A BILL TO BE ENTITLED
AN ACT to modify the procedures concerning final administrative decisions in contested cases heard by the office of administrative hearings.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 150B‑36 reads as rewritten:
"§ 150B‑36.  Final decision.
(a)	After an agency receives the official record in a contested case, the agency must give each party to the contested case 15 days to file exceptions to the decision or order made by the administrative law judge and to present written arguments to those in the agency who will make the final decision or order. If none of the parties files exceptions to the recommended decision or order within the 15‑day period, the agency is considered to have adopted the administrative law judge's recommended decision or order as the agency's final decision or order.
(a1)	If a party files in good faith a timely and sufficient affidavit of personal bias or other reason for disqualification of a member of the agency making the final decision, the agency shall determine the matter as a part of the record in the case. The determination is subject to judicial review at the conclusion of the case.
(b)	Except as provided in G.S. 150B‑34(c) or subsection (d) of this section, a final decision or order in a contested case shall be made by the agency within the time set by G.S. 150B‑44. If the agency does not adopt as its final decision or order the recommended decision or order made in the contested case under subsection (a) of this section, it must make a written final decision or order. In making its final decision or order, the agency may consider only the official record as defined in G.S. 150B‑37(a) and the exceptions filed by a party. The final decision or order shall include findings of fact and conclusions of law. The findings of fact and conclusions of law made in the contested case by the administrative law judge are binding on the agency in making its final decision or order if they are supported by substantial evidence admissible under G.S. 150B‑29(a), 150B‑30, or 150B‑31 in view of the entire record. For each finding of fact not adopted by the agency and each finding of fact made by the agency that is not contained in the administrative law judge's decision, the agency shall follow the procedures set forth in subsections (b1) and (b2) of this section.
(b1)	For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the following:
(1)	The specific reasons for not adopting the findings of fact.
(2)	The evidence in the record relied upon by the agency in not adopting the finding of fact contained in the administrative law judge's decision.
Any finding of fact not specifically rejected as required by this subsection shall be deemed accepted for purposes of judicial review of the final decision pursuant to Article 4 of this Chapter.
(b2)	For each finding of fact made by the agency that is not contained in the administrative law judge's decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact. Any new finding of fact made by the agency shall be supported by substantial evidence in the record. The agency shall not make any new finding of fact that is inconsistent with a finding of fact contained in the administrative law judge's decision unless the finding of fact in the administrative law judge's decision is not adopted as required by subsection (b1) of this section.
	A copy of the agency's decision shall be served upon each party personally or by certified mail addressed to the party at the latest address given by the party to the agency, and a copy shall be furnished to the party's attorney of record and the Office of Administrative Hearings.
(c)	The following decisions made by administrative law judges in contested cases are final decisions appealable directly to superior court under Article 4 of this Chapter:
(1)	A determination that the Office of Administrative Hearings lacks jurisdiction.
(2)	An order entered pursuant to the authority in G.S. 7A‑759(e).
(3)	An order entered pursuant to a written prehearing motion that either dismisses the contested case for failure of the petitioner to prosecute or grants the relief requested when a party does not comply with procedural requirements.
(4)	An order entered pursuant to a prehearing motion to dismiss the contested case in accordance with G.S. 1A‑1, Rule 12(b) when the order disposes of all issues in the contested case.
(5)	An order entered pursuant to the authority in G.S. 150B‑31(b) when the stipulation or waiver confers final decision authority on the administrative law judge.
(d)	An administrative law judge may grant judgment on the pleadings, pursuant to a motion made in accordance with G.S. 1A‑1, Rule 12(c), or summary judgment, pursuant to a motion made in accordance with G.S. 1A‑1, Rule 56, that disposes of all issues in the contested case. Notwithstanding subsection (b) of this section, a decision granting a motion for judgment on the pleadings or summary judgment need not include findings of fact or conclusions of law, except as determined by the administrative law judge to be required or allowed by G.S. 1A‑1, Rule 12(c) or Rule 56. For any decision by the administrative law judge granting judgment on the pleadings or summary judgment that disposes of all issues in the contested case, the agency shall make a final decision. If the agency does not adopt the administrative law judge's decision, it shall set forth the basis for failing to adopt the decision and shall remand the case to the administrative law judge for hearing. The party aggrieved by the agency's decision shall be entitled to immediate judicial review of the decision under Article 4 of this Chapter."
SECTION 2.  G.S. 150B‑44 reads as rewritten:
"§ 150B‑44.  Right to judicial intervention when decision unreasonably delayed.
Unreasonable delay on the part of any agency or administrative law judge in taking any required action shall be justification for any person whose rights, duties, or privileges are adversely affected by such delay to seek a court order compelling action by the agency or administrative law judge. An agency that is subject to Article 3 of this Chapter and is not a board or commission has 45 days from the day it receives the official record in a contested case from the Office of Administrative Hearings to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 30 days. An agency that is subject to Article 3 of this Chapter and is a board or commission has 45 days from the day it receives the official record in a contested case from the Office of Administrative Hearings or 45 days after its next regularly scheduled meeting, whichever is longer, to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 30 days. If an agency subject to Article 3 of this Chapter has not made a final decision within these time limits, the agency is considered to have adopted the administrative law judge's decision as the agency's final decision. Failure of an agency subject to Article 3A of this Chapter to make a final decision within 75 days of the close of the contested case hearing is justification for a person whose rights, duties, or privileges are adversely affected by the delay to seek a court order compelling action by the agency or, if the case was heard by an administrative law judge, by the administrative law judge. The Board of Trustees of the North Carolina State Health Plan for Teachers and State Employees is a "board" for purposes of this section."
SECTION 3.  G.S. 150B‑51 reads as rewritten:
"§ 150B‑51.  Scope and standard of review.
(a)	In reviewing a final decision in a contested case in which an administrative law judge made a recommended decision and the State Personnel Commission made an advisory decision in accordance with G.S. 126‑37(b1), the court shall make three initial determinations, as follows:
(1)	The court shall determine whether the applicable appointing authority heard new evidence after receiving the recommended decision. If the court determines that the applicable appointing authority heard new evidence, the court shall reverse the decision or remand the case to the applicable appointing authority to enter a decision in accordance with the evidence in the official record. 
(2)	If the applicable appointing authority did not adopt the recommended decision, the court shall determine whether the administrative law judge's findings of fact and conclusions of law are supported by substantial evidence admissible under G.S. 150B‑29(a), 150B‑30, or 150B‑31 in view of the entire record. If the court determines that the applicable appointing authority failed to adhere to the administrative law judge's findings of fact and conclusions of law that are supported by substantial evidence, the court shall reverse the decision or remand the case to the applicable appointing authority to enter a decision in accordance with the evidence in the official record.
(3)	If the applicable appointing authority did not adopt the recommended decision, the court shall determine whether the applicable appointing authority's decision states the specific reasons why the applicable appointing authority did not adopt the recommended decision. If the court determines that the applicable appointing authority did not state specific reasons why it did not adopt a recommended decision, the court shall reverse the decision or remand the case to the applicable appointing authority to enter the specific reasons.
(a1)	In reviewing a final decision in a contested case in which an administrative law judge made a decision, in accordance with G.S. 150B‑34(a), and the agency adopted the administrative law judge's decision, the court shall determine whether the agency heard new evidence after receiving the decision. If the court determines that the agency heard new evidence, the court shall reverse the decision or remand the case to the agency to enter a decision in accordance with the evidence in the official record. The court shall also determine whether the agency specifically rejected findings of fact contained in the administrative law judge's decision in the manner provided by G.S. 150B‑36(b1) and made findings of fact in accordance with G.S. 150B‑36(b2). If the court determines that the agency failed to follow the procedure set forth in G.S. 150B‑36, the court may take appropriate action under subsection (b) of this section.
(b)	Except as provided in subsection (c) of this section, in reviewing a final decision, the court may affirm the decision of the agency or remand the case to the agency or to the administrative law judge for further proceedings. It may also reverse or modify the agency's decision, or adopt the administrative law judge's decision if the substantial rights of the petitioners may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:
(1)	In violation of constitutional provisions;
(2)	In excess of the statutory authority or jurisdiction of the agency;
(3)	Made upon unlawful procedure;
(4)	Affected by other error of law;
(5)	Unsupported by substantial evidence admissible under G.S. 150B‑29(a), 150B‑30, or 150B‑31 in view of the entire record as submitted; or
(6)	Arbitrary, capricious, or an abuse of discretion.
(c)	In reviewing a final decision in a contested case in which an administrative law judge made a decision, in accordance with G.S. 150B‑34(a), and the agency does not adopt the administrative law judge's decision, the court shall review the official record, de novo, and shall make findings of fact and conclusions of law. In reviewing the case, the court shall not give deference to any prior decision made in the case and shall not be bound by the findings of fact or the conclusions of law contained in the agency's final decision. The court shall determine whether the petitioner is entitled to the relief sought in the petition, based upon its review of the official record. The court reviewing a final decision under this subsection may adopt the administrative law judge's decision; may adopt, reverse, or modify the agency's decision; may remand the case to the agency for further explanations under G.S. 150B‑36(b1), 150B‑36(b2), or 150B‑36(b3), or reverse or modify the final decision for the agency's failure to provide the explanations; and may take any other action allowed by law.
(d)	In reviewing a final agency decision allowing judgment on the pleadings or summary judgment, or in reviewing an agency decision that does not adopt an administrative law judge's decision allowing judgment on the pleadings or summary judgment pursuant to G.S. 150B‑36(d), the court may enter any order allowed by G.S. 1A‑1, Rule 12(c) or Rule 56. If the order of the court does not fully adjudicate the case, the court shall remand the case to the administrative law judge for such further proceedings as are just."
SECTION 4.  This act is effective when it becomes law and applies to contested cases commenced on or after that date.