the municipality. Funds derived from the facilities fees shall be used exclusively by the county or municipality for providing, maintaining, and constructing adequate courtroom and related judicial facilities, including: adequate space and furniture for judges, district attorneys, public defenders and other personnel of the Office of Indigent Defense Services, magistrates, juries, and other court related personnel; office space, furniture and vaults for the clerk; jail and juvenile detention facilities; free parking for jurors; and a law library (including books) if one has heretofore been established or if the governing body hereafter decides to establish one. In the event the funds derived from the facilities fees exceed what is needed for these purposes, the county or municipality may, with the approval of the Administrative Officer of the Courts as to the amount, use any or all of the excess to retire outstanding indebtedness incurred in the construction of the facilities, or to reimburse the county or municipality for funds expended in constructing or renovating the facilities (without incurring any indebtedness) within a period of two years before or after the date a district court is established in such county, or to supplement the operations of the General Court of Justice in the county.
(2a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  three dollars ($3.00), to be credited to the Court Information Technology Fund.
(3)	For the retirement and insurance benefits of both State and local government law‑enforcement officers, the sum of six dollars and twenty‑five cents ($6.25), to be remitted to the State Treasurer. Fifty cents (50¢) of this sum shall be administered as is provided in Article 12C of Chapter 143 of the General Statutes. Five dollars and seventy‑five cents ($5.75) of this sum shall be administered as is provided in Article 12E of Chapter 143 of the General Statutes, with one dollar and twenty‑five cents ($1.25) being administered in accordance with the provisions of G.S. 143‑166.50(e).
(3a)	For the supplemental pension benefits of sheriffs, the sum of one dollar twenty‑five cents ($1.25) to be remitted to the Department of Justice and administered under the provisions of Article 12G of Chapter 143 of the General Statutes.
(4)	For support of the General Court of Justice, the sum of  one hundred three dollars and fifty cents ($103.50) in the district court, including cases before a magistrate, and the sum of  one hundred fifteen dollars and fifty cents ($115.50) in the superior court, to be remitted to the State Treasurer. For a person convicted of a felony in superior court who has made a first appearance in district court, both the district court and superior court fees shall be assessed. The State Treasurer shall remit the sum of two dollars and five cents ($2.05) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.4, and ninety‑five cents ($.95) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.19.
(4a)	For support of the General Court of Justice, the sum of five dollars ($5.00) for all offenses arising under Chapter 20 of the General Statutes, to be remitted to the State Treasurer.
(5)	For using pretrial release services, the district or superior court judge shall, upon conviction, impose a fee of fifteen dollars ($15.00) to be remitted to the county providing the pretrial release services. This cost shall be assessed and collected only if the defendant had been accepted and released to the supervision of the agency providing the pretrial release services.
(6)	For support of the General Court of Justice, the sum of  two hundred dollars ($200.00) is payable by a defendant who fails to appear to answer the charge as scheduled, unless within 20 days after the scheduled appearance, the person either appears in court to answer the charge or disposes of the charge pursuant to G.S. 7A‑146. Upon a showing to the court that the defendant failed to appear because of an error or omission of a judicial official, a prosecutor, or a law‑enforcement officer, the court shall waive this fee. This fee shall be remitted to the State Treasurer.
(7)	For the services of the State Bureau of Investigation laboratory facilities, the district or superior court judge shall, upon conviction, order payment of the sum of three hundred dollars ($300.00) to be remitted to the Department of Justice for support of the State Bureau of Investigation. This cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratories have performed DNA analysis of the crime, tests of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The court may waive or reduce the amount of the payment required by this subdivision upon a finding of just cause to grant such a waiver or reduction.
(8)	For the services of any crime laboratory facility operated by a local government or group of local governments, the district or superior court judge shall, upon conviction, order payment of the sum of three hundred dollars ($300.00) to be remitted to the general fund of the local governmental unit that operates the laboratory to be used for law enforcement purposes. The cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratory has performed DNA analysis of the crime, test of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The costs shall be assessed only if the court finds that the work performed at the local government's laboratory is the equivalent of the same kind of work performed by the State Bureau of Investigation under subdivision (7) of this subsection. The court may waive or reduce the amount of the payment required by this subdivision upon a finding of just cause to grant such a waiver or reduction."
SECTION 15.20.(b)  Effective July 1, 2010, G.S. 7A‑304(a), as rewritten by subsection (a) of this section, reads as rewritten:
"(a)	In every criminal case in the superior or district court, wherein the defendant is convicted, or enters a plea of guilty or nolo contendere, or when costs are assessed against the prosecuting witness, the following costs shall be assessed and collected, except that when the judgment imposes an active prison sentence, costs shall be assessed and collected only when the judgment specifically so provides, and that no costs may be assessed when a case is dismissed.
(1)	For each arrest or personal service of criminal process, including citations and subpoenas, the sum of five dollars ($5.00), to be remitted to the county wherein the arrest was made or process was served, except that in those cases in which the arrest was made or process served by a law‑enforcement officer employed by a municipality, the fee shall be paid to the municipality employing the officer.
(2)	For the use of the courtroom and related judicial facilities, the sum of twelve dollars ($12.00) in the district court, including cases before a magistrate, and the sum of thirty dollars ($30.00) in superior court, to be remitted to the county in which the judgment is rendered. In all cases where the judgment is rendered in facilities provided by a municipality, the facilities fee shall be paid to the municipality. Funds derived from the facilities fees shall be used exclusively by the county or municipality for providing, maintaining, and constructing adequate courtroom and related judicial facilities, including: adequate space and furniture for judges, district attorneys, public defenders and other personnel of the Office of Indigent Defense Services, magistrates, juries, and other court related personnel; office space, furniture and vaults for the clerk; jail and juvenile detention facilities; free parking for jurors; and a law library (including books) if one has heretofore been established or if the governing body hereafter decides to establish one. In the event the funds derived from the facilities fees exceed what is needed for these purposes, the county or municipality may, with the approval of the Administrative Officer of the Courts as to the amount, use any or all of the excess to retire outstanding indebtedness incurred in the construction of the facilities, or to reimburse the county or municipality for funds expended in constructing or renovating the facilities (without incurring any indebtedness) within a period of two years before or after the date a district court is established in such county, or to supplement the operations of the General Court of Justice in the county.
(2a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  four dollars ($4.00), to be credited to the Court Information Technology Fund.
(3)	For the retirement and insurance benefits of both State and local government law‑enforcement officers, the sum of six dollars and twenty‑five cents ($6.25), to be remitted to the State Treasurer. Fifty cents (50¢) of this sum shall be administered as is provided in Article 12C of Chapter 143 of the General Statutes. Five dollars and seventy‑five cents ($5.75) of this sum shall be administered as is provided in Article 12E of Chapter 143 of the General Statutes, with one dollar and twenty‑five cents ($1.25) being administered in accordance with the provisions of G.S. 143‑166.50(e).
(3a)	For the supplemental pension benefits of sheriffs, the sum of one dollar twenty‑five cents ($1.25) to be remitted to the Department of Justice and administered under the provisions of Article 12G of Chapter 143 of the General Statutes.
(4)	For support of the General Court of Justice, the sum of  one hundred five dollars and fifty cents ($105.50) in the district court, including cases before a magistrate, and the sum of  one hundred thirty-five dollars and fifty cents ($135.50) in the superior court, to be remitted to the State Treasurer. For a person convicted of a felony in superior court who has made a first appearance in district court, both the district court and superior court fees shall be assessed. The State Treasurer shall remit the sum of two dollars and five cents ($2.05) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.4, and ninety‑five cents ($.95) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.19.
(4a)	For support of the General Court of Justice, the sum of ten dollars ($10.00) for all offenses arising under Chapter 20 of the General Statutes, to be remitted to the State Treasurer.
(5)	For using pretrial release services, the district or superior court judge shall, upon conviction, impose a fee of fifteen dollars ($15.00) to be remitted to the county providing the pretrial release services. This cost shall be assessed and collected only if the defendant had been accepted and released to the supervision of the agency providing the pretrial release services.
(6)	For support of the General Court of Justice, the sum of two hundred dollars ($200.00) is payable by a defendant who fails to appear to answer the charge as scheduled, unless within 20 days after the scheduled appearance, the person either appears in court to answer the charge or disposes of the charge pursuant to G.S. 7A‑146. Upon a showing to the court that the defendant failed to appear because of an error or omission of a judicial official, a prosecutor, or a law‑enforcement officer, the court shall waive this fee. This fee shall be remitted to the State Treasurer.
(7)	For the services of the State Bureau of Investigation laboratory facilities, the district or superior court judge shall, upon conviction, order payment of the sum of three hundred dollars ($300.00) to be remitted to the Department of Justice for support of the State Bureau of Investigation. This cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratories have performed DNA analysis of the crime, tests of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The court may waive or reduce the amount of the payment required by this subdivision upon a finding of just cause to grant such a waiver or reduction.
(8)	For the services of any crime laboratory facility operated by a local government or group of local governments, the district or superior court judge shall, upon conviction, order payment of the sum of three hundred dollars ($300.00) to be remitted to the general fund of the local governmental unit that operates the laboratory to be used for law enforcement purposes. The cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratory has performed DNA analysis of the crime, test of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The costs shall be assessed only if the court finds that the work performed at the local government's laboratory is the equivalent of the same kind of work performed by the State Bureau of Investigation under subdivision (7) of this subsection. The court may waive or reduce the amount of the payment required by this subdivision upon a finding of just cause to grant such a waiver or reduction."
SECTION 15.20.(c)  G.S. 7A‑304 is amended by adding a new subsection to read:
"(f)	Defendants owing costs under this section may either make payment in full when costs are assessed or may make payment on an installment plan arranged with the court. Defendants making use of an installment plan shall pay a onetime setup fee of twenty dollars ($20.00) to cover the additional costs to the court of receiving and disbursing installment payments. Notwithstanding the provisions of G.S. 7A‑304(d)(1), the setup fee authorized by this subsection shall be paid prior to the disbursement of funds for any other purpose. Fees collected under this section shall be remitted to the State Treasurer for support of the General Court of Justice."
SECTION 15.20.(d)  G.S. 7A‑305(a) reads as rewritten:
"(a)	In every civil action in the superior or district court, except for actions brought under Chapter 50B of the General Statutes, shall be assessed:
(1)	For the use of the courtroom and related judicial facilities, the sum of twelve dollars ($12.00) in cases heard before a magistrate, and the sum of sixteen dollars ($16.00) in district and superior court, to be remitted to the county in which the judgment is rendered, except that in all cases in which the judgment is rendered in facilities provided by a municipality, the facilities fee shall be paid to the municipality. Funds derived from the facilities fees shall be used in the same manner, for the same purposes, and subject to the same restrictions, as facilities fees assessed in criminal actions.
(1a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  three dollars ($3.00), to be credited to the Court Information Technology Fund.
(2)	For support of the General Court of Justice, the sum of  one hundred thirty dollars ($130.00) in the superior court, except that if a case is assigned to a special superior court judge as a complex business case under G.S. 7A‑45.3, an additional two hundred dollars ($200.00) shall be paid upon its assignment, and the sum of  seventy‑eight dollars ($78.00) in the district court except that if the case is assigned to a magistrate the sum shall be  fifty‑five dollars ($55.00). Sums collected under this subdivision shall be remitted to the State Treasurer. The State Treasurer shall remit the sum of two dollars and five cents ($2.05) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.4, and ninety‑five cents ($.95) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.19."
SECTION 15.20.(e)  Effective July 1, 2010, G.S. 7A‑305(a), as rewritten by subsection (d) of this section, reads as rewritten:
"(a)	In every civil action in the superior or district court, except for actions brought under Chapter 50B of the General Statutes, shall be assessed:
(1)	For the use of the courtroom and related judicial facilities, the sum of twelve dollars ($12.00) in cases heard before a magistrate, and the sum of sixteen dollars ($16.00) in district and superior court, to be remitted to the county in which the judgment is rendered, except that in all cases in which the judgment is rendered in facilities provided by a municipality, the facilities fee shall be paid to the municipality. Funds derived from the facilities fees shall be used in the same manner, for the same purposes, and subject to the same restrictions, as facilities fees assessed in criminal actions.
(1a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of four dollars ($4.00), to be credited to the Court Information Technology Fund.
(2)	For support of the General Court of Justice, the sum of  one hundred forty dollars ($140.00) in the superior court, except that if a case is assigned to a special superior court judge as a complex business case under G.S. 7A‑45.3, an additional two hundred dollars ($200.00) shall be paid upon its assignment, and the sum of  eighty dollars ($80.00) in the district court except that if the case is assigned to a magistrate the sum shall be fifty‑five dollars ($55.00). Sums collected under this subdivision shall be remitted to the State Treasurer. The State Treasurer shall remit the sum of two dollars and five cents ($2.05) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.4, and ninety‑five cents ($.95) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.19."
SECTION 15.20.(f)  G.S. 7A‑306(a)(1a) reads as rewritten:
"(1a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  three dollars ($3.00), to be credited to the Court Information Technology Fund."
SECTION 15.20.(g)  Effective July 1, 2010, G.S. 7A‑306(a)(1a), as amended by subsection (f) of this section, reads as rewritten:
"(1a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  four dollars ($4.00), to be credited to the Court Information Technology Fund."
SECTION 15.20.(h)  G.S. 7A‑307(a)(1a) reads as rewritten:
"(1a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  three dollars ($3.00), to be credited to the Court Information Technology Fund."
SECTION 15.20.(i)  Effective July 1, 2010, G.S. 7A‑307(a)(1a), as amended by subsection (h) of this section, reads as rewritten:
"(1a)	For the upgrade, maintenance, and operation of the judicial and county courthouse phone systems, the sum of  four dollars ($4.00), to be credited to the Court Information Technology Fund."
SECTION 15.20.(j)  G.S. 20‑135.2A(e) reads as rewritten:
"(e)	Any driver or front seat passenger who fails to wear a seat belt as required by this section shall have committed an infraction and shall pay a penalty of twenty‑five dollars ($25.00) plus the following court  costs: the General Court of Justice fee provided for in G.S. 7A-304(a)(4), the telephone facilities fee provided for in G.S. 7A-304(a)(2a), and the law enforcement training and certification fee provided for in G.S. 7A-304(a)(3b). Any rear seat occupant of a vehicle who fails to wear a seat belt as required by this section shall have committed an infraction and shall pay a penalty of ten dollars ($10.00) and no court costs. Court costs assessed under this section are for the support of the General Court of Justice and shall be remitted to the State Treasurer. Conviction of an infraction under this section has no other consequence."
SECTION 15.20.(k)  G.S. 20‑140.4 reads as rewritten:
"§ 20‑140.4.  Special provisions for motorcycles and mopeds.
(a)	No person shall operate a motorcycle or moped upon a highway or public vehicular area:
(1)	When the number of persons upon such motorcycle or moped, including the operator, shall exceed the number of persons which it was designed to carry.
(2)	Unless the operator and all passengers thereon wear on their heads, with a retention strap properly secured, safety helmets of a type that complies with Federal Motor Vehicle Safety Standard (FMVSS) 218.
(b)	Violation of any provision of this section shall not be considered negligence per se or contributory negligence per se in any civil action.
(c)	Any person convicted of violating this section shall have committed an infraction and shall  pay a penalty of twenty‑five dollars ($25.00) plus the following court costs: the General Court of Justice fee provided for in G.S. 7A-304(a)(4), the telephone facilities fee provided for in G.S. 7A-304(a)(2a), and the law enforcement training and certification fee provided for in G.S. 7A-304(a)(3b). Conviction of an infraction under this section has no other consequence.
(d)	No drivers license points or insurance surcharge shall be assessed on account of violation of this section."
SECTION 15.20.(l)  Subsections (a), (j), and (k) of this section become effective July 1, 2009, and apply to all costs assessed or collected on or after that date, except that in misdemeanor or infraction cases disposed of on or after that date by written appearance, waiver of trial or hearing, and plea of guilt or admission of responsibility pursuant to G.S. 7A‑180(4) or G.S. 7A‑273(2), in which the citation or other criminal process was issued before that date, the cost shall be the lesser of those specified in G.S. 7A‑304(a), as amended by subsection (a) of this section, or those specified in the notice portion of the defendant's or respondent's copy of the citation or other criminal process, if any costs are specified in that notice. 
Subsection (b) of this section becomes effective July 1, 2010, and applies to all costs assessed or collected on or after that date, except that in misdemeanor or infraction cases disposed of on or after that date by written appearance, waiver of trial or hearing, and plea of guilt or admission of responsibility pursuant to G.S. 7A‑180(4) or G.S. 7A‑273(2), in which the citation or other criminal process was issued before that date, the cost shall be the lesser of those specified in G.S. 7A‑304(a), as amended by subsection (b) of this section, or those specified in the notice portion of the defendant's or respondent's copy of the citation or other criminal process, if any costs are specified in that notice.
Subsections (e), (g), and (i) of this section become effective July 1, 2010, and apply to fees assessed or collected on or after that date. The remainder of this section becomes effective July 1, 2009, and applies to fees assessed or collected on or after that date.

PART XVI. DEPARTMENT OF JUSTICE

Private Protective Services and Alarm Systems Licensing Boards Pay for Use of State Facilities and Services
SECTION 16.1.  The Private Protective Services and Alarm Systems Licensing Boards shall pay the appropriate State agency for the use of physical facilities and services provided to those Boards by the State.

Use of Seized and Forfeited Property Transferred to State Law Enforcement Agencies by the Federal Government
SECTION 16.2.(a)  Assets transferred to the Departments of Justice, Correction, and Crime Control and Public Safety during the 2009‑2011 fiscal biennium pursuant to applicable federal law shall be credited to the budgets of the respective departments and shall result in an increase of law enforcement resources for those departments. The Departments of Justice, Correction, and Crime Control and Public Safety shall report to the Joint Legislative Commission on Governmental Operations upon receipt of the assets and, before using the assets, shall report on the intended use of the assets and the departmental priorities on which the assets may be expended. 
SECTION 16.2.(b)  The General Assembly finds that the use of assets transferred pursuant to federal law for new personnel positions, new projects, acquisition of real property, repair of buildings where the repair includes structural change, and construction of or additions to buildings may result in additional expenses for the State in future fiscal periods. Therefore, the Department of Justice, the Department of Correction, and the Department of Crime Control and Public Safety are prohibited from using these assets for such purposes without the prior approval of the General Assembly.
SECTION 16.2.(c)  Nothing in this section prohibits North Carolina law enforcement agencies from receiving funds from the United States Department of Justice, the United States Department of the Treasury, and the United States Department of Health and Human Services.

Certain Litigation Expenses to Be Paid by Clients
SECTION 16.3.  Client departments, agencies, and boards shall reimburse the Department of Justice for reasonable court fees, attorney travel and subsistence costs, and other costs directly related to litigation in which the Department of Justice is representing the department, agency, or board.

NC Legal Education Assistance Foundation Report on Funds Disbursed
SECTION 16.4.  The North Carolina Legal Education Assistance Foundation shall report by March 1 of each year to the Joint Legislative Commission on Governmental Operations and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of State funds, the purpose of the expenditures, the number of attorneys receiving funds, the average award amount, the average student loan amount, the number of attorneys on the waiting list, and the average number of years for which attorneys receive loan assistance.

Hiring of Sworn Staff Positions for the State Bureau of Investigation
SECTION 16.5.  The Department of Justice may hire sworn personnel to fill vacant positions in the State Bureau of Investigation only in the following circumstances: (i) the position's regular responsibilities involve warrant executions, property searches, criminal investigations, or arrest activities that are consistent in frequency with the responsibilities of other sworn agents; (ii) the position is a promotion for a sworn agent who was employed at the State Bureau of Investigation prior to July 1, 2007; (iii) the position is a forensic drug chemist position which requires "responding to clandestine methamphetamine laboratories" as a primary duty; (iv) the position is a forensic impressions analyst position which requires "responding to clandestine methamphetamine laboratories" as a primary duty; or (v) the position primarily involves supervising sworn personnel.

Reduce Department Share of Payment for Judgments Against County and City Boards of Education
SECTION 16.6.(a)  G.S. 143‑300.1(c) reads as rewritten:
"(c)	In the event of settlement pursuant to G.S. 143‑295 or in the event the Industrial Commission awards damages against any county or city board of education under this section, the Attorney General shall draw a voucher for the amount required to pay the award. The funds necessary to cover the liability for claims against county and city boards of education for accidents involving school buses and school transportation service vehicles shall be made available from funds appropriated to the State Board of Education for that purpose. On January 1 and June 1 of each year, each county and city board of education shall pay the State Board of Education an amount equal to fifty percent (50%) of the damages paid by the State Board of Education pursuant to this subsection during the preceding six months. These receipts shall be used to offset fifty percent (50%) of the costs incurred by the State Board of Education pursuant to this subsection. Neither the county or city boards of education, or the county or city administrative unit shall be liable for the payment of any award made pursuant to the provisions of this section in excess of the amount paid upon a voucher by the Attorney General. Settlement and payment may be made by the Attorney General as provided in G.S. 143‑295."
SECTION 16.6.(b)  G.S. 143‑300.1(d) reads as rewritten:
"(d)	Except as otherwise provided in this subsection, the Attorney General may, upon the request of an employee or former employee, defend any civil action brought against the driver, transportation safety assistant, or monitor of a public school bus or school transportation service vehicle or school bus maintenance mechanic when the driver or mechanic is employed and paid by the local school administrative unit, when the monitor is acting in accordance with G.S. 115C‑245(d), when the transportation safety assistant is acting in accordance with G.S. 115C‑245(e), or when the driver is an unpaid school bus driver trainee under the supervision of an authorized employee of the Department of Transportation, Division of Motor Vehicles, or an authorized employee of a county or city board of education or administrative unit. The Attorney General may afford this defense through the use of a member of his staff or, in his discretion, employ private counsel. The Attorney General is authorized to pay any judgment rendered in the civil action not to exceed the limit provided under the Tort Claims Act. The funds necessary to cover the liability shall be made available from funds appropriated to the State Board of Education for that purpose. On January 1 and June 1 of each year, each county and city board of education shall pay the State Board of Education an amount equal to fifty percent (50%) of the damages paid by the State Board of Education pursuant to this subsection during the preceding six months. These receipts shall be used to offset fifty percent (50%) of the costs incurred by the State Board of Education pursuant to this subsection. The Attorney General may compromise and settle any claim covered by this section to the extent that he finds the same to be valid, up to the limit provided in the Tort Claims Act, provided that the authority granted in this subsection shall be limited to only those claims that would be within the jurisdiction of the Industrial Commission under the Tort Claims Act.
The Attorney General shall refuse to provide for the defense of a civil action or proceeding brought against an employee or former employee if the Attorney General determines that:
(1)	The act or omission was not within the scope and course of his employment as a State employee; or
(2)	The employee or former employee acted or failed to act because of actual fraud, corruption, or actual malice on his part; or
(3)	Defense of the action or proceeding by the State would create a conflict of interest between the State and the employee or former employee; or
(4)	Defense of the action or proceeding would not be in the best interests of the State."
SECTION 16.6.(c)  This section becomes effective July 1, 2010.

PART XVII. DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Report on the Use of Illegal Immigration Project Funds
SECTION 17.1.  No later than March 1, 2010, the North Carolina Sheriffs' Association, Inc., shall submit a report to the Chairs of the House and Senate Appropriations Committees and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety on the operations and effectiveness of the Illegal Immigration Project. The report shall include all of the following:
(1)	An overview of the program.
(2)	The program budget.
(3)	A summary of work done with funds received, which shall include the following information:
a.	The total number of law enforcement agencies that received funding from the program for officer training.
b.	The total number of officers trained.
c.	The total number of training sessions administered.
d.	Copies of educational/informational materials distributed.
(4)	Recommendations on ways that federal, State, and local resources can be used to further improve the effectiveness of the Illegal Immigration Project and other immigration enforcement initiatives.

Abolish Butner Public Safety Division
SECTION 17.2.(a)  G.S. 122C‑408 is repealed.
SECTION 17.2.(b)  Beginning on the effective date of this act, the Town of Butner shall provide fire and police protection within its incorporated limits. The service required by this section shall be at least the same level of service that the Town of Butner was previously provided pursuant to contract with the Department of Crime Control and Public Safety.
SECTION 17.2.(c)  The Charter of the Town of Butner, as enacted by Section 1 of S.L. 2007‑269, is amended by adding a new Article to read:
"ARTICLE IX. POLICE DEPARTMENT.
"Section 9.1. Appointment; Powers; and Duties of Chief of Police and Police Officers.
(a)	Chief. The Mayor shall appoint the Chief of Police. The Chief of Police shall have immediate direction and control of the Police Department, subject to the supervision of the Mayor, and to such rules, regulations, and orders as the Mayor may prescribe.
(b)	General Powers. The Chief of Police and each member of the police force shall have, for the purpose of enforcing Town ordinances and regulations, or preserving the peace of the Town, and of suppressing disturbances, and apprehending offenders, the powers of peace officers vested in sheriffs and constables.
(c)	Public Peace. The Chief of Police and other police officers of the Town shall have the power, and it shall be their duty, to suppress all breaches of the public peace, and all disturbances of the quiet and good order of the Town, and they may, with or without warrant, arrest, anywhere within the corporate limits of the Town, or within one mile thereof, any person charged with the violation of any ordinance of the Town, or with any other offense whatsoever against the public peace, and the quiet and good order of the community.
(d)	Other Duties. In addition to the foregoing, the Chief of Police and other police officers shall perform such other duties as may from time to time be prescribed by the Mayor not inconsistent with the Constitution and laws of the State of North Carolina and the provisions of this Charter.
"Section 9.2. Police Emergency Lines. The Chief of Police or other police officer in charge at the scene of a parade, accident, disturbance, crime scene, natural or artificial disaster, or emergency, or any large gathering of people shall have authority to provide barricades, ropes, signs, or other means of restraint, and it shall be unlawful for any person other than a law enforcement officer, firefighter, or other person having official business at the scene to cross such a line without express permission of the police officer at the scene."
SECTION 17.2.(d)  The Charter of the Town of Butner, as enacted by Section 1 of S.L. 2007‑269, is amended by adding a new Article to read:
"ARTICLE X. FIRE DEPARTMENT.
"Section 10.1. Appointment; Powers; and Duties of Fire Chief.
(a)	Appointment; General Authority. The Mayor shall appoint a Fire Chief. The Fire Chief shall have immediate direction and control of the Fire Department, subject to the supervision of the Mayor and to such rules, regulations, and orders as the Mayor may prescribe.
(b)	Destroying Property at Fires. The Fire Chief, and in the Fire Chief's absence, any assistant, may order the blowing up, tearing down, or other destruction of any building when it is deemed necessary to stop the progress of a fire. No person shall be held liable, civilly or criminally, for acting in obedience to their orders, nor shall the Fire Chief or any assistant, the Town, the Mayor, or the Town Council be held liable, civilly or criminally, for the giving of such orders or for damages to property ordered destroyed.
(c)	Fire, etc., Emergency Lines. The Chief of Police or other police officer, or the Fire Chief or any assistant, in charge at the scene of a fire, accident, disturbance, natural or artificial disaster or emergency, or any large gathering of people shall have authority to provide barricades, ropes, signs, or other means of restraint, and it shall be unlawful for any person other than a law enforcement officer, firefighter, or other person having official business at the scene to cross such a line without express permission of the person in charge at the scene.
(d)	Other Duties. The Fire Chief and other firefighters shall perform such other duties in addition to those provided in this Charter as may be prescribed by law or Town ordinances, or that may from time to time be prescribed by the Mayor."
SECTION 17.2.(e)  G.S. 122C‑414 is repealed.
SECTION 17.2.(f)  G.S. 143‑341(8)i.3. reads as rewritten:
"3.	To require on a schedule determined by the Department all State agencies to transfer ownership, custody or control of any or all passenger motor vehicles within the ownership, custody or control of that agency to the Department, except those motor vehicles under the ownership, custody or control of the Highway Patrol or the State Bureau of Investigation which are used primarily for law‑enforcement purposes."
SECTION 17.2.(g)  G.S. 160A‑288(d)(4) is repealed.
SECTION 17.2.(h)  G.S. 160A‑288.2(d)(3) is repealed.
SECTION 17.2.(i)  Subsections 1(a) and 1(b) of Chapter 830 of the 1983 Session Laws, as amended by Section 43.3 of S.L. 2005‑276 and Section 14 of S.L. 2007‑269, are repealed.  
SECTION 17.2.(j)  Subsection (i) of this section shall have no effect upon the validity of any liens of the State, Durham County, Granville County, or the Butner Police and Fire Protection District for ad valorem taxes outstanding before the effective date of subsection (i) of this section. Such liens may be collected or foreclosed upon after the effective date of subsection (i) of this section as though the property were still within the corporate limits of the District.

Transfer of State Capitol Police to the Department of Crime Control and Public Safety
SECTION 17.3.(a)  The State Capitol Police is hereby transferred by a Type I transfer, as defined in G.S. 143A‑6, from the Department of Administration to the Department of Crime Control and Public Safety.
SECTION 17.3.(b)  G.S. 143‑340(21) and (22) are repealed.
SECTION 17.3.(c)  G.S. 143‑341.1 is repealed.
SECTION 17.3.(d)  G.S. 143B‑475(a) reads as rewritten:
"(a)	All functions, powers, duties and obligations heretofore vested in the following subunits of the following departments are hereby transferred to and vested in the Department of Crime Control and Public Safety:
(1)	The National Guard, Department of Military and Veterans Affairs.
(2)	Civil Preparedness, Department of Military and Veterans Affairs.
(3)	State Civil Air Patrol, Department of Military and Veterans Affairs.
(4)	State Highway Patrol, Department of Transportation.
(5)	State Board of Alcoholic Control Enforcement Division, Department of Commerce.
(6)	Governor's Crime Commission, Department of Natural and Economic Resources.
(7)	Crime Control Division, Department of Natural and Economic Resources.
(8)	Criminal Justice Information System Board, Department of Natural and Economic Resources.
(9)	Criminal Justice Information System Security and Privacy Board, Department of Natural and Economic Resources.
(10)	The Commercial Vehicle, Oversize/Overweight, Motor Carrier Safety Regulation and Mobile Home and Manufactured Housing regulatory and enforcement functions of the Department of Transportation, Division of Motor Vehicles Enforcement Section.
(11)	State Capitol Police, Department of Administration."
SECTION 17.3.(e)  G.S. 143B‑476(a) reads as rewritten:
"(a)	The head of the Department of Crime Control and Public Safety is the Secretary of Crime Control and Public Safety, who shall be known as the Secretary. The Secretary shall have such powers and duties as are conferred on him by this Chapter, delegated to him by the Governor, and conferred on him by the Constitution and laws of this State. These powers and duties include:
(1)	Accepting gifts, bequests, devises, grants, matching funds and other considerations from private or governmental sources for use in promoting the work of the Governor's Crime Commission.
(2)	Making grants for use in pursuing the objectives of the Governor's Crime Commission.
(3)	Adopting rules as may be required by the federal government for federal grants‑in‑aid for criminal justice purposes and to implement and carry out the regulatory and enforcement duties assigned to the Department of Crime Control and Public Safety as provided by the various commercial vehicle, oversize/overweight, motor carrier safety, motor fuel, and mobile and manufactured home statutes.
(4)	Ascertaining the State's duties concerning grants to the State by the Law Enforcement Assistance Administration of the United States Department of Justice, and developing and administering a plan to ensure that the State fulfills its duties.
(5)	Administering the Assistance Program for Victims of Rape and Sex Offenses.
(6)	Appointing, with the Governor's approval, a special police officer to serve as Director of the State Capitol Police Division."
SECTION 17.3.(f)  Chapter 143B of the General Statutes is amended by adding a new Part to read:
"Part 7. State Capitol Police Division.
"§ 143B‑508.  State Capitol Police Division – powers and duties.
(a)	Division Established. – There is hereby established, within the Department of Crime Control and Public Safety, the State Capitol Police Division, which shall be organized and staffed in accordance with applicable laws and regulations and within the limits of authorized appropriations.
(b)	Purpose. – The State Capitol Police Division shall serve as a special police agency of the Department of Crime Control and Public Safety. The Director of the State Capitol Police, appointed by the Secretary pursuant to G.S. 143B‑476(6), with the approval of the Governor, may appoint as special police officers such reliable persons as he may deem necessary.
(c)	Appointment of Officers. – Special police officers appointed pursuant to this section may not exercise the power of arrest until they shall take an oath, to be administered by any person authorized to administer oaths, as required by law. 
(d)	Jurisdiction of Officers. – Each special police officer of the State Capitol Police shall have the same power of arrest as the police officers of the City of Raleigh. Such authority may be exercised within the same territorial jurisdiction as exercised by the police officers of the City of Raleigh, and in addition thereto the authority of a deputy sheriff may be exercised on property owned, leased, or maintained by the State located in the County of Wake.
(f)	Public Safety. – The Director of the State Capitol Police, or the Director's designee, shall exercise at all times those means that, in the opinion of the Director or the designee, may be effective in protecting all State buildings and grounds, except for the State legislative buildings and grounds as defined in G.S. 120‑32.1(d), and the persons within those buildings and grounds from fire, bombs, bomb threats, or any other emergency or potentially hazardous conditions, including both the ordering and control of the evacuation of those buildings and grounds. The Director, or the Director's designee, may employ the assistance of other available law enforcement agencies and emergency agencies to aid and assist in evacuations of those buildings and grounds."

Study Consolidation of Law Enforcement Agencies
SECTION 17.4.  The Office of State Budget and Management shall study the feasibility of consolidating the law enforcement agencies in the executive branch of State government for the purpose of coordinating the activities of these agencies, and reducing duplication and overlapping of law enforcement responsibilities, training, and technical assistance among State law enforcement agencies.  The Office of State Budget and Management shall report its findings and recommendations by February 1, 2010, to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee.

Law Enforcement Support Services Fees
SECTION 17.5.  Article 11 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-475.2.  Fees for services.
A fee in the amount set by the Department is imposed on the entities listed in this section.  The fees are departmental receipts and are applied to the Department's costs in providing services to these entities.  The fees apply to the following:
(1)	A local law enforcement agency that receives equipment from the Department, whether by transfer, loan, or procurement under an agreement with the United States Department of Defense.
(2)	A person for whom the Department stores evidence."

Increase Charitable Bingo Licensing Fee
SECTION 17.6.  G.S. 14‑309.7(a) reads as rewritten:
"(a)	An exempt organization may not operate a bingo game at a location without a license. Application for a bingo license shall be made to the Department of Crime Control and Public Safety on a form prescribed by the Department. The Department shall charge an annual application fee of two hundred dollars ($200.00) to defray the cost of issuing bingo licenses and handling bingo audit reports. The fees collected shall be deposited in the General Fund of the State. This license shall expire one year after the granting of the license. This license may be renewed yearly, if the applicant pays the application fee and files an audit with the Department pursuant to G.S. 14‑309.11. A copy of the application and license shall be furnished to the local law‑enforcement agency in the county or municipality in which the licensee intends to operate before bingo is conducted by the licensee."

Increase fees for licensing boxers and for tickets sold at boxing events
SECTION 17.7.(a)  G.S. 143‑655(a) reads as rewritten:
"(a)	License Fees. – The Division shall collect the following license fees:
Announcer	$75.00
Contestant	$50.00
Judge	$75.00
Manager	$150.00
Matchmaker	$300.00
Promoter	$450.00
Referee	$75.00
Timekeeper	$75.00
Second	$50.00."
SECTION 17.7.(b)  G.S. 143‑655(b1) reads as rewritten:
"(b1)	Admission Fees. – The Division shall collect a fee in the amount of two dollars ($2.00) per each ticket sold to attend events regulated in this Article."

PART XViii. DEPARTMENT OF JUVENILE JUSTICE AND DELINQUENCY PREVENTION

Annual Evaluation of Community Programs
SECTION 18.1.  The Department of Juvenile Justice and Delinquency Prevention shall conduct an evaluation of the Eckerd and Camp Woodson wilderness camp programs and of multipurpose group homes.
In conducting the evaluation of each of these programs, the Department shall consider whether participation in each program results in a reduction of court involvement among juveniles. The Department also shall identify whether the programs are achieving the goals and objectives of the Juvenile Justice Reform Act, S.L. 1998‑202. The Department shall report the results of the evaluation to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee, the chairs of the Senate and House of Representatives Appropriations Committees and the chairs of the Subcommittees on Justice and Public Safety of the Senate and House of Representatives Appropriations Committees by March 1 of each year.

Reports on Certain Programs
SECTION 18.2.(a)  Project Challenge North Carolina, Inc., shall report to the Department of Juvenile Justice and Delinquency Prevention and the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety by April 1 each year on the operation and the effectiveness of its program in providing alternative dispositions and services to juveniles who have been adjudicated delinquent or undisciplined.  The report shall include information on:
(1)	The source of referrals for juveniles.
(2)	The types of offenses committed by juveniles participating in the program.
(3)	The amount of time those juveniles spend in the program.
(4)	The number of juveniles who successfully complete the program.
(5)	The number of juveniles who commit additional offenses after completing the program.
(6)	The program's budget and expenditures, including all funding sources.
SECTION 18.2.(b)  The Juvenile Assessment Center shall report to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the effectiveness of the Center by April 1 each year.  The report shall include information on the number of juveniles served and an evaluation of the effectiveness of juvenile assessment plans and services provided as a result of these plans. In addition, the report shall include information on the Center's budget and expenditures, including all funding sources.

State Funds May Be Used as Federal Matching Funds
SECTION 18.3.  Funds appropriated in this act to the Department of Juvenile Justice and Delinquency Prevention for the 2009‑2010 fiscal year may be used as matching funds for the Juvenile Accountability Incentive Block Grants. If North Carolina receives Juvenile Accountability Incentive Block Grants or a notice of funds to be awarded, the Office of State Budget and Management and the Governor's Crime Commission shall consult with the Department of Juvenile Justice and Delinquency Prevention regarding the criteria for awarding federal funds.  The Office of State Budget and Management, the Governor's Crime Commission, and the Department of Juvenile Justice and Delinquency Prevention shall report to the Appropriations Committees of the Senate and House of Representatives and the Joint Legislative Commission on Governmental Operations prior to allocation of the federal funds.  The report shall identify the amount of funds to be received for the 2009‑2010 fiscal year, the amount of funds anticipated for the 2009‑2010 fiscal year, and the allocation of funds by program and purpose.

Treatment Staffing Model at Youth Development Centers
SECTION 18.4.  The Department shall implement the staffing treatment model presented to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee as part of the Department's November 14, 2006, report regarding the joint use with the Department of Correction of the Swannanoa Youth Development Center campus.
The staffing levels of the new youth development centers shall be capped at 66 staff for a 32‑bed facility and 198 staff for the 96‑bed facility for the 2009‑2011 fiscal biennium. Staffing ratios shall be no more than 2.1 staff per every juvenile committed at every other existing youth development center.

Establishment of a Gang Prevention and Intervention Pilot Program
SECTION 18.5.(a)  As part of the Governor's Comprehensive Gang Initiative, the Department of Juvenile Justice and Delinquency Prevention shall establish a two‑year Gang Prevention and Intervention Pilot Program that will focus on youth at risk for gang involvement and those who are already associated with gangs and gang activity.  The Department of Juvenile Justice and Delinquency Prevention shall:
(1)	Ensure that measurable performance indicators and systems are put in place to evaluate the effectiveness of the pilot program, and
(2)	Conduct both process‑ and outcome‑focused evaluations of the pilot program to determine community and institutional impacts of the pilot program pertaining to gang behavior, desistance, and activities. These evaluations may consider the degree of successful implementation of the program and measurable changes in gang‑related and gang‑affiliated behaviors noted in institutional, court system, communities, and related programs.
SECTION 18.5.(b)  The Department of Juvenile
Justice and Delinquency Prevention shall report to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the implementation and continuing operation of the pilot program by April 1 each year. The report shall include information on the number of juveniles served and an evaluation of the effectiveness of the pilot program. In addition, the report shall include the information set out in subsection (a) of this section.

Eliminate Support Our Students Program
SECTION 18.6.  Part 5A of Article 3 of Chapter 143B of the General Statutes is repealed.

juvenile crime prevention council (JCPC) GRANT REPORTING AND CERTIFICATION
SECTION 18.7.  On or before  October 1 of each year, the Department of Juvenile Justice and Delinquency Prevention shall submit to the Joint Legislative Commission on Governmental Operations and the Appropriations Committees of the Senate and House of Representatives a list of the recipients of the grants awarded, or preapproved for award, from funds appropriated to the Department for local Juvenile Crime Prevention Council  grants, including:
(1)	The amount of the grant awarded.
(2)	The membership of the local committee or council administering the award funds on the local level.
(3)	The type of program funded.
(4)	A short description of the local services, programs, or projects that will receive funds.
(5)	Identification of any programs that received grant funds at one time but for which funding has been eliminated by the Department.
(6)	The number of at‑risk, diverted, and adjudicated juveniles served by each county.
(7)	The Department's actions to ensure that county JCPCs prioritize funding for dispositions of intermediate and community‑level sanctions for court‑adjudicated juveniles under minimum standards adopted by the Department.
(8)	The total cost for each funded program, including the cost per juvenile and the essential elements of the program.
A written copy of the list and other information regarding the projects shall also be sent to the Fiscal Research Division of the General Assembly.

PART XIX. DEPARTMENT OF CORRECTION

INMATE ROAD SQUADS AND LITTER CREWS
SECTION 19.1.  Of the funds appropriated to the Department of Transportation in this act, the sum of eleven million three hundred thousand dollars ($11,300,000) per year shall be transferred by the Department to the Department of Correction during the 2009‑2010 and 2010‑2011 fiscal years for the cost of operating medium custody inmate road squads, as authorized by G.S. 148‑26.5, and minimum custody inmate litter crews.  This transfer shall be made quarterly in the amount of two million eight hundred twenty‑five thousand dollars ($2,825,000). The Department of Transportation may use funds appropriated in this act to pay an additional amount exceeding the eleven million three hundred thousand dollars ($11,300,000), but those payments shall be subject to negotiations among the Department of Transportation, the Department of Correction, and the Office of State Budget and Management prior to payment by the Department of Transportation.
The Office of State Budget and Management shall conduct a study, in consultation with the Department of Correction and the Department of Transportation, to determine the actual cost and cost/benefit of operating medium custody road squads and minimum custody litter crews. The Office of State Budget and Management shall report the results of this study to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee and to the Joint Legislative Transportation Oversight Committee by March 1, 2010. The study shall include a recommendation on whether or not the amount transferred from the Department of Transportation to the Department of Correction for this work is adequate.

FEDERAL GRANT REPORTING
SECTION 19.2.  The Department of Correction, the Department of Justice, the Department of Crime Control and Public Safety, the Judicial Department, and the Department of Juvenile Justice and Delinquency Prevention shall report by May 1 of each year to the Joint Legislative Commission on Governmental Operations, the Chairs of the House of Representatives and Senate Appropriations Committees, and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on federal grant funds received or preapproved for receipt by those departments. The report shall include information on the amount of grant funds received or preapproved for receipt by each department, the use of the funds, the State match expended to receive the funds, and the period to be covered by each grant.  If the department intends to continue the program beyond the end of the grant period, the department shall report on the proposed method for continuing the funding of the program at the end of the grant period. Each department shall also report on any information it may have indicating that the State will be requested to provide future funding for a program presently supported by a local grant.

REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL COSTS FOR INMATES, PAROLEES, AND POST‑RELEASE SUPERVISEES AWAITING TRANSFER TO STATE PRISON SYSTEM
SECTION 19.3.  Notwithstanding G.S. 143C‑6‑9, the Department of Correction may use funds available to the Department for the 2009‑2011 biennium to pay the sum of forty dollars ($40.00) per day as reimbursement to counties for the cost of housing convicted inmates, parolees, and post‑release supervisees awaiting transfer to the State prison system, as provided in G.S. 148‑29. The Department shall report quarterly to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee, the Chairs of the House of Representatives and Senate Appropriations Committees, and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of funds to reimburse counties for prisoners awaiting transfer and on its progress in reducing the jail backlog.

USE OF CLOSED PRISON FACILITIES
SECTION 19.4.(a)  In conjunction with the closing of prison facilities, including small expensive prison units recommended for consolidation by the Government Performance Audit Committee, the Department of Correction shall consult with the county or municipality in which the unit is located, with the elected State and local officials, and with State and federal agencies about the possibility of converting that unit to other use. The Department may also consult with any private for‑profit or nonprofit firm about the possibility of converting the unit to other use. In developing a proposal for future use of each unit, the Department shall give priority to converting the unit to other criminal justice use. Consistent with existing law and the future needs of the Department of Correction, the State may provide for the transfer or the lease of any of these units to counties, municipalities, State agencies, or private firms wishing to convert them to other use. The Department of Correction may also consider converting some of the units recommended for closing from one security custody level to another, where that conversion would be cost‑effective. A prison unit under lease to a county pursuant to the provisions of this section for use as a jail is exempt for the period of the lease from any of the minimum standards adopted by the Secretary of Health and Human Services pursuant to G.S. 153A‑221 for the housing of adult prisoners that would subject the unit to greater standards than those required of a unit of the State prison system.
Prior to any transfer or lease of these units, the Department of Correction shall report on the terms of the proposed transfer or lease to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee. The Department of Correction also shall provide annual summary reports to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the conversion of these units to other use and on all leases or transfers entered into pursuant to this section.
SECTION 19.4.(b)  The Department of Correction shall study the feasibility of establishing probation revocation centers at closed prison facilities. The Department shall consult with counties to explore cost‑sharing of these facilities. The Department shall report its findings to the Chairs of the Appropriations Subcommittees on Justice and Public Safety by February 1, 2010.

LIMIT USE OF OPERATIONAL FUNDS
SECTION 19.5.  Funds appropriated in this act to the Department of Correction for operational costs for additional facilities shall be used for personnel and operating expenses set forth in the budget approved by the General Assembly in this act.  These funds shall not be expended for any other purpose, except as provided for in this act, and shall not be expended for additional prison personnel positions until the new facilities are within 120 days of projected completion, except that the Department may establish critical positions prior to 120 days of completion representing no more than twenty percent (20%) of the total estimated number of positions.

CENTER FOR COMMUNITY TRANSITIONS/CONTRACT AND REPORT
SECTION 19.6.  The Department of Correction may continue to contract with The Center for Community Transitions, Inc., a nonprofit corporation, for the purchase of prison beds for minimum security female inmates during the 2009‑2011 biennium. The Center for Community Transitions, Inc., shall report by February 1 of each year to the Joint Legislative Commission on Governmental Operations on the annual cost per inmate and the average daily inmate population compared to bed capacity using the same methodology as that used by the Department of Correction.

INMATE MEDICAL COSTS
SECTION 19.7.  Notwithstanding the provisions of G.S. 143C‑6‑9, the Department of Correction may use funds available during the 2009‑2011 biennium for the inmate medical program if expenditures are projected to exceed the Department's inmate medical continuation budget. The Department shall consult with the Joint Legislative Commission on Governmental Operations prior to exceeding the continuation budget amount.

PAROLE ELIGIBILITY REPORT/MUTUAL AGREEMENT PAROLE PROGRAM/MEDICAL RELEASE PROGRAM
SECTION 19.8.(a)  The Post‑Release Supervision and Parole Commission shall, with the assistance of the North Carolina Sentencing and Policy Advisory Commission and the Department of Correction, analyze the amount of time each inmate who is eligible for parole on or before July 1, 2010, has served compared to the time served by offenders under Structured Sentencing for comparable crimes. The Commission shall determine if the person has served more time in custody than the person would have served if sentenced to the maximum sentence under the provisions of Article 81B of Chapter 15A of the General Statutes. The "maximum sentence," for the purposes of this section, shall be calculated as set forth in subsection (b) of this section.
SECTION 19.8.(b)  For the purposes of this section, the following rules apply for the calculation of the maximum sentence:
(1)	The offense upon which the person was convicted shall be classified as the same felony class as the offense would have been classified if committed after the effective date of Article 81B of Chapter 15A of the General Statutes.
(2)	The minimum sentence shall be the maximum number of months in the presumptive range of minimum durations in Prior Record Level VI of G.S. 15A‑1340.17(c) for the felony class determined under subdivision (1) of this subsection. The maximum sentence shall be calculated using G.S. 15A‑1340.17(d), (e), or (e1).
(3)	If a person is serving sentences for two or more offenses that are concurrent in any respect, then the offense with the greater classification shall be used to determine a single maximum sentence for the concurrent offenses. The fact that the person has been convicted of multiple offenses may be considered by the Commission in making its determinations under subsection (a) of this section.
SECTION 19.8.(c)  The Post‑Release Supervision and Parole Commission shall report to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee  and to the Chairs of the House of Representatives and Senate Appropriations Committees, and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by April 1, 2010. The report shall include the following:  the class of the offense for which each parole‑eligible inmate was convicted and whether an inmate had multiple criminal convictions. The Commission shall reinitiate the parole review process for each offender who has served more time than that person would have under Structured Sentencing as provided by subsections (a) and (b) of this section.
The Commission shall also report on the number of parole‑eligible inmates reconsidered in compliance with this section and the number who were actually paroled.
SECTION 19.8.(d)  The Department of Correction and the Post‑Release Supervision and Parole Commission shall report by March 1 of each year to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the number of inmates enrolled in the mutual agreement parole program, the number completing the program and being paroled, and the number who enrolled but were terminated from the program. The information should be based on the previous calendar year.
SECTION 19.8.(e)  The Department of Correction and the Post‑Release Supervision and Parole Commission shall report by March 1 of each year to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the number of inmates proposed for release, considered for release, and granted release under Chapter 84B of Chapter 15A of the General Statutes, providing for the medical release of inmates who are either permanently and totally disabled, terminally ill, or geriatric.

FEDERAL GRANT MATCHING FUNDS
SECTION 19.9.  Notwithstanding the provisions of G.S. 143C‑6‑9, the Department of Correction may use up to the sum of one million two hundred thousand dollars ($1,200,000) during the 2009‑2010 fiscal year from funds available to the Department to provide the State match needed in order to receive federal grant funds. Prior to using funds for this purpose, the Department shall report to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Commission on Governmental Operations on the grants to be matched using these funds.

REPORTS ON NONPROFIT PROGRAMS
SECTION 19.10.(a)  Funds appropriated in this act to the Department of Correction to support the programs of Harriet's House may be used for program operating costs, the purchase of equipment, and the rental of real property to serve women released from prison with children in their custody. Harriet's House shall report by February 1 of each year to the  Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of State appropriations and on the effectiveness of the program, including information on the number of clients served, the number of clients who successfully complete the Harriet's House program, and the number of clients who have been rearrested within three years of successfully completing the program. The report shall provide financial and program data for the complete fiscal year prior to the year in which the report is submitted. The financial report shall identify all funding sources and amounts.
SECTION 19.10.(b)  Summit House shall report by February 1 of each year to the  Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of State appropriations and on the effectiveness of the program, including information on the number of clients served, the number of clients who have had their probation revoked, the number of clients who successfully complete the program while housed at Summit House, Inc., and the number of clients who have been rearrested within three years of successfully completing the program. The report shall provide financial and program data for the complete fiscal year prior to the year in which the report is submitted. The financial report shall identify all funding sources and amounts.
SECTION 19.10.(c)  Women at Risk shall report by February 1 of each year to the  Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of State funds and on the effectiveness of the program, including information on the number of clients served, the number of clients who have had their probation revoked, the number of clients who have successfully completed the program, and the number of clients who have been rearrested within three years of successfully completing the program. The report shall provide financial and program data for the complete fiscal year prior to the year in which the report is submitted. The financial report shall identify all funding sources and amounts.
SECTION 19.10.(d)  Our Children's Place shall report by February 1 of each year to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee and the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety on the status of the planning, design, and construction of Our Children's Place, the proposed program components and evaluation measures, and on the projected number of inmates and their children to be served. The report shall also provide financial data, including the expenditure of State funds and all funding sources and amounts.

CRIMINAL JUSTICE PARTNERSHIP
SECTION 19.11.(a)  G.S. 143B‑273.4 reads as rewritten:
"§ 143B‑273.4.  Eligible population.
(a)	An eligible offender is an adult offender who  either is in confinement awaiting trial or was convicted of a misdemeanor or a felony offense and received a nonincarcerative sentence of an intermediate punishment or is serving a term of parole or post‑release supervision after serving an active sentence of imprisonment.
(b)	The priority populations for programs funded under this Article shall be:
(1)	Offenders sentenced to intermediate  punishments; and
(2)	Offenders who are appropriate for release from jail prior to trial under the supervision of a pretrial monitoring program."
SECTION 19.11.(b)  Notwithstanding any other provision of law, a county may use funds appropriated pursuant to the Criminal Justice Partnership Act, Article 6A of Chapter 143B of the General Statutes, to provide more than one community‑based corrections program.
SECTION 19.11.(c)  Effective July 1, 2009, the Department of Correction shall recalculate the county allocation funding formula mandated under G.S. 143B‑273.15 using updated data.
SECTION 19.11.(d)  Notwithstanding the provisions of G.S. 143B‑273.15 specifying that grants to participating counties are for the full fiscal year and that unobligated funds are returned to the State‑County Criminal Justice Partnership Account at the end of the grant period, the Department of Correction may reallocate unspent or unclaimed funds distributed to counties participating in the State‑County Criminal Justice Partnership Program in an effort to maintain the level of services realized in previous fiscal years.
SECTION 19.11.(e)  The Department of Correction may not deny funds to a county to support both a residential program and a day reporting center if the Department of Correction determines  that the county has a demonstrated need and a fully developed plan for each type of sanction.
SECTION 19.11.(f)  The Department of Correction shall report by March 1 of each year to the Chairs of the House of Representatives and Senate Appropriations Committees, the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety, and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the status of the State‑County Criminal Justice Partnership Program. The report shall include the following information:
(1)	The amount of funds carried over from the prior fiscal year;
(2)	The dollar amount and purpose of grants awarded to counties as discretionary grants for the current fiscal year;
(3)	Any counties the Department anticipates will submit requests for new implementation grants;
(4)	An update on efforts to ensure that all counties make use of the electronic reporting system, including the number of counties submitting offender participation data via the system;
(5)	An analysis of offender participation data received, including data on each program's utilization and capacity;
(6)	An analysis of comparable programs prepared by the Division of Research and Planning, Department of Correction, including a comparison of programs in each program type on selected outcome measures developed by the Division of Community Corrections in consultation with the Fiscal Research Division and the Division of Research and Planning, and a summary of the reports prepared by county Criminal Justice Partnerships Advisory Boards;
(7)	A review of whether each sentenced offender program is meeting established program goals developed by the Division of Community Corrections in consultation with the Division of Research and Planning and the State Criminal Justice Partnership Advisory Board;
(8)	The number of community offenders and intermediate offenders served by each county program;
(9)	The amount of Criminal Justice Partnership funds spent on community offenders and intermediate offenders; and
(10)	A short description of the services and programs provided by each partnership, including who the service providers are and the amount of funds each service provider receives.

REPORT ON PROBATION AND PAROLE CASELOADS
SECTION 19.12.(a)  The Department of Correction shall report by March 1 of each year to the chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on caseload averages for probation and parole officers.  The report shall include:
(1)	Data on current caseload averages and district averages for probation/parole officer positions;
(2)	Data on current span of control for chief probation officers;
(3)	An analysis of the optimal caseloads for these officer classifications;
(4)	An assessment of the role of surveillance officers;
(5)	The number and role of paraprofessionals in supervising low‑risk caseloads;
(6)	An update on the Department's implementation of the recommendations contained in the National Institute of Correction study conducted on the Division of Community Corrections in 2004 and 2008;
(7)	The process of assigning offenders to an appropriate supervision level based on a risk assessment and an examination of other existing resources for assessment and case planning, including the Sentencing Services Program in the Office of Indigent Defense Services and the range of screening and assessment services provided by the Division of Mental Health, Developmental Disability, and Substance Abuse Services in the Department of Health and Human Services; and
(8)	Data on cases supervised solely for the collection of court‑ordered payments.
SECTION 19.12.(b)  The Department of Correction shall conduct a study of  probation/parole officer workload. The study shall include analysis of the type of offenders supervised, the distribution of the probation/parole officers' time by type of activity, the caseload carried by the officers, and comparisons to practices in other states. The study shall be used to determine whether the caseload goals established by the Structured Sentencing Act are still appropriate, based on the nature of the offenders supervised and the time required to supervise those offenders.
SECTION 19.12.(c)  The Department of Correction shall report the results of the study and recommendations for any adjustments to caseload goals to the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by January 1, 2011.
SECTION 19.12.(d)  The Department of Correction shall report by March 1 of each year to the Chairs of the House and Senate Appropriations Committees, the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety, and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee on the following:
(1)	The number of sex offenders enrolled on active and passive GPS monitoring.
(2)	The caseloads of probation officers assigned to GPS‑monitored sex offenders.
(3)	The number of violations.
(4)	The number of absconders.
(5)	The projected number of offenders to be enrolled by the end of the 2009‑2010 fiscal year and the end of the 2010‑2011 fiscal year.
(6)	The total cost of the program, including a per‑offender cost.

REPORT ON INMATE WELFARE AND CORRECTION ENTERPRISES
SECTION 19.13.  The Department of Correction, in consultation with the Office of State Budget and Management, shall study the feasibility of budgeting positions currently funded from the Inmate Welfare Fund and the Correction Enterprise Fund from the General Fund instead. The Department shall report its findings by April 1, 2010, to the chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee.

PRE‑SENTENCE INVESTIGATIONS FEASIBILITY STUDY
SECTION 19.14.  The Office of Research and Planning of the Department of Correction shall conduct a feasibility study of conducting pre‑sentence investigations on all offenders convicted of felonies for which the sentencing judge has the option of intermediate or active punishments. This feasibility study shall be conducted as a pilot implementation, incorporating a variety of districts across the State reflecting both rural and urban settings, as well as diversity of programming available within the district.
The Office of Research and Planning shall report the results of its study by May 1, 2010, to the Chairs of the House of Representatives and Senate Appropriations Committees, the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety, and the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee.

STUDY INCARCERATED MOTHERS PROGRAM
SECTION 19.15.(a)  Our Children's Place, Inc., a nonprofit corporation, shall submit to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee by October 1, 2009, a comprehensive plan for the implementation of a contractual program to house incarcerated women with their children.  This plan shall include criteria for placement, minimum standards for custody and security, and projections of costs for implementation, including presumptive funding sources and memoranda of intent from affected agencies.
SECTION 19.15.(b)  The Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee shall make recommendations to the 2010 Session of the 2009 General Assembly concerning the establishment of a program to house incarcerated women with their children. These recommendations shall address legal issues related to the custody of the children while in the program.

PART XX. general Government

General Government Agencies Report Allocation of Departmentwide Reductions
SECTION 20.1.  No later than September 1, 2009, the following State agencies shall identify the allocation of departmentwide expenditure reductions for the 2009‑2011 fiscal biennium and shall report the allocation of reductions to the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on General Government of the Senate and the House of Representatives, and the Fiscal Research Division:
(1)	Administration.
(2)	Auditor.
(3)	Cultural Resources, including the allocation of 6.4% reduction to historic sites, maritime museums, and history museums.
(4)	Cultural Resources – Roanoke Island Commission.
(5)	General Assembly.
(6)	Governor.
(7)	Insurance.
(8)	Lieutenant Governor.
(9)	Administrative Hearings.
(10)	Revenue.
(11)	State Board of Elections.
(12)	State Budget and Management.
(13)	State Controller.
(14)	Treasurer.

Part XXA. DEPARTMENT OF ADMINISTRATION

NC GREEN BUSINESS FUND/FUNDS
SECTION 20A.1.  Of the funds received by the State under the American Recovery and Reinvestment Act of 2009 and appropriated in this act to the State Energy Office, Department of Administration, for the 2009‑2010 fiscal year, the sum of five million dollars ($5,000,000) in nonrecurring funds shall be allocated to the North Carolina Green Business Fund in the Department of Commerce.

Biofuels Center of north carolina
SECTION 20A.2.  Of the funds received by the State under the American Recovery and Reinvestment Act of 2009 and appropriated in this act to the State Energy Office, Department of Administration, for the 2009‑2010 fiscal year, the sum of three million dollars ($3,000,000) in nonrecurring funds shall be allocated to the Biofuels Center of North Carolina. These funds shall be used for costs related to implementing the North Carolina Strategic Plan for Biofuels Leadership developed under S.L. 2006‑206.

Coastal Sounds Wind Study
SECTION 20A.3.  Of the funds received by the State under the American Recovery and Reinvestment Act of 2009 and appropriated in this act to the State Energy Office, Department of Administration, for the 2009‑2010 fiscal year, the sum of three hundred thousand dollars ($300,000) in nonrecurring funds shall be allocated to The University of North Carolina. These funds shall be used for costs related to implementing the pilot project described in Section 9.14 of this act.

PART XXI. DEPARTMENT OF insurance

Set Insurance Regulatory Charge
SECTION 21.1.(a)  The percentage rate to be used in calculating the insurance regulatory charge under G.S. 58‑6‑25 is five and one‑half percent (5.5%) for the 2009 calendar year.
SECTION 21.1.(b)  This section is effective when it becomes law.

PART xxii. OFFice of state budget and management

Study OSBM, OSC, and Treasurer Consolidation
SECTION 22.1.  The Office of State Budget and Management, after reviewing the constitutional duties of the Governor in preparing and executing the budget and the constitutional status of the duties of the office of State Treasurer, shall study the feasibility of consolidating the Office of State Controller, the Office of State Budget and Management, and some of the functions of the State Treasurer, or reallocating functions of those state agencies, all with the goal of achieving economies or improving management.
The Office of State Budget and Management, no later than April 1, 2010, shall report to the full chairs of the Senate and House Appropriations Committees and to the Fiscal Research Division its findings and recommendations from the study required by the previous paragraph.

PART xxiii. OFFICE OF THE STATE CONTROLLER

Overpayments Audit
SECTION 23.1.(a)  During the 2009‑2011 biennium, receipts generated by the collection of inadvertent overpayments by State agencies to vendors as a result of pricing errors, neglected rebates and discounts, miscalculated freight charges, unclaimed refunds, erroneously paid excise taxes, and related errors as required by G.S. 147‑86.22(c) are to be deposited in the Special Reserve Account 24172.
SECTION 23.1.(b)  For each year of the 2009‑2011 biennium, five hundred thousand dollars ($500,000) of the funds transferred from the Special Reserve Account 24172 shall be used by the Office of the State Controller for data processing, debt collection, or e‑commerce costs.
SECTION 23.1.(c)  All funds available in the Special Reserve Account 24172 on July 1 of each year of the 2009‑2011 biennium are transferred to the General Fund on that date.
SECTION 23.1.(d)  Any unobligated funds in the Special Reserve Account 24172 that are realized above the allowance in subsection (b) of this section are subject to appropriation by the General Assembly.
SECTION 23.1.(e)  The State Controller shall report quarterly to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the revenue deposited into the Special Reserve Account 24172 and the disbursement of that revenue.

Beacon Staff to Support Statewide Enterprise Training Program
SECTION 23.2.  For the 2009‑2011 fiscal biennium, the Office of the State Controller shall use three hundred sixty‑four thousand four hundred thirty‑eight dollars ($364,438) of existing BEACON funds to continue the following six full‑time, time‑limited training positions that are effective July 1, 2009, and that support the statewide enterprise training program established by Section 20.1 of S.L. 2008‑107:
(1)	Two Staff Development Specialists II ($112,525).
(2)	One BEACON University Trainer ($70,928).
(3)	One Technical Support Technician ($64,708).
(4)	One Administrative Support Specialist ($45,347).
(5)	One Business and Technology Application Technician ($70,928).

PART xxiv. DEPARTMENT OF THE secretary of state

Increase Registration Fee Renewal for Securities Salesmen
SECTION 24.1.  G.S. 78A‑37(b) reads as rewritten:
"(b)	Every applicant for initial or renewal registration shall pay a filing fee of three hundred dollars ($300.00) in the case of a dealer and one hundred dollars ($100.00) in the case of a salesman. The Administrator may by rule reduce the registration fee proportionately when the registration will be in effect for less than a full year."

Create Special Fund for Auction Rate Securities Investigations Costs
SECTION 24.2.(a)  There is established the Auction Rate Securities Investigation Special Fund, which is a special fund created with the unexpended funds from the existing Auction Rate Securities (ARS) fund from fiscal year 2008‑2009 for reimbursement of the costs of investigations arising from the Department of the Secretary of State's administration of Chapters 78A, 78C, and 78D of the General Statutes. The Auction Rate Securities Investigation Special Fund shall be used to continue the Department's active participation in the North American Securities Administrators Association (NASAA) ARS Task Force investigation into the marketing of Auction Rate Securities by the regulated community to investors as well as the remedies for harm arising from such marketing. Reimbursements paid by investment banks and firms to the Department as part of the Department's involvement in the NASAA ARS Task Force shall be deposited into the Auction Rate Securities Investigation Special Fund.
SECTION 24.2.(b)  The maximum balance of the Auction Rate Securities Investigation Special Fund shall be limited to three million two hundred thousand dollars ($3,200,000). If deposits from investment banks and firms paid as reimbursements for investigation costs cause the fund to exceed three million two hundred thousand dollars ($3,200,000), then the amount exceeding three million two hundred thousand dollars ($3,200,000) shall immediately be transferred to the General Fund.
SECTION 24.2.(c)  In the event that the Department of the Secretary of State receives other monies as reimbursement for the costs of investigations into activities which are not a part of the NASAA ARS Task Force, these monies shall also be deposited into the Auction Rate Securities Special Fund and shall remain available to the Department for the administration of Chapters 78A, 78C, and 78D of the General Statutes, subject to the limitations on the Auction Rate Securities Investigation Special Fund's maximum balance in subsection (b) of this section.

PART xxv. DEPARTMENT OF TRANSPORTATION

Cash Flow Highway Funds and Highway Trust Fund Appropriations
SECTION 25.1.(a)  The General Assembly authorizes and certifies anticipated revenues of the Highway Fund as follows:
For Fiscal Year 2011‑2012	$1,736.5 million
For Fiscal Year 2012‑2013	$1,835.2 million
For Fiscal Year 2013‑2014	$1,945.3 million
For Fiscal Year 2014‑2015	$2,008.7 million
SECTION 25.1.(b)  The General Assembly authorizes and certifies anticipated revenues of the Highway Trust Fund as follows:
For Fiscal Year 2011‑2012	$  950.4 million
For Fiscal Year 2012‑2013	$1,006.9 million
For Fiscal Year 2013‑2014	$1,066.4 million
For Fiscal Year 2014‑2015	$1,108.3 million

Modify Global Transpark Debt
SECTION 25.2.  G.S. 147‑69.2(b)(11), as amended by Section 7 of S.L. 2005‑144, Section 2 of S.L. 2005‑201, Section 28.17 of S.L. 2005‑276, and Section 27.7 of S.L. 2007‑323 reads as rewritten:
"(b)	It shall be the duty of the State Treasurer to invest the cash of the funds enumerated in subsection (a) of this section in excess of the amount required to meet the current needs and demands on such funds, selecting from among the following:
…
(11)	With respect to assets of the Escheat Fund, obligations of the North Carolina Global TransPark Authority authorized by G.S. 63A‑4(a)(22), not to exceed twenty‑five million dollars ($25,000,000), that have a final maturity not later than October 1,  2011. The obligations shall bear interest at the rate set by the State Treasurer. No commitment to purchase obligations may be made pursuant to this subdivision after September 1, 1993, and no obligations may be purchased after September 1, 1994. In the event of a loss to the Escheat Fund by reason of an investment made pursuant to this subdivision, it is the intention of the General Assembly to hold the Escheat Fund harmless from the loss by appropriating to the Escheat Fund funds equivalent to the loss.
If any part of the property owned by the North Carolina Global TransPark Authority now or in the future is divested, proceeds of the divestment shall be used to fulfill any unmet obligations on an investment made pursuant to this subdivision.
…."

Small Construction and Contingency Funds
SECTION 25.3.  Of the funds appropriated in this act to the Department of Transportation:
(1)	Fourteen million dollars ($14,000,000) shall be allocated in each fiscal year for small construction projects recommended by the member of the Board of Transportation representing the Division in which the project is to be constructed in consultation with the Division Engineer and approved by the Board of Transportation. These funds shall be allocated equally in each fiscal year of the biennium among the 14 Highway Divisions for small construction projects.
(2)	Thirteen million nine hundred fifty thousand dollars ($13,950,000) in fiscal year 2009‑2010 and thirteen million nine hundred fifty thousand dollars ($13,950,000) in fiscal year 2010‑2011 shall be used statewide for rural or small urban highway improvements and related transportation enhancements to public roads and public facilities, industrial access roads, and spot safety projects, including pedestrian walkways that enhance highway safety. Projects funded pursuant to this subdivision shall be approved by the Secretary of Transportation.
None of these funds used for rural secondary road construction are subject to the county allocation formulas in G.S. 136‑44.5(b) and (c).
These funds are not subject to G.S. 136‑44.7.
The Department of Transportation shall report to the members of the General Assembly on projects funded pursuant to this section in each member's district prior to the Board of Transportation's action. The Department shall make a quarterly comprehensive report on the use of these funds to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division.

use Secondary Road Improvement funds for highway MAINTENANCE in fiscal year 2009‑2010
SECTION 25.4.  Notwithstanding the provisions of G.S. 136‑44.2A regarding the annual allocation of funds from the Highway Fund to the Department of Transportation for secondary road improvement programs, the funds required to be allocated for the secondary road improvement programs, established pursuant to G.S. 136‑44.7 and G.S. 136‑44.8, for fiscal year 2009‑2010, shall remain in the Highway Fund for highway maintenance.

NC Turnpike Authority Transferred to the Department of Transportation
SECTION 25.5.(a)  G.S. 136‑89.182 reads as rewritten:
"§ 136‑89.182.  North Carolina Turnpike Authority.
…
(b)	Administrative Placement. – The Authority shall be located within the Department of Transportation  and shall be subject to and under the direct supervision of the Secretary of Transportation.
…
(d)	Board of Transportation Members. –  Members of the North Carolina Board of Transportation may serve as members of the Authority Board.
…."
SECTION 25.5.(b)  The transfer of the North Carolina Turnpike Authority to the Department of Transportation has all the elements of a Type I transfer under G.S. 143A‑6.

Allow the Department of Transportation to require facilities constructed within Rights‑of‑Way to be constructed from permeable pavement
SECTION 25.6.(a)  G.S. 136‑18 is amended by adding a new subdivision to read:
"(41)	The Department shall, prior to the beginning of construction, determine whether all sidewalks and other facilities primarily intended for the use of pedestrians and bicycles that are to be constructed within the right‑of‑way of a public street or highway that is a part of the State highway system or an urban highway system must be constructed of permeable pavement. "Permeable pavement" means paving material that absorbs water or allows water to infiltrate through the paving material. Permeable pavement materials include porous concrete, permeable interlocking concrete pavers, concrete grid pavers, porous asphalt, and any other material with similar characteristics. Compacted gravel shall not be considered permeable pavement."
SECTION 25.6.(b)  This section becomes effective October 1, 2009, and applies to facilities constructed on or after that date.

PART xxvi. SALARIES AND BENEFITS

GOVERNOR AND COUNCIL OF STATE/NO SALARY INCREASES
SECTION 26.1.(a)  For the 2009‑2010 and 2010‑2011 fiscal years, the salary of the Governor shall remain the amount set by G.S. 147‑11(a).
SECTION 26.1.(b)  The annual salaries for the members of the Council of State, payable monthly, for the 2009‑2010 and 2010‑2011 fiscal years are:

	Council of State	Annual Salary
	Lieutenant Governor		$123,198
	Attorney General		123,198
	Secretary of State		123,198
	State Treasurer		123,198
	State Auditor		123,198
	Superintendent of Public Instruction		123,198
	Agriculture Commissioner		123,198
	Insurance Commissioner		123,198
	Labor Commissioner		123,198

NONELECTED DEPARTMENT HEAD/NO SALARY INCREASES
SECTION 26.2.  In accordance with G.S. 143B‑9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the 2009‑2010 and 2010‑2011 fiscal years are:

	Nonelected Department Heads	Annual Salary
	Secretary of Administration		$120,363
	Secretary of Correction		120,363
	Secretary of Crime Control and Public Safety		120,363
	Secretary of Cultural Resources		120,363
	Secretary of Commerce		120,363
	Secretary of Environment and Natural Resources		120,363
	Secretary of Health and Human Services		120,363
	Secretary of Juvenile Justice and
		Delinquency Prevention		120,363
	Secretary of Revenue		120,363
	Secretary of Transportation		120,363

CERTAIN EXECUTIVE BRANCH OFFICIALS/NO SALARY INCREASES
SECTION 26.3.  The annual salaries, payable monthly, for the 2009‑2010 and 2010‑2011 fiscal years for the following executive branch officials are:

	Executive Branch Officials	Annual Salary
	Chairman, Alcoholic Beverage Control Commission		$109,553
	State Controller		153,319
	Commissioner of Motor Vehicles		109,553
	Commissioner of Banks		123,198
	State Personnel Director		120,363
	Chairman, Parole Commission		100,035
	Members of the Parole Commission		46,178
	Chairman, Utilities Commission		137,203
	Members of the Utilities Commission		123,198
	Executive Director, Agency for
		Public Telecommunications		92,356
	Director, Museum of Art		112,256
	Executive Director, North Carolina
		Agricultural Finance Authority		106,635
	State Chief Information Officer		153,227

JUDICIAL BRANCH OFFICIALS/NO SALARY INCREASES 
SECTION 26.4.(a)  The annual salaries, payable monthly, for specified judicial branch officials for the 2009‑2010 and 2010‑2011 fiscal years are:

	Judicial Branch Officials	Annual Salary
	Chief Justice, Supreme Court		$140,932
	Associate Justice, Supreme Court		137,249
	Chief Judge, Court of Appeals		135,061
	Judge, Court of Appeals		131,531
	Judge, Senior Regular Resident Superior Court		127,957
	Judge, Superior Court		124,382
	Chief Judge, District Court		112,946
	Judge, District Court		109,372
	District Attorney		119,305
	Administrative Officer of the Courts		126,738
	Assistant Administrative Officer of the Courts		115,763
	Public Defender		119,305
	Director of Indigent Defense Services		123,022

SECTION 26.4.(b)  The district attorney or public defender of a judicial district, with the approval of the Administrative Officer of the Courts or the Commission on Indigent Defense Services, respectively, shall set the salaries of assistant district attorneys or assistant public defenders, respectively, in that district such that the average salaries of assistant district attorneys or assistant public defenders in that district do not exceed seventy thousand nine hundred forty‑six dollars ($70,946), and the minimum salary of any assistant district attorney or assistant public defender is at least thirty‑seven thousand one hundred eighty‑two dollars ($37,182). The annual salaries in effect on June 30, 2009, shall remain at the same amount for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.4.(c)  The annual salaries in effect on June 30, 2009, for permanent, full‑time employees of the Judicial Department whose salaries are not itemized in this act shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.4.(d)  The annual salaries in effect on June 30, 2009, for permanent, part‑time employees of the Judicial Department whose salaries are not itemized in this act, shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.

CLERK OF SUPERIOR COURT/NO SALARY INCREASES
SECTION 26.5.  The annual salaries of the clerks of superior court provided by G.S. 7A‑101(a) shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.

ASSISTANT AND DEPUTY CLERKS OF COURT/NO SALARY INCREASES
SECTION 26.6.  The annual salaries of the assistant and deputy clerks of superior court provided by G.S. 7A‑102(c1) shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years, and there shall not be a step increase.

MAGISTRATES/ NO SALARY INCREASES
SECTION 26.7.  The annual salaries of magistrates provided by G.S. 7A‑171.1(a) shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years, and there shall not be a step increase.

GENERAL ASSEMBLY PRINCIPAL CLERKS/NO SALARY INCREASES
SECTION 26.8.  The annual salaries of the General Assembly principal clerks provided by G.S. 120‑37(c) shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.

SERGEANT‑AT‑ARMS AND READING CLERKS/NO SALARY INCREASES
SECTION 26.9.  The annual salaries of the General Assembly sergeants‑at‑arms and reading clerks provided by G.S. 120‑37(b) shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.

LEGISLATIVE EMPLOYEES/NO SALARY INCREASES
SECTION 26.10.  The Legislative Services Officer shall not increase the salaries of nonelected employees of the General Assembly in effect on June 30, 2009. Except as specifically provided in this section, nothing in this act limits any of the provisions of G.S. 120‑32.

COMMUNITY COLLEGES PERSONNEL/NO SALARY INCREASES
SECTION 26.11.(a)  The annual salaries in effect on June 30, 2009, for faculty, except as otherwise provided by Section 8.1 of this act, and for all permanent, full‑time community college institutional personnel supported by State funds, shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.11.(b)  The minimum salaries for community college faculty shall be based on the following education levels:
(1)	Vocational Diploma/Certificate or Less. – This education level includes faculty members who are high school graduates, have vocational diplomas, or have completed one year of college.
(2)	Associate Degree or Equivalent. – This education level includes faculty members who have an associate degree or have completed two or more years of college but have no degree.
(3)	Bachelor's Degree.
(4)	Master's Degree or Education Specialist.
(5)	Doctoral Degree.
SECTION 26.11.(c)  For the 2009‑2010 and 2010‑2011 school years, the minimum salaries for nine‑month, full‑time curriculum community college faculty shall not be increased and shall remain as follows:
	Education Level	Minimum Salary
Vocational Diploma/Certificate or Less	$34,314
Associate Degree or Equivalent	$34,819
Bachelor's Degree	$37,009
Master's Degree or Education Specialist	$38,952
Doctoral Degree	$41,753
No full‑time faculty member shall earn less than the minimum salary for his or her education level. The pro rata hourly rate of the minimum salary for each education level shall be used to determine the minimum salary for part‑time faculty members.

UNIVERSITY OF NORTH CAROLINA SYSTEM/EPA NO SALARY INCREASES
SECTION 26.12(a)  Of funds appropriated to the Faculty Recruiting and Retention Fund under the Office of the President of the University of North Carolina, allocations from the fund shall be made for salary increases at the discretion of the President of the University of North Carolina only for the purpose of recruiting and retaining faculty members as necessary at constituent institutions.
SECTION 26.12.(b)    The annual salaries in effect on June 30, 2009, for all employees of The University of North Carolina supported by State funds, and for employees of the North Carolina School of Science and Mathematics shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years except for faculty as otherwise provided by the Faculty Recruiting and Retention Fund or the Distinguished Professors Endowment Fund. 

MOST STATE EMPLOYEES/NO SALARY INCREASES
SECTION 26.13.(a) The salaries in effect June 30, 2009, of all permanent, full‑time State employees whose salaries are set in accordance with the State Personnel Act, and who are paid from the General Fund or the Highway Fund, shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.13.(b)  Except as otherwise provided in this act, the salaries in effect on June 30, 2009, for permanent, full‑time State officials and persons in exempt positions that are recommended by the Governor and set by the General Assembly shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.13.(c)  The salaries in effect on June 30, 2009, for all permanent, part‑time State employees shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.13.(d)  The Director of the Budget may allocate out of special operating funds or from other sources of the employing agency, except tax revenues, sufficient funds to maintain salaries in accordance with subsection (a), (b), or (c) of this section, including funds for the employer's retirement and social security contributions, for the permanent, full‑time and part‑time employees of the agency, provided the employing agency elects to make available the necessary funds.

ALL STATE‑SUPPORTED PERSONNEL/NO SALARY INCREASES
SECTION 26.14.(a)  Salaries and related benefits for positions that are funded partially from the General Fund or Highway Fund and partially from sources other than the General Fund or Highway Fund, in effect June 30, 2009, shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.14.(b)  The salary increase provisions of G.S. 20‑187.3 are suspended for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.14.(c)  The Director of the Budget shall transfer from the Reserve for Compensation Increases in this act for fiscal years 2009‑2010 and 2010‑2011 all funds necessary for the salaries authorized by this act, including funds for the employer's retirement and social security contributions.
SECTION 26.14.(d)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.

TEACHER SALARY SCHEDULES 
SECTION 26.15.(a)  The following monthly salary schedules shall apply for the 2009‑2010 fiscal year to certified personnel of the public schools who are classified as teachers.  The schedule contains 32 steps with each step corresponding to one year of teaching experience.

2009‑2010 Monthly Salary Schedule
"A" Teachers
	Years of Experience	"A" Teachers	NBPTS Certification
	0	$3,043	N/A
	1	$3,085	N/A
	2	$3,129	N/A
	3	$3,264	$3,656
	4	$3,404	$3,812
	5	$3,538	$3,963
	6	$3,667	$4,107
	7	$3,771	$4,224
	8	$3,819	$4,277
	9	$3,868	$4,332
	10	$3,918	$4,388
	11	$3,967	$4,443
	12	$4,018	$4,500
	13	$4,069	$4,557
	14	$4,122	$4,617
	15	$4,176	$4,677
	16	$4,231	$4,739
	17	$4,286	$4,800
	18	$4,345	$4,866
	19	$4,403	$4,931
	20	$4,461	$4,996
	21	$4,523	$5,066
	22	$4,584	$5,134
	23	$4,650	$5,208
	24	$4,714	$5,280
	25	$4,779	$5,352
	26	$4,845	$5,426
	27	$4,913	$5,503
	28	$4,984	$5,582
	29	$5,055	$5,662
	30	$5,153	$5,771
	31+	$5,255	$5,886

2009‑2010 Monthly Salary Schedule
"M" Teachers
	Years of Experience	"M" Teachers	NBPTS Certification
	0	$3,347	N/A
	1	$3,394	N/A
	2	$3,442	N/A
	3	$3,590	$4,021
	4	$3,744	$4,193
	5	$3,892	$4,359
	6	$4,034	$4,518
	7	$4,148	$4,646
	8	$4,201	$4,705
	9	$4,255	$4,766
	10	$4,310	$4,827
	11	$4,364	$4,888
	12	$4,420	$4,950
	13	$4,476	$5,013
	14	$4,534	$5,078
	15	$4,594	$5,145
	16	$4,654	$5,212
	17	$4,715	$5,281
	18	$4,780	$5,354
	19	$4,843	$5,424
	20	$4,907	$5,496
	21	$4,975	$5,572
	22	$5,042	$5,647
	23	$5,115	$5,729
	24	$5,185	$5,807
	25	$5,257	$5,888
	26	$5,330	$5,970
	27	$5,404	$6,052
	28	$5,482	$6,140
	29	$5,561	$6,228
	30	$5,668	$6,348
	31+	$5,781	$6,475

SECTION 26.15.(b)  Annual longevity payments for teachers shall be at the rate of one and one‑half percent (1.5%) of base salary for 10 to 14 years of State service, two and twenty‑five hundredths percent (2.25%) of base salary for 15 to 19 years of State service, three and twenty‑five hundredths percent (3.25%) of base salary for 20 to 24 years of State service, and four and one‑half percent (4.5%) of base salary for 25 or more years of State service.  The longevity payment shall be paid in a lump sum once a year.
SECTION 26.15.(c)  Certified public schoolteachers with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "M" teachers.  Certified public schoolteachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "M" teachers.
SECTION 26.15.(d)  The first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "M" teachers.  Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience.  Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.
Certified psychologists with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided for certified psychologists. Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.
SECTION 26.15.(e)  Speech pathologists who are certified as speech pathologists at the master's degree level and audiologists who are certified as audiologists at the master's degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.
Speech pathologists and audiologists with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided for speech pathologists and audiologists. Speech pathologists and audiologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for speech pathologists and audiologists.
SECTION 26.15.(f)  Certified school nurses who are employed in the public schools as nurses shall be paid on the "M" salary schedule.
SECTION 26.15.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.

SCHOOL BASED ADMINISTRATOR SALARY SCHEDULE
SECTION 26.16.(a)  The base salary schedule for school‑based administrators shall apply only to principals and assistant principals.  The base salary schedule for the 2009‑2010 fiscal year, commencing July 1, 2009, is as follows:

2009‑2010 Principal and Assistant Principal Salary Schedules
Classification
Years of Exp	Assistant	Prin I	Prin II	Prin III	Prin IV
	Principal	(0‑10)	(11‑21)	(22‑32)	(33‑43)
	0‑4	$3,781	‑	‑	‑	‑
	5	$3,931	‑	‑	‑	‑
	6	$4,074	‑	‑	‑	‑
	7	$4,189	‑	‑	‑	‑
	8	$4,243	$4,243	‑	‑	‑
	9	$4,298	$4,298	‑	‑	‑
	10	$4,353	$4,353	$4,408	‑	‑
	11	$4,408	$4,408	$4,464	‑	‑
	12	$4,464	$4,464	$4,521	$4,579	‑
	13	$4,521	$4,521	$4,579	$4,640	$4,701
	14	$4,579	$4,579	$4,640	$4,701	$4,762
	15	$4,640	$4,640	$4,701	$4,762	$4,828
	16	$4,701	$4,701	$4,762	$4,828	$4,891
	17	$4,762	$4,762	$4,828	$4,891	$4,956
	18	$4,828	$4,828	$4,891	$4,956	$5,025
	19	$4,891	$4,891	$4,956	$5,025	$5,092
	20	$4,956	$4,956	$5,025	$5,092	$5,166
	21	$5,025	$5,025	$5,092	$5,166	$5,237
	22	$5,092	$5,092	$5,166	$5,237	$5,310
	23	$5,166	$5,166	$5,237	$5,310	$5,383
	24	$5,237	$5,237	$5,310	$5,383	$5,458
	25	$5,310	$5,310	$5,383	$5,458	$5,537
	26	$5,383	$5,383	$5,458	$5,537	$5,617
	27	$5,458	$5,458	$5,537	$5,617	$5,725
	28	$5,537	$5,537	$5,617	$5,725	$5,839
	29	$5,617	$5,617	$5,725	$5,839	$5,956
	30	$5,725	$5,725	$5,839	$5,956	$6,075
	31	$5,839	$5,839	$5,956	$6,075	$6,197
	32	‑	$5,956	$6,075	$6,197	$6,321
	33	‑	‑	$6,197	$6,321	$6,447
	34	‑	‑	$6,321	$6,447	$6,576
	35	‑	‑	‑	$6,576	$6,708
	36	‑	‑	‑	$6,708	$6,842
	37	‑	‑	‑	‑	$6,979

2009‑2010 Principal and Assistant Principal Salary Schedules
Classification
Years of Exp	Prin V	Prin VI	Prin VII	Prin VIII
	(44‑54)	(55‑65)	(66‑100)	(101+)
	0‑14	$4,828	‑	‑	‑
	15	$4,891	‑	‑	‑
	16	$4,956	$5,025	‑	‑
	17	$5,025	$5,092	$5,237	‑
	18	$5,092	$5,166	$5,310	$5,383
	19	$5,166	$5,237	$5,383	$5,458
	20	$5,237	$5,310	$5,458	$5,537
	21	$5,310	$5,383	$5,537	$5,617
	22	$5,383	$5,458	$5,617	$5,725
	23	$5,458	$5,537	$5,725	$5,839
	24	$5,537	$5,617	$5,839	$5,956
	25	$5,617	$5,725	$5,956	$6,075
	26	$5,725	$5,839	$6,075	$6,197
	27	$5,839	$5,956	$6,197	$6,321
	28	$5,956	$6,075	$6,321	$6,447
	29	$6,075	$6,197	$6,447	$6,576
	30	$6,197	$6,321	$6,576	$6,708
	31	$6,321	$6,447	$6,708	$6,842
	32	$6,447	$6,576	$6,842	$6,979
	33	$6,576	$6,708	$6,979	$7,119
	34	$6,708	$6,842	$7,119	$7,261
	35	$6,842	$6,979	$7,261	$7,406
	36	$6,979	$7,119	$7,406	$7,554
	37	$7,119	$7,261	$7,554	$7,705
	38	$7,261	$7,406	$7,705	$7,859
	39	‑	$7,554	$7,859	$8,016
	40	‑	$7,705	$8,016	$8,176
	41	‑	‑	$8,176	$8,340

SECTION 26.16.(b)  The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools and in cooperative innovative high schools, shall be determined in accordance with the following schedule:
Number of Teachers
Classification	Supervised

Assistant Principal
Principal I		Fewer than 11 Teachers
Principal II	11‑21 Teachers
Principal III	22‑32 Teachers
Principal IV	33‑43 Teachers
Principal V	44‑54 Teachers
Principal VI	55‑65 Teachers
Principal VII		66‑100 Teachers
Principal VIII		More than 100 Teachers

The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non‑State funds or the principal or teacher assistants.
The beginning classification for principals in alternative schools and in cooperative innovative high school programs shall be the Principal III level. Principals in alternative schools who supervise 33 or more teachers shall be classified according to the number of teachers supervised.
SECTION 26.16.(c)  A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal. A principal or assistant principal shall also continue to receive any additional State‑funded percentage increases earned for the 1997‑1998, 1998‑1999, and 1999‑2000 school years for improvement in student performance or maintaining a safe and orderly school.
SECTION 26.16.(d)  Principals and assistant principals with certification based on academic preparation at the six‑year degree level shall be paid a salary supplement of one hundred twenty‑six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty‑three dollars ($253.00) per month.
SECTION 26.16.(e)  Longevity pay for principals and assistant principals shall be as provided for State employees under the State Personnel Act.
SECTION 26.16.(f)  If a principal is reassigned to a higher job classification because the principal is transferred to a school within a local school administrative unit with a larger number of State‑allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the higher job classification.
If a principal is reassigned to a lower job classification because the principal is transferred to a school within a local school administrative unit with a smaller number of State‑allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the lower job classification.
This subsection applies to all transfers on or after the effective date of this section, except transfers in school systems that have been created, or will be created, by merging two or more school systems. Transfers in these merged systems are exempt from the provisions of this subsection for one calendar year following the date of the merger.
SECTION 26.16.(g)  Participants in an approved full‑time master's in school administration program shall receive up to a 10‑month stipend at the beginning salary of an assistant principal during the internship period of the master's program.  For the 2006‑2007 fiscal year and subsequent fiscal years, the stipend shall not exceed the difference between the beginning salary of an assistant principal plus the cost of tuition, fees, and books and any fellowship funds received by the intern as a full‑time student, including awards of the Principal Fellows Program. The Principal Fellows Program or the school of education where the intern participates in a full‑time master's in school administration program shall supply the Department of Public Instruction with certification of eligible full‑time interns.
SECTION 26.16.(h)  During the 2009‑2010 fiscal year, the placement on the salary schedule of an administrator with a one‑year provisional assistant principal's certificate shall be at the entry‑level salary for an assistant principal or the appropriate step on the teacher salary schedule, whichever is higher.

CENTRAL OFFICE SALARIES
SECTION 26.17.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2009‑2010 fiscal year, beginning July 1, 2009.
School Administrator I	$3,309	$6,207
School Administrator II	$3,508	$6,583
School Administrator III	$3,724	$6,984
School Administrator IV	$3,874	$7,262
School Administrator V	$4,030	$7,556
School Administrator VI	$4,275	$8,013
School Administrator VII	$4,447	$8,336
The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents. The category in which an employee is placed shall be included in the contract of any employee.
SECTION 26.17.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2009‑2010 fiscal year, beginning July 1, 2009.
Superintendent I	$4,720	$8,843
Superintendent II	$5,011	$9,377
Superintendent III	$5,316	$9,948
Superintendent IV	$5,642	$10,552
Superintendent V	$5,988	$11,196
The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.
SECTION 26.17.(c)  Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the State Personnel Act.
SECTION 26.17.(d)  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided pursuant to this section.  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for under this section.
SECTION 26.17.(e)  The State Board of Education shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.
SECTION 26.17.(f)  The salaries in effect June 30, 2009, for all permanent full‑time personnel paid from the Central Office Allotment, shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.

noncertified school personnel SALARIES
SECTION 26.18.(a)  The salaries in effect June 30, 2009, of permanent, full‑time noncertified public school employees whose salaries are supported from the State's General Fund shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.18.(b)  The salaries in effect on June 30, 2009, for all permanent part‑time noncertified public school employees whose salaries are supported from the State's General Fund shall remain in effect for the 2009‑2010 and 2010‑2011 fiscal years.
SECTION 26.18.(c)  The Director of the Budget may allocate out of special operating funds or from other sources of the employing agency, except tax revenues, sufficient funds to maintain salaries in accordance with subsection (a) or (b) of this section including funds for the employer's retirement and social security contributions for the permanent full‑time and part‑time employees of the agency, provided the employing agency elects to make available the necessary funds.

Bonus for Certified Personnel at the Top of Their Salary Schedules
SECTION 26.19.  Effective July 1, 2009, any permanent certified personnel employed on July 1, 2009, and paid on the teacher salary schedule with 31+ years of experience shall receive a one‑time bonus equivalent to one and eight‑tenths percent (1.8%).  Effective July 1, 2009, any permanent personnel employed on July 1, 2009, and paid at the top of the principal and assistant principal salary schedule shall receive a one‑time bonus equivalent to two percent (2%).  For permanent part‑time personnel, the one‑time bonus shall be adjusted pro rata.  Personnel defined under G.S. 115C‑325(a)(5a) are not eligible to receive the bonus.

SALARY‑RELATED CONTRIBUTIONS/EMPLOYER
SECTION 26.20.(a)  Required employer salary‑related contributions for employees whose salaries are paid from department, office, institution, or agency receipts shall be paid from the same source as the source of the employee's salary.  If an employee's salary is paid in part from the General Fund or Highway Fund and in part from department, office, institution, or agency receipts, required employer salary‑related contributions may be paid from the General Fund or Highway Fund only to the extent of the proportionate part paid from the General Fund or Highway Fund in support of the salary of the employee, and the remainder of the employer's requirements shall be paid from the source that supplies the remainder of the employee's salary. The requirements of this section as to source of payment are also applicable to payments on behalf of the employee for hospital‑medical benefits, longevity pay, unemployment compensation, accumulated leave, workers' compensation, severance pay, separation allowances, and applicable disability income benefits.
Notwithstanding any other provision of law, an employer who hires or has hired a retiree as an employee shall enroll the retiree in the active group and pay the cost for the hospital‑medical benefits if that retiree is employed in a position that would require the employer to pay hospital‑medical benefits if the individual had not been retired.
SECTION 26.20.(b)  Effective July 1, 2009, the State's employer contribution rates budgeted for retirement and related benefits as percentage of covered salaries for the 2009‑2010 fiscal year are:  (i) eight and sixty‑five hundredths percent (8.65%) – Teachers and State Employees; (ii) thirteen and sixty‑five hundredths percent (13.65%) – State Law Enforcement Officers; (iii) eleven and seventy‑six hundredths percent (11.76%) – University Employees' Optional Retirement System; (iv) eleven and seventy‑six hundredths percent (11.76%) – Community College Optional Retirement Program; (v) nineteen and fifty‑one hundredths percent (19.51%) – Consolidated Judicial Retirement System; and (vi) four and forty hundredths percent (4.40%) – Legislative Retirement System.  Each of the foregoing contribution rates includes four and forty hundredths percent (4.40%) for hospital and medical benefits.  The rate for Teachers and State Employees, State Law Enforcement Officers, Community College Optional Retirement Program, and for the University Employees' Optional Retirement Program includes fifty‑two hundredths percent (0.52%) for the Disability Income Plan.  The rates for Teachers and State Employees and State Law Enforcement Officers include sixteen‑hundredths percent (0.16%) for the Death Benefits Plan.  The rate for State Law Enforcement Officers includes five percent (5%) for Supplemental Retirement Income.
SECTION 26.20.(c)  Effective July 1, 2010, the State's employer contribution rates budgeted for retirement and related benefits as percentage of covered salaries for the 2010‑2011 fiscal year are:  (i) nine and five hundredths percent (9.05%) – Teachers and State Employees; (ii) fourteen and five hundredths percent (14.05%) – State Law Enforcement Officers; (iii) twelve and sixteen hundredths percent (12.16%) – University Employees' Optional Retirement System; (iv) twelve and sixteen hundredths percent (12.16%) – Community College Optional Retirement Program; (v) nineteen and ninety‑one hundredths percent (19.91%) – Consolidated Judicial Retirement System; and (vi) four and eighty hundredths percent (4.80%) – Legislative Retirement System.  Each of the foregoing contribution rates includes four and eighty hundredths percent (4.80%) for hospital and medical benefits.  The rate for Teachers and State Employees, State Law Enforcement Officers, Community College Optional Retirement Program, and for the University Employees' Optional Retirement Program includes fifty‑two hundredths percent (0.52%) for the Disability Income Plan.  The rates for Teachers and State Employees and State Law Enforcement Officers include sixteen‑hundredths percent (0.16%) for the Death Benefits Plan.  The rate for State Law Enforcement Officers includes five percent (5%) for Supplemental Retirement Income.

NATIONAL GUARD PENSION FUND
SECTION 26.21.  G.S. 127A‑40 reads as rewritten:
"(f)	The Secretary of Crime Control and Public Safety shall determine the eligibility of guard members for the benefits herein provided and shall certify those eligible to the State Treasurer. In addition, the Department of Crime Control and Public Safety shall, on and after July 1, 1983, provide the Department of State Treasurer with an annual census population, by age and the number of years of creditable service, for all former members of the National Guard in receipt of a pension as well as for all active members of the National Guard who are not in receipt of a pension and who have seven and more years of creditable service. The Department of Crime Control and Public Safety shall also provide the State Treasurer a census population of all former members of the National Guard who are not in receipt of a pension and who have 15 and more years of creditable service. The Department of State Treasurer shall make pension payments to those persons certified from the North Carolina National Guard Pension Fund, which shall include general fund appropriations made to  the Department of State Treasurer. The Department of State Treasurer shall have performed an annual actuarial valuation of the fund and shall have the financial responsibility for maintaining the fund on a generally accepted actuarial basis. The Department of Crime Control and Public Safety shall provide the Department of State Treasurer with whatever assistance is required by the State Treasurer in carrying out his financial responsibilities."

EXTEND PHASED RETIREMENT PROGRAM EXEMPTION
SECTION 26.22.  Section 29.28(f) of S.L. 2005‑276, as amended by Section 22.21 of S.L. 2006‑66, reads as rewritten:
"SECTION 29.28.(f)  Subsections (a) and (b) of this section become effective August 1, 2005. Subsection (e) of this section becomes effective November 1, 2005, but does not apply to participants in The University of North Carolina Phased Retirement Program until the earlier of  August 31, 2013, or 12 months after the issuance of final phased retirement regulations by the Internal Revenue Service. The remainder of this section becomes effective June 30, 2005."

PART xxvii. CAPITAL APPROPRIATIONS.

General Fund Capital Appropriations/Introduction
SECTION 27.1.  The appropriations made by the 2009 General Assembly for capital improvements are for constructing, repairing, or renovating State buildings, utilities, and other capital facilities, for acquiring sites for them where necessary, and for acquiring buildings and land for State government purposes.

Capital Appropriations/General Fund
SECTION 27.2.  There is appropriated from the General Fund for the 2009‑2010 fiscal year the following amounts for capital improvements:

Capital Improvements – General Fund	2009‑2010

Department of Environment and Natural Resources
	Water Resources Development Projects	$	17,600,000

TOTAL CAPITAL IMPROVEMENTS – GENERAL FUND	$17,600,000

Water Resources Development Project Funds
SECTION 27.3.(a)  The Department of Environment and Natural Resources shall allocate the funds appropriated in this act for water resources development projects to the following projects with costs as indicated:

Name of Project	2009‑2010

(1)	Wilmington Harbor Deepening	$	1,300,000
(2)	B. Everett Jordan Lake Water Supply Storage		200,000
(3)	Carolina Beach Renourishment		738,000
(4)	Carolina Beach South (Kure Beach) Renourishment		842,000
(5)	Wrightsville Beach Renourishment		2,059,000
(6)	Ocean Isle Beach Renourishment		1,211,000
(7)	Nags Head Beach Renourishment		2,000,000
(8)	Bald Head Island Beach Renourishment		5,000,000
(9)	State/Local WRD Grants			1,000,000
(10)	Emerald Isle Boat Launch			1,000,000
(11)	Beaufort Harbor Maintenance			50,000
(12)	Princeville Flood Control			100,000
(13)	Currituck Sound Environmental Restoration		100,000
(14)	West Onslow Beach (Topsail Beach, Pender County)		75,000
(15)	Aquatic Obstruction Removal – Statewide		300,000
(16)	Aquatic Plant Control (State, L. Gaston & Roanoke Rapids L.)		300,000
(17)	Mountain to the Sea Trail – Water Based Recreation		250,000
(18)	Little Fork Creek (Rendezvous State Park)		400,000
(19)	Planning Assistance to Communities		75,000
(20)	Concord Stream Restoration (Cabarrus County) (Sec. 206)		350,000
(21)	Wilson Bay Restoration (Sec. 206), Onslow County		250,000

TOTALS			$17,600,000

SECTION 27.3.(b)  Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed. If any projects funded under subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 2009‑2010 fiscal year, or if the projects funded under subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:
(1)	U.S. Army Corps of Engineers project feasibility studies.
(2)	U.S. Army Corps of Engineers projects whose schedules have advanced and require State‑matching funds in fiscal year 2009‑2010.
(3)	State‑local water resources development projects.
Funds not expended or encumbered for these purposes shall revert to the General Fund at the end of the 2010‑2011 fiscal year.
SECTION 27.3.(c)  The Department shall make semiannual reports on the use of these funds to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Office of State Budget and Management. Each report shall include all of the following:
(1)	All projects listed in this section.
(2)	The estimated cost of each project.
(3)	The date that work on each project began or is expected to begin.
(4)	The date that work on each project was completed or is expected to be completed.
(5)	The actual cost of each project.
The semiannual reports also shall show those projects advanced in schedule, those projects delayed in schedule, and an estimate of the amount of funds expected to revert to the General Fund.

Non‑General Fund Capital Improvement Authorizations
SECTION 27.4.(a)  The General Assembly authorizes the following capital projects to be funded with receipts or from other non‑General Fund sources:

Name of Project	Amount of Non‑General Fund
	Funding Authorized for 2009‑2010

Department of Crime Control and Public Safety
	Additions and Renovations to Armories		$ 9,303,442
	Camp Butner Cantonment – Phase 1 Design	1,367,000
	Family Assistance Centers	2,000,000

Department of Cultural Resources
	Aycock Birthplace Picnic Shelter	86,100
	Maritime Museum – Floating Dock	130,000
	Museum of History Chronology Exhibit – Phase 2B (1900‑1960)	1,200,000

Department of Environment and Natural Resources
	Jennette's Pier Reconstruction	24,446,400
	Zoo – Elephant Exhibit New Restrooms	300,000

Wildlife Resources Commission
	Armstrong Hatchery Lower Raceway Replacement	1,725,000
	Centennial Campus Education Center Exhibit Completion	180,000
	Chinquapin Equipment Storage Pole Shed	60,000
	Chowan Bridge Fishing Pier and Edenton Boating Access	450,000
	Emerald Isle New Boating Access Area	600,000
	Falls Lake Office Building	550,000
	Hampstead Land Acquisition	10,000,000
	Land Acquisitions – State Gamelands	59,135,000
	Lewelyn Branch New Boating Access Area	150,000
	Manns Harbor Bridge Marina Acquisition	5,750,000
	Marion Depot Drainage Repairs	200,000
	McKinney Lake Hatchery Kettles Replacement	1,700,000
	Minor Boating Access Area Renovations – Various Locations	150,000
	New Coldwater Fish Hatchery Construction	7,900,000
	Ocean Isle Boating Access Area Renovations	150,000
	Outer Banks Education Center Teaching Facility Repairs	245,000
	Pechmann Fishing Education Center Pond Restoration	160,000
	Pechmann Fishing Education Center Storage Building	220,000
	Pisgah Education Center Gift Shop Renovation and Expansion	200,000
	Pisgah Education Center Outdoor Exhibit Renovation	450,000
	Pisgah Education Center Repairs	155,000
	Pisgah Hatchery Water System Renovation	100,000
	Rhodes Pond Dam Repairs	500,000
	Sneads Ferry Land Acquisition	6,500,000
	Sunset Harbor Land Acquisition	925,000
	Swan Quarter Land Acquisition	1,700,000
	Sykes Depot Pond, Office, Storage Construction	350,000
	Table Rock Hatchery Office and Workshop Replacement	345,000

TOTAL AMOUNT OF NON‑GENERAL FUND CAPITAL
	PROJECTS AUTHORIZED	$139,382,942

SECTION 27.4.(b)  From funds deposited with the State Treasurer in a capital improvement account to the credit of the Department of Agriculture and Consumer Services pursuant to G.S. 146‑30, the sum of thirty thousand dollars ($30,000) for the 2009‑2010 fiscal year shall be transferred to the Department of Agriculture and Consumer Services to be used, notwithstanding G.S. 146‑30, by the Department for its plant conservation program under Article 19B of Chapter 106 of the General Statutes for costs incidental to the acquisition of land, such as land appraisals, land surveys, title searches, environmental studies, and for the management of the plant conservation program preserves owned by the Department.
SECTION 27.4.(c)  Notwithstanding G.S. 143C‑8‑7, and subject to approval by the Director of the Budget, during the 2009‑2011 fiscal biennium, the Aquariums Division of the Department of Environment and Natural Resources may expend funds from the North Carolina Aquariums Fund for capital improvement projects.

Repairs and Renovations Reserve Allocation
SECTION 27.5.(a)  Of the funds in the Reserve for Repairs and Renovations for the 2009‑2010 fiscal year, fifty‑four percent (54%) shall be allocated to the Board of Governors of The University of North Carolina for repairs and renovations pursuant to G.S. 143C‑4‑3, in accordance with guidelines developed in The University of North Carolina Funding Allocation Model for Reserve for Repairs and Renovations, as approved by the Board of Governors of The University of North Carolina, and forty‑six percent (46%) shall be allocated to the Office of State Budget and Management for repairs and renovations pursuant to G.S. 143C‑4‑3.
Notwithstanding G.S. 143C‑4‑3, the Board of Governors may allocate funds for the repair and renovation of facilities not supported from the General Fund if the Board determines that sufficient funds are not available from other sources and that conditions warrant General Fund assistance. Any such finding shall be included in the Board's submission to the Joint Legislative Commission on Governmental Operations on the proposed allocation of funds.
The Board of Governors and the Office of State Budget and Management shall consult with the Joint Legislative Commission on Governmental Operations prior to the allocation or reallocation of these funds.
SECTION 27.5.(b)  In addition to any other funds in the Reserve for Repairs and Renovations for the 2009‑2010 fiscal year, the following funds are transferred to that Reserve:
(1)	Proceeds of bonds and notes issued pursuant to Section 27.10(f)(2) of this act for the repair and renovation of State facilities and related infrastructure.
(2)	The Energy Efficiency and Conservation Block Grant funds appropriated in this act.
SECTION 27.5.(c)  Notwithstanding G.S. 143C‑4‑3(b), Energy Efficiency and Conservation Block Grant funds shall be used for repairs and renovations to State and university facilities that will make those facilities more energy efficient. Eligible projects under this subsection include:
(1)	Replacement of incandescent light bulbs with compact fluorescent light bulbs, installation of exit signs that employ light‑emitting diode (LED) technology, the installation of occupancy sensors or optical sensors, and other lighting efficiency improvements.
(2)	For windows that need replacement, installation of more energy‑efficient windows.
(3)	Insulation improvements when practicable.
(4)	Replacement of inefficient or oversized heating, ventilation, and air‑conditioning (HVAC) systems when those systems are subject to replacement and installation of programmable automation systems.
(5)	Installation of aerators in sink faucets that reduce the flow rate and other water system projects that reduce water consumption.
(6)	Any other retrofit or replacement projects that make State or university facilities more energy efficient for which the incremental cost of the project will be equal to or less than the energy or water savings that result over a period of three years after completion.
SECTION 27.5.(d)  Of the funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, a portion shall be used by the Board of Governors for the installation of fire sprinklers in university residence halls. This portion shall be in addition to funds otherwise appropriated in this act for the same purpose. Such funds shall be allocated among the University's constituent institutions by the President of The University of North Carolina, who shall consider the following factors when allocating those funds:
(1)	The safety and well‑being of the residents of campus housing programs.
(2)	The current level of housing rents charged to students and how that compares to an institution's public peers and other UNC institutions.
(3)	The level of previous authorizations to constituent institutions for the construction or renovation of residence halls funded from the General Fund, or from bonds or certificates of participation supported by the General Fund, since 1996.
(4)	The financial status of each constituent institution's housing system, including debt capacity, debt coverage ratios, credit rankings, required reserves, the planned use of cash balances for other housing system improvements, and the constituent institution's ability to pay for the installation of fire sprinklers in all residence halls.
(5)	The total cost of each proposed project, including the cost of installing fire sprinklers and the cost of other construction, such as asbestos removal and additional water supply needs.
The Board of Governors shall submit progress reports to the Joint Legislative Commission on Governmental Operations. Reports shall include the status of completed, current, and planned projects. Reports shall also include information on the financial status of each constituent institution's housing system, the constituent institution's ability to pay for fire protection in residence halls, and the timing of installation of fire sprinklers. Reports shall be submitted on January 1 and July 1 until all residence halls have fire sprinklers.
SECTION 27.5.(e)  Of the funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, a portion shall be used by the Board of Governors for campus public safety improvements allowable under G.S. 143C‑4‑3(b).

Procedures for Disbursement of Capital Funds
SECTION 27.6.  The appropriations made by the 2009 General Assembly for capital improvements shall be disbursed for the purposes provided by this act.  Expenditure of funds shall not be made by any State department, institution, or agency until an allotment has been approved by the Governor as Director of the Budget.  The allotment shall be approved only after full compliance with the State Budget Act, Chapter 143C of the General Statutes.  Prior to the award of construction contracts for projects to be financed in whole or in part with self‑liquidating appropriations, the Director of the Budget shall approve the elements of the method of financing of those projects including the source of funds, interest rate, and liquidation period.  Provided, however, that if the Director of the Budget approves the method of financing a project, the Director shall report that action to the Joint Legislative Commission on Governmental Operations at its next meeting.
Where direct capital improvement appropriations include the purpose of furnishing fixed and movable equipment for any project, those funds for equipment shall not be subject to transfer into construction accounts except as authorized by the Director of the Budget. The expenditure of funds for fixed and movable equipment and furnishings shall be reviewed and approved by the Director of the Budget prior to commitment of funds.
Capital improvement projects authorized by the 2009 General Assembly shall be completed, including fixed and movable equipment and furnishings, within the limits of the amounts of the direct or self‑liquidating appropriations provided, except as otherwise provided in this act. Capital improvement projects authorized by the 2009 General Assembly for the design phase only shall be designed within the scope of the project as defined by the approved cost estimate filed with the Director of the Budget, including costs associated with site preparation, demolition, and movable and fixed equipment.

Center for Design and Winston‑Salem State Amendments
SECTION 27.7.(a)  Section 1.1 of S.L. 2004‑179, as amended by Section 30.3A of S.L. 2005‑276, Section 2.1 of S.L. 2006‑146, and Section 27.8 of S.L. 2008‑107, is amended by deleting the language:
	"11,500,000	10,000,000	Land acquisition, site preparation, engineering, architectural, and other consulting services, and construction of a Center for Design Innovation in the Piedmont Triad Research Park to be operated jointly by Winston‑Salem State University and the North Carolina School of the Arts."
and substituting the language:
"11,500,000		10,000,000	Land acquisition, site preparation, engineering, architectural, and other consulting services, acquisition of an existing building, construction, or renovation of a Center for Design Innovation to be operated jointly by Winston‑Salem State University and the North Carolina School of the Arts."
SECTION 27.7.(b)  G.S. 142‑94 reads as rewritten:
"§ 142‑94.  Procurement of capital facilities.
The provisions of Articles 3, 3B, 3C, 3D, and 8 of Chapter 143 of the General Statutes and any other laws or rules of the State that relate to the acquisition and construction of State property apply to the financing of capital facilities through the use of special indebtedness pursuant to this Article. This section does not apply to the construction and lease‑purchase, including leases with an option to purchase at the end of the lease term for a nominal sum, of State office buildings pursuant to proposals submitted before the effective date of this Article in response to requests for proposals, to the extent any of those proposals, as they may be supplemented or amended, are approved by the Department of Administration and any of these leases or lease‑purchase agreements are approved by the Council of State in accordance with G.S. 143‑341(4)d2. With the exception of Article 8 of Chapter 143 of the General Statutes, this section does not apply to any special indebtedness issued pursuant to this Article for the purchase, construction, or operation of capital facilities by Gateway University Research Park, Inc., a joint Millennial Campus in Greensboro. This section does not apply to facilities for the Center for Design Innovation to be operated jointly by Winston‑Salem State University and the University of North Carolina School of the Arts, as authorized in Section 1.1 of S.L. 2004‑179, as amended."
SECTION 27.7.(c)  Notwithstanding the Joint Conference Committee Report dated July 17, 2004, for S.L. 2004‑124, the two million dollars ($2,000,000) appropriated for Winston‑Salem State University shall be used to provide funds to acquire land and renovate space for Winston‑Salem State University.

Debt Service for Green Square Complex Parking Construction
SECTION 27.8.  Notwithstanding Item 61, Page M‑11, of the Joint Conference Committee Report on the Continuation, Expansion and Capital Budgets for S.L. 2008‑107, the General Fund shall service the debt for the Green Square Complex parking deck during the 2009‑2011 fiscal biennium.

Adjustments to COPS for Reduced Construction Inflation
SECTION 27.9.(a)  Section 27.8(a) of S.L. 2008‑107 reads as rewritten:
"SECTION 27.8.(a)  The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the projects described in this subsection. In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness:
(1)	In the maximum aggregate principal amount of sixty‑three million eight hundred nineteen thousand five hundred fifty‑eight dollars ($63,819,558) to finance the capital facility costs of completing a School of Dentistry building at East Carolina University and no more than 10 satellite dental clinics across the State. No more than a maximum aggregate amount of twenty‑one million dollars ($21,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of sixty million dollars ($60,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010.
(2)	In the maximum aggregate principal amount of thirty‑five million six hundred seventy‑eight thousand nine hundred seventy‑six dollars ($35,678,976) to finance the capital facility costs of completing a family medicine building at East Carolina University. No more than a maximum aggregate amount of sixteen million six hundred thousand dollars ($16,600,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(3)	In the maximum aggregate principal amount of seventeen million eighty‑two thousand six hundred fifty‑five dollars ($17,082,655) to finance the capital facility costs of completing a School of Education building at Elizabeth City State University. No more than a maximum aggregate amount of seven million dollars ($7,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of fifteen million dollars ($15,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010.
(4)	In the maximum aggregate principal amount of two million four hundred thirty‑eight thousand dollars ($2,438,000) to finance the capital improvement costs of acquiring land and constructing capital facilities for a horse park in Rockingham County for North Carolina Agricultural and Technical State University.
(5)	In the maximum aggregate principal amount of nineteen million four hundred eighty‑one thousand seven hundred thirty‑nine dollars ($19,481,739) to finance the capital facility costs of completing a general classroom building at North Carolina Agricultural and Technical State University. No more than a maximum aggregate amount of seven million dollars ($7,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(6)	In the maximum aggregate principal amount of twenty‑three million one hundred twenty‑five thousand two hundred twenty‑seven dollars ($23,125,227) to finance the capital facility costs of completing a nursing building at North Carolina Central University. No more than a maximum aggregate amount of six million dollars ($6,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of seventeen million dollars ($17,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010.
(7)	In the maximum aggregate principal amount of ten million four hundred ninety‑five thousand nine hundred eighty‑one dollars ($10,495,981) to finance the capital facility costs of completing a central storage facility at the North Carolina School of the Arts. 
(8)	In the maximum aggregate principal amount of eleven million nine hundred fifty thousand six hundred seventy‑nine dollars ($11,950,679) to finance the capital facility costs of completing a film school production facility at the North Carolina School of the Arts. No special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of two million dollars ($2,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010. No more than a maximum aggregate amount of seven million nine hundred thousand dollars ($7,900,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2011.
(9)	In the maximum aggregate principal amount of one hundred one million five hundred sixty‑eight thousand eight hundred thirty dollars ($101,568,830) to finance the capital facility costs of completing the Centennial Campus library at North Carolina State University. No more than a maximum aggregate amount of forty‑nine million dollars ($49,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of sixty‑eight million one hundred thousand dollars ($68,100,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010. No more than a maximum aggregate amount of ninety‑two million five hundred sixty‑eight thousand eight hundred thirty dollars ($92,568,830) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2011.
(10)	In the maximum aggregate principal amount of four million dollars ($4,000,000) for the capital facility costs of completing the 4‑H Campuses at North Carolina State University. 
(11)	In the maximum aggregate principal amount of sixty‑three million eight hundred nineteen thousand five hundred fifty‑eight dollars ($63,819,558) to finance the capital facility costs of completing a School of Dentistry expansion at the University of North Carolina at Chapel Hill. No special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of twenty‑five million dollars ($25,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010. No more than a maximum aggregate amount of fifty‑five million eight hundred nineteen thousand five hundred fifty‑eight dollars ($55,819,558) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2011.
(12)	In the maximum aggregate principal amount of fifty‑three million nine hundred eleven thousand three hundred five dollars ($53,911,305) to finance the capital facility costs of completing the Energy Production Infrastructure Center at the University of North Carolina at Charlotte. No more than a maximum aggregate amount of ten million dollars ($10,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of thirty‑two million two hundred eighteen thousand dollars ($32,218,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010. 
(13)	In the maximum aggregate principal amount of forty‑two million six hundred seventy thousand dollars ($42,670,000) to finance the capital facility costs of completing an academic classroom and office building at the University of North Carolina at Greensboro. No more than a maximum aggregate amount of twenty‑one million dollars ($21,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(14)	In the maximum aggregate principal amount of ten million dollars ($10,000,000) to finance the capital facility costs of installing fire sprinklers in The University of North Carolina System residence halls. 
(15)	In the maximum aggregate principal amount of twenty‑five million dollars ($25,000,000) to finance the capital improvement costs of acquiring State land throughout The University of North Carolina System.
(16)	In the maximum aggregate principal amount of thirty‑four million dollars ($34,000,000) to finance the capital improvement costs of purchasing State judicial facilities located at 901 Corporate Drive, Raleigh, NC, and more particularly described as Phase Two, Tract A of Raleigh Corporate Center consisting of 17.28 acres and as shown on the map recorded in Map book 1987, page 720, and Map book 1990, page 576, of the Wake County Register of Deeds. 
(17)	In the maximum aggregate principal amount of forty‑two million nine hundred forty‑seven thousand three hundred dollars ($42,947,300) to finance the capital facility costs of completing a health care and mental health facility at the North Carolina Correctional Institute for Women. No more than a maximum aggregate amount of twenty‑seven million dollars ($27,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. 
(18)	In the maximum aggregate principal amount of twelve million three hundred sixty‑nine thousand eight hundred eleven dollars ($12,369,811) to finance the capital facility costs of completing a minimum security addition at Scotland Correctional Institution. No more than a maximum aggregate amount of six million dollars ($6,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of ten million dollars ($10,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010.
(19)	In the maximum aggregate principal amount of eighteen million seventeen thousand five hundred nineteen dollars ($18,017,519) to finance the capital facility costs of completing a medium security addition at Bertie Correctional Institution. No more than a maximum aggregate amount of seven million dollars ($7,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of fourteen million dollars ($14,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010.
(20)	In the maximum aggregate principal amount of twelve million three hundred sixty‑nine thousand eight hundred eleven dollars ($12,369,811) to finance the capital facility costs of completing a minimum security addition at Tabor Correctional Institution. No more than a maximum aggregate amount of six million dollars ($6,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of ten million dollars ($10,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010.
(21)	In the maximum aggregate principal amount of eighteen million seventeen thousand five hundred nineteen dollars ($18,017,519) to finance the capital facility costs of completing a medium security addition at Lanesboro Correctional Institution. No more than a maximum aggregate amount of seven million dollars ($7,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. No more than a maximum aggregate amount of fourteen million dollars ($14,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2010. 
(22)	In the maximum aggregate principal amount of two million nine hundred twenty‑five thousand dollars ($2,925,000) to finance the capital facility costs of completing Phase I of the CSS Neuse State Historic Site. 
(23)	In the maximum aggregate principal amount of seven million dollars ($7,000,000) to finance the capital facility costs of completing Port of Morehead City Berth Improvements and Phase I of Port of Wilmington Berth 8  Improvements. 
(24)	In the maximum aggregate principal amount of three million seven hundred thousand dollars ($3,700,000) to finance the capital facility costs of completing a Southeastern North Carolina Agriculture Center Pavilion. 
(25)	In the maximum aggregate principal amount of seven million six hundred twenty thousand eight hundred twenty‑three dollars ($7,620,823) to finance the capital facility costs of Department of Agriculture and Consumer Services capital improvements. Sales proceeds shall be allocated between the projects in the following manner:

Project	Allocation of Sales Proceeds
Bathroom and truckshed expansion at 
	The Western North Carolina Farmers'
	Market	$650,000

Davis Arena renovation and expansion at 
	The Western North Carolina Agricultural 
	Center	$6,970,823

(26)	In the maximum aggregate principal amount of four million three hundred three thousand nine hundred forty‑four dollars ($4,303,944) to finance the capital facility costs of completing an oyster hatchery. 
(27)	In the maximum aggregate principal amount of two million seven hundred thousand dollars ($2,700,000) to finance the capital improvement costs of completing an expansion and renovation to the polar bear exhibit at the North Carolina Zoo.
(28)	In the maximum aggregate principal amount of ten million dollars ($10,000,000) to finance the capital improvement costs of acquiring State park lands and conservation areas for the Land for Tomorrow initiative in the Department of Environment and Natural Resources. Proceeds shall be allocated to support the conservation priorities of the One North Carolina Naturally program."
SECTION 27.9.(b)  Section 29.13(a) of S.L. 2007‑323, as amended by Section 27.8(d) of S.L. 2008‑107, reads as rewritten:
"SECTION 29.13.(a)  The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the projects described in this subsection. In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness:
(1)	In the maximum aggregate principal amount of thirty‑four million dollars ($34,000,000) to finance the capital facility costs of completing a new educational building at Appalachian State University. No more than a maximum aggregate amount of three million dollars ($3,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008.
(2)	In the maximum aggregate principal amount of twenty‑one million four hundred seventy‑five thousand five hundred fifty‑one dollars ($21,475,551) to finance the capital facility costs of completing a new Science and Technology Complex at Fayetteville State University. No more than a maximum aggregate amount of five million dollars ($5,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008.
(3)	In the maximum aggregate principal amount of twenty‑three million six hundred six thousand seven hundred twenty‑three dollars ($23,606,723) to finance the capital facility costs of completing a new library at the North Carolina School of the Arts. No more than a maximum aggregate amount of one million seven hundred seventy‑five thousand six hundred dollars ($1,775,600) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of fourteen million three hundred seventy‑three thousand six hundred dollars ($14,373,600) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(4)	In the maximum aggregate principal amount of thirty‑eight million dollars ($38,000,000) to finance the capital facility costs of completing the Randall B. Terry Companion Animal Hospital at North Carolina State University. No more than a maximum aggregate amount of twenty‑eight million five hundred thousand dollars ($28,500,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008.
(5)	In the maximum aggregate principal amount of thirty‑two million three hundred twenty‑six thousand nine hundred forty‑seven dollars ($32,326,947) to finance the capital facility costs of completing an addition to Engineering Building III in the School of Engineering at North Carolina State University. No more than a maximum aggregate amount of eight million five hundred thousand dollars ($8,500,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of twenty‑five million five hundred thousand dollars ($25,500,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(6)	In the maximum aggregate principal amount of eight million six hundred eighty‑seven thousand dollars ($8,687,000) to finance the capital facility costs of renovating Rhoades Hall at the University of North Carolina at Asheville. 
(7)	In the maximum aggregate principal amount of one hundred nineteen million six hundred eight thousand two hundred twenty‑five dollars ($119,608,225) to finance the capital facility costs of a Genomics Science Building at the University of North Carolina at Chapel Hill. No more than a maximum aggregate amount of thirty‑one million dollars ($31,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of eighty‑six million dollars ($86,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(8)	In the maximum aggregate principal amount of nineteen million dollars ($19,000,000) to finance the capital facility costs of completing a Nursing and Allied Health Building at the University of North Carolina at Pembroke. No more than a maximum aggregate amount of five million dollars ($5,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008.
(9)	In the maximum aggregate principal amount of thirty‑four million five hundred twenty‑five thousand dollars ($34,525,000) to finance the capital facility costs of completing a new teaching laboratory at the University of North Carolina at Wilmington. No more than a maximum aggregate amount of two million five hundred thousand dollars ($2,500,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of eight million six hundred thirty‑one thousand two hundred fifty dollars ($8,631,250) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(10)	In the maximum aggregate principal amount of thirty‑eight million eight hundred sixty‑two thousand nine hundred sixty dollars ($38,862,960) to finance the capital facility costs of completing a new Health and Gerontological Building at Western Carolina University. No more than a maximum aggregate amount of eighteen million eight hundred two thousand five hundred dollars ($18,802,500) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(11)	In the maximum aggregate principal amount of twenty‑eight million five hundred seven thousand dollars ($28,507,000) to finance the capital facility costs of completing a new student activities center at Winston‑Salem State University. No more than a maximum aggregate amount of two million dollars ($2,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of fourteen million seven hundred ninety‑nine thousand dollars ($14,799,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(12)	In the maximum aggregate principal amount of fifty million three hundred ninety two thousand six dollars ($50,392,006) to finance the capital facility costs of completing a Nanoscience Building to be used jointly by the University of North Carolina at Greensboro and North Carolina Agricultural and Technical State University. No more than a maximum aggregate amount of twenty‑five million dollars ($25,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
(13)	In the maximum aggregate principal amount of thirty‑two million five hundred thousand dollars ($32,500,000) to finance the capital facility costs for completing the Coastal Studies Institute. No more than a maximum aggregate amount of eight million dollars ($8,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of twenty‑three million dollars ($23,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009. 
(14)	In the maximum aggregate principal amount of nineteen million eight hundred sixteen thousand five hundred dollars ($19,816,500) to finance the capital facility costs of a medium security facility at the Scotland Correctional Institution. No more than a maximum aggregate amount of five million dollars ($5,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008.
(15)	In the maximum aggregate principal amount of thirteen million one hundred ninety‑one thousand three hundred dollars ($13,191,300) to finance the capital facility costs of a minimum security facility at the Alexander Correctional Institution. No more than a maximum aggregate amount of six million five hundred ninety‑five thousand six hundred fifty dollars ($6,595,650) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008.
(16)	In the maximum aggregate principal amount of thirty‑five million dollars ($35,000,000) to finance the capital facility costs of a new education and visitors center at Tryon Palace Historic Sites and Gardens. No more than a maximum aggregate amount of five million dollars ($5,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of twenty‑five million dollars ($25,000,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009."
SECTION 27.9.(c)  Section 23.12 of S.L. 2006‑66, as amended by Section 27.8(c) of S.L. 2008‑107, reads as rewritten:
"SPECIAL INDEBTEDNESS PROJECTS
SECTION 23.12.(a)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of forty‑five million one hundred thirty dollars ($45,130,000) to finance the costs of constructing new buildings and pavilions and renovating existing buildings at the North Carolina Museum of Art. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the costs of constructing and renovating the project described in this subsection.
SECTION 23.12.(b)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of twenty million dollars ($20,000,000) to finance the capital facility costs of completing the Central Regional Psychiatric Hospital for the Department of Health and Human Services. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection.
SECTION 23.12.(c)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of twenty‑four million one hundred sixteen thousand four hundred thirty‑three dollars ($24,116,433) to finance the capital facility costs of a new Secondary State Data Center. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection.
SECTION 23.12.(d)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of forty‑five million eight hundred twenty‑seven thousand four hundred dollars ($45,827,400) to finance the capital facility costs of a new Center City Classroom Building at the University of North Carolina – Charlotte. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection.
SECTION 23.12.(e)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of one hundred one million dollars ($101,000,000) to finance the capital facility costs of the Department of Health and Human Services Public Health Laboratory and Office of Chief Medical Examiner. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection. No more than a maximum aggregate principal amount of twenty million dollars ($20,000,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2007.
SECTION 23.12.(f)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of one hundred forty million four hundred seventy eight thousand seventy dollars ($140,478,070) to finance the capital facility costs of the Eastern Regional Psychiatric Hospital for the Department of Health and Human Services. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection. No more than a maximum aggregate principal amount of twenty million dollars ($20,000,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2007. No more than a maximum aggregate principal amount of one hundred million dollars ($100,000,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2008.
SECTION 23.12.(g)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of one hundred thirty‑two million two hundred thousand dollars ($132,200,000) to finance the capital facility costs of the Regional Medical Center and Mental Health Center of the Department of Correction. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection. No more than a maximum aggregate principal amount of eight million two hundred thousand dollars ($8,200,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2007. No more than a maximum aggregate principal amount of fifty‑eight million two hundred thousand dollars ($58,200,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2008. No more than a maximum aggregate principal amount of ninety‑eight million two hundred thousand dollars ($98,200,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2009.
SECTION 23.12.(h)  In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of one hundred fifty‑seven million one hundred eighty thousand nine hundred sixty dollars ($157,180,960) to finance the capital facility costs of the Western Regional Psychiatric Hospital for the Department of Health and Human Services. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the project described in this subsection. No special indebtedness may be issued or incurred under this subsection prior to July 1, 2008. No more than a maximum aggregate principal amount of twenty million dollars ($20,000,000) of special indebtedness may be issued or incurred under this subsection prior to July 1, 2009.
SECTION 23.12.(i)  This section is effective when it becomes law."
SECTION 27.9.(d)  Section 1.2 of S.L. 2004‑179, as amended by Section 1 of S.L. 2006‑231, reads as rewritten:
"SECTION 1.2. In accordance with G.S. 142‑83, this section authorizes the issuance or incurrence of special indebtedness in the maximum aggregate principal amount of thirty‑five million two hundred thousand dollars ($35,200,000) to finance the costs of constructing up to five youth development centers totaling up to 224 beds to be operated by the Department of Juvenile Justice and Delinquency Prevention and to be located as determined by that Department. The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the cost of constructing the projects described by this section. Of the special indebtedness authorized by this section, no more than thirteen million dollars ($13,000,000) may be issued or incurred before July 1, 2005."
SECTION 27.9.(e)  Notwithstanding anything in Section 47.1 of S.L. 2003‑284 to the contrary, the maximum amount of special indebtedness authorized by that section for the capital facilities cost of Columbus County Correctional Institution is one hundred one million fifty‑six thousand four hundred ninety dollars ($101,056,490).

Two‑Thirds Bonds Act of 2009
SECTION 27.10.(a)  Short Title. – This section may be cited as the "Two‑Thirds Bonds Act of 2009."
SECTION 27.10.(b)  Findings and Determinations. – It is the intent and purpose of the General Assembly by this section to provide for the issuance of general obligation bonds or notes of the State in order to provide funds for the cost of State capital facilities and for the cost of repairs and renovations of State capital facilities and related infrastructure.  
SECTION 27.10.(c)  Definitions. – The following definitions apply in this section unless the context otherwise requires:
(1)	Bonds. – Bonds issued under this section.
(2)	Cost. – The term includes all of the following:
a.	The cost of constructing, reconstructing, renovating, repairing, enlarging, acquiring, and improving State capital facilities, including the acquisition of land, rights‑of‑way, easements, franchises, equipment, machinery, furnishings, and other interests in real or personal property acquired or used in connection with a State capital facility.
b.	The cost of engineering, architectural, and other consulting services as may be required.
c.	Administrative expenses and charges.
d.	The cost of providing personnel to ensure effective project management.
e.	The cost of bond insurance, investment contracts, credit enhancement and liquidity facilities, interest‑rate swap agreements or other derivative products, financial and legal consultants, and related costs of bond and note issuance, to the extent and as determined by the State Treasurer.
f.	Finance charges, reserves for debt service, and other types of reserves required pursuant to the terms of any bond or note or related documents, interest before and during construction or acquisition of a State capital facility and, if considered advisable by the State Treasurer, for a period not exceeding two years after the estimated date of completion of construction or acquisition.
g.	The cost of reimbursing the State for any payments made for any cost described in this subdivision.
h.	Any other costs and expenses necessary or incidental to the purposes of this section.
(3)	Credit facility. – An agreement entered into by the State Treasurer on behalf of the State with a bank, savings and loan association or other banking institution, an insurance company, reinsurance company, surety company or other insurance institution, a corporation, investment banking firm or other investment institution, or any financial institution or other similar provider of a credit facility, which provider may be located within or without the United States, such agreement providing for prompt payment of all or any part of the principal or purchase price (whether at maturity, presentment or tender for purchase, redemption or acceleration), redemption premium, if any, and interest on any bonds or notes payable on demand or tender by the owner, in consideration of the State agreeing to repay the provider of the credit facility in accordance with the terms and provisions of such agreement.
(4)	Notes. – Notes issued under this section.
(5)	Par formula. – A provision or formula adopted by the State to provide for the adjustment, from time to time, of the interest rate or rates borne by any bonds or notes, including:
a.	A provision providing for such adjustment so that the purchase price of such bonds or notes in the open market would be as close to par as possible.
b.	A provision providing for such adjustment based upon a percentage or percentages of a prime rate or base rate, which percentage or percentages may vary or be applied for different periods of time.
c.	Such other provision as the State Treasurer may determine to be consistent with this act and will not materially and adversely affect the financial position of the State and the marketing of bonds or notes at a reasonable interest cost to the State.
(6)	State. – The State of North Carolina, including any State agency.
(7)	State agency. – Any agency, institution, board, commission, bureau, council, department, division, officer, or employee of the State. The term does not include counties, municipal corporations, political subdivisions, local boards of education, or other local public bodies.
SECTION 27.10.(d)  Authorization of Bonds and Notes. – The State Treasurer is authorized, by and with the consent of the Council of State, to issue and sell at one time or from time to time general obligation bonds or notes of the State to be designated 'State of North Carolina General Obligation Bonds,' with any additional designations as may be determined, with any other available funds, for the purposes authorized by this section. The aggregate principal amount of bonds authorized by this section for the fiscal years ending June 30, 2010, and June 30, 2011, may not exceed the lesser of (i) the amount authorized by this subsection for that fiscal year and (ii) an amount that, together with all other general obligation bonds issued by the State, excluding refunding bonds, during the biennium ending June 30, 2011, is greater than two‑thirds of the net amount by which the State's outstanding general obligation bonds was reduced during the biennium ended June 30, 2009. The aggregate principal amount of bonds authorized by this section for the fiscal years ending June 30, 2012, and June 30, 2013, may not exceed the lesser of (i) the amount authorized by this subsection for that fiscal year and (ii) an amount that, together with all other general obligation bonds issued by the State, excluding refunding bonds, during the biennium ending June 30, 2013, is greater than two‑thirds of the net amount by which the State's outstanding general obligation bonds was reduced during the biennium ended June 30, 2011. If the maximum principal amount of bonds and notes authorized for a fiscal year is in excess of the amount described above, then the maximum amount of bonds and notes authorized in this section for that fiscal year is reduced by such excess. There is hereby authorized the following amount of bonds and notes authorized by this section in the following fiscal years:
(1)	In the maximum aggregate principal amount of one hundred six million six hundred ten thousand dollars ($106,610,000) for fiscal year 2009‑2010.
(2)	In the maximum aggregate principal amount of one hundred million dollars ($100,000,000) for fiscal year 2010‑2011.
(3)	In the maximum aggregate principal amount of fifty million dollars ($50,000,000) for fiscal year 2011‑2012.
(4)	In the maximum aggregate principal amount of fifty million dollars ($50,000,000) for fiscal year 2012‑2013.
SECTION 27.10.(e)  Uses of Bond and Note Proceeds. – The proceeds of bonds and notes shall be used for financing the cost of State capital facilities and for repairing and renovating State capital facilities as provided in this section.  Any additional moneys which may be received by grant from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any State capital facilities authorized by this section may be placed by the State Treasurer in a separate fund or funds and shall be disbursed, to the extent permitted by the terms of the grant, without regard to any limitations imposed by this section.
The proceeds of bonds and notes may be used with any other moneys made available by the General Assembly for the cost of State capital facilities, including the proceeds of any other State bond issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this section is ratified or any subsequent sessions. The proceeds of bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget. The funds provided by this section shall be disbursed for the purposes provided in this section upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the State Budget Act, Chapter 143C of the General Statutes.
The Office of State Budget and Management and the Board of Governors of The University of North Carolina shall provide semiannual reports to the Joint Legislative Oversight Committee on Capital Improvements, the Chairs of the Senate and House of Representatives Appropriation Committees, and the Fiscal Research Division on the expenditure of moneys authorized by this section. The reports shall continue until the completion of the projects provided for in this section.
SECTION 27.10.(f)  Allocation of Proceeds. – The proceeds of bonds and notes shall be allocated and expended as provided in this subsection:
(1)	A maximum aggregate principal amount of two hundred forty million dollars ($240,000,000) to finance the capital facility costs of the new Biomedical Research Imaging Center at the University of North Carolina at Chapel Hill. No more than a maximum aggregate principal amount of seventy‑four million dollars ($74,000,000) may be issued or incurred under this subdivision prior to July 1, 2010. No more than a maximum aggregate amount of one hundred seventy‑four million dollars ($174,000,000) may be issued or incurred prior to July 1, 2011. No more than a maximum aggregate amount of two hundred twenty‑four million dollars ($224,000,000) may be issued or incurred prior to July 1, 2012. The projected allocation for this capital facility may be increased to reflect the availability of other funds, including contingency funds, income earned on the investment of bond and note proceeds, and the proceeds of any grants. 
(2)	A maximum aggregate principal amount of sixty‑six million six hundred ten thousand dollars ($66,610,000) to be used only in accordance with this subdivision for the repair and renovation of State facilities and related infrastructure. No more than a maximum aggregate amount of thirty‑two million six hundred ten thousand dollars ($32,610,000) may be issued or incurred under this subdivision prior to July 1, 2012.
SECTION 27.10.(g)  Issuance of Bonds and Notes. – 
(1)	Terms and conditions. – Bonds or notes may bear a date or dates, may be serial or term bonds or notes, or any combination thereof, may mature in such amounts and at such time or times, not exceeding 40 years from their date or dates, may be payable at such place or places, either within or without the United States of America, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, may bear interest at such rate or rates, which may vary from time to time, and may be made redeemable before maturity, at the option of the State or otherwise as may be provided by the State, at such price or prices, including a price less than or greater than the face amount of the bonds or notes, and under such terms and conditions, all as may be determined by the State Treasurer, by and with the consent of the Council of State.
(2)	Signatures; form and denomination; registration. – Bonds or notes may be issued in certificated or uncertificated form. If issued in certificated form, bonds or notes shall be signed on behalf of the State by the Governor or shall bear the Governor's facsimile signature, shall be signed by the State Treasurer or shall bear the State Treasurer's facsimile signature, and shall bear the great seal of the State, or a facsimile of the seal shall be impressed or imprinted thereon. If bonds or notes bear the facsimile signatures of the Governor and the State Treasurer, the bonds or notes shall also bear a manual signature which may be that of a bond registrar, trustee, paying agent, or designated assistant of the State Treasurer. Should any officer whose signature or facsimile signature appears on bonds or notes cease to be such officer before the delivery of the bonds or notes, the signature or facsimile signature shall nevertheless have the same validity for all purposes as if the officer had remained in office until delivery. Bonds or notes may bear the facsimile signatures of persons who at the actual time of the execution of the bonds or notes shall be the proper officers to sign any bond or note, although at the date of the bond or note such persons may not have been such officers. The form and denomination of bonds or notes, including the provisions with respect to registration of the bonds or notes and any system for their registration, shall be as the State Treasurer may determine in conformity with this section.
(3)	Manner of sale; expenses. – Subject to the approval by the Council of State as to the manner in which bonds or notes shall be offered for sale, whether at public or private sale, whether within or without the United States, and whether by publishing notices in certain newspapers and financial journals, mailing notices, inviting bids by correspondence, negotiating contracts of purchase, or otherwise, the State Treasurer is authorized to sell bonds or notes at one time or from time to time at any rates of interest, which may vary from time to time, and at any prices, including a price less than or greater than the face amount of the bonds or notes, as the State Treasurer may determine. All expenses incurred in the preparation, sale, and issuance of bonds or notes shall be paid by the State Treasurer from the proceeds of bonds or notes or other available moneys.
(4)	Notes; repayment. – 
a.	By and with the consent of the Council of State, the State Treasurer is hereby authorized to borrow money and to execute and issue notes of the State for the same, but only in the following circumstances and under the following conditions:
1.	For anticipating the sale of bonds, the issuance of which the Council of State has approved, if the State Treasurer considers it advisable to postpone the issuance of the bonds;
2.	For the payment of interest on or any installment of principal of any bonds then outstanding, if there are not sufficient funds in the State treasury with which to pay the interest or installment of principal as they respectively become due;
3.	For the renewal of any loan evidenced by notes authorized in this section;
4.	For the purposes authorized in this section; and
5.	For refunding bonds or notes as authorized in this section.
b.	Funds derived from the sale of bonds or notes may be used in the payment of any bond anticipation notes issued under this section. Funds provided by the General Assembly for the payment of interest on or principal of bonds shall be used in paying the interest on or principal of any notes and any renewals thereof, the proceeds of which shall have been used in paying interest on or principal of the bonds.
(5)	Refunding bonds and notes. – By and with the consent of the Council of State, the State Treasurer is authorized to issue and sell refunding bonds and notes pursuant to the provisions of the State Refunding Bond Act for the purpose of refunding bonds or notes issued pursuant to this section. The refunding bonds and notes may be combined with any other issues of State bonds and notes similarly secured. Refunding bonds or notes may be issued at any time prior to the final maturity of the debt obligation to be refunded. The proceeds from the sale of any refunding bonds or notes shall be applied to the immediate payment and retirement of the bonds or notes being refunded or, if not required for the immediate payment of the bonds or notes being refunded, the proceeds shall be deposited in trust to provide for the payment and retirement of the bonds or notes being refunded and to pay any expenses incurred in connection with the refunding. Money in a trust fund may be invested in (i) direct obligations of the United States government, (ii) obligations the principal of and interest on which are guaranteed by the United States government, (iii) obligations of any agency or instrumentality of the United States government if the timely payment of principal and interest on the obligations is unconditionally guaranteed by the United States government, or (iv) certificates of deposit issued by a bank or trust company located in the State if the certificates are secured by a pledge of any of the obligations described in (i), (ii), or (iii) above having an aggregate market value, exclusive of accrued interest, equal at least to the principal amount of the certificates so secured. This section does not limit the duration of any deposit in trust for the retirement of bonds or notes being refunded but that have not matured and are not presently redeemable, or if presently redeemable, have not been called for redemption. 
(6)	Tax exemption. – Bonds and notes shall at all times be free from taxation by the State or any political subdivision or any of their agencies, excepting estate, inheritance or gift taxes, income taxes on the gain from the transfer of bonds or notes, and franchise taxes. The interest on bonds or notes is not subject to taxation as income.
(7)	Investment eligibility. – Bonds and notes are securities in which all of the following may invest, including capital in their control or belonging to them:  public officers, agencies, and public bodies of the State and its political subdivisions, all insurance companies, trust companies, investment companies, banks, savings banks, savings and loan associations, credit unions, pension or retirement funds, other financial institutions engaged in business in the State, executors, administrators, trustees, and other fiduciaries. Bonds and notes are hereby made securities which may properly and legally be deposited with and received by any officer or agency of the State or political subdivision of the State for any purpose for which the deposit of bonds, notes, or obligations of the State or any political subdivision is now or may hereafter be authorized by law.
(8)	Faith and credit. – The faith and credit and taxing power of the State are hereby pledged for the payment of the principal of and the interest on bonds and notes. The State expressly reserves the right to amend any provision of this section to the extent it does not impair any contractual right of a bond owner.
(9)	Other agreements. – The State Treasurer may authorize, execute, obtain, or otherwise provide for bond insurance, investment contracts, credit and liquidity facilities, interest‑rate swap agreements and other derivative products, and any other related instruments and matters the State Treasurer determines are desirable in connection with issuance, incurrence, carrying, or securing of bonds or notes. The State Treasurer is authorized to employ and designate any financial consultants, underwriters, and bond attorneys to be associated with any bond or note issue under this section as the State Treasurer considers necessary.
SECTION 27.10.(h)  Variable Rate Demand Bonds and Notes. – In fixing the details of bonds and notes, the State Treasurer may provide that any of the bonds or notes may:
(1)	Be made payable from time to time on demand or tender for purchase by the owner, if a credit facility supports the bonds or notes, unless the State Treasurer specifically determines that a credit facility is not required upon a finding and determination by the State Treasurer that the absence of a credit facility will not materially and adversely affect the financial position of the State and the marketing of the bonds or notes at a reasonable interest cost to the State;
(2)	Be additionally supported by a credit facility;
(3)	Be made subject to redemption or a mandatory tender for purchase prior to maturity;
(4)	Bear interest at a rate or rates that may vary for any period of time, as may be provided in the proceedings providing for the issuance of the bonds or notes, including, without limitation, such variations as may be permitted pursuant to a par formula; and 
(5)	Be made the subject of a remarketing agreement whereby an attempt is made to remarket bonds or notes to new purchasers prior to their presentment for payment to the provider of the credit facility or to the State.
If the aggregate principal amount payable by the State under a credit facility is in excess of the aggregate principal amount of bonds or notes secured by the credit facility, whether as a result of the inclusion in the credit facility of a provision for the payment of interest for a limited period of time or the payment of a redemption premium or for any other reason, then the amount of authorized but unissued bonds or notes during the term of such credit facility shall not be less than the amount of such excess, unless the payment of such excess is otherwise provided for by agreement of the State executed by the State Treasurer.
SECTION 27.10.(i)  Interpretation of Section. – 
(1)	Additional method. – The foregoing sections of this section shall be deemed to provide an additional and alternative method for the doing of the things authorized under it and shall be regarded as supplemental and additional to powers conferred by other laws and shall not be regarded as in derogation of any powers now existing.
(2)	Statutory references. – References in this section to specific sections or Chapters of the General Statutes or to specific acts are intended to be references to such sections, Chapters, or acts as they may be amended from time to time by the General Assembly.
(3)	Broad construction. – This section, being necessary for the health and welfare of the people of the State, shall be broadly construed to effect the purposes thereof.
(4)	Inconsistent provisions. – Insofar as the provisions of this section are inconsistent with the provisions of any general, special, or local laws, or parts thereof, the provisions of this section shall be controlling.
(5)	Severability. – If any provision of this section or the application thereof to any person or circumstance is held invalid, such invalidity shall 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 declared to be severable.
SECTION 27.10.(j)  G.S 116‑29.5 reads as rewritten:
"§ 116‑29.5.  Biomedical Research Imaging Center.
The General Assembly finds that the construction of the Biomedical Research Imaging Center at the University of North Carolina at Chapel Hill is a vital component of the State's efforts to improve the health and wellness of its citizens. Therefore, there is appropriated from the General Fund to the Board of Governors of The University of North Carolina the following sums for the corresponding fiscal year to be used for the planning and construction of the Biomedical Research Imaging Center:
Fiscal Year	Amount:
2009‑2010	 $74,000,000
2010‑2011	 $100,000,000
2011‑2012	$50,000,000
2012‑2013	$16,000,000."
SECTION 27.10.(k)  The funds appropriated for the 2009‑2010 shall be placed in a Reserve for the Biomedical Research Imaging Center and shall be spent only to the extent that the Council of State does not authorize the issuance of bonds in the amount of $74,000,000 during the 2009‑2010 fiscal year.
SECTION 27.10.(l)  Effective Date. – This section is effective when it becomes law.

PART xxviii. MISCELLANEOUS PROVISIONS

STATE BUDGET ACT APPLIES
SECTION 28.1.  The provisions of the State Budget Act, Chapter 143C of the General Statutes, are reenacted and shall remain in full force and effect and are incorporated in this act by reference.

COMMITTEE REPORT
SECTION 28.2.(a)  The Senate Appropriations Committee Report on the Continuation, Expansion and Capital Budgets dated April 7, 2009, which was distributed in the Senate and the House of Representatives and used to explain this act, shall indicate action by the General Assembly on this act and shall therefore be used to construe this act, as provided in the State Budget Act, Chapter 143C of the General Statutes, and for these purposes shall be considered a part of this act and as such shall be printed as a part of the Session Laws.
SECTION 28.2.(b)  The budget enacted by the General Assembly is for the maintenance of the various departments, institutions, and other spending agencies of the State for the 2008‑2009 budget as provided in G.S. 143C‑3‑5. This budget includes the appropriations of State funds as defined in G.S. 143C‑1‑1(d)(25).
The Director of the Budget submitted recommended adjustments to the budget to the General Assembly in March 2009 in the documents "North Carolina State Budget, Recommended Operating Budget 2009‑2011, Volumes 1 through 6," for the 2009‑2011 fiscal biennium for the various departments, institutions, and other spending agencies of the State. The adjustments to these documents made by the General Assembly are set out in the Committee Report.
SECTION 28.2.(c)  The budget enacted by the General Assembly shall also be interpreted in accordance with G.S. 143C‑5‑5, the special provisions in this act, and other appropriate legislation.
In the event that there is a conflict between the line‑item budget certified by the Director of the Budget and the budget enacted by the General Assembly, the budget enacted by the General Assembly shall prevail.

MOST TEXT APPLIES ONLY TO THE 2009‑2011 FISCAL BIENNIUM
SECTION 28.3.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2009‑2011 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2009‑2011 fiscal biennium.

EFFECT OF HEADINGS
SECTION 28.4.  The headings to the parts and sections of this act are a convenience to the reader and are for reference only.  The headings do not expand, limit, or define the text of this act, except for effective dates referring to a part.

SEVERABILITY CLAUSE
SECTION 28.5.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

EFFECTIVE DATE
SECTION 28.5A.  This act becomes effective only if the General Assembly enacts modifications to tax law that increase revenues by an amount sufficient to ensure that the State's budget is balanced.
SECTION 28.6.  Except as otherwise provided, this act becomes effective July 1, 2009.