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

TITLE OF ACT
SECTION 1.1.  This act shall be known as "The Current Operations and Capital Improvements Appropriations Act of 2014."

INTRODUCTION
SECTION 1.2.  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 as provided in G.S. 143C‑1‑2(b).

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 adjusted for the fiscal year ending June 30, 2015, according to the schedule that follows. Amounts set out in parentheses are reductions from General Fund appropriations for the 2014‑2015 fiscal year.

Current Operations – General Fund		2014‑2015

EDUCATION	

Community Colleges System Office	25,762,994

Department of Public Instruction	15,113,117

University of North Carolina – Board of Governors	
	Appalachian State University	
	East Carolina University	
		Academic Affairs	(620,650)
		Health Affairs	
	Elizabeth City State University	
	Fayetteville State University	
	North Carolina A & T State University	
	North Carolina Central University	
	North Carolina State University	
		Academic Affairs	1,839,185
		Agricultural Extension	
		Agricultural Research	
	University of North Carolina at Asheville	
	University of North Carolina at Chapel Hill	
		Academic Affairs	
		Health Affairs	
		Area Health Education Centers	
	University of North Carolina at Charlotte	
	University of North Carolina at Greensboro	
	University of North Carolina at Pembroke	
	University of North Carolina School of the Arts	
	University of North Carolina at Wilmington	
	Western Carolina University	
	Winston‑Salem State University	(220,272)
	General Administration	1,000,000
	University Institutional Programs	29,422,770
	Related Educational Programs	50,000
	North Carolina School of Science and Mathematics	
	Aid To Private Institutions	
Total University of North Carolina – Board of Governors	31,471,033

HEALTH AND HUMAN SERVICES	

Department of Health and Human Services	
	Division of Central Management and Support	7,196,823
	Division of Aging and Adult Services	100,000
	Divisions of Services to the Blind, Deaf, and Hard of Hearing	0
	Division of Child Development and Early Education	(75,846,623)
	Division of Health Service Regulation	(288,000)
	Division of Medical Assistance	61,047,188
	Division of Mental Health, Developmental Disabilities, and
		Substance Abuse Services	(16,047,038)
	NC Health Choice	(15,750,000)
	Division of Public Health	(5,605,543)
	Division of Social Services	13,541,509
	Division of Vocation Rehabilitation	(575,336)
Total Health and Human Services	(32,227,020)

NATURAL AND ECONOMIC RESOURCES	

Department of Agriculture and Consumer Services	614,461

Department of Commerce	
	Commerce	(991,443)
	Commerce State‑Aid	5,005,473

Wildlife Resources Commission	(1,010,520)

Department of Environment and Natural Resources	1,852,857

Department of Labor	39,557

JUSTICE AND PUBLIC SAFETY	

Department of Public Safety	63,079,628

Judicial Department	5,123,332

Judicial Department – Indigent Defense	386,037

Department of Justice	(32,098,850)

GENERAL GOVERNMENT	

Department of Administration	(11,073,045)

Office of Administrative Hearings	42,478

Department of State Auditor	168,155

Office of State Controller	(182,268)

Department of Cultural Resources	
	Cultural Resources	666,555
	Roanoke Island Commission	(9,000)

State Board of Elections	165,223

General Assembly	876,444

Office of the Governor	236,521

Office of State Budget and Management	
	Office of State Budget and Management	(45,116)
	OSBM – Reserve for Special Appropriations	(20,000)

Housing Finance Agency	9,830,322

Department of Insurance	
	Insurance	(256,486)

Office of Lieutenant Governor	(3,031)

Department of Revenue	(1,444,357)

Department of Secretary of State	37,415

Department of State Treasurer	
	State Treasurer	1,523,783
	State Treasurer – Retirement for Fire and Rescue Squad Workers	(1,499,836)

RESERVES, ADJUSTMENTS AND DEBT SERVICE	

Reserve for Future Benefit Needs	(56,400,000)

Reserve for State Health Plan	(22,000,000)

Reserve for Job Development Investment Grant (JDIG) 	(15,571,684)

One North Carolina Fund	(7,144,263)

Information Technology Fund	4,684,488

Information Technology Reserve Fund	(10,342,418)

Disability Income Plan	(3,200,000)

Medicaid Risk Reserve	117,800,000

Reserve for Pending Legislation and Legislative Services
	Commission Litigation	6,500,000

Conservation Reserve	10,000,000

Debt Service	
	General Debt Service	(7,390,916)
	Federal Reimbursement	0

TOTAL CURRENT OPERATIONS – GENERAL FUND	98,069,620

GENERAL FUND AVAILABILITY STATEMENT
SECTION 2.2.(a)  Section 2.2(a) of S.L. 2013‑360 is repealed. The General Fund availability used in adjusting the 2014‑2015 budget is shown below:
		FY 2014‑2015
Unappropriated Balance Remaining from Previous Year	323,693,704
Anticipated Undercollections from FY 2013‑2014	(429,400,000)
Anticipated Reversions from FY 2013‑2014	407,201,425

Less Earmarkings of Year End Fund Balance	
Savings Reserve 	(89,098,836)
Repairs and Renovations	(89,098,837)
Beginning Unreserved Fund Balance	123,297,456

Revenues Based on Existing Tax Structure	19,972,100,000

Nontax Revenues	
Investment Income	11,300,000
Judicial Fees	244,500,000
Disproportionate Share	109,000,000
Master Settlement Agreement	137,500,000
Other Nontax Revenues	195,500,000
Insurance	77,000,000
Highway Fund Transfer	215,900,000
Subtotal Nontax Revenues	990,700,000

Total General Fund Availability	21,086,097,456

Adjustments to Availability: 2014 Session	
Transfer from Cash Balances from Department of Agriculture and
Consumer Services Special Funds	1,210,690
Transfer from Interest from Department of Environment and
Natural Resources (DENR) Special Funds	430,385
Diversion of Funds from DENR Inspection and Maintenance 
Control Special Fund	3,000,000
Diversion of Funds from DENR Water and Air Account Special Fund	750,000
Transfer of Federal Insurance Contribution Act (FICA) Fund Cash Balance	5,255,000
Adjustment of Transfer from Insurance Regulatory Fund	(256,486)
Adjustment of Transfer from Treasurer's Office	1,523,783
Transfer from E‑Commerce Fund	2,130,000
Transfer from Blount Street Properties Fund	2,400,000
Increase from ABC Permit Fees	9,600,000
Four‑year Phaseout of Provision of Medicaid Hold Harmless 
Law Guaranteeing Counties $500,000 Benefit	5,990,000
Redirect Funds from Gross Premiums Tax on Property 
Coverage Contracts	1,600,000
Phase‑in Sales Tax on Piped Natural Gas	(2,150,000)
Reduce Sales Tax on Manufactured and Modular Homes	(6,100,000)

Subtotal Adjustments to Availability: 2014 Session	25,383,372

Revised General Fund Availability	21,111,480,828

Less: General Fund Appropriations	21,111,480,828

Unappropriated Balance Remaining	0

SECTION 2.2.(b)  Effective June 30, 2014, Section 2.2 of S.L. 2013‑360 reads as rewritten:
"…
"SECTION 2.2.(c)  Notwithstanding the provisions of G.S. 143C‑4‑3, the State Controller shall transfer a total of one hundred fifty million dollars ($150,000,000) from the unreserved fund balance to the Repairs and Renovations Reserve on June 30, 2013, and a total of eighty-nine million ninety-eight thousand eight hundred thirty-seven dollars ($89,098,837) to the Repairs and Renovations Reserve on June 30, 2014. This subsection becomes effective June 30, 2013. Funds transferred under this section to the Repairs and Renovations Reserve are appropriated for the 2013‑2014 and 2014‑2015 fiscal years and shall be used in accordance with G.S. 143C‑4‑3.
"SECTION 2.2.(d)  Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer a total of two hundred thirty‑two million five hundred thirty‑seven thousand nine hundred forty‑two dollars ($232,537,942) from the unreserved fund balance to the Savings Reserve Account on June 30, 2013, and the sum of eighty-nine million ninety-eight thousand eight hundred thirty-six dollars ($89,098,836) from the unreserved fund balance to the Savings Reserve Account on June 30, 2014. Neither of these transfers is an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2013.
…."
SECTION 2.2.(c)  Interest from the following funds shall be redirected to the General Fund:
Budget	Fund
Code	Code	Description
24303	2990	Marine Conservation Fund
24306	2127	Dry Cleaning Solvent Cleanup Fund
24318	2054	Bernard Allen Drinking Water Fund
64301	6342	Water Pollution Control System Account
64305	6370	Commercial Leaking Petroleum Storage Tanks Fund
64305	6371	Noncommercial Leaking Petroleum Storage Tanks Fund
64305	6372	Inactive Hazardous Sites Fund
64305	6373	Emergency Response Fund
64305	6375	Superfund Cost Share Fund
64305	6376	Brownfield Superfund Fund
64305	6379	Inactive Hazardous Sites Fund‑S1492
SECTION 2.2.(d)  Notwithstanding G.S. 20‑183.7(c), fees collected for electronic inspection authorizations during the 2014‑2015 fiscal year that would have been credited to the I & M Air Pollution Control Account established under G.S. 143‑215.3A(b1) shall be credited to the State's General Fund.
SECTION 2.2.(e)  Notwithstanding G.S. 105‑449.125, seven hundred fifty thousand dollars ($750,000) of the revenue collected by the Secretary of Revenue from the motor fuel excise tax levied under Part 7 of Article 36C of Chapter 105 of the General Statutes that would otherwise be credited to the Water and Air Quality Account shall be credited to the State's General Fund.
SECTION 2.2.(f)  Notwithstanding G.S. 106‑65.104, the unallotted and unexpended balance of funds in the Bedding Law Account on June 30, 2014, shall be transferred to the General Fund.
SECTION 2.2.(g)  Notwithstanding any other provision of law, fees collected for e‑commerce transactions during the 2014‑2015 fiscal year that would have been credited to the Reserve for E‑Commerce shall be credited to the State's General Fund.
SECTION 2.2.(h)  Notwithstanding the use requirements provided in Section 2 of S.L. 2003‑404, the State Controller shall transfer the sum of two million four hundred thousand dollars ($2,400,000) from the special trust fund created by S.L. 2003‑404 to the General Fund to be used for the purposes expressed and allocated by this act.
SECTION 2.2.(i)  Notwithstanding any other provision of law to the contrary, effective July 1, 2014, the State Controller shall transfer five million two hundred fifty‑five thousand dollars ($5,255,000) from the NC Federal Insurance Contribution Act (FICA) Account to be deposited in the appropriate budget code as determined by the State Controller.

PART III. CURRENT OPERATIONS/HIGHWAY FUND

CURRENT OPERATIONS/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 adjusted for the fiscal year ending June 30, 2015, according to the following schedule. Amounts set out in parentheses are reductions from Highway Fund Appropriations for the 2014‑2015 fiscal year.

Current Operations – Highway Fund	2014‑2015

Department of Transportation	
	Administration	$ (7,519,785)

Division of Highways	
	Administration	0
	Construction	3,963,829
	Maintenance	44,381,941
	Planning and Research	0
	OSHA Program	(7,307)

Ferry Operations	6,200,000

State Aid to Municipalities	9,453,990

Intermodal Divisions	
	Public Transportation	0
	Aviation	0
	Rail		0
	Bicycle and Pedestrian	0

Governor's Highway Safety	(5,699)
Division of Motor Vehicles	(192,422)

Other State Agencies, Reserves, Transfers	8,098,312

Capital Improvements	0

Total Highway Fund Appropriations	$ 1,980,683,359

HIGHWAY FUND AVAILABILITY STATEMENT
SECTION 3.2.  Section 3.2 of S.L. 2013‑360 is repealed. The Highway Fund availability used in adjusting the 2014‑2015 fiscal year budget is shown below:

Highway Fund Availability Statement	2014‑2015

Unreserved Fund Balance	$ 12,000,000
Estimated Revenue	1,973,750,000
Adjustment to Revenue Availability:	
Gasoline Inspection Tax (Underground Storage Tank Clean Up)	(3,458,927)
Motor Fuel Tax (Shallow Draft Navigation Channel Dredging Fund)	(1,677,134)
Motor Fuel Tax Refund Repeal (Taxi Cabs)	69,420

Revised Total Highway Fund Availability	$ 1,980,683,359

Unappropriated Balance	$ 0

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

CURRENT OPERATIONS/HIGHWAY TRUST FUND
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 adjusted for the fiscal year ending June 30, 2015, according to the following schedule. Amounts set out in parentheses are reductions from Highway Trust Fund Appropriations for the 2014‑2015 fiscal year.

Current Operations – Highway Trust Fund	2014‑2015

Program Administration	 ($11,000,000)
Aid to Municipalities	0
Intrastate		0
Secondary Roads	0
Urban Loops	0
Mobility Fund	0
Turnpike Authority	0
Transfer to General Fund	0
Transfer to Highway Fund	0
Debt Service	0
Strategic Prioritization Funding Plan for Transportation Investments	67,993,140

Total Highway Trust Fund Appropriations	$ 1,162,393,140

HIGHWAY TRUST FUND AVAILABILITY STATEMENT
SECTION 4.2.  Section 4.2 of S.L. 2013‑360 is repealed. The Highway Trust Fund availability used in developing the 2014‑2015 fiscal year budget is shown below:

Highway Trust Fund Availability Statement	2014‑2015

Unreserved Fund Balance	$ 0
Estimated Revenue	1,162,370,000
Adjustment to Revenue Availability:	
Motor Fuel Tax Refund Repeal (Taxi Cabs)	23,140

Total Highway Trust Fund Availability	$ 1,162,393,140

Unappropriated Balance	$ 0

PART V. OTHER APPROPRIATIONS

INDIAN GAMING EDUCATION REVENUE FUND
SECTION 5.1.  Section 5.4 of S.L. 2013‑360 reads as rewritten:
"SECTION 5.4.(a)  There is appropriated from the Indian Gaming Education Revenue Fund to the Department of Public Instruction, School Technology Fund, the sum of five million dollars ($5,000,000) for the 2013‑2014 fiscal year and the sum of six million dollars ($6,000,000) for the 2014‑2015 fiscal year.
"SECTION 5.4.(b)  G.S. 143C‑9‑7 does not apply to the use of these funds for the 2013‑2015 fiscal biennium."

EDUCATION LOTTERY FUNDS/HONESTY IN ADVERTISING AND MARKETING/ESTABLISH THE JOINT LEGISLATIVE OVERSIGHT COMMITTEE ON THE NORTH CAROLINA STATE LOTTERY/NO LOTTERY FUNDS PLEDGED FOR LOCAL INDEBTEDNESS
SECTION 5.2.(a)  Section 6.11(e) of S.L. 2013‑360 reads as rewritten:
"SECTION 6.11.(e)  The appropriations made from the Education Lottery Fund for the 2013‑2015 fiscal biennium are as follows:
	FY 2013‑2014	FY 2014‑2015

Classroom Teachers	$ 220,643,188	
					$ 381,547,574
Prekindergarten Program	75,535,709						124,704,077
Public School Building Capital Fund	100,000,000	100,000,000
Scholarships for Needy Students	30,450,000	30,450,000
UNC Need‑Based Financial Aid	10,744,733	10,744,733
UNC Need‑Based Financial Aid Forward Funding Reserve	32,530,359	
Digital Learning	11,928,735	
Textbooks			10,983,161

TOTAL APPROPRIATION	$ 481,832,724	
					$ 658,429,545"
SECTION 5.2.(b)  Section 6.11(f) of S.L. 2013‑360 reads as rewritten:
"SECTION 6.11.(f)  Notwithstanding G.S. 18C‑164, the Office of State Budget and Management shall not transfer funds to the Education Lottery Reserve Fund for the 2013‑2014 fiscal year or the 2014‑2015 fiscal year."
SECTION 5.2.(c)  Funds appropriated for Digital Learning shall not revert at the end of the fiscal year but shall remain available until expended.
SECTION 5.2.(d)  G.S. 18C‑114 reads as rewritten:
"§ 18C‑114.  Powers and duties of the Commission.
(a)	The Commission shall have the following powers and duties:
(1)	Except as provided in G.S. 18C‑130(a), to specify the types of lottery games and gaming technology to be used in the Lottery.
(2)	To prescribe the nature of lottery advertising which shall comply with the following:
a.	All advertising shall include resources for responsible  gambling information.
b.	No advertising may intentionally target specific groups or economic classes.
c.	No advertising may be misleading, unfair, deceptive, or present any lottery game as a means of relieving any person's financial or personal difficulties.
d.	No advertising may have the primary purpose of inducing persons to participate in the Lottery.
e.	Advertising which states a total of payments to be paid over a period of time shall state the present value of the prize.
f.	Advertising which states the probability of winning a prize shall not omit the value of the lowest prize to be won.
g.	Advertising which states the odds of winning a prize must, at a minimum, disclose the odds of winning the prize with the largest value.
h.	No advertising or sponsorship may take place in connection with any high school or collegiate sport or high school or collegiate sporting event.
…."
SECTION 5.2.(e)  G.S. 18C‑115 reads as rewritten:
"§ 18C‑115.  Reports.
(a)	Reports on Operation of the Commission. – The Commission shall send quarterly and annual reports on the operations of the Commission to the Governor, State Treasurer, the Joint Legislative Oversight Committee on the North Carolina State Lottery, and to the General Assembly. The reports shall include complete statements of lottery revenues, prize disbursements, expenses, net revenues, and all other financial transactions involving lottery funds, including the occurrence of any audit.
(b)	Disclosure of Proceeds from Lottery Funding. – Each State department or agency receiving lottery funds shall use its established communications channels to inform the public about amounts received and activities supported by lottery proceeds."
SECTION 5.2.(f)  G.S. 18C‑130 reads as rewritten:
"§ 18C‑130.  Types of lottery games; lottery games and lottery advertising; certain disclosures and information to be provided.
(a)	Unless the General Assembly approves, the Commission may use only draw‑style games and instant scratch‑off games as types of lottery games.
(b)	In lottery games using tickets, each ticket in a particular game shall have printed on it a unique number distinguishing it from every other ticket in that lottery game and an abbreviated form of the game‑play rules, including resources for responsible gambling information. In lottery games using tickets, no ticket may have printed on it a depiction of one or more cartoon characters. In lottery games using tickets with preprinted winners, the overall estimated odds of winning prizes shall be printed on each ticket. No name or photograph of a current or former elected official shall appear on the tickets of any lottery game.
…
(e)	Lottery advertising shall be tastefully designed and presented in a manner to minimize the appeal of lottery games to minors. The use of false, misleading, unfair, or deceptive information in lottery advertising is prohibited and shall constitute an unfair and deceptive trade practice under G.S. 75‑1.1.
(f)	The Commission shall make available on its Web site a detailed tabulation of the estimated number of prizes of each particular prize denomination that are expected to be awarded in each lottery game and the estimated odds of winning each prize at the time that lottery game is offered for sale to the public.
…
(h)	The University of North Carolina shall develop and make available to the Department of Public Instruction course and professional development materials explaining the probabilities and other mathematical features of a lottery game for inclusion as a component of high school courses in civics and mathematics. The University of North Carolina shall also make available those same materials to the Office of Non‑Public Education in the Department of Administration to be available to other schools.
(i)	The University of North Carolina shall commission or perform research on patterns of:
(1)	Lottery participation as to frequency, amounts spent, family income levels, and other socioeconomic factors.
(2)	Lottery ticket sales locations in comparison to the frequency, amounts spent, family income levels, and other socioeconomic factors of the neighborhoods.
The University of North Carolina shall make such research available to the Legislative Research Commission."
SECTION 5.2.(g)  G.S. 18C‑132 reads as rewritten:
"§ 18C‑132.  Procedures for drawings and claiming prizes; payment of prizes; protection of information concerning certain prize winners.
(a)	If a lottery game uses a daily or less frequent drawing of winning numbers, a drawing among entries including second chance drawings where the value of the prize is five thousand dollars ($5,000) or more, or a drawing among finalists, all of the following conditions shall be met:
…
(2)	The drawings shall be witnessed by an independent certified public accountant or by an auditor employed by a certified public accounting firm. No advertising of a North Carolina game shall refer to the role of the independent certified public accountant or auditor employed by a certified public accounting firm.
…."
SECTION 5.2.(h)  G.S. 18C‑152 reads as rewritten:
"§ 18C‑152.  Investigation of lottery potential contractors.
…
(c)	For purposes of this subsection, the term "potential contractor" shall include the potential contractor and each of the persons applicable under subsection (b) of this section. At a minimum, the potential contractor required to disclose information for a thorough background investigation under G.S. 18C‑151 shall do all of the following:
…
(3)	Disclose all the states and jurisdictions in which the potential contractor has contracts to supply gambling or gaming goods or services, including lottery goods and services, and the nature of the goods or services involved for each state or jurisdiction.
(4)	Disclose all the states and jurisdictions in which the potential contractor has applied for, has sought renewal of, has received, has been denied, has pending, or has had revoked a lottery, gambling, or gaming license or permit of any kind or had fines or penalties assessed on a license, permit, contract, or operation and the disposition of such in each such state or jurisdiction. If any lottery, gambling, or gaming license, permit, or contract has been revoked or has not been renewed or any lottery, gambling, or gaming license, permit, or application has been either denied or is pending and has remained pending for more than six months, all of the facts and circumstances underlying the failure to receive that license shall be disclosed.
…
(6a)	Disclose as to the potential contractor's demographic data for its employees broken down by the following categories: race, age, sex, and nationality. The Commission may specify age bands and nationality groupings for the disclosure report.
(7)	If at least twenty percent (20%) of the cost of a potential contractor's contract is subcontracted, the potential contractor shall disclose all of the information required by this section for the subcontractor as if the subcontractor were itself a potential contractor.
…."
SECTION 5.2.(i)  G.S. 18C‑162 reads as rewritten:
"§ 18C‑162.  Allocation of revenues.
(a)	The Commission shall allocate revenues to the North Carolina State Lottery Fund in order to increase and maximize the available revenues for education purposes, and to the extent practicable, shall adhere to the following guidelines:
…
(3)	No more than eight percent (8%) of the total annual revenues, as described in this Chapter, shall be allocated for payment of expenses of the Lottery. Advertising expenses shall not exceed two percent (2%) of the total annual revenues.
…."
SECTION 5.2.(j)  G.S. 18C‑164(c) reads as rewritten:
"(c)	The General Assembly shall appropriate the remaining net revenue of the Education Lottery Fund annually in the Current Operations Appropriations Act for education‑related purposes, based upon estimates of lottery net revenue to the Education Lottery Fund provided by the Office of State Budget and Management and the Fiscal Research Division of the Legislative Services Commission. A security interest shall not be granted in funds appropriated pursuant to this subsection."
SECTION 5.2.(k)  Article 8 of Chapter 18C of the General Statutes is amended by adding a new section to read:
"§ 18C‑174.  Venue for civil actions.
Venue for any civil action under this Chapter or for any civil action under G.S. 75‑1.1 for a violation of G.S. 18C‑130(e) shall be in Wake County."
SECTION 5.2.(l)  The provisions of subsection (k) of this section do not affect pending litigation.
SECTION 5.2.(m)  G.S. 18C‑172 is repealed.
SECTION 5.2.(n)  Chapter 120 of the General Statutes is amended by adding a new Article to read:
"Article 34.
"Joint Legislative Oversight Committee on the North Carolina State Lottery.
"§ 120‑295.  Creation and membership of the Joint Legislative Oversight Committee on the North Carolina State Lottery.
(a)	The Joint Legislative Oversight Committee on the North Carolina State Lottery is established. The Committee consists of 22 members as follows:
(1)	Eleven members of the Senate appointed by the President Pro Tempore of the Senate, at least three of whom are members of the minority party; and
(2)	Eleven members of the House of Representatives appointed by the Speaker of the House of Representatives, at least three of whom are members of the minority party.
(b)	Terms on the Committee are for two years and begin on the convening of the General Assembly in each odd‑numbered year. Members may complete a term of service on the Committee even if they do not seek reelection or are not reelected to the General Assembly, but resignation or removal from service in the General Assembly constitutes resignation or removal from service on the Committee.
(c)	A member continues to serve until a successor is appointed. A vacancy shall be filled within 30 days by the officer who made the original appointment.
"§ 120‑296.  Purpose and powers of Committee.
(a)	The Joint Legislative Oversight Committee on the North Carolina State Lottery shall examine, on a continuing basis, the operations of the North Carolina State Lottery. The Committee shall make ongoing recommendations to the General Assembly on ways to improve the operations and success of the lottery. The Committee shall do all of the following in conducting its examination of the North Carolina State Lottery:
(1)	Examine the administration, budgeting, and policies of the lottery.
(2)	Assess the lottery's efficiency and effectiveness.
(3)	Review other state lottery policies and procedures to identify improvements and options for maximizing the transfer of lottery funds to the Education Lottery Fund.
(4)	Study any other matters that the Committee considers necessary to fulfill its mandate.
"§ 120‑297.  Organization of Committee.
(a)	The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate a cochair of the Joint Legislative Oversight Committee on the North Carolina State Lottery. The Committee shall meet upon the joint call of the cochairs.
(b)	A quorum of the Committee is five members. No action may be taken except by a majority vote at a meeting at which a quorum is present. While in the discharge of its official duties, the Committee has the powers of a joint committee under G.S. 120‑19 and G.S. 120‑19.1 through G.S. 120‑19.4.
(c)	Members of the Committee shall receive subsistence and travel expenses as provided in G.S. 120‑3.1. The Committee may contract for consultants or hire employees in accordance with G.S. 120‑32.02. The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work. Upon the direction of the Legislative Services Commission, the Directors of Legislative Assistants of the Senate and of the House of Representatives shall assign clerical staff to the Committee. The expenses for clerical employees shall be borne by the Committee.
(d)	The Committee cochairs may establish subcommittees for the purpose of examining issues relating to services provided by particular divisions within the State's general government departments.
"§ 120‑298.  Reports to Committee.
Whenever the North Carolina State Lottery is required by law to report to the General Assembly or to any of its permanent committees or subcommittees on matters affecting the lottery, it shall transmit a copy of the report to the cochairs of the Joint Legislative Oversight Committee on the North Carolina State Lottery."
SECTION 5.2.(o)  Subsection (c) of this section becomes effective June 30, 2014. Subsection (j) of this section becomes effective July 1, 2014, and applies to debt authorized on or after that date.

PART VI. GENERAL PROVISIONS

APPROPRIATE ENCUMBERED GRANT FUNDS THAT ARE RETURNED TO THE STATE
SECTION 6.1.  Section 5.1 of S.L. 2013‑360 is amended by adding a new subsection to read:
"SECTION 5.1.(f)  Notwithstanding subsections (a) and (b) of this section, there is appropriated from the General Fund for the 2014‑2015 fiscal year an amount equal to the amount of encumbered funds required to be spent in order to honor encumbrances of grant funds in accordance with G.S. 143C‑6‑23(f2)."

ESTABLISHING OR INCREASING FEES UNDER THIS ACT
SECTION 6.2.(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 to the level authorized or anticipated in this act.
SECTION 6.2.(b)  Notwithstanding G.S. 150B‑21.1A(a), an agency may adopt an emergency rule in accordance with G.S. 150B‑21.1A to establish or increase a fee as authorized by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter 150B of the General Statutes.

EXPENDITURES OF FUNDS IN RESERVES LIMITED
SECTION 6.3.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

STATUTORY CHANGES RELATED TO THE DISPOSITION OF SETTLEMENT FUNDS
SECTION 6.6.(a)  Article 1 of Chapter 114 of the General Statutes is amended by adding a new section to read:
"§ 114‑2.4A.  Disposition of funds received by the State or a State agency from a settlement or other final order or judgment of the court.
(a)	Definition. – For purposes of this section, the term "settlement" means an agreement entered into by the State or a State agency, with or without a court's participation, that ends (i) a dispute, lawsuit, or part of the dispute or lawsuit or (ii) the involvement of the State or State agency in the dispute, lawsuit, or part of the dispute or lawsuit. This term includes settlement agreements, stipulation agreements, consent judgments, and consent decrees.
(b)	Prohibition. – The following restrictions shall apply:
(1)	Funds received by the State or a State agency from a settlement or other final order or judgment of the court shall not be transferred or expended pursuant to G.S. 143C‑6‑4 and shall remain unexpended until the funds are appropriated by the General Assembly.
(2)	The Attorney General, any subordinate who has been delegated the authority to negotiate or approve a settlement, and any private counsel retained to represent a State agency shall have no authority to include or agree to terms or conditions in any settlement that authorizes the expenditure, transfer, or award of funds to any person or entity other than (i) a party to the dispute or lawsuit or (ii) a consumer entitled to a refund or the recovery of damages.
(c)	Exception. – This section does not apply to funds received by the Department of Health and Human Services to the extent those funds represent the recovery of previously expended Medicaid funds.
(d)	Recommendation. – The Attorney General may provide a nonbinding written recommendation to the chairs of the Senate and House Appropriations Committees for their consideration as to what purpose the funds subject to the prohibitions in subsection (b) of this section should be appropriated for.
(e)	Overrealized Receipts. – Any provision of law authorizing the expenditure of overrealized receipts shall not apply to the funds referred to in subdivision (1) of subsection (b) of this section unless the language of the law specifically references this section or specifically references funds received by the State or a State agency from a settlement or other final order or judgment of the court.
(f)	Required Disposition. – If the terms of a federal grant, another provision of State or federal law, or the State Constitution require a specific disposition of funds received from a settlement or other final order or judgment of the court, nothing in this section shall be construed to supersede, or authorize a deviation from, that specific disposition. Furthermore, nothing in this subsection shall be construed to abrogate the requirement that funds drawn from the State treasury be in consequence of appropriations made by law.
(g)	Required Submission. – In addition to any other report or filing that may be required by law, and unless the settlement is sealed pursuant to a written order of the court in accordance with G.S. 132‑1.3 or federal law, the Attorney General's Office shall submit a copy to the Legislative Library of any settlement or other final order or judgment of the court in which the State or a State agency receives funds. The submission required by this subsection shall be made within 60 days of the date (i) the settlement is entered into or (ii) the final order or judgment of the court is entered. Any information deemed confidential by State or federal law shall be redacted from the copy of the settlement or other final order or judgment of the court prior to submitting it to the Legislative Library."
SECTION 6.6.(b)  This section is effective July 1, 2014, and applies to settlements entered into on or after that date and other final orders or judgments of the court entered on or after that date.

ORDER OF APPROPRIATIONS BILLS
SECTION 6.8.  G.S. 143C‑5‑2 reads as rewritten:
"§ 143C‑5‑2.  Order of appropriations bills.
(a)	Each house of the General Assembly shall first pass its version of the Current Operations Appropriations Act on third reading and order it sent to the other chamber before placing any other appropriations bill on the calendar for second reading. This section does not apply to the following bills:
(1)	An appropriations bill to respond to an emergency as defined by G.S. 166A‑19.3.
(2)	An appropriations bill making adjustments to the current year budget.
(3)	An appropriations bill authorizing continued operations at current funding levels.
(b)	The provisions of subsection (a) of this section shall apply to each fiscal year of the biennium."

REPORTING ON AGENCY REORGANIZATIONS AND MOVEMENTS OF POSITIONS
SECTION 6.10.  Article 6 of Chapter 143C of the General Statutes is amended by adding a new section to read:
"§ 143C‑6‑12.  Quarterly report on State agency reorganizations and movements of positions.
The Office of State Budget and Management shall report quarterly to the Joint Legislative Commission on Governmental Operations and the appropriate Joint Legislative Oversight Committee on reorganizations of State agencies and movements of State agency positions. Each report submitted pursuant to this section shall include all of the following information for the previous quarter:
(1)	A list of all reorganizations within State agencies or between State agencies.
(2)	A list of all positions moved within a State agency or between State agencies.
(3)	A statement of the purpose of each reorganization and position movement undertaken and of the legal authority under which each reorganization and position movement was made."

Contingency and Emergency Fund
SECTION 6.12.  Section 6.1 of S.L. 2013‑360 reads as rewritten:
"SECTION 6.1.  For the 2013-2015 fiscal biennium and notwithstanding the provisions of G.S. 143C-4-4(b), funds appropriated to the Contingency and Emergency Fund may be used only for expenditures required (i) by a court or Industrial Commission order, (ii) to respond to events as authorized under G.S. 166A-19.40(a) of the North Carolina Emergency Management Act, or (iii) for litigation expenses incurred by State agencies in defense of the State during the 2014‑2015 fiscal year, in an amount not to exceed seven hundred fifty thousand dollars ($750,000), as approved by the Office of State Budget and Management.
These funds shall not be used for other statutorily authorized purposes or for any other contingencies and emergencies."

Department of Administration/Eugenics Program Amendments
SECTION 6.13.(a)  G.S. 143B‑426.51 reads as rewritten:
"§ 143B‑426.51.  Compensation payments.
(a)	A claimant determined to be a qualified recipient under this Part shall receive compensation in the amount determined by this subsection from funds appropriated to the Department of State Treasurer for these purposes. A qualified recipient shall receive compensation in the form of two payments. The initial payment and largest payment shall be made in October 2014. A second and final payment shall be made after the exhaustion of all appeals arising from the denial of eligibility for compensation under this Part.
The initial payment to each qualified recipient will be calculated by adding together the number of qualified recipients as of October 1, 2014, and the number of claims outstanding that are pending, then dividing that total number into the sum of ten million dollars ($10,000,000). The initial payment checks shall be remitted by October 31, 2014.
The final payment calculation will be made by taking the balance of compensation funds remaining after the exhaustion of appeals and dividing that sum equally between the number of qualified recipients determined finally to be eligible to receive compensation. The final payment checks shall be remitted within 90 days of the exhaustion of the last appeal. Any qualified claimant who was successful on appeal and who did not receive an initial payment shall be paid an amount equal to the initial payment amount, plus the amount from the final payment calculation.
The State Controller and the State Treasurer shall collaborate to facilitate the administration of this section so as to effectuate the compensation of qualified recipients as soon as practicable.
(b)	If any claimant shall die during the pendency of a claim, or after being determined to be a qualified recipient, any payment shall be made to the estate of the decedent.
(c)	A qualified recipient may assign compensation received pursuant to subsection (a) of this section to a trust established for the benefit of the qualified recipient.
(d)	It is the public policy of this State that funds awarded for the compensation of sterilization victims under this Part may be used only for the purpose of benefiting victims and shall not be used to pay attorneys' fees arising from representation at the Office of Justice for Sterilization Victims, before the Industrial Commission, or on appeal. The General Assembly finds that qualified recipients have suffered a unique harm that calls for a unique remedy and that there are sufficient sources of assistance and pro bono legal representation available to protect their interests. Therefore, any agreement for the acceptance of attorneys' fees is null and void unless counsel has sought and received an opinion from the North Carolina State Bar that the fee arrangement is reasonable under the Rules of Professional Conduct.
(e)	By December 1, 2014, the Office shall submit all remaining claim forms to the Industrial Commission for appropriate disposition in accordance with this Part."
SECTION 6.13.(b)  G.S. 143B‑426.52(a) reads as rewritten:
"(a)	An individual shall be entitled to compensation as provided for in this Part if a claim is submitted on behalf of that individual in accordance with this Part, or is mailed and postmarked, on or before June 30, 2014, and that individual is subsequently determined by a preponderance of the evidence to be a qualified recipient, except that any competent adult who gave consent is not a qualified recipient unless that individual can show by a preponderance of the evidence that the consent was not informed."
SECTION 6.13.(c)  G.S. 143B‑426.53(i) is repealed.
SECTION 6.13.(d)  G.S. 105‑153.5(b)(9) is repealed.
SECTION 6.13.(e)  Section 6.18(f) of S.L. 2013-360 reads as rewritten:
"SECTION 6.18.(f)  Of the funds appropriated to the Office of Justice for Sterilization Victims, the sum of one hundred thirty thousand dollars ($130,000) is appropriated to the Department of Administration for the 2013‑2014 fiscal year to pay the costs of administering the compensation program for sterilization victims."
SECTION 6.13.(f)  Of the funds appropriated from the General Fund to the Office of Justice for Sterilization Victims, Department of Administration, the sum of one hundred thirty thousand dollars ($130,000) shall be used for the 2014‑2015 fiscal year to pay the costs of administering the compensation program for sterilization victims.
SECTION 6.13.(g)  Section 6.18(g) of S.L. 2013‑360 reads as rewritten:
"SECTION 6.18.(g)  Subsection (b) of this section becomes effective for taxable years beginning on or after January 1, 2015. Subsections (e) and (g) of this section are effective when this act becomes law. The remainder of this section becomes effective July 1, 2013. Except for the provisions of subsections (b) and (c) of this section, and the final adjudication of any claims under subsection (a) of this section that are pending on June 30, 2015, this section expires June 30, 2015, and the Office of Justice for Sterilization Victims is abolished."
SECTION 6.13.(h)  G.S. 108A-70.5 is amended by adding a new subsection to read:
"(f)	With regard to any recipient who has received compensation pursuant to Part 30 of Article 9 of Chapter 143B of the General Statutes, the Department shall reduce the amount of any recovery it seeks from the deceased recipient's estate under this section by the amount of the resource disregard provided for in G.S. 143B-426.56(b)(1)."

PART VII. INFORMATION TECHNOLOGY

INFORMATION TECHNOLOGY FUND
SECTION 7.1.  Section 7.1 of S.L. 2013‑360 reads as rewritten:
"SECTION 7.1.  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 2013‑2014	FY 2014‑2015

General Fund Appropriation for IT Fund	$6,053,142	$7,608,142
General Fund Appropriation for
Government Data Analytics Center	$3,000,000	$6,417,515
Criminal Justice Law Enforcement Automated Data System
(CJLEADS)	$1,129,488
Interest	$2,200	$2,200
IT Fund Balance, June 30	$0	$2,200

Total Funds Available	$9,055,342	$15,159,545
Appropriations are made from the Information Technology Fund for the 2013‑2015 fiscal biennium as follows:
Information Technology Operations
Criminal Justice Information Network	$189,563	$189,563
Center for Geographic Information and Analysis	$495,338	$495,338
Enterprise Security Risk Management	$864,148	$864,148
Enterprise Project Management Office	$1,473,285	$1,473,285
Architecture and Engineering	$851,986	$851,986
State Portal	$224,741	$224,741
Enterprise Licenses	$33,000	$33,000
Longitudinal Data Board	$5,000
Subtotal Information Technology Operations	$4,132,061	$4,137,061

Information Technology Projects
Government Data Analytics Center	$3,000,000	$6,417,515
CJLEADS	$1,129,488
IT Consolidation	$1,021,081	$1,021,081
Electronic Forms/Digital Signatures	$900,000	$450,000
Enterprise Resource Planning		$2,000,000
Subtotal Information Technology Projects	$4,921,081	$9,018,084

Total	$9,053,142	$15,155,145

Unless a change is approved by the State Chief Information Officer after consultation with the Office of State Budget and Management, funds appropriated to the Information Technology Fund shall be spent only as specified in this section. Changes shall not result in any degradation to the information technology operations or projects listed in this section for which the funds were originally appropriated.
Any changes to the specified uses shall be reported immediately in writing to the Chairs of the Joint Legislative Oversight Committee on Information Technology, the Chair and Cochair of the House Appropriations Subcommittee on Information Technology, and the Fiscal Research Division.
Funding appropriated to the IT Fund for Enterprise Resource Planning (ERP) shall be used by the State Chief Information Officer, in conjunction with the NC Government Efficiency and Reform Initiative (NC GEAR) and the State Controller, to develop a strategic implementation plan for a Statewide Enterprise Resource Planning System. The plan shall be submitted to the Joint Legislative Oversight Committee on Information Technology by January 31, 2015."

INFORMATION TECHNOLOGY INTERNAL SERVICE FUND/RATE SETTING
SECTION 7.2.  Section 7.2 of S.L. 2013‑360 reads as rewritten:
"…
"SECTION 7.2.(b)  IT Internal Service Fund. – For the 2014‑2015 fiscal year, receipts for the IT Internal Service Fund shall not exceed one hundred ninety million dollars ($190,000,000), excluding a 60‑day balance for contingencies. Rates approved by the Office of State Budget and Management (OSBM) to support the IT Internal Service Fund shall be based on this fund limit. In the event the Fund exceeds the required limit, rates shall be adjusted within 30 days. In the event that an increase in receipts for the IT Internal Service Fund is required, the Office of Information Technology services may only implement the increase after consultation with the Joint Legislative Commission on Governmental Operations.
"SECTION 7.2.(c)  Rate Setting. – By October 31, 2014, the State Chief Information Officer shall establish consistent, fully transparent, easily understandable rates that reflect industry standards for each service for which any agency is charged. A report explaining the rate structure shall be submitted to the Joint Legislative Commission on Governmental Operations, the Chairs of the Joint Legislative Oversight Committee on Information Technology, the House Appropriations Subcommittee on Information Technology, and the Fiscal Research Division. Rate increases shall require the approval of OSBM and consultation with the Joint Legislative Commission on Governmental Operations. Rate reductions may be implemented following notification of OSBM.
"SECTION 7.2.(c1)  By October 31, 2014, the State Chief Information Officer shall establish rates for use of the Criminal Justice Law Enforcement Automated Data System (CJLEADS) by federal and private entities and users outside the State. These rates shall be reported to the Joint Legislative Oversight Committee on Information Technology.
…."

INFORMATION TECHNOLOGY RESERVE FUND
SECTION 7.3.  Section 7.3 of S.L. 2013‑360 reads as rewritten:
"SECTION 7.3.(a)  Funds in the Information Technology (IT) Reserve Fund for the 2013‑2014 fiscal year consist of the sum of twenty‑eight million dollars ($28,000,000) appropriated from the General Fund. Funds in the IT Reserve Fund for the 2014‑2015 fiscal year consist of the sum of twenty-one million two hundred forty thousand sixty‑seven dollars ($21,240,067) appropriated from the General Fund.
"SECTION 7.3.(b)  The IT Reserve Fund shall be established in the Office of the State Chief Information Officer (CIO). It shall be interest‑bearing and nonreverting. The State CIO shall follow established procedures for project approval. Appropriations are made from the IT Reserve Fund for the 2013‑2015 fiscal biennium as follows:
	FY 2013‑2014	FY 2014‑2015
Prepare/Focus	$	250,000	$	0
Plan	1,570,806	2,239,512
Build	1,507,353 1,507,353
Remediation	1,100,000	600,000
Security	1,571,394	392,788
Network Simplification	0	4,832,485
Desktop Remediation	17,000,0006,944,968
Desktop Software Licenses	4,015,000	2,300,000
Operate	985,447	185,446
Customer Data	0	0
Secure Sign‑On	0	2,237,515
Innovation Center	0	0
"SECTION 7.3.(c)  By September 15, 2014, the State Chief Information Officer shall update the time line for completing initiatives included in the IT Reserve Fund to the Joint Legislative Oversight Committee on Information Technology, the House Appropriations Subcommittee on Information Technology, and the Fiscal Research Division. The time line shall include the dates for completion of a strategic plan, an enterprise architecture, a new business case methodology, and implementation of a new project management process. Not later than the dates specified in the time line, each of these documents shall be submitted to the Joint Legislative Oversight Committee on Information Technology, the House Appropriations Subcommittee on Information Technology, and the Fiscal Research Division.
"SECTION 7.3.(d)  Unless a change is approved by the State Chief Information Officer after consultation with the Office of State Budget and Management, funds appropriated to the IT Reserve Fund shall be spent only as specified in this section."

INFORMATION TECHNOLOGY OPERATIONS
SECTION 7.4.(a)  Section 7.4 of S.L. 2013‑360 is amended by adding a new subsection to read:
"SECTION 7.4.(a1)  Unless an exception is granted in writing by the State Chief Information Officer, any new equipment purchased by State agencies to replace equipment currently housed in State agency data centers and any equipment purchased to provide new data center capabilities for State agencies shall be installed in Office of Information Technology Services data centers. Prior to purchasing any new equipment, State agencies shall coordinate with the Office of the State Chief Information Officer and the Office of Information Technology Services to ensure ITS has the capability to support planned equipment purchases."
SECTION 7.4.(b)  Section 7.4(c) of S.L. 2013‑360 reads as rewritten:
"SECTION 7.4.(c)  Restructuring Plan. – The State CIO shall update the plan to restructure the State's IT operations for the most effective and efficient utilization of resources and capabilities. The plan shall include identifying, documenting, and providing a framework for developing and implementing the education and training required for all State information technology personnel, including information technology contracting professionals. Each State agency, department, and institution, and The University of North Carolina, shall (i) cooperate fully with the Office of the State CIO during the review and assessment phase of restructuring plan development and (ii) provide to the State CIO all information needed to carry out the purposes of this subsection. By December 1, 2014, the State CIO shall present the plan to the Joint Legislative Oversight Committee on Information Technology, along with any recommended legislative proposals to the 2015 General Assembly."

TAX INFORMATION MANAGEMENT SYSTEM CHANGES
SECTION 7.5.(a)  The public‑private partnerships previously initiated to develop and implement the Tax Information Management Systems (TIMS) are no longer authorized. Effective July 1, 2014, all funding for the TIMS project must be appropriated by the General Assembly to the Department of Revenue for each initiative comprising the project, including all funding generated by the benefits stream.
SECTION 7.5.(b)  Section 7.17 of S.L. 2013‑360, as amended by Section 2.1 of S.L. 2013‑363, reads as rewritten:
"SECTION 7.17.(a)  Additional Public‑Private Partnership. – The Secretary of Revenue may enter into an additional public‑private arrangement in order to expand the implementation of the Tax Information Management System (TIMS). All such arrangements will terminate January 31, 2014.

	
"
"SECTION 7.17.(c)  Management/Performance Measurement. – The Secretary of Revenue shall establish a measurement process to determine the increased revenue or cost‑savings attributed to contracts authorized by this section. To accomplish this, the Secretary shall consult subject matter experts in the Department of Revenue, in other governmental units, and in the private sector, as necessary. At a minimum, the measurement process shall include all of the following:
(1)	Calculation of a revenue baseline against which the increased revenue attributable to the project is measured and a cost‑basis baseline against which the cost‑savings resulting from the project are measured.
(2)	Periodic evaluation to determine whether the baselines need to be modified based on significant measurable changes in the economic environment.
(3)	Monthly calculation of increased revenue and cost‑savings attributable to contracts executed under this section.
"
"
"SECTION 7.17.(f)  Expert Counsel Required. – Notwithstanding G.S. 114‑2.3, the Department of Revenue shall engage the services of private counsel with the pertinent information technology and computer law expertise to negotiate and review contracts entered into under this section.
"
"

	
	
"SECTION 7.17.(i)  Information Technology Project Oversight. – Contracts pertaining to TIMS as authorized by this section shall be subject to existing State information technology project oversight laws and statutes, and the project management shall comply with all statutory requirements and other criteria established by the State Chief Information Officer and the Office of State Budget and Management for information technology projects. The State Chief Information Officer and the Office of State Budget and Management shall immediately report any failure to do so to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the House of Representatives and Senate Committees on Appropriations, and the Fiscal Research Division.
…."
SECTION 7.5.(c)  Section 6A.5 of S.L. 2011‑145, as amended by Section 6A.3(j) of S.L. 2012‑142 and Section 7.17(j) of S.L. 2013‑360, reads as rewritten:
"…
"SECTION 6A.5.(c)  There is established within the Department of Revenue the Oversight Committee for reviewing and approving the benefits measurement methodology and calculation process. The Oversight Committee shall review and approve in writing all contracts, including change orders, amendments to contracts, and addendums to contracts, before they are executed under this section. This shall include (i) details of each public‑private contract, (ii) the benefits from each contract, and (iii) a comprehensive forecast of the benefits of using public‑private agreements to implement TIMS and the additional PDP components, including the measurement process established for the Secretary of Revenue. The Oversight Committee shall approve all of the fund transfers for this project. Within five days of entering into a contract, the Department shall provide copies of each contract and all associated information to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the House of Representatives and Senate Committees on Appropriations, and the Fiscal Research Division.
The members of the Committee shall include the following:
(1)	The Director of the Office of State Budget and Management;
(2)	The Secretary of the Department of Revenue;
(3)	The State Chief Information Officer;
(4)	Two persons appointed by the Governor;
(5)	One member of the general public having expertise in information technology appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives; and
(6)	One member of the general public having expertise in economic and revenue forecasting appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate.
The State Budget Director shall serve as chair of the Committee. The Committee shall set its meeting schedule and adopt its rules of operation by majority vote. A majority of the members constitutes a quorum. Vacancies shall be filled by the appointing authority. Administrative support staff shall be provided by the Department of Revenue. Members of the Committee shall receive reimbursements for subsistence and travel expenses as provided by Chapter 138 of the General Statutes. The Committee shall terminate on June 30, 2018.
The Department shall provide copies of the minutes of each meeting and all associated information to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the House of Representatives Appropriations Committee, the Chairs of the Senate Committee on Appropriations/Base Budget, and the Fiscal Research Division.
"SECTION 6A.5.(c1)  The TIMS Oversight Committee created by Section 6A.5(c) of this act shall do all of the following:
(1)	Approve and monitor management performance measures.
(2)	Approve project initiatives.
(3)	Approve project changes.
(4)	Provide project oversight.
(5)	Review funding requirements and project expenditures.
(6)	Provide TIMS project recommendations to the Department of Revenue and the General Assembly.
(7)	Ensure Department of Revenue compliance with all applicable laws.
"SECTION 6A.5.(c2)  Beginning August 1, 2014, and quarterly thereafter, the Department of Revenue shall submit detailed quarterly reports to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the Senate Appropriations Committee on General Government and Information Technology, the Chairs of the House Appropriations Subcommittee on General Government, the Chair of the House Appropriations Subcommittee on Information Technology, and the Fiscal Research Division. At a minimum, the reports shall include all of the following:
(1)	Project status, to include any issues identified by the Enterprise Project Management Office.
(2)	Comparison of project status to the time line, with an explanation of any differences.
(3)	Any changes in project cost.
(4)	Actual expenditures to date.
(5)	Any variances from projected expenditures and the reasons for the variance.
(6)	Any potential funding shortfalls and their impact.
(7)	Any issues identified by the Department of Revenue, with a corrective action plan and a time line for resolving the issues.
(8)	Impact of any issues identified on the project schedule.
(9)	Impact of any issues identified on project cost.
(10)	Any changes to the project scope.
(11)	Any change requests submitted to project vendors and the cost of the changes."

GOVERNMENT DATA ANALYTICS CENTER/BUSINESS INTELLIGENCE
SECTION 7.6.(a)  G.S. 143B‑426.38A reads as rewritten:
"§ 143B‑426.38A.  Government Data Analytics Center; State data‑sharing requirements.
(a)	State Government Data Analytics. – The State shall initiate across State agencies, departments, and institutions a data integration and data‑sharing initiative that is not intended to replace transactional systems but is instead intended to leverage the data from those systems for enterprise‑level State business intelligence. For the purposes of this section, the term "business intelligence (BI)" means the process of collecting, organizing, sharing, and analyzing data through integrated data management, reporting, visualization, and advanced analytics to discover patterns and other useful information that will allow policymakers and State officials to make more informed decisions. The term also includes:
(1)	Broad master data management capabilities such as data integration, data quality and enrichment, data governance, and master data management to collect, reference, and categorize information from multiple sources.
(2)	Self‑service query and reporting capabilities to provide timely, relevant, and actionable information to business users delivered through a variety of interfaces, devices, or applications based on their specific roles and responsibilities.
All State agency business intelligence requirements, including any planning or development efforts associated with creating BI capability, shall be implemented through the GDAC. The State Chief Information Officer shall ensure that State agencies use the GDAC for agency business intelligence requirements.
...
	
...."
SECTION 7.6.(b)  Of the funds appropriated to the Information Technology Fund, the sum of six million four hundred seventeen thousand five hundred fifteen dollars ($6,417,515) for the 2014‑2015 fiscal year shall be used to support the GDAC and NCFACTS. Of these funds, the sum of one million four hundred seventeen thousand five hundred fifteen dollars ($1,417,515) shall be used in each fiscal year of the 2013‑2015 fiscal biennium for Office of State Controller internal costs. An additional one million one hundred twenty‑nine thousand four hundred eighty‑eight dollars ($1,129,488) for the 2014‑2015 fiscal year shall be used to support the Criminal Justice Law Enforcement Automated Data System.

VEHICLE MANAGEMENT
SECTION 7.11.(a)  Section 7.16(e) of S.L. 2013‑360 reads as rewritten:
"SECTION 7.16.(e)  Until December 31, 2015, no State or local governmental entity or officer may procure or operate an unmanned aircraft system or disclose personal information about any person acquired through the operation of an unmanned aircraft system unless the State CIO approves an exception specifically granting disclosure, use, or purchase. Any exceptions to the prohibition in this subsection shall be reported immediately to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. The following definitions apply in this section:
(1)	"Unmanned aircraft" means an aircraft that is operated without the possibility of human intervention from within or on the aircraft.
(2)	"Unmanned aircraft system" means an unmanned aircraft and associated elements, including communication links and components that control the unmanned aircraft that are required for the pilot in command to operate safely and efficiently in the national airspace system."
SECTION 7.11.(b)  If Section 7.16(e) of S.L. 2013‑360 is repealed during the 2014 Session of the 2013 General Assembly, then Section 7.16 of S.L. 2013-360 is amended by adding the following new subsection:
"SECTION 7.16.(g)  Until December 31, 2015, no State or local governmental entity or officer may procure or operate an unmanned aircraft system or disclose personal information about any person acquired through the operation of an unmanned aircraft system unless the State CIO approves an exception specifically granting disclosure, use, or purchase. Any exceptions to the prohibition in this subsection shall be reported immediately to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division. The following definitions apply in this section:
(1)	"Unmanned aircraft" means an aircraft that is operated without the possibility of human intervention from within or on the aircraft.
(2)	"Unmanned aircraft system" means an unmanned aircraft and associated elements, including communication links and components that control the unmanned aircraft that are required for the pilot in command to operate safely and efficiently in the national airspace system."

USE OF MOBILE COMMUNICATIONS DEVICES
SECTION 7.12.(a)  G.S. 147‑33.91(a) reads as rewritten:
"(a)	With respect to State agencies, the State Chief Information Officer shall exercise general coordinating authority for all telecommunications and mobile electronic communications matters relating to the internal management and operations of those agencies. In discharging that responsibility, the State Chief Information Officer, in cooperation with affected State agency heads, may:
…
(14)	Monitor the use of mobile electronic communications devices within State agencies and maintain information on the following:
a.	The total number of devices issued by each agency.
b.	The total cost of mobile devices issued by each agency.
c.	The number and cost of new devices issued.
d.	The contracts used to obtain the devices."
SECTION 7.12.(b)  Section 7.18 of S.L. 2013‑360 is repealed.

STATE PORTAL
SECTION 7.13.(a)  Section 7.22 of S.L. 2013‑360 reads as rewritten:
"SECTION 7.22.  The State Chief Information Officer (SCIO) shall develop a plan to implement an electronic portal that makes obtaining information, conducting online transactions, and communicating with State agencies more convenient for members of the public. The SCIO shall report to the Joint Legislative Oversight Committee on Information Technology on the details of the plan prior to implementation. The plan shall contain all of the following:
(1)	A detailed description for development and implementation of the portal, to include a list of anticipated applications to be implemented during the State fiscal years of 2013‑2017.
(2)	A description of how the portal will be implemented, including the use of outside vendors, detailed information on vendor participation, and potential costs.
(3)	Detailed information on the anticipated total cost of ownership of the portal and any applications proposed for implementation during the State fiscal years of 2013‑2017, including the amount of any payments to be made to any vendors supporting the project for each application and the portal as a whole.
(4)	A funding model that limits the costs to the State.
(5)	If outsourced, a detailed, fully executable plan to return portal operations to the State, with associated costs.
(6)	A provision requiring that any fees to support the operation of the portal must be authorized by the State Chief Information Officer."
Funding appropriated to the IT Fund for Enterprise Resource Planning (ERP) shall be used by the State Chief Information Officer, in conjunction with the NC Government Efficiency and Reform Initiative (NC GEAR) and the State Controller, to develop a strategic implementation plan for a Statewide Enterprise Resource Planning System. The plan shall be submitted to the Joint Legislative Oversight Committee on Information Technology by January 31, 2015."

Information Technology Services/Employees Exempted from state human resources act
SECTION 7.17.  G.S. 126‑5(c1) is amended by adding a new subdivision to read:
"(c1)	Except as to the provisions of Articles 6 and 7 of this Chapter, the provisions of this Chapter shall not apply to:
…
(31)	Employees of the Office of Information Technology Services hired on or after July 1, 2014."

ITS/budget and reporting information technology expenditures
SECTION 7.18.  The Office of the State Chief Information Officer shall complete implementation of a Budget and Reporting Information Technology Expenditures (BRITE) tool. By December 15, 2014, the State Chief Information Officer shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the status of the implementation within the Office of Information Technology Services and the potential for expansion of the BRITE tool to other State agencies.

PART VIII. PUBLIC SCHOOLS

FUNDS FOR CHILDREN WITH DISABILITIES
SECTION 8.1.  The State Board of Education shall allocate additional funds for children with disabilities on the basis of three thousand seven hundred sixty‑eight dollars and eleven cents ($3,768.11) per child for the 2014‑2015 fiscal 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 its 2014‑2015 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 8.2.  The State Board of Education shall allocate additional funds for academically or intellectually gifted children on the basis of one thousand two hundred thirty‑nine dollars and sixty‑five cents ($1,239.65) per child for the 2014‑2015 fiscal year. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2014‑2015 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. 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.

CERTAIN EDUCATION‑BASED SALARY SUPPLEMENTS
SECTION 8.3.  Section 8.22 of S.L. 2013‑360 reads as rewritten:
"SECTION 8.22.(a)  Notwithstanding Section 35.11 of this act, only the following teachers and instructional support personnel shall be paid on the "M" salary schedule or receive a salary supplement for academic preparation at the six‑year degree level or at the doctoral degree level for the 2014‑2015 school year and subsequent school years:
(1)	Certified school nurses and instructional support personnel in positions for which a master's degree is required for licensure.
(2)	Teachers and instructional support personnel who were paid on that salary schedule or received that salary supplement prior to the 2014‑2015 school year.
(3)	Teachers and instructional support personnel who (i) complete a degree at the master's, six‑year, or doctoral degree level for which they completed at least one course prior to July 1, 2013, and (ii) would have qualified for the salary supplement pursuant to State Board of Education policy, TCP‑A‑006, as it was in effect on June 30, 2013.
(4)	Teachers and instructional support personnel who do not qualify under subdivisions (1), (2), and (3) of this subsection but who spend at least seventy percent (70%) of their work time in either of the following:
a.	Classroom instruction related to their graduate academic preparation in their field or subject area within their area of licensure. Most of the teachers' remaining time shall be spent in one or more of the following:
1.	Mentoring teachers.
2.	Performing demonstration lessons for teachers.
3.	Writing curricula.
4.	Developing and leading staff development programs for teachers.
b.	Work within the employee's area of graduate academic preparation.
"SECTION 8.22.(b)  Beginning with the 2014‑2015 fiscal year and subsequent fiscal years thereafter, for teachers who are paid on the "M" salary schedule under subdivision (4) of subsection (a) of this section, determination of whether teachers and instructional support personnel shall be paid on the "M" salary schedule or receive a salary supplement for academic preparation shall take place on an annual basis. Teachers and instructional support personnel may be moved off of the "M" salary schedule or discontinue receiving salary supplements if they are not meeting the requirements of subdivision (4) of subsection (a) of this section in that year.
"SECTION 8.22.(c)  Unless an individual otherwise qualifies under subdivision (2) or (3) of subsection (a) of this section, teachers and instructional support personnel who earn an advanced degree in school administration shall not be paid on the "M" salary schedule or receive a salary supplement for academic preparation unless they serve as an assistant principal or principal."

FUNDS FOR SMALL COUNTY SCHOOL ADMINISTRATIVE UNITS
SECTION 8.4.  Section 8.4 of S.L. 2013‑360, as amended by Section 3.11 of S.L. 2013‑363, reads as rewritten:
"SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
…
"SECTION 8.4.(d)  Allotment Schedule for the 2014‑2015 Fiscal Year. – Except as otherwise provided in subsections (e) and (g) of this section, for the 2014‑2015 fiscal year, each eligible county school administrative unit shall receive a dollar allotment according to the following schedule:

	
	
	Allotted ADM	Small County Allotment
	0‑600	$ 1,710,000
	601‑1,300	$ 1,820,000
	1,301‑1,700	$ 1,548,700
	1,701‑2,000	$ 1,600,000
	2,001‑2,300	$ 1,560,000
	2,301‑2,600	$ 1,470,000
	2,601‑2,800	$ 1,498,000
	2,801‑3,200	$ 1,548,000
"SECTION 8.4.(e)  Phase‑Out Provisions for the 2014‑2015 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (d) of this section in the 2014‑2015 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local administrative units shall be reduced in equal increments in each of the five years after the local administrative unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local administrative unit becomes ineligible.
Allotments for eligible local school administrative units shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2013‑2014 in any fiscal year.
"
…."

BUDGET REDUCTIONS/DEPARTMENT OF PUBLIC INSTRUCTION
SECTION 8.6.  Section 8.6 of S.L. 2013‑360 reads as rewritten:
"SECTION 8.6.(a)  Notwithstanding G.S. 143C‑6‑4, the Department of Public Instruction may, after consultation with the Office of State Budget and Management and the Fiscal Research Division, reorganize, if necessary, to implement the budget reductions for the 2013‑2015 fiscal biennium. Consultation shall occur prior to requesting budgetary and personnel changes through the budget revision process. The Department shall provide a current organization chart in the consultation process and shall report to the Joint Legislative Commission on Governmental Operations on any reorganization.
"SECTION 8.6.(b)  In implementing budget reductions for the 2014‑2015 fiscal year, the Department of Public Instruction shall make no reduction to funding or positions for the North Carolina Center for Advancement of Teaching, the Eastern North Carolina School for the Deaf, the North Carolina School for the Deaf, and the Governor Morehead School and shall make no reduction in funding to any of the following entities:
(1)	Communities in Schools of North Carolina, Inc.
(2)	Teach for America, Inc.
(3)	Beginnings For Parents of Children Who Are Deaf or Hard of Hearing, Inc."

CLARIFY CARRYFORWARD FOR READING CAMPS
SECTION 8.7.(a) Section 8.16 of S.L. 2013‑360 reads as rewritten:
"SECTION 8.16. Funds appropriated for the 2013‑2015 fiscal biennium and subsequent fiscal years for summer reading camps as defined in G.S. 115C‑83.3(9) shall not revert at the end of each fiscal year but shall remain available for expenditure until August 31 of the subsequent fiscal year."
SECTION 8.7.(b)  If House Bill 230, 2013 Regular Session, becomes law, then Section 8.16 of S.L. 2013‑360, as amended by subsection (a) of this section, reads as rewritten:
"SECTION 8.16. Funds appropriated for the 2013‑2015 fiscal biennium and subsequent fiscal years for reading camps as defined in G.S. 115C‑83.3(9) shall not revert at the end of each fiscal year but shall remain available for expenditure until October 31 of the subsequent fiscal year."
SECTION 8.7.(c)  This section becomes effective June 30, 2014.

CARRYFORWARD FOR PANIC ALARM GRANTS
SECTION 8.8.(a)  Section 8.37 of S.L. 2013‑360 is amended by adding a new subsection to read:
"SECTION 8.37.(b1)  Grants to local school administrative units shall not revert at the end of the fiscal year but shall remain available for expenditure until the end of the subsequent fiscal year."
SECTION 8.8.(b)  This section becomes effective June 30, 2014.

STATE BOARD OF EDUCATION NOTIFICATION TO THE GENERAL ASSEMBLY OF FEDERAL GRANT APPLICATIONS
SECTION 8.9.  G.S. 115C‑12 is amended by adding a new subdivision to read:
"§ 115C‑12.  Powers and duties of the Board generally.
The general supervision and administration of the free public school system shall be vested in the State Board of Education. The State Board of Education shall establish policy for the system of free public schools, subject to laws enacted by the General Assembly. The powers and duties of the State Board of Education are defined as follows:
…
(42)	To notify the General Assembly of federal grant applications. – The State Board of Education shall provide written notification to the General Assembly in accordance with G.S. 120‑29.5 and to the Fiscal Research Division of its intent to apply for any federal grant prior to submitting the grant application. The notice shall include details about the grant and a brief summary of any anticipated policy implications of accepting the grant."

PROPERTY INSURANCE SYSTEM FOR CHARTER SCHOOLS
SECTION 8.10.  G.S. 115C‑533 reads as rewritten:
"§ 115C‑533.  Duty of State Board to operate insurance system.
The State Board of Education shall have the duty to manage and operate a system of insurance for public school property. The State Board may offer a system of property insurance to any charter schools approved pursuant to G.S. 115C‑238.29D."

CLARIFY MILITARY SERVICE CREDIT FOR NEWLY HIRED EDUCATORS
SECTION 8.12.  G.S. 115C‑302.3(a) reads as rewritten:
"(a)	The State Board of Education shall establish rules for awarding credit for salary purposes to principals, assistant principals, and teachers, who (i) served in the Armed Forces of the United States; (ii) have retired or who have received an Honorable Discharge; and (iii) have not been previously employed by a public school located in North Carolina. The rules shall include the following provisions:
(1)	One full year of experience credit shall be awarded for each year of full‑time relevant nonteaching work experience completed (i) while on active military duty in the Armed Forces of the United States and (ii) after earning a bachelor's degree.
(2)	One full year of experience credit shall be awarded for each two years of full‑time relevant nonteaching work experience completed (i) while on active duty in the Armed Forces of the United States and (ii) before earning a bachelor's degree.
(3)	One full year of experience credit shall be awarded for every two years of full‑time instructional or leadership duties while on active military duty in the Armed Forces of the United States, regardless of academic degree held while in instruction or leadership roles."

funds for advanced placement/international baccalaureate courses
SECTION 8.17.  Section 8.27(d) of S.L. 2013‑360 reads as rewritten:
"SECTION 8.27.(d)  Of the funds appropriated to the Department of Public Instruction to implement the requirements of this section, ten million eight hundred thirty‑one thousand one hundred eighty‑four dollars ($10,831,184) for the 2014‑2015 fiscal year shall be used to fund fees for testing in advanced courses and one million five hundred thousand dollars ($1,500,000) for each fiscal year shall be used by the North Carolina Advanced Placement Partnership to carry out its responsibilities as set forth in this section. Funding appropriated for professional development may be used by the State Board of Education to contract with an independent evaluator to assess the implementation and impact of advanced course programs in North Carolina. For the purposes of this section, the term "advanced courses" means an Advanced Placement or International Baccalaureate Diploma Programme course.
If the funds appropriated for the 2014‑2015 fiscal year and subsequent fiscal years are insufficient, the Department of Public Instruction may use other funds within the State Public School Fund for these purposes."

JLEOC Study of NCVPS Revenue
SECTION 8.18.(a)  The Joint Legislative Education Oversight Committee shall study the potential generation of revenue by the North Carolina Virtual Public School Program (NCVPS) by selling virtual course seats in under‑subscribed courses to out‑of‑state students, selling training courses to in‑State and out‑of‑state educators, and selling packages of educational materials to out‑of‑state education entities. The Committee shall consider issues related to authorizing NCVPS to expand as a for‑profit online education provider, including intellectual property barriers, the use of public-private partnerships for expansion of marketing outside of the State, potential fiscal benefits to the State, concerns related to allowing NCVPS to enter the private commercial marketplace as an online education provider, and any other issues the Committee deems relevant.
SECTION 8.18.(b)  The Joint Legislative Education Oversight Committee shall report the results of the study required by subsection (a) of this section, including recommendations for any proposed legislative changes, to the General Assembly prior to the convening of the 2015 General Assembly.

COMPETITIVE GRANTS TO IMPROVE AFTER‑SCHOOL SERVICES
SECTION 8.19.(a)  Of the funds appropriated by this act for the At‑Risk Student Services Alternative School Allotment for the 2014‑2015 fiscal year, the State Board of Education shall use five million dollars ($5,000,000) for the After‑School Quality Improvement Grant Program administered by the Department of Public Instruction. It is the intent of the General Assembly to appropriate five million dollars ($5,000,000) for this purpose in each year of the 2015‑2017 fiscal biennium. Of the funds appropriated for the program, the Department of Public Instruction may use up to two hundred thousand dollars ($200,000) for each fiscal year to administer the program.
SECTION 8.19.(b)  The purpose of the After‑School Quality Improvement Grant Program is to pilot after‑school learning programs for at‑risk students that raise standards for student academic outcomes by focusing on the following:
(1)	Use of an evidence‑based model with a proven track record of success.
(2)	Inclusion of rigorous, quantitative performance measures to confirm their effectiveness during the grant cycle and at the end‑of‑grant cycle.
(3)	Full integration with State performance measures and student academic goals.
(4)	Expansion for wider use in North Carolina.
(5)	Prioritization of science, technology, engineering, and mathematics (STEM) learning opportunities.
(6)	Expansion of student access to learning activities and academic support that strengthen student engagement and leverage community‑based resources, which may include organizations that provide mentoring services and private-sector employer involvement.
SECTION 8.19.(c)  Local school administrative units and nonprofits working in collaboration with local school administrative units may participate in the program, as set forth in this section, and are eligible to receive two‑year grants of up to five hundred thousand dollars ($500,000) a year, based on the proposed number of students served, with an option for a third year of funding. At least seventy percent (70%) of students served by the program must qualify for free or reduced‑price meals.
Grants shall be matched on the basis of three dollars ($3.00) in grant funds for every one dollar ($1.00) in nongrant funds. Matching funds shall not include other State funds. Matching funds may include in‑kind contributions.
SECTION 8.19.(d)  Grant recipients shall report to the Department of Public Instruction after the first year of funding on the progress of the grant, including alignment with State academic standards, data collection for reporting student progress, and other measures, before receiving funding for the next fiscal year. Grant recipients shall report after the second year of funding on key performance data, including statewide test results, attendance rates, and promotion rates. Grant allocations for the third year shall be based on student performance data.
SECTION 8.19.(e)  The Department of Public Instruction shall provide interim reports on the grant program to the Joint Legislative Education Oversight Committee by September 15, 2015, and September 15, 2016, with a final report on the program by September 15, 2017. The final report shall include the final results of the program and recommendations regarding effective after‑school program models, standards, and performance measures based on student performance and the experience of the grant recipients.

Schematic Designs/Emergency Access to Schools
SECTION 8.20.(a)  Section 8.39 of S.L. 2013‑360 is repealed.
SECTION 8.20.(b)  Article 8C of Chapter 115C of the General Statutes is amended by adding new sections to read:
"§ 115C‑105.53.  Schematic diagrams and emergency access to school buildings for local law enforcement agencies.
(a)	Each local school administrative unit shall provide the following to local law enforcement agencies: (i) schematic diagrams, including digital schematic diagrams, and (ii) emergency access to key storage devices such as KNOX® boxes for all school buildings. Local school administrative units shall provide updates of the schematic diagrams to local law enforcement agencies when substantial modifications such as new facilities or modifications to doors and windows are made to school buildings. Local school administrative units shall also be responsible for providing local law enforcement agencies with updated access to school building key storage devices such as KNOX® boxes when changes are made to these boxes or devices.
(b)	The Department of Public Instruction, in consultation with the Department of Public Safety, shall develop standards and guidelines for the preparation and content of schematic diagrams and necessary updates. Local school administrative units may use these standards and guidelines to assist in the preparation of their schematic diagrams.
(c)	Schematic diagrams are not considered a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.
"§ 115C‑105.54.  Schematic diagrams and emergency response information provided to Division of Emergency Management.
(a)	Each local school administrative unit shall provide the following to the Division of Emergency Management (Division) at the Department of Public Safety: (i) schematic diagrams, including digital schematic diagrams, and (ii) emergency response information requested by the Division for the School Risk Management Plan (SRMP) and the School Emergency Response Plan (SERP). Local school administrative units shall also provide updated schematic diagrams and emergency response information to the Division when such updates are made. The Division shall ensure that the diagrams and emergency response information are securely stored and distributed as provided in the SRMP and SERP to first responders, emergency personnel, and school personnel and approved by the Department of Public Instruction.
(b)	The schematic diagrams and emergency response information are not considered a public record as the term "public record" is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6."
SECTION 8.20.(c)  The schematic diagrams referenced in subsection (b) of this section shall be provided to local law enforcement agencies and the Division of Emergency Management at the Department of Public Safety by June 1, 2015.

NBPTS Supplement for instructional coaches in Title I Schools
SECTION 8.21.  G.S. 115C‑296.2(b) reads as rewritten:
"(b)	Definitions. – As used in this subsection:
(1)	A "North Carolina public school" is a school operated by a local board of education, the Department of Health and Human Services, the Division of Adult Correction of the Department of Public Safety, the Division of Juvenile Justice of the Department of Public Safety or The University of North Carolina; a school affiliated with The University of North Carolina; or a charter school approved by the State Board of Education.
(2)	A "teacher" is a person who:
a.	Either:
1.	Is certified to teach in North Carolina; or
2.	Holds a certificate or license issued by the State Board of Education that meets the professional license requirement for NBPTS certification.
b.	Is a State‑paid employee of a North Carolina public school.
c.	Is paid on the teacher salary schedule.
d.	Spends at least seventy percent (70%) of his or her work time:
1.	In classroom instruction, if the employee is employed as a teacher. Most of the teacher's remaining time shall be spent in one or more of the following: mentoring teachers, doing demonstration lessons for teachers, writing curricula, developing and leading staff development programs for teachers; 
2.	In work within the employee's area of certification or licensure, if the employee is employed in an area of NBPTS certification other than direct classroom instruction; or
3.	As an instructional coach, as classified by the Department of Public Instruction, in a Title I school. As used in this sub‑sub‑subdivision, a Title I school is a school identified under Part A of Title I of the Elementary and Secondary Education Act of 1965, as amended."

JLEOC Study diagnostic reading Assessments for Read to Achieve
SECTION 8.22.(a)  The Joint Legislative Education Oversight Committee shall study the formative and diagnostic reading assessments required by the Department of Public Instruction to meet the provisions of the Read to Achieve Program. The study shall examine whether there are additional options for formative and diagnostic reading assessments that would provide local school administrative units with additional flexibility in meeting the requirements of Read to Achieve, and if fewer assessment instruments or data-gathering activities could be used. When considering additional assessments, the Committee shall review the assessments to see if they could be used with the Education Value‑Added Assessment System (EVAAS) in analyzing student growth for the purposes of the teacher evaluation instrument for kindergarten through second grade teachers. The Committee shall also identify other assessments that may be used in analyzing student growth for the purposes of the teacher evaluation instrument for kindergarten through second grade teachers. In identifying additional options for both formative and diagnostic reading assessments, and other assessments for analyzing student growth for the purposes of the teacher evaluation, the Committee shall consider at least the following factors:
(1)	The time required for conducting assessments.
(2)	The level of integration of assessment results with instructional support for teachers and students.
(3)	The timeliness in reporting assessment results to teachers and administrators.
(4)	The ability to provide timely and useful assessment results to parents and guardians.
SECTION 8.22.(b)  The Joint Legislative Education Oversight Committee shall report the results of the study required by subsection (a) of this section to the General Assembly prior to the convening of the 2015 General Assembly.

Supply of EMERGENCY EPINEPHRINE AUTO‑INJECTORS ON SCHOOL PROPERTY
SECTION 8.23.(a)  Article 25A of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑375.2A.  School supply of epinephrine auto‑injectors.
(a)	A local board of education shall provide for a supply of emergency epinephrine auto‑injectors on school property and at school‑sponsored events on school grounds for use by trained school personnel to provide emergency medical aid to persons suffering from an anaphylactic reaction. Each school shall store in a secure but easily accessible location a minimum of two epinephrine auto‑injectors. For purposes of this section, "school property" does not include transportation to or from school.
(b)	For the purposes of this section and G.S. 115C‑375.2, "epinephrine auto‑injector" means a disposable drug delivery system with a spring‑activated, concealed needle that is designed for emergency administration of epinephrine to provide rapid, convenient first aid for persons suffering a potentially fatal reaction to anaphylaxis.
(c)	The principal shall designate one or more school personnel, as part of the medical care program under G.S. 115C‑375.1, to receive initial training and annual retraining from a school nurse or qualified representative of the local health department regarding the storage and emergency use of an epinephrine auto‑injector. Notwithstanding any other provision of law to the contrary, the school nurse or other designated school personnel who has received training under this subsection shall obtain a prescription for epinephrine auto‑injectors from a physician, physician assistant, or nurse practitioner of the local health department serving the area in which the local school administrative unit is located.
(d)	The principal shall collaborate with appropriate school personnel to develop an emergency action plan for the use of epinephrine auto‑injectors in an emergency. The plan shall include at least the following components:
(1)	Standards and procedures for the storage and emergency use of epinephrine auto‑injectors by trained school personnel.
(2)	Techniques for recognizing symptoms of anaphylaxis.
(3)	Emergency follow‑up procedures, including calling emergency services and contacting a student's parent and physician.
(4)	Instruction and certification in cardiopulmonary resuscitation.
(e)	A supply of emergency epinephrine auto‑injectors provided in accordance with this section shall not be used as the sole medication supply for students known to have a medical condition requiring the availability or use of an epinephrine auto‑injector. Those students may be authorized to possess and self‑administer their asthma medication on school property under G.S. 115C‑375.2.
(f)	A local board of education, its members, employees, designees, agents, or volunteers, and a physician, physician assistant, or nurse practitioner of the local health department shall not be liable in civil damages to any party for any act authorized by this section or for any omission relating to that act unless that act or omission amounts to gross negligence, wanton conduct, or intentional wrongdoing."
SECTION 8.23.(b)  G.S. 115C‑238.29F(a) reads as rewritten:
"(a)	Health and Safety Standards. – A charter school shall meet the same health and safety requirements required of a local school administrative unit. The Department of Public Instruction shall ensure that charter schools provide parents and guardians with information about meningococcal meningitis and influenza and their vaccines at the beginning of every school year. This information shall include the causes, symptoms, and how meningococcal meningitis and influenza are spread and the places where parents and guardians may obtain additional information and vaccinations for their children.
The Department of Public Instruction shall also ensure that charter schools provide parents and guardians with information about cervical cancer, cervical dysplasia, human papillomavirus, and the vaccines available to prevent these diseases. This information shall be provided at the beginning of the school year to parents of children entering grades five through 12. This information shall include the causes and symptoms of these diseases, how they are transmitted, how they may be prevented by vaccination, including the benefits and possible side effects of vaccination, and the places where parents and guardians may obtain additional information and vaccinations for their children.
The Department of Public Instruction shall also ensure that charter schools provide students in grades seven through 12 with information annually on the preventable risks for preterm birth in subsequent pregnancies, including induced abortion, smoking, alcohol consumption, the use of illicit drugs, and inadequate prenatal care.
The Department of Public Instruction shall also ensure that charter schools provide students in grades nine through 12 with information annually on the manner in which a parent may lawfully abandon a newborn baby with a responsible person, in accordance with G.S. 7B‑500.
The Department of Public Instruction shall also ensure that the guidelines for individual diabetes care plans adopted by the State Board of Education under G.S. 115C‑12(31) are implemented in charter schools in which students with diabetes are enrolled and that charter schools otherwise comply with the provisions of G.S. 115C‑375.3.
The Department of Public Instruction shall ensure that charter schools comply with G.S. 115C‑375.2A. The board of directors of a charter school shall provide the school with a supply of emergency epinephrine auto‑injectors necessary to carry out the provisions of G.S. 115C‑375.2A."
SECTION 8.23.(c)  G.S. 115C‑238.66(7) reads as rewritten:
"(7)	Health and safety. – The board of directors shall require that the regional school meet the same health and safety standards required of a local school administrative unit.
The Department of Public Instruction shall ensure that regional schools comply with G.S. 115C‑375.2A. The board of directors of a regional school shall provide the school with a supply of emergency epinephrine auto‑injectors necessary to carry out the provisions of G.S. 115C‑375.2A."
SECTION 8.23.(d)  By September 1, 2014, the North Carolina Board of Pharmacy, in consultation with the State Board of Education, shall adopt rules addressing the authorization for school personnel to obtain a prescription for epinephrine for emergency health circumstances in public schools in accordance with G.S. 115C‑375.2A, as enacted by this section.
SECTION 8.23.(e)  Subsections (a) through (c) of this section become effective October 1, 2014.

PERMIT LOCAL BOARDS OF EDUCATION TO use STATE FUNDS FOR SUPPLEMENTAL SALARIES AND DIFFERENTIAL PAY FOR SCHOOL PERSONNEL
SECTION 8.24.  G.S. 115C‑105.25 reads as rewritten:
"§ 115C‑105.25.  Budget flexibility.
(a)	Consistent with improving student performance, a local board shall provide maximum flexibility to schools in the use of funds to enable the schools to accomplish their goals.
(a1)	Except as otherwise provided in subsection (b) of this section, the State Board of Education shall permit local boards of education to transfer, at the discretion of the local board, any available State funds into an allotment category to provide supplemental salaries and differential pay for school personnel.
…."

Opportunity Scholarship Grant Clarifications
SECTION 8.25.(a)  G.S. 115C‑562.2(a) reads as rewritten:
"(a)	The Authority shall make available no later than February 1 annually applications to eligible students for the award of scholarship grants to attend any nonpublic school. Information about scholarship grants and the application process shall be made available on the Authority's Web site. Beginning March 15, the Authority shall begin awarding scholarship grants according to the following criteria:
(1)	First priority shall be given to eligible students who received a scholarship grant during the previous school year if those students have applied by March 1.
…."
SECTION 8.25.(b)  G.S. 115C‑562.2 is amended by adding a new subsection to read:
"(e)	Scholarship applications and personally identifiable information related to eligible students receiving scholarship grants shall not be a public record under Chapter 132 of the General Statutes. For the purposes of this section, personally identifiable information means any information directly related to a student or members of a student's household, including the name, birthdate, address, social security number, telephone number, e-mail address, financial information, or any other information or identification number that would provide information about a specific student or members of a specific student's household."
SECTION 8.25.(c)  G.S. 115C‑562.3(a) reads as rewritten:
"(a)	The Authority may seek verification of information on any application for scholarship grants from eligible students. The Authority shall select and verify six percent (6%) of applications annually, including those with apparent errors on the face of the application. The Authority shall establish rules for the verification process and may use the federal verification requirements process for free and reduced‑price lunch applications as guidance for those rules. If a household fails to cooperate with verification efforts, the Authority shall revoke the award of the scholarship grant to the eligible student."
SECTION 8.25.(d)  G.S. 115C‑562.5 is amended by adding a new subsection to read:
"(c1)	A nonpublic school shall not discriminate with respect to the categories listed in 42 U.S.C. § 2000d, as that statute read on January 1, 2014."
SECTION 8.25.(d1)  G.S. 115C‑562.5(a)(2) reads as rewritten:
"(a)	A nonpublic school that accepts eligible students receiving scholarship grants shall comply with the following:
…
(2)	Provide to the Authority a criminal background check conducted for the staff member with the highest decision‑making authority, as defined by the bylaws, articles of incorporation, or other governing document, to ensure that person has not been convicted of any crime listed in G.S. 115C‑332."
SECTION 8.25.(e)  G.S. 115C‑562.7(a) is repealed.
SECTION 8.25.(f)  G.S. 115C‑562.7(b) reads as rewritten:
"(b)	The Authority shall report annually, no later than April 1, to the Joint Legislative Education Oversight Committee on the following:
…."
SECTION 8.25.(g)  Notwithstanding the requirements of G.S. 115C‑562.2, as amended by this section, no applications for the 2014‑2015 school year shall be accepted by the State Education Assistance Authority after February 25, 2014. To the extent the total appropriation for scholarship grants is not awarded prior to the fall semester of the 2014‑2015 school year, the State Education Assistance Authority may reopen applications for award of scholarship grants for the spring semester of the 2014‑2015 school year.
SECTION 8.25.(h)  Notwithstanding the requirements of G.S. 115C‑562.3, as amended by this section, for applications received for the 2014‑2015 school year, the State Education Assistance Authority shall select and verify no less than three percent (3%) of applications, including those with apparent errors on the face of the application.
SECTION 8.25.(i)  Of the funds appropriated to the Board of Governors of The University of North Carolina for the 2014‑2015 fiscal year to award scholarship grants to eligible students in accordance with Section 8.29 of S.L. 2013‑360 and the provisions of this section, any unspent funds in the 2014‑2015 fiscal year for this purpose shall revert to the General Fund on June 30, 2015.
SECTION 8.25.(j)  Subsection (b) of this section becomes effective July 1, 2013. The remainder of this section is effective when it becomes law.

injury prevention and return‑to‑work programs
SECTION 8.26.  G.S. 115C‑12 is amended by adding a new subdivision to read:
"(42)	To Ensure that Local Boards of Education Implement Injury Prevention and Return‑to‑Work Programs. – The State Board of Education shall develop policies and procedures to ensure that local boards of education implement and comply with loss prevention and return‑to‑work programs based on models adopted by the State Board. These models shall be designed to reduce the number of injuries resulting in workers' compensation claims and ensure injured employees with workers' compensation claims return to work in accordance with current State Board of Education policy."

participation in Investing in Innovation Grants
SECTION 8.27.  Section 8.25(b) of S.L. 2013‑360 reads as rewritten:
"SECTION 8.25.(b)  The federal Investing in Innovation Fund Grant: Validating Early College Strategies for Traditional Comprehensive High Schools awarded to the North Carolina New Schools Project for 2012‑2017 requires students to enroll in a community college course in the 10th grade. Notwithstanding any other provision of law, specified local school administrative units may offer one community college course to participating sophomore (10th grade) students. Participating local school administrative units are Alleghany, Beaufort, Bladen, Hertford, Jones, Madison, Martin, Richmond, Rutherford, Surry, Warren, and Yancey County Schools."

Department of Public Instruction Response Time
SECTION 8.28.  Staff at the Department of Public Instruction shall, whenever practicable, respond to requests for information originating from the superintendent of a local school administrative unit, the principal officer of a charter school, or the principal of a regional school, or their designees, within three business days of receipt of the request. Absent extraordinary circumstances, requests for information shall be reasonably and fully answered within 14 business days following an initial response.

Read to Achieve Student Portfolios
SECTION 8.29.(a)  If House Bill 230, 2013 Regular Session, becomes law, then G.S. 115C‑83.3(8), as amended by that act, reads as rewritten:
"(8)	"Student reading portfolio" means a compilation of independently produced student work selected by the student's teacher, beginning during the first half of the school year, and signed by the teacher and principal, as an accurate picture of the student's reading proficiency. The student reading portfolio shall include an organized collection of evidence of the student's reading proficiency. A single piece of evidence may be used to show reading proficiency for up to two standards. For each reading standard, there shall be two examples of student work, gathered over the course of the school year, demonstrating the student's reading proficiency. If a student correctly responds to eighty percent (80%) of the comprehension questions about one reading passage as used as an initial work sample, then that one work sample shall suffice to demonstrate student reading proficiency on the standards covered in that sample. A student reading portfolio shall only be compiled with students when it is determined that administration of a standardized test of reading comprehension would likely not yield positive findings of a student's reading proficiency."
SECTION 8.29.(b)  If House Bill 230, 2013 Regular Session, becomes law, then G.S. 115C‑83.7(b)(4), as amended by that act, reads as rewritten:
"(4)	Students who demonstrate, through a student reading portfolio, reading proficiency appropriate for third grade students. Student reading portfolio and review processes used by local school administrative units shall be approved by the State Board of Education. A local school administrative unit implementing the student reading portfolio process established by the State Board of Education shall limit the use of this portfolio process only to a student for whom it is appropriate as determined by the student’s principal, after consulting with the teacher and the student’s parents, and shall discontinue administration of the portfolio passages whenever a student is not demonstrating reading proficiency."
SECTION 8.29.(c)  If House Bill 230, 2013 Regular Session, becomes law, then G.S. 115C‑83.3(2), as amended by that act, reads as rewritten:
"(2)	"Alternative assessment" means a valid and reliable standardized assessment of reading comprehension, approved by the State Board of Education, that is not the same test as the State‑approved standardized test of reading comprehension administered to third grade students. The State Board of Education shall (i) provide several valid and reliable alternative assessments to local school administrative units upon request, (ii) approve valid and reliable alternative assessments submitted by local school administrative units, and (iii) establish achievement level ranges for each approved alternative assessment. The State Board of Education shall annually review all alternative assessments to ensure ongoing relevance, validity, and reliability. The State Board of Education shall complete the review and approval process as provided in this subdivision by September 15 of each year."
SECTION 8.29.(d)  If House Bill 230, 2013 Regular Session, becomes law, then G.S. 115C‑83.9(d), as amended by that act, reads as rewritten:
"(d)	Teachers and principals shall provide opportunities, including, but not limited to, information sessions, to discuss with parents and guardians the notifications listed in this section. Principals shall provide at least one information session within the first 30 days of school regarding the requirement for reading proficiency for third grade students."

School Performance Scores and Grades
SECTION 8.30.  If House Bill 230, 2013 Regular Session, becomes law, then G.S. 115C‑83.15(d), as amended by that act, reads as rewritten:
"(d)	Calculation of the School Performance Scores and Grades. – The State Board of Education shall use EVAAS to calculate the school performance score by adding the school achievement score, as provided in subsection (b) of this section, and the school growth score, as provided in subsection (c) of this section, earned by a school. The school achievement score shall account for twenty percent (20%), and the school growth score shall account for eighty percent (80%) of the total sum. If a school has met expected growth and inclusion of the school's growth score reduces the school's performance score and grade, a school may choose to use the school achievement score solely to calculate the performance score and grade. For all schools, the total school performance score shall be converted to a 100‑point scale and used to determine a school performance grade based on the following scale:
(1)	A school performance score of at least 85 is equivalent to an overall school performance grade of A.
(2)	A school performance score of at least 70 is equivalent to an overall school performance grade of B.
(3)	A school performance score of at least 55 is equivalent to an overall school performance grade of C.
(4)	A school performance score of at least 40 is equivalent to an overall school performance grade of D.
(5)	A school performance score of less than 40 points is equivalent to an overall school performance grade of F."

Rural Charter School Development Pilot program
SECTION 8.31.(a)  Parents for Educational Freedom in North Carolina, Inc., (PEFNC) shall use up to three hundred thousand dollars ($300,000) in nonrecurring funds made available to it under this act for the 2014‑2015 fiscal year to provide grant funding to participants for the development of up to 12 charter schools in counties with currently less than a sixty‑five percent (65%) average passage rate on end‑of‑grade and end‑of‑course tests. State funds shall only be used to provide grants to participants in the pilot program and shall not be used by PEFNC for its overhead costs in administering the program.
SECTION 8.31.(b)  PEFNC shall match State funds available to it under this act on the basis of one dollar ($1.00) in grant funds for every one dollar ($1.00) in nongrant funds. Matching funds shall not include other State funds. Matching funds may include in‑kind contributions.
SECTION 8.31.(c)  PEFNC shall require that grant recipients participating in the pilot program meet at least all of the following conditions:
(1)	The recipient is seeking approval by the State Board of Education to operate a charter school or is in the planning year required before beginning operations.
(2)	The charter school shall be located in a county with less than a sixty‑five percent (65%) average passage rate on end‑of‑grade and end‑of‑course tests.
(3)	The recipient charter school shall be subject to audit oversight by the State Auditor.
SECTION 8.31.(d)  PEFNC may provide grants of up to one hundred thousand dollars ($100,000) to recipients for an initial planning year.
SECTION 8.31.(e)  By March 15, 2015, and annually thereafter, PEFNC shall submit to the Joint Legislative Education Oversight Committee a report on the progress of the pilot program, an accounting of expenditures, and the status of grant recipients.

Annual Distribution of School Bullying/CYBER‑BULLYING Policies
SECTION 8.32.(a)  G.S. 115C‑407.16(d) reads as rewritten:
"(d)	At the beginning of each school year, the principal shall provide the local school administrative unit's policy prohibiting bullying and harassing behavior, including cyber‑bullying, to staff, students, and parents as defined in G.S. 115C-390.1(b)(8). Notice of the local policy shall appear in any school unit publication that sets forth the comprehensive rules, procedures, and standards of conduct for schools within the school unit and in any student and school employee handbook."
SECTION 8.32.(b)  This section applies beginning with the 2014‑2015 school year.

clarify school counselors work duties
SECTION 8.33.(a)  G.S. 115C‑316.1(b) reads as rewritten:
"(b)	School counseling program support activities do not include the coordination of standardized testing. During the remainder of their work time, school counselors may assist other staff with the coordination of standardized testing."
SECTION 8.33.(b)  Section 8.35(b) of S.L. 2013‑360 is repealed.

Funds for Charter School Closure
SECTION 8.34.(a)  G.S. 115C‑238.29F(i) is repealed.
SECTION 8.34.(b)  Article 16 of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑238.29L.  Dissolution of a charter school.
(a)	Funds Reserved for Closure Proceedings. – A charter school shall maintain, for the purposes of ensuring payment of expenses related to closure proceedings in the event of a voluntary or involuntary dissolution of the charter school, one or more of the options set forth in this subsection. The minimum aggregate value of the options chosen by the charter school shall be fifty thousand dollars ($50,000). The State Board of Education shall not allocate any funds under G.S. 115C‑238.29H to a charter school unless the school has provided documentation to the State Board that the charter school has met the requirements of this subsection. Permissible options to satisfy the requirements of this subsection include one or more of the following:
(1)	An escrow account.
(2)	A letter of credit.
(3)	A bond.
(4)	A deed of trust.
(b)	Distribution of Assets. – Upon dissolution of a charter school, all net assets of the charter school purchased with public funds shall be deemed the property of the local school administrative unit in which the charter school is located."
SECTION 8.34.(c)  G.S. 115C‑238.29G(a1) reads as rewritten:
"(a1)	The State Board shall adopt criteria for adequate performance by a charter school and shall identify charter schools with inadequate performance. The criteria shall include a requirement that a charter school which demonstrates no growth in student performance and has annual performance composites below sixty percent (60%) in any two years in a three‑year period is inadequate.
…
(2)	If a charter school is inadequate and has had a charter for more than five years, the State Board is authorized to terminate, not renew, or seek applicants to assume the charter through a competitive bid process established by the State Board. The State Board shall develop rules on the assumption of a charter by a new entity that include all aspects of the operations of the charter school, including the status of the employees. Public assets would transfer to the new entity and not revert to the local school administrative unit in which the charter school is located pursuant to G.S. 115C‑238.29L(b)."
SECTION 8.34.(d)  This section applies to charter schools that submit applications for an initial charter or the renewal of a charter to the State Board of Education on or after the effective date of this act.

Virtual Charter School Pilot Program
SECTION 8.35.(a)  Notwithstanding G.S. 115C‑238.29D or any other provision of law to the contrary, the State Board of Education shall establish a pilot program to authorize the operation of two virtual charter schools serving students in kindergarten through twelfth grade. The State Board shall establish an application process to allow student enrollment in the selected virtual charter schools beginning with the 2015‑2016 school year. A virtual charter school participating in the pilot may serve any grade span of students in kindergarten through twelfth grade. The pilot program shall continue for a period of four school years and shall end with the 2018‑2019 school year.
SECTION 8.35.(b)  The virtual charter schools participating in the pilot program authorized by this section shall be subject to the statutes and rules applicable to charter schools pursuant to Part 6A of Article 16 of Chapter 115C of the General Statutes, except as follows:
(1)	The maximum student enrollment in any participating school shall be no greater than 1,500 in its first year of operation and may increase by twenty percent (20%) for each participating school up to a maximum student enrollment of 2,592 in the fourth year of the pilot. The State Board of Education may waive this maximum student enrollment threshold, beginning in the fourth year of the school's operation, if the State Board determines that doing so would be in the best interest of North Carolina students.
(2)	The maximum overall ratio of teachers to students for kindergarten through eighth grade shall be 1:50, and for ninth through twelfth grade shall be 1:150.
(3)	A student who regularly fails to participate in courses may be withdrawn from enrollment pursuant to procedures adopted by the virtual charter school. The procedures adopted by the virtual charter school shall ensure that (i) fair notice is provided to the parent and student and (ii) an opportunity is provided, prior to withdrawal of the student by the school, for the student and parent to demonstrate that failure to participate in courses is due to a lawful absence recognized under Part I of Article 26 of Chapter 115C of the General Statutes and any applicable rules adopted by the State Board of Education.
SECTION 8.35.(c)  In addition to the operating requirements applicable to a virtual charter school participating in the pilot program pursuant to Part 6A of Article 16 of Chapter 115C of the General Statutes, the following requirements shall apply to a participating virtual charter school:
(1)	The school shall maintain an administrative office within North Carolina. In addition, the school shall maintain at least one testing center or meeting place within each of the eight State Board of Education districts where the participating students reside, to allow educators and administrators from the school to meet students and parents.
(2)	If the school contracts with a third party for the provision of administrative staff, such staff fulfilling the equivalent positions of superintendent, principal, or business officer shall be residents of North Carolina.
(3)	All teaching staff shall carry the appropriate State certification to instruct any course and shall receive professional development in virtual instruction pursuant to the school's application to the State Board of Education to participate in the pilot program within 30 days of the employee's date of hire. At least ninety percent (90%) of the teaching staff shall reside within North Carolina.
(4)	The school shall have a withdrawal rate below twenty‑five percent (25%). A student enrolled in a school with the intent expressed prior to enrollment of only being enrolled for a finite period of time within the school year shall not be counted in the measured withdrawal rate. The school shall keep a written record of a student's stated intent for finite enrollment. A count of school attendance shall be taken at least once during each semester for funding purposes.
(5)	The school shall ensure that each student is assigned a learning coach. The learning coach shall provide (i) daily support and supervision of students, (ii) ensure student participation in online lessons, and (iii) coordinate teacher‑led instructional sessions and State assessments.
SECTION 8.35.(d)  Notwithstanding G.S. 115C‑238.29B and G.S. 115C‑238.29D, a participating virtual charter school that is successful in meeting the requirements of this section and the applicable requirements of Part 6A of Article 16 of Chapter 115C of the General Statutes during the period of the pilot program shall be eligible to be approved by the State Board of Education, at its discretion, without additional application requirements.
SECTION 8.35.(e)  The State Board of Education shall provide State funding to a virtual charter school participating in the pilot program as provided in G.S. 115C‑238.29H(a) and G.S. 115C‑238.29H(a1). The amount allocated pursuant to G.S. 115C‑238.29H(a)(1) shall not, however, include the allocation for low‑wealth counties supplemental funding and the allocation for small county supplemental funding. Virtual charter schools participating in the pilot program shall also be subject to the requirements in G.S. 115C‑238.29H(b) through G.S. 115C‑238.29H(d). The amount of local funds provided to participating schools pursuant to G.S. 115C-238.29H(b) shall be the lesser of seven hundred ninety dollars ($790.00) per pupil or the amount computed in accordance with G.S. 115C‑238.29H(b).
SECTION 8.35.(f)  A participating virtual charter school that does not comply with the provisions of this section may result in deferment or termination of enrollment expansion, or termination of a pilot. Schools are subject to presentation of data to the State Board of Education at the call of the Chair of the State Board with a minimum of 21 days' notice.
SECTION 8.35.(g)  The State Board shall report on the initial implementation of the pilot program to the Joint Legislative Education Oversight Committee by November 15, 2016, and on findings from three years of operation of the pilot program by November 15, 2018. At a minimum, the report shall include the following:
(1)	The number of students who have enrolled in courses offered by the schools.
(2)	The number and type of courses offered by the schools.
(3)	The withdrawal rate of students after enrollment.
(4)	Student performance and accountability data.
(5)	Information on the implementation, administration, and funding for the pilot program.
(6)	Recommendations on the modification, continuation, and potential expansion of the program.

clarify regional school cihs applications
SECTION 8.36.(a)  G.S. 115C‑238.50A(1a) reads as rewritten:
"(1a)	Cooperative innovative high school. – A high school approved by the State Board of Education and the applicable governing Board that meets the following criteria:
a.	It has no more than 100 students per grade level. This criterion shall not apply to a regional school as defined in G.S. 115C‑238.61.
b.	It partners with an institution of higher education to enable students to concurrently obtain a high school diploma and begin or complete an associate degree program, master a certificate or vocational program, or earn up to two years of college credit within five years.
c.	It is located on the campus of the partner institution of higher education, unless the governing Board or the local board of trustees for a private North Carolina college specifically waives the requirement through adoption of a formal resolution. This criterion shall not apply to a regional school established as provided in Part 10 of this Article."
SECTION 8.36.(b)  Notwithstanding the requirements of Part 9 of Article 16 of Chapter 115C of the General Statutes, for the 2014‑2015 school year, the Northeast Regional School of Biotechnology and Agriscience shall be designated as a cooperative innovative high school. To maintain the designation as a cooperative innovative high school beyond the 2014‑2015 school year, the board of directors of the Northeast Regional School of Biotechnology and Agriscience shall apply with a local board of trustees for approval as a cooperative innovative high school program as provided under Part 9 of Article 16 of Chapter 115C of the General Statutes.

PART IX. Compensation of Public School Employees

TEACHER SALARY SCHEDULE
SECTION 9.1.(a)  The following monthly salary schedules shall apply for the 2014‑2015 fiscal year to certified personnel of the public schools who are classified as teachers. The schedules contain 37 steps, with each step corresponding to one year of teaching experience.
2014‑2015 Monthly Salary Schedule
"A" Teachers
Years of Experience	"A" Teachers	NBPTS Certification
0‑2	3,300	‑
3‑5	3,300	3,696
6	3,318	3,716
7	3,383	3,789
8	3,490	3,909
9	3,601	4,033
10	3,708	4,153
11	3,812	4,269
12	3,899	4,367
13	3,949	4,423
14	4,000	4,480
15	4,052	4,538
16	4,104	4,596
17	4,156	4,655
18	4,211	4,716
19	4,266	4,778
20	4,322	4,841
21	4,380	4,906
22	4,438	4,971
23	4,500	5,040
24	4,561	5,108
25	4,622	5,177
26	4,686	5,248
27	4,750	5,320
28	4,819	5,397
29	4,886	5,472
30	4,962	5,557
31	5,041	5,646
32	5,087	5,697
33	5,135	5,751
34	5,183	5,805
35	5,249	5,879
36+	5,318	5,956
2014‑2015 Monthly Salary Schedule
"M" Teachers
Years of Experience	"M" Teachers	NBPTS Certification
	0‑2	3,630	‑
	3‑5	3,630	4,066
	6	3,650	4,088
	7	3,721	4,168
	8	3,839	4,300
	9	3,961	4,436
	10	4,079	4,568
	11	4,193	4,696
	12	4,289	4,804
	13	4,344	4,865
	14	4,400	4,928
	15	4,457	4,992
	16	4,514	5,056
	17	4,572	5,121
	18	4,632	5,188
	19	4,693	5,256
	20	4,754	5,324
	21	4,818	5,396
	22	4,882	5,468
	23	4,950	5,544
	24	5,017	5,619
	25	5,084	5,694
	26	5,155	5,774
	27	5,225	5,852
	28	5,301	5,937
	29	5,375	6,020
	30	5,458	6,113
	31	5,545	6,210
	32	5,596	6,268
	33	5,649	6,327
	34	5,701	6,385
	35	5,774	6,467
	36+	5,850	6,552
SECTION 9.1.(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 9.1.(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 9.1.(d)  The first step of the salary schedule for school psychologists shall be equivalent to Step 10, corresponding to 10 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 9.1.(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 9.1.(f)  Certified school nurses who are employed in the public schools as nurses shall be paid on the "M" salary schedule.
SECTION 9.1.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.
SECTION 9.1.(h)  Section 35.11 of S.L. 2013‑360 is repealed.

REPEAL OF SESSION LAWS REPEALING CAREER STATUS
SECTION 9.4.(a)  Section 9.6(a) of S.L. 2013‑360 is repealed.   
SECTION 9.4.(b)  Section 9.6(f) of S.L. 2013‑360 reads as rewritten:
"SECTION 9.6.(f)  G.S. 115C‑325(c)(1) through (c)(3) and G.S. 115‑325(c)(5) and (c)(6) are repealed effective August 1, 2013. Individuals who have not received career status prior to the 2013‑2014 school year shall not be granted career status during the 2013‑2014 school year. "
SECTION 9.4.(c)  Section 9.6(i) of S.L. 2013‑360 is repealed.
SECTION 9.4.(d)  Section 9.6(j) of S.L. 2013‑360 reads as rewritten:
"SECTION 9.6.(j)  Subsection (b) of this section becomes effective July 1, 2014. G.S. 115C‑325.1 through G.S. 115C‑325.13, as enacted by this section, shall apply to all teachers currently employed as of July 1, 2014, on a contract or who are employed on contract after July 1, 2014. "
SECTION 9.4.(e)  Section 9.6(k) of S.L. 2013‑360 reads as rewritten:
"SECTION 9.6.(k)  Subsections (c) and (d) of this section become effective July 1, 2014, and apply to all employees employed by a local board of education as of that date and employees hired or reemployed on or after that date."
SECTION 9.4.(f)  Subsections (o) through (t) and (v) through (x) of Section 9.7 of S.L. 2013‑360 are repealed.
SECTION 9.4.(g)  Subsection 9.7(y) of S.L. 2013‑360 reads as rewritten:
"SECTION 9.7.(y)  Subsection (u) of this section becomes effective August 1, 2013. Subsections (a) through (n) of this section become effective July 1, 2014. "

SYSTEM OF EMPLOYMENT FOR TEACHERS WITH CAREER STATUS
SECTION 9.6.(a)  G.S. 115C‑325 reads as rewritten:
"§ 115C‑325.  System of employment for public school teachers.
(a)	Definition of Terms. – As used in this section unless the context requires otherwise:
(1)	Repealed by Session Laws 1997‑221, s. 13(a).
(1a)	"Career employee" as used in this section includes all of the following:
a.	An employee who has obtained career status with that local board as a teacher prior to August 1, 2013.
b.	An employee who has obtained career status with that local board in an administrative position as provided in G.S. 115C‑325(d)(2).
	
d.	A school administrator during the term of a school administrator contract as provided in G.S. 115C‑287.1(c).
(1b)	"Career school administrator" means a school administrator who has obtained career status in an administrative position on or before June 30, 1997.
(1c)	"Career teacher" means a teacher who has obtained career status with that local board of education prior to August 1, 2013.
(1d)	Repealed by Session Laws 2011‑348, s. 1, effective July 1, 2011, and applicable to persons recommended for dismissal or demotion on or after that date.
(2)	Repealed by Session Laws 1997, c. 221, s. 13(a).
(3)	"Day" means calendar day. In computing any period of time, Rule 6 of the North Carolina Rules of Civil Procedure shall apply.
(4)	"Demote" means to reduce the salary of a person who is classified or paid by the State Board of Education as a classroom teacher or as a school administrator. The word "demote" does not include: (i) a suspension without pay pursuant to G.S. 115C‑325(f)(1); (ii) the elimination or reduction of bonus payments, including merit‑based supplements, or a systemwide modification in the amount of any applicable local supplement; or (iii) any reduction in salary that results from the elimination of a special duty, such as the duty of an athletic coach or a choral director.
(4a)	"Disciplinary suspension" means a final decision to suspend a teacher or school administrator without pay for no more than 60 days under G.S. 115C‑325(f)(2).
	
(4c)	"Hearing officer" means a person selected under G.S. 115C‑325(h)(7).
	
(5a)	[Expired.]
(5b)	"School administrator" means a principal, assistant principal, supervisor, or director whose major function includes the direct or indirect supervision of teaching or any other part of the instructional program as provided in G.S. 115C‑287.1(a)(3).
(6)	"Teacher" means a person who holds at least a current, not provisional or expired, Class A license or a regular, not provisional or expired, vocational license issued by the State Board of Education; whose major responsibility is to teach or directly supervises teaching or who is classified by the State Board of Education or is paid either as a classroom teacher or instructional support personnel; who is employed to fill a full‑time, permanent position; and who is a career teacher.
(7)	(See note) Redesignated.
	
…
(c)		

(3)	No Continuation of Career Status. – No employee of a local board of education shall continue in a career status as a teacher if he or she no longer performs the responsibilities of a teacher as defined in G.S. 115C‑325(a)(6). No person who is employed as a school administrator who did not acquire career status as a school administrator by June 30, 1997, shall have career status as an administrator. Further, no director or assistant principal is eligible to obtain career status as a school administrator unless he or she has already been conferred that status by the local board of education.
(4)	Leave of Absence. – A career teacher who has been granted a leave of absence by a board shall maintain his or her career status if the teacher returns to the teaching position at the end of the authorized leave.

	

	
(d)	Career Teachers and Career School Administrators.
(1)	A career teacher or career school administrator shall not be subjected to the requirement of annual appointment nor shall he or she be dismissed, demoted, or employed on a part‑time basis without his or her consent except as provided in subsection (e).
(2)		
b.	Repealed by Session Laws 1997, c. 221, s. 13(a).
c.	Subject to G.S. 115C‑287.1, when a teacher has performed the duties of supervisor or principal for three consecutive years, the board, near the end of the third year, shall vote upon his employment for the next school year. The board shall give him written notice of that decision by June 1 of his third year of employment as a supervisor or principal. If a majority of the board votes to reemploy the teacher as a principal or supervisor, and it has notified him of that decision, it may not rescind that action but must proceed under the provisions of this section. If a majority of the board votes not to reemploy the teacher as a principal or supervisor, he shall retain career status as a teacher if that status was attained prior to assuming the duties of supervisor or principal. A supervisor or principal who has not held that position for three years and whose contract will not be renewed for the next school year shall be notified by June 1 and shall retain career status as a teacher if that status was attained prior to assuming the duties of supervisor or principal.
A year, for purposes of computing time as a probationary principal or supervisor, shall not be less than 145 workdays performed as a full‑time, permanent principal or supervisor in a contract year.

(e)	Grounds for Dismissal or Demotion of a Career Employee.
…
(3)	Inadequate Performance. – In determining whether the professional performance of a career employee is adequate, consideration shall be given to regular and special evaluation reports prepared in accordance with the published policy of the employing local school administrative unit and to any published standards of performance which shall have been adopted by the board. Failure to notify a career employee of an inadequacy or deficiency in performance shall be conclusive evidence of satisfactory performance. Inadequate performance for a teacher shall mean (i) the failure to perform at a proficient level on any standard of the evaluation instrument or (ii) otherwise performing in a manner that is below standard. For a career teacher, a performance rating below proficient shall constitute inadequate performance unless the principal noted on the instrument that the teacher is making adequate progress toward proficiency given the circumstances.
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(o)	Resignation. –
…
(2)	A career teacher who is not recommended for dismissal should not resign without the consent of the superintendent unless he or she has given at least 30 days' notice. If a teacher who is not recommended for dismissal does resign without giving at least 30 days' notice, the board may request that the State Board of Education revoke the teacher's license for the remainder of that school year. A copy of the request shall be placed in the teacher's personnel file.
(p)	Section Applicable to Certain Institutions. – Notwithstanding any law or regulation to the contrary, this section shall apply to all persons who are employed as career teachers in teaching and related educational classes in the schools and institutions of the Departments of Health and Human Services and Public Instruction and the Divisions of Juvenile Justice and Adult Correction of the Department of Public Safety regardless of the age of the students.
(p1)	Procedure for Dismissal of School Administrators and Teachers Employed in Low‑Performing Residential Schools. –
(1)	This subdivision shall govern the dismissal by the Secretary of Health and Human Services of teachers, principals, assistant principals, directors, supervisors, and other licensed personnel who are career employees and are assigned to a residential school that the State Board has identified as low‑performing and to which the State Board has assigned an assistance team under Part 3A of Article 3 of Chapter 143B of the General Statutes. The Secretary shall dismiss a teacher, principal, assistant principal, director, supervisor, or other licensed personnel when the Secretary receives two consecutive evaluations that include written findings and recommendations regarding that person's inadequate performance from the assistance team. These findings and recommendations shall be substantial evidence of the inadequate performance of the teacher or school administrator.
	The Secretary may dismiss a teacher, principal, assistant principal, director, supervisor, or other licensed personnel when:
a.	The Secretary determines that the school has failed to make satisfactory improvement after the State Board assigned an assistance team to that school under Part 3A of Article 3 of Chapter 143B of the General Statutes; and
b.	That assistance team makes the recommendation to dismiss the teacher, principal, assistant principal, director, supervisor, or other licensed personnel for one or more grounds established in G.S. 115C‑325(e)(1) for dismissal or demotion of a career employee.
Within 30 days of any dismissal under this subdivision, a teacher, principal, assistant principal, director, supervisor, or other licensed personnel may request a hearing before a panel of three members designated by the Secretary. The Secretary shall adopt procedures to ensure that due process rights are afforded to persons recommended for dismissal under this subdivision. Decisions of the panel may be appealed on the record to the Secretary, with further right of judicial review under Chapter 150B of the General Statutes.
…
(q)	Procedure for Dismissal of School Administrators and Teachers Employed in Low‑Performing Schools. –

	

	

	
(2)	Notwithstanding any other provision of this section or any other law, this subdivision shall govern the State Board's dismissal of teachers, assistant principals, directors, and supervisors who are career employees assigned to schools that the State Board has identified as low‑performing and to which the State Board has assigned an assistance team under Article 8B of this Chapter. The State Board shall dismiss a teacher, assistant principal, director, or supervisor when the State Board receives two consecutive evaluations that include written findings and recommendations regarding that person's inadequate performance from the assistance team. These findings and recommendations shall be substantial evidence of the inadequate performance of the teacher or school administrator.
	The State Board may dismiss a teacher, assistant principal, director, or supervisor when:
a.	The State Board determines that the school has failed to make satisfactory improvement after the State Board assigned an assistance team to that school under G.S. 115C‑105.38; and
b.	That assistance team makes the recommendation to dismiss the teacher, assistant principal, director, or supervisor for one or more grounds established in G.S. 115C‑325(e)(1) for dismissal or demotion of a career teacher.
A teacher, assistant principal, director, or supervisor may request a hearing before a panel of three members of the State Board within 30 days of any dismissal under this subdivision. The State Board shall adopt procedures to ensure that due process rights are afforded to persons recommended for dismissal under this subdivision. Decisions of the panel may be appealed on the record to the State Board, with further right of judicial review under Chapter 150B of the General Statutes.
…
(3)	Nothing in this subsection shall prevent a local board from refusing to renew the contract of any person employed in a school identified as low‑performing under G.S. 115C‑105.37.
	
(5)	The State Board shall have the right to subpoena witnesses and documents on behalf of any party to the proceedings under this subsection."
SECTION 9.6.(b)  G.S. 115C‑287.1 is amended by adding a new subsection to read:
"(a1)	Notwithstanding subsection (a) of this section, school administrators who are serving in a principal or supervisor position as of July 1, 2014, and who had achieved career status on or before June 30, 1997, shall be employed pursuant to G.S. 115C‑325. A school administrator shall cease to be employed pursuant to G.S. 115C‑325 if the school administrator is dismissed or demoted or if the school administrator voluntarily relinquishes career status through promotion, resignation, or otherwise."

Clarifying changes for teacher contracts
SECTION 9.7.(a)  Part 3A of Article 22 of Chapter 115C of the General Statutes, consisting of G.S. 115C‑326.5, is recodified as Part 3B of Article 22 of Chapter 115C of the General Statutes. G.S. 115C‑325.1 through G.S. 115C‑325.13 are recodified as Part 3A of Article 22 of Chapter 115C of the General Statutes, to be entitled "Teacher Employment Contracts."
SECTION 9.7.(b)  G.S. 115C‑325.1 reads as rewritten:
"§ 115C‑325.1.  Definitions.
As used in this Part, the following definitions apply:
(1)	"Day" means calendar day. In computing any period of time, Rule 6 of the North Carolina Rules of Civil Procedure shall apply.
(2)	"Demote" means to reduce the salary of a person who is classified or paid by the State Board of Education as a classroom teacher or as a school administrator during the term of the contract. The word "demote" does not include (i) a suspension without pay pursuant to G.S. 115C‑325.5(a); (ii) the elimination or reduction of bonus payments, including merit‑based supplements or a systemwide modification in the amount of any applicable local supplement; (iii) any reduction in salary that results from the elimination of a special duty, such as the duty of an athletic coach or a choral director; or (iv) any reduction of pay as compared to a prior term of contract.
(3)	"Disciplinary suspension" means a final decision to suspend a teacher or school administrator without pay for no more than 60 days under G.S. 115C‑325.5(b).
(4)	"Residential school" means a school operated by the Department of Health and Human Services that provides residential services to students pursuant to Part 3A of Article 3 of Chapter 143B of the General Statutes or a school operated pursuant to Article 9C of Chapter 115C of the General Statutes.
(5)	"School administrator" means a principal, assistant principal, supervisor, or director whose major function includes the direct or indirect supervision of teaching or any other part of the instructional program, as provided in G.S. 115C‑287.1(a)(3).
(6)	"Teacher" means a person meeting each of the following requirements:
a.	Who holds at least one of the following licenses issued by the State Board of Education:
1.	A current standard professional educator's license.
2.	A current lateral entry teaching license.
3.	A regular, not expired, vocational license.
b.	Whose major responsibility is to teach or directly supervise teaching or who is classified by the State Board of Education or is paid either as a classroom teacher or instructional support personnel.
c.	Who is employed to fill a full‑time, permanent position.
d.	Who is not a career teacher as defined in G.S. 115C‑325(a)(1c).
(7)	"Year" means, for purposes of computing time of employment as a teacher, no less than 120 workdays performed as a teacher in a full‑time, permanent position in a school year. Workdays performed pending the outcome of a criminal history check as provided in G.S. 115C‑332 are included in computing time as a teacher."
SECTION 9.7.(c)  G.S. 115C‑325.10 reads as rewritten:
"§ 115C‑325.10.  Application to certain institutions.
Notwithstanding any law or regulation to the contrary, this Part shall apply to all persons employed in teaching and related educational classes in the schools and institutions of the Departments of Health and Human Services and Public Instruction and the Divisions of Juvenile Justice and Adult Correction of the Department of Public Safety who are not career teachers as defined in G.S. 115C‑325(a)(1c), regardless of the age of the students."
SECTION 9.7.(d)  A teacher who entered into a four‑year contract no later than June 30, 2014, pursuant to Section 9.6(g) of S.L. 2013‑360, may elect to retain that contract under its terms or to waive that contract.
If the teacher was a career teacher as of the date the contract was accepted and waives the contract under this subsection, the teacher shall be employed pursuant to G.S. 115C‑325, as amended by this act, and shall not receive a pay raise as provided for in Section 9.6(h) of S.L. 2013‑360.
Teachers who elect to retain the four‑year contract shall (i) voluntarily relinquish career status and any claim to career status, (ii) be employed in accordance with G.S. 115C‑325.1 through G.S. 115C‑325.13, and (iii) receive a pay raise of five hundred dollars ($500.00) for the first year, one thousand dollars ($1,000) for the second year, one thousand five hundred dollars ($1,500) for the third year, and two thousand dollars ($2,000) for the fourth year of the four‑year contract. These pay raises shall be a part of the employee's base salary.
SECTION 9.7.(e)  The Department of Public Instruction shall use any funds available to it for the 2014‑2015 fiscal year, and in subsequent fiscal years, to provide pay raises for any teachers who elect to retain their four‑year contracts in accordance with subsection (d) of this section.

CONFORMING CHANGES
SECTION 9.8.(a)  G.S. 115C‑105.26(b)(2) reads as rewritten:
"(2)	State rules and policies, except those pertaining to public school State salary schedules and employee benefits for school employees, the instructional program that must be offered under the Basic Education Program, the system of employment for public school teachers and administrators set out in G.S. 115C‑287.1 and in Part 3 and Part 3A of Article 22 of this Chapter, health and safety codes, compulsory attendance, the minimum lengths of the school day and year, and the Uniform Education Reporting System."
SECTION 9.8.(b)  G.S. 115C‑105.37B(a)(2) reads as rewritten:
"(2)	Restart model, in which the State Board of Education would authorize the local board of education to operate the school with the same exemptions from statutes and rules as a charter school authorized under Part 6A of Article 16 of this Chapter, or under the management of an educational management organization that has been selected through a rigorous review process. A school operated under this subdivision remains under the control of the local board of education, and employees assigned to the school are employees of the local school administrative unit with the protections provided by Part 3 or Part 3A of Article 22 of this Chapter."
SECTION 9.8.(c)  G.S. 115C‑276(l) reads as rewritten:
"(l)	To Maintain Personnel Files and to Participate in Firing and Demoting of Staff. – The superintendent shall maintain in his or her office a personnel file for each teacher that contains complaints, commendations, or suggestions for correction or improvement about the teacher and shall participate in the firing and demoting of staff, as provided in Part 3 and Part 3A of Article 22 of this Chapter."
SECTION 9.8.(d)  G.S. 115C‑325.6(b) reads as rewritten:
"(b)	Notice of Recommendation. – Before recommending to a board the dismissal or demotion of a teacher, the superintendent shall give written notice to the teacher by certified mail or personal delivery of the superintendent's intention to make such recommendation and shall set forth as part of the superintendent's recommendation the grounds upon which he or she believes such dismissal or demotion is justified. The superintendent also shall meet with the teacher and provide written notice of the charges against the teacher, an explanation of the basis for the charges, and an opportunity to respond if the teacher has not done so under G.S. 115C‑325.5(a). The notice shall include a statement to the effect that the teacher, within 14 days after the date of receipt of the notice, may request a hearing before the board on the superintendent's recommendation. A copy of Part 3A of Article 22 of Chapter 115C of the General Statutes shall also be sent to the teacher."
SECTION 9.8.(e)  G.S. 115C‑335(b) reads as rewritten:
"(b)	Training. – The State Board, in collaboration with the Board of Governors of The University of North Carolina, shall develop programs designed to train principals and superintendents in the proper administration of the employee evaluations developed by the State Board. The Board of Governors shall use the professional development programs for public school employees that are under its authority to make this training available to all principals and superintendents at locations that are geographically convenient to local school administrative units. The programs shall include methods to determine whether an employee's performance has improved student learning, the development and implementation of appropriate professional growth and mandatory improvement plans, the process for contract nonrenewal, and the dismissal process under Part 3 and Part 3A of Article 22 of this Chapter. The Board of Governors shall ensure that the subject matter of the training programs is incorporated into the masters in school administration programs offered by the constituent institutions. The State Board, in collaboration with the Board of Governors, also shall develop in‑service programs for licensed public school employees that may be included in a mandatory improvement plan created under G.S. 115C‑333(b) or G.S. 115C‑333.1(b). The Board of Governors shall use the professional development programs for public school employees that are under its authority to make this training available at locations that are geographically convenient to local school administrative units."

SCHOOL‑BASED ADMINISTRATOR SALARY SCHEDULE
SECTION 9.11.(a)  The following base salary schedule for school‑based administrators shall apply only to principals and assistant principals. This base salary schedule shall apply for the 2014‑2015 fiscal year commencing July 1, 2014.

2014‑2015 Principal and Assistant Principal Salary Schedules
Classification
Years of	Assistant	Prin I	Prin II	Prin III	Prin IV
Experience	Principal	(0‑10)	(11‑21)	(22‑32)	(33‑43)
0‑9	$4,001	‑	‑	‑	‑
10	$4,120	‑	‑	‑	‑
	11	$4,235	‑	‑	‑	‑
	12	$4,332	‑	‑	‑	‑
	13	$4,387	$4,387	‑	‑	‑
	14	$4,444	$4,444	‑	‑	‑
	15	$4,502	$4,502	$4,559	‑	‑
	16	$4,559	$4,559	$4,618	‑	‑
	17	$4,618	$4,618	$4,678	$4,740	‑
	18	$4,678	$4,678	$4,740	$4,802	$4,866
	19	$4,740	$4,740	$4,802	$4,866	$4,931
	20	$4,802	$4,802	$4,866	$4,931	$5,000
	21	$4,866	$4,866	$4,931	$5,000	$5,067
	22	$4,931	$4,931	$5,000	$5,067	$5,135
	23	$5,000	$5,000	$5,067	$5,135	$5,207
	24	$5,067	$5,067	$5,135	$5,207	$5,277
	25	$5,135	$5,135	$5,207	$5,277	$5,354
	26	$5,207	$5,207	$5,277	$5,354	$5,429
	27	$5,277	$5,277	$5,354	$5,429	$5,513
	28	$5,354	$5,354	$5,429	$5,513	$5,600
	29	$5,429	$5,429	$5,513	$5,600	$5,652
	30	$5,513	$5,513	$5,600	$5,652	$5,705
	31	$5,600	$5,600	$5,652	$5,705	$5,758
	32	$5,652	$5,652	$5,705	$5,758	$5,832
	33	$5,705	$5,705	$5,758	$5,832	$5,909
	34	$5,758	$5,758	$5,832	$5,909	$6,027
	35	$5,832	$5,832	$5,909	$6,027	$6,148
	36	$5,909	$5,909	$6,027	$6,148	$6,271
	37	‑	$6,027	$6,148	$6,271	$6,396
	38	‑	‑	$6,271	$6,396	$6,524
	39	‑	‑	$6,396	$6,524	$6,654
	40	‑	‑	‑	$6,654	$6,787
	41	‑	‑	‑	$6,787	$6,923
	42	‑	‑	‑	‑	$7,061
2014‑2015 Principal and Assistant Principal Salary Schedules
Classification
Years of	 Prin V	Prin VI	Prin VII	Prin VIII
Experience	(44‑54)	(55‑65)	(66‑100)	(101+)
0‑19	$5,000	‑	‑	‑
	20	$5,067	‑	‑	‑
	21	$5,135	$5,207	‑	‑
	22	$5,207	$5,277	$5,429	‑
	23	$5,277	$5,354	$5,513	$5,600
	24	$5,354	$5,429	$5,600	$5,652
	25	$5,429	$5,513	$5,652	$5,705
	26	$5,513	$5,600	$5,705	$5,758
	27	$5,600	$5,652	$5,758	$5,832
	28	$5,652	$5,705	$5,832	$5,909
	29	$5,705	$5,758	$5,909	$6,027
	30	$5,758	$5,832	$6,027	$6,148
	31	$5,832	$5,909	$6,148	$6,271
	32	$5,909	$6,027	$6,271	$6,396
	33	$6,027	$6,148	$6,396	$6,524
	34	$6,148	$6,271	$6,524	$6,654
	35	$6,271	$6,396	$6,654	$6,787
	36	$6,396	$6,524	$6,787	$6,923
	37	$6,524	$6,654	$6,923	$7,061
	38	$6,654	$6,787	$7,061	$7,202
	39	$6,787	$6,923	$7,202	$7,346
	40	$6,923	$7,061	$7,346	$7,493
	41	$7,061	$7,202	$7,493	$7,643
	42	$7,202	$7,346	$7,643	$7,796
	43	$7,346	$7,493	$7,796	$7,952
	44	‑	$7,643	$7,952	$8,111
	45	‑	$7,796	$8,111	$8,273
	46+	‑	‑	$8,273	$8,438
SECTION 9.11.(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:
Classification	Number of Teachers 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 9.11.(c)  A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certified employee of the public schools and an additional step for every three years of experience serving as a principal on or before June 30, 2009. 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 9.11.(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 9.11.(e)  Longevity pay for principals and assistant principals shall be as provided for State employees under the North Carolina Human Resources Act.
SECTION 9.11.(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 9.11.(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. 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 9.11.(h)  During the 2013‑2015 fiscal biennium, 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 9.12.  Section 35.13 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.13.(a)  The monthly salary ranges that follow, which apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers, shall be increased by one thousand dollars ($1,000) annually as follows:
School Administrator I	$3,432	$6,364
School Administrator II	$3,633	$6,745
School Administrator III	$3,852	$7,151
School Administrator IV	$4,003	$7,432
School Administrator V	$4,161	$7,730
School Administrator VI	$4,409	$8,192
School Administrator VII	$4,583	$8,519
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 35.13.(b)  The monthly salary ranges that follow, which apply to public school superintendents, shall be increased beginning July 1, 2014, as follows:
Superintendent I	$4,860	$9,032
Superintendent II	$5,154	$9,573
Superintendent III	$5,463	$10,150
Superintendent IV	$5,793	$10,762
Superintendent V	$6,143	$11,413
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 35.13.(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 35.13.(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 35.13.(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 35.13.(f)  The annual salaries of all permanent, full‑time personnel paid from the Central Office Allotment shall be increased by one thousand dollars ($1,000)."

NONCERTIFIED PERSONNEL SALARIES
SECTION 9.13.  Section 35.14 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.14.  The annual salary for permanent, full‑time noncertified public school employees whose salaries are supported from the State's General Fund shall be increased by one thousand dollars ($1,000). Part‑time, noncertified public school employees shall receive the increase authorized by this section on a prorated and equitable basis."

BONUS FOR CERTIFIED PERSONNEL AT THE TOP OF THEIR SALARY SCHEDULES
SECTION 9.14.(a)  Effective July 1, 2014, any permanent personnel employed on July 1, 2014, and paid at the top of the principal and assistant principal salary schedule applicable to them for the 2013‑2014 school year shall receive a one‑time bonus, payable monthly, equivalent to two percent (2%).
SECTION 9.14.(b)  Effective July 1, 2014, any permanent certified personnel employed on July 1, 2014, and paid at the top teacher salary schedule applicable to them for the 2013‑2014 school year shall receive a one‑time bonus, payable monthly, equivalent to two percent (2%).

career pathways pilot program
SECTION 9.15.(a)  Pilot. – The State Board of Education shall establish a three‑year career pathways program pilot, as provided in this section, for selected local school administrative units to develop a career pathways program to provide for, in addition to base salary and other applicable local supplements, differentiated pay for classroom teachers based on a teacher's demonstrated effectiveness and additional responsibilities in advanced roles. For the purposes of this section, a classroom teacher is a teacher who works in the classroom providing instruction and who is not instructional support personnel.
SECTION 9.15.(b)  Request for Proposal Requirements. – No later than September 15, 2014, the State Board shall develop a Request for Proposal (RFP) for local boards of education to participate in the pilot. As part of the RFP, the State Board of Education shall establish the duties that are associated with advanced roles for classroom teachers. Local boards of education shall submit RFPs for consideration no later than January 1, 2015. The RFP shall require local boards of education to include in their proposals a career pathway plan that meets, at a minimum, the following criteria:
(1)	Career pathway teacher eligibility and duties. ‑
a.	Enable eligible classroom teachers to progress within their careers and become career pathway teachers by doing any of the following:
1.	Assuming advanced roles that include accountability for student growth across a team of teachers.
2.	Becoming leaders of teams of two or more highly effective teachers and teachers of record for all students served by a teaching team.
b.	Provide information in a form readily accessible to both teachers and the public on the criteria and procedures for selection as a career pathway teacher.
c.	Require a classroom teacher to be rated as highly effective on the North Carolina Teacher Evaluation instrument to be eligible to be a career pathway teacher. A highly effective classroom teacher is a teacher who receives, on the North Carolina Teacher Evaluation instrument, a rating of at least accomplished on each of the teacher evaluation standards and who exceeds expected student growth based on three years of teacher evaluation data as calculated by the State Board of Education.
d.	Increase the amount of time during the school day for a career pathway teacher to plan, collaborate, and participate in on‑the‑job development or leadership of others.
e.	Establish equally stringent eligibility requirements for a career pathway teacher to remain in an advanced role as those required to initially attain that role.
f.	Establish a procedure for determining whether a career pathway teacher is successfully performing the additional duties associated with the career pathway.
g.	Ensure that career pathway teachers may opt out of the career pathways plan by voluntarily relinquishing additional duties associated with the career pathway. Voluntary relinquishment of duties associated with the career pathway shall not be considered a demotion under Part 3 or Part 3A of Article 22 of Chapter 115C of the General Statutes.
(2)	Career pathway salary bonuses. ‑
a.	Pay career pathway salary supplements of at least ten percent (10%) of the State teacher salary schedule to career pathway teachers who assume advanced roles.
b.	Pay career pathway salary supplements of at least twenty‑five percent (25%) of the State teacher salary schedule to career pathway teachers who lead teams of two or more other teachers and are the teachers of record for all students served by the teaching team.
c.	Require that career pathway salary supplements be paid as a bonus or supplement to the teacher's regular salary and not be included in the average salary calculation used for budgeting State allotments.
d.	Require that a career pathway teacher who (i) fails to maintain a rating of highly effective or (ii) is not successfully performing the additional duties associated with the career pathway shall be paid only the salary applicable to him or her on the State salary schedule and any other local supplements that would otherwise apply to the teacher's compensation.
e.	Require that a teacher who opts out of the career pathways plan shall be paid only the salary applicable to him or her on the State salary schedule and any other local supplements that would otherwise apply to the teacher's compensation.
(3)	Career pathways plan funding. – Achieves financial sustainability for career pathways salary supplements, as provided in subdivision (2) of this subsection, by reallocating other funds, including local, private, State, or federal funds.
(4)	System goals. ‑
a.	Develop measures for determining how the career pathways plan shall do at least the following:
1.	Improve the quality of classroom instruction.
2.	Increase the attractiveness of teaching.
3.	Encourage the recognition, impact, and retention of high‑quality teachers.
b.	Increase the percentage of students in the local school administrative unit with a highly effective teacher as their teacher of record in at least English Language Arts, math, social studies, and science to a minimum of seventy‑five percent (75%) of students in that subject by the third year of implementation through the career pathways program.
SECTION 9.15.(c)  Selection of Pilot Units. – By March 15, 2015, the State Board of Education shall review the RFPs submitted by local boards of education in accordance with subsection (b) of this section and shall select for the first cohort of the pilot program eight local school administrative units that meet the following criteria:
(1)	Two school districts with an average daily membership (ADM) equal to or less than 4,000.
(2)	Two school districts with an ADM of 4,001 to 10,000.
(3)	Two school districts with an ADM of 10,001 to 30,000.
(4)	Two school districts with an ADM of 30,001 or more.
SECTION 9.15.(d)  Pilot Implementation. – The local school administrative units selected for the pilot shall implement their approved career pathways plans beginning with the 2015‑2016 school year and ending with the 2017‑2018 school year. The local boards of education for each approved pilot local school administrative unit shall report annually no later than August 15 following each school year of the pilot to the State Board of Education on the following:
(1)	The methodology for measurement and outcomes determined by the board for how the career pathways plan has accomplished the following:
a.	Improved the quality of classroom instruction.
b.	Increased the attractiveness of teaching.
c.	Encouraged the recognition, impact, and retention of high‑quality teachers.
(2)	The percentage of students with a highly effective teacher as their teacher of record for English Language Arts, math, social studies, and science.
SECTION 9.15.(e)  Second Cohort of Pilot. – It is the intent of the General Assembly, subject to the availability of funds, that the State Board of Education shall select a second cohort of eight local school administrative units using the process and requirements set forth in this section to begin a career pathways program pilot in the 2016‑2017 school year.
SECTION 9.15.(f)  Pilot Evaluation. – The State Board of Education shall report annually beginning October 15, 2015, until the conclusion of all the pilots, including a second cohort as described in subsection (e) of this section, on all aspects of the implementation and evaluation of the pilot career pathways plans to the offices of the President Pro Tempore of the Senate and the Speaker of the House of Representatives, the Senate Appropriations/Base Budget Committee, the House Committee on Appropriations, the Senate Appropriations Committee on Education/Higher Education, the House Appropriations Subcommittee on Education, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee.
SECTION 9.15.(g)  Career Pathways Plan Statewide Recommendation. – The State Board of Education shall evaluate implementation and success of the pilot plans and identify successful, reliable elements to develop recommendations to the General Assembly for a career pathways plan that could be implemented by a local board of education in its local school administrative unit. The career pathways plan may contain multiple career pathway options, as well as a default career pathway program, and shall be designed to improve the quality of classroom instruction, increase the attractiveness of teaching, and encourage the recognition, impact, and retention of high‑quality teachers. The State Board of Education shall report no later than October 15, 2018, on the statewide career pathways plan to the offices of the President Pro Tempore of the Senate and the Speaker of the House of Representatives, the Senate Appropriations/Base Budget Committee, the House Committee on Appropriations, the Senate Appropriations Committee on Education/Higher Education, the House Appropriations Subcommittee on Education, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee.
SECTION 9.15.(h)  Career Pathways Plan Rules. – The State Board of Education shall adopt rules necessary to carry out the provisions of this section. Notwithstanding Article 2A of Chapter 150B of the General Statutes, the State Board of Education shall be exempt from rule making in establishing rules to carry out the career pathways pilot program set forth in this section.
SECTION 9.15.(i)  Career Pathways Plan Administration. – The State Board of Education, in consultation with the Office of the Governor, shall be responsible for administration of the career pathways plan pilot program and shall dedicate up to three full‑time staff positions. One position shall be assigned as the primary administrator of the program. The primary administrator shall (i) lead oversight of pilot local school administrative unit selection and career pathway development and piloting, (ii) lead assessments of pilots for career pathways plan recommendations, and (iii) provide information about progress toward goals of this section and activities undertaken to implement this section to the Governor, State Board of Education, and State Superintendent of Public Instruction. Two additional positions shall be assigned to assist the primary administrator.
SECTION 9.15.(j)  Matching Funds for Career Pathways Plan. – The career pathways pilot program shall provide one hundred dollars ($100.00) per ADM for teacher salary supplements for up to twenty-five percent (25%) of ADM in each pilot local school administrative unit. State funding allocated to local school administrative units for the career pathways program pilot shall be matched by the unit at a minimum of one dollar ($1.00) of matching funds for every one dollar ($1.00) of State funds to pay supplements to teachers in the career pathways program. Matching funds may include the reallocation of other funds, including local, private, State, or federal funds.
SECTION 9.15.(k)  Flexible Funding for Career Pathways Plan Pilot Local School Administrative Units. – Notwithstanding G.S. 115C‑105.25(5b), beginning with the 2015‑2016 fiscal year, the State Board of Education shall increase flexibility in the use of State funds for pilot local school administrative units by allowing positions allocated for classroom teachers and instructional support personnel to be converted to dollar equivalents for the purpose of transferring funds into the career pathways program for those local school administrative units participating in the program. These positions shall be converted at the first step of the "A" Teacher Salary Schedule effective for that fiscal year.
SECTION 9.15.(l)  G.S. 150B‑1(d) reads as rewritten:
"(d)	Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:
…
(26)	The State Board of Education with respect to the career pathways pilot program established by the 2013 General Assembly. The program authorizes local school administrative units to develop a program for differentiated pay for classroom teachers based on a teacher's demonstrated effectiveness and assumption of advanced roles."

PART X. COMMUNITY COLLEGES

PROCESS FOR PERIODICALLY REVISING ENROLLMENT TIERS
SECTION 10.2.  The State Board of Community Colleges shall develop a process for periodically reviewing and revising how courses and programs are classified into tiers in the enrollment funding model. The process shall be developed by March 1, 2015, and reported to the Office of State Budget and Management and the Fiscal Research Division of the North Carolina General Assembly.
The State Board of Community Colleges shall identify those courses and programs in high‑need areas and may suggest any revisions to the model. These revisions shall be submitted as part of their budget requests for the 2017‑2019 fiscal biennium.

Revenues/expenditures/FEES COLLECTED AND ASSESSED BY THE MANUFACTURING SOLUTIONS CENTER AND THE TEXTILE TECHNOLOGY CENTER
SECTION 10.3.  The State Board of Community Colleges shall report, no later than January 15, 2015, to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management a summary of the revenues and expenditures for the Manufacturing Solutions Center at Catawba Valley Community College and for the Textile Technology Center at Gaston College during the 2012‑2013 and 2013‑2014 fiscal years. The report shall include information on the structure of the fees assessed and the total fees collected by each Center.

JLEOC STUDY ON VOCATIONAL TRAINING FOR INDIVIDUALS WITH INTELLECTUAL DISABILITIES
SECTION 10.4.(a)  The Joint Legislative Education Oversight Committee shall study at least the following issues related to vocational training for individuals with intellectual disabilities:
(1)	Model programs for implementation on a systemwide basis at community college campuses and constituent institutions of The University of North Carolina for training and developing vocational expertise and job readiness in students with intellectual disabilities.
(2)	Enhancing employment outcomes for individuals with intellectual disabilities.
(3)	Barriers to employment for individuals with intellectual disabilities.
(4)	Establishment and expansion of partnerships between community colleges, constituent institutions of The University of North Carolina, the Department of Health and Human Services, Division of Vocational Rehabilitative Services, and community‑based organizations that offer job training and job placement opportunities for individuals with intellectual disabilities.
(5)	Policies for ensuring that students with intellectual disabilities are prepared for higher educational opportunities upon completion of their elementary and secondary school education.
(6)	Policies for transition planning and job training for students with intellectual disabilities as they complete their elementary and secondary school education.
SECTION 10.4.(b)  The Joint Legislative Education Oversight Committee shall report the results of the study required by subsection (a) of this section to the General Assembly prior to the convening of the 2015 General Assembly.

Extend Authority to reorganize THE COMMUNITY COLLEGES SYSTEM OFFICE
SECTION 10.5.(a)  Section 10.1(b) of S.L. 2013‑360 reads as rewritten:
"SECTION 10.1.(b)  This section expires June 30, 2015."

PERMIT the board of Community Colleges TO TRANSFER certain FUNDS TO DEPARTMENT OF COMMERCE TO OFFSET APPRENTICESHIP FEES
SECTION 10.6.(a)  Notwithstanding any other provision of law, of the funds appropriated by this act for the Customized Industry Training Program for the 2014‑2015 fiscal year, the State Board of Community Colleges shall transfer three hundred thousand dollars ($300,000) to the Department of Commerce to offset fee revenue lost when apprenticeship fees assessed pursuant to G.S. 94‑12 are waived.
SECTION 10.6.(b)  This section shall expire June 30, 2015.

Community Colleges and UNC Study Bilateral Agreements Regarding Transfer Process
SECTION 10.7.(a)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall jointly study the various bilateral agreements and partnerships that exist between constituent institutions of The University of North Carolina and the community colleges throughout the State. The study shall specifically focus on those agreements and partnerships that aid in the transfer process and those agreements and partnerships that encourage or require students to complete some coursework at a community college before attending or transferring to a constituent institution. The study shall also provide data on the agreements and partnerships, to the extent this information is available, on all of the following:
(1)	A description of the agreement or partnership;
(2)	The number of years it has been in existence;
(3)	The number of participants by year; and
(4)	An analysis of student outcomes after a transfer under the agreement or partnership.
SECTION 10.7.(b)  The findings of the study shall be reported to the Joint Legislative Education Oversight Committee and the Senate Appropriations Committee on Education/Higher Education and the House Appropriations Subcommittee on Education by February 1, 2015. The final report shall also include recommendations on replication and expansion possibilities for the various agreements and partnerships.

funds for the Cape fear Botanical Gardens
SECTION 10.8.  Of the funds allocated to Fayetteville Technical Community College by the Community Colleges System Office for the 2014-2015 fiscal year, Fayetteville Technical Community College may use up to fifty thousand dollars ($50,000) to support the Cape Fear Botanical Garden as part of the Fayetteville Technical Community College Horticulture Technology/Management program.

PART XI. UNIVERSITIES

DISTINGUISHED PROFESSOR ENDOWMENT trust FUND
SECTION 11.1.(a)  Part 4A of Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑41.14A.  Distinguished Professor Endowment Trust Funds; no State match requirement.
Notwithstanding any other provision of this Part, no State match shall be required to use private donations and gifts that were or are intended by the donor for the Distinguished Professorships. However, if the written terms of a particular donation or gift required a State match, then this section shall not apply without the written consent of the donor."
SECTION 11.1.(b)  G.S. 116‑41.13 reads as rewritten:
"§ 116‑41.13.  Distinguished Professors Endowment Trust Fund; purpose.
The General Assembly of North Carolina recognizes that the public university system would be greatly strengthened by the addition of distinguished scholars. It further recognizes that private as well as State support is preferred in helping to obtain distinguished scholars for the State universities and that private support will help strengthen the commitment of citizens and organizations in promoting excellence throughout all State universities. It is the intent of the General Assembly to establish a trust fund to provide the opportunity to each State university to receive and match challenge grants to create endowments for selected distinguished professors to occupy chairs within the university. The associated foundations that serve the universities shall solicit and receive gifts from private sources for the establishment of endowments for chairs within universities and to provide matching funds to the trust fund challenge grants when matching funds are available."

UNC TO FUND NORTH CAROLINA RESEARCH CAMPUS
SECTION 11.2.  Of the funds appropriated in this act to the Board of Governors of The University of North Carolina, the Board of Governors shall use twenty‑nine million dollars ($29,000,000) to support UNC‑related activities at the North Carolina Research Campus at Kannapolis.

REPORT ON INSTITUTIONAL TRUST FUNDS
SECTION 11.4.  G.S. 116‑36.1(e) reads as rewritten:
"(e)	Each institution shall submit such reports or other information concerning its trust fund accounts as may be required by the Board or by the Director of the Budget."

REPORT ON ACADEMIC SUMMER BRIDGE
SECTION 11.5.  No later than November 1, 2014, the Board of Governors of The University of North Carolina shall report to the Office of State Budget and Management and the Joint Legislative Education Oversight Committee on the impact of Academic Summer Bridge programs on student outcomes. At a minimum, the report shall include information by institution on graduation rates, average time to degree, and student academic performance at multiple intervals over a four‑year course of study.

OPERATION OF 4‑H CAMPS AND USE OF VARIOUS SITES OF DEFUNCT 4‑H CAMPS AND TRANSFER 4‑H CAMP SERTOMA/MOORE SPRINGS TO THE STATE PARKS SYSTEM.
SECTION 11.7.(a)  Part 5 of Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑43.20.  Operation of 4‑H camps.
(a)	North Carolina State University shall not close the 4‑H camps listed in subdivisions (1) through (3) of this subsection. Further, North Carolina State University shall continue to operate each of those camps as 4‑H camps and to offer programs and services at the sites of each of those camps at a level that is at least equivalent to the programs and services offered at each site as of June 30, 2013. The following three 4‑H camps are to continue and are to be operated as 4‑H camps as provided by this subsection:
(1)	Eastern 4‑H Center located in Columbia, NC.
(2)	Millstone 4‑H Camp located near Ellerbe, NC.
(3)	Betsy‑Jeff Penn 4‑H Educational Center located near Reidsville, NC.
(b)	The 4‑H camps that were located at the sites listed in subdivisions (1) and (2) of this subsection have ceased to operate as 4‑H camps. At the request of the board of county commissioners of any county that is the site of one of the defunct 4‑H camps listed in this subsection, North Carolina State University shall consult with the board regarding actions that may be taken to reopen the 4‑H camp in that county and other options that may be available for the use of the site.
Within 90 days after any consultation with a board of county commissioners conducted pursuant to this subsection, North Carolina State University shall submit a written report to the Joint Legislative Education Oversight Committee, the Senate Appropriations Committee on Education/Higher Education, the House of Representatives Appropriations Subcommittee on Education, and the Fiscal Research Division regarding the feasibility of reopening the site as a 4‑H camp and any other options considered for the use of the site.
The list of defunct 4‑H camps follows:
(1)	Anita‑Alta 4‑H Camp in the Pisgah National Forest in Lenoir, NC.
(2)	Swannanoa 4‑H Camp located at Swannanoa, NC.
(c)	North Carolina State University shall take all practicable measures to operate the 4‑H camps in a manner that will generate a positive fund balance in the institutional trust funds that account for the activities of the 4‑H camps."
SECTION 11.7.(b)  Article 7 of Chapter 146 of the General Statutes is amended by adding a new section to read:
"§ 146‑30.1.  Application of net proceeds of disposition or use of real property allocated to the 4‑H Camping Program.
(a)	Limitation. – Notwithstanding G.S. 146‑30 or any other provision of law, and subject to the limitations contained in any applicable deed, the net proceeds of any disposition of, use of, or activity on real property allocated to the 4‑H Camping Program shall be used solely for the operation of the 4‑H Camping Program, for the acquisition of real property for the 4‑H Camping Program, or for the funding of an endowment to support these purposes. These proceeds shall not be used to pay any debt or other financial obligation owed to a State agency that arose prior to the effective date of this section.
(b)	Definition of Net Proceeds. – For purposes of this section, the term "net proceeds" shall have the same meaning as in G.S. 146‑30.
(c)	No Supplanting of General Fund Support. – It is the intent of the General Assembly that appropriations for the 4‑H Camping Program not be reduced as a result of the realization of proceeds under this section. Instead, the General Assembly intends that the amount of appropriations be determined as if no proceeds had been realized under this section. The Director of the Budget shall not decrease the recommended continuation budget requirements for the 4‑H Camping Program as a result of proceeds being realized under this section.
(d)	Proceeds Must Be Appropriated. – Nothing in this section shall be construed to appropriate the proceeds described in this section."
SECTION 11.7.(c)  If on the effective date of this section the net proceeds of any use of, or activity on, real property allocated to the 4‑H Camping Program are being used in a manner prohibited by G.S. 146‑30.1, then notwithstanding that section they may continue to be used in that manner.
SECTION 11.7.(d)  The Department of Administration shall reallocate all of the approximately 716 acres of State‑owned real property that is part of Camp Sertoma/Moore Springs property to the Department of Environment and Natural Resources. The General Assembly authorizes the Department of Environment and Natural Resources to add this property to the State Parks System as provided in G.S. 113‑44.14(b).
SECTION 11.7.(e)  Of the funds appropriated by this act for the 2014‑2015 fiscal year to the Board of Governors of The University of North Carolina for North Carolina State University the sum of seven hundred twenty‑five thousand dollars ($725,000) in recurring funds shall be allocated equally among all operating 4‑H camps, including any currently defunct 4‑H camp that reopens and operates as a 4‑H camp. The funds allocated under this section shall be used for the operation, repair, and renovation of operating 4‑H camps.

STUDY FINANCIAL AID PAYMENT SCHEDULE TO INCENTIVIZE THIRTY COMPLETED HOURS PER YEAR and implement revised payment schedule
SECTION 11.8.  Section 11.15(h) of S.L. 2013‑360 reads as rewritten:
"SECTION 11.15.(h)  The State Education Assistance Authority, in consultation with The University of North Carolina, the North Carolina Community College System, and the North Carolina Independent Colleges and Universities, shall study ways to structure its financial aid payment schedules to encourage students to complete an average of 30 credit hours per academic year. The State Education Assistance Authority shall make an interim report to the Joint Legislative Education Oversight Committee by March 1, 2015, on its progress or lack thereof in developing such schedules and shall make a final report to the Joint Legislative Education Oversight Committee by October 1, 2015, about the financial aid payment schedules it proposes to implement.
After submitting its final report to the Joint Legislative Education Oversight Committee, the State Education Assistance Authority shall structure its payment schedules to encourage students to complete an average of 30 credit hours per academic year. The revised payment schedules shall be in place for financial aid awards made for the 2016‑2017 academic year and all subsequent academic years."

UNC FACULTY TUITION WAIVER
SECTION 11.9.(a)  G.S. 116‑143(d) reads as rewritten:
"(d)	Notwithstanding the above provision relating to the abolition of free tuition, the Board of Governors of The University of North Carolina may, in its discretion, provide regulations under which a full‑time faculty member of the rank of full‑time instructor or above, and any full‑time staff member of The University of North Carolina may during the period of normal employment enroll for not more than three courses per year in The University of North Carolina free of charge for tuition and fees, provided such enrollment does not interfere with normal employment obligations and further provided that such enrollments are not counted for the purpose of receiving general fund appropriations."
SECTION 11.9.(b)  This section applies to the 2014‑2015 fall academic semester and each subsequent academic semester.

REPORT ON COLLEGE FOUNDATION OF NORTH CAROLINA SUSTAINABILITY
SECTION 11.11.  No later than December 1, 2014, the State Education Assistance Authority shall report to the Office of State Budget and Management and the Fiscal Research Division of the General Assembly on its progress toward funding operations of the College Foundation of North Carolina entirely from non‑General Fund sources. This report shall include all of the following: 
(1)	The status of fundraising efforts to date.
(2)	A detailed plan and time line for generating additional revenues.
(3)	Estimated expenditures and revenues by type for the next four fiscal years.
(4)	Potential reduction measures and alternative funding options should General Fund appropriations not be provided in the next biennium.

TUITION ASSISTANCE TO VETERANS WHO PARTICIPATE IN THE YELLOW RIBBON PROGRAM AND THEIR SPOUSES AND DEPENDENT RELATIVES
SECTION 11.12.(a)  Article 14 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑143.8.  Tuition assistance for certain veterans and their dependents.
(a)	The following definitions apply in this section:
(1)	Institution of higher education. – Has the same meaning as in G.S. 116‑143.1(a)(1).
(2)	Yellow Ribbon Program. – Yellow Ribbon G.I. Education Enhancement Program, 38 U.S.C. § 3317.
(b)	Either the Board of Governors of The University of North Carolina or one or more constituent institutions shall annually enter into an agreement with the United States Secretary of Veterans Affairs to participate in the Yellow Ribbon Program. The State Board of Community Colleges or one or more community colleges shall annually enter into an agreement with the United States Secretary of Veterans Affairs to participate in the Yellow Ribbon Program. The agreements shall include all of the following terms:
(1)	A grant of ninety percent (90%) of the cost of tuition and mandatory fees not otherwise covered shall be provided for every eligible veteran or eligible spouse or dependent relative of a veteran who is enrolled or will be enrolled as an undergraduate student at a constituent institution or as a student at a community college.
(2)	To be eligible for grants under the Yellow Ribbon Program, a student must meet all program requirements established by the federal government. In addition, to be eligible for a Yellow Ribbon grant in which the school share of the grant is paid with State appropriation, a student must be enrolled as an undergraduate student at a constituent institution or as a student at a North Carolina community college.
(c)	This section is not intended to prohibit constituent institutions from using private funds to provide Yellow Ribbon grants for students enrolled in master's or doctoral level programs.
(d)	The General Assembly encourages private institutions of higher education in North Carolina to participate in the Yellow Ribbon Program."
SECTION 11.12.(b)  It is the intent of the General Assembly to establish two reserve funds for the purpose of forward funding tuition assistance to students who participate in the Yellow Ribbon Program. Therefore, the General Assembly establishes the two following reserve funds:
(1)	There is established the UNC Yellow Ribbon Reserve to be managed by the Board of Governors of The University of North Carolina. Of the funds appropriated by this act to the Board of Governors, the sum of four million eight hundred sixty‑three thousand two hundred seventy‑six dollars ($4,863,276) shall be allocated to the UNC Yellow Ribbon Reserve and shall be held in reserve for the 2014‑2015 fiscal year. Beginning with the 2015‑2016 fiscal year, the funds in the UNC Yellow Ribbon Reserve shall be used to fund undergraduate tuition assistance to participants in the Yellow Ribbon Program for the 2015‑2016 academic year and each subsequent academic year.
(2)	There is established the Community College Yellow Ribbon Reserve to be managed by the State Board of Community Colleges. Of the funds appropriated by this act to the Community Colleges System Office, the sum of one million dollars ($1,000,000) shall be allocated to the Community College Yellow Ribbon Reserve and shall be held in reserve for the 2014‑2015 fiscal year. Beginning with the 2015‑2016 fiscal year, the funds in the Community College Yellow Ribbon Reserve shall be used to fund tuition assistance to participants in the Yellow Ribbon Program for the 2015‑2016 academic year and each subsequent academic year.
SECTION 11.12.(c)  The Board of Governors and the State Board of Community Colleges shall each report to the Joint Legislative Education Oversight Committee by January 1, 2015, regarding their planned participation in the Yellow Ribbon Program for the 2015‑2016 academic year. Each report shall include the following information:
(1)	The number and identity of constituent institutions or community colleges that will participate in the Yellow Ribbon Program.
(2)	The methodology used by each governing board to select the institutions of higher education that will participate in the Yellow Ribbon Program.
(3)	For each institution that will participate, the maximum number of students and the maximum award amount per student.
(4)	A list of the institutions of higher education that will not participate in the Yellow Ribbon Program and the reason each institution is not participating.
SECTION 11.12.(d)  Subsection (a) of this section applies to the 2015‑2016 academic year and each subsequent academic year.

STUDY UNIVERSITY TUITION
SECTION 11.15.(a)  The Joint Legislative Education Oversight Committee shall study the increasing cost of attendance for resident and nonresident students attending The University of North Carolina. In doing so, the Committee shall consider, at a minimum, all of the following:
(1)	The tuition and mandatory fees at the constituent institutions of The University of North Carolina.
(2)	How changes in tuition and fees in recent years have compared to overall economic inflation.
(3)	The funding available to offset increases in the cost of attendance, which could include non‑General Fund revenues and the availability of State‑ and non‑State-funded financial aid.
(4)	The tuition cost controls or limits that may have been implemented in other states.
(5)	The desirability of encouraging students seeking an undergraduate degree to enroll first in a community college for college credit and then enroll in a constituent institution to complete the requirements for the undergraduate degree.
SECTION 11.15.(b)  The Joint Legislative Education Oversight Committee shall report the results of the study required by subsection (a) of this section to the General Assembly prior to the convening of the 2015 General Assembly.

UNC REVERSIONS
SECTION 11.17.(a)  G.S. 116‑30.3 reads as rewritten:
"§ 116‑30.3.  Reversions.
(a)	Of the General Fund current operations appropriations credit balance remaining at the end of each fiscal year in each of the budget codes listed in this subsection, any amount of the General Fund appropriation for that budget code for that fiscal year (i) may be carried forward to the next fiscal year in that budget code, (ii) is appropriated in that budget code, and (iii) may be used for any of the purposes set out in subsection (f) of this section. However, the amount carried forward in each budget code under this subsection shall not exceed two and one‑half percent (2.5%) of the General Fund appropriation in that budget code. The Director of the Budget, under the authority set forth in G.S. 143C‑6‑2, shall establish the General Fund current operations credit balance remaining in each budget code.
The budget codes that may carry forward a General Fund current operations appropriations credit balance remaining at the end of each fiscal year pursuant to this section are the budget codes for each of the following:
(1)	Each special responsibility constituent institution.
(2)	The Area Health Education Centers of the University of North Carolina at Chapel Hill.
(3)	General Administration Budget Code 16010.
(b)	Repealed by Session Laws 1998‑212, s. 11(b).
(c)	Repealed by Session Laws 1998‑212, s. 11(a).
(d)	Repealed by Session Laws 1998‑212, s. 11(b).
	
(f)	Funds carried forward pursuant to subsection (a) of this section may be used for one‑time expenditures, provided, however, that the expenditures shall not impose additional financial obligations on the State and shall not be used to support positions."
SECTION 11.17.(b)  G.S. 116‑14(b2) reads as rewritten:
"(b2)	The President, in consultation with the State Auditor and the Director of the Office of State Human Resources, shall ascertain that the management staff and internal financial controls are in place and continue in place to successfully administer the additional authority authorized under G.S. 116‑14(b1) and G.S. 116‑30.3. All actions taken by the President pursuant to G.S. 116‑14(b1) and G.S. 116‑30.3 are subject to audit by the State Auditor."
SECTION 11.17.(c)  This section applies to the 2014‑2015 fiscal year and each subsequent fiscal year.

UNC SET NONRESIDENT TUITION RATES
SECTION 11.18.  Notwithstanding the provisions of S.L. 2013‑360, the Board of Governors of The University of North Carolina may set nonresident undergraduate tuition rates for the 2014‑2015 fiscal year at any level deemed appropriate by the Board of Governors; however, the systemwide total in new tuition receipts due to these changes must be at least twenty‑seven million two hundred forty‑three thousand one hundred fifty‑seven dollars ($27,243,157) for the 2014‑2015 fiscal year.

UNC STRATEGIC PLAN FUNDS
SECTION 11.19.  Section 11.13 of S.L. 2013‑360 reads as rewritten:
"SECTION 11.13.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2013‑2015 fiscal biennium, the Board of Governors may spend a sum of up to fifteen million dollars ($15,000,000) on a recurring basis to implement provisions of The University of North Carolina Strategic Plan as set out in the report "Our Time, Our Future: The University of North Carolina Compact with North Carolina. These funds are in addition to any new funds appropriated for The University of North Carolina by this act."

REPORT ON FUNDING OF STATE MEDICAL SCHOOLS
SECTION 11.20.  The University of North Carolina System, working with the appropriate constituent institutions and health systems, shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Education Oversight Committee on how the medical schools are funded. The report shall include a detailed explanation of the sources of all income within both a current and historical context, noting any changes in funding sources and amounts over time. The report shall also include a detailed explanation of operating expenses so that they may be compared to income. The report required by this section is due by October 1, 2014, and shall be based on the most recent audited fiscal year practicable.

STUDY ON ESTABLISHMENT OF NEW OPTOMETRY SCHOOLS
SECTION 11.21.(a)  By December 1, 2014, the Board of Governors of The University of North Carolina shall evaluate and report to the Joint Legislative Education Oversight Committee, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division on the feasibility of establishing a school of optometry at one or more of the following constituent institutions:
(1)	The University of North Carolina at Chapel Hill.
(2)	The University of North Carolina at Pembroke.
(3)	East Carolina University.
(4)	Elizabeth City State University.
(5)	Fayetteville State University.
(6)	North Carolina Agricultural and Technical State University.
(7)	North Carolina Central University.
(8)	Winston‑Salem State University.
SECTION 11.21.(b)  The report by the Board of Governors pursuant to subsection (a) of this section shall include at least all of the following:
(1)	A breakdown of any projected capital, operational, or other expenditures necessary for establishing and operating a school of optometry affiliated with the institution.
(2)	A breakdown of all funds available to assist the institution with these expenses.
(3)	A projected number of applicants for the affiliated school of optometry.
SECTION 11.21.(c)  The North Carolina Independent Colleges and Universities, Inc., (NCICU) is encouraged to examine and report by December 1, 2014, to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the feasibility of establishing a school of optometry affiliated with an NCICU college or university. The report should include at least all of the following:
(1)	A breakdown of any projected capital, operational, or other expenditures necessary for establishing and operating a school of optometry affiliated with the institution.
(2)	A breakdown of all funds available to assist the institution with these expenses.
(3)	A projected number of applicants for the affiliated school of optometry.

UNC MANAGEMENT FLEXIBILITY REDUCTION
SECTION 11.22.  Section 11.5 of S.L. 2013‑360 reads as rewritten:
"SECTION 11.5.(a)  The management flexibility reduction for The University of North Carolina shall not be allocated by the Board of Governors to the constituent institutions and affiliated entities using an across‑the‑board method but shall be done in a manner that recognizes the importance of the academic missions and differences among The University of North Carolina entities.
Before taking reductions in instructional budgets, the Board of Governors and the campuses of the constituent institutions shall consider all of the following:
(1)	Reducing State funding for centers and institutes, speaker series, and other nonacademic activities.
(2)	Faculty workload adjustments.
(3)	Restructuring of research activities.
(4)	Implementing cost‑saving span of control measures.
(5)	Reducing the number of senior and middle management positions.
(6)	Eliminating low‑performing, redundant, or low‑enrollment programs.
(7)	Using alternative funding sources.
(8)	Protecting direct classroom services.
The Board of Governors and the campuses of the constituent institutions also shall review the institutional trust funds and the special funds held by or on behalf of The University of North Carolina and its constituent institutions to determine whether there are monies available in those funds that can be used to assist with operating costs. In addition, the campuses of the constituent institutions also shall require their faculty to have a teaching workload equal to the national average in their Carnegie classification.
"SECTION 11.5.(b)  In allocating the management flexibility reduction, no reduction in State funds shall be allocated in either fiscal year of the 2013‑2015 biennium to any of the following:
(1)	UNC Need‑Based Financial Aid.
(2)	North Carolina Need‑Based Scholarship.

	
"SECTION 11.5.(c)  The University of North Carolina shall report on the implementation of the management flexibility reduction in subsection (a) of this section to the Office of State Budget and Management and the Fiscal Research Division no later than October 1, 2014. This report shall identify both of the following by campus:
(1)	The total number of positions eliminated by type (faculty/nonfaculty).
(2)	The low‑performing, redundant, and low‑enrollment programs that were eliminated."

restore teaching fellows program
SECTION 11.23.  Section 1.38(a) and Section 1.38(c) of S.L. 2011-266 are repealed.

eCSu sTUDY
SECTION 11.24.(a)  The General Assembly finds that Elizabeth City State University had its origins established during the 1891 legislative session and is a key educational and economic resource for northeastern North Carolina. The Joint Legislative Education Oversight Committee shall evaluate and study strategies to address any financial or enrollment concerns.
SECTION 11.24.(b)  The Joint Legislative Education Oversight Committee shall examine, at a minimum, any plans of The University of North Carolina Board of Governors or of Elizabeth City State University to restore Elizabeth City State University to more financially sustainable conditions, including the strategies described in Elizabeth City State University’s March 2014, document titled, "Rightsizing ECSU: The Need for Financial Stability". Further, the General Assembly urges that, in conducting the study described in subsection (a) of this section, the JLEOC's work include consultation with the Board of Trustees of Elizabeth City State University and any other appropriate parties.
SECTION 11.24.(c) The Joint Legislative Education Oversight Committee shall report the results of the study required by this section to the General Assembly prior to the convening of the 2015 General Assembly. The report shall include recommendations, if any, for actions by the General Assembly to address such financial and enrollment concerns.

PART XII. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SUBPART XII‑A. CENTRAL MANAGEMENT AND SUPPORT

HHS COMPETITIVE GRANTS PROCESS REVISIONS
SECTION 12A.1.  Section 12A.2 of S.L. 2013‑360 reads as rewritten:
"FUNDING FOR NONPROFIT ORGANIZATIONS/ESTABLISH COMPETITIVE GRANTS PROCESS
"SECTION 12A.2.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of nine million five hundred twenty‑nine thousand one hundred thirty‑four dollars ($9,529,134) in recurring funds for the 2013‑2014 fiscal year and the sum of nine million three hundred three thousand nine hundred eleven dollars ($9,303,911) in recurring funds for the 2014‑2015 fiscal year, the sum of three hundred seventeen thousand four hundred dollars ($317,400) in nonrecurring funds for each year of the 2013‑2015 fiscal biennium, and the sum of three million eight hundred fifty‑two thousand five hundred dollars ($3,852,500) appropriated in Section 12J.1 of this act in Social Services Block Grant funds for each year of the 2013‑2015 fiscal biennium shall be used to allocate funds for nonprofit organizations.
…
"SECTION 12A.2.(d)  It is the intent of the General Assembly that, beginning fiscal year 2014‑2015, the Department implement a competitive grants process for nonprofit funding. To that end, the Department shall develop a plan that establishes a competitive grants process to be administered by the Division of Central Management and Support. The Department shall develop a plan that, at a minimum, includes each of the following:
(1)	A request for application (RFA) process to allow nonprofits to apply for and receive State funds on a competitive basis.
(2)	A requirement that nonprofits match a minimum of ten percent (10%) of the total amount of the grant award.
(3)	A requirement that the Secretary prioritize grant awards to those nonprofits that are able to leverage non‑State funds in addition to the grant award.
(4)	A process that awards grants to nonprofits that have the capacity to provide services on a statewide basis and that support any of the following State health and wellness initiatives:
a.	A program targeting advocacy, support, education, or residential services for persons diagnosed with autism.
	
c.	A system of residential supports for those afflicted with substance abuse addiction.
d.	A program of advocacy and supports for individuals with intellectual and developmental disabilities or severe and persistent mental illness, substance abusers, or the elderly.
e.	Supports and services to children and adults with developmental disabilities or mental health diagnoses.
f.	A food distribution system for needy individuals.
g.	The provision and coordination of services for the homeless.
h.	The provision of services for individuals aging out of foster care.
i.	Programs promoting wellness, physical activity, and health education programming for North Carolinians.
j.	A program focused on enhancing vision screening through the State's public school system.
k.	Provision for the delivery of after‑school services for apprenticeships or mentoring at‑risk youth.
l.	The provision of direct services for amyotrophic lateral sclerosis (ALS) and those diagnosed with the disease.
m.	The provision of assistive information technology services for blind and disabled persons.
n.	A comprehensive smoking prevention and cessation program that screens and treats tobacco use in pregnant women and postpartum mothers.
(5)	Ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for health and wellness programs and initiatives.
…."

FUNDS FOR STATEWIDE HEALTH INFORMATION EXCHANGE
SECTION 12A.2.(a)  It is the intent of the General Assembly:
(1)	To maximize receipt of federal funds for administration and support of the statewide health information exchange network (HIE Network).
(2)	To allow the North Carolina Health Information Exchange (NC HIE), the nonprofit corporation responsible for overseeing and administering the HIE Network, to receive the State's share of available federal funds for administration and support of the HIE Network in order to reduce the operating costs of the HIE Network by an amount sufficient to allow for the elimination or reduction of the participation fee the NC HIE currently imposes on hospitals required to connect to the HIE Network pursuant to G.S. 90‑413.3A.
(3)	Beginning with the 2015‑2016 fiscal year, to make the Department of Health and Human Services, Division of Central Management and Support, responsible for using State funds to draw down available matching federal funds for administration and support of the HIE Network.
SECTION 12A.2.(b)  From the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the health information exchange for the 2014‑2015 fiscal year, the Department shall allocate to the North Carolina Health Information Exchange, a nonprofit corporation, an amount sufficient to represent the State share for the maximum amount of approved federal matching funds for allowable Medicaid administrative costs related to the HIE Network.
SECTION 12A.2.(c)  By March 1, 2015, the NC HIE shall report to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division on its use of (i) State appropriations allocated to the NC HIE pursuant to this section and (ii) federal matching funds received by the NC HIE for costs related to the HIE Network. The report shall include a detailed, audited report of all State and federal funds received by the NC HIE and all expenditures from these funds.

Repeal Plans to Implement System Modifications To Enable Contract Entities to Perform Medicaid Claim Adjudication in the Replacement Medicaid Management Information System
SECTION 12A.4.(a)  Section 12A.4(j) of S.L. 2013‑360 is repealed.
SECTION 12A.4.(b)  Section 12A.4(k) of S.L. 2013‑360, as amended by Section 4.11 of S.L. 2013‑363, is repealed.

Funds for Replacement Medicaid Management Information System
SECTION 12A.5.  Section 12A.4(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 12A.4.(a)  The Secretary of the Department of Health and Human Services may utilize prior year earned revenue received for the replacement MMIS in the amount of nine million six hundred fifty‑eight thousand one hundred fifty‑two dollars ($9,658,152) for the 2013‑2014 fiscal year and in the amount of six million eight hundred ninety thousand six hundred dollars ($6,890,600) for the 2014‑2015 fiscal year. In the event the Department does not receive prior year earned revenues in the amounts authorized by this section, or funds are insufficient to advance the project, the Department may, with prior approval from the Office of State Budget and Management (OSBM), utilize overrealized receipts and funds appropriated to the Department to achieve the level of funding specified in this section for the replacement MMIS."

Funds for North Carolina Families Accessing Services Through Technology (NC FAST)
SECTION 12A.6.  Section 12A.6(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 12A.6.(a)  Funds appropriated in this act in the amount of eight hundred sixty‑four thousand six hundred fifty‑five dollars ($864,655) for State fiscal year 2014‑2015 along with prior year earned revenue in the amount of four million one hundred thirty‑eight thousand two dollars ($4,138,002) and the cash balance in Budget Code 24410 Fund 2411 for the North Carolina Families Accessing Services through Technology (NC FAST) project shall be used to match federal funds in fiscal years 2013‑2014 and 2014‑2015 to expedite the development and implementation of the Eligibility Information System (EIS), Child Care, Low Income Energy Assistance, and Crisis Intervention Programs, and Child Service components of the NC FAST project."

SUPPLEMENTAL SHORT‑TERM ASSISTANCE FOR GROUP HOMES
SECTION 12A.7.(a)  Notwithstanding any other provision of law, funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2014‑2015 fiscal year for unpaid LME liabilities is reduced by the sum of two million dollars ($2,000,000) in nonrecurring funds, and that amount is instead allocated to the Department of Health and Human Services, Division of Central Management and Support, for the 2014‑2015 fiscal year to provide temporary, short‑term financial assistance in the form of a monthly payment to group homes on behalf of each resident who meets all of the following criteria:
(1)	Was eligible for Medicaid‑covered personal care services (PCS) prior to January 1, 2013, but was determined to be ineligible for PCS on or after January 1, 2013, due to Medicaid State Plan changes in PCS eligibility criteria specified in Section 10.9F of S.L. 2012‑142, as amended by Section 3.7 of S.L. 2012‑145 and Section 70 of S.L. 2012‑194.
(2)	Has continuously resided in a group home since December 31, 2012.
SECTION 12A.7.(b)  These monthly payments shall be subject to all of the following requirements and limitations:
(1)	The amount of the monthly payments authorized by this section shall not exceed four hundred sixty‑four dollars and thirty cents ($464.30) per month for each resident who meets all criteria specified in subsection (a) of this section.
(2)	A group home that receives the monthly payments authorized by this section shall not, under any circumstances, use these payments for any purpose other than providing, as necessary, supervision and medication management for a resident who meets all criteria specified in subsection (a) of this section.
(3)	The Department shall make monthly payments authorized by this section to a group home on behalf of each resident who meets all criteria specified in subsection (a) of this section only for the period commencing July 1, 2014, and ending June 30, 2015, or upon depletion of the two million dollars ($2,000,000) in nonrecurring funds appropriated in this act to the Division of Central Management and Support for the 2014‑2015 fiscal year for the purpose of this section, whichever is earlier.
(4)	The Department shall make monthly payments authorized by this section only to the extent sufficient funds are available from the two million dollars ($2,000,000) in nonrecurring funds appropriated in this act to the Division of Central Management and Support for the 2014‑2015 fiscal year for the purpose of this section.
(5)	The Department shall not make monthly payments authorized by this section to a group home on behalf of a resident during the pendency of an appeal by or on behalf of the resident under G.S. 108A‑70.9A.
(6)	The Department shall terminate all monthly payments pursuant to this section on June 30, 2015, or upon depletion of the funds appropriated in this act to the Division of Central Management and Support for the 2014‑2015 fiscal year for the purpose of this section, whichever is earlier.
(7)	Each group home that receives the monthly payments authorized by this section shall submit to the Department a list of all funding sources for the operational costs of the group home for the preceding two years, in accordance with the schedule and format prescribed by the Department.
SECTION 12A.7.(c)  The Department shall use an existing mechanism to administer these funds in the least restrictive manner that ensures compliance with this section and timely and accurate payments to group homes. The Department shall not, under any circumstances, use any portion of the two million dollars ($2,000,000) appropriated in this act to the Division of Central Management and Support for the purpose of this section for any other purpose.
SECTION 12A.7.(d)  By no later than April 1, 2015, the Department of Health and Human Services shall submit to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division:
(1)	A plan for a long‑term solution for individuals residing in group homes who would like to continue residing in this setting and, as a result of an independent assessment, have been determined to need only supervision, medication management, or both.
(2)	A list of funding sources for each group home that receives assistance authorized by this section, based on the information provided to the Department pursuant to Section 12A.7(b)(7).
SECTION 12A.7.(e)  Nothing in this section shall be construed as an obligation by the General Assembly to appropriate funds for the purpose of this section, or as an entitlement by any group home, resident of a group home, or other person to receive temporary, short‑term financial assistance under this section.
SECTION 12A.7.(f)  As used in this act, "group home" means any facility that (i) is licensed under Chapter 122C of the General Statutes, (ii) meets the definition of a supervised living facility under 10A NCAC 27G .5601(c)(1) or 10A NCAC 27G .5601(c)(3), and (iii) serves adults whose primary diagnosis is mental illness or a developmental disability but may also have other diagnoses.
SECTION 12A.7.(g)  This section expires June 30, 2015.

SUBPART XII‑B. DIVISION OF CHILD DEVELOPMENT AND EARLY EDUCATION

CHILD CARE SUBSIDY RATES/REVISE CO‑PAYMENTS AND ELIGIBILITY CRITERIA
SECTION 12B.1.  Section 12B.3 of S.L. 2013‑360 reads as rewritten:
"CHILD CARE SUBSIDY RATES
"SECTION 12B.3.(a)  Beginning October 1, 2014, the maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be determined based on a percentage of the federal poverty level as follows:
	AGE	INCOME PERCENTAGE LEVEL
	0‑5	200%
	6‑12	133%
The eligibility for any child with special needs, including a child who is 13 years of age or older, shall be two hundred percent (200%) of the federal poverty level.
"SECTION 12B.3.(a1)  A child receiving child care subsidy based on seventy‑five percent (75%) of the State median income shall continue to receive subsidy based on seventy‑five percent (75%) of the State median income until the child's next eligibility redetermination by the Department, and at that redetermination, the child's income eligibility shall be based on the eligibility criteria set forth in subsection (a) of this section.
"SECTION 12B.3.(b)  Beginning October 1, 2014, fees for families who are required to share in the cost of care shall be established based on ten percent (10%) of gross family income. Co‑payments shall not be prorated for part‑time care.

		

"SECTION 12B.3.(b1)  No later than January 1, 2015, the Department of Health and Human Services, Division of Child Development and Early Education, shall revise its child care subsidy policy to include in the policy's definition of "income unit" the following:
(1)	A stepparent and the stepparent's child, if applicable.
(2)	A nonparent relative caretaker, and the caretaker's spouse and child, if applicable, when the parent of the child receiving child care subsidy does not live in the home with the child.
…
"SECTION 12B.3.(h)  Payment for subsidized child care services provided with Temporary Assistance for Needy Families Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.
…."

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES ENHANCEMENTS/REQUIRE FUND‑RAISING ASSISTANCE/CODIFY TANF MAINTENANCE OF EFFORT REQUIREMENT
SECTION 12B.2.(a)  Section 12B.9 of S.L. 2013‑360 is amended by adding the following new subsection to read:
"SECTION 12B.9.(i)  The North Carolina Partnership for Children, Inc., (Partnership) shall include in its assistance to local partnerships training and assistance with fund‑raising activities. From funds available to the Partnership, the Partnership shall hire a staff of three individuals who are qualified in the areas of grant writing and fund‑raising to assist local partnerships in raising non‑State funds, particularly regarding private donations. The staff hired pursuant to this subsection shall be located regionally and be accessible to participate in the various local partnerships' activities."
SECTION 12B.2.(b)  G.S. 143B‑168.15(g) reads as rewritten:
"(g)	Not less than thirty percent (30%) of the funds spent in each year of each local partnership's direct services allocation shall be used to expand child care subsidies. To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child care services as described in this section. The North Carolina Partnership may increase this percentage requirement up to a maximum of fifty percent (50%) when, based upon a significant local waiting list for subsidized child care, the North Carolina Partnership determines a higher percentage is justified. Local partnerships shall spend an amount for child care subsidies that provides at least fifty‑two million dollars ($52,000,000) for the Temporary Assistance to Needy Families (TANF) maintenance of effort requirement and the Child Care Development Fund and Block Grant match requirement."

STUDY CHILD CARE SUBSIDY FOR 11‑ AND 12‑YEAR OLDS
SECTION 12B.3.(a)  The Department of Health and Human Services, Division of Child Development and Early Education, shall study child care subsidy for 11‑ and 12‑year olds. The Division shall study (i) available options for 11‑ and 12‑ year olds for before and after school care, (ii) available resources other than child care subsidy to pay for before and after school care, and (iii) the average cost of care for 11‑ and 12‑ year olds.
SECTION 12B.3.(b)  The Division shall report its findings and recommendations to the Joint Legislative Committee on Health and Human Services and the Fiscal Research Division no later than November 30, 2014. The report shall include separate findings and recommendations for 11‑ and 12‑year olds.

REVISE CHILD CARE ALLOCATION FORMULA
SECTION 12B.4.  Section 12B.4 of S.L. 2013‑360 reads as rewritten:
"CHILD CARE ALLOCATION FORMULA
"SECTION 12B.4.(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%) North Carolina Partnership for Children, Inc., 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%) North Carolina Partnership for Children, Inc., 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 the applicable federal poverty level percentage set forth in Section 12B.3(a) of this act, as amended.
(2)	No county's allocation shall be less than ninety percent (90%) of its State fiscal year 2001‑2002 initial child care subsidy allocation.
(3)	For fiscal years 2013‑2014 and 2014‑2015, the Division of Child Development and Early Education shall base the formula identified in subdivision (1) of this subsection on the same data source used for the 2012‑2013 fiscal year.
(4)	The Department of Health and Human Services shall allocate to counties all State funds appropriated for child care subsidy and shall not withhold funds during the 2013‑2014 and 2014‑2015 fiscal years.
"SECTION 12B.4.(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 North Carolina Partnership for Children, Inc., funds within a county.
"SECTION 12B.4.(c)  When implementing the formula under subsection (a) of this section, the Department of Health and Human Services, Division of Child Development and Early Education, shall include the market rate increase in the formula process, rather than running these increases outside of the formula process. Additionally, the Department shall do the following:
(1)	Beginning fiscal year 2014‑2015, use one‑third implementation of the new Census data allocation formula every two years, provided the following applies regarding increases to a county's allocation:
a.	For the 2014‑2015 fiscal year allocations, a county that did not have a child care subsidy waiting list during the 2013‑2014 fiscal year shall not receive an increase in its allocation due to the new allocation formula directed in this subdivision.
b.	Beginning fiscal year 2015‑2016, a county whose spending coefficient is below ninety‑five percent (95%) in the previous fiscal year shall not receive an increase in its allocation in the following fiscal year. The Division may waive this requirement and allow an increase if the spending coefficient is below ninety‑five percent (95%) due to extraordinary circumstances, such as a State or federal disaster declaration in the affected county. By October 1st of each year, the Division shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the counties that received a waiver pursuant to this sub-subdivision and the reasons for the waiver.
(2)	Effective immediately following the next new Census data release, use one‑third biennial implementation, which reflects a six‑year phase‑in approach for each Census cycle thereafter going forward."

Child Care Market Rate Adjustments
SECTION 12B.5.  By January 1, 2015, the Department shall implement an adjustment to child care market rates based upon the 2013 Child Care Market Rate Study. Three‑ to five‑star rated child care centers and three‑ to five‑star rated child care homes shall receive forty percent (40%) of the recommended rate adjustments as defined in the 2013 Child Care Market Rate Study.

NC Pre‑K Audits
SECTION 12B.6.  Section 12B.1 of S.L. 2013‑360, as amended by Sections 4.2 and 4.3 of S.L. 2013‑363, is amended by adding the following new subsection to read:
"SECTION 12B.1.(k)  The administration of the NC Pre‑K program by local partnerships shall be subject to the biennial financial and compliance audits authorized under G.S. 143B‑168.14(b)."

Child Care License Certification by DHHS
SECTION 12B.7.  The Department of Health and Human Services shall be responsible for certifying individuals and assigning a certification level pursuant to the North Carolina Early Education Certification based on rules adopted by the Commission.

SUBPART XII‑C. DIVISION OF SOCIAL SERVICES

CHILD PROTECTIVE SERVICES IMPROVEMENT INITIATIVE
SECTION 12C.1.(a)  Findings and Intent. – The General Assembly makes the following findings:
(1)	Child Protective Services' policy from the Department of Health and Human Services, Division of Social Services, recommends that the average child protective services caseload be no greater than 10 families at any time for workers performing child protective services assessments and 10 families at any time for staff providing in‑home services. However, data suggests that in 43 of the counties in this State, 21 have a caseload size of over 15 cases per worker; and further, in nine of those 21 counties, there is an average caseload size of over 20 cases per worker.
(2)	During the 2013‑2014 fiscal year, county departments of social services lost federal funding for child protective services under the Temporary Assistance of Needy Families (TANF) Block Grant and Title IV‑E funding. However, the number of Child Protective Services investigations has grown by twenty percent (20%) from fiscal year 2002 to fiscal year 2012.
(3)	There is no current, statewide data available on the performance of county departments of social services regarding child protective services.
(4)	There exists the potential for a conflict of interest to arise when a county department of social services has been appointed as guardian for both (i) a child who is the subject of a report of abuse, neglect, or dependency that would be investigated by Child Protective Services and (ii) for the parent or legal guardian of the child.
It is the intent of the General Assembly to (i) reduce caseload size for Child Protective Services' workers to the recommended standard, (ii) provide adequate resources for county departments of social services to provide child protective services for abused, neglected, and dependent children, (iii) provide for a comprehensive evaluation of various functions and funding regarding child protective services, and (iv) study ways to reduce conflicts of interest regarding guardianship and child protective services. To that end, the General Assembly supports the initiatives and the allocation of funds for child welfare services as described in this section.
SECTION 12C.1.(b)  Funds for Child Protective Services. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of eight million three hundred twenty‑six thousand six hundred twenty‑seven dollars ($8,326,627) shall be allocated to provide additional child protective services workers at county departments of social services to reduce caseloads to the recommended standard.
SECTION 12C.1.(c)  Funds for In‑Home Services. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of four million five hundred thousand dollars ($4,500,000) shall be allocated for Child Welfare in‑home services to provide and coordinate interventions and services that focus on child safety and protection, family preservation, and the prevention of further abuse or neglect.
SECTION 12C.1.(d)  Funds for Oversight of Child Welfare Services. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of seven hundred fifty thousand dollars ($750,000) shall be allocated to fund nine positions to the Division to enhance oversight of child welfare services in county departments of social services. These positions shall be used to monitor, train, and provide technical assistance to the county departments of social services to ensure children and families are provided services that address the safety, permanency, and well‑being of children served by child welfare services.
SECTION 12C.1.(e)  Pilot Program. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of three hundred thousand dollars ($300,000) shall be used to establish and implement a child protective services pilot program. The funds shall be used to enhance coordination of services and information among county departments of social services, local law enforcement agencies, the court system, guardian ad litem programs, and other agencies as deemed appropriate by the Department. The Department shall determine the number of sites that may participate in the pilot program and include regions that are geographically diverse.
The Division shall make a progress report on the pilot program 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 no later than March 1, 2015. The Division shall make a final report of its findings and recommendations on the pilot program to the Joint Legislative Oversight Committee on Health and Human Services no later than March 1, 2016.
SECTION 12C.1.(f)  Statewide Evaluation. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of seven hundred thousand dollars ($700,000) shall be used to provide for a comprehensive, statewide evaluation of the State's child protective services system. The Division of Social Services shall contract for an independent evaluation of the system, which evaluation shall include developing recommendations on the following:
(1)	The performance of county departments of social services as related to child protective services.
(2)	Caseload sizes.
(3)	The administrative structure of the child protective services system in the State.
(4)	Adequacy of funding.
(5)	Child protective services' worker turnover.
(6)	Monitoring and oversight of county departments of social services.
The Division shall report the findings and recommendations from the evaluation to the Joint Legislative Oversight Committee on Health and Human Services no later than January 1, 2016.
SECTION 12C.1.(g)  Study Conflicts of Interest/Public Guardianship and Child Protective Services. – The Department of Health and Human Services, Division of Social Services, shall study the issue of conflicts of interest in child welfare cases as related to public guardianship. In conducting the study, the Department shall consider the following regarding addressing potential conflicts of interest:
(1)	Creating internal firewalls to prevent information sharing and influence among staff members involved with the conflicting cases.
(2)	Creating a formal or an informal "buddy system" allowing a county with a conflict to refer a case to a neighboring county.
(3)	Referring the guardianship to a corporate guardian until the child welfare case is resolved.
(4)	Having the Department assume responsibility for either the guardianship or the child welfare case.
(5)	Recommending legislation to permit the clerk the option to appoint a public agency or official, other than the Director of Social Services, to serve as a disinterested public agent in exceptional circumstances only.
(6)	Any other issues specific to this matter the Department deems appropriate.
The Division shall submit a final report of 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, and the Fiscal Research Division no later than February 1, 2015.

Clarify Work First Family Assistance Income Levels
SECTION 12C.2.  G.S. 108A‑27.01 reads as rewritten:
"§ 108A‑27.01.  Income eligibility and payment level for Work First Family Assistance.
The maximum net family annual income eligibility standards for Work First Family Assistance are as provided in the table below. The payment level for Work First Family Assistance shall be fifty percent (50%) of the standard of need."
Family	Income
Size	Level
1	$ 4,344
2	5,664
3	6,528
4	7,128
5	7,776
6	8,376
7	8,952
8	9,256"

EASTERN BAND OF CHEROKEE INDIANS/ASSUMPTION BY TRIBE OF VARIOUS HUMAN SERVICES
SECTION 12C.3.(a)  The purpose of this section is to enable the Eastern Band of Cherokee Indians to assume responsibility for certain social services, healthcare benefit programs, ancillary services, including Medicaid administrative and service related functions, and related reimbursements.
SECTION 12C.3.(b)  Beginning October 1, 2014, or upon federal approval, the Eastern Band of Cherokee Indians may begin assuming the responsibility for the Supplemental Nutrition Assistance Program (SNAP). When the Eastern Band of Cherokee Indians assumes responsibility for SNAP, then any State statutes, portions of statutes, or rules relating to the provision of social services regarding SNAP services by a county department of social services for members of the Eastern Band of Cherokee Indians shall no longer apply to the Tribe, and the functions, administration, and funding requirements relating to those social services are thereby delegated to the Eastern Band of Cherokee Indians.
No later than October 1, 2015, and with the exception of services related to special assistance, childcare, and adult care homes, the Eastern Band of Cherokee Indians may assume responsibility for other programs as described under G.S. 108A‑25(e), enacted in subsection (c) of this section. When the Eastern Band of Cherokee Indians assumes responsibility for any of those other programs, then any State statutes, portions of statutes, or rules relating to the provision of services for those programs by a county department of social services for members of the Eastern Band of Cherokee Indians shall no longer apply to the Tribe, and the functions, administration, and funding requirements relating to those programs are thereby delegated to the Eastern Band of Cherokee Indians.
SECTION 12C.3.(c)  G.S. 108A‑25 reads as rewritten:
"§ 108A‑25.  Creation of programs; assumption by federally recognized tribe of programs.
…
(e)	When any federally recognized Native American tribe within the State assumes responsibility for any social services, Medicaid and NC Health Choice healthcare benefit programs, and ancillary services, including Medicaid administrative and service functions, that are otherwise the responsibility of a county under State law, then, notwithstanding any other provision of law, the county shall be relieved of the legal responsibility related to the tribe's assumption of those services."
SECTION 12C.3.(d)  G.S. 108A‑87 reads as rewritten:
"§ 108A‑87.  Allocation of nonfederal shares.
(a)	The nonfederal share of the annual cost of each public assistance and social services program and related administrative costs may be divided between the State and counties as determined by the General Assembly and in a manner consistent with federal laws and regulations.
(b)	The nonfederal share of the annual cost of public assistance and social services programs and related administrative costs provided to Indians living on federal reservations held in trust by the United States on their behalf shall be borne entirely by the State.
(c)	Notwithstanding subsections (a) and (b) of this section, when the Eastern Band of Cherokee Indians assumes responsibility for a program described under G.S. 108A-25(e), the following shall occur:
(1)	Nonfederal matching funds designated to Jackson and Swain counties to serve the Eastern Band of Cherokee Indians for that program previously borne by the State shall be allocated directly to the Eastern Band of Cherokee Indians rather than to those counties.
(2)	Any portion of nonfederal matching funds borne by counties for public assistance and social services programs and related administrative costs shall be borne by the Eastern Band of Cherokee Indians."
SECTION 12C.3.(e)  No later than October 1, 2014, the Department of Health and Human Services, Division of Medical Assistance, shall submit to the Centers for Medicare and Medicaid Services (CMS) Medicaid and NC Health Choice state plan amendments and Medicaid waivers necessary to achieve the following:
(1)	To effectuate the changes required by this section.
(2)	To address the healthcare needs identified in community health assessments and plans conducted by the Eastern Band of Cherokee Indians, provided that changes to Medicaid and NC Health Choice services made by the state plan amendments or waivers will be one hundred percent (100%) federally funded. If any state plan amendments or waivers authorized by this subdivision will increase the state share of administrative or other costs, the Department shall report the anticipated increased costs to the Joint Legislative Oversight Committee on Health and Human Services.
The state plan amendments and waivers authorized by this section shall have an effective date no later than October 1, 2015.

SUBPART XII‑D. DIVISION OF AGING AND ADULT SERVICES

CLARIFICATION OF ELIGIBILITY FOR STATE‑COUNTY SPECIAL ASSISTANCE PROGRAM
SECTION 12D.1.(a)  G.S. 108A‑41(b) reads as rewritten:
"(b)	Assistance shall be granted to any person who meets all of the following criteria:
(1)	Is one of the following:
a.	65 years of age or older.
b.	Between the ages of 18 and 65, and permanently and totally disabled or legally blind pursuant to G.S. 111‑11.
(2)	Has insufficient income or other resources to provide a reasonable subsistence compatible with decency and health as determined by the rules and regulations of the Social Services Commission.
(3)	Is one of the following:
a.	A resident of North Carolina for at least 90 days immediately prior to receiving this assistance.
b.	A person coming to North Carolina to join a close relative who has resided in North Carolina for at least 180 consecutive days immediately prior to the person's application. The close relative shall furnish verification of his or her residency to the local department of social services at the time the applicant applies for special assistance. As used in this sub‑subdivision, a close relative is the person's parent, grandparent, brother, sister, spouse, or child.
c.	A person discharged from a State facility who was a patient in the facility as a result of an interstate mental health compact. As used in this sub‑subdivision the term State facility is a facility listed under G.S. 122C‑181."

STATE‑COUNTY SHARE OF COSTS FOR SPECIAL ASSISTANCE PROGRAM
SECTION 12D.2.  G.S. 143B‑139.5 reads as rewritten:
"§ 143B‑139.5.  Department of Health and Human Services; adult care State/county share of costs for State‑County Special Assistance programs.
State funds available to the Department of Health and Human Services shall pay fifty percent (50%), and the counties shall pay fifty percent (50%) of the authorized rates for care in adult care homes including area mental health agency‑operated or contracted‑group homes. The Department shall use the State's appropriation to the State‑County Special Assistance program for this program, for the State‑County Special Assistance in‑home program, and for rental assistance. Each county shall use county funds budgeted for the State‑County Special Assistance program for this program, for the State‑County Special Assistance in‑home program, and for rental assistance."

EXAMINATION OF WAYS TO IMPROVE THE PUBLIC GUARDIANSHIP SYSTEM
SECTION 12D.3.(a)  The Department of Health and Human Services (Department), Division of Aging and Adult Services, shall collaborate with the Administrative Office of the Courts to develop a plan regarding the Department's evaluation of complaints pertaining to wards under the care of publicly funded guardians in order to ensure that, in addition to current requirements, the complaint process incorporates a face‑to‑face observation of the ward, an interview with the ward, or both. The plan shall include a requirement that an individual with experience in understanding the unique needs and abilities of the ward be assigned to conduct the observation or interview.
SECTION 12D.3.(b)  The Department shall continue utilizing existing safeguards regarding guardians as paid service providers. In addition, the Division of Aging and Adult Services shall consult with the clerks of superior court, local management entities that have been approved as managed care organizations, the North Carolina Bar Association Section on Elder Law, and any other interested groups to develop a model plan for transitioning a ward to an alternative guardianship arrangement when an individual guardian of the person becomes unable or unwilling to serve. The model plan shall focus on ways to prevent the appointment of a public guardian.
SECTION 12D.3.(c)  The Department shall continue to study whether utilization of care coordination services would provide needed oversight to safeguard against conflicts of interest when guardians serve as paid providers.
SECTION 12D.3.(d)  The Department shall submit a final report of its findings and recommendations for each of the issues described in subsections (a) through (c) of this section to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than October 1, 2014.

STATUS REPORTS FILED BY CORPORATIONS OR DISINTERESTED PUBLIC AGENTS SERVING AS GUARDIANS FOR INCOMPETENT WARDS
SECTION 12D.4.(a)  G.S. 35A‑1202(14) reads as rewritten:
"(14)	"Status report" means the report required by G.S. 35A‑1242 to be filed by the general guardian or guardian of the person."
SECTION 12D.4.(b)  G.S. 35A‑1242 reads as rewritten:
"§ 35A‑1242.  Status reports for incompetent wards.
(a)	Any corporation or disinterested public agent that is guardian of the person for an incompetent person, within six months after being appointed, shall file an initial status report with the clerk and submit a copy of the initial status report to the designated agency, if there is one. Such guardian shall file a second status report with the clerk one year after being appointed, and subsequent reports annually thereafter. The clerk may order any other guardian of the person to file status reports. If a guardian required by this section to file a status report is employed by the designated agency, the guardian shall file any required status report with the clerk and submit a copy of the status report to the designated agency.
(a1)	Each status report shall include all of the following:
(1)	A report or summary of recent medical and dental examinations of the ward by one or more physicians and dentists. In instances when the guardian has made diligent but unsuccessful attempts to secure this information, the guardian shall include in the status report an explanation and documentation of all actions taken to attempt to secure this information.
(2)	A report on the guardian's performance of the duties set forth in this Chapter and in the clerk's order appointing the guardian.
(3)	A report on the ward's residence, education, employment, and rehabilitation or habilitation.
(4)	A report of the guardian's efforts to restore competency.
(5)	A report of the guardian's efforts to seek alternatives to guardianship.
(6)	If the guardian is a disinterested public agent or corporation, a report of the efforts to identify alternative guardians.
(7)	The guardian's recommendations for implementing a more limited guardianship, preserving for the ward the opportunity to exercise rights that are within the ward's comprehension and judgment.
(8)	Any additional reports or information required by the clerk.
(a2)	The guardian may include in each status report additional information pertaining to the ward's best interests.
(b)	Each status report shall be filed (i) under the guardian's oath or affirmation that the report is complete and accurate so far as the guardian is informed and can determine or (ii) with the signature of a disinterested, competent witness to a statement by the guardian that the report is complete and accurate so far as the guardian is informed and can determine. Status reports filed with the signature of a disinterested, competent witness shall include the full name, address, and telephone number of the witness.
(b1)	The clerk shall make status reports submitted by corporations or disinterested public agents available to the Director, or the Director's designee, of the Division of Aging and Adult Services within the Department of Health and Human Services. The Director, or the Director's designee, shall review the status reports in connection with the Department's regular program of oversight for these categories of guardians.
(c)	A clerk or designated agency that receives a status report shall not make the status report available to anyone other than the guardian, the ward, the court, or State or local human services agencies providing services to the ward.
(d)	The clerk, on the clerk's own motion, or any interested party, may file a motion in the cause pursuant to G.S. 35A‑1207 with the clerk in the county where the guardianship is filed to request modification of the order appointing the guardian or guardians or for consideration of any matters contained in the status report."
SECTION 12D.4.(c)  This section becomes effective October 1, 2014.

Development of Strategic State Plan for Alzheimer's Disease
SECTION 12D.5.  G.S. 143B‑181.1 is amended by adding a new subdivision to read:
"(13)	To develop a strategic State plan for Alzheimer's disease. The plan shall address ways to improve at least all of the following with respect to Alzheimer's disease:
a.	Statewide awareness and education.
b.	Early detection and diagnosis.
c.	Care coordination.
d.	Quality of care.
e.	Health care system capacity.
f.	Training for health care professionals.
g.	Access to treatment.
h.	Home- and community-based services.
i.	Long‑term care.
j.	Caregiver assistance.
k.	Research.
l.	Brain health.
m.	Data collection.
n.	Public safety and safety‑related needs of individuals with Alzheimer's disease.
o.	Legal protections for individuals living with Alzheimer's disease and their caregivers.
p.	State policies to assist individuals with Alzheimer's disease and their families."

Reinstatement of the Volunteer development program as a service CATEGORY under the Home and Community Care Block Grant
SECTION 12D.6.  The Department of Health and Human Services, Division of Aging and Adult Services, shall reinstate the Volunteer Development Program as a service category under the Home and Community Care Block Grant. Counties may elect to use this program to provide services to older adults from funds received under the Home and Community Care Block Grant.

SUBPART XII‑E. DIVISION OF PUBLIC HEALTH

CHILDREN'S DEVELOPMENTAL SERVICES AGENCIES
SECTION 12E.1.  Section 12E.4 of S.L. 2013‑360 reads as rewritten:
"SECTION 12E.4.  The Department of Health and Human Services, Division of Public Health, shall explore all options in order to achieve the reduced amount of State funds appropriated in this act for the Children's Developmental Service Agencies (CDSAs) program. The Department shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than March 1, 2015, identifying the actions implemented by the Department to achieve this reduction."

INCREASED FEE FOR PRIVATE WELL-WATER TESTING
SECTION 12E.3.(a)  G.S. 130A‑5(16) reads as rewritten:
"(16)	To charge a fee of up to seventy‑four dollars ($74.00) for analyzing private well‑water samples sent to the State Laboratory of Public Health by local health departments. The fee shall be imposed only for analyzing samples from newly constructed and existing wells. The fee shall be computed annually by the Director of the State Laboratory of Public Health by analyzing the previous year's testing at the State Laboratory of Public Health, and applying the amount of the total cost of the private well‑water testing, minus State appropriations that support this effort. The fee includes the charge for the private well‑water panel test kit."
SECTION 12E.3.(b)  Subsection (a) of this section becomes effective July 1, 2014, and applies to private well‑water samples analyzed on or after that date.
SECTION 12E.3.(c)  The Department of Health and Human Services, Division of Public Health, shall, in consultation with local health departments and the Department of Environment and Natural Resources, study options for reducing or waiving the private well‑water testing fee established in subsection (a) of this section for households with incomes at or below three hundred percent (300%) of the current federal poverty level. The Department shall report its findings and recommendations, including any recommended legislation, to the Joint Legislative Oversight Committee on Health and Human Services, the Environmental Review Commission, and the Fiscal Research Division by December 1, 2014.

Operational Efficiencies for Office of the Chief Medical Examiner
SECTION 12E.6.(a)  G.S. 130A‑382 reads as rewritten:
"§ 130A‑382.  County medical examiners; appointment; term of office; vacancies.
The Chief Medical Examiner shall appoint one or more county medical examiners for each county for a three‑year term. In appointing medical examiners for each county, the Chief Medical Examiner shall give preference to physicians licensed to practice medicine in this State but may also appoint licensed physician assistants, nurse practitioners, nurses, coroners, or emergency medical technician paramedics. A medical examiner may serve more than one county. The Chief Medical Examiner may take jurisdiction in any case or appoint another medical examiner to do so."
SECTION 12E.6.(b)  By December 1, 2014, the Department of Health and Human Services, Division of Public Health, shall study and report to the Joint Legislative Oversight Committee on Health and Human Services on the adequacy of the current fee paid by the State and counties (i) pursuant to G.S. 130A‑387 for investigations and reports and (ii) pursuant to G.S. 130A‑389 for autopsies. The report due under this subsection shall include recommendations for any fee increase deemed necessary by the Department as well as an explanation and documentation to support the recommended fee increase.
SECTION 12E.6.(c)  A portion of the funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, for the Office of the Chief Medical Examiner for the 2014‑2015 fiscal year shall be used by the Department to establish a system of oversight to achieve operational efficiencies and improve quality assurance with respect to postmortem medicolegal examinations conducted under the authority of the Office of the Chief Medical Examiner pursuant to Part 1 of Article 16 of Chapter 130A of the General Statutes. In establishing the system of oversight required by this subsection, the Department shall develop and implement uniform protocols for conducting postmortem medicolegal examinations in accordance with established best practices for these examinations.

Adjust Reporting Date for Diabetes Coordination Report
SECTION 12E.7.  G.S. 130A‑221.1(b) reads as rewritten:
"(b)	On or before January 1 of each odd-numbered year, the entities referenced in subsection (a) of this section shall collectively submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. The report shall provide the following:
(1)	An assessment of the financial impact that each type of diabetes has on each entity and collectively on the State. This assessment shall include: the number of individuals with diabetes served by the entity, the cost of diabetes prevention and control programs implemented by the entity, the financial toll or impact diabetes and related complications places on the program, and the financial toll or impact diabetes and related complications places on each program in comparison to other chronic diseases and conditions.
(2)	A description and an assessment of the effectiveness of each entity's programs and activities implemented to prevent and control diabetes. For each program and activity, the assessment shall document the source and amount of funding provided to the entity, including funding provided by the State.
(3)	A description of the level of coordination that exists among the entities referenced in subsection (a) of this section, as it relates to activities, programs, and messaging to manage, treat, and prevent all types of diabetes and the complications from diabetes.
(4)	The development of and revisions to detailed action plans for preventing and controlling diabetes and related complications. The plans shall identify proposed action steps to reduce the impact of diabetes, pre‑diabetes, and related diabetic complications; identify expected outcomes for each action step; and establish benchmarks for preventing and controlling diabetes.
(5)	A detailed budget identifying needs, costs, and resources required to implement the plans identified in subdivision (4) of this subsection, including a list of actionable items for consideration by the Committee."

FOOD PROTECTION PROGRAM BUDGET REALIGNMENT
SECTION 12E.8.  Notwithstanding any other provision of law, the four hundred thousand dollars ($400,000) that is appropriated under this act for aid to counties for local food and lodging programs shall be retained by the State beginning with the 2014‑2015 fiscal year, to pay for the costs to operate the State elements of the food and lodging program, which was transferred to the Department of Health and Human Services pursuant to Section 13.3(d) of S.L. 2011‑145.

TRANSFER OF SUMMER FOOD SERVICE PROGRAM TO DEPARTMENT OF PUBLIC INSTRUCTION
SECTION 12E.9.  The North Carolina Summer Food Service Program is hereby transferred from the Division of Public Health, Department of Health and Human Services, to the Department of Public Instruction, by a Type I transfer, as defined in G.S. 143A‑6.

SUBPART XII‑F. DIVISION OF MH/DD/SAS AND STATE OPERATED HEALTHCARE FACILITIES

TRAUMATIC BRAIN INJURY FUNDING
SECTION 12F.1.  Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2014‑2015 fiscal year, the sum of two million three hundred seventy‑three thousand eighty‑six dollars ($2,373,086) shall be used exclusively to support traumatic brain injury (TBI) services as follows:
(1)	The sum of three hundred fifty‑nine thousand two hundred eighteen dollars ($359,218) shall be used to fund contracts with the Brain Injury Association of North Carolina, Carolinas Rehabilitation, or other appropriate service providers.
(2)	The sum of seven hundred ninety‑six thousand nine hundred thirty‑four dollars ($796,934) shall be used to support residential programs across the State that are specifically designed to serve individuals with TBI.
(3)	The sum of one million two hundred sixteen thousand nine hundred thirty‑four dollars ($1,216,934) shall be used to support requests submitted by individual consumers for assistance with residential support services, home modifications, transportation, and other requests deemed necessary by the consumer's local management entity and primary care physician.

REPORT ON STRATEGIES FOR IMPROVING MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES
SECTION 12F.3.(a)  The Department of Health and Human Services (Department) shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1, 2014, that includes all of the following components:
(1)	A strategy for improving communication and coordination among all divisions within the Department that administer funds or programs related to the delivery of behavioral health services, especially regarding the most appropriate and efficient uses of public and private inpatient behavioral health services. The Department shall include as part of its strategy a process to address shortages and deficiencies identified in the annual State Medical Facilities Plan.
(2)	A plan developed in collaboration with local management entities that have been approved to operate as managed care organizations (LME/MCOs) to increase access to, and availability of, community‑based outpatient crisis and emergency services for the stabilization and treatment of individuals experiencing mental health, developmental disability, or substance abuse crises in settings other than local hospital emergency departments and State‑operated psychiatric hospitals.
(3)	A plan to ensure that a comprehensive array of outpatient treatment and crisis prevention and intervention services are available and accessible to children, adolescents, and adults in every LME/MCO catchment area. The plan shall ensure that an adequate number of crisis stabilization units are available in each LME/MCO catchment area. The plan shall include specific strategies for increasing the number of Facility‑Based Crisis Programs for Children and Adolescents in high‑need areas of the State and the availability of Professional Treatment Services in Facility‑Based Crisis Programs for Children and Adolescents as defined in section 4.b.(8)(k) of the current Medicaid State Plan. The plan shall further describe in detail all actions necessary to implement those strategies, including a description of how the Department's funds will be utilized.
(4)	Findings and recommendations for increasing the inventory of inpatient psychiatric and substance abuse services within the State. In developing its findings and recommendations, the Department shall examine the advantages and disadvantages of increasing this inventory of services through (i) additional State‑operated facilities, (ii) community hospital beds, (iii) United States Veterans Administration beds, and (iv) community‑based services that decrease the need for inpatient treatment.
(5)	A plan for offering hospitals and other entities incentives to apply for licenses to begin offering new inpatient behavioral health services, or to begin operating existing licensed beds that are currently unstaffed, or both.
(6)	Recommendations on the use of the existing Cherry Hospital buildings after patients and operations are relocated to the replacement facility. In developing its findings and recommendations, the Department shall conduct a study that includes development of an inventory and assessment of the condition of every building located on the existing Cherry Hospital campus. The study shall include an examination of the feasibility of using the existing Cherry Hospital facility to provide community‑based and facility‑based behavioral health services, including additional child and adolescent inpatient beds.
(7)	A method by which the Division of Health Service Regulation can begin tracking and separately reporting no later than January 1, 2015, on the inventory of inpatient behavioral health beds for children ages six through 12 and for adolescents over age 12.
(8)	A status update on the implementation of each component of the 2008 Mental Health Commission Workforce Development Plan.
SECTION 12F.3.(b)  The Department shall submit a report to the House Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division by March 1, 2015, that includes all of the following components:
(1)	A comprehensive strategy, developed in collaboration with stakeholders deemed relevant by the Department, to address the dearth of licensed child and adolescent inpatient psychiatric beds in facilities throughout the State. The strategy shall do all of the following:
a.	Ensure that an adequate inventory of child and adolescent beds are available in each LME/MCO catchment area.
b.	Include the development and implementation of a child and adolescent psychiatric bed registry to provide real‑time information on the number of beds available at each licensed and nonlicensed facility in the State.
c.	Include recommendations as to any regulatory changes necessary to ensure safety and quality in Facility‑Based Crisis Programs for Children and Adolescents.
(2)	Recommendations for meaningful outcome measures to be implemented by State‑operated alcohol and drug abuse treatment centers to assess the impact of inpatient treatment on an individual's substance use following discharge from a State‑operated alcohol and drug abuse treatment center. The recommendations shall include a proposed time line for implementation of these outcome measures.

Report and Plan Regarding Budget Shortfalls within the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services
SECTION 12F.4.  By December 1, 2014, the Department of Health and Human Services shall provide a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the budget shortfalls within the Department as a result of liabilities associated with (i) the provision of community services for the treatment of mental illness, developmental disabilities, and substance abuse disorders and (ii) the State‑operated health care facilities under the jurisdiction of the Department. The report shall include a detailed explanation of all of the following:
(1)	A history of the annual budget shortfalls since 2008 and all the contributing factors.
(2)	An explanation of actions taken by the Department and the Office of State Budget and Management to address these budget shortfalls.
(3)	A plan for eliminating these budget shortfalls.

Funds Appropriated to Implement Recommendations of the Joint Legislative Oversight Committee on Health and Human Services Regarding Behavioral Health Crisis Services
SECTION 12F.5.(a)  The following definitions apply in this section:
(1)	Facility‑Based Crisis Center. – A 24‑hour residential facility licensed under 10A NCAC 27G .5000 to provide facility‑based crisis service as described in 10A NCAC 27G .5001.
(2)	Secretary. – The Secretary of the North Carolina Department of Health and Human Services.
(3)	Behavioral Health Urgent Care Center. – An outpatient facility that provides walk‑in crisis assessment, referral, and treatment by licensed behavioral health professionals with prescriptive authority to individuals with an urgent or emergent need for mental health, intellectual or developmental disabilities, or substance abuse services.
SECTION 12F.5.(b)  From funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for community services for the 2014‑2015 fiscal year, the Division shall use five million twenty‑eight thousand six hundred seventy‑seven dollars ($5,028,677) in recurring funds to accomplish the following:
(1)	To increase the number of co-located or operationally linked behavioral health urgent care centers and facility‑based crisis centers.
(2)	To increase the number of facility‑based crisis centers designated by the Secretary as facilities for the custody and treatment of involuntary clients pursuant to G.S. 122C‑252 and 10A NCAC 26C .0101. The Department shall give priority to areas of the State experiencing a shortage of these types of facilities.
(3)	To provide reimbursement for services provided by facility‑based crisis centers.
(4)	To establish facility‑based crisis centers for children and adolescents.

SUBPART XII‑G. DIVISION OF HEALTH SERVICE REGULATION

TECHNICAL CORRECTION TO CERTIFICATE OF NEED EXEMPTION FOR REPLACEMENT OF PREVIOUSLY APPROVED EQUIPMENT
SECTION 12G.1.(a)  G.S. 131E‑184(f) reads as rewritten:
"(f)	The Department shall exempt from certificate of need review the purchase of any replacement equipment that exceeds the two million dollar ($2,000,000) threshold set forth in G.S. 131E‑176(22a) if all of the following conditions are met:
(1)	The equipment being replaced is located on the main campus.
(2)	The Department has previously issued a certificate of need for the equipment being replaced. This subdivision does not apply if a certificate of need was not required at the time the equipment being replaced was initially purchased by the licensed health service facility.
(3)	The licensed health service facility proposing to purchase the replacement equipment shall provide prior written notice to the Department, along with supporting documentation to demonstrate that it meets the exemption criteria of this subsection."
SECTION 12G.1.(b)  This section is effective when it becomes law.

STUDY CONCERNING EXPANSION OF HEALTH CARE COST REDUCTION AND TRANSPARENCY ACT TO ADDITIONAL HEALTH CARE PROVIDERS
SECTION 12G.3.  By December 1, 2014, the Department of Health and Human Services shall study and submit a written report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division summarizing its recommendations for extending North Carolina's Health Care Cost Reduction and Transparency Act of 2013 (the Act) to additional health care providers. The report shall identify all of the following:
(1)	Recommended categories of additional health care providers that should be subject to the requirements of the Act.
(2)	Recommended data to be collected for the purpose of transparency from each category of identified health care providers.
(3)	Recommended exemptions, if any, from certain requirements of the Act for each category of identified health care providers.
(4)	Recommended effective dates for the applicability of the Act to each category of identified health care providers.

MORATORIUM ON HOME CARE AGENCY LICENSES FOR IN‑HOME AIDE SERVICES
SECTION 12G.4.  For the period commencing July 1, 2014, and ending July 1, 2016, and notwithstanding the provisions of the Home Care Agency Licensure Act set forth in Part 3 of Article 6 of Chapter 131E of the General Statutes or any rules adopted pursuant to that Part, the Department of Health and Human Services shall not issue any licenses for home care agencies as defined in G.S. 131E‑136(2) that intend to offer in‑home aide services. This prohibition does not apply to companion and sitter services and shall not restrict the Department from doing any of the following:
(1)	Issuing a license to a certified home health agency as defined in G.S. 131E‑176(12) that intends to offer in‑home aide services.
(2)	Issuing a license to an agency that needs a new license for an existing home care agency being acquired.
(3)	Issuing a license for a new home care agency in any area of the State upon a determination by the Secretary of the Department of Health and Human Services that increased access to care is necessary in that area.

Moratorium on Special Care Unit Licenses
SECTION 12G.5.  Section 12G.1(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 12G.1.(a)  For the period beginning July 31, 2013, and ending July 1, 2015, the Department of Health and Human Services, Division of Health Service Regulation (Department), shall not issue any licenses for special care units as defined in G.S. 131D‑4.6 and G.S. 131E‑114. This prohibition shall not restrict the Department from doing any of the following:
(1)	Issuing a license to a facility that is acquiring an existing special care unit.
(2)	Issuing a license for a special care unit in any area of the State upon a determination by the Secretary of the Department of Health and Human Services that increased access to this type of care is necessary in that area during the two‑year moratorium imposed by this section.
(3)	Processing all completed applications for special care unit licenses received by the Division of Health Service Regulation along with the applicable license fee prior to June 1, 2013.
(4)	Issuing a license to a facility that was in possession of a certificate of need as of July 31, 2013, that included authorization to operate special care unit beds."

Prohibition on Youth Using Tanning Equipment
SECTION 12G.6.(a)  G.S. 104E‑9.1(a) reads as rewritten:
"(a)	Operators of tanning equipment and owners of tanning facilities subject to rules adopted pursuant to this Chapter shall comply with or ensure compliance with the following:
(1)	The operator shall provide to each consumer a warning statement that defines the potential hazards and consequences of exposure to ultraviolet radiation. Before allowing the consumer's initial use of the tanning equipment, the operator shall obtain the signature of the consumer on the warning statement acknowledging receipt of the warning.
(2)	The operator shall not allow a person under 18 years of age to use tanning equipment.
(3)	Neither an operator nor an owner shall claim or distribute promotional materials that claim that using tanning equipment is safe or free from risk or that using tanning equipment will result in medical or health benefits."
SECTION 12G.6.(b)  This section becomes effective October 1, 2014.

SUBPART XII‑H. DIVISION OF MEDICAL ASSISTANCE (MEDICAID)

Appropriation for Medicaid Reform to Be Used Solely for Medicaid Reform
SECTION 12H.1.  Funds appropriated elsewhere in this act to the Department of Health and Human Services, Division of Medical Assistance, for Medicaid reform may be used only for Medicaid reform and, notwithstanding the State Budget Act, may not be used for any other purpose, such as funding any shortfalls in the Medicaid program.

Reinstate Medicaid Annual Report
SECTION 12H.2.  The Department of Health and Human Services, Division of Medical Assistance, shall reinstate the publication of the Medicaid Annual Report and accompanying tables, which was discontinued after 2008. The Division shall publish the report and tables on its Web site and shall not publish copies in print.

Modify Intensive In-Home Service
SECTION 12H.4.  No later than October 1, 2014, the Department of Health and Human Services, Division of Medical Assistance, shall modify the service definition for the Intensive In‑Home Service to reflect a team‑to‑family ratio of one Intensive In‑Home team to 12 families for both the Medicaid and NC Health Choice programs. 

Traumatic Brain Injury Waiver
SECTION 12H.6.  The Department of Health and Human Services, Division of Medical Assistance, and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, in conjunction with the North Carolina Traumatic Brain Injury Advisory Council, shall design and draft a 1915(c) waiver to add a new service package for Medicaid eligibles with traumatic brain injury (TBI). This draft waiver may be based on an update to the 2010 report on a waiver to serve individuals with traumatic brain injury. The Department shall report the draft waiver, other findings, and any additional options to provide Medicaid services to those suffering from TBI to the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Health and Human Services by February 1, 2015. The Department may submit drafts of the waiver to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waiver for CMS approval until authorized by the General Assembly.

Drug Reimbursement Using Average Acquisition Cost
SECTION 12H.8.(a)  If federal drug pricing changes to use average acquisition cost for ingredients, then the Department of Health and Human Services, Division of Medical Assistance, shall, notwithstanding Section 12H.13(f) of S.L. 2013‑360, adjust the rate for dispensing drugs to offset the impact to providers of any such changes to using average acquisition cost. In adjusting the rates for dispensing drugs, the Department shall do the following:
(1)	Raise dispensing fees to make the shift to using average acquisition cost budget neutral.
(2)	Maintain a distinction between the dispensing fees for preferred and brand drugs.
Any actions taken under this subsection shall be reported (i) to the chairs of the House Appropriations Committee, the Senate Appropriations/Base Budget Committee, and the Joint Legislative Oversight Committee on Health and Human Services, (ii) to the Fiscal Research Division, and (iii) to the Office of State Budget and Management. Any State plan amendments required to implement this subsection shall not be subject to the 90 day prior submission requirement of G.S. 108A‑54.1A(e), as amended by Section 12H.21 of this act.
SECTION 12H.8.(b)  By August 1, 2015, the Department of Health and Human Services, Division of Medical Assistance, shall issue a request for proposals (RFP) for a contractor to perform a statewide drug dispensing fee study. The Department shall use the funds appropriated elsewhere in this budget for this study as the State share to draw down additional federal Medicaid funds for this study.

Substitution of Generic Drugs for Unavailable Preferred Drugs
SECTION 12H.8A.  If the Department of Health and Human Services, Division of Medical Assistance, finds that there are net General Fund savings to the Medicaid program from doing so, then the Division may allow a pharmacist to substitute and dispense a generic drug in place of a preferred drug without prior authorization, subject to all of the following being true:
(1)	The Division normally requires the dispensing of the preferred drug over the equivalent generic drug.
(2)	The pharmacist has not been able to acquire the preferred drug from at least two separate wholesalers within the two weeks prior to dispensing the generic substitute.
(3)	The pharmacist maintains records of the failed attempts to acquire the preferred drug. Such records shall be open to inspection and audit by the Division.
(4)	The prescriber has not indicated that the preferred drug is "medically necessary."
For purposes of this section, "savings to the Medicaid program" shall not be limited to savings within the prescription drug service area, but shall also include savings in other areas of the program such as savings from not having to send the prescription back to the prescriber for prior authorization of the generic substitution or savings from instances where missed doses may lead to negative and costly patient outcomes.

Contracted Study of Personal Care Services Options
SECTION 12H.10.  The Joint Legislative Oversight Committee on Health and Human Services shall engage a contractor to study issues related to reforming and redesigning personal care services (PCS) while meeting the State's obligations under the Americans with Disabilities Act and the United States Supreme Court's decision in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999). The study shall examine the following issues:
(1)	What categories of Medicaid recipients are currently receiving PCS, and in what settings are they being served?
(2)	What is the total number of Medicaid recipients receiving PCS in each category, and what is the anticipated growth in each category?
(3)	What is the current cost of serving Medicaid recipients in each setting, and specifically, the sources of public funding utilized to serve those individuals?
(4)	What alternative, more cost‑effective assistance models could be implemented for each category of Medicaid recipient?
(5)	Specifically, whether more cost‑effective assistance could be offered through the new 1915(i) State plan home‑ and community‑based services and 1915 waiver options for each category of Medicaid recipient.
(6)	Recommendations regarding what outcomes the redesigned program should be designed to achieve.
(7)	The impact of reforming and redesigning personal care services on appeals and litigation.
(8)	Other areas as deemed appropriate by the chairs of the Joint Legislative Oversight Committee on Health and Human Services.
The study shall also address the quality of resident care within adult care homes and the adequacy of State oversight of adult care homes, including inspections, procedures, and processes.
No later than December 1, 2015, the contractor shall report the results and recommendations of the study to the Joint Legislative Oversight Committee on Health and Human Services. The Department of Health and Human Services shall give the contractor full access to all data necessary to complete the study and the report. The Department of Health and Human Services shall make payments to the contractor hired by the Joint Legislative Oversight Committee on Health and Human Services from funds appropriated elsewhere in this budget for this contract as well as from federal Medicaid matching funds available for this contract.

Adult Care Home Cost Reporting
SECTION 12H.11.  The Department of Health and Human Services shall require compliance with the adult care home cost reporting requirements set forth in G.S. 131D‑4.2. The Department shall make available the data collected from the cost reporting in a character‑separated values (CSV) plain text format or other file format that may easily be imported into software used for spreadsheets, databases, and data analytics.

Study Regional Base Rates
SECTION 12H.12.  Section 12H.20(b) of S.L. 2013‑360 reads as rewritten:
"SECTION 12H.20.(b)  The Department of Health and Human Services, Division of Medical Assistance, shall study replacing the existing base rates for individual hospitals with new regional base rates for all hospitals within a given region. The Department shall consult with hospitals to define the regions and to identify appropriate regional differences in order to identify potential regional base rates. The potential regional base rates shall do the following:
(1)	Maintain the same statewide total for the base rates for all hospitals as before the base rate revision, after first adjusting the statewide total based on the changes to rates made by subsection (a) of this section.
(2)	Ensure the sustainability of small rural hospitals, ensuring access to care.
The Division shall report its findings to the Joint Legislative Oversight Committee on Health and Human Services no later than December 1, 2014."

Supplemental Payments to Eligible Medical Professional Providers
SECTION 12H.13.(a)  Effective July 1, 2014, supplemental payments that increase reimbursement to the average commercial rate for certain eligible medical providers described in the Medicaid State Plan, Attachment 4.19‑B, Section 5, Pages 2 and 3, shall be modified as follows:
(1)	The number of eligible medical professional providers shall be limited as follows:
a.	418 with the East Carolina University (ECU) Brody School of Medicine.
b.	1,176 with the University of North Carolina at Chapel Hill (UNC) Faculty Physicians.
c.	14 with the UNC Hospitals Pediatric Clinic.
d.	75 with UNC Physicians Network.
e.	18 with Chatham Hospital.
(2)	Supplement payments shall not be made for services provided in Wake County.
The Department of Health and Human Services shall not make any other modifications to the portion of the Medicaid State Plan referenced in this section, except as provided herein.
SECTION 12H.13.(b)  Beginning on December 31, 2014, and annually thereafter, UNC and ECU shall submit an annual report based on their preceding fiscal year to the Joint Legislative Oversight Committee on Health and Human Services containing all of the following information for each individual provider for whom this supplemental payment is received:
(1)	For each service provided by the provider and for which the supplemental payment is received, the location where the service was provided, including county, municipality, and zip code.
(2)	The percentage of the provider's total time spent serving Medicaid recipients annually that is for services provided at locations other than the ECU Brody School of Medicine, the Firetower Medical Office, or the UNC School of Medicine.
(3)	The amount of Medicaid reimbursement for each service for which a supplemental payment was made for services provided by the provider.
(4)	On an annual basis, the percentage of the provider's time spent engaging in the following:
a.	Clinical patient care.
b.	Teaching.
c.	Research.
d.	Other activities.
SECTION 12H.13.(c)  The entities receiving the supplemental payments addressed in subsection (a) of this section shall transfer an amount to the Department of Health and Human Services, Division of Medical Assistance, sufficient to ensure that after reducing the transfer by twenty-five and nine-tenths percent (25.9%) there are funds for the State share necessary to make the supplemental payments. That twenty-five and nine-tenths percent (25.9%) shall be retained by the State for the Medicaid program.
SECTION 12H.13.(d)  Any State plan amendments required to implement this section shall not be subject to the 90‑day prior submission requirement of G.S. 108A‑54.1A(e).

Repeal Shared Savings Program; Maintain Certain Rate Reductions
SECTION 12H.14.(a)  All subsections of Section 12H.18 of S.L. 2013‑360, except for subsection (b), are repealed.
SECTION 12H.14.(b)  Section 12H.18(b) of S.L. 2013‑360 reads as rewritten:
"SECTION 12H.18.(b)  During the 2013‑2015 fiscal biennium, the Department of Health and Human Services shall reduce by three percent (3%) the payments for the following services rendered to Medicaid and NC Health Choice recipients on or after January 1, 2014:
…
"
SECTION 12H.14.(c)  Effective January 1, 2015, Section 12H.18(b) of S.L. 2013‑360, as amended by subsection (b) of this section, reads as rewritten:
"SECTION 12H.18.(b)  During the 2013‑2015 fiscal biennium, the Department of Health and Human Services shall reduce by three percent (3%) the payments for the following services rendered to Medicaid and NC Health Choice recipients on or after January 1, 2014:
(1)	Inpatient hospital.
(2)	Physician, excluding primary care until January 1, 2015.
(3)	Dental.
(4)	Optical services and supplies.
(5)	Podiatry.
(6)	Chiropractors.
(7)	Hearing aids.
(8)	Personal care services.
	
(10)	Adult care homes.
(11)	Dispensing drugs."

1915(c) Innovations Waiver Services Assessment
SECTION 12H.18.(a)  If (i) federal law or regulation is amended to allow the imposition of assessments on 1915(c) North Carolina Innovations Waiver (formerly Community Alternatives Program for Persons with Mental Retardation/Developmental Disabilities (CAP‑MR/DD)) services or such assessments are otherwise allowed by the Centers for Medicare & Medicaid Services (CMS) through waivers and (ii) the providers of such services are willing to participate in an assessment program, then the Department of Health and Human Services, Division of Medical Assistance, may implement a Medicaid assessment program for such services up to the maximum percentage allowed by federal regulation. The Department may retain up to sixty‑five percent (65%) of the amount from such an assessment program to support Medicaid expenditures. The Department shall amend contracts with local management entities that have been approved to operate as managed care organizations (LME/MCOs) to ensure that any assessment funds not retained by the Department are used to increase LME/MCO capitation rates and that the additional amounts are passed along to the providers of Innovations Waiver service providers through increased reimbursement rates.
SECTION 12H.18.(b)  The authorization provided to the Department under subsection (a) of this section to impose a new assessment program on Innovations Waiver services shall continue to exist until July 1, 2017. If an assessment program has not been established by July 1, 2017, then this section expires.

Implement CCNC Payment of PMPMs
SECTION 12H.19.  The Department of Health and Human Services, Division of Medical Assistance, shall implement the payment of per member per month (PMPM) payments to providers participating in Community Care of North Carolina (CCNC) programs by CCNC, as previously directed by Section 12H.22 of S.L. 2013‑360.

Primary Care Case Management for Dual Eligibles 
SECTION 12H.20.(a)  The Department of Health and Human Services, Division of Medical Assistance, shall draft one or more waivers that will expand primary care case management and that are designed to accomplish the following:
(1)	Medicare and Medicaid dual eligibles shall be required to enroll in primary care case management to the maximum extent allowed by the Centers for Medicare and Medicaid Services (CMS).
(2)	Primary care case management shall be provided for enrolled dual eligibles.
(3)	Primary care case management for dual eligibles with a primary diagnosis of mental illness may be administered by the LME/MCOs.
The Department may submit drafts of the waivers to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waivers for CMS approval until authorized by the General Assembly.
SECTION 12H.20.(b)  No later than March 1, 2015, the Department shall submit to the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Health and Human Services a copy of the draft waivers and a report, which shall include the following:
(1)	The anticipated increase in number of dual eligibles that will enroll in primary care case management.
(2)	The costs associated with serving the increased number of enrolled dual eligibles.
(3)	The anticipated savings to the Medicaid program.
(4)	A detailed fiscal analysis supporting any calculation of anticipated savings.

Additional Notice on SPAs
SECTION 12H.21.(a)  G.S. 108A‑54.1A reads as rewritten:
"§ 108A‑54.1A.  Amendments to Medicaid State Plan and Medicaid Waivers.
…
(d)	No fewer than 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its Web site and notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division that the amendment has been posted. This requirement shall not apply to draft or proposed amendments submitted to the federal government for comments but not submitted for approval. The amendment shall remain posted on the Department's Web site at least until the plan has been approved, rejected, or withdrawn. If the authority for submitting the amendment to the State Plan is pursuant to subdivision (3), (4), (5), or (6) of subsection (b) of this section, then, prior to submitting an amendment to the federal government, the Department shall submit to the General Assembly members receiving notice under this subsection and to the Fiscal Research Division an explanation of the amendment, the need for the amendment, and the federal time limits required for implementation of the amendment.
(e)	The Department shall submit an amendment to the State Plan to the federal government by a date sufficient to provide the federal government adequate time to review and approve the amendment so the amendment may be effective by the date required by the directing authority in subsection (b) of this section. Additionally, if a change is made to the Medicaid program by the General Assembly and that change requires an amendment to the State Plan, then the amendment shall be submitted at least 90 days prior to the effective date of the change as provided in the legislation.
(f)	Any public notice required under 42 C.F.R. 447.205 shall, in addition to any other posting requirements under federal law, be posted on the Department's Web site. Upon posting such a public notice, the Department shall notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division that the public notice has been posted. Public notices shall remain posted on the Department's Web site."
SECTION 12H.21.(b)  G.S. 108A‑55(c) reads as rewritten:
"(c)	The Department shall reimburse providers of services, equipment, or supplies under the Medical Assistance Program in the following amounts:
(1)	The amount approved by the Centers for Medicare & Medicaid Services (CMS) of the United States Department of Health and Human Services, if CMS approves an exact reimbursement amount.
(2)	The amount determined by application of a method approved by the Centers for Medicare & Medicaid Services (CMS) of the United States Department of Health and Human Services, if CMS approves the method by which a reimbursement amount is determined, and not the exact amount.
The Department shall establish the methods by which reimbursement amounts are determined in accordance with Chapter 150B of the General Statutes. A change in a reimbursement amount becomes effective as of the date for which the change is approved by the Centers for Medicare & Medicaid Services (CMS) of the United States Department of Health and Human Services."
SECTION 12H.21.(c)  By repealing language in subsection (b) of this section related to giving to the General Assembly notice of a public notice, it is not the intent of the General Assembly to remove the required notice of the changes to reimbursement amounts for services, equipment, or supplies. Rather, it is the intent that those notices be given pursuant to G.S. 108A‑54.1A(f), rather than pursuant to both G.S. 108A‑54.1A(f) and G.S. 108A‑55(c).
SECTION 12H.21.(d)  This section becomes effective July 1, 2014, and the amendment to G.S. 108A‑54.1A(e) applies to State Plan Amendments with effective dates on or after October 1, 2014.

Comprehensive Program Integrity Contract
SECTION 12H.22.(a)  No later than March 1, 2015, the Department of Health and Human Services, Division of Medical Assistance, shall issue a request for proposals for one contract to become effective on September 1, 2015, for the following program integrity functions:
(1)	Postpayment reviews.
(2)	Data analytics.
(3)	Medical necessity reviews.
(4)	Investigation.
(5)	Recovery Audit Contracts.
(6)	Prepayment review.
SECTION 12H.22.(b)  The Department of Health and Human Services shall not enter into any contract, other than the comprehensive contract allowed under subsection (a) of this section, involving the program integrity functions listed in subsection (a) of this section that would have a termination date after September 1, 2015.
SECTION 12H.22.(c)  This section shall not apply to program integrity functions performed by LME/MCOs.

Clarify Notice of Extrapolated Overpayments
SECTION 12H.26.(a)  G.S. 108C‑5(i) reads as rewritten:
"(i)	Prior to extrapolating the results of any audits, the Department shall demonstrate and inform the provider that (i) the provider failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has a credible allegation of fraud concerning the provider. Nothing in the subsection shall be construed to prohibit the Department from identifying the extrapolated overpayment amount in the same notice that meets the requirements of this subsection."
SECTION 12H.26.(b)  G.S. 108C‑5 is amended by adding a new subsection to read:
"(t)	Nothing in this Chapter shall be construed to prohibit the Department from utilizing a contractor to send notices to providers on behalf of the Department."

Participation in Mediation in Recipient Appeals
SECTION 12H.27.(a)  G.S. 108A‑70.9B reads as rewritten:
"§ 108A‑70.9B.  Contested Medicaid cases.
…
(c)	Mediation. – Upon receipt of an appeal request form as provided by G.S. 108A‑70.9A(e) or other clear request for a hearing by a Medicaid recipient, OAH shall immediately notify the Mediation Network of North Carolina, which shall contact the recipient within five days to offer mediation in an attempt to resolve the dispute. If mediation is accepted, the mediation must be completed within 25 days of submission of the request for appeal. Upon completion of the mediation, the mediator shall inform OAH and the Department within 24 hours of the resolution by facsimile or electronic messaging. If the parties have resolved matters in the mediation, OAH shall dismiss the case. OAH shall not conduct a hearing of any contested Medicaid case until it has received notice from the mediator assigned that either: (i) the mediation was unsuccessful, or (ii) the petitioner has rejected the offer of mediation, or (iii) the petitioner has failed to appear at a scheduled mediation. If the recipient accepts an offer of mediation and then fails to attend mediation without good cause, OAH shall dismiss the contested case.
…."
SECTION 12H.27.(b)  G.S. 108D‑15(i) reads as rewritten:
"(i)	Mediation. – Upon receipt of an appeal request form as provided by G.S. 108D‑15(f) or other clear request for a hearing by an enrollee, OAH shall immediately notify the Mediation Network of North Carolina, which shall contact the enrollee within five days to offer mediation in an attempt to resolve the dispute. If mediation is accepted, the mediation must be completed within 25 days of submission of the request for appeal. Upon completion of the mediation, the mediator shall inform OAH and the LME/MCO within 24 hours of the resolution by facsimile or electronic messaging. If the parties have resolved matters in the mediation, OAH shall dismiss the case. OAH shall not conduct a hearing of any contested case involving a dispute of a managed care action until it has received notice from the mediator assigned that either (i) the mediation was unsuccessful, (ii) the petitioner has rejected the offer of mediation, or (iii) the petitioner has failed to appear at a scheduled mediation. If the enrollee accepts an offer of mediation and then fails to attend mediation without good cause, OAH shall dismiss the contested case."
SECTION 12H.27.(c)  This section is effective October 1, 2014, and applies to appeals of notices of adverse determination mailed on or after that date and appeals of notices of resolution mailed on or after that date.

Extend Existing Image Utilization Management Services Contract; Contain Costs of Future Contracts
SECTION 12H.30.(a)  The Department of Health and Human Services, Division of Medical Assistance, shall renegotiate the existing contract for imaging utilization management services in order to achieve five million five hundred thousand dollars ($5,500,000) in annual savings of net General Fund appropriations.
SECTION 12H.30.(b)  The Department of Health and Human Services, Division of Medical Assistance, shall issue a request for proposals (RFP) for a contract for imaging utilization management services to ascertain whether the State can achieve better savings with an alternative vendor and, if so, enter into a contract with the alternative vendor. Such an RFP shall incorporate the same requirements as those specified in Section 10.68B of S.L. 2009‑451, which was enacted by Section 6 of S.L. 2009‑575.
SECTION 12H.30.(c)  No later than March 1, 2015, the Department of Health and Human Services, Division of Medical Assistance, shall report on the results of this section to (i) the House Appropriations Subcommittee on Health and Human Services, (ii) the Senate Appropriations Committee on Health and Human Services, and (iii) the Fiscal Research Division.

Nonemergency Medical Transportation Contract
SECTION 12H.31.  The Department of Health and Human Services, Division of Medical Assistance, shall develop and issue a request for proposal for a contract beginning January 1, 2015, for the statewide management of Medicaid nonemergency medical transportation services.

Ambulance Transports to Crisis Centers
SECTION 12H.32.  The Department of Health and Human Services, Division of Medical Assistance, shall study the practice of reimbursing for ambulance transports that divert individuals in mental health crisis from hospital emergency departments to alternative appropriate locations for care. The Department shall study existing pilot programs in North Carolina, as well as other states, and shall specifically study expansion of the Wake County Emergency Medical Services (EMS) Advanced Practice Paramedics pilot program. The study shall do the following:
(1)	Propose necessary Medicaid and mental health policy changes.
(2)	Identify funding needs.
(3)	Identify available funding sources.
(4)	Identify any other actions that would be necessary to facilitate implementation.
The Department shall report its findings and recommendations to the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Health and Human Services by March 1, 2015.

Paragard Reimbursement
SECTION 12H.33.(a)  Beginning July 1, 2014, the Department of Health and Human Services, Division of Medical Assistance, shall reimburse for Paragard using the same reimbursement methodology as is used for Implanon and Mirena.
SECTION 12H.33.(b)  Any State plan amendment required to implement this section shall not be subject to the 90‑day prior submission requirement of G.S. 108A‑54.1A(e).

Study Botox Reimbursement
SECTION 12H.33A.  Prior to the convening of the 2015 General Assembly, the Joint Legislative Oversight Committee on Health and Human Services shall study the issue of implementing uniform Medicaid reimbursement rates for Botox for physicians and pharmacists.

Report on PACE Program
SECTION 12H.34.(a)  By September 1, 2014, the Department of Health and Human Services, Division of Medical Assistance, shall report to the Joint Legislative Oversight Committee on Health and Human Services with the following information on the Program of All‑Inclusive Care for the Elderly (PACE):
(1)	The number of individuals being served in each of the PACE service areas.
(2)	A description of the program enrollment criteria and enrollment process.
(3)	Detailed figures showing how funding for the program has been spent during the past two fiscal years.
(4)	The per member per month cost of serving individuals through the PACE program compared to the cost of serving individuals in a nursing home.
(5)	An estimate of how many PACE participants would enter a nursing home if they were not enrolled with the PACE program.
SECTION 12H.34.(b)  By December 1, 2014, the Department of Health and Human Services, Division of Medical Assistance, shall submit an additional report to the Joint Legislative Oversight Committee on Health and Human Services with the following information on the Program of All‑Inclusive Care for the Elderly (PACE):
(1)	An update on all of the information required by subsection (a) of this section.
(2)	A comparison of North Carolina's PACE program to PACE programs in other states.
(3)	Recommendations for how to make the program sustainable.

Allow for the Movement of Certain Medicaid Recipients
SECTION 12H.35.  Individuals served pursuant to the State's Section 1915(b)/(c) managed care waiver are exempt from Medicaid home origin requirements for the purposes of services provided under the Section 1915(b)/(c) managed care waiver. Medicaid provided for individuals served pursuant to the State's Section 1915(b)/(c) managed care waiver shall be based on the individual's Medicaid current county of residence. Notwithstanding the forgoing, however, Section 1915(c) innovations waiver slots shall be portable and recognized uniformly throughout all counties of North Carolina; an individual who receives an innovations waiver in one county shall not be required to reapply in another county if that individual moves or seeks services in another county.

Appointment and Confirmation of Medicaid Director
SECTION 12H.36.(a)  Effective July 1, 2014, and applying to Directors of the Division of Medical Services appointed on or after that date, G.S. 108A‑54 is amended by adding a new subsection to read:
"§ 108A‑54.  Authorization of Medical Assistance Program; administration.
…
(e)	The Medicaid Program shall be managed by the Director of the Division of Medical Assistance (Medicaid Director), who shall be recommended by the Secretary of Health and Human Services and appointed by the Governor, subject to confirmation by the General Assembly by joint resolution. The term of office for the Medicaid Director shall be five years beginning upon the date of qualification for office. In case of a vacancy in the office of Medicaid Director for any reason prior to the expiration of his or her term of office, the name of his or her successor for a new five year term shall be submitted by the Governor to the General Assembly not later than 60 days after the vacancy arises. If a vacancy arises in the office when the General Assembly is not in session, the Medicaid Director shall be appointed by the Governor to serve on an interim basis pending confirmation by the General Assembly.
Upon failure of the Governor to submit a name at least 90 days before the expiration of a term or within 60 days of occurrence of a vacancy, the President Pro Tempore of the Senate and the Speaker of the House of Representatives jointly shall submit a name of an appointee to the General Assembly. The appointment shall then be made by enactment of a bill. The bill shall state the name of the person being appointed, the office to which the appointment is being made, the effective date of the appointment, the date of expiration of the term, the city and state of residence of the appointee, and that the appointment is made upon the joint recommendation of the Speaker of the House of Representatives and the President Pro Tempore of the Senate. Nothing precludes any member of the General Assembly from proposing an amendment to any bill making such an appointment.
The Medicaid Director may be removed by either the Secretary of Health and Human Services or the Governor for any of the grounds set forth in G.S. 143B‑13(b), (c), or (d)."
SECTION 12H.36.(b)  The Director of the Division of Medical Assistance (Medicaid Director) serving as of July 1, 2014, shall continue to serve until a successor is appointed under 108A‑54(e).

align annual medicaid basic billing unit limits to fiscal year
SECTION 12H.37.(a)  Beginning July 1, 2015, the Department of Health and Human Services, Division of Medical Assistance, shall require that annual Medicaid billing unit limits for services managed by the LME/MCOs be based upon the fiscal year, provided that this standardization can be accomplished with no net fiscal impact on General Fund appropriations. 
SECTION 12H.37.(b)  Any State Plan Amendment required to implement this section shall not be subject to the 90-day prior submission requirement of G.S. 108A-54.1A(e).

SUBPART XII‑I. MISCELLANEOUS

CONTROL OF DATA DISCLOSED TO THE NORTH CAROLINA HEALTH INFORMATION EXCHANGE BY REQUIRED PARTICIPANTS
SECTION 12I.1.(a)  G.S. 90‑413.3A(b) reads as rewritten:
"(b)	Any hospital, as defined in G.S. 131E‑76(3) that has an electronic health record system shall connect to the HIE Network and submit individual patient demographic and clinical data on services paid for with Medicaid funds, based upon the findings set forth in subsection (a) of this section and notwithstanding the voluntary nature of the NC HIE under G.S. 90‑413.2. The NC HIE shall give the Department of Health and Human Services real‑time access to data and information disclosed through the HIE Network. At the request of the Director of the Fiscal Research, Bill Drafting, Research, or Program Evaluation Divisions of the General Assembly, the NC HIE shall provide the professional staff of these Divisions with data and information responsive to the Director's request. Prior to providing the General Assembly's staff with any data or information disclosed through the HIE Network pursuant to this subsection, the NC HIE shall redact any personal identifying information in a manner consistent with the standards specified for de-identification of health information under the HIPAA Privacy Rule, 45 C.F.R. 164.15, as amended."
SECTION 12I.1.(b)  G.S. 90‑413.3A is amended by adding a new subsection to read:
"(c)	Any data disclosed through the HIE Network pursuant to subsection (b) of this section shall be and will remain the sole property of the State. Any data or product derived from the data disclosed to the HIE Network pursuant to subsection (b) of this section, including a consolidation or analysis of the data, shall be and will remain the sole property of the State. The NC HIE shall not allow proprietary information it receives pursuant to this section to be used by any person or entity for commercial purposes."
SECTION 12I.1.(c)  In order to ensure the successful, uninterrupted operation of the statewide health information exchange network (HIE Network), the Department of Health and Human Services (Department) shall develop a transition plan for transferring the responsibilities imposed on the NC HIE under Article 29A of the General Statutes to another entity in the event the NC HIE is unable or unwilling to continue overseeing and administering the HIE Network. The Department shall develop the plan in consultation with the Office of Information Technology Services and the NC HIE and submit the plan to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than February 1, 2015.

Reinstatement of Hospital Setoff Debt Collection
SECTION 12I.4.(a)  G.S. 105A‑2(9) reads as rewritten:
"(9)	State agency. – Any of the following:
a.	A unit of the executive, legislative, or judicial branch of State 
	
	government.
b.	A local agency, to the extent it administers a program supervised by the Department of Health and Human Services or it operates a Child Support Enforcement Program, enabled by Chapter 110, Article 9, and Title IV, Part D of the Social Security Act.
c.	A community college."
SECTION 12I.4.(b)  This section is effective when it becomes law and applies to tax refunds determined by the Department of Revenue on or after that date.

SUBPART XII‑J. DHHS BLOCK GRANTS

REVISE DHHS BLOCK GRANTS
SECTION 12J.1.  Section 12J.1 of S.L. 2013‑360 reads as rewritten:
"DHHS BLOCK GRANTS
"SECTION 12J.1.(a)  Except as otherwise provided, appropriations from federal block grant funds are made for each year of the fiscal biennium ending June 30, 2015, according to the following schedule:

TEMPORARY ASSISTANCE TO NEEDY	FY2013‑2014	FY2014‑2015
FAMILIES (TANF) FUNDS

Local Program Expenditures

Division of Social Services

01.	Work First Family Assistance	$ 60,285,413	$ 60,285,413

02.	Work First County Block Grants	82,485,495	82,485,495

03.	Work First Electing Counties	2,352,521	2,352,521

04.	Adoption Services – Special Children
Adoption Fund	2,026,877	2,026,877

05.	Child Protective Services – Child Welfare
Workers for Local DSS	9,412,391	9,412,391

06.	Child Welfare Collaborative	632,416	632,416

06A.	Foster Care Services		1,385,152

Division of Child Development and Early Education

07.	Subsidized Child Care Program	57,172,097	54,054,806

08.	Swap Child Care Subsidy	6,352,644	6,352,644

08A.	Pre‑K Swap Out		7,195,807

Division of Public Health

09.	Teen Pregnancy Initiatives	2,500,000	2,500,000

DHHS Administration

10.	Division of Social Services	2,482,260	2,482,260

11.	Office of the Secretary	34,042	34,042

Transfers to Other Block Grants

Division of Child Development and Early Education

12.	Transfer to the Child Care and
Development Fund	71,773,001	71,773,001

13.	Transfer to Social Services Block
Grant for Child Protective Services – 
Child Welfare Training in Counties	1,300,000	1,300,000

14.	Transfer to Social Services Block
Grant for Child Protective Services	5,040,000	5,040,000

15.	Transfer to Social Services Block
Grant for County Departments of
Social Services for Children's Services	4,148,001	4,148,001

TOTAL TEMPORARY ASSISTANCE TO
NEEDY FAMILIES (TANF) FUNDS	$307,997,158	$313,460,826

TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF)
EMERGENCY CONTINGENCY FUNDS

Local Program Expenditures

Division of Social Services

01.	Work First County Block Grants	$ 5,580,925	$ 5,580,925

02.	Work First Electing Counties	25,692	25,692

Division of Child Development and Early Education

03.	Subsidized Child Care	6,549,469	11,679,394

04.	Pre‑K Slots	4,000,000

05.	Pre‑K Swap Out	8,646,527

TOTAL TEMPORARY ASSISTANCE TO
NEEDY FAMILIES (TANF) EMERGENCY
CONTINGENCY FUNDS	$12,156,086	$ 29,932,538

SOCIAL SERVICES BLOCK GRANT

Local Program Expenditures

Divisions of Social Services and Aging and Adult Services

01.	County Departments of Social Services
(Transfer from TANF $4,148,001)	$ 29,422,137	$ 27,427,015

02.	Child Protective Services
(Transfer from TANF)	5,040,000	5,040,000

03.	State In‑Home Services Fund	1,943,950	1,943,950

04.	Adult Protective Services	1,245,363	1,245,363

05.	State Adult Day Care Fund	1,994,084	1,994,084

06.	Child Protective Services/CPS
Investigative Services – Child Medical
Evaluation Program	563,868	563,868

07.	Special Children Adoption Incentive Fund	462,600	462,600

08.	Child Protective Services – Child
Welfare Training for Counties
(Transfer from TANF)	1,300,000	1,300,000

09.	Home and Community Care Block
Grant (HCCBG)	1,696,888	1,696,888

10.	Child Advocacy Centers	375,000	375,000

11.	Guardianship	3,978,360	3,978,360

12.	UNC Cares Contract	229,376	57,344

Division of Central Management and Support

14.	DHHS Competitive Block Grants
for Nonprofits	3,852,500	3,852,500

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

15.	Mental Health Services – Adult and
Child/Developmental Disabilities Program/
Substance Abuse Services – Adult	4,030,730	4,030,730

DHHS Program Expenditures

Division of Services for the Blind

16.	Independent Living Program	3,361,323	3,361,323

Division of Health Service Regulation

17.	Adult Care Licensure Program	381,087	381,087

18.	Mental Health Licensure and
Certification Program	190,284	190,284

DHHS Administration

19.	Division of Aging and Adult Services	577,745	577,745

20.	Division of Social Services	559,109	559,109

21.	Office of the Secretary/Controller's Office	127,731	127,731

22.	Division of Child Development	13,878	13,878

23.	Division of Mental Health, Developmental
	Disabilities, and Substance Abuse Services	27,446	27,446

24.	Division of Health Service Regulation	118,946	118,946

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 62,877,557	$ 59,325,251

LOW‑INCOME HOME ENERGY ASSISTANCE BLOCK GRANT

Local Program Expenditures

Division of Social Services

01.	Low‑Income Energy Assistance
Program (LIEAP)	$ 50,876,440	$ 50,876,440

02.	Crisis Intervention Program (CIP)	33,866,195	33,866,195

Local Administration

Division of Social Services

03.	County DSS Administration	6,757,731	6,757,731

DHHS Administration

04.	Office of the Secretary/DIRM	412,488	412,488

05.	Office of the Secretary/Controller's Office	18,378	18,378

Transfers to Other State Agencies

Department of Environment and Natural 
Resources (DENR)

06.	Weatherization Program	14,947,789	12,473,090

07.	Heating Air Repair and Replacement
Program (HARRP)	7,193,873	6,636,633

08.	Local Residential Energy Efficiency Service
Providers – Weatherization	37,257	692,950

09.	Local Residential Energy Efficiency Service
	Providers – HARRP	338,352	312,227

10.	DENR Administration – Weatherization	37,257	692,950

11.	DENR Administration – HARRP	338,352	312,226

Department of Administration

12.	N.C. Commission on Indian Affairs	87,736	87,736

TOTAL LOW‑INCOME HOME ENERGY
ASSISTANCE BLOCK GRANT	$ 114,911,848$113,139,044

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

Local Program Expenditures

Division of Child Development and Early Education

01.	Child Care Services
(Smart Start $7,000,000)	$ 156,566,345$168,536,136

02.	Electronic Tracking System	3,000,000	3,000,000

03.	Transfer from TANF Block Grant
	for Child Care Subsidies	71,773,001	71,773,001

04.	Quality and Availability Initiatives
(TEACH Program $3,800,000)	24,262,402	24,168,551

DHHS Administration

Division of Child Development and Early Education

05.	DCDEE Administrative Expenses	6,000,000	7,677,977

Division of Social Services

06.	Local Subsidized Child Care
Services Support	13,274,413	13,274,413

Division of Central Administration

07.	DHHS Central Administration – DIRM
Technical Services	775,000	775,000

08.	Central Regional Maintenance	202,000

TOTAL CHILD CARE AND DEVELOPMENT
FUND BLOCK GRANT	$ 275,651,161	$289,407,078

MENTAL HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

01.	Mental Health Services – Adult	$ 10,717,607	

02.	Mental Health Services – Child	5,121,991	

03.	Administration	200,000	200,000

04.	Mental Health Services – Adult/Child	12,398,643

04A.	Crisis Solutions Initiative – Walk‑In
Crisis Centers	2,253,833

05.	Crisis Solutions Initiative – Critical Time
Intervention	750,000

06.	Crisis Solutions Initiative – Peer Support
Respite Centers Pilot	700,000

07.	Crisis Solutions Initiative – Community
Paramedic Mobile Crisis Management	60,000

08.	Crisis Solutions Initiative – Mental Health
First Aid	500,000

09.	Crisis Solutions Initiative – Group Homes
Skills Training	65,000

10.	Crisis Solutions Initiative – Innovative
Technologies	41,000

TOTAL MENTAL HEALTH SERVICES
BLOCK GRANT	$ 16,039,598	$ 16,968,476

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

Local Program Expenditures

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

	

03.	Substance Abuse – HIV and IV Drug	3,919,723	3,919,723

04A.	Substance Abuse Prevention	8,669,284

05A.	Substance Abuse Services – Treatment for
Children/Adults	29,519,883

05B.	Crisis Solutions Initiatives – Walk‑In
Crisis Centers	420,000

05C.	Crisis Solutions Initiatives – Collegiate
Wellness/Addiction Recovery	1,085,000

05D.	Crisis Solutions Initiatives – Community
Paramedic Mobile Crisis Management	60,000

05E.	Crisis Solutions Initiatives – Innovative
Technologies	41,000

05F.	Crisis Solutions Initiatives – Veterans Crisis	250,000

06.	Administration	454,000	454,000

Division of Public Health

			

08A.	HIV Testing for Individuals in Substance
Abuse Treatment	765,949

TOTAL SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT	$ 37,527,700	$ 45,184,839

MATERNAL AND CHILD HEALTH BLOCK GRANT

Local Program Expenditures

Division of Public Health

01.	Children's Health Services
(Safe Sleep Campaign  
$45,000; Prevent Blindness $560,837)	$ 8,042,531	$ 7,574,703

02.	Women's Health
(March of Dimes $350,000; Teen Pregnancy
Prevention Initiatives $650,000; Perinatal
Quality Collaborative $350,000;
17P Project $52,000; Carolina Pregnancy
Care Fellowship $300,000;
Nurse‑Family Partnership $509,018)	8,532,935		8,095,148

03.	Oral Health	44,901	44,901

DHHS Program Expenditures

Division of Public Health

04.	Children's Health Services	1,301,504	1,300,578

05.	Women's Health – Maternal Health	105,419	105,361

06.	State Center for Health Statistics	164,487	156,230

07.	Health Promotion – Injury and
Violence Prevention	89,374	84,919

DHHS Administration

Division of Public Health

08.	Division of Public Health Administration	573,108	552,571

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 18,854,259	$ 17,914,411

PREVENTIVE HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

01.	Physical Activity and Prevention	$ 1,186,142	$ 2,079,945

02.	Injury and Violence Prevention
(Services to Rape Victims – Set‑Aside)	169,730	173,476

DHHS Program Expenditures

Division of Public Health

03.	HIV/STD Prevention and
Community Planning	145,819	145,819

04.	Oral Health Preventive Services	46,302	46,302

05.	Laboratory Services – Testing,
Training, and Consultation	10,980	21,012

06.	Injury and Violence Prevention
(Services to Rape Victims – Set‑Aside)	199,634	199,634

06A.	State Laboratory Services – Testing,
Training, and Consultation	199,634

07.	Heart Disease and Stroke Prevention	162,249	187,693

08.	Performance Improvement and Accountability	213,971	738,784

09.	Physical Activity and Nutrition	38,000	68,073

10.	State Center for Health Statistics	61,406	61,406

TOTAL PREVENTIVE HEALTH
SERVICES BLOCK GRANT	$ 2,234,233	$ 3,921,778

COMMUNITY SERVICES BLOCK GRANT

Local Program Expenditures

Office of Economic Opportunity

01.	Community Action Agencies	$ 22,402,724	$ 24,168,417

02.	Limited Purpose Agencies	1,244,596	1,342,690

DHHS Administration

03.	Office of Economic Opportunity	1,244,596	1,342,690

TOTAL COMMUNITY SERVICES
BLOCK GRANT	$ 24,891,916	$ 26,853,797

"GENERAL PROVISIONS
"SECTION 12J.1.(b)  Information to Be Included in Block Grant Plans. – The Department of Health and Human Services shall submit a separate plan for each Block Grant received and administered by the Department, and each plan shall include the following:
(1)	A delineation of the proposed allocations by program or activity, including State and federal match requirements.
(2)	A delineation of the proposed State and local administrative expenditures.
(3)	An identification of all new positions to be established through the Block Grant, including permanent, temporary, and time‑limited positions.
(4)	A comparison of the proposed allocations by program or activity with two prior years' program and activity budgets and two prior years' actual program or activity expenditures.
(5)	A projection of current year expenditures by program or activity.
(6)	A projection of federal Block Grant funds available, including unspent federal funds from the current and prior fiscal years.
"SECTION 12J.1.(c)  Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing 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 Office of State Budget and Management shall not approve 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 or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall develop a plan to adjust the block grants based on reduced federal funding.
Notwithstanding the provisions of this subsection, for fiscal years 2013‑2014 and 2014‑2015, increases in the federal fund availability for the Temporary Assistance to Needy Families (TANF) Block Grant shall be used only for the North Carolina Child Care Subsidy program to pay for child care in four‑ or five‑star rated facilities for four‑year‑old children and shall not be used to supplant State funds.
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 Oversight Committee on Health and Human Services, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division.
"SECTION 12J.1.(d)  Except as otherwise provided, appropriations from federal Block Grant funds are made for each year of the fiscal biennium ending June 30, 2015, according to the schedule enacted for State fiscal years 2013‑2014 and 2014‑2015 or until a new schedule is enacted by the General Assembly.
"SECTION 12J.1.(e)  All changes to the budgeted allocations to the Block Grants or contingency funds and other grants related to existing 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 the Office of State Budget and Management shall consult with the Joint Legislative Commission on Governmental Operations for review prior to implementing the changes. The report shall include an itemized listing of affected programs, including associated changes in budgeted allocations. All changes to the budgeted allocations to the Block Grants shall be reported immediately to the Joint Legislative Oversight 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.
"SECTION 12J.1.(e1)  Except as otherwise provided, the Department of Health and Human Services shall have flexibility to transfer funding between the Temporary Assistance to Needy Families (TANF) Block Grant and the TANF Emergency Contingency Funds Block Grant so long as the total allocation for the line items within those block grants remains the same.

"TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS
"SECTION 12J.1.(f)  The sum of eighty‑two million four hundred eighty‑five thousand four hundred ninety‑five dollars ($82,485,495) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for each year of the 2013‑2015 fiscal biennium shall be used for Work First County Block Grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures.
"SECTION 12J.1.(g)  The sum of two million four hundred eighty‑two thousand two hundred sixty dollars ($2,482,260) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for each year of the 2013‑2015 fiscal biennium shall be used to support administration of TANF‑funded programs.
"SECTION 12J.1.(h)  The sum of nine million four hundred twelve thousand three hundred ninety‑one dollars ($9,412,391) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in TANF funds for each year of the 2013‑2015 fiscal biennium 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.
Counties shall maintain their level of expenditures in local funds for Child Protective Services workers. Of the Block Grant funds appropriated for Child Protective Services workers, the total expenditures from State and local funds for fiscal years 2013‑2014 and 2014‑2015 shall not be less than the total expended from State and local funds for the 2012‑2013 fiscal year.
"SECTION 12J.1.(i)  The sum of two million twenty‑six thousand eight hundred seventy‑seven dollars ($2,026,877) appropriated in this section in TANF funds to the Department of Health and Human Services, Special Children Adoption Fund, for each year of the 2013‑2015 fiscal biennium shall be used in accordance with G.S. 108A‑50.2. 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 12J.1.(j)  The sum of six hundred thirty‑two thousand four hundred sixteen dollars ($632,416) appropriated in this section to the Department of Health and Human Services in TANF funds for each year of the 2013‑2015 fiscal biennium shall be used to continue support for the Child Welfare Collaborative.

"SOCIAL SERVICES BLOCK GRANT
"SECTION 12J.1.(k)  The sum of twenty‑nine million four hundred twenty‑two thousand one hundred thirty‑seven dollars ($29,422,137) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2013‑2014 fiscal year and the sum of twenty‑seven million four hundred twenty‑seven thousand fifteen dollars ($27,427,015) appropriated in this section in the Social Services Block Grant for the 2014‑2015 fiscal year shall be used for county block grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures.
"SECTION 12J.1.(l)  The sum of one million three hundred thousand dollars ($1,300,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for each year of the 2013‑2015 fiscal biennium shall be used 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 12J.1.(m)  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 12J.1.(n)  Social Services Block Grant funds appropriated for the Special Childrens Adoption Incentive Fund will require a fifty percent (50%) local match.
"SECTION 12J.1.(o)  The sum of five million forty thousand dollars ($5,040,000) appropriated in this section in the Social Services Block Grant for each year of the 2013‑2015 fiscal biennium shall be allocated to the Department of Health and Human Services, Division of Social Services. The Division shall allocate these funds to local departments of social services to replace the loss of Child Protective Services State funds that are currently used by county government to pay for Child Protective Services staff at the local level. These funds shall be used to maintain the number of Child Protective Services workers throughout the State. These Social Services Block Grant funds shall be used to pay for salaries and related expenses only and are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty‑five percent (25%).
"SECTION 12J.1.(p)  The sum of three million eight hundred fifty‑two thousand five hundred dollars ($3,852,500) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Central Management and Support, shall be used for DHHS competitive block grants pursuant to Section 12A.2 of this act for each year of the 2013‑2015 fiscal biennium. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).
"SECTION 12J.1.(q)  The sum of three hundred seventy‑five thousand dollars ($375,000) appropriated in this section in the Social Services Block Grant for each year of the 2013‑2015 fiscal biennium to the Department of Health and Human Services, Division of Social Services, shall be used to continue support for the Child Advocacy Centers and are exempt from the provisions of 10A NCAC 71R .0201(3).
"SECTION 12J.1.(r)  The sum of three million nine hundred seventy‑eight thousand three hundred sixty dollars ($3,978,360) appropriated in this section in the Social Services Block Grant for each year of the 2013‑2015 fiscal biennium to the Department of Health and Human Services, Divisions of Social Services and Aging and Adult Services, shall be used for guardianship services pursuant to Chapter 35A of the General Statutes. The Department may expend funds appropriated in this section to support (i) existing corporate guardianship contracts during the 2013‑2014 and 2014‑2015 fiscal years and (ii) guardianship contracts transferred to the State from local management entities or managed care organizations during the 2013‑2014 and 2014‑2015 fiscal years.

"LOW‑INCOME HOME ENERGY ASSISTANCE BLOCK GRANT
"SECTION 12J.1.(s)  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.
"SECTION 12J.1.(t)  The sum of fifty million eight hundred seventy‑six thousand four hundred forty dollars ($50,876,440) appropriated in this section in the Low‑Income Home Energy Assistance Block Grant for each year of the 2013‑2015 fiscal biennium to the Department of Health and Human Services, Division of Social Services, shall be used for energy assistance payments for the households of (i) elderly persons age 60 and above with income up to one hundred thirty percent (130%) of the federal poverty level and (ii) disabled persons eligible for services funded through the Division of Aging and Adult Services.
County departments of social services shall submit to the Division of Social Services an outreach plan for targeting households with 60‑year‑old household members no later than August 1 of each year. The outreach plan shall comply with the following:
(1)	Ensure that eligible households are made aware of the available assistance with particular attention paid to the elderly population age 60 and above and disabled persons receiving services through the Division of Aging and Adult Services.
(2)	Include efforts by the county department of social services to contact other State and local governmental entities and community‑based organizations to (i) offer the opportunity to provide outreach and (ii) receive applications for energy assistance.
(3)	Be approved by the local board of social services or human services board prior to submission.

"CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
"SECTION 12J.1.(u)  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 12J.1.(v)  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.

"SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT
"SECTION 12J.1.(v1)  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 2014‑2015 fiscal year shall be allocated to the Department of Administration, Division of Veterans Affairs, to establish a call‑in center to assist veterans in locating service benefits and crisis services. The call‑in center shall be staffed by certified veteran peers within the Division of Veterans Affairs and trained by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

"MATERNAL AND CHILD HEALTH BLOCK GRANT
"SECTION 12J.1.(w)  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 2013‑2014 fiscal year or the 2014‑2015 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) and (4a). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.
"SECTION 12J.1.(x)  The Department of Health and Human Services shall ensure that there will be follow‑up testing in the Newborn Screening Program."

PART XIII. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

PLANT SCIENCES RESEARCH AND INNOVATION INITIATIVE
SECTION 13.1.(a)  The funds appropriated by this act to the Department of Agriculture and Consumer Services for the Plant Sciences Research initiative shall be used by the Commissioner to develop jointly with the College of Agriculture and Life Sciences at North Carolina State University and other stakeholders a formal proposal and economic needs assessment for establishment of a public/private partnership between the University, other academic institutions, private companies in the agribusiness and bioscience sectors, the Department, and other State regulatory agencies for the following amounts and purposes: (i) the sum of three hundred fifty thousand dollars ($350,000) for a partnership to be known as the "Plant Sciences Research and Innovation Initiative" and (ii) the sum of two hundred fifty thousand dollars ($250,000) for a partnership to be known as the "Food Processing Initiative."
SECTION 13.1.(b)  The Department and North Carolina State University shall jointly submit a copy of the proposal and report on the results of the economic needs assessment to the Chairs of the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Chairs of the Senate Appropriations Committee on Natural and Economic Resources, the Agriculture and Forestry Awareness Study Commission, and the Fiscal Research Division by January 1, 2015.

Bedding Law Account Fund
SECTION 13.1A.  The Department of Agriculture and Consumer Services may use funds from the Bedding Law Account for the information technology needs of the Structural Pest Control & Pesticides Division of the Department.

REPEAL COTTON WAREHOUSE FUND
SECTION 13.1B.(a)  Effective June 30, 2014, G.S. 106‑435 is repealed, and the unallotted and unexpended funds in the Cotton Warehouse Fund on that date shall be transferred to the Research Stations Division of the Department of Agriculture and Consumer Services and used to support the operations of the Division.
SECTION 13.1B.(b)  Effective June 30, 2014, G.S. 106‑451.27 is repealed.

STATE FAIR ADMISSION
SECTION 13.2.(a)  G.S. 150B‑1(d) is amended by adding a new subdivision to read:
"(d)	Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:
…
(26)	The Board of Agriculture in the Department of Agriculture and Consumer Services with respect to annual admission fees for the State Fair. The Board shall annually post the admission fee schedule on its Web site and provide notice of the fee schedule, along with a citation to this section, to all persons named on the mailing list maintained pursuant to G.S. 150B‑21.2(d)."
SECTION 13.2.(b)  This section is effective when it becomes law.

Farmland Preservation Trust Fund
SECTION 13.2A.  Funds appropriated by this act to the North Carolina Agricultural Development and Farmland Preservation Trust Fund for protection of military buffers may only be used to match funding from the federal government for that purpose on at least an equal basis.

"GOT TO BE NC" MARKETING CAMPAIGN TO BE THE OFFICIAL AGRICULTURAL MARKETING CAMPAIGN FOR THE STATE
SECTION 13.4.  G.S. 106‑550 reads as rewritten:
"§ 106‑550.  Policy as to promotion of use of, and markets for, farm products.
(a)	It is declared to be in the interest of the public welfare that the North Carolina farmers who are producers of livestock, poultry, seafood, field crops and other agricultural products, including cattle, sheep, broilers, turkeys, commercial eggs, peanuts, cotton, potatoes, sweet potatoes, peaches, apples, berries, vegetables and other fruits of all kinds, as well as bulbs and flowers and other agricultural products having a domestic or foreign market, shall be permitted and encouraged to act jointly and in cooperation with growers, handlers, dealers and processors of such products in promoting and stimulating, by advertising and other methods, the increased production, use and sale, domestic and foreign, of any and all of such agricultural commodities. The provisions of this Article, however, shall not include the agricultural products of tobacco, strawberries, strawberry plants, porcine animals, or equines, with respect to which separate provisions have been made.
(b)	The "Got to be NC" marketing campaign of the Department of Agriculture and Consumer Services shall be the official agricultural marketing campaign for the State."

DACS RESEARCH STATIONS
SECTION 13.8.  G.S. 106‑6.3 reads as rewritten:
"§ 106‑6.3.  Create special revenue fund for research stations.
The Research Stations Fund is established as a special revenue fund within the Department of Agriculture and Consumer Services, Division of Research Stations. This Fund shall consist of receipts from the sale of commodities produced on the Department's research stations and any gifts, bequests, or grants for the benefit of this Fund. No General Fund appropriations shall be credited to this Fund. Any balance exceeding one million dollars ($1,000,000) in this Fund at the end of any fiscal year shall revert to the General Fund. The Department shall use this Fund only to develop, improve, repair, maintain, operate, or otherwise invest in research stations operated by the Department's Research Stations Division."

CERTIFICATION OF PRIVATE PESTICIDE APPLICATORS
SECTION 13.10.(a)  G.S. 143‑440(b) reads as rewritten:
"(b)	The Board may include in any such restricted use regulation the time and conditions of sale, distribution, or use of such restricted use pesticides, may prohibit the use of any restricted use pesticide for designated purposes or at designated times; may require the purchaser or user to certify that restricted use pesticides will be used only as labeled or as further restricted by regulation; may require the certification and recertification of private applicators, and charge a fee of up to ten dollars ($10.00), with the fee set at a level to make the certification/recertification program self‑supporting, and, after opportunity for a hearing, may suspend, revoke or modify the certification for violation of any provision of this Article, or any rule or regulation adopted thereunder; may adopt rules to classify private applicators; and may, if it deems it necessary to carry out the provisions of this Part, require that any or all restricted use pesticides shall be purchased, possessed, or used only under permit of the Board and under its direct supervision in certain areas and/or under certain conditions or in certain quantities or concentrations except that any person licensed to sell such pesticides may purchase and possess such pesticides without a permit. The Board may require all persons issued such permits to maintain records as to the use of the restricted use pesticides. The Board may authorize the use of restricted use pesticides by persons licensed under the North Carolina Structural Pest Control Act without a permit. A nonrefundable fee of ten dollars ($10.00) shall be charged for each examination required by this section. This examination fee is in addition to the certification or recertification fee, and any other fee authorized pursuant to any other provision of Article 4C of Chapter 106 of the General Statutes."
SECTION 13.10.(b)  G.S. 106‑65.24 reads as rewritten:
"§ 106‑65.24.  Definitions.
As used in this Article:
…
(23)	"Structural pest control" means the control of wood‑destroying organisms or household pests (including, but not limited to, animals such as moths, cockroaches, ants, beetles, flies, mosquitoes, ticks, wasps, bees, fleas, mites, silverfish, millipedes, centipedes, sowbugs, crickets, termites, wood borers, etc.), including the identification of infestations or infections, the making of inspections, the use of pesticides, including insecticides, repellents, attractants, rodenticides, fungicides, and fumigants, as well as all other substances, mechanical devices or structural modifications under whatever name known, for the purpose of preventing, controlling and eradicating insects, vermin, rodents and other pests in household structures, commercial buildings, and other structures (including household structures, commercial buildings and other structures in all stages of construction), and outside areas, as well as all phases of fumigation, including treatment of products by vacuum fumigation, and the fumigation of railroad cars, trucks, ships, and airplanes, or any one or any combination thereof. Structural pest control shall not include ancillary activities such as furniture moving, cleaning, maintenance, or repair of property that may be performed in association with the control of wood‑destroying organisms or household pests as described in this subdivision.
…."
SECTION 13.10.(c)  G.S. 106‑65.25 reads as rewritten:
"§ 106‑65.25.  Phases of structural pest control; prohibited acts; license required; exceptions.
…
(i)	Nothing in this Article shall limit or restrict the ability of a person engaged in activities ancillary to structural pest control as set forth in G.S. 106‑65.24(23) to be engaged in such activities, whether as an employee, independent contractor, or otherwise, for one or more structural pest control licensees."

INCREASE FEES ASSOCIATED WITH NATIONAL POULTRY IMPROVEMENT PLAN
SECTION 13.11.  G.S. 106‑543 reads as rewritten:
"§ 106‑543.  Requirements of national poultry improvement plan must be met.
(a)	All baby chicks, turkey poults and hatching eggs sold or offered for sale shall originate in flocks that meet the requirements of the National Poultry Improvement Plan as administered by the North Carolina Department of Agriculture and Consumer Services and the regulations issued by authority of this Article for the control of pullorum disease and other infectious diseases provided that nothing in this Article shall require any hatchery to adopt the National Poultry Improvement Plan.
(b)	The Department of Agriculture and Consumer Services shall charge the following fees for certification in the National Poultry Improvement Plan to cover the costs of pullorum testing:
(1)	An initial certification fee of fifty dollars ($50.00), plus ten cents (10¢) per bird.
(2)	An annual recertification fee of ten dollars ($10.00), plus ten cents (10¢) per bird."

FEES FOR FOREST MANAGEMENT PLANS
SECTION 13.13.(a)  Article 83 of Chapter 106 of the General Statutes is amended by adding a new section to read:
"§ 106-1013.1.  Forest management plans.
The Commissioner shall charge landowners the following fee for preparation of forest management plans:
(1)	Two hundred fifty dollars ($250.00) for plans for tracts of land of less than 20 acres.
(2)	Five hundred dollars ($500.00) for plans for tracts of land of 20 acres or more and less than 50 acres.
(3)	Seven hundred fifty dollars ($750.00) for plans for tracts of land of 50 acres of more."
SECTION 13.13.(b)  This section becomes effective July 1, 2014, and applies to forest management plans applied for on or after that date.

TRANSFER THE ANIMAL WELFARE SECTION AND THE SPAY/NEUTER PROGRAM FROM THE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES TO THE DEPARTMENT OF PUBLIC SAFETY; AND AMEND DEFINITION OF ANIMAL DEALER
SECTION 13.14.(a)  The Animal Welfare Section and the Spay/Neuter Program, as established by Articles 3 and 5 of Chapter 19A of the General Statutes and other applicable laws of this State, are transferred to the Department of Public Safety. This transfer shall have all of the elements of a Type I transfer, as defined in G.S. 143A‑6.
SECTION 13.14.(b)  The Animal Welfare Act, Article 3 of Chapter 19A of the General Statutes, reads as rewritten:
"Article 3.
"Animal Welfare Act.
"§ 19A‑20.  Title of Article.
This Article may be cited as the Animal Welfare Act.
"§ 19A‑21.  Purposes.
The purposes of this Article are (i) to protect the owners of dogs and cats from the theft of such pets; (ii) to prevent the sale or use of stolen pets; (iii) to insure that animals, as items of commerce, are provided humane care and treatment by regulating the transportation, sale, purchase, housing, care, handling and treatment of such animals by persons or organizations engaged in transporting, buying, or selling them for such use; (iv) to insure that animals confined in pet shops, kennels, animal shelters and auction markets are provided humane care and treatment; (v) to prohibit the sale, trade or adoption of those animals which show physical signs of infection, communicable disease, or congenital abnormalities, unless veterinary care is assured subsequent to sale, trade or adoption.
"§ 19A‑22.  Animal Welfare Section in Law Enforcement Division of the Department of Public Safety created; Director.
There is hereby created within the Law Enforcement Division of the Department of Public Safety, a new section thereof, to be known as the Animal Welfare Section of said division.
The Secretary of the Department of Public Safety is hereby authorized to appoint a Director of said section whose duties and authority shall be determined by the Secretary.
"§ 19A‑23.  Definitions.
For the purposes of this Article, the following terms, when used in the Article or the rules or orders made pursuant thereto, shall be construed respectively to mean:
(1)	"Adequate feed" means the provision at suitable intervals, not to exceed 24 hours, of a quantity of wholesome foodstuff suitable for the species and age, sufficient to maintain a reasonable level of nutrition in each animal. Such foodstuff shall be served in a sanitized receptacle, dish, or container.
(2)	"Adequate water" means a constant access to a supply of clean, fresh, potable water provided in a sanitary manner or provided at suitable intervals for the species and not to exceed 24 hours at any interval.
(3)	"Ambient temperature" means the temperature surrounding the animal.
(4)	"Animal" means any domestic dog (Canis familiaris), or domestic cat (Felis domestica).
(5)	"Animal shelter" means a facility which is used to house or contain seized, stray, homeless, quarantined, abandoned or unwanted animals and which is under contract with, owned, operated, or maintained by a county, city, town, or other municipality, or by a duly incorporated humane society, animal welfare society, society for the prevention of cruelty to animals, or other nonprofit organization devoted to the welfare, protection, rehabilitation, or humane treatment of animals.
(5a)	"Approved foster care provider" means an individual, nonprofit corporation, or association that cares for stray animals that has been favorably assessed by the operator of the animal shelter through the application of written standards.
(5b)	"Approved rescue organization" means a nonprofit corporation or association that cares for stray animals that has been favorably assessed by the operator of the animal shelter through the application of written standards.
(5c)	"Boarding kennel" means a facility or establishment which regularly offers to the public the service of boarding dogs or cats or both for a fee. Such a facility or establishment may, in addition to providing shelter, food and water, offer grooming or other services for dogs and/or cats.
(6)	"Secretary" means the Secretary of the Department of Public Safety.
(7)	"Dealer" means any person who sells, exchanges, or donates, or offers to sell, exchange, or donate animals to another dealer, pet shop, or research facility; provided, however, that an individual who breeds and raises on his own premises no more than the offspring of five canine or feline females per year, unless bred and raised specifically for research purposes shall not be considered to be a dealer for the purposes of this Article.
(7a)	"Department" means the Department of Public Safety.
(8)	"Director" means the Director of the Animal Welfare Section of the Law Enforcement Division of the Department of Public Safety.
…
"§ 19A‑24.  Powers of Department of Public Safety.
(a)	The Department of Public Safety shall:
(1)	Establish standards for the care of animals at animal shelters, boarding kennels, pet shops, public auctions, and animals sold by dealers to the public. A boarding kennel that offers dog day care services and has a ratio of dogs to employees or supervisors, or both employees and supervisors, of not more than 10 to one, shall not as to such services be subject to any regulations that restrict the number of dogs that are permitted within any primary enclosure.
…
(b)	In addition to rules on the euthanasia of animals adopted pursuant to subdivision (5) of subsection (a) of this section, the Department of Public Safety shall adopt rules for the certification of euthanasia technicians. The rules may provide for:
…
(c)	Regardless of the extent to which the Board exercises its authority under subsection (b) of this section, the Department may deny, revoke, or suspend the certification of a euthanasia technician who has been convicted of or entered a plea of guilty or nolo contendere to a felony involving the illegal use, possession, sale, manufacture, distribution, or transportation of a controlled substance, drug, or narcotic.
(d)	Persons seeking certification as euthanasia technicians, or a renewal of such certification, shall provide the Department a fingerprint card in a format acceptable to the Department, a form signed by the person consenting to a criminal record check and the use of the person's fingerprints, and such other identifying information as may be required by the State or national data banks. The Department may deny certification to persons who refuse to provide the fingerprint card or consent to the criminal background check. Fees required by the Department of Justice for conducting the criminal background check shall be collected by the Department and remitted to the Department of Justice along with the fingerprint card and consent form."
"§ 19A‑25.  Employees; investigations; right of entry.
For the enforcement of the provisions of this Article, the Director is authorized, subject to the approval of the Secretary to appoint employees as are necessary in order to carry out and enforce the provisions of this Article. The Director shall cause the investigation of all reports of violations of the provisions of this Article, and the rules adopted pursuant to the provisions hereof; provided further, that if any person shall deny the Director or his representative admittance to his property, either person shall be entitled to secure from any superior court judge a court order granting such admittance.
"§ 19A‑26.  Certificate of registration required for animal shelter.
No person shall operate an animal shelter unless a certificate of registration for such animal shelter shall have been granted by the Director. Application for such certificate shall be made in the manner provided by the Director. No fee shall be required for such application or certificate. Certificates of registration shall be valid for a period of one year or until suspended or revoked and may be renewed for like periods upon application in the manner provided.
…
"§ 19A‑32.1.  Minimum holding period for animals in animal shelters; public viewing of animals in animal shelters; disposition of animals.
…
(f)	An animal that is surrendered to an animal shelter by the animal's owner and not reclaimed by that owner during the minimum holding period may be disposed of in one of the following manners:
(1)	Returned to the owner.
(2)	Adopted as a pet by a new owner.
(3)	Euthanized by a procedure approved by rules adopted by the Department of Public Safety or, in the absence of such rules, by a procedure approved by the American Veterinary Medical Association, the Humane Society of the United States, or the American Humane Association.
…
(j)	Animal shelters shall maintain a record of all animals impounded at the shelter, shall retain those records for a period of at least three years from the date of impoundment, and shall make those records available for inspection during regular inspections pursuant to this Article or upon the request of a representative of the Animal Welfare Section. These records shall contain, at a minimum:
(1)	The date of impoundment.
(2)	The length of impoundment.
(3)	The disposition of each animal, including the name and address of any person to whom the animal is released, any institution that person represents, and the identifying information required under subsection (i) of this section.
(4)	Other information required by rules adopted by the Department of Public Safety.
…
"§ 19A‑36.  Penalty for violation of Article by city/county employee responsible for animal control.
Violation of any provision of this Article which relates to the seizing, impoundment, and custody of an animal by a city or county employee responsible for animal control shall constitute a Class 3 misdemeanor and the person convicted thereof shall be subject to a fine of not less than fifty dollars ($50.00) and not more than one hundred dollars ($100.00), and each animal handled in violation shall constitute a separate offense.
…
"§ 19A‑41.  Legal representation by the Attorney General.
It shall be the duty of the Attorney General to represent the Secretary of the Department of Public Safety, or to designate some member of his staff to represent the Secretary and the Department, in all actions or proceedings in connection with this Article."
SECTION 13.14.(b1)  G.S. 19A‑23, as amended by subsection (b) of this section, reads as rewritten:
"§ 19A‑23.  Definitions.
For the purposes of this Article, the following terms, when used in the Article or the rules or orders made pursuant thereto, shall be construed respectively to mean:
…
(7)	"Dealer" means any person who sells, exchanges, or donates, or offers to sell, exchange, or donate animals to another dealer, pet shop, or research facility or any person who owns, has custody of, or maintains 10 or more female dogs over the age of six months that are capable of reproduction and that are kept primarily for the purposes of breeding and selling the offspring as pets. A kennel or boarding facility in which the majority of dogs are being trained primarily for hunting, sporting, field trials, or show shall not be considered a dealer.
…."
SECTION 13.14.(c)  Article 5 of Chapter 19A of the General Statutes reads as rewritten:
"Article 5.
"Spay/Neuter Program.
"§ 19A‑60.  Legislative findings.
The General Assembly finds that the uncontrolled breeding of cats and dogs in the State has led to unacceptable numbers of unwanted dogs, puppies and cats and kittens. These unwanted animals become strays and constitute a public nuisance and a public health hazard. The animals themselves suffer privation and death, are impounded, and most are destroyed at great expense to local governments. It is the intention of the General Assembly to provide a voluntary means of funding a spay/neuter program to provide financial assistance to local governments offering low‑income persons reduced‑cost spay/neuter services for their dogs and cats and to provide a statewide education program on the benefits of spaying and neutering pets.
"§ 19A‑61.  Spay/Neuter Program established.
There is established in the Department of Public Safety a voluntary statewide program to foster the spaying and neutering of dogs and cats for the purpose of reducing the population of unwanted animals in the State. The program shall consist of the following components:
(1)	Education Program. – The Department shall establish a statewide program to educate the public about the benefits of having cats and dogs spayed and neutered. The Department may work cooperatively on the program with the North Carolina School of Veterinary Medicine, other State agencies and departments, county and city health departments and animal control agencies, and statewide and local humane organizations. The Department may employ outside consultants to assist with the education program.
(2)	Local Spay/Neuter Assistance Program. – The Department shall administer the Spay/Neuter Account established in G.S. 19A‑62. Monies deposited in the account shall be available to reimburse eligible counties and cities for the direct costs of spay/neuter surgeries for cats and dogs made available to low‑income persons.
"§ 19A‑62.  Spay/Neuter Account established.
(a)	Creation. – The Spay/Neuter Account is established as a nonreverting special revenue account in the Department of Public Safety. The Account consists of the following:
(1)	Repealed by Session Laws 2010‑31, s. 11.4(c), effective October 1, 2010.
(2)	Twenty dollars ($20.00) of the additional fee imposed by G.S. 20‑79.7 for an Animal Lovers special license plate.
(3)	Any other funds available from appropriations by the General Assembly or from contributions and grants from public or private sources.
(4)	An annual transfer of two hundred fifty thousand dollars ($250,000) in receipts of the Animal Feed and Pet Food Branch within the Food and Drug Protection Division of the Department of Agriculture and Consumer Services, of which $10,000 may be used to establish and publicize a fund to accept additional private contributions for the operation of the Dealer inspection program under Article 3 of this Chapter or the Spay/Neuter program under this Article.
(5)	An annual transfer of sixty‑one thousand five hundred twenty‑five dollars ($61,525) in receipts collected by the Department from the inspection fee authorized by G.S. 106‑284.40(a).
(b)	Use. – The revenue in the Account shall be used by the Department of Public Safety as follows:
…
(c)	Report. – In February of each year, the Department must report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division. The report must contain information regarding all revenues and expenditures of the Spay/Neuter Account.
…
"§ 19A‑64.  Distributions to counties and cities from Spay/Neuter Account.
…
(b)	Application. – A county or city eligible for reimbursement of spaying and neutering costs from the Spay/Neuter Account shall apply to the Department of Public Safety by the last day of January, April, July, and October of each year to receive a distribution from the Account for that quarter. The application shall be submitted in the form required by the Department and shall include an itemized listing of the costs for which reimbursement is sought.
…
"§ 19A‑65.  Annual Report Required From Every Animal Shelter in Receipt of State or Local Funding.
Every county or city animal shelter, or animal shelter operated under contract with a county or city or otherwise in receipt of State or local funding shall prepare an annual report in the form required by the Department of Public Safety setting forth the numbers, by species, of animals received into the shelter, the number adopted out, the number returned to owner, and the number destroyed. The report shall also contain the total operating expenses of the shelter and the cost per animal handled. The report shall be filed with the Department of Public Safety by March 1 of each year. A city or county that does not timely file the report required by this section is not eligible to receive reimbursement payments under G.S. 19A‑64 during the calendar year in which the report was to be filed.
"§ 19A‑66.  Notification of available funding.
Prior to January 1 of each year, the Department of Public Safety shall notify counties and cities that have, prior to that notification deadline, established eligibility for distribution of funds from the Spay/Neuter Account pursuant to G.S. 19A‑63, of the following:
…."
SECTION 13.14.(d)  G.S. 90‑101(a2) reads as rewritten:
"(a2)	An animal shelter may register under this section for the limited purpose of obtaining, possessing, and using sodium pentobarbital and other drugs approved by the Department in consultation with the North Carolina Veterinary Medical Association for the euthanasia of animals lawfully held by the animal shelter. An animal shelter registered under this section shall also register with the federal Drug Enforcement Agency under the federal Controlled Substances Act. An animal shelter's acquisition of sodium pentobarbital and other approved drugs for use in the euthanizing of animals shall be made only by the shelter's manager or chief operating officer or by a licensed veterinarian.
A person certified by the Department of Public Safety to administer euthanasia by injection is authorized to possess and administer sodium pentobarbital and other approved euthanasia drugs for the purposes of euthanizing domestic dogs (Canis familiaris) and cats (Felis domestica) lawfully held by an animal shelter. Possession and administration of sodium pentobarbital and other approved drugs for use in the euthanizing of dogs and cats by a certified euthanasia technician shall be limited to the premises of the animal shelter.
For purposes of this section, "animal shelter" means an animal shelter registered under Article 3 of Chapter 19A of the General Statutes and owned, operated, or maintained by a unit of local government or under contract with a unit of local government for the purpose of housing or containing seized, stray, homeless, quarantined, abandoned, or unwanted animals."
SECTION 13.14.(e)  G.S. 153A‑442 reads as rewritten:
"§ 153A‑442.  Animal shelters.
A county may establish, equip, operate, and maintain an animal shelter or may contribute to the support of an animal shelter, and for these purposes may appropriate funds not otherwise limited as to use by law. The animal shelters shall meet the same standards as animal shelters regulated by the Department of Public Safety pursuant to its authority under Chapter 19A of the General Statutes."
SECTION 13.14.(f)  G.S. 160A‑493 reads as rewritten:
"§ 160A‑493.  Animal shelters.
A city may establish, equip, operate, and maintain an animal shelter or may contribute to the support of an animal shelter, and for these purposes may appropriate funds not otherwise limited as to use by law. The animal shelters shall meet the same standards as animal shelters regulated by the Department of Public Safety pursuant to its authority under Chapter 19A of the General Statutes."
SECTION 13.14.(g)  Subsection 13.14(b1) of this section becomes effective July 1, 2015.

TVA Settlement Funds
SECTION 13.15.  Section 13.3 of S.L. 2013‑360 reads as rewritten:
"SECTION 13.3.(a)  In each fiscal year of the 2013‑2015 biennium, the Department of Agriculture and Consumer Services shall apply for two million two hundred forty thousand dollars ($2,240,000) from the Tennessee Valley Authority Settlement Agreement in compliance with the requirements of paragraphs 122 through 128 of the Consent Decree entered into by the State in State of Alabama et al. v. Tennessee Valley Authority, Civil Action 3:11‑cv‑00170 in the United States District Court for the Eastern District of Tennessee, and Appendix C to the Compliance Agreement. The funds received by the State under this section shall be allocated as follows:
(1)	Five hundred thousand dollars ($500,000) for each fiscal year of the 2013‑2015 biennium to award grants for "Environmental Mitigation Projects" of the types specified in paragraph 128 of the Consent Decree in the following counties: Avery, Buncombe, Burke, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, McDowell, Mitchell, Swain, Transylvania, Watauga, Yancey.
(2)	Five hundred thousand dollars ($500,000) for the 2013‑2014 fiscal year to the North Carolina Agricultural Water Resources Assistance Program to fund projects in the following counties: Avery, Buncombe, Burke, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, McDowell, Mitchell, Swain, Transylvania, Watauga, Yancey.
(2a)	Five hundred thousand dollars ($500,000) for the 2014‑2015 fiscal year to WNC Communities to fund lighting efficiency projects for public schools in areas served by the organization. Of the funds allocated in this subdivision, WNC Communities may use up to fifty thousand dollars ($50,000) for administrative expenses.
(3)	One million dollars ($1,000,000) for each fiscal year of the 2013‑2015 biennium to North Carolina Agricultural Development and Farmland Preservation Trust Fund to be used, notwithstanding G.S. 106‑744, to award funds in the following counties: Avery, Buncombe, Burke, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, McDowell, Mitchell, Swain, Transylvania, Watauga, Yancey.
(4)	Two hundred forty thousand dollars ($240,000) for each fiscal year of the 2013‑2015 biennium to the Appalachian Energy Center at Appalachian State University.
"SECTION 13.3.(b)  Funds allocated under subdivision (1) of subsection (a) of this section shall not be used to acquire land or purchase conservation easements."

PART XIV. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

AGENCIES REPORT ON FEDERAL GRANTS
SECTION 14.1.  The Department of Environment and Natural Resources, the Wildlife Resources Commission, the Department of Labor, the Department of Commerce, and the Department of Agriculture shall review every federal grant received by the respective departments and report no later than February 1, 2015, to the Chairs of the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Chairs of the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division regarding the source and amount of the grant, the match required for the grant from State funds, and any conditions, limitations, restrictions, or additional actions or programs the department is required to fulfill or undertake as a result of accepting the grant.

NER FACILITIES AND ADMINISTRATIVE FEES
SECTION 14.2.  The Department of Agriculture, the Department of Commerce, the North Carolina Biotechnology Center, and the Department of Environment and Natural Resources shall negotiate indirect cost waivers with every constituent institution of The University of North Carolina performing State‑funded research for the Center or the respective Departments. The waivers shall provide that the Center or the Departments pay facilities and administrative costs at a rate no greater than the lowest rate paid by any other State agency, department, or commission for research at that constituent institution.

Efficiencies Reporting By NER Agencies
SECTION 14.2A.(a)  The Wildlife Resources Commission and the Departments of Environment and Natural Resources, Labor, Commerce, and Agriculture that have, within the current biennium, as defined in G.S. 143C‑1‑1, undergone reorganizations, modifications to assignments or duties, or transfers of departmental functions or positions between Fund Codes shall submit a report as provided in this section. The report shall address the rationale for the reorganization or other administrative modifications, the efficiencies achieved, and the cost‑savings resulting from the reorganization or other administrative modifications, including, at a minimum, the following:
(1)	Positions eliminated.
(2)	Positions transferred among divisions, sections, or programs.
(3)	New divisions, sections, and programs established.
(4)	A comparison of the organizational charts before and after the reorganizations or other administrative modifications with each structural change clearly identified.
(5)	A list of divisions, sections, and programs that were unaffected by the reorganizations or other administrative modifications.
(6)	Resulting cost‑savings, itemized by funding source.
(7)	An explanation of improvements in the administrative capability of the department to manage its programs and carry out its mission.
(8)	An identification of any obsolete or overlapping activities.
SECTION 14.2A.(b)  Each department shall submit its report to the Chairs of the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division of the General Assembly no later than December 1, 2014.

Aquarium Fund Fee Transfers
SECTION 14.2C.  G.S. 143B‑289.44 reads as rewritten:
"§ 143B‑289.44.  North Carolina Aquariums; fees; fund.
(a)	Fees. – The Secretary of Environment and Natural Resources may adopt a schedule of fees for the aquariums and piers operated by the North Carolina Aquariums, including:
(1)	Gate admission fees.
(2)	Facility rental fees.
(3)	Educational programs.
(b)	Fund. – The North Carolina Aquariums Fund is hereby created as a special and nonreverting fund. The North Carolina Aquariums Fund shall be used for repair, renovation, expansion, maintenance, educational exhibit construction, and operational expenses at existing aquariums, to pay the debt service and lease payments related to the financing of expansions of aquariums, and to match private funds that are raised for these purposes.
(c)	Disposition of Fees. – All entrance fee receipts shall be credited to the North Carolina Aquariums Fund. Receipts so credited that are necessary to support the personnel and operational expenses of the aquariums shall be transferred to the aquariums' General Fund operating budget on a monthly basis.
…."

JENNETTE'S PIER
SECTION 14.2D.(a)  The Department of Administration shall dispose by sale of the Jennette's Pier facility as set forth in this section. Notwithstanding any provision of law to the contrary, the Department shall not sell the facility for less than either the fair market value or the total amount invested in the facility from all sources as determined by the Department, whichever is higher. Notwithstanding G.S. 146‑30, the Department shall deposit the net proceeds from the disposition of the property to reimburse the Town of Nags Head and Dare County for their financial contributions to the land acquisition and construction of the facility, with all remaining proceeds to the Clean Water Management Trust Fund.
SECTION 14.2D.(b)  The Department shall report no later than April 1, 2015, to the Chairs of the Senate Appropriations Committee on Natural and Economic Resources, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, and the Fiscal Research Division regarding the status of the facility sale required by this section.

COASTAL AND ESTUARINE WATER BEACH ACCESS PROGRAM
SECTION 14.4.(a)  Funds transferred from the Parks and Recreation Trust Fund to the Division of Coastal Management pursuant to G.S. 113‑44.15(b)(3) for the Coastal and Estuarine Water Beach Access Program shall be deposited in a noninterest-bearing special fund to be titled Coastal and Estuarine Water Beach Access Fund. The Fund shall be a special revenue fund consisting of gifts and grants to the Fund and other monies appropriated to the Fund by the General Assembly.
SECTION 14.4.(b)  Funds previously transferred from the Parks and Recreation Trust Fund to the Division of Coastal Management for the Coastal and Estuarine Water Beach Access Program that were deposited in capital funds shall be transferred to the Coastal and Estuarine Water Beach Access Fund established by subsection (a) of this section no later than September 30, 2014.

TECHNICAL CORRECTIONS: CWMTF
SECTION 14.8.(a)  G.S. 113A‑251 reads as rewritten:
"§ 113A‑251.  Purpose.

It is the intent of the General Assembly that moneys from the Fund created under this Article shall be used to help finance projects that enhance or restore degraded surface waters; protect and conserve surface waters, including drinking supplies, and contribute toward a network of riparian buffers and greenways for environmental, educational, and recreational benefits; provide buffers around military bases to protect the military mission; acquire land that represents the ecological diversity of North Carolina; and acquire land that contributes to the development of a balanced State program of historic properties."
SECTION 14.8.(b)  G.S. 113A‑252 reads as rewritten:
"§ 113A‑252.  Definitions.
The following definitions apply in this Article:
(1)	Council. – The advisory council for the Clean Water Management Trust Fund.
	
(3)	Fund. – The Clean Water Management Trust Fund created pursuant to this Article.
(4)	Land. – Real property and any interest in, easement in, or restriction on real property.
(4a)	Local government unit. – Defined in G.S. 159G‑20.
	
(5)	Trustees. – The trustees of the Clean Water Management Trust Fund.
	
	"
SECTION 14.8.(c)  G.S. 113A‑254 reads as rewritten:
"§ 113A‑254.  Grant requirements.
(a)	Eligible Applicants. – Any of the following are eligible to apply for a grant from the Fund for the purpose of protecting and enhancing water quality:
(1)	A State agency.
(2)	A local government unit.
(3)	A nonprofit corporation whose primary purpose is the conservation, preservation, or restoration of our State's cultural, environmental, or natural resources.
(a1)	Criteria. – The criteria developed by the Trustees under G.S. 113A‑256 apply to grants made under this Article.
…

…."
SECTION 14.8.(d)  G.S. 113A‑255(b1) is amended by adding a new subdivision to read:
"(b1)	Qualifications. – The office of Trustee is declared to be an office that may be held concurrently with any other executive or appointive office, under the authority of Article VI, Section 9, of the North Carolina Constitution. When appointing members of the Authority, the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives shall give consideration to adequate representation from the various regions of the State and shall give consideration to the appointment of members who are knowledgeable in any of the following areas:
…
(5)	Historic preservation."
SECTION 14.8.(e)  G.S. 113A‑256(b) reads as rewritten:
"(b)	Develop Grant Criteria. – The Trustees shall develop criteria for awarding grants under this Article. The criteria developed shall include consideration of the following:
…
(2)	The objectives of the various basinwide management plans for the State's river basins and watersheds.
…."
SECTION 14.8.(f)  G.S. 113A‑259 reads as rewritten:
"§ 113A‑259.  Clean Water Management Trust Fund: Advisory Council.
There is established the Clean Water Management Trust Fund Advisory Council. The Council shall advise the Trustees with regard to allocations made from the Fund, and other issues as requested by the Trustees. The Council shall be composed of the following or its designees:
(1)	Commissioner of Agriculture.
(2)	Chair of the Wildlife Resources Commission.
(3)	Secretary of Environment and Natural Resources.
(4)	Secretary of the Department of Commerce.
(5)	Secretary of the Department of Cultural Resources."

Water Quality Remediation Funds
SECTION 14.8A.  Of the funds appropriated in this act to the Clean Water Management Trust Fund, the sum of one million dollars ($1,000,000) shall be used for the remediation and mitigation of stormwater impacts to lakes subject to a Nutrient Management Strategy approved by the Environmental Management Commission.

COMMERCIAL FISHING LICENSES
SECTION 14.9.(a)  The General Assembly finds that additional funding is necessary to support the Division of Marine Fisheries' At‑Sea Observer Program and for the continued viability of the commercial fishing industry in North Carolina.
SECTION 14.9.(b)  G.S. 113‑168.2 reads as rewritten:
"§ 113‑168.2.  Standard Commercial Fishing License.
…
(e)	Fees. – The annual SCFL fee for a resident of this State shall be four hundred dollars ($400.00). The annual SCFL fee for a person who is not a resident of this State shall be the amount charged to a resident of this State in the nonresident's state. In no event, however, may the fee be less than four hundred dollars ($400.00). For purposes of this subsection, a "resident of this State" is a person who is a resident within the meaning of:
(1)	Sub‑subdivisions a. through d. of G.S. 113‑130(4) and who filed a State income tax return as a resident of North Carolina for the previous calendar or tax year, or
(2)	G.S. 113‑130(4)e.
…."
SECTION 14.9.(c)  G.S. 113‑168.3(b) reads as rewritten:
"(b)	Eligibility; Fees. – Any individual who is 65 years of age or older and who is eligible for a SCFL under G.S. 113‑168.2 may apply for either a SCFL or RSCFL. An applicant for a RSCFL shall provide proof of age at the time the application is made. The annual fee for a RSCFL for a resident of this State shall be two hundred dollars ($200.00). The annual fee for a RSCFL for a person who is not a resident of this State shall be two hundred sixty dollars ($260.00). For purposes of this subsection, a "resident of this State" is a person who is a resident within the meaning of:
(1)	Sub‑subdivisions a. through d. of G.S. 113‑130(4) and who filed a State income tax return as a resident of North Carolina for the previous calendar or tax year, or
(2)	G.S. 113‑130(4)e."
SECTION 14.9.(d)  G.S. 113‑169.2 reads as rewritten:
"§ 113‑169.2.  Shellfish license for North Carolina residents without a SCFL.
…
(c)	Fees. – Shellfish licenses issued under this section shall be issued annually upon payment of a fee of fifty dollars ($50.00) upon proof that the license applicant is a North Carolina resident.
…."
SECTION 14.9.(e)  G.S. 113‑169.3 reads as rewritten:
"§ 113‑169.3.  Licenses for fish dealers.
…
(e)	Application Fee for New Fish Dealers. – An applicant for a new fish dealer license shall pay a nonrefundable application fee of one hundred dollars ($100.00) in addition to the license category fees set forth in this section.
(f)	License Category Fees. – Every fish dealer subject to licensing requirements shall secure an annual license at each established location for each of the following activities transacted there, upon payment of the fee set out:
(1)	Dealing in oysters: $100.00.
(2)	Dealing in scallops: $100.00.
(3)	Dealing in clams: $100.00.
(4)	Dealing in hard or soft crabs: $100.00.
(5)	Dealing in shrimp, including bait: $100.00.
(6)	Dealing in finfish, including bait: $100.00.
(7)	Operating menhaden or other fish‑dehydrating or oil‑extracting processing plants: $100.00.
(8)	Consolidated license (all categories): $600.00.
…."
SECTION 14.9.(f)  G.S. 113‑169.5(b) reads as rewritten:
"(b)	The fee for a land or sell license for a vessel not having its primary situs in North Carolina is four hundred dollars ($400.00), or an amount equal to the nonresident fee charged by the nonresident's state, whichever is greater. Persons aboard vessels having a primary situs in a jurisdiction that would allow North Carolina vessels without restriction to land or sell their catch, taken outside the jurisdiction, may land or sell their catch in the State without complying with this section if the persons are in possession of a valid license from their state of residence."
SECTION 14.9.(g)  G.S. 113‑173(f) reads as rewritten:
"(f)	Duration; Fees. – The RCGL shall be valid for a one‑year period from the date of purchase. The fee for a RCGL for a North Carolina resident shall be seventy dollars ($70.00). The fee for a RCGL for an individual who is not a North Carolina resident shall be five hundred dollars ($500.00)."
SECTION 14.9.(h)  G.S. 113‑210 reads as rewritten:
"§ 113‑210.  Under Dock Oyster Culture.
…
	
(m)	Advance Sale of Permits; Permit Revenue. – To ensure an orderly transition from one permit year to the next, the Division may issue a permit prior to July 1 of the permit year for which the permit is valid. Revenue that the Division receives for the issuance of a permit prior to the beginning of a permit year shall not revert at the end of the fiscal year in which the revenue is received and shall be credited and available to the Division for the permit year in which the permit is valid."
SECTION 14.9.(i)  G.S. 143B‑289.54 reads as rewritten:
"§ 143B‑289.54.  Marine Fisheries Commission – members; appointment; term; oath; ethical standards; removal; compensation; staff.
…
(g)	Ethical Standards. –
(1)	Covered persons. – All members of the Commission are covered persons for the purposes of Chapter 138A of the General Statutes and shall comply with the applicable requirements of that Chapter, including mandatory training, the public disclosure of economic interests, provisions for avoidance of conflicts of interest, and ethical standards for covered persons.
(1a)		Additional disclosure statements. – Any person under consideration for appointment to the Commission shall provide an additional disclosure statement to the Governor, which shall include the following:
a.	The nominee's financial interests in and related to State fishery resources.
b.	Licenses issued by the Division of Marine Fisheries and Wildlife Resources Commission held by the nominee or any business in which the nominee has a financial interest.
c.	The nominee's membership in, affiliation with, or employment by any organization or group pertaining to the management or use of the State's fisheries or wildlife resources.
	Disclosure statements shall be treated as public records under Chapter 132 of the General Statutes and shall be updated on an annual basis.
(2)	Voting/conflict of interest. – A member of the Commission shall not vote on any issue before the Commission that would have a "significant and predictable effect" on the member's financial interest. For purposes of this subdivision, "significant and predictable effect" means there is or may be a close causal link between the decision of the Commission and an expected disproportionate financial benefit to the member that is shared only by a minority of persons within the same industry sector or gear group. A member of the Commission shall also abstain from voting on any petition submitted by an advocacy group of which the member is an officer or sits as a member of the advocacy group's board of directors. A member of the Commission shall not use the member's official position as a member of the Commission to secure any special privilege or exemption of substantial value for any person. No member of the Commission shall, by the member's conduct, create an appearance that any person could improperly influence the member in the performance of the member's official duties.
(3)	Regular attendance. – It shall be the duty of each member of the Commission to regularly attend meetings of the Commission.
(h)	Removal. – The Governor may remove, as provided in G.S. 143B‑13, any member of the Commission for misfeasance, malfeasance, or nonfeasance. For purposes of this subsection, malfeasance shall include, but is not limited to, any of the following: 
(1)	Any criminal conviction of a member for violation of any hunting or fishing laws of the State or rules promulgated by the Marine Fisheries Commission or Wildlife Resources Commission.
(2)	Any citation of a member or a company owned, in whole or in part, by the member for violation of any hunting or fishing laws of the State or rules promulgated by the Marine Fisheries Commission or Wildlife Resources Commission.
…."
SECTION 14.9.(j)  Fifty percent (50%) of the fees collected under this section for the 2014‑2015 and all subsequent fiscal years shall be used to support the At‑Sea Observer Program.
SECTION 14.9.(k)  It is the intent of the General Assembly to use the increase in fees authorized by this section for support of the At‑Sea Observer Program and to study permissible ways to establish a fishing resource fund and entity charged with reviewing and cooperating in the approval of use of moneys from the fund.
SECTION 14.9.(l)  Subsections (b), (c), (d), (e), (f), and (g) of this section are effective when they become law and apply to fees collected for the 2015‑2016 and all succeeding license years.

DIVISION OF MARINE FISHERIES JOINT ENFORCEMENT AGREEMENTS
SECTION 14.11.(a)  G.S. 113‑224 reads as rewritten:
"§ 113‑224.  Cooperative agreements by Department.
(a)	The Department is empowered to enter into cooperative agreements with public and private agencies and individuals respecting the matters governed in this Subchapter. Pursuant to such agreements the Department may expend funds, assign employees to additional duties within or without the State, assume additional responsibilities, and take other actions that may be required by virtue of such agreements, in the overall best interests of the conservation of marine and estuarine resources.
(b)	The Fisheries Director or a designee of the Fisheries Director shall enter into an agreement with the National Marine Fisheries Service of the United States Department of Commerce allowing Division of Marine Fisheries inspectors to accept delegation of law enforcement powers over matters within the jurisdiction of the National Marine Fisheries Service."
SECTION 14.11.(b)  G.S. 128‑1.1 is amended by adding a new subsection to read:
"(c2)	Inspectors of the Division of Marine Fisheries of the Department of Environment and Natural Resources may also assume law enforcement powers granted to the National Marine Fisheries Service as set forth in G.S. 113‑224(b)."

PERMIT ELECTRONIC TRANSMISSION OF RULES
SECTION 14.13.  G.S. 113‑221 reads as rewritten:
"§ 113‑221.  Rules.
…
(b)	Upon purchasing a license, each licensee shall be provided access to a copy of the rules concerning the activities authorized by the license. The copy may be in written or electronic form, including by file download over the Internet. A written copy of the rules shall be provided to a licensee upon request.
(c)	The Fisheries Director shall notify licensees of a new rule or change to a rule by sending each licensee either a newsletter containing the text of the rule or change or an updated codification of the rules of the Marine Fisheries Commission that contains the new rule or change. The Director may elect to use electronic means rather than mail to notify licensees if electronic means would be more timely and cost‑effective. A written copy of any notification produced in accordance with this section shall be provided to a licensee upon request.
…."

Natural Heritage Program Online Access Fees
SECTION 14.13A.(a)  Article 9A of Chapter 113A of the General Statutes is amended by adding the following new section to read:
"§ 113A‑164.12.  Access to information; fees.
(a)	The Secretary may establish fees to defray the costs associated with any of the following:
(1)	Responding to inquiries requiring customized environmental review services or the costs associated with developing, improving, or maintaining technology that supports an online interface for external users to access Natural Heritage Program data. The Secretary may reduce or waive the fee established under this subsection if the Secretary determines that a waiver or reduction of the fee is in the public interest.
(2)	Any activity authorized under G.S. 113A‑253(8e), including an inventory of natural areas conducted under the Natural Heritage Program, conservation and protection planning, and informational programs for owners of natural areas, as defined in G.S. 113A‑164.3.
(b)	Fees collected under this section are receipts of the Department of Environment and Natural Resources and shall be deposited in the Clean Water Management Trust Fund for the purpose of supporting the operations of the Natural Heritage Program."
SECTION 14.3A.(b)  G.S. 113A‑253(c)(8e) reads as rewritten:
"(8e)	To authorize expenditures from the Fund not to exceed the sum of seven hundred fifty thousand dollars ($750,000) and any fees collected under G.S. 113A‑164.12 to pay for the inventory of natural areas conducted under the Natural Heritage Program established pursuant to the Nature Preserves Act, Article 9A of Chapter 113A of the General Statutes, and to pay for conservation and protection planning and for informational programs for owners of natural areas, as defined in G.S. 113A‑164.3."

CDBG INFRASTRUCTURE ELIGIBLE ACTIVITIES CLARIFICATION
SECTION 14.15.  Section 15.14(g) of S.L. 2013‑360, as amended by Section 5.16(c) of S.L. 2013‑363, reads as rewritten:
"SECTION 15.14.(g) For purposes of this section, eligible activities under the category of Infrastructure in subsection (a) of this section are limited to critical public water and wastewater projects and associated connections to the new lines located on private property of eligible homeowners, consistent with federal law. Notwithstanding any State law or rule, eligible activities as defined in this subsection are limited only by applicable HUD regulations and federal law. Notwithstanding the provisions of subsection (e) of this section, funds allocated to the Infrastructure category in subsection (a) of this section shall not be reallocated to any other category."

WATER INFRASTRUCTURE
SECTION 14.17.  The Department of Environment and Natural Resources, Division of Water Infrastructure, shall require all local governments applying for loans or grants for water or wastewater purposes to certify that no funds received from water or wastewater utility operations have been transferred to the local government's General Fund for the purpose of supplementing the resources of the General Fund. The prohibition in this section shall not be interpreted to include payments made to the local government to reimburse the General Fund for expenses paid from that Fund that are reasonably allocable to the regular and ongoing operations of the utility, including, but not limited to, rent and shared facility costs, engineering and design work, plan review, and shared personnel costs.

Grants to Municipalities in Tier I and II Counties for Water AND Sewer Infrastructure Improvements
SECTION 14.17A.  Of the funds appropriated in this act to the Department of Environment and Natural Resources, the sum of five hundred thousand dollars ($500,000) shall be allocated for grants to municipalities in development tier I and development tier II areas as those tiers are defined in G.S. 143B‑437.08 for water and sewer infrastructure development projects. Notwithstanding Chapter 159G or any other provision of law, the grants shall be used for projects that serve a public purpose related to the provision of water and sewer service to local government or educational facilities.

AMEND SHALLOW DRAFT NAVIGATION CHANNEL AND LAKE DREDGING FUNDING
SECTION 14.18.(a)  G.S. 105‑449.126 reads as rewritten:
"§ 105‑449.126.  Distribution of part of Highway Fund allocation to Wildlife Resources Fund and Shallow Draft Navigation Channel and Lake Dredging Fund.
(a)	The Secretary shall credit to the Wildlife Resources Fund one‑sixth of one percent (1/6 of 1%) of the amount that is allocated to the Highway Fund under G.S. 105‑449.125 and is from the excise tax on motor fuel. Revenue credited to the Wildlife Resources Fund under this section may be used only for the boating and water safety activities described in G.S. 75A‑3(c). The Secretary must credit revenue to the Wildlife Resources Fund on a quarterly basis. The Secretary must make the distribution within 45 days of the end of each quarter.
(b)	The Secretary shall credit to the Shallow Draft Navigation Channel and Lake Dredging Fund one‑sixth of one percent (1/6 of 1%) of the amount that is allocated to the Highway Fund under G.S. 105‑449.125 and is from the excise tax on motor fuel. Revenue credited to the Shallow Draft Navigation Channel and Lake Dredging Fund under this section may be used only for the dredging activities described in G.S. 143‑215.73F. The Secretary shall credit revenue to the Shallow Draft Navigation Channel and Lake Dredging Fund on a quarterly basis. The Secretary must make the distribution within 45 days of the end of each quarter."
SECTION 14.18.(b)  Notwithstanding G.S. 105‑449.125, the funds credited to the Wildlife Resources Fund and the Shallow Draft Navigation Channel and Lake Dredging Fund for the first quarter of calendar year 2014 shall be distributed August 15, 2014. Notwithstanding G.S. 105‑449.125, the funds credited to the Wildlife Resources Fund and the Shallow Draft Navigation Channel and Lake Dredging Fund for the last quarter of calendar year 2014 shall be allocated to the Highway Trust Fund.
SECTION 14.18.(c)  Notwithstanding G.S. 105‑449.125, in addition to the funds credited under G.S. 105‑449.126 the Secretary of Revenue shall also credit the sum of one million six hundred seventy-seven thousand one hundred thirty-four dollars ($1,677,134) to the Shallow Draft Navigation Channel and Lake Dredging Fund for the 2014‑2015 fiscal year no later than August 15, 2014. The funds distributed shall be from the funds collected under Article 36C of Chapter 105 of the General Statutes from the effective date of this act until August 15, 2014.
SECTION 14.18.(d)  Section 14.18(a) is effective for quarters beginning on or after January 1, 2014. The remainder of this section is effective when it becomes law.

Aquatic Weed Control
SECTION 14.19.(a)  Under the authority granted by G.S. 113A‑227, the Secretary of the Department of Environment and Natural Resources may adopt rules necessary to implement the provisions relative to boat washing for aquatic weed prevention measures, including rules relating to monitoring and enforcement.
SECTION 14.19.(b)  G.S. 143‑215.73F reads as rewritten:
"§ 143‑215.73F.  Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund.
The Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund is established as a special revenue fund. The Fund consists of fees credited to it under G.S. 75A‑3, 75A‑38, and 105‑449.126. Revenue in the Fund may only be used to provide the State's share of the costs associated with any dredging project designed to keep shallow draft navigation channels located in State waters or waters of the state located within lakes navigable and safe, or for aquatic weed control projects in waters of the State located within lakes under Article 22C of Chapter 113 of the General Statutes. Funding for aquatic weed control projects is limited to five hundred thousand dollars ($500,000) in each fiscal year. Any project funded by revenue from the Fund, with the exception of aquatic weed control projects, must be cost-shared with non-State dollars on a one-to-one basis. For purposes of this section, "shallow draft navigation channel" means (i) a waterway connection with a maximum depth of 16 feet between the Atlantic Ocean and a bay or the Atlantic Intracoastal Waterway, (ii) a river entrance to the Atlantic Ocean through which tidal and other currents flow, or (iii) other interior coastal waterways. "Shallow draft navigation channel" includes the Atlantic Intracoastal Waterway and its side channels, Beaufort Harbor, Bogue Inlet, Carolina Beach Inlet, the channel from Back Sound to Lookout Back, channels connected to federal navigation channels, Lockwoods Folly River, Manteo/Shallowbag Bay, including Oregon Inlet, Masonboro Inlet, New River, New Topsail Inlet, Rodanthe, Rollinson, Shallotte River, Silver Lake Harbor, and the waterway connecting Pamlico Sound and Beaufort Harbor."

COAL ASH MANAGEMENT
SECTION 14.20.  Of the funds appropriated in this act to the Department of Environment and Natural Resources for coal ash management, the Department may use up to five hundred ninety‑six thousand dollars ($596,000) in lapsed salary and operating funds in fiscal year 2014‑2015 to purchase scientific equipment and two new vehicles to support the ongoing surveys and regulatory activities related to coal ash management activities in the State.

REDIRECT INTEREST ON CERTAIN ENVIRONMENTAL FUNDS
SECTION 14.21.(a)  G.S. 143B‑289.59 reads as rewritten:
"§ 143B‑289.59.  Conservation Fund; Commission may accept gifts.
…
(b)	The Marine Fisheries Commission is hereby authorized to issue and sell appropriate emblems by which to identify recipients thereof as contributors to a special marine and estuarine resources Conservation Fund that shall be made available to the Marine Fisheries Commission for conservation, protection, enhancement, preservation, and perpetuation of marine and estuarine species that may be endangered or threatened with extinction and for education about these issues. The special Conservation Fund is subject to oversight of the State Auditor pursuant to Article 5A of Chapter 147 of the General Statutes, except that interest and other income received on the Fund balance shall be treated as set forth in G.S. 147‑69.1(d). Emblems of different sizes, shapes, types, or designs may be used to recognize contributions in different amounts, but no emblem shall be issued for a contribution amounting in value to less than five dollars ($5.00)."
SECTION 14.21.(b)  G.S. 143‑215.104C reads as rewritten:
"§ 143‑215.104C.  Dry‑Cleaning Solvent Cleanup Fund.
(a)	Creation. – The Dry‑Cleaning Solvent Cleanup Fund is established as a special revenue fund to be administered by the Commission. Accordingly, revenue in the Fund at the end of a fiscal year does not revert. The Fund is created to provide revenue to implement this Part.
…."
SECTION 14.21.(c)  G.S. 87‑98 reads as rewritten:
"§ 87‑98.  Bernard Allen Memorial Emergency Drinking Water Fund.
(a)	The Bernard Allen Memorial Emergency Drinking Water Fund is established under the control and direction of the Department. The Fund shall be a nonreverting fund consisting of monies appropriated by the General Assembly or made available to the Fund from any other source.
…."
SECTION 14.21.(d)  G.S. 90A‑42 reads as rewritten:
"§ 90A‑42.  Fees.
…
(b)	The Water Pollution Control System Account is established as a nonreverting account within the Department. Fees collected under this section shall be credited to the Account and applied to the costs of administering this Article. Interest and other income received on the Fund balance shall be treated as set forth in G.S. 147‑69.1(d)."
SECTION 14.21.(e)  G.S. 143‑215.94B reads as rewritten:
"§ 143‑215.94B.  Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund.
…
(e)	The Commercial Fund shall be treated as a special trust fund pursuant to G.S. 147‑69.2 and G.S. 147‑69.3, except that interest and other income received on the Fund balance shall be treated as set forth in G.S. 147‑69.1(d).
…."
SECTION 14.21.(f)  G.S. 143‑215.94D reads as rewritten:
"§ 143‑215.94D.  Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund.
…
(e)	The Noncommercial Fund shall be treated as a special trust fund pursuant to G.S. 147‑69.2 and G.S. 147‑69.3, except that interest and other income received on the Fund balance shall be treated as set forth in G.S. 147‑69.1(d).
…."
SECTION 14.21.(g)  G.S. 130A‑310.11 reads as rewritten:
"§ 130A‑310.11.  Inactive Hazardous Sites Cleanup Fund created.
(a)	There is established under the control and direction of the Department the Inactive Hazardous Sites Cleanup Fund. This fund shall be a revolving fund consisting of any monies appropriated for such purpose by the General Assembly or available to it from grants, taxes, and other monies paid to it or recovered by or on behalf of the Department. The Inactive Hazardous Sites Cleanup Fund shall be treated as a nonreverting special trust fund pursuant to G.S. 147‑69.2 and G.S. 147‑69.3, except that interest and other income received on the Fund balance shall be treated as set forth in G.S. 147‑69.1(d).
…."
SECTION 14.21.(h)  G.S. 130A‑310.38 reads as rewritten:
"§ 130A‑310.38.  Brownfields Property Reuse Act Implementation Account.
The Brownfields Property Reuse Act Implementation Account is created as a nonreverting account in the Office of the State Treasurer. The Account shall consist of fees and interest collected under G.S. 130A‑310.39, moneys appropriated to it by the General Assembly, moneys received from the federal government, moneys contributed by private organizations, and moneys received from any other source. Funds in the Account shall be used by the Department to defray the costs of implementing this Part. The Department may contract with a private entity for any services necessary to implement this Part."

I & M AIR POLLUTION CONTROL ACCOUNT
SECTION 14.22.  The Division of Air Quality of the Department of Environment and Natural Resources shall use the cash balance remaining in the I & M Air Pollution Control Account for operations in the 2014‑2015 fiscal year related to the development and implementation of air pollution control programs for mobile sources.

WATER AND AIR QUALITY ACCOUNT
SECTION 14.23.  The Division of Air Quality of the Department of Environment and Natural Resources shall use the cash balance remaining in the Water and Air Quality Account to administer its programs in fiscal year 2014‑2015.

SOLID WASTE DISPOSAL TAX CONFORMING CHANGE
SECTION 14.24.  G.S. 130A‑295.9 reads as rewritten:
"§ 130A‑295.9.  Solid waste disposal tax; use of proceeds.
It is the intent that the proceeds of the solid waste disposal tax imposed by Article 5G of Chapter 105 of the General Statutes shall be used only for the following purposes:
…
	"

Eliminate Waste Management Fee Cap
SECTION 14.24A.  G.S. 130A‑294.1(c) is repealed.

Department of Environment and Natural Resources Management Flexibility
SECTION 14.24B.(a)  Notwithstanding S.L. 2013‑360 and G.S. 143C‑6‑4, the Department of Environment and Natural Resources may take the two million dollar ($2,000,000) reduction from sources other than efficiencies created by consolidating the Divisions of Water Resources and Water Quality, subject to the following restrictions:
(1)	No State attraction proposed for closure in the Appropriations Act of 2014, S.B. 744, 2013 Regular Session, as passed by either the Senate or the House of Representatives but not adopted when the Appropriations Act of 2014 becomes law, may be included in the reduction by the Department.
(2)	No program or item expansion funds appropriated for the 2013-2015 fiscal biennium to the Department shall be used to offset the management flexibility reduction under this section.
SECTION 14.24B.(b)  The Department shall report on the reductions made as required by this section no later than October 1, 2014, to the chairs of the Senate Appropriations Committee on Natural and Economic Resources, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, and the Fiscal Research Division.

WILDLIFE LICENSING CHANGES
SECTION 14.25.(a)  G.S. 113‑270.3(b)(1b) reads as rewritten:
"(b)	The special activity licenses and stamp issued by the Wildlife Resources Commission are as follows:
…
(1b)	Bear Management Stamp – $10.00. This electronically generated stamp must be procured before taking any bear within the State. Notwithstanding any other provision of law, a resident or nonresident individual may not take any bear within the State without procuring this stamp; provided, that those persons who have purchased a lifetime license established by G.S. 113‑270.1D(b), 113‑270.2(c)(2), or 113‑351(c)(3) prior to July 1, 2014, and those persons exempt from the license requirements as set forth in G.S. 113‑276(c), G.S. 113‑276(d), and G.S. 113‑276(n) shall obtain this stamp free of charge. All of the revenue generated by this stamp shall be dedicated to black bear research and management."
SECTION 14.25.(b)  G.S. 113‑174.2 reads as rewritten:
"§ 113‑174.2.  Coastal Recreational Fishing License.
…
(c)	Types of CRFLs; Fees; Duration. – The Wildlife Resources Commission shall issue the following CRFLs:
(1)	Annual Resident CRFL. – $15.00. This license is valid from the date of issue for a period of 12 months as defined by G.S. 113‑270.1B(b) and G.S. 113‑270.1B(c). This license shall be issued only to an individual who is a resident of the State.
(1a)	Annual Nonresident CRFL. – $30.00. This license is valid from the date of issue for a period of 12 months as defined by G.S. 113‑270.1B(b) and G.S. 113‑270.1B(c). This license shall be issued only to an individual who is not a resident of the State.
(2)	Repealed by Session Laws 2005‑455, s. 1.4, effective January 1, 2007.
(3)	Repealed by Session Laws 2005‑455, s. 1.4, effective January 1, 2007.
(4)	Ten‑Day Resident CRFL. – $5.00. This license is valid for a period of 10 consecutive days, as indicated on the license. This license shall be issued only to an individual who is a resident of the State.
(4a)	Ten‑Day Nonresident CRFL. – $10.00. This license is valid for a period of 10 consecutive days, as indicated on the license. This license shall be issued only to an individual who is not a resident of the State.
(5)	Repealed by Session Laws 2005‑455, s. 1.4, effective January 1, 2007.
(6)	Lifetime CRFLs. – Except as provided in sub‑subdivision j. of this subdivision, CRFLs issued under this subdivision are valid for the lifetime of the licensee.
a. –d.	Repealed by Session Laws 2005‑455, s. 1.4, effective January 1, 2007.
e.	Infant Lifetime CRFL. – $100.00. This license shall be issued only to an individual younger than one year of age.
f.	Youth Lifetime CRFL. – $150.00. This license shall be issued only to an individual who is one year of age or older but younger than 12 years of age.
g.	(Effective until August 1, 2014) Resident Adult Lifetime CRFL. – $250.00. This license shall be issued only to an individual who is 12 years of age or older but younger than 65 years of age and who is a resident of the State.
g.	(Effective August 1, 2014) Resident Adult Lifetime CRFL. – $250.00. This license shall be issued only to an individual who is 12 years of age or older but younger than 70 years of age and who is a resident of the State.
h.	Nonresident Adult Lifetime CRFL. – $500.00. This license shall be issued only to an individual who is 12 years of age or older and who is not a resident of the State.
i.	(Effective until August 1, 2014) Resident Age 65 Lifetime CRFL. – $15.00. This license shall be issued only to an individual who is 65 years of age or older and who is a resident of the State.
i.	(Effective August 1, 2014) Resident Age 70 Lifetime CRFL. – $15.00. This license shall be issued only to an individual who is 70 years of age or older and who is a resident of the State.
j.	Resident Disabled Veteran CRFL. – $10.00. This license shall be issued only to an individual who is a resident of the State and who is a fifty percent (50%) or more disabled veteran as determined by the United States Department of Veterans Affairs or as established by G.S. 113‑351(c)(3)(f). This license remains valid for the lifetime of the licensee so long as the licensee remains fifty percent (50%) or more disabled.
k.	Resident Totally Disabled CRFL. – $10.00. This license shall be issued only to an individual who is a resident of the State and who is totally and permanently disabled as determined by the Social Security Administration or as established by G.S. 113‑351(c)(3)(g).
…."
SECTION 14.25.(c)  G.S. 113‑173 reads as rewritten:
"§ 113‑173.  Recreational Commercial Gear License.
…
(f)	Duration; Fees. – The RCGL shall be valid from the date of issue for a period of 12 months as defined by G.S. 113‑270.1B(b) and G.S. 113‑270.1B(c). The fee for a RCGL for a North Carolina resident shall be forty‑three dollars and seventy‑five cents ($43.75). The fee for a RCGL for an individual who is not a North Carolina resident shall be three hundred twelve dollars and fifty cents ($312.50).
…."
SECTION 14.25.(d)  G.S. 113‑351 reads as rewritten:
"§ 113‑351.  Unified hunting and fishing licenses; subsistence license waiver.
(a)	Definitions. – The definitions set out in G.S. 113‑174 apply to this Article.
(b)	General Provisions Governing Licenses and Waivers. – The general provisions governing licenses set out in G.S. 113‑174.1 apply to licenses and waivers issued under this section.
(c)	Types of Unified Hunting and Fishing Licenses; Fees; Duration. – The Wildlife Resources Commission shall issue the following Unified Hunting and Fishing Licenses:
(1)	Annual Resident Unified Sportsman/Coastal Recreational Fishing License. – $55.00. This license is valid from the date of issue for a period of 12 months as defined by G.S. 113‑270.1B(b) and G.S. 113‑270.1B(c). This license shall be issued only to an individual who is a resident of the State. This license authorizes the licensee to take all wild animals and wild birds, including waterfowl, by all lawful methods in all open seasons, including the use of game lands; to fish with hook and line for all fish in all inland fishing waters and joint fishing waters, including public mountain trout waters; and to engage in recreational fishing in coastal fishing waters.
(2)	Annual Resident Unified Inland/Coastal Recreational Fishing License. – $35.00. This license is valid from the date of issue for a period of 12 months as defined by G.S. 113‑270.1B(b) and G.S. 113‑270.1B(c). This license shall be issued only to an individual who is a resident of the State. This license authorizes the licensee to fish with hook and line for all fish in all inland fishing waters and joint fishing waters, including public mountain trout waters, and to engage in recreational fishing in coastal fishing waters.
…."
SECTION 14.25.(e)  G.S. 113‑270.1D reads as rewritten:
"§ 113‑270.1D.  Sportsman licenses.
(a)	Annual Sportsman License – $50.00. This license shall be issued only to an individual resident of the State and entitles the licensee to take all wild animals and wild birds, including waterfowl, by all lawful methods in all open seasons, including the use of game lands, and to fish with hook and line for all fish in all inland and joint fishing waters, including public mountain trout waters. An annual sportsman license issued under this subsection does not entitle the licensee to engage in recreational fishing in coastal fishing waters that are not joint fishing waters.
(b)	Lifetime Sportsman Licenses. Except as provided in subdivision (7) of this subsection, lifetime sportsman licenses are valid for the lifetime of the licensees. Lifetime sportsman licenses entitle the licensees to take all wild animals and wild birds by all lawful methods in all open seasons, including the use of game lands, and to fish with hook and line for all fish in all inland and joint fishing waters, including public mountain trout waters. A lifetime sportsman license issued under this subsection does not entitle the licensee to engage in recreational fishing in coastal fishing waters that are not joint fishing waters. Lifetime sportsman licenses issued by the Wildlife Resources Commission are:
…
(3)	Adult Resident Lifetime Sportsman License – $500.00. This license shall be issued only to an individual resident of the State who is 12 years of age or older but younger than 70 years of age.
(4)	Nonresident Lifetime Sportsman License – $1,200. This license shall be issued only to an individual nonresident of the State.
(5)	Age 70 Resident Lifetime Sportsman License – $15.00.This license shall be issued only to an individual resident of the State who is at least 70 years of age.
(6)	Repealed by Session Laws 2005‑455, s. 1.7 effective January 1, 2007.
(7)	Resident Disabled Veteran Lifetime Sportsman License – $100.00. This license shall be issued only to an individual who is a resident of the State and who is a fifty percent (50%) or more disabled veteran as determined by the United States Department of Veterans Affairs or as established by rules of the Wildlife Resources Commission. This license remains valid for the lifetime of the licensee so long as the licensee remains fifty percent (50%) or more disabled.
(8)	Resident Totally Disabled Lifetime Sportsman License – $100.00. This license shall be issued only to an individual who is a resident of the State and who is totally and permanently disabled as determined by the Social Security Administration or as established by rules of the Wildlife Resources Commission."
SECTION 14.25.(f)  Subsections (a) and (e) of this section become effective August 1, 2014.

TRANSFER RESPONSIBILITY FOR DEER OVERSIGHT TO DACS
SECTION 14.26.(a)  Article 49H of Chapter 106 of the General Statutes reads as rewritten:
"Article 49H.
"Production, Sale, Transportation, and Licensing of Fallow Deer and Red Deer.
"§ 106‑549.97.  Regulation by Department of Agriculture and Consumer Services of certain cervids produced and sold for commercial purposes; definitions.
(a)	The Department of Agriculture and Consumer Services shall regulate the production and sale of farmed cervids. The Board of Agriculture shall adopt rules for the production and sale of farmed cervids in such a manner as to provide for close supervision of any person, firm, or corporation producing and selling farmed cervids.
	
(c)	The following definitions apply in this Article:
(1)	Repealed by Session Laws 2003‑344, s. 11, effective July 27, 2003.
(2)	Repealed by Session Laws 2003‑344, s. 11, effective July 27, 2003.
(3)	Cervid or Cervidae. – All animals in the Family Cervidae (elk and deer).
(4)	Farmed Cervid. – Any member of the Cervidae family, other than white‑tailed deer, elk, mule deer, or black‑tailed deer, that is bought and sold for commercial purposes.
(5)	White‑tailed deer. – A member of the species Odocoileus virginianus."
"§ 106‑549.97A.  Transportation of cervids and licensing of captive cervid facilities.
(a)	The Department of Agriculture and Consumer Services shall regulate the transportation, including importation and exportation, and possession of cervids. The Board of Agriculture shall adopt rules to implement this section, including requirements for captivity licenses, captivity permits, and transportation permits. The rules adopted pursuant to this section shall establish standards of care for the transportation and possession of cervids, including requirements for fencing, tagging, record keeping, and inspection of captive cervid facilities. Notwithstanding any other provision of law, the Board may charge a fee of up to fifty dollars ($50.00) for the processing of applications for captivity licenses, captivity permits, and transportation permits, and the renewal or modification of those licenses and permits. The fees collected shall be applied to the costs of administering this section.
(b)	Every applicant for a transportation permit shall comply with the Department's requirements for transportation pursuant to Article 34 of Chapter 106 of the General Statutes.
(c)	Notwithstanding any other provision of law, the Board shall issue captivity licenses, captivity permits, or transportation permits to any person possessing cervids that were held in captivity by that person prior to May 17, 2002, if the Commissioner finds that the applicant has come into compliance with all applicable rules related to the holding of cervids in captivity by January 1, 2004, and that issuance of such license or permit does not pose unreasonable risk to the conservation of wildlife resources.
(d)	Any captivity license, captivity permit, or cervids held contrary to the provisions of this section may be subject to forfeiture and disposition in accordance with the provisions of this Article.
(e)	The Board shall issue rules requiring that any applicant for a transportation permit indemnify or provide another form of financial assurance acceptable to the Board to protect the State from any costs or liabilities related to the activities authorized by the permit.
…
"§ 106‑549.99.  Regulations for control and prevention of diseases and disorders.
The Commissioner may adopt regulations and procedures for the disposition of cervids infected with diseases or disorders or kept or moved in violation of this Article and pursuant regulations. Such regulations may authorize the Commissioner to quarantine, destroy, confiscate, or otherwise dispose of, eradicate, establish cleanup areas, and require owners to disinfect, fumigate, treat with drugs, or destroy cervids at their own expense or to take measures to eradicate cervid diseases or disorders.
The Commissioner shall have authority to allow, require, or forbid use of drugs in the control of cervid diseases or disorders and may define as infested or infected symptomless carriers of a disease or disorder and consider cervids which have been exposed to a disease or disorder to be infected or infested. The Commissioner may take emergency action pursuant to the provisions in this Article if needed to protect the cervid industry in North Carolina or wild cervid populations. Such action shall remain in force until rescinded by the Commissioner.
"§ 106‑549.100.  Designation of persons to administer Article; inspections.
The Commissioner shall have the authority to designate such employees of the Department or persons collaborating with the Department as may seem expedient to carry out the duties and exercise the powers provided by this Article. The Commissioner is authorized to survey or inspect premises of any person maintaining a population of cervids, inspect cervids for diseases and disorders, and otherwise enforce the provisions of this Article and associated regulations. The Commissioner or his or her designated agent shall have authority to enter upon any premises to inspect any cervids to determine the presence or absence of diseases or disorders.
Such inspections and other activities may be conducted with the permission of the owner or person in charge. If permission is denied the Commissioner or his or her designated agent, the inspections and other activities may be conducted in a reasonable manner, with a warrant, with respect to any premises or vehicles. The warrant shall be issued pursuant to Article 4A of Chapter 15 of the General Statutes. A superior court judge may issue confiscation orders on any cervids for which confiscation is authorized in this Article or pursuant regulations.
"§ 106‑549.101.  Penalties.
The Commissioner may assess a civil penalty of not more than ten thousand dollars ($10,000) against a person who violates this Article or a rule adopted to implement this Article. In determining the amount of the penalty, the Commissioner shall consider the degree and extent of harm caused by the violation. No civil penalty may be assessed under this section unless the person has been given the opportunity for a hearing pursuant to the Administrative Procedure Act, Chapter 150B of the General Statutes. If not paid within 30 days after the effective date of a final decision by the Commissioner, the penalty may be collected by any lawful means for the collection of a debt. The clear proceeds of civil penalties assessed pursuant to this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 14.26.(b)  G.S. 113‑272.6 reads as rewritten:
"§ 113‑272.6.  Regulation of hunted cervid carcasses.
	The Wildlife Resources Commission shall regulate the transportation, including importation and exportation, and possession of cervid game carcasses and parts of cervid game carcasses extracted by hunters. The Commission shall adopt rules to implement this section. Notwithstanding any other provision of law, the Commission may charge a fee of up to fifty dollars ($50.00) for the processing of applications for permits issued under this section and the renewal or modification of those permits. The fees collected shall be applied to the costs of administering this section.
			"
SECTION 14.26.(c)  The Department of Agriculture and Consumer Services shall study the risks associated with the spread of Chronic Wasting Disease, also known as transmissible spongiform encephalopathy, due to the importation of cervids from outside the State. The Department shall report no later than February 1, 2015, to the Chairs of the Appropriations Subcommittee on Natural and Economic Resources of the House of Representatives, the Chairs of the Appropriations Committee on Natural and Economic Resources of the Senate, and the Fiscal Research Division with its proposals and recommendations for the best methods of minimizing the potential cost to the State associated with containment, condemnation, and mitigation costs associated with an outbreak of Chronic Wasting Disease in the State.
SECTION 14.26.(d)  The Commissioner shall not issue a transportation permit for the importation of cervids into the State prior to July 1, 2015.

Interstate Chemicals Clearinghouse
SECTION 14.27.  The Department of Environment and Natural Resources is authorized to join the Interstate Chemicals Clearinghouse for the purpose of access to key data necessary to enhance safety in the use of toxic substances.

Water and Sewer funds/forest City
SECTION 14.28.  Of the funds appropriated in this act to the Department of Environment and Natural Resources for grants to local governments for critical needs water infrastructure development grants, the sum of seventeen thousand five hundred dollars ($17,500) shall be allocated to the town of Forest City for a water line extension.

PART XV. DEPARTMENT OF COMMERCE

Transfer ABC COMMISSION to Department of Public Safety
SECTION 15.2A.(a)  The North Carolina Alcoholic Beverage Control Commission is hereby transferred to the Department of Public Safety. This transfer shall have all of the elements of a Type II transfer, as described in G.S. 143A‑6.
SECTION 15.2A.(b)  G.S. 143B‑431(a)(2)a. is repealed.
SECTION 15.2A.(c)  G.S. 143B‑433(1)a. is repealed.
SECTION 15.2A.(d)  G.S. 18B‑200(a) reads as rewritten:
"§ 18B‑200.  North Carolina Alcoholic Beverage Control Commission.
(a)	Creation of Commission; compensation. – The North Carolina Alcoholic Beverage Control Commission is created to consist of a chairman and two associate members. The Commission shall be administratively located within the Department of Public Safety but shall exercise its powers independently of the Secretary of Public Safety. The chairman shall devote his full time to his official duties and receive a salary fixed by the General Assembly in the Current Operations Appropriations Act. The associate members shall be compensated for per diem, subsistence and travel as provided in Chapter 138 of the General Statutes."
SECTION 15.2A.(e)  G.S. 143B‑600 reads as rewritten:
"§ 143B‑600.  Organization.
(a)	There is established the Department of Public Safety. The head of the Department of Public Safety is the Secretary of Public Safety, who shall be known as the Secretary.
(b)	The powers and duties of the deputy secretaries, commissioners, directors, and the divisions of the Department shall be subject to the direction and control of the Secretary of Public Safety, except that the powers and duties of the North Carolina Alcoholic Beverage Control Commission shall be exercised independently of the Secretary, in accordance with G.S. 18B‑200."
SECTION 15.2A.(f)  This section becomes effective October 1, 2014.

SET REGULATORY FEE FOR UTILITIES COMMISSION
SECTION 15.2B.  Section 15.1(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 15.1.(a)  The percentage rate to be used in calculating the public utility regulatory fee under G.S. 62‑302(b)(2) is fourteen one-hundredths of one percent (0.14%) for each public utility's North Carolina jurisdictional revenues earned during each quarter that begins on or after July 1, 2014."

REPEAL COMMERCE FLEXIBILITY TO REORGANIZE DEPARTMENT
SECTION 15.3.  Section 15.7A of S.L. 2013‑360 is repealed.

COMMERCE FUNDS USED FOR BASE REALIGNMENT AND CLOSURE ACTIVITIES
SECTION 15.4.(a)  Funds appropriated to the Department of Commerce for the 2013‑2014 fiscal year that are unexpended and unencumbered as of June 30, 2014, shall not revert to the General Fund but shall remain available to the Department until expended for use in the State's preparation for United States Department of Defense Base Realignment and Closure activities.
SECTION 15.4.(b)  This section becomes effective June 30, 2014.

SPECIAL FUNDS TRANSFER/OFFSET COMMERCE ADMINISTRATION GENERAL FUND APPROPRIATION
SECTION 15.5.(a)  The Office of State Budget and Management, in conjunction with the Office of the State Controller and the Department of Commerce, shall transfer the unencumbered cash balances in the following funds as of June 30, 2014, to Commerce Administration (Budget Code 14600‑1111):
(1)	24609‑2537 – Energy Research Grants
(2)	24609‑2535 – NC Green Business Fund
(3)	24609‑2562 – One North Carolina Small Business Fund
(4)	24613‑2622 – Main Street Solutions
SECTION 15.5.(b)  The Office of State Budget and Management, in conjunction with the Office of the State Controller and the Department of Commerce, shall transfer the unencumbered cash balance in the Economic Development Reserve (Budget Code 24609‑2584) as of June 30, 2014, to Commerce Administration (Budget Code 14600‑1111) and, upon the transfer, close the Reserve.
SECTION 15.5.(c)  The transfers in subsections (a) and (b) of this section are to offset General Fund appropriations to the Department of Commerce for administration.

COMMON FOLLOW‑UP/COSTS SHARED BY STATE AGENCIES & LEAD DEVELOP PLAN TO TRANSFER COMMON FOLLOW‑UP DATA AND CAPABILITIES TO GDAC
SECTION 15.6.(a)  The Commission on Workforce Development (hereinafter "Commission") shall prescribe a method for calculating the amount each of the agencies listed in this subsection shall contribute to fund the Common Follow‑Up System at a cost of five hundred thousand dollars ($500,000) on a nonrecurring basis. In developing the method, the Commission shall consider each agency's proportion of data contribution and System usage. The agencies that shall contribute to fund the Common Follow‑Up System are as follows:
(1)	Department of Public Safety, Division of Adult Correction.
(2)	Department of Public Instruction.
(3)	Department of Commerce, Division of Workforce Solutions.
(4)	Department of Health and Human Services, Division of Services for the Blind; Division of Social Services; and Division of Vocational Rehabilitation Services.
(5)	North Carolina Community College System.
(6)	The University of North Carolina.
SECTION 15.6.(b)  The agencies listed in subsection (a) of this section shall transfer their share of the funds needed to fund the Common Follow‑Up System, which shall be determined using the method prescribed by the Commission, to the Department of Commerce, Labor & Economic Analysis Division, no later than December 31, 2014.
SECTION 15.6.(c)  The Department of Commerce, Labor & Economic Analysis Division (LEAD), shall develop a plan to transfer the information in and required capabilities of the Common Follow‑Up System to the Government Data Analytics Center (GDAC). By February 1, 2015, the Department shall submit the plan to the Office of the State Chief Information Officer, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division.

MERGE ACCESS NC & DEMAND DRIVEN DATA DELIVERY SYSTEMS/NC BROADBAND REPORTING REQUIREMENT
SECTION 15.7.(a)  Of the funds appropriated in this act to the Department of Commerce, the Department shall use the sum of two hundred fifty thousand dollars ($250,000) in the 2014‑2015 fiscal year in nonrecurring funds to merge Access NC and Demand Driven Data Delivery to eliminate the duplication of effort in maintaining multiple economic and labor market data systems. By February 1, 2015, and more frequently as requested, the Department shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the progress of the merger, including whether there are improved efficiencies and cost savings.
SECTION 15.7.(b)  By February 1, 2015, and more frequently as requested, the Office of the State Chief Information Officer shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on NC Connect activities, including providing an update on how NC Broadband in the Department of Commerce has been incorporated into NC Connect.

ECONOMIC DEVELOPMENT COMPETITIVE GRANT PROGRAM FOR UNDERSERVED AND LIMITED RESOURCE COMMUNITIES
SECTION 15.8. Section 15.10B(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 15.10B.(a)  Of the funds appropriated in this act to the Department of Commerce (Department), the sum of one million two hundred fifty thousand dollars ($1,250,000) for the 2014‑2015 fiscal year in recurring funds shall be allocated for the Economic Development Competitive Grant Program for Underserved and Limited Resource Communities. The Department shall establish and implement this Program to provide grants to local governments and/or nonprofit organizations to encourage the development of economic development activities, services, and projects that benefit underserved populations and limited resource communities across the State."

COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE MATCHING FUNDS
SECTION 15.9.(a)  Of the funds appropriated in this act to the Department of Commerce, the sum of six hundred thirty‑seven thousand five hundred dollars ($637,500) in recurring funds for the 2014‑2015 fiscal year shall be used to meet the State matching funds requirement for Community Development Block Grant (CDBG) funds. All or a portion of these funds shall be used to purchase and install a new grants management software program in the 2014‑2015 fiscal year.
SECTION 15.9.(b)  Effective July 1, 2014, the Secretary of Commerce shall reduce expenditures in the amount of six hundred thirty‑seven thousand five hundred dollars ($637,500) in recurring funds for the 2014‑2015 fiscal year for the Rural Economic Development Division. However, the Secretary shall not make reductions as provided in this subsection to any grant programs administered by the Rural Economic Development Division. The recurring reductions provided for in this subsection shall be used to offset the cash‑match funds appropriated in subsection (a) of this section.
SECTION 15.9.(c)  The Department shall provide the remaining required State match funds in‑kind by taking the necessary steps to ensure that positions with salaries equaling the sum of six hundred thirty‑seven thousand five hundred dollars ($637,500) in recurring funds for the 2014‑2015 fiscal year shall be dedicated full time to performing duties related to CDBG activities. To satisfy the in‑kind requirement provided for in this subsection, the Department may include positions in the Department of Environment and Natural Resources, CDBG‑Infrastructure, that are funded by the General Fund.
SECTION 15.9.(d)  By February 1, 2015, the Department shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division regarding (i) the positions eliminated as provided in this section and associated funding and (ii) the manner in which the State match will be achieved and how it will be reported to the United States Department of Housing and Urban Development, CDBG Administration.

USE OF DEOBLIGATED COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
SECTION 15.9A.  The Department of Commerce may use the sum of five million nine hundred eight thousand four hundred ninety‑seven dollars ($5,908,497) in deobligated Community Development Block Grant (CDBG) funds as follows:
(1)	Five million dollars ($5,000,000) for providing public services. The category of public services includes providing substance abuse services and employment services, including job training, to homeless and at‑risk veterans in rural areas of the State.
(2)	Nine hundred eight thousand four hundred ninety‑seven dollars ($908,497) for providing training and guidance to local governments relative to the CDBG program, its management, and administration requirements.

RURAL ECONOMIC DEVELOPMENT DIVISION/LOANS & GRANTS TO LOCAL GOVERNMENTS TO REUSE OR DEMOLISH BUILDINGS AND PROPERTIES
SECTION 15.10.  G.S. 143B‑472.127 reads as rewritten:
"§ 143B‑472.127.  Programs administered.
(a)	The Rural Economic Development Division shall be responsible for administering the program whereby economic development grants or loans are awarded by the Rural Infrastructure Authority as provided in G.S. 143B‑472.128 to local government units. The Rural Infrastructure Authority shall, in awarding economic development grants or loans under the provisions of this subsection, give priority to local government units of the counties that have one of the 80 highest rankings under G.S. 143B‑437.08 after the adjustment of that section. The funds available for grants or loans under this program may be used as follows:
…
(2)	To provide matching grants or loans to local government units in an economically distressed county that will productively reuse or demolish buildings and properties or construct or expand rural health care facilities, with priority given to towns or communities with populations of less than 5,000. For purposes of this section, the term "economically distressed county" has the same meaning as in G.S. 143B‑437.01.
…."

RURAL ECONOMIC DEVELOPMENT DIVISION/NONRECURRING FUNDS USED FOR GRANTS ONLY
SECTION 15.10A.  The Department of Commerce, Rural Economic Development Division, shall use nonrecurring funds appropriated in this act for the 2014‑2015 fiscal year only for the purpose of making grants as provided in Part 22 of Article 10 of Chapter 143B of the General Statutes. The Department of Commerce, Rural Economic Development Division, shall not use nonrecurring funds appropriated in this act for the 2014‑2015 fiscal year for administrative or any other expenses, but shall use those funds only for the purpose provided for in this section.

COMMERCE STUDY ADJUSTMENTS TO DEVELOPMENT FACTORS USED IN MAKING DEVELOPMENT TIER DESIGNATIONS
SECTION 15.10B.(a)  The Department of Commerce (Department) shall study factors that may be used to make an adjustment to a county's development tier designation regardless of the county's actual development factor assigned under G.S. 143B‑437.08(b). The adjustment factors considered shall include, at a minimum, events or occurrences that negatively impact a county's rate of unemployment, median household income, percentage growth in population, and assessed value per capita. The Department shall also consider aligning the State's development tier designations with the U.S. Housing and Urban Development entitlement designations.
SECTION 15.10B.(b)  By February 1, 2015, the Department of Commerce shall report the findings of its study to the Joint Legislative Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division.

TRAVEL AND TOURISM BOARD/APPPOINTMENTS
SECTION 15.10C.  G.S. 143B‑434.1 reads as rewritten:
"§ 143B‑434.1.  The North Carolina Travel and Tourism Board – creation, duties, membership.
…
(c)	The Board shall consist of 31 members as follows:
…
(18)	One member designated by the Commissioner of Agriculture, who shall have expertise in agritourism.
(19)	One member designated by the Secretary of the Department of Environment and Natural Resources, who shall represent the State Parks System."
…."

LiDAR RESERVE/TOPOGRAPHICAL MAPPING OF THE STATE
SECTION 15.12.(a)  Part 1 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new section to read as follows:
"§ 143B‑603.  LiDAR Reserve.
The "LiDAR Reserve" is established in the Department of Public Safety. Funds in the LiDAR Reserve shall only be used for LiDAR topographical mapping of the State."
SECTION 15.12.(b)  The Office of State Budget and Management, in conjunction with the Office of the State Controller and the Department of Commerce, shall transfer the cash balances in the following funds as of June 30, 2014, to the LiDAR Reserve in the Department of Public Safety:
(1)	24602‑2959 – Disaster Relief Fund, Small Business Loans (Hurricane Floyd) – ($122,243).
(2)	24602‑2966 – Disaster Relief Fund, Small Business Loans (2005 Disaster Recovery) – ($3,097,757).

AGRICULTURE GAS EXPANSION FUND
SECTION 15.13.(a)  G.S. 143B‑437.020 is repealed.
SECTION 15.13.(b)  This section is effective when it becomes law.

FUND ONE NC SMALL BUSINESS FUND
SECTION 15.14.  Of the funds remaining in the One North Carolina Fund established in G.S. 143B‑437.71 at the end of fiscal year 2013‑2014, an amount equal to two million five hundred thousand dollars ($2,500,000) shall be transferred to the One North Carolina Small Business Fund and used for the North Carolina SBIR/STTR Incentive Program and the North Carolina SBIR/STTR Matching Funds Program.

Main Street Solutions Funding
SECTION 15.14A.  Of the funds unexpended and unencumbered in the Industrial Development Fund Utility Account, the sum of one million dollars ($1,000,000) shall be transferred to the Main Street Solutions Fund to supplement the program for the 2014‑2015 fiscal year.

EMPLOYMENT SECURITY RESERVE FUND
SECTION 15.15.  Section 15.4(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 15.4.(a)  There is appropriated from the Employment Security Reserve Fund to the Department of Commerce, Division of Employment Security, the amount needed for the 2014‑2015 fiscal year to fund the interest payment due to the federal government for the debt owed to the U.S. Treasury for unemployment benefits."

APPOINTMENT OF DEPUTY COMMISSIONERS FOR INDUSTRIAL COMMISSION
SECTION 15.16.(a)  G.S. 97‑79(b) reads as rewritten:
"(b)	The Chair of the Commission may appoint deputy commissioners to serve a term of eight years. Deputy commissioners shall have the same power as members of the Commission pursuant to G.S. 97‑80 and the same power to take evidence and enter orders, opinions, and awards based thereon as is possessed by the members of the Commission. Upon the expiration of the initial or subsequent term or terms of any deputy commissioner, the deputy commissioner's employment shall be separated unless the deputy commissioner is reappointed by the Chair of the Commission. Deputy commissioners shall not be subject to the State Personnel System nor to the provisions of G.S. 126‑5(d)(7)."
SECTION 15.16.(b)  As of August 1, 2014, the terms of all current deputy commissioners are as follows:
(1)	The seven deputy commissioners with the least time of service shall each serve a term of six months expiring February 1, 2015.
(2)	The seven deputy commissioners with the next least time of service shall each serve a term of 12 months expiring August 1, 2015.
(3)	The remaining deputy commissioners not covered under subdivision (1) or (2) of this subsection shall each serve a term of 18 months expiring February 1, 2016.
(4)	Time of service shall be calculated beginning with the hire date of the person as a deputy commissioner.
(5)	Nothing in this section shall prohibit a current deputy commissioner from being eligible for reappointment to an eight‑year term, as provided by subsection (a) of this section.
SECTION 15.16.(c)  Section 60(b) of S.L. 2013‑413 is repealed.
SECTION 15.16.(d)  Notwithstanding G.S. 97‑31.1, this section is effective when it becomes law.

WORKERS' COMPENSATION/REIMBURSEMENT FOR PRESCRIPTION DRUGS AND PROFESSIONAL PHARMACEUTICAL SERVICES
SECTION 15.16A.  Article 1 of Chapter 97 of the General Statutes is amended by adding a new section to read as follows:
"§ 97‑26.2.  Reimbursement for prescription drugs and professional pharmaceutical services.
(a)	The reimbursement for prescription drugs and professional pharmaceutical services shall be limited to one hundred five percent (105%) of the average wholesale price (AWP) of the product, calculated on a per‑unit basis, as of the date of dispensing.
(b)	All of the following shall apply to the reimbursement for prescription drugs and professional pharmaceutical services:
(1)	A health care provider seeking reimbursement for drugs dispensed by a physician shall include the original manufacturer's National Drug Code (NDC) number, as assigned by the United States Food and Drug Administration, on the bills and reports required by this section.
(2)	In no event may a physician receive reimbursement in excess of one hundred five percent (105%) of the AWP of the drugs dispensed by a physician, as determined by reference to the original manufacturer's NDC number.
(3)	A repackaged NDC number may not be used and will not be considered the original manufacturer's NDC number. If a health care provider seeking reimbursement for drugs dispensed by a physician does not include the original manufacturer's NDC number on the bills and reports required by this section, reimbursement shall be limited to one hundred ten percent (110%) of the AWP of the least expensive clinically equivalent drug, calculated on a per‑unit basis.
(4)	No outpatient provider, other than a licensed pharmacy, may receive reimbursement for narcotics dispensed in excess of an initial five‑day supply, commencing upon the employee's initial treatment following injury. Reimbursement under this subdivision shall be made for the five‑day supply at the rates provided in this section.
(5)	For purposes of this section, the term "clinically equivalent" means a drug has chemical equivalents which, when administered in the same amounts, will provide essentially the same therapeutic effect as measured by the control of a symptom or disease."

Industrial Commission Fees
SECTION 15.16B.(a)  G.S. 97‑73 reads as rewritten:
"§ 97‑73.  Fees.
(a)	Claims. – Except as provided in subsection (e) of this section, 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.
(e)	Exceptions. – Notwithstanding subsection (a) of this section, the Industrial Commission may not charge fees for any of the following:
(1)	A hearing before a Deputy Commissioner under this Chapter.
(2)	A hearing before the full Commission under this Chapter.
(3)	Processing of an agreement for compensation of disability, an employer's admission of employee's right to permanent partial disability, or a supplemental agreement as to payment of compensation."
SECTION 15.16B.(b)  This section becomes effective July 1, 2015.

NC BIOTECHNOLOGY CENTER
SECTION 15.17.  Section 15.30 of S.L. 2013‑360 reads as rewritten:
"SECTION 15.30.(a)  Of the funds appropriated in this act to the North Carolina Biotechnology Center (hereinafter "Center"), the sum of twelve million six hundred thousand three hundred thirty‑eight dollars ($12,600,338) for each fiscal year in the 2013‑2015 biennium shall be allocated as follows:
(1)	Job Creation: Ag Biotech Initiative, Economic and Industrial Development, and related activities – $2,709,073;
(2)	Science and Commercialization: Science and Technology Development, Centers of Innovation, Business and Technology Development, Education and Training, and related activities – $8,165,019; and
(3)	Center Operations: Administration, Professional and Technical Assistance and Oversight, Corporate Communications, Human Resource Management, Financial and Grant Administration, Legal, and Accounting – $1,726,246.
"SECTION 15.30.(a1)  The Center shall prioritize funding and distribution of loans over existing funding and distribution of grants.
"SECTION 15.30.(b)  Except to provide administrative flexibility, up to ten percent (10%) of each of the allocations in subsection (a) of this section may be reallocated to one or more of the other allocations in subsection (a) of this section if, in the judgment of Center management, the reallocation will advance the mission of the Center.
"SECTION 15.30.(c)  The Center shall comply with the following reporting requirements:
(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 Center's annual audited financial statement within 30 days of issuance of the statement.
"SECTION 15.30.(d)  Of the funds appropriated in this act to the Center, the sum of three million six hundred thousand dollars ($3,600,000) for the 2014‑2015 fiscal year in nonrecurring funds shall be allocated as follows:
(1)	Continued efforts growing the Ag Biotech sector – $500,000.
(2)	Concentrated attention on biodefense cluster effort – $1,100,000.
(3)	New industry/university partnership grant program – $2,000,000."

RESEARCH TRIANGLE INSTITUTE ENERGY RESEARCH
SECTION 15.18.  The Research Triangle Institute shall share with the State Energy Office any research supported wholly or partially through funds appropriated by this act that pertains to energy or energy efficiency.

GRASSROOTS SCIENCE PROGRAM
SECTION 15.19.  Section 15.25A of S.L. 2013‑360 reads as rewritten:
"SECTION 15.25A.(a)  Of the funds appropriated in this act to the Department of Commerce for State‑Aid, the sum of two million three hundred forty‑seven thousand seven hundred eighty‑two dollars ($2,347,782) for the 2013‑2014 fiscal year and the sum of two million three hundred forty‑seven thousand seven hundred eighty‑two dollars ($2,347,782) for the 2014‑2015 fiscal year are allocated as grants‑in‑aid for each fiscal year as follows:
	2013‑2014	2014‑2015
…

		
…
"
	
	"

THE SUPPORT CENTER/FUNDS
SECTION 15.21.(a)  Of the funds appropriated in this act to the Department of Commerce, the sum of one million dollars ($1,000,000) for the 2014‑2015 fiscal year in nonrecurring funds shall be allocated to The Support Center.
SECTION 15.21.(b)  The Support Center 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 Center's annual audited financial statement within 30 days of issuance of the statement.

PART XVI. DEPARTMENT OF PUBLIC SAFETY

SUBPART XVI‑A. GENERAL PROVISIONS

GOVERNOR'S CRIME COMMISSION
SECTION 16A.2.  G.S. 143B‑1101(b) reads as rewritten:
"(b)	The Governor's Crime Commission shall review the level of gang activity throughout the State and assess the progress and accomplishments of the State, and of local governments, in preventing the proliferation of gangs and addressing the needs of juveniles who have been identified as being associated with gang activity.
The Governor's Crime Commission shall develop recommendations concerning the establishment of priorities and needed improvements with respect to gang prevention and shall report those recommendations to the Chairs of the Senate Appropriations Committee on Justice and Public Safety, the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety, and to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety on or before March 1 of each year."

Limited Authority to Reclassify and Eliminate Certain Positions
SECTION 16A.3.  Notwithstanding any other provision of law, subject to the approval of the Director of the Budget, the Secretary of the Department of Public Safety may reclassify or eliminate existing administrative positions that are not specifically addressed in this act as needed for the efficient operation of the Department. The Secretary of the Department of Public Safety shall report any position reclassification undertaken pursuant to this section to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety, the Chairs of the Senate Appropriations Committee on Justice and Public Safety, and the Fiscal Research Division within 30 days of the reclassification. The report shall include the position number, original title, original fund code, original budgeted salary, new title, new fund code, and new budgeted salary for each reclassified position.

SUBPART XVI‑B. DIVISION OF LAW ENFORCEMENT

COMPLIANCE WITH CJIS DATA SECURITY STANDARDS
SECTION 16B.1.  The Department of Public Safety shall use funds available to the Division of Law Enforcement to ensure compliance with applicable Federal Bureau of Investigation security standards relating to the access of data in its Criminal Justice Information System. The Department is encouraged to use funds transferred to the State from federal asset forfeiture programs for this purpose.

ABC PERMIT FEE INCREASE
SECTION 16B.2.(a)  G.S. 18B‑903 reads as rewritten:
"§ 18B‑903.  Duration of permit; renewal and transfer.
…
(b)	Renewal. – Application for renewal of an ABC permit shall be on a form provided by the Commission. An application for renewal shall be accompanied by an application fee. The application fee shall be the same amount as the initial fee set in G.S. 18B‑902, except that the renewal application fee for each wine shop permit shall be five hundred dollars ($500.00), and the renewal application fee for each mixed beverages permit and each guest room cabinet permit shall be one thousand dollars ($1,000). A renewal fee shall not be refundable.
(b1)	Registration. – Each person holding a malt beverage, fortified wine, or unfortified wine permit issued pursuant to G.S. 18B‑902(d)(1) through G.S. 18B‑902(d)(6) shall register by May 1 of each year on a form provided by the Commission, in order to provide information needed by the State in enforcing this Chapter and to support the costs of that enforcement. The registration required by this subsection shall be accompanied by an annual registration and inspection fee of four hundred dollars ($400.00) for each permit held. The fee shall be paid by May 1 of each year. A registration fee shall not be refundable. Failure to pay the annual registration and inspection fee shall result in revocation of the permit.
…."
SECTION 16B.2.(b)  This section applies to fees assessed or collected for permits issued or renewed on or after July 1, 2014.

ESTABLISH HAZARDOUS MATERIALS FACILITY FEE/NEW HAZMAT RESPONSE TEAM
SECTION 16B.3.(a)  G.S. 166A‑21 reads as rewritten:
"§ 166A‑21.  Definitions.
The following definitions apply in this Article:
(1)	Department. – The Department of Public Safety.
(2)	Division. – The Division of Emergency Management.
(3)	Hazardous materials emergency response team or hazmat team. – An organized group of persons specially trained and equipped to respond to and control actual or potential leaks or spills of hazardous materials.
(4)	Hazardous material. – Any material defined as a hazardous substance under 29 Code of Federal Regulations § 1910.120(a)(3).
(5)	Hazardous materials incident or hazardous materials emergency. – An uncontrolled release or threatened release of a hazardous substance requiring outside assistance by a local fire department or hazmat team to contain and control.
(6)	Regional response team. – A hazmat team under contract with the State to provide response to hazardous materials emergencies occurring outside the hazmat team's local jurisdiction at the direction of the Department of Public Safety, Division of Emergency Management.
(7)	Secretary. – The Secretary of the Department of Public Safety.
(8)	Technician‑level entry capability. – The capacity of a hazmat team, in terms of training and equipment as specified in 29 Code of Federal Regulations § 1910.120, to respond to a hazardous materials incident requiring affirmative measures, such as patching, plugging, or other action necessary to stop and contain the release of a hazardous substance at its source.
(9)	Terrorist incident. – Activities that occur within the territorial jurisdiction of the United States, involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any state, and are intended to do one of the following:
a.	Intimidate or coerce a civilian population.
b.	Influence the policy of a government by intimidation or coercion.
c.	Affect the conduct of a government by mass destruction, assassination, or kidnapping."
SECTION 16B.3.(b)  Article 2 of Chapter 166A of the General Statutes is amended by adding a new section to read:
"§ 166A‑29.1.  Hazardous materials facility fee.
(a)	Definitions. – The following definitions apply in this section:
(1)	EPCRA. – The federal Emergency Planning and Community Right‑to‑Know Act, P.L. No. 99‑499 et. seq.
(2)	Hazardous chemical. – As defined in 29 C.F.R. 1910.1200(c), except that the term does not include any of the following:
a.	Any food, food additive, color additive, drug, or cosmetic regulated by the Food and Drug Administration.
b.	Any substance present as a solid in any manufactured item to the extent exposure to the substance does not occur under normal conditions of use.
c.	Any substance to the extent that it is used for personal, family, or household purposes or is present in the same form and concentration as a product packaged for distribution and use by the public.
d.	Any substance to the extent that it is used in a research laboratory or a hospital or other medical facility under the direct supervision of a technically qualified individual.
e.	Any substance to the extent that it is used in routine agricultural operations or is a fertilizer held for sale by a retailer to the ultimate consumer.
(3)	Extremely hazardous substance. – Any substance, regardless of its state, set forth in 40 C.F.R. Part 355, Appendix A or B.
(b)	Annual Fee Shall Be Charged. – A person required under Section 302 or 312 of EPCRA to submit a notification or an annual inventory form to the Division shall be required to pay to the Department an annual fee in the amount set forth in subsection (c) of this section.
(c)	Amount of Fee. – The amount of the annual fee charged pursuant to subsection (b) of this section shall be calculated in accordance with the following, up to a maximum annual amount of five thousand dollars ($5,000):
(1)	A fee of fifty dollars ($50.00) shall be assessed for each substance reported by a facility that is classified as a hazardous chemical.
(2)	A fee of ninety dollars ($90.00) shall be assessed for each substance reported by a facility that is classified as an extremely hazardous substance.
(d)	Late Fees. – The Division may impose a late fee for failure to submit a report or filing that substantially complies with the requirements of EPCRA by the federal filing deadline or for failure to pay any fee, including a late fee. This fee shall be in addition to the fee imposed pursuant to subsection (c) of this section. Prior to imposing a late fee, the Division shall provide the person who will be assessed the late fee with written notice that identifies the specific requirements that have not been met and informs the person of its intent to assess a late fee. The assessment of a late fee shall be subject to the following limitations:
(1)	If the report filing or fee is submitted within 30 days after receipt of the Division's notice that it intends to assess a late fee, no late fee shall be assessed.
(2)	If the report filing or fee has not been submitted by the end of the period set forth in subdivision (1) of this subsection, the Division may impose a late fee in an amount equal to the amount of the fee charged pursuant to subsection (c) of this section.
(e)	Exemptions. – No fee shall be charged under this section to any of the following:
(1)	An owner or operator of a family farm enterprise, a facility owned by a State or local government, or a nonprofit corporation.
(2)	An owner or operator of a facility where motor vehicle fuels are stored and from which such fuels are offered for retail sale. However, hazardous chemicals or extremely hazardous substances at such a facility, other than motor vehicle fuels for retail sale, shall not be subject to this exemption.
(f)	Use of Fee Proceeds. – The proceeds of fees assessed pursuant to this section shall be used for the following:
(1)	To pay costs associated with the maintenance of a hazardous materials database.
(2)	To support the operations of the regional response program for hazardous materials emergencies and terrorist incidents.
(3)	To provide grants to counties for hazardous materials emergency response planning, training, and related exercises."
SECTION 16B.3.(c)  The Department of Public Safety may establish and operate an additional hazmat team to serve Lee and Moore Counties and shall use proceeds from fees assessed and collected pursuant to G.S. 166A‑29.1 to ensure that the hazardous materials emergency response capabilities in Moore and Lee Counties are sufficient to respond to any hazardous materials emergencies occurring in those counties as a result of natural gas exploration and extraction.
SECTION 16B.3.(d)  G.S. 166A‑22 reads as rewritten:
"§ 166A‑22.  Hazardous materials emergency response program.
(a)	The Secretary shall adopt rules establishing a regional response program for hazardous materials emergencies and terrorist incidents, to be administered by the Division of Emergency Management. To the extent possible, the regional response program shall be coordinated with other emergency planning activities of the State. The regional response program shall include at least seven hazmat teams located strategically across the State that are available to provide regional response to hazardous materials or terrorist incidents requiring technician‑level entry capability and 24‑hour dispatch and communications capability at the Division of Emergency Management Operations Center. The rules for the program shall include:
…."
SECTION 16B.3.(e)  This section applies to fees assessed on or after July 1, 2014.

Mobile VIPER Radios for the State Highway Patrol
SECTION 16B.5.  The Department of Public Safety shall use the sum of two million eight hundred ninety‑four thousand one hundred eighty‑eight dollars ($2,894,188) of funds available to the Division of Law Enforcement to purchase mobile VIPER radios for the State Highway Patrol. The Department is encouraged to use funds transferred to the State from federal asset forfeiture programs for this purpose.

STATE CAPITOL POLICE/RECEIPT-SUPPORTED POSITIONS
SECTION 16B.6.(a)  The State Capitol Police may contract with State agencies for the creation of receipt‑supported positions to provide security services to the buildings occupied by those agencies.
SECTION 16B.6.(b)  The State Capitol Police shall report the creation of any position pursuant to this section to the Chairs of the House Appropriations Subcommittee on Justice and Public Safety and to the Chairs of the Senate Appropriations Committee on Justice and Public Safety within 30 days of the position's creation.

Authorize Additional Assistant Adjutant General Position
SECTION 16B.7.  G.S. 127A‑19 reads as rewritten:
"§ 127A‑19.  Adjutant General.
The military head of the militia shall be the Adjutant General who shall hold the rank of major general. The Adjutant General shall be appointed by the Governor in the Governor's capacity as commander in chief of the militia, in consultation with the Secretary of Public Safety, and shall serve at the pleasure of the Governor. No person shall be appointed as Adjutant General who has less than five years' commissioned service in an active status in any component of the Armed Forces of the United States. The Adjutant General, while holding this office, may be a member of the active North Carolina National Guard or naval militia.
Subject to the approval of the Governor and in consultation with the Secretary of Public Safety, the Adjutant General may appoint (i) a deputy adjutant general who may hold the rank of major general, and (ii) two assistant adjutants general for Army National Guard, and an assistant adjutant general for Air National Guard, each of whom may hold the rank of brigadier general and who shall serve at the pleasure of the Governor. The Adjutant General may also employ staff members and other personnel as authorized by the Secretary and funded."

SUBPART XVI‑C. DIVISION OF ADULT CORRECTION

ALL MISDEMEANANTS TO SERVE SENTENCES IN LOCAL CONFINEMENT FACILITIES
SECTION 16C.1.(a)  G.S. 15A‑1351(a) reads as rewritten:
"(a)	The judge may sentence to special probation a defendant convicted of a criminal offense other than impaired driving under G.S. 20‑138.1, if based on the defendant's prior record or conviction level as found pursuant to Article 81B of this Chapter, an intermediate punishment is authorized for the class of offense of which the defendant has been convicted. A defendant convicted of impaired driving under G.S. 20‑138.1 may also be sentenced to special probation. Under a sentence of special probation, the court may suspend the term of imprisonment and place the defendant on probation as provided in Article 82, Probation, and in addition require that the defendant submit to a period or periods of imprisonment in the custody of the Division of Adult Correction of the Department of Public Safety or a designated local confinement or treatment facility at whatever time or intervals within the period of probation, consecutive or nonconsecutive, the court determines, as provided in this subsection. For probationary sentences for misdemeanors, including impaired driving under G.S. 20‑138.1, all imprisonment under this subsection shall be in a designated local confinement or treatment facility. In addition to any other conditions of probation which the court may impose, the court shall impose, when imposing a period or periods of imprisonment as a condition of special probation, the condition that the defendant obey the Rules and Regulations of the Division of Adult Correction of the Department of Public Safety governing conduct of inmates, and this condition shall apply to the defendant whether or not the court imposes it as a part of the written order. Except for probationary sentences for misdemeanors, including impaired driving under G.S. 20‑138.1, if imprisonment is for continuous periods, the confinement may be in the custody of either the Division of Adult Correction of the Department of Public Safety or a local confinement facility. Noncontinuous periods of imprisonment under special probation may only be served in a designated local confinement or treatment facility. Except for probationary sentences of impaired driving under G.S. 20‑138.1, the total of all periods of confinement imposed as an incident of special probation, but not including an activated suspended sentence, may not exceed one‑fourth the maximum sentence of imprisonment imposed for the offense, and no confinement other than an activated suspended sentence may be required beyond two years of conviction. For probationary sentences for impaired driving under G.S. 20‑138.1, the total of all periods of confinement imposed as an incident of special probation, but not including an activated suspended sentence, shall not exceed one‑fourth the maximum penalty allowed by law. In imposing a sentence of special probation, the judge may credit any time spent committed or confined, as a result of the charge, to either the suspended sentence or to the imprisonment required for special probation. The original period of probation, including the period of imprisonment required for special probation, shall be as specified in G.S. 15A‑1343.2(d), but may not exceed a maximum of five years, except as provided by G.S. 15A‑1342(a). The court may revoke, modify, or terminate special probation as otherwise provided for probationary sentences."
SECTION 16C.1.(b)  G.S. 15A‑1352 reads as rewritten:
"§ 15A‑1352.  Commitment to Division of Adult Correction of the Department of Public Safety or local confinement facility.
(a)	Except as provided in subsection (f) of this section, a person sentenced to imprisonment for a misdemeanor under this Article or for nonpayment of a fine for conviction of a misdemeanor under Article 84 of this Chapter shall be committed for the term designated by the court to the Statewide Misdemeanant Confinement Program as provided in G.S. 148‑32.1 or, if the period is for 90 days or less, to a local confinement facility, except as provided for in G.S. 148‑32.1(b).
If a person is sentenced to imprisonment for a misdemeanor under this Article or for nonpayment of a fine under Article 84 of this Chapter, the sentencing judge  may make a finding of fact as to whether the person would be suitable for placement in a county satellite jail/work release unit operated pursuant to G.S. 153A‑230.3. If the sentencing judge makes a finding of fact that the person would be suitable for placement in a county satellite jail/work release unit and the person meets the requirements listed in G.S. 153A‑230.3(a)(1), then the custodian of the local confinement facility may transfer the misdemeanant to a county satellite jail/work release unit.
(b)	A person sentenced to imprisonment for a felony under this Article or for nonpayment of a fine for conviction of a felony under Article 84 of this Chapter shall be committed for the term designated by the court to the custody of the Division of Adult Correction of the Department of Public Safety.

	
(d)	Notwithstanding any other provision of law, when the sentencing court, with the consent of the person sentenced, orders that a person convicted of a misdemeanor be granted work release, the court may commit the person to a specific prison facility or local confinement facility or satellite jail/work release unit within the county of the sentencing court in order to facilitate the work release arrangement. When appropriate to facilitate the work release arrangement, the sentencing court may, with the consent of the sheriff or board of commissioners, commit the person to a specific local confinement facility or satellite jail/work release unit in another county.
	
(f)	A person sentenced to imprisonment of any duration for impaired driving under G.S. 20‑138.1, other than imprisonment required as a condition of special probation under G.S. 15A‑1351(a) or G.S. 15A‑1344(e), shall be committed to the Statewide Misdemeanant Confinement Program established under G.S. 148‑32.1."
SECTION 16C.1.(c)  G.S. 20‑176(c1) is repealed.
SECTION 16C.1.(d)  G.S. 20‑179(f3) reads as rewritten:
"(f3)	Aggravated Level One Punishment. – A defendant subject to Aggravated Level One punishment may be fined up to ten thousand dollars ($10,000) and shall be sentenced to a term of imprisonment that includes a minimum term of not less than 12 months and a maximum term of not more than 36 months. Notwithstanding G.S. 15A‑1371, a defendant sentenced to a term of imprisonment pursuant to this subsection shall not be eligible for parole. However, the defendant shall be released from the Statewide Misdemeanant Confinement Program on the date equivalent to the defendant's maximum imposed term of imprisonment less four months and shall be supervised by the Section of Community Supervision of the Division of Adult Correction under and subject to the provisions of Article 84A of Chapter 15A of the General Statutes and shall also be required to abstain from alcohol consumption for the four‑month period of supervision as verified by a continuous alcohol monitoring system. For purposes of revocation, violation of the requirement to abstain from alcohol or comply with the use of a continuous alcohol monitoring system shall be deemed a controlling condition under G.S. 15A‑1368.4.
The term of imprisonment may be suspended only if a condition of special probation is imposed to require the defendant to serve a term of imprisonment of at least 120 days. If the defendant is placed on probation, the judge shall impose as requirements that the defendant (i) abstain from alcohol consumption for a minimum of 120 days to a maximum of the term of probation, as verified by a continuous alcohol monitoring system pursuant to subsections (h1) and (h3) of this section, and (ii) obtain a substance abuse assessment and the education or treatment required by G.S. 20‑17.6 for the restoration of a drivers license and as a condition of probation. The judge may impose any other lawful condition of probation."
SECTION 16C.1.(e)  G.S. 148‑13 reads as rewritten:
"§ 148‑13.  Regulations as to custody grades, privileges, gain time credit, etc.
(a)	The Secretary of Public Safety may issue regulations regarding the grades of custody in which State prisoners are kept, the privileges and restrictions applicable to each custody grade, and the amount of cash, clothing, etc., to be awarded to State prisoners after their discharge or parole. The amount of cash awarded to a prisoner upon discharge or parole after being incarcerated for two years or longer shall be at least forty‑five dollars ($45.00).
(a1)	The Secretary of Public Safety shall adopt rules to specify the rates at, and circumstances under, which earned time authorized by G.S. 15A‑1340.13(d) and G.S. 15A‑1340.20(d) may be earned or forfeited by persons serving activated sentences of imprisonment for felony or misdemeanor convictions.
(b)	With respect to prisoners who are serving sentences for impaired driving offenses under G.S. 20‑138.1, the Secretary of Public Safety may, in his discretion, issue regulations regarding deductions of time from the terms of such prisoners for good behavior, meritorious conduct, work or study, participation in rehabilitation programs, and the like.
(c),	(d) Repealed by Session Laws 1993, c. 538, s. 32, effective January 1, 1995.
(e)	The Secretary's regulations concerning earned time and good time credits authorized by this section shall be distributed to and followed by local jail administrators with regard to sentenced jail prisoners.
(f)	The provisions of this section do not apply to persons sentenced to a term of special probation under G.S. 15A‑1344(e) or G.S. 15A‑1351(a)."
SECTION 16C.1.(f)  G.S. 148‑32.1 reads as rewritten:
"§ 148‑32.1.  Local confinement, costs, alternate facilities, parole, work release.
(a)	Repealed by Session Laws 2009‑451, s. 19.22A, effective July 1, 2009.
(b)	In the event that the custodian of the local confinement facility certifies in writing to the clerk of the superior court in the county in which the local confinement facility is located that the local confinement facility is filled to capacity, or that the facility cannot reasonably accommodate any more prisoners due to segregation requirements for particular prisoners, or that the custodian anticipates, in light of local experiences, an influx of temporary prisoners at that time, or if the local confinement facility does not meet the minimum standards published pursuant to G.S. 153A‑221, any judge of the district court in the district court district as defined in G.S. 7A‑133 where the facility is located, or any superior court judge who has jurisdiction pursuant to G.S. 7A‑47.1 or G.S. 7A‑48 in a district or set of districts as defined in G.S. 7A‑41.1 where the facility is located may order that a prisoner not housed pursuant to the Statewide Misdemeanant Confinement Program established in subsection (b2) of this section be transferred to any other qualified local confinement facility within that district or within another such district where space is available, including a satellite jail unit operated pursuant to G.S. 153A‑230.3 if the prisoner is a non‑violent misdemeanant, which local facility shall accept the transferred prisoner.
If no other local confinement facility is available and the reason for the requested transfer is that the local confinement facility that would be required to house the prisoner cannot reasonably accommodate any more prisoners due to segregation requirements for particular prisoners or the local facility does not meet the minimum standards published pursuant to G.S. 153A‑221, then the judge may order that a prisoner not housed pursuant to the Statewide Misdemeanant Confinement Program established in subsection (b2) of this section be transferred to a facility operated by the Division of Adult Correction of the Department of Public Safety as designated by the Division of Adult Correction. In no event, however, shall a prisoner whose term of imprisonment is less than 30 days be assigned or ordered transferred to a facility operated by the Division of Adult Correction.
(b1)	It is the intent of the General Assembly to authorize the Division of Adult Correction to enter into voluntary agreements with counties to provide housing for misdemeanants serving periods of confinement of more than 90 days and for all sentences imposed for impaired driving under G.S. 20‑138.1, regardless of length. It is further the intent of the General Assembly that the Division of Adult Correction, in conjunction with the North Carolina Sheriffs' Association, Inc., establish a program for housing misdemeanants serving periods of confinement of more than 90 days and for all sentences imposed for impaired driving under G.S. 20‑138.1, regardless of length. It is also the intent of the General Assembly that the Division of Adult Correction contract with the North Carolina Sheriffs' Association, Inc., to provide a service that identifies space in local confinement facilities that is available for housing these misdemeanants.
The General Assembly intends that the cost of housing and caring for these misdemeanants, including, but not limited to, care, supervision, transportation, medical, and any other related costs, be covered by State funds and not be imposed as a local cost. Therefore, the General Assembly intends that the funds in the Statewide Misdemeanant Confinement Fund established in G.S. 148‑10.4 be used to provide funding to cover the costs of managing a system for providing that housing of misdemeanants in local confinement facilities as well as reimbursing the counties for housing and related expenses for those misdemeanants.
(b2)	The Statewide Misdemeanant Confinement Program is established. The Program shall provide for the housing of misdemeanants from all counties serving sentences imposed for a period of more than 90 days and for all sentences imposed for impaired driving under G.S. 20‑138.1, regardless of length. Those misdemeanants shall be confined in local confinement facilities except as provided in subsections (b3) and (b4) of this section. The Program shall address methods for the placement and transportation of inmates and reimbursement to counties for the housing of those inmates. Any county that voluntarily agrees to house misdemeanants from that county or from other counties pursuant to the Program may enter into a written agreement with the Division of Adult Correction to do so.
This Program shall only operate as long as sufficient State funds are available through the Statewide Misdemeanant Confinement Fund established in G.S. 148‑10.4(c).
…."
SECTION 16C.1.(g)  This section becomes effective October 1, 2014, and applies to (i) persons placed on probation or sentenced to imprisonment for impaired driving under G.S. 20‑138.1 on or after January 1, 2015, and (ii) persons placed on probation or sentenced to imprisonment for all other misdemeanors other than impaired driving under G.S. 20‑138.1 on or after October 1, 2014.

REMOVE LIMITATION ON COMMUNITY WORK CREW FEE
SECTION 16C.2.  G.S. 148‑32.2 reads as rewritten:
"§ 148‑32.2.  Community work crew fee.
The Division of Adult Correction of the Department of Public Safety may charge a fee to any unit of local government to which it provides, upon request, a community work crew. The amount of the fee shall be no more than the cost to the Division to provide the crew to the unit of local government."

INMATE LABOR CONTRACT
SECTION 16C.3.  The Division of Adult Correction of the Department of Public Safety shall prioritize inmate labor contracts in areas where prisons were closed during the 2013‑2014 fiscal year. The Division shall charge a transportation fee equivalent to the mileage cost of transporting inmates to and from the contract site. The Division shall also charge an administrative fee as part of the inmate labor contract that reflects the other costs associated with providing the inmate labor.

EVALUATION OF ELECTRICAL DEVICES, APPLIANCES, AND EQUIPMENT USED BY THE DIVISION OF ADULT CORRECTION
SECTION 16C.4.  G.S. 66‑25(b) reads as rewritten:
"(b)	Electrical devices, appliances, or equipment used by the Division of Adult Correction of the Department of Public Safety may be evaluated for safety and suitability by the Central Engineering Section of the Department of Public Safety. The evaluation shall be conducted in accordance with nationally recognized standards. Electrical devices, appliances, and equipment used by the Division that are not evaluated by the Central Engineering Section as provided by this subsection are subject to the evaluation requirement of subsection (a) of this section."

MAINTENANCE OF PRISONS
SECTION 16C.5.  Section 1.1 of S.L. 2011‑412, as amended by Section 1.2 of S.L. 2011‑412, reads as rewritten:
"SECTION 1.1. The Department of Public Safety shall study the potential benefits and costs of contracting for maintenance services at prison facilities and report its findings to the 2013 Session of the General Assembly. The Department may expand private maintenance contracts to additional prison facilities if it determines that savings can be realized by doing so and that safety can be maintained at those facilities. The Department shall report to the Joint Legislative Commission on Governmental Operations on the anticipated savings and on safety considerations prior to entering any prison maintenance contract under this section."

ADULT AND JUVENILE INMATE MEDICAL COSTS
SECTION 16C.6.(a)  Section 16C.4(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 16C.4.(a)  The Department of Public Safety shall reimburse those providers and facilities providing approved inmate medical services outside the correctional or juvenile facility the lesser amount of either a rate of seventy percent (70%) of the provider's then‑current prevailing charge or two times the then‑current Medicaid rate for any given service. The Department shall have the right to audit any given provider to determine the actual prevailing charge to ensure compliance with this provision.
This section does apply to vendors providing services that are not billed on a fee‑for‑service basis, such as temporary staffing. Nothing in this section shall preclude the Department from contracting with a provider for services at rates that provide greater documentable cost avoidance for the State than do the rates contained in this section or at rates that are less favorable to the State but that will ensure the continued access to care."
SECTION 16C.6.(b)  Section 19.6(c) of S.L. 2010‑31 reads as rewritten:
"SECTION 19.6.(c)  The Department of Public Safety shall consult with the Division of Medical Assistance in the Department of Health and Human Services to develop protocols for prisoners and juveniles committed to the Department who would be eligible for Medicaid if they were not incarcerated to access Medicaid while in custody, under extended limits of confinement, or committed to the Department. The Department shall seek reimbursement from Medicaid for those health care costs incurred by the Department in those instances when the Medicaid eligibility of an inmate or of a juvenile held in secure custody or committed to the Department has been temporarily reinstated due to a hospitalization."

REPORT ON TREATMENT FOR EFFECTIVE COMMUNITY SUPERVISION PROGRAM
SECTION 16C.7.(a)  Section 16C.12 of S.L. 2013‑360 is repealed.
SECTION 16C.7.(b)  G.S. 143B‑1155(c) reads as rewritten:
"(c)	The Division of Adult Correction shall report by March 1 of each year to the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Oversight Committee on Justice and Public Safety on the status of the Treatment for Effective Community Supervision Program. The report shall include the following information:
(1)	The dollar amount and purpose of funds provided on a contractual basis to service providers for the previous fiscal year and the amount of any funds carried over from the previous fiscal year.
(2)	An analysis of offender participation data received, including the following:
a.	The number of people on probation and post‑release supervision that are in the priority population that received services.
b.	The number of people on probation and post‑release supervision that are in the priority population that did not receive services.
c.	The number of people on probation and post‑release supervision outside of the priority population that received services.
d.	The type of services provided to these populations, including data on each program's utilization, capacity, and completion rates.
e.	The rate of revocations and the educational progress and employment status of people who received services.
f.	Other measures as determined appropriate.
(3)	The dollar amount needed to provide additional services to meet the needs of the priority population in the upcoming budget year.
(4)	Details of personnel, travel, contractual, operating, and equipment expenditures for each program type."

CLARIFY THE IMPOSITION OF CONFINEMENT IN RESPONSE TO VIOLATIONS
SECTION 16C.8.(a)  G.S. 15A‑1344(d2) reads as rewritten:
"(d2)	Confinement in Response to Violation. – When a defendant under supervision for a felony conviction has violated a condition of probation other than G.S. 15A‑1343(b)(1) or G.S. 15A‑1343(b)(3a), the court may impose a period of confinement of 90 consecutive days to be served in the custody of the Division of Adult Correction of the Department of Public Safety. The court may not revoke probation unless the defendant has previously received a total of two periods of confinement under this subsection. A defendant may receive only two periods of confinement under this subsection. The 90‑day term of confinement ordered under this subsection for a felony shall not be reduced by credit for time already served in the case. Any such credit shall instead be applied to the suspended sentence. However, if the time remaining on the maximum imposed sentence on a defendant under supervision for a felony conviction is 90 days or less, then the term of confinement is for the remaining period of the sentence. Confinement under this section shall be credited pursuant to G.S. 15‑196.1.
When a defendant under supervision for a misdemeanor conviction has violated a condition of probation other than G.S. 15A‑1343(b)(1) or G.S. 15A‑1343(b)(3a), the court may impose a period of confinement of up to 90 consecutive days to be served where the defendant would have served an active sentence. The court may not revoke probation unless the defendant has previously received a total of two periods of confinement under this subsection. A defendant may receive only two periods of confinement under this subsection. Confinement under this section shall be credited pursuant to G.S. 15‑196.1.
The period of confinement imposed under this subsection on a defendant who is on probation for multiple offenses shall run concurrently on all cases related to the violation. Confinement shall be immediate unless otherwise specified by the court.
"
SECTION 16C.8.(b)  This section becomes effective October 1, 2014, and applies to probation violations occurring on or after that date.

DETER INMATE ACCESS TO CELL PHONES
SECTION 16C.9.  In an effort to deter illegal access of cell phones by inmates in the State's prison system, the Department of Public Safety is encouraged to identify non‑General Fund sources of funds, including federal and foundation grants and other receipts, to fund enhanced prison security technology.

USE OF CLOSED FACILITIES
SECTION 16C.10.  Section 16A.3 of S.L. 2013‑360 reads as rewritten:
"SECTION 16A.3.  In conjunction with the closing of prison facilities, youth detention centers, and youth development centers, the Department of Public Safety shall consult with the county or municipality in which the facility is located, with the elected State and local officials, and with State and federal agencies about the possibility of converting that facility to other use. The Department may also consult with any private for‑profit or nonprofit firm about the possibility of converting the facility to other use. In developing a proposal for future use of each facility, the Department shall give priority to converting the facility to other criminal justice use. Consistent with existing law and the future needs of the Department of Public Safety, the State may provide for the transfer or the lease of any of these facilities to counties, municipalities, State agencies, federal agencies, or private firms wishing to convert them to other use. The Department of Public Safety may also consider converting some of the facilities 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.
In addition, the Department of Public Safety may use available funds to reopen and convert closed facilities for use as treatment and behavior modification facilities for offenders serving a period of confinement in response to violation pursuant to G.S. 15A‑1344(d2)."

JUSTICE REINVESTMENT ACT/LIMITED AUTHORITY TO RECLASSIFY VACANT POSITIONS
SECTION 16C.11.  Section 16C.13 of S.L. 2013‑360 reads as rewritten:
"SECTION 16C.13.(a)  Notwithstanding any other provision of law, subject to the approval of the Director of the Budget, the Secretary of Public Safety may reclassify vacant positions within the Department to create up to 30 new field services specialist or chief probation/parole officer positions in order to meet the increasing caseloads resulting from the implementation of the Justice Reinvestment Act of 2011, S.L. 2011‑192, as amended.
"SECTION 16C.13.(b)  The Department of Public Safety shall report to the Chairs of the Senate Appropriations Committee on Justice and Public Safety and the House Appropriations Subcommittee on Justice and Public Safety by March 1, 2015, on the following:
(1)	The position number, position type, salary, and position location of each new position created under the authority of this section.
(2)	The position number, position type, fund code, and position location of each vacant position used to create new positions under the authority of this section."

TECHNICAL CORRECTION/STATE COMMUNITY CORRECTIONS ADVISORY BOARD APPOINTMENT
SECTION 16C.12.  G.S. 143B‑1157(b)(1) reads as rewritten:
"(b)	The membership of the State Board shall be selected as follows:
(1)	The Governor shall appoint the following members: the county sheriff, the chief of a city police department, the member of the public who has been the victim of a crime, the two rehabilitated ex‑offenders, and the members selected from each of the service areas."

Study 340B Drug Pricing Opportunities
SECTION 16C.13.  The Department of Public Safety, Division of Adult Correction, shall study opportunities for the State to obtain savings under the federal 340B Drug Pricing Program on drugs provided to prisoners in State correctional facilities. The Division shall conduct this study in conjunction with the University of North Carolina Health Care System. The Department shall report the results of this study by December 1, 2014, to the chairs of (i) the Joint Legislative Oversight Committee on Justice and Public Safety, (ii) the House Appropriations Subcommittee on Justice and Public Safety, and (iii) the Senate Appropriations Committee on Justice and Public Safety.

SUBPART XVI‑D. RESERVED

PART XVII. DEPARTMENT OF JUSTICE

TRANSFER THE SBI AND THE ALCOHOL LAW ENFORCEMENT SECTION
SECTION 17.1.(a)  The State Bureau of Investigation is hereby transferred to the Department of Public Safety as a new section within the Law Enforcement Division. This transfer shall have all of the elements of a Type I transfer, as described in G.S. 143A‑6.

SBI TRANSFER – CREATION OF STATUTORY SUBPARTS
SECTION 17.1.(b)  Part 4 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new Subpart to read:
"Subpart A. General Provisions."
SECTION 17.1.(c)  Part 4 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new Subpart to read:
"Subpart B. State Capitol Police."
SECTION 17.1.(d)  Part 4 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new Subpart to read:
"Subpart C. State Bureau of Investigation."

SBI TRANSFER – REPEAL OF CERTAIN STATUTES AND RECODIFICATION OF OTHER AFFECTED STATUTES
SECTION 17.1.(e)  G.S. 114‑13 is repealed.
SECTION 17.1.(f)  G.S. 114‑2.7 is recodified as G.S. 143B‑901 under Subpart A of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (b) of this section.
SECTION 17.1.(g)  G.S. 114‑10 through G.S. 114‑10.1 are recodified as G.S. 143B‑902 through G.S. 143B‑905 under Subpart A of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (b) of this section.
SECTION 17.1.(h)  G.S. 143B‑900 is recodified as G.S. 143B‑911 under Subpart B of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (c) of this section.
SECTION 17.1.(i)  G.S. 114‑12 is recodified as G.S. 143B‑915 under Subpart C of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (d) of this section. The following statutes are recodified as G.S. 143B‑917 through G.S. 143B‑924 under Subpart C of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (d) of this section: G.S. 114‑14 through G.S. 114‑15.3 and G.S. 114‑17 through G.S. 114‑18.
SECTION 17.1.(j)  G.S. 114‑19 is recodified as G.S. 143B‑906 under Subpart A of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (b) of this section.
SECTION 17.1.(k)  G.S. 114‑19.01 is recodified as G.S. 143B‑925 under Subpart C of Part 4 of Article 13 of Chapter 143B of the General Statutes, as created by subsection (d) of this section.
SECTION 17.1.(l)  All of Part 2 of Article 4 of Chapter 114 of the General Statutes, other than the section recodified by subsection (k) of this section, is recodified as Subpart D of Part 4 of Article 13 of Chapter 143B of the General Statutes, "Criminal History Record Checks", G.S. 143B‑930 through G.S. 143B‑981. Statutory sections of the former statutes that were reserved for future codification shall have corresponding sections that are reserved for future codification in the recodified statutes.
SECTION 17.1.(m)  Part 3 of Article 4 of Chapter 114 of the General Statutes is recodified as Subpart E of Part 4 of Article 13 of Chapter 143B of the General Statutes, "Protection of Public Officials", G.S. 143B‑986 through G.S. 143B‑987.

SBI TRANSFER – OTHER CHANGES
SECTION 17.1.(n)  The following statutes, as recodified by subsections (f) through (m) of this section, as applicable, are amended by deleting the language "Department of Justice" wherever it appears and substituting "Department of Public Safety": G.S. 14‑208.15A, 14‑415.19, 15A‑145, 15A‑145.1, 15A‑145.2, 15A‑145.3, 15A‑145.4(c) and (j), 15A‑145.5(c), 15A‑145.6(c), 15A‑146, 18B‑902, 19A‑24, 48‑3‑309, 53‑244.050, 58‑71‑51, 58‑89A‑60, 66‑407, 70‑13.1, 74C‑8.1, 74D‑2.1, 74F‑18, 84‑24, 85B‑3.2, 90‑11, 90‑30, 90‑85.15, 90‑102.1, 90‑113.5, 90‑113.46A, 90‑143.3, 90‑171.48, 90‑210.25, 90‑224, 90‑270.22, 90‑270.26, 90‑270.29A, 90‑288.01, 90‑622, 90‑629, 90‑629.1, 90‑652, 90D‑7, 93A‑4, 95‑47.2, 106‑65.26, 110‑90.2, 115C‑238.73, 115C‑332, 121‑25.1, 143‑166.13, 143‑143.10A, 143B‑930 through 143B‑965, and 160A‑304.
SECTION 17.1.(o)  The following statutes, as recodified by subsections (f) through (m) of this section, as applicable, are amended by deleting the language "Attorney General" wherever it appears and substituting "Secretary of Public Safety": G.S. 15A‑1475, 58‑79‑1 through 58‑79‑15, 58‑79‑25, 143B‑921, and 163‑278.
SECTION 17.1.(p)  The following statutes, as recodified by subsections (f) through (m) of this section, as applicable, are amended by deleting the language "Division of Criminal Information" and "State Bureau of Investigation's Division of Criminal Information" wherever they appear and substituting "Department of Public Safety": G.S. 7B‑2507, 15A‑1340.14, 15A‑1340.21, 20‑26, 85B‑3.2, 122C‑80, 143B‑935, 143B‑943, 143B‑954, and 143B‑981.
SECTION 17.1.(q)  The following statutes are amended by deleting the language "Division" wherever it appears and substituting "Department of Public Safety": G.S. 14‑208.7, 14‑208.8, 14‑208.8A, 14‑208.9, 14‑208.9A, 14‑208.12A, 14‑208.15, 14‑208.15A, 14‑208.22, and 14‑208.27. However, no substitution shall be made under this subsection to instances of the word "Division" that appear in the phrase "Division of Adult Correction."
SECTION 17.1.(r)  G.S. 7A‑349 reads as rewritten:
"§ 7A‑349.  Criminal history record check; denial of employment, contract, or volunteer opportunity.
The Judicial Department may deny employment, a contract, or a volunteer opportunity to any person who refuses to consent to a criminal history check authorized under G.S. 143B‑950 and may dismiss a current employee, terminate a contractor, or terminate a volunteer relationship if that employee, contractor, or volunteer refuses to consent to a criminal history record check authorized under G.S. 143B‑950."
SECTION 17.1.(s)  G.S. 7B‑1904 reads as rewritten:
"§ 7B‑1904.  Order for secure or nonsecure custody.
The custody order shall be in writing and shall direct a law enforcement officer or other authorized person to assume custody of the juvenile and to make due return on the order. The official executing the order shall give a copy of the order to the juvenile's parent, guardian, or custodian. If the order is for nonsecure custody, the official executing the order shall also give a copy of the petition and order to the person or agency with whom the juvenile is being placed. If the order is for secure custody, copies of the petition and custody order shall accompany the juvenile to the detention facility or holdover facility of the jail. A message of the Department of Public Safety stating that a juvenile petition and secure custody order relating to a specified juvenile are on file in a particular county shall be authority to detain the juvenile in secure custody until a copy of the juvenile petition and secure custody order can be forwarded to the juvenile detention facility. The copies of the juvenile petition and secure custody order shall be transmitted to the detention facility no later than 72 hours after the initial detention of the juvenile.
An officer receiving an order for custody which is complete and regular on its face may execute it in accordance with its terms and need not inquire into its regularity or continued validity, nor does the officer incur criminal or civil liability for its execution."
SECTION 17.1.(t)  G.S. 8‑58.20(c) reads as rewritten:
"(c)	The analyst who analyzes the forensic sample and signs the report shall complete an affidavit on a form developed by the State Crime Laboratory. In the affidavit, the analyst shall state (i) that the person is qualified by education, training, and experience to perform the analysis, (ii) the name and location of the laboratory where the analysis was performed, and (iii) that performing the analysis is part of that person's regular duties. The analyst shall also aver in the affidavit that the tests were performed pursuant to the accrediting body's standards for that discipline and that the evidence was handled in accordance with established and accepted procedures while in the custody of the laboratory. The affidavit shall be sufficient to constitute prima facie evidence regarding the person's qualifications. The analyst shall attach the affidavit to the laboratory report and shall provide the affidavit to the investigating officer and the district attorney in the prosecutorial district in which the criminal charges are pending. An affidavit by a forensic analyst sworn to and properly executed before an official authorized to administer oaths is admissible in evidence without further authentication in any criminal proceeding with respect to the forensic analysis administered and the procedures followed."
SECTION 17.1.(u)  G.S. 14‑16.9 reads as rewritten:
"§ 14‑16.9.  Officers‑elect to be covered.
Any person who has been elected to any office covered by this Article but has not yet taken the oath of office shall be considered to hold the office for the purpose of this Article and G.S. 143B‑919."
SECTION 17.1.(v)  G.S. 14‑132(c)(3) reads as rewritten:
"(3)	Designated by the Secretary of Public Safety in accordance with G.S. 143B‑987."
SECTION 17.1.(w)  G.S. 14‑208.6 reads as rewritten:
"§ 14‑208.6.  Definitions.
The following definitions apply in this Article:
…
(1c)	"Department" means the Department of Public Safety.
…
(8)	"Statewide registry" means the central registry compiled by the Department in accordance with G.S. 14‑208.14.
…."
SECTION 17.1.(x)  G.S. 14‑208.13 reads as rewritten:
"§ 14‑208.13.  File with Criminal Information Network.
(a)	The Department of Public Safety shall include the registration information in the Criminal Information Network as set forth in G.S. 143B‑905.
(b)	The Department of Public Safety shall maintain the registration information permanently even after the registrant's reporting requirement expires."
SECTION 17.1.(y)  G.S. 14‑208.14 reads as rewritten:
"§ 14‑208.14.  Statewide registry; Department of Public Safety designated custodian of statewide registry.
(a)	The Department of Public Safety shall compile and keep current a central statewide sex offender registry. The Department is the State agency designated as the custodian of the statewide registry. As custodian the Department has the following responsibilities:
(1)	To receive from the sheriff or any other law enforcement agency or penal institution all sex offender registrations, changes of address, changes of academic or educational employment status, and prerelease notifications required under this Article or under federal law. The Department shall also receive notices of any violation of this Article, including a failure to register or a failure to report a change of address.
(2)	To provide all need‑to‑know law enforcement agencies (local, State, campus, federal, and those located in other states) immediately upon receipt by the Department of any of the following: registration information, a prerelease notification, a change of address, a change of academic or educational employment status, or notice of a violation of this Article.
(2a)	To notify the appropriate law enforcement unit at an institution of higher education as soon as possible upon receipt by the Department of relevant information based on registration information or notice of a change of academic or educational employment status. If an institution of higher education does not have a law enforcement unit, then the Department shall provide the information to the local law enforcement agency that has jurisdiction for the campus.
(3)	To coordinate efforts among law enforcement agencies and penal institutions to ensure that the registration information, changes of address, change of name, prerelease notifications, and notices of failure to register or to report a change of address are conveyed in an appropriate and timely manner.
(4)	To provide public access to the statewide registry in accordance with this Article.
(4a)	To maintain the system for public access so that a registrant's full name, any aliases, and any legal name changes are cross‑referenced and a member of the public may conduct a search of the system for a registrant under any of those names.
(5)	To maintain a system allowing an entity to access a list of online identifiers of persons in the central sex offender registry.
(b)	The statewide registry shall include the following:
(1)	Registration information obtained by a sheriff or penal institution under this Article or from any other local or State law enforcement agency.
(2)	Registration information received from a state or local law enforcement agency or penal institution in another state.
(3)	Registration information received from a federal law enforcement agency or penal institution."
SECTION 17.1.(z)  G.S. 14‑208.31 reads as rewritten:
"§ 14‑208.31.  File with Criminal Information Network.
(a)	The Department of Public Safety shall include the registration information in the Criminal Information Network as set forth in G.S. 143B‑905.
(b)	The Department of Public Safety shall maintain the registration information permanently even after the registrant's reporting requirement expires; however, the records shall remain confidential in accordance with Article 32 of Chapter 7B of the General Statutes."
SECTION 17.1.(aa)  G.S. 14‑415.4(d)(5) reads as rewritten:
"(5)	The petitioner submits his or her fingerprints to the sheriff of the county in which the petitioner resides for a criminal background check pursuant to G.S. 143B‑959."
SECTION 17.1.(bb)  G.S. 15A‑266.2(4) reads as rewritten:
"(4)	'DNA Sample' means blood, cheek swabs, or any biological sample containing cells provided by any person with respect to offenses covered by this Article or submitted to the State Crime Laboratory pursuant to this Article for analysis pursuant to a criminal investigation or storage or both."
SECTION 17.1.(cc)  G.S. 15A‑1341(d) reads as rewritten:
"(d)	Search of Sex Offender Registration Information Required When Placing a Defendant on Probation. – When the court places a defendant on probation, the probation officer assigned to the defendant shall conduct a search of the defendant's name or other identifying information against the registration information regarding sex offenders compiled by the Department of Public Safety in accordance with Article 27A of Chapter 14 of the General Statutes. The probation officer may conduct the search using the Internet site maintained by the Department of Public Safety."
SECTION 17.1.(dd)  G.S. 15A‑298 reads as rewritten:
"§ 15A‑298.  Subpoena authority.
Pursuant to rules issued by the Department of Public Safety, the Director of the State Bureau of Investigation or the Director's designee may issue an administrative subpoena to a communications common carrier or an electronic communications service to compel production of business records if the records:
(1)	Disclose information concerning local or long‑distance toll records or subscriber information; and
(2)	Are material to an active criminal investigation being conducted by the State Bureau of Investigation."
SECTION 17.1.(ee)  G.S. 18C‑151(a)(3) reads as rewritten:
"(3)	All proposals shall be accompanied by a bond or letter of credit in an amount equal to not less than five percent (5%) of the proposal and the fee to cover the cost of the criminal record check conducted under G.S. 143B‑935."
SECTION 17.1.(ff)  G.S. 74F‑6(16) reads as rewritten:
"(16)	Request that the Department of Public Safety conduct criminal history record checks of applicants for licensure and apprenticeships pursuant to G.S. 143B‑946."
SECTION 17.1.(gg)  G.S. 90‑113.33(10) reads as rewritten:
"(10)	Request that the Department of Public Safety conduct criminal history record checks of applicants for registration, certification, or licensure pursuant to G.S. 143B‑941."
SECTION 17.1.(hh)  G.S. 90‑171.23(b)(19) reads as rewritten:
"(19)	Request that the Department of Public Safety conduct criminal history record checks of applicants for licensure pursuant to G.S. 143B‑940."
SECTION 17.1.(ii)  G.S. 90‑270.63(b) reads as rewritten:
"(b)	The Board may request that an applicant for licensure, an applicant seeking reinstatement of a license, or a licensee under investigation by the Board for alleged criminal offenses in violation of this Article consent to a criminal history record check. Refusal to consent to a criminal history record check may constitute grounds for the Board to deny licensure to an applicant, deny reinstatement of a license to an applicant, or revoke the license of a licensee. The Board shall ensure that the State and national criminal history of an applicant is checked. The Board shall be responsible for providing to the North Carolina Department of Public Safety the fingerprints of the applicant or licensee to be checked, a form signed by the applicant or licensee consenting to the criminal history record check and the use of fingerprints and other identifying information required by the State or National Repositories of Criminal Histories, and any additional information required by the Department of Public Safety in accordance with G.S. 143B‑958. The Board shall keep all information obtained pursuant to this section confidential. The Board shall collect any fees required by the Department of Public Safety and shall remit the fees to the Department of Public Safety for expenses associated with conducting the criminal history record check."
SECTION 17.1.(jj)  G.S. 90‑345(b) reads as rewritten:
"(b)	The Board may request that an applicant for licensure, an applicant seeking reinstatement of a license, or a licensee under investigation by the Board for alleged criminal offenses in violation of this Article consent to a criminal history record check. Refusal to consent to a criminal history record check may constitute grounds for the Board to deny licensure to an applicant, deny reinstatement of a license to an applicant, or revoke the license of a licensee. The Board shall ensure that the State and national criminal history of an applicant is checked. The Board shall be responsible for providing to the North Carolina Department of Public Safety the fingerprints of the applicant or licensee to be checked, a form signed by the applicant or licensee consenting to the criminal record check and the use of fingerprints and other identifying information required by the State or National Repositories of Criminal Histories, and any additional information required by the Department of Public Safety in accordance with G.S. 143B‑957. The Board shall keep all information obtained pursuant to this section confidential. The Board shall collect any fees required by the Department of Public Safety and shall remit the fees to the Department of Public Safety for expenses associated with conducting the criminal history record check."
SECTION 17.1.(kk)  G.S. 93E‑1‑6(c1) reads as rewritten:
"(c1)	The Board shall also make an investigation as it deems necessary into the background of the applicant to determine the applicant's qualifications with due regard to the paramount interest of the public as to the applicant's competency, honesty, truthfulness, and integrity. All applicants shall consent to a criminal history record check. Refusal to consent to a criminal history record check may constitute grounds for the Board to deny an application. The Board shall ensure that the State and national criminal history of an applicant is checked. The Board shall be responsible for providing to the North Carolina Department of Public Safety the fingerprints of the applicant to be checked, a form signed by the applicant consenting to the criminal history record check, and the use of fingerprints and other identifying information required by the State or National Repositories of Criminal Histories and any additional information required by the Department of Public Safety in accordance with G.S. 143B‑961. The Board shall keep all information obtained pursuant to this section confidential. The Board shall collect any fees required by the Department of Public Safety and shall remit the fees to the Department of Public Safety for expenses associated with conducting the criminal history record check."
SECTION 17.1.(ll)  G.S. 93E‑2‑11(b) reads as rewritten:
"(b)	The Board may require that an applicant for registration as an appraisal management company or a registrant consent to a criminal history record check. Refusal to consent to a criminal history record check may constitute grounds for the Board to deny registration to an applicant or registrant. The Board shall ensure that the State and national criminal history of an applicant or registrant is checked. The Board shall be responsible for providing to the North Carolina Department of Public Safety the fingerprints of the applicant or registrant to be checked, a form signed by the applicant or registrant consenting to the criminal record check and the use of fingerprints and other identifying information required by the State or National Repositories of Criminal Histories, and any additional information required by the Department of Public Safety in accordance with G.S. 143B‑961. The Board shall keep all information obtained pursuant to this section confidential. The Board shall collect any fees required by the Department of Public Safety and shall remit the fees to the Department of Public Safety for expenses associated with conducting the criminal history record check."
SECTION 17.1.(mm)  G.S. 101‑5 reads as rewritten:
"§ 101‑5.  Name change application requirements; grounds for clerk to order or deny name change; certificate and record.
…
(e)	The clerk shall forward the order granting the name change to:
…
(2)	The Department of Public Safety, which shall update its records to show the name change.
…
(g)	Upon information obtained by the clerk of fraud or material misrepresentation in the application for a name change, the clerk on his or her own motion may set aside the order granting the name change after notice to the applicant and opportunity to be heard. If the clerk sets aside the name change order, the clerk shall notify the State Registrar of Vital Statistics and the Department of Public Safety."
SECTION 17.1.(nn)  G.S. 110‑90.2(g), as rewritten by subsection (n) of this section, reads as rewritten:
"(g)	The child care provider shall pay the cost of the fingerprinting and the federal criminal history record check in accordance with G.S. 143B‑934. The Department of Public Safety shall perform the State criminal history record check. The Department of Health and Human Services shall pay for and conduct the county criminal history record check. Child care providers who reside outside the State bear the cost of the county criminal history record check and shall provide the county criminal history record check to the Division of Child Development as required by this section."
SECTION 17.1.(oo)  G.S. 113‑172(a) reads as rewritten:
"(a)	The Secretary shall designate license agents for the Department. The Division and license agents designated by the Secretary under this section shall issue licenses authorized under this Article in accordance with this Article and the rules of the Commission. The Secretary may require license agents to enter into a contract that provides for their duties and compensation, post a bond, and submit to reasonable inspections and audits. If a license agent violates any provision of this Article, the rules of the Commission, or the terms of the contract, the Secretary may initiate proceedings for the forfeiture of the license agent's bond and may summarily suspend, revoke, or refuse to renew a designation as a license agent and may impound or require the return of all licenses, moneys, record books, reports, license forms and other documents, ledgers, and materials pertinent or apparently pertinent to the license agency. The Secretary shall report evidence or misuse of State property, including license fees, by a license agent to the State Bureau of Investigation as provided by G.S. 143B‑920."
SECTION 17.1.(pp)  G.S. 114‑2.7, as recodified as G.S. 143B‑901 by subsection (f) of this section, reads as rewritten:
"§ 143B‑901.  Reporting system and database on certain domestic‑violence‑related homicides; reports by law enforcement agencies required; annual report to the General Assembly.
The Department of Public Safety, in consultation with the North Carolina Council for Women/Domestic Violence Commission, the North Carolina Sheriffs' Association, and the North Carolina Association of Chiefs of Police, shall develop a reporting system and database that reflects the number of homicides in the State where the offender and the victim had a personal relationship, as defined by G.S. 50B‑1(b). The information in the database shall also include the type of personal relationship that existed between the offender and the victim, whether the victim had obtained an order pursuant to G.S. 50B‑3, and whether there was a pending charge for which the offender was on pretrial release pursuant to G.S. 15A‑534.1. All State and local law enforcement agencies shall report information to the Department of Public Safety upon making a determination that a homicide meets the reporting system's criteria. The report shall be made in the format adopted by the Department of Public Safety. The Department of Public Safety shall report to the Joint Legislative Oversight Committee on Justice and Public Safety, no later than February 1 of each year, with the data collected for the previous calendar year."
SECTION 17.1.(qq)  G.S. 114‑10, as recodified as G.S. 143B‑902 by subsection (g) of this section, reads as rewritten:
"§ 143B‑902.  Powers and duties of the Department of Public Safety with respect to criminal information.
In addition to its other duties, it shall be the duty of the Department of Public Safety to do all of the following:
…
(2)	To collect, correlate, and maintain access to information that will assist in the performance of duties required in the administration of criminal justice throughout the State. This information may include, but is not limited to, motor vehicle registration, drivers' licenses, wanted and missing persons, stolen property, warrants, stolen vehicles, firearms registration, sexual offender registration as provided under Article 27A of Chapter 14 of the General Statutes, drugs, drug users and parole and probation histories. In performing this function, the Department may arrange to use information available in other agencies and units of State, local and federal government, but shall provide security measures to insure that such information shall be made available only to those whose duties, relating to the administration of justice, require such information.
…
	
(6)	To promulgate rules and regulations for the administration of this Article."
SECTION 17.1.(rr)  G.S. 114‑10.01, as recodified as G.S. 143B‑903 by subsection (g) of this section, reads as rewritten:
"§ 143B‑903.  Collection of traffic law enforcement statistics.
(a)	In addition to its other duties, the Department of Public Safety shall collect, correlate, and maintain the following information regarding traffic law enforcement by law enforcement officers:
…
(b)	For purposes of this section, "law enforcement officer" means any of the following:
(1)	All State law enforcement officers.
(2)	Law enforcement officers employed by county sheriffs or county police departments.
(3)	Law enforcement officers employed by police departments in municipalities with a population of 10,000 or more persons.
(4)	Law enforcement officers employed by police departments in municipalities employing five or more full‑time sworn officers for every 1,000 in population, as calculated by the Department for the calendar year in which the stop was made.
…
(d)	Each law enforcement officer making a stop covered by subdivision (1) of subsection (a) of this section shall be assigned an anonymous identification number by the officer's employing agency. The anonymous identifying number shall be public record and shall be reported to the Department to be correlated along with the data collected under subsection (a) of this section. The correlation between the identification numbers and the names of the officers shall not be a public record, and shall not be disclosed by the agency except when required by order of a court of competent jurisdiction to resolve a claim or defense properly before the court.
(d1)	Any agency subject to the requirements of this section shall submit information collected under subsection (a) of this section to the Department within 60 days of the close of each month. Any agency that does not submit the information as required by this subsection shall be ineligible to receive any law enforcement grants available by or through the State until the information which is reasonably available is submitted.
(e)	The Department shall publish and distribute by December 1 of each year a list indicating the law enforcement officers that will be subject to the provisions of this section during the calendar year commencing on the following January 1."
SECTION 17.1.(ss)  G.S. 114‑10.02, as recodified as G.S. 143B‑904 by subsection (g) of this section, reads as rewritten:
"§ 143B‑904.  Collection of statistics on the use of deadly force by law enforcement officers.
(a)	In addition to its other duties, the Department of Public Safety shall collect, maintain, and annually publish the number of deaths, by law enforcement agency, resulting from the use of deadly force by law enforcement officers in the course and scope of their official duties.
(b)	For purposes of this section, "law enforcement officer" means sworn law enforcement officers with the power of arrest, both State and local."
SECTION 17.1.(tt)  G.S. 114‑10.1, as recodified as G.S. 143B‑905 by subsection (g) of this section, reads as rewritten:
"§ 143B‑905.  Criminal Information Network.
(a)	The Department of Public Safety is authorized to establish, devise, maintain and operate a system for receiving and disseminating to participating agencies information collected, maintained and correlated under authority of G.S. 143B‑902. The system shall be known as the Criminal Information Network.
(b)	The Department of Public Safety is authorized to cooperate with the Division of Motor Vehicles, Department of Administration, and other State, local and federal agencies and organizations in carrying out the purpose and intent of this section, and to utilize, in cooperation with other State agencies and to the extent as may be practical, computers and related equipment as may be operated by other State agencies.
(c)	The Department of Public Safety, after consultation with participating agencies, shall adopt rules and regulations governing the organization and administration of the Criminal Information Network, including rules and regulations governing the types of information relating to the administration of criminal justice to be entered into the system, and who shall have access to such information. The rules and regulations governing access to the Criminal Information Network shall not prohibit an attorney who has entered a criminal proceeding in accordance with G.S. 15A‑141 from obtaining information relevant to that criminal proceeding. The rules and regulations governing access to the Criminal Information Network shall not prohibit an attorney who represents a person in adjudicatory or dispositional proceedings for an infraction from obtaining the person's driving record or criminal history.
(d)	
The Department may impose monthly fees on participating agencies. The monthly fees collected under this subsection shall be used to offset the cost of operating and maintaining the Criminal Information Network.
(1)	The Department may impose a monthly circuit fee on agencies that access the Criminal Information Network through a circuit maintained and operated by the Department of Public Safety. The amount of the monthly fee is three hundred dollars ($300.00) plus an additional fee amount for each device linked to the Network. The additional fee amount varies depending upon the type of device. For a desktop device after the first seven desktop devices, the additional monthly fee is twenty‑five dollars ($25.00) per device. For a mobile device, the additional monthly fee is twelve dollars ($12.00) per device.
(2)	The Department may impose a monthly device fee on agencies that access the Criminal Information Network through some other approved means. The amount of the monthly device fee varies depending upon the type of device. For a desktop device, the monthly fee is twenty‑five dollars ($25.00) per device. For a mobile device, the fee is twelve dollars ($12.00) per device."
SECTION 17.1.(uu)  G.S. 114‑12, as recodified as G.S. 143B‑915 by subsection (i) of this section, reads as rewritten:
"§ 143B‑915.  Bureau of Investigation created; powers and duties.
In order to secure a more effective administration of the criminal laws of the State, to prevent crime, and to procure the speedy apprehension of criminals, the Secretary of Public Safety shall set up in the Division of Law Enforcement of the Department of Public Safety a section to be designated as the State Bureau of Investigation. The Section shall have charge of and administer the agencies and activities herein set up for the identification of criminals, for their apprehension, and investigation and preparation of evidence to be used in criminal courts; and the said Bureau shall have charge of investigation of criminal matters herein especially mentioned, and of such other crimes and criminal procedure as the Governor may direct.
In the personnel of the Bureau shall be included a sufficient number of persons of training and skill in the investigation of crime and in the preparation of evidence as to be of service to local enforcement officers, under the direction of the Governor, in criminal matters of major importance.
"
SECTION 17.1.(vv)  G.S. 114‑14, as recodified as G.S. 143B‑917 by subsection (i) of this section, reads as rewritten:
"§ 143B‑917.  General powers and duties of law enforcement officers of the State Bureau of Investigation.
Sworn law enforcement officers of the State Bureau of Investigation are given the same power of arrest as is now vested in the sheriffs of the several counties, and their jurisdiction shall be statewide. Sworn law enforcement officers of the Bureau shall, at the request of the Governor, give assistance to sheriffs, police officers, district attorneys, and judges when called upon by them and so directed."
SECTION 17.1.(ww)  G.S. 114‑15, as recodified as G.S. 143B‑919 by subsection (i) of this section, reads as rewritten:
"§ 143B‑919.  Investigations of lynchings, election frauds, etc.; services subject to call of Governor; witness fees and mileage for employees.
(a)	The Bureau shall, upon request of the Governor, investigate and prepare evidence in the event of any lynching or mob violence in the State; shall investigate all cases arising from frauds in connection with elections when requested to do so by the Board of Elections, and when so directed by the Governor. Such investigation, however, shall in nowise interfere with the power of the Attorney General to make such investigation as the Attorney General is authorized to make under the laws of the State. The Bureau is authorized further, at the request of the Governor, to investigate cases of frauds arising under the Social Security Laws of the State, of violations of the gaming laws, and lottery laws, and matters of similar kind when called upon by the Governor so to do. In all such cases it shall be the duty of the Department to keep such records as may be necessary and to prepare evidence in the cases investigated, for the use of enforcement officers and for the trial of causes. The services of employees of the Bureau may be required by the Governor in connection with the investigation of any crime committed anywhere in the State when called upon by the enforcement officers of the State, and when, in the judgment of the Governor, such services may be rendered with advantage to the enforcement of the criminal law. The State Bureau of Investigation is hereby authorized to investigate without request the attempted arson of, or arson of, damage of, theft from, or theft of, or misuse of, any State‑owned personal property, buildings, or other real property or any assault upon or threats against any legislative officer named in G.S. 147‑2(1), (2), or (3), any executive officer named in G.S. 147‑3(c), or any court officer as defined in G.S. 14‑16.10(1). 
(a1)	The Bureau also is authorized at the request of the Governor to conduct a background investigation on a person that the Governor plans to nominate for a position that must be confirmed by the General Assembly, the Senate, or the House of Representatives. The background investigation of the proposed nominee shall be limited to an investigation of the person's criminal record, educational background, employment record, records concerning the listing and payment of taxes, and credit record, and to a requirement that the person provide the information contained in the statements of economic interest required to be filed by persons subject to Chapter 138A of the General Statutes. The Governor must give the person being investigated written notice that the Governor intends to request a background investigation at least 10 days prior to the date that the Governor requests the State Bureau of Investigation to conduct the background investigation. The written notice shall be sent by regular mail, and there is created a rebuttable presumption that the person received the notice if the Governor has a copy of the notice.
…
(c)	All records and evidence collected and compiled by employees of the Bureau shall, upon request, be made available to the district attorney of any district if the same concerns persons or investigations in his district.
(d)	In all cases where the cost is assessed against the defendant and paid by him, there shall be assessed in the bill of cost, mileage and witness fees to any employees of the Bureau who are witnesses in cases arising in courts of this State. The fees so assessed, charged and collected shall be forwarded by the clerks of the court to the Treasurer of the State of North Carolina, and there credited to the Bureau of Identification and Investigation Fund."
SECTION 17.1.(xx)  G.S. 114‑19.1(d), as recodified by subsection (l) of this section, reads as rewritten:
"(d)	Nothing in this section shall be construed as enlarging any right to receive any record of the State Bureau of Investigation. Such rights are and shall be controlled by G.S. 143B‑919, 143B‑906, 120‑19.4A, and other applicable statutes."
SECTION 17.1.(yy)  G.S. 114‑19.6(b), as recodified by subsection (l) of this section and rewritten by subsection (o) of this section, reads as rewritten:
"(b)	When requested by the Department of Health and Human Services or the Division of Juvenile Justice of the Department of Public Safety, the North Carolina Department of Public Safety may provide to the requesting department or division a covered person's criminal history from the State Repository of Criminal Histories. Such requests shall not be due to a person's age, sex, race, color, national origin, religion, creed, political affiliation, or handicapping condition as defined by G.S. 168A‑3. For requests for a State criminal history record check only, the requesting department or division shall provide to the Department of Public Safety a form consenting to the check signed by the covered person to be checked and any additional information required by the Department of Public Safety. National criminal record checks are authorized for covered applicants who have not resided in the State of North Carolina during the past five years. For national checks the Department of Health and Human Services or the Division of Juvenile Justice of the Department of Public Safety shall provide to the North Carolina Department of Public Safety the fingerprints of the covered person to be checked, any additional information required by the Department of Public Safety, and a form signed by the covered person to be checked consenting to the check of the criminal record and to the use of fingerprints and other identifying information required by the State or National Repositories. The fingerprints of the individual shall be forwarded to the State Bureau of Investigation for a search of the State criminal history record file and the State Bureau of Investigation shall forward a set of fingerprints to the Federal Bureau of Investigation for a national criminal history record check. The Department of Health and Human Services and the Division of Juvenile Justice of the Department of Public Safety shall keep all information pursuant to this section confidential. The Department of Public Safety shall charge a reasonable fee for conducting the checks of the criminal history records authorized by this section."
SECTION 17.1.(zz)  G.S. 114‑20, as recodified as G.S. 143B‑986 by subsection (m) of this section, reads as rewritten:
"§ 143B‑986.  Authority to provide protection to certain public officials.
The North Carolina State Bureau of Investigation is authorized to provide protection to public officials who request it, and who, in the discretion of the Director of the Bureau with the approval of the Secretary of Public Safety, demonstrate a need for such protection. The bureau shall not provide protection for any individual other than the Governor for a period greater than 30 days without review and reapproval by the Secretary of Public Safety. This review and reapproval shall be required at the end of each 30‑day period."
SECTION 17.1.(aaa)  G.S. 114‑20.1, as recodified as G.S. 143B‑987 by subsection (m) of this section, reads as rewritten:
"§ 143B‑987.  Authority to designate areas for protection of public officials.
(a)	The Secretary of Public Safety is authorized to designate buildings and grounds which constitute temporary residences or temporary offices of any public official being protected under authority of G.S. 143B‑986, or any area that will be visited by any such official, a public building or facility during the time of such use.
(b)	The Secretary of Public Safety may, with the consent of the official to be protected, make rules governing ingress to or egress from such buildings, grounds or areas designated under this section."
SECTION 17.1.(bbb)  G.S. 122C‑80 reads as rewritten:
"§ 122C‑80.  Criminal history record check required for certain applicants for employment.
…
(b)	Requirement. – An offer of employment by a provider licensed under this Chapter to an applicant to fill a position that does not require the applicant to have an occupational license is conditioned on consent to a State and national criminal history record check of the applicant. If the applicant has been a resident of this State for less than five years, then the offer of employment is conditioned on consent to a State and national criminal history record check of the applicant. The national criminal history record check shall include a check of the applicant's fingerprints. If the applicant has been a resident of this State for five years or more, then the offer is conditioned on consent to a State criminal history record check of the applicant. A provider shall not employ an applicant who refuses to consent to a criminal history record check required by this section. Except as otherwise provided in this subsection, within five business days of making the conditional offer of employment, a provider shall submit a request to the Department of Public Safety under G.S. 143B‑939 to conduct a criminal history record check required by this section or shall submit a request to a private entity to conduct a State criminal history record check required by this section. Notwithstanding G.S. 143B‑939, the Department of Public Safety shall return the results of national criminal history record checks for employment positions not covered by Public Law 105‑277 to the Department of Health and Human Services, Criminal Records Check Unit. Within five business days of receipt of the national criminal history of the person, the Department of Health and Human Services, Criminal Records Check Unit, shall notify the provider as to whether the information received may affect the employability of the applicant. In no case shall the results of the national criminal history record check be shared with the provider. Providers shall make available upon request verification that a criminal history check has been completed on any staff covered by this section. A county that has adopted an appropriate local ordinance and has access to the Division of Criminal Information data bank may conduct on behalf of a provider a State criminal history record check required by this section without the provider having to submit a request to the Department of Justice. In such a case, the county shall commence with the State criminal history record check required by this section within five business days of the conditional offer of employment by the provider. All criminal history information received by the provider is confidential and may not be disclosed, except to the applicant as provided in subsection (c) of this section. For purposes of this subsection, the term "private entity" means a business regularly engaged in conducting criminal history record checks utilizing public records obtained from a State agency.
…
(g)	Conditional Employment. – A provider may employ an applicant conditionally prior to obtaining the results of a criminal history record check regarding the applicant if both of the following requirements are met:
(1)	The provider shall not employ an applicant prior to obtaining the applicant's consent for criminal history record check as required in subsection (b) of this section or the completed fingerprint cards as required in G.S. 143B‑939.
(2)	The provider shall submit the request for a criminal history record check not later than five business days after the individual begins conditional employment."
SECTION 17.1.(ccc)  G.S. 122C‑205(c) reads as rewritten:
"(c)	Upon receipt of notice of an escape or breach of a condition of release as described in subsections (a) and (b) of this section, an appropriate law enforcement officer shall take the client into custody and have the client returned to the 24‑hour facility from which the client has escaped or has been conditionally released. Transportation of the client back to the 24‑hour facility shall be provided in the same manner as described in G.S. 122C‑251 and G.S. 122C‑408(b). Law enforcement agencies who are notified of a client's escape or breach of conditional release shall be notified of the client's return by the responsible 24‑hour facility. Under the circumstances described in this section, the initial notification by the 24‑hour facility of the client's escape or breach of conditional release shall be given by telephone communication to the appropriate law enforcement agency or agencies and, if available and appropriate, by Department of Public Safety message to any law enforcement agency in or out of state and by entry into the National Crime Information Center (NCIC) telecommunications system. As soon as reasonably possible following notification, written authorization to take the client into custody shall also be issued by the 24‑hour facility. Under this section, law enforcement officers shall have the authority to take a client into custody upon receipt of the telephone notification or Department of Public Safety message prior to receiving written authorization. The notification of a law enforcement agency does not, in and of itself, render this information public information within the purview of Chapter 132 of the General Statutes. However, the responsible law enforcement agency shall determine the extent of disclosure of personal identifying and background information reasonably necessary, under the circumstances, in order to assure the expeditious return of a client to the 24‑hour facility involved and to protect the general public and is authorized to make such disclosure. The responsible law enforcement agency may also place any appropriate message or entry into either the Department of Public Safety's Criminal Information System or National Crime Information System, or both, as appropriate."
SECTION 17.1.(ddd)  G.S. 131D‑10.3A reads as rewritten:
"§ 131D‑10.3A.  Mandatory criminal checks.
…
(d)	The Department of Public Safety shall provide to the Department the criminal history of the individuals specified in subsection (a) of this section obtained from the State and National Repositories of Criminal Histories as requested by the Department. The Department shall provide to the Department of Public Safety, along with the request, the fingerprints of the individual to be checked, any additional information required by the Department of Public Safety, and a form consenting to the check of the criminal record and to the use of fingerprints and other identifying information required by the State or National Repositories signed by the individual to be checked. The fingerprints of the individual to be checked shall be forwarded to the State Bureau of Investigation for a search of the State's criminal history record file, and the State Bureau of Investigation shall forward a set of fingerprints to the Federal Bureau of Investigation for a national criminal history record check.
…
(i)	The Department of Public Safety shall perform the State and national criminal history checks on individuals required by this section and shall charge the Department a reasonable fee only for conducting the checks of the national criminal history records authorized by this section. The Division of Social Services, Department of Health and Human Services, shall bear the costs of implementing this section."
SECTION 17.1.(eee)  G.S. 131D‑40 reads as rewritten:
"§ 131D‑40.  Criminal history record checks required for certain applicants for employment.
(a)	Requirement; Adult Care Home. – An offer of employment by an adult care home licensed under this Chapter to an applicant to fill a position that does not require the applicant to have an occupational license is conditioned on consent to a criminal history record check of the applicant. If the applicant has been a resident of this State for less than five years, then the offer of employment is conditioned on consent to a State and national criminal history record check of the applicant. The national criminal history record check shall include a check of the applicant's fingerprints. If the applicant has been a resident of this State for five years or more, then the offer is conditioned on consent to a State criminal history record check of the applicant. An adult care home shall not employ an applicant who refuses to consent to a criminal history record check required by this section. Within five business days of making the conditional offer of employment, an adult care home shall submit a request to the Department of Public Safety under G.S. 143B‑939 to conduct a State or national criminal history record check required by this section, or shall submit a request to a private entity to conduct a State criminal history record check required by this section. Notwithstanding G.S. 143B‑939, the Department of Public Safety shall return the results of national criminal history record checks for employment positions not covered by Public Law 105‑277 to the Department of Health and Human Services, Criminal Records Check Unit. Within five business days of receipt of the national criminal history of the person, the Department of Health and Human Services, Criminal Records Check Unit, shall notify the adult care home as to whether the information received may affect the employability of the applicant. In no case shall the results of the national criminal history record check be shared with the adult care home. Adult care homes shall make available upon request verification that a criminal history check has been completed on any staff covered by this section. All criminal history information received by the home is confidential and may not be disclosed, except to the applicant as provided in subsection (b) of this section.
(a1)	Requirement; Contract Agency of Adult Care Home. – An offer of employment by a contract agency of an adult care home licensed under this Chapter to an applicant to fill a position that does not require the applicant to have an occupational license is conditioned upon consent to a criminal history record check of the applicant. If the applicant has been a resident of this State for less than five years, then the offer of employment is conditioned on consent to a State and national criminal history record check of the applicant. The national criminal history record check shall include a check of the applicant's fingerprints. If the applicant has been a resident of this State for five years or more, then the offer is conditioned on consent to a State criminal history record check of the applicant. A contract agency of an adult care home shall not employ an applicant who refuses to consent to a criminal history record check required by this section. Within five business days of making the conditional offer of employment, a contract agency of an adult care home shall submit a request to the Department of Public Safety under G.S. 143B‑939 to conduct a State or national criminal history record check required by this section, or shall submit a request to a private entity to conduct a State criminal history record check required by this section. Notwithstanding G.S. 143B‑939, the Department of Public Safety shall return the results of national criminal history record checks for employment positions not covered by Public Law 105‑277 to the Department of Health and Human Services, Criminal Records Check Unit. Within five business days of receipt of the national criminal history of the person, the Department of Health and Human Services, Criminal Records Check Unit, shall notify the contract agency of the adult care home as to whether the information received may affect the employability of the applicant. In no case shall the results of the national criminal history record check be shared with the contract agency of the adult care home. Contract agencies of adult care homes shall make available upon request verification that a criminal history check has been completed on any staff covered by this section. All criminal history information received by the contract agency is confidential and may not be disclosed, except to the applicant as provided by subsection (b) of this section.
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(f)	Conditional Employment. – An adult care home may employ an applicant conditionally prior to obtaining the results of a criminal history record check regarding the applicant if both of the following requirements are met:
(1)	The adult care home shall not employ an applicant prior to obtaining the applicant's consent for a criminal history record check as required in subsection (a) of this section or the completed fingerprint cards as required in G.S. 143B‑939.
(2)	The adult care home shall submit the request for a criminal history record check not later than five business days after the individual begins conditional employment.
…."
SECTION 17.1.(fff)  G.S. 131E‑159(g) reads as rewritten:
"(g)	An individual who applies for EMS credentials, seeks to renew EMS credentials, or holds EMS credentials is subject to a criminal background review by the Department. At the request of the Department, the Emergency Medical Services Disciplinary Committee, established by G.S. 143‑519, shall review criminal background information and make a recommendation regarding the eligibility of an individual to obtain initial EMS credentials, renew EMS credentials, or maintain EMS credentials. The Department and the Emergency Medical Services Disciplinary Committee shall keep all information obtained pursuant to this subsection confidential. The Medical Care Commission shall adopt rules to implement the provisions of this subsection, including rules to establish a reasonable fee to offset the actual costs of criminal history information obtained pursuant to G.S. 143B‑952."
SECTION 17.1.(ggg)  G.S. 131E‑265 reads as rewritten:
"§ 131E‑265.  Criminal history record checks required for certain applicants for employment.
(a)	Requirement; Nursing Home or Home Care Agency. – An offer of employment by a nursing home licensed under this Chapter to an applicant to fill a position that does not require the applicant to have an occupational license is conditioned on consent to a criminal history record check of the applicant. If the applicant has been a resident of this State for less than five years, then the offer of employment is conditioned on consent to a State and national criminal history record check of the applicant. The national criminal history record check shall include a check of the applicant's fingerprints. If the applicant has been a resident of this State for five years or more, then the offer is conditioned on consent to a State criminal history record check of the applicant. An offer of employment by a home care agency licensed under this Chapter to an applicant to fill a position that requires entering the patient's home is conditioned on consent to a criminal history record check of the applicant. In addition, employment status change of a current employee of a home care agency licensed under this Chapter from a position that does not require entering the patient's home to a position that requires entering the patient's home shall be conditioned on consent to a criminal history record check of that current employee. If the applicant for employment or if the current employee who is changing employment status has been a resident of this State for less than five years, then the offer of employment or change in employment status is conditioned on consent to a State and national criminal history record check. The national criminal history record check shall include a check of the applicant's or current employee's fingerprints. If the applicant or current employee has been a resident of this State for five years or more, then the offer is conditioned on consent to a State criminal history record check of the applicant or current employee applying for a change in employment status. A nursing home or a home care agency shall not employ an applicant who refuses to consent to a criminal history record check required by this section. In addition, a home care agency shall not change a current employee's employment status from a position that does not require entering the patient's home to a position that requires entering the patient's home who refuses to consent to a criminal history record check required by this section. Within five business days of making the conditional offer of employment, a nursing home or home care agency shall submit a request to the Department of Public Safety under G.S. 143B‑939 to conduct a State or national criminal history record check required by this section, or shall submit a request to a private entity to conduct a State criminal history record check required by this section. Notwithstanding G.S. 143B‑939, the Department of Public Safety shall return the results of national criminal history record checks for employment positions not covered by Public Law 105‑277 to the Department of Health and Human Services, Criminal Records Check Unit. Within five business days of receipt of the national criminal history of the person, the Department of Health and Human Services, Criminal Records Check Unit, shall notify the nursing home or home care agency as to whether the information received may affect the employability of the applicant. In no case shall the results of the national criminal history record check be shared with the nursing home or home care agency. Nursing homes and home care agencies shall make available upon request verification that a criminal history check has been completed on any staff covered by this section. All criminal history information received by the home or agency is confidential and may not be disclosed, except to the applicant as provided in subsection (b) of this section.
(a1)	Requirement; Contract Agency of Nursing Home or Home Care Agency. – An offer of employment by a contract agency of a nursing home or home care agency licensed under this Chapter to an applicant to fill a position that does not require the applicant to have an occupational license is conditioned upon consent to a criminal history record check of the applicant. If the applicant has been a resident of this State for less than five years, then the offer of employment is conditioned on consent to a State and national criminal history record check of the applicant. The national criminal history record check shall include a check of the applicant's fingerprints. If the applicant has been a resident of this State for five years or more, then the offer is conditioned on consent to a State criminal history record check of the applicant. A contract agency of a nursing home or home care agency shall not employ an applicant who refuses to consent to a criminal history record check required by this section. Within five business days of making the conditional offer of employment, a contract agency of a nursing home or home care agency shall submit a request to the Department of Public Safety under G.S. 143B‑939 to conduct a State or national criminal history record check required by this section, or shall submit a request to a private entity to conduct a State criminal history record check required by this section. Notwithstanding G.S. 143B‑939, the Department of Public Safety shall return the results of national criminal history record checks for employment positions not covered by Public Law 105‑277 to the Department of Health and Human Services, Criminal Records Check Unit. Within five business days of receipt of the national criminal history of the person, the Department of Health and Human Services, Criminal Records Check Unit, shall notify the contract agency of the nursing home or home care agency as to whether the information received may affect the employability of the applicant. In no case shall the results of the national criminal history record check be shared with the contract agency of the nursing home or home care agency. Contract agencies of nursing homes and home care agencies shall make available upon request verification that a criminal history check has been completed on any staff covered by this section. All criminal history information received by the contract agency is confidential and may not be disclosed, except to the applicant as provided by subsection (b) of this section.
…
(f)	Conditional Employment. – A nursing home or home care agency may employ an applicant conditionally prior to obtaining the results of a criminal history record check regarding the applicant if both of the following requirements are met:
(1)	The nursing home or home care agency shall not employ an applicant prior to obtaining the applicant's consent for a criminal history record check as required in subsection (a) of this section or the completed fingerprint cards as required in G.S. 143B‑939.
(2)	The nursing home or home care agency shall submit the request for a criminal history record check not later than five business days after the individual begins conditional employment.
…."
SECTION 17.1.(hhh)  G.S. 143‑143.10(b)(6) reads as rewritten:
"(6)	To request that the Department of Public Safety  conduct criminal history checks of applicants for licensure pursuant to G.S. 143B‑944."
SECTION 17.1.(iii)  G.S. 148‑37.3(c) reads as rewritten:
"(c)	Any private corporation described in subsection (a) of this section shall reimburse the State and any county or other law enforcement agency for the full cost of any additional expenses incurred by the State or the county or other law enforcement agency in connection with the pursuit and apprehension of an escaped inmate from the facility.
In the event of an escape from the facility, any private corporation described in subsection (a) of this section shall immediately notify the sheriff in the county in which the facility is located, who shall cause an immediate entry into the Department of Public Safety's Criminal Information Network. The sheriff of the county in which the facility is located shall be the lead law enforcement officer in connection with the pursuit and apprehension of an escaped inmate from the facility."
SECTION 17.1.(jjj)  G.S. 153A‑94.2 reads as rewritten:
"§ 153A‑94.2.  Criminal history record checks of employees permitted.
The board of commissioners may adopt or provide for rules and regulations or ordinances concerning a requirement that any applicant for employment be subject to a criminal history record check of State and National Repositories of Criminal Histories conducted by the Department of Public Safety in accordance with G.S. 143B‑945. The local or regional public employer may consider the results of these criminal history record checks in its hiring decisions."
SECTION 17.1.(kkk)  G.S. 160A‑164.2 reads as rewritten:
"§ 160A‑164.2.  Criminal history record check of employees permitted.
The council may adopt or provide for rules and regulations or ordinances concerning a requirement that any applicant for employment be subject to a criminal history record check of State and National Repositories of Criminal Histories conducted by the Department of Public Safety in accordance with G.S. 143B‑945. The city may consider the results of these criminal history record checks in its hiring decisions."
SECTION 17.1.(lll)  G.S. 164‑44(a) reads as rewritten:
"(a)	The Commission shall have the secondary duty of collecting, developing, and maintaining statistical data relating to sentencing, corrections, and juvenile justice so that the primary duties of the Commission will be formulated using data that is valid, accurate, and relevant to this State. All State agencies shall provide data as it is requested by the Commission. For the purposes of G.S. 143B‑930, the Commission shall be considered to be engaged in the administration of criminal justice. All meetings of the Commission shall be open to the public and the information presented to the Commission shall be available to any State agency or member of the General Assembly."
SECTION 17.1.(mmm)  Subpart C of Part 2 of Article 4 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑926.  Appointment and term of the Director of the State Bureau of Investigation.
(a)	The Director of the State Bureau of Investigation shall be appointed by the Governor for a term of eight years subject to confirmation by the General Assembly by joint resolution. The name of the person to be appointed by the Governor shall be submitted by the Governor to the General Assembly for confirmation by the General Assembly on or before May 1 of the year in which the term for which the appointment is to be made expires. Upon failure of the Governor to submit a name as herein provided, the President Pro Tempore of the Senate and the Speaker of the House of Representatives jointly shall submit a name of an appointee to the General Assembly on or before May 15 of the same year. The appointment shall then be made by enactment of a bill. The bill shall state the name of the person being appointed, the office to which the appointment is being made, the effective date of the appointment, the date of expiration of the term, the residence of the appointee, and that the appointment is made upon the joint recommendation of the Speaker of the House of Representatives and the President Pro Tempore of the Senate. Nothing precludes any member of the General Assembly from proposing an amendment to any bill making such an appointment.
(b)	The Director may be removed from office by the Governor for any of the grounds set forth in G.S. 143B‑13(b), (c), and (d). In case of a vacancy in the office of the Director of the State Bureau of Investigation for any reason prior to the expiration of the Director's term of office, the name of the Director's successor shall be submitted by the Governor to the General Assembly not later than 60 days after the vacancy arises. If a vacancy arises in the office when the General Assembly is not in session, the Director shall be appointed by the Governor to serve on an interim basis pending confirmation by the General Assembly."
SECTION 17.1.(nnn)  Notwithstanding anything in G.S. 143B‑926, as enacted by subsection (mmm) of this section, to the contrary, the Governor shall appoint an acting Director of the State Bureau of Investigation who shall serve until a new Director is appointed pursuant to G.S. 143B‑926. A Director shall be appointed pursuant to G.S. 143B‑926 no later than June 1, 2015, for a term that shall end on June 30, 2023.
SECTION 17.1.(ooo)  Notwithstanding any other provision of law, there shall be no transfer of positions to or from the State Bureau of Investigation and no changes to the authorized budget of the State Bureau of Investigation, as it existed on March 1, 2014, prior to the transfer of the State Bureau of Investigation to the Department of Public Safety. Under no circumstances shall funds be expended from Budget Code 23606 – Justice Seized and Forfeited Assets, unless those expenditures were reported to the NC General Assembly on or before February 4, 2014.

ALCOHOL LAW ENFORCEMENT SECTION TRANSFER
SECTION 17.1.(ppp)  The Alcohol Law Enforcement Section shall be relocated as a branch under the State Bureau of Investigation.
SECTION 17.1.(qqq)  G.S. 18B‑500 reads as rewritten:
"§ 18B‑500.  Alcohol law‑enforcement agents.
(a)	Appointment. – The Director of the State Bureau of Investigation shall appoint alcohol law‑enforcement agents and other enforcement personnel. The Director may also appoint regular employees of the Commission as alcohol law‑enforcement agents. Alcohol law‑enforcement agents shall be designated as "alcohol law‑enforcement agents". Persons serving as reserve alcohol law‑enforcement agents are considered employees of the Alcohol Law Enforcement Branch for workers' compensation purposes while performing duties assigned or approved by the Head of the Alcohol Law Enforcement Branch or the Head's designee.
(b)	Subject Matter Jurisdiction. – After taking the oath prescribed for a peace officer, an alcohol law‑enforcement agent shall have authority to arrest and take other investigatory and enforcement actions for any criminal offense. The primary responsibility of an agent shall be enforcement of the ABC and lottery laws.
…
(g)	Shifting of Personnel From One District to Another. – The Head of the Alcohol Law Enforcement Branch, under rules adopted by the Department of Public Safety may, from time to time, shift the forces from one district to another or consolidate more than one district force at any point for special purposes. Whenever an agent of the Alcohol Law Enforcement Section is transferred from one district to another for the convenience of the State or for reasons other than the request of the agent, the Department shall be responsible for transporting the household goods, furniture, and personal apparel of the agent and members of the agent's household."
SECTION 17.1.(rrr)  The following statutes are amended by deleting the word "Section" wherever it appears in uppercase and substituting "Branch": G.S. 18B‑101(5), 18B‑201, 18B‑202, 18B‑203, 18B‑504, 18B‑805, 18B‑902, 18B‑903, 18B‑904, 19‑2.1, 105‑259(b)(15), and 143‑652.1 through 143‑658.
SECTION 17.1.(sss)  G.S. 143‑651 reads as rewritten:
"§ 143‑651.  Definitions.
The following definitions apply in this Article:
…
(4a)	Branch. – The Alcohol Law Enforcement Branch of the State Bureau of Investigation.
...
(23b)	Sanctioned amateur match. – Any match regulated by an amateur sports organization that has been recognized and approved by the Branch.
…
	
…."
SECTION 17.1.(ttt)  G.S. 114‑19(a), recodified as G.S. 143B‑906 by subsection (j) of this act, reads as rewritten:
"(a)	It shall be the duty of the State Bureau of Investigation to receive and collect criminal information, to assist in locating, identifying, and keeping records of criminals in this State, and from other states, and to compare, classify, compile, publish, make available and disseminate any and all such information to the sheriffs, constables, police authorities, courts or any other officials of the State requiring such criminal identification, crime statistics and other information respecting crimes local and national, and to conduct surveys and studies for the purpose of determining so far as is possible the source of any criminal conspiracy, crime wave, movement or cooperative action on the part of the criminals, reporting such conditions, and to cooperate with all officials in detecting and preventing."

MISCELLANEOUS PROVISIONS
SECTION 17.1.(uuu)  The Department of Public Safety shall consolidate ALE and SBI Regions and Regional Offices. These regional offices shall be operational by October 1, 2014.
SECTION 17.1.(vvv)  The Department of Public Safety shall make the following reports on progress implementing this section to the Joint Legislative Oversight Committee on Justice and Public Safety:
(1)	An interim report on or before January 1, 2015.
(2)	A second interim report on or before April 1, 2015.
(3)	A final report on or before October 1, 2015. This report may include any recommendations for changes to applicable statutes.
SECTION 17.1.(xxx)  Subsection (ooo) of this section is effective when it becomes law. The remainder of this section becomes effective July 1, 2014.

Study Merger of State Crime Lab and Office of the State Medical Examiner
SECTION 17.3.  The Joint Legislative Oversight Committee on Justice and Public Safety and the Joint Legislative Oversight Committee on Health and Human Services shall jointly study merging the North Carolina State Crime Laboratory and the Office of the State Medical Examiner into a single independent State agency and shall report their findings and recommendations to the 2015 General Assembly. The study and report required by this section shall include at least the following:
(1)	An examination of whether the quality or quantity of services provided by each agency would improve if the two agencies were merged into a single independent State agency.
(2)	An analysis of potential cost-savings that might be realized as a result of the merger.
(3)	Identification of potential obstacles to the merger.

Ensure Proper Role for Attorney General
SECTION 17.3A.(a)  G.S. 120‑32.6 reads as rewritten:
"§ 120‑32.6.  Certain employment authority.
(a)	Use of Private Counsel. – G.S. 114‑2.3 and G.S. 147‑17 (a) through (c) shall not apply to the General Assembly.
(b)	General Assembly as Client of Attorney General by Operation of Law. – Whenever the validity or constitutionality of an act of the General Assembly or a provision of the Constitution of North Carolina is the subject of an action in any court of this State, if the General Assembly hires outside counsel to represent the General Assembly in connection with that action, the General Assembly shall be deemed to be a client of the Attorney General for purposes of that action as a matter of law.
(c)	General Assembly Counsel Shall Be Lead Counsel. – In those instances when the General Assembly employs counsel in addition to or other than the Attorney General, the Speaker of the House of Representatives and the President Pro Tempore of the Senate may jointly designate the counsel employed by the General Assembly as lead counsel. The lead counsel so designated shall possess final decision‑making authority with respect to the representation, counsel, or service, and other cocounsel shall, consistent with the Rules of Professional Conduct, cooperate with such designated lead counsel.
(d)	The rights provided by this section shall be supplemental to those provided by any other provision of law."
SECTION 17.3A.(b)  This section is effective when it becomes law.

Transfer Private Protective Services Board and Alarm Systems Licensing Board to the Department of Public Safety
SECTION 17.5.(a)  The Private Protective Services Board and the Alarm Systems Licensing Board are hereby transferred to the Department of Public Safety. These transfers shall have all of the elements of a Type II transfer, as described in G.S. 143A‑6.
SECTION 17.5.(b)  The following statutes are amended by deleting "Attorney General" wherever it appears and substituting "Secretary of Public Safety": G.S. 74C‑6, 74C‑7, and 74C‑13.
SECTION 17.5.(c)  G.S. 74C‑4 reads as rewritten:
"§ 74C‑4.  Private Protective Services Board established; members; terms; vacancies; compensation; meetings.
(a)	The Private Protective Services Board is hereby established in the Department of Public Safety to administer the licensing and set educational and training requirements for persons, firms, associations, and corporations engaged in a private protective services profession within this State.
(b)	The Board shall consist of 14 members: the Secretary of Public Safety or the Secretary's designated representative, three persons appointed by the Governor, five persons appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, and five persons appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives. All appointments by the General Assembly shall be subject to the provisions of G.S. 120‑121, and vacancies in the positions filled by those appointments shall be filled pursuant to G.S. 120‑122. One of those persons appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate and all five persons appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives shall be licensees under this Chapter; all other appointees may not be licensees of the Board nor licensed by the Board while serving as Board members. All persons appointed shall serve terms of three years. With the exception of the Secretary of Public Safety or the Secretary's designated representative, no person shall serve more than eight consecutive years on the Board. Board members may continue to serve until their successors have been appointed.
…."
SECTION 17.5.(d)  G.S. 74C‑6, as rewritten by subsection (b) of this section, reads as rewritten:
"§ 74C‑6.  Position of Director created.
The position of Director of the Private Protective Services Board is hereby created within the Department of Public Safety. The Secretary of Public Safety shall appoint a person to fill this full‑time position. The Director's duties shall be to administer the directives contained in this Chapter and the rules promulgated by the Board to implement this Chapter and to carry out the administrative duties incident to the functioning of the Board in order to actively police the private protective services industry to ensure compliance with the law in all aspects."
SECTION 17.5.(e)  G.S. 74D‑4(b) reads as rewritten:
"(b)	The Board shall consist of seven members: the Secretary of Public Safety or his designee; two persons appointed by the Governor, one of whom shall be licensed under this Chapter and one of whom shall be a public member; two persons appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120‑121, one of whom shall be licensed under this Chapter and one of whom shall be a public member; and two persons appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120‑121, one of whom shall be licensed under this Chapter and one of whom shall be a public member."
SECTION 17.5.(f)  G.S. 74D‑5.1 reads as rewritten:
"§ 74D‑5.1.  Position of Director created.
The position of Director of the Alarm Systems Licensing Board is hereby created within the Department of Public Safety. The Secretary of Public Safety shall appoint a person to fill this full‑time position. The Director's duties shall be to administer the directives contained in this Chapter and the rules promulgated by the Board to implement this Chapter and to carry out the administrative duties incident to the functioning of the Board in order to actively police the alarm systems industry to insure compliance with the law in all aspects. The Director may issue a temporary grant or denial of a request for registration subject to final action by the Board at its next regularly scheduled meeting."
SECTION 17.5.(g)  G.S. 74D‑5.2 reads as rewritten:
"§ 74D‑5.2.  Investigative powers of the Secretary of Public Safety.
The Secretary of Public Safety shall have the power to investigate or cause to be investigated any complaints, allegations, or suspicions of wrongdoing or violations of this Chapter involving individuals licensed, or to be licensed, under this Chapter. Any investigation conducted pursuant to this section is deemed confidential and is not subject to review under G.S. 132‑1 until the investigation is complete and a report is presented to the Board. However, the report may be released to the licensee after the investigation is complete but before the report is presented to the Board."

PART XVIII. JUDICIAL DEPARTMENT

SUBPART XVIII‑A. OFFICE OF INDIGENT DEFENSE SERVICES

FINAL REPORT ON CRIMINAL CASE INFORMATION SYSTEM
SECTION 18A.2.  Section 18B.10 of S.L. 2013‑360 reads as rewritten:
"SECTION 18B.10.  The Administrative Office of the Courts, in consultation with the Office of Indigent Defense Services, shall use the sum of three hundred fifty thousand dollars ($350,000) in funds available to the Administrative Office of the Courts for the 2013‑2015 fiscal biennium and the sum of three hundred fifty thousand dollars ($350,000) in funds available to the Office of Indigent Defense Services for the 2013‑2015 fiscal biennium to develop or acquire and to implement a component of the Department's criminal case information system for use by public defenders no later than February 1, 2015. The Administrative Office of the Courts shall make an interim report on the development and implementation of this system by February 1, 2014, and a final report on the completed implementation of the system by July 1, 2015, to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety and to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety."

SUBPART XVIII‑B. ADMINISTRATIVE OFFICE OF THE COURTS

AMEND VARIOUS PROVISIONS REQUIRING REPORTS ON THE OPERATIONS OF THE COURTS
SECTION 18B.1.(a)  G.S. 7A‑343 reads as rewritten:
"§ 7A‑343.  Duties of Director.
The Director is the Administrative Officer of the Courts, and the Director's duties include all of the following:
…
(8)	Prepare and submit an annual report on the work of the Judicial Department to the Chief Justice, and transmit a copy to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety and to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety. The annual report shall include the activities of each North Carolina Business Court site, including the number of new, closed, and pending cases, the average age of pending cases, and the annual expenditures for the prior fiscal year.
…."
SECTION 18B.1.(b)  G.S. 7A‑343.2 reads as rewritten:
"§ 7A‑343.2.  Court Information Technology Fund.
(a)	Fund. – The Court Information Technology Fund is established within the Judicial Department as a special revenue fund. Interest and other investment income earned by the Fund accrues to it. The Fund consists of the following revenues:
(1)	All monies collected by the Director pursuant to G.S. 7A‑109(d) and G.S. 7A‑49.5.
(2)	State judicial facilities fees credited to the Fund under G.S. 7A‑304 through G.S. 7A‑307.
(b)	Use. – Money in the Fund derived from State judicial facilities fees must be used to upgrade, maintain, and operate the judicial and county courthouse phone systems. All other monies in the Fund must be used to supplement funds otherwise available to the Judicial Department for court information technology and office automation needs.
(c)	Report. – The Director must report annually by February 1 of each year to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety. The report must include the following:
(1)	Amounts credited in the preceding year to the Fund.
(2)	Amounts expended in the preceding year from the Fund and the purposes of the expenditures.
(3)	Proposed expenditures of the monies in the Fund."
SECTION 18B.1.(c)  G.S. 7A‑809 reads as rewritten:
"§ 7A‑809.  Reports.
The Conference of Clerks of Superior Court shall, in consultation with the registers of deeds, annually study the status of the individual counties and judicial districts as to whether or not the clerks of superior court or the registers of deeds are implementing G.S. 132‑1.10(f1) and report results of the study to the  Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety and to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety on or before March 1 of each year."
SECTION 18B.1.(d)  Section 15.4 of S.L. 2009‑451 is repealed.
SECTION 18B.1.(e)  Article 7 of Chapter 7A of the General Statutes is amended by adding a new section to read:
"§ 7A‑45.5.  Annual report on Business Court activities.
The Administrative Office of the Courts shall report to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety and to the Chairs of the Joint Legislative Oversight Committee 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."
SECTION 18B.1.(f)  G.S. 15A‑1475 reads as rewritten:
"§ 15A‑1475.  Reports.
The North Carolina Innocence Inquiry Commission shall report annually by February 1 of each year on its activities to the Joint Legislative Oversight Committee on Justice and Public Safety and the State Judicial Council. The report may contain recommendations of any needed legislative changes related to the activities of the Commission. The report shall recommend the funding needed by the Commission, the district attorneys, and the State Bureau of Investigation in order to meet their responsibilities under S.L. 2006‑184. Recommendations concerning the district attorneys or the State Bureau of Investigation shall only be made after consultations with the North Carolina Conference of District Attorneys and the Attorney General."
SECTION 18B.1.(g)  G.S. 7A‑38.6 is repealed.
SECTION 18B.1.(h)  G.S. 7A‑409.1(g) reads as rewritten:
"(g)	The State Judicial Council shall report annually to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety, to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety, and to the Chief Justice no later than December 31 regarding the implementation of S.L. 2006‑184, the act creating the North Carolina Innocence Inquiry Commission, and shall include in its report the statistics regarding inquiries and any recommendations for changes. The House of Representatives and the Senate shall refer the report of the State Judicial Council to the Joint Legislative Oversight Committee on Justice and Public Safety and such other committees as the Speaker of the House of Representatives or the President Pro Tempore of the Senate shall deem appropriate, for their review."
SECTION 18B.1.(i)  Section 18A.1 of S.L. 2013‑360 is repealed.
SECTION 18B.1.(j)  Article 39B of Chapter 7A of the General Statutes is amended by adding a new section to read:
"§ 7A‑498.9.  Annual report on Office of Indigent Defense Services.
The Office of Indigent Defense Services shall report to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety and to the Chairs of the House of Representatives Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety by February 1 of each year on the following:
(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 services, 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 18B.1.(k)  Section 18A.4 of S.L. 2013‑360 reads as rewritten:
"SECTION 18A.4.  The Office of Indigent Defense Services shall issue a request for proposals from private law firms or not‑for‑profit legal representation organizations for the provision of all classes of legal cases for indigent clients in all judicial districts. The Office of Indigent Defense Services shall report on the issuance of this request for proposals to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety and to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety by October 1 of each year. In cases where the proposed contract can provide representation services more efficiently than current costs and ensure that the quality of representation is sufficient to meet applicable constitutional and statutory standards, the Office of Indigent Defense Services shall use private assigned counsel funds to enter into contracts for this purpose. In selecting contracts, the Office of Indigent Defense Services shall consider the cost‑effectiveness of the proposed contract. Disputes regarding the ability of the potential contractor to provide effective representation for clients served by the contract shall be determined by the senior resident superior court judge for the district."

ANNUAL REPORT ON CRIMINAL COURT COST WAIVERS
SECTION 18B.2.  Section 15.10(b) of S.L. 2011‑145 reads as rewritten:
"SECTION 15.10.(b)  The Administrative Office of the Courts shall make the necessary modifications to its information systems to maintain records of all cases in which the judge makes a finding of just cause to grant a waiver of criminal court costs under G.S. 7A‑304(a) and shall report on those waivers to the  Chairs of the Senate Appropriations Committee on Justice and Public Safety, the Chairs of the House Appropriations Subcommittee on Justice and Public Safety, and the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety by February 1 of each year. The report shall aggregate the waivers by the district in which the waiver or waivers were granted and by the name of each judge granting a waiver or waivers."

COMPENSATION OF COURT REPORTERS
SECTION 18B.3.  Section 18B.21 of S.L. 2013‑360 reads as rewritten:
"SECTION 18B.21. The Administrative Office of the Courts, in consultation with the National Center for State Courts, shall study the most effective and efficient deployment of court reporters to produce timely records of court proceedings and the most appropriate and effective compensation for court reporters. The Administrative Office of the Courts shall make an interim report of its findings and recommendations to the Chairs of the House of Representatives Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety and to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety by February 1, 2014, and a final report of its findings and recommendations by January 1, 2015."

TRAINING FOR SUPERIOR AND DISTRICT COURT JUDGES
SECTION 18B.5.  The School of Government at the University of North Carolina at Chapel Hill, in cooperation with the Administrative Office of the Courts, the North Carolina Association of District Court Judges, the North Carolina Conference of Superior Court Judges, and the State Crime Laboratory, shall ensure that the continuing judicial education programs coordinated by the School of Government incorporate content related to the proper custody and handling of biological evidence, including relevant information about the work of the State Crime Laboratory. The topic shall be addressed in continuing legal education programs for superior and district court judges on a regular basis.

ABOLISH two SPECIAL SUPERIOR COURT JUDGESHIPS/authorize two additional business court judges/provide for the appointment of business court judges by the governor in consultation with the chief justice
SECTION 18B.6.(a)  G.S. 7A‑45.1 is amended by adding a new subsection to read:
"(a8)	Notwithstanding any other provision of this section, the two special superior court judgeships held as of April 1, 2014, by judges whose terms expire on January 26, 2016, are abolished when any of the following first occurs:
(1)	Retirement of the incumbent judge.
(2)	Resignation of the incumbent judge.
(3)	Removal from office of the incumbent judge.
(4)	Death of the incumbent judge.
(5)	Expiration of the term of the incumbent judge."
SECTION 18B.6.(b)  G.S. 7A‑45.3 reads as rewritten:
"§ 7A‑45.3.  Superior court judges designated for complex business cases.
(a)	The Governor, in consultation with the Chief Justice, shall appoint up to five special superior court judges as initially provided for in subsections (b) and (c) of this section to hear and decide complex business cases as prescribed by the rules of practice. Any judge so appointed shall be known as a business court judge and shall preside in the business court. If there is more than one business court judge, the Chief Justice may designate one of them as the senior business court judge. If there is no designation by the Chief Justice, the judge with the longest term of service on the court shall serve as senior business court judge until the Chief Justice makes an appointment to the position.
(b)	The three special superior court judges designated by the Chief Justice as of April 1, 2014, as business court judges shall serve as three of the business court judges authorized under subsection (a) of this section until each judge's retirement, resignation, removal from office, or death or until the expiration of that judge's term. Upon the occurrence of each judge's retirement, resignation, removal from office, or death or until the expiration of the judge's term, the Governor shall appoint a successor as provided in subsection (a) of this section.
(c)	Notwithstanding the provisions of G.S. 7A‑45.1, the two additional business court judges shall be filled by appointment of the Governor as provided in subsection (a) of this section upon the retirement, resignation, removal from office, or death or until the expiration of the term of the incumbent judge of each of the two special superior court judgeships held as of April 1, 2014, by judges whose terms expire on April 29, 2015, and October 20, 2015.
(d)	Upon appointment, each business court judge shall serve a term expiring five years from the date that each judge takes office."

AUTHORIZE THE COURT TO ASSESS A FEE FOR THE COSTS OF THE SERVICES OF A PRIVATE HOSPITAL PERFORMING TOXICOLOGICAL TESTING FOR A PROSECUTORIAL DISTRICT
SECTION 18B.14.(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. No costs may be assessed when a case is dismissed. Only upon entry of a written order, supported by findings of fact and conclusions of law, determining that there is just cause, the court may (i) waive costs assessed under this section or (ii) waive or reduce costs assessed under subdivision (7), (8), (8a), (11), (12), or (13) of this section.
…
(7)	For the services of the North Carolina State Crime 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 Laboratory. 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.
(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 North Carolina State Crime Laboratory under subdivision (7) of this subsection.
(8a)	For the services of any private hospital performing toxicological testing under contract with a prosecutorial district, 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 State Treasurer for the support of the General Court of Justice. 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 testing of bodily fluids of the defendant for the presence of alcohol or controlled substances. The costs shall be assessed only if the court finds that the work performed by the local hospital is the equivalent of the same kind of work performed by the North Carolina State Crime Laboratory under subdivision (7) of this subsection.
…
(11)	For the services of an expert witness employed by the North Carolina State Crime Laboratory who completes a chemical analysis pursuant to G.S. 20‑139.1 or a forensic analysis pursuant to G.S. 8‑58.20 and provides testimony about that analysis in a defendant's trial, the district or superior court judge shall, upon conviction of the defendant, order payment of the sum of six hundred dollars ($600.00) to be remitted to the Department of Justice for support of the State Crime Laboratory. This cost shall be assessed only in cases in which the expert witness provides testimony about the chemical or forensic analysis in the defendant's trial and shall be in addition to any cost assessed under subdivision (7) of this subsection.
(12)	For the services of an expert witness employed by a crime laboratory operated by a local government or group of local governments who completes a chemical analysis pursuant to G.S. 20‑139.1 or a forensic analysis pursuant to G.S. 8‑58.20 and provides testimony about that analysis in a defendant's trial, the district or superior court judge shall, upon conviction of the defendant, 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 local law enforcement. This cost shall be assessed only in cases in which the expert witness provides testimony about the chemical or forensic analysis in the defendant's trial and shall be in addition to any cost assessed under subdivision (8) of this subsection.
(13)	For the services of an expert witness employed by a private hospital performing toxicological testing under contract with a prosecutorial district who completes a chemical analysis pursuant to G.S. 20‑139.1 and provides testimony about that analysis in a defendant's trial, the district or superior court judge shall, upon conviction of the defendant, order payment of the sum of six hundred dollars ($600.00) to be remitted to the State Treasurer for the support of the General Court of Justice. This cost shall be assessed only in cases in which the expert witness provides testimony about the chemical analysis in the defendant's trial and shall be in addition to any cost assessed under subdivision (8a) of this subsection."
SECTION 18B.14.(b)  This section becomes effective December 1, 2014, and applies to fees assessed or collected on or after that date.

PART XIX. DEPARTMENT OF CULTURAL RESOURCES

CAP GRANTS FROM STATE AID TO LIBRARIES FUND
SECTION 19.2.  The Department of Cultural Resources shall not allocate a grant to a municipal or single-county library from the Aid to Public Libraries Fund that exceeds four hundred seventy-five thousand dollars ($475,000) for the 2014‑2015 fiscal year.

Queen Anne's Revenge Project Special Fund
SECTION 19.4.  Part 1 of Article 2 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑53.3. Queen Anne's Revenge Project.
(a)	Fund. – The Queen Anne's Revenge Project Special Fund is created as a special, interest‑bearing revenue fund within the Department of Cultural Resources, Office of Archives and History. The Fund shall consist of all receipts derived from private donations, grant funds, and earned revenue. The revenue in the Fund may be used only for contracted services, personal services and operations, conference and meeting expenses, travel, staff salaries, operations for laboratory needs, museum exhibits, and other administrative costs related to the Queen Anne's Revenge Project. The staff of the Office of Archives and History and the Department of Cultural Resources shall determine how the funds will be used for the purposes of the Queen Anne's Revenge Project, and those funds are hereby appropriated for those purposes.
(b)	Application. – This section applies to the Queen Anne's Revenge, the historic shipwreck owned by the State and managed by the Department of Cultural Resources, Office of Archives and History.
(c)	Reports. – The Department of Cultural Resources shall submit a report by September 30 of each year to the Joint Legislative Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on General Government, the Senate Appropriations Committee on General Government and Information Technology, and the Fiscal Research Division. This report shall include the source and amount of all funds credited to the Fund and the purpose and amount of all expenditures from the Fund during the prior fiscal year."

Exempt DCR From Operating Rules Requirements Related to Historic Sites and Museums
SECTION 19.5.(a)  G.S. 121‑7.3 reads as rewritten:
"§ 121‑7.3.  Admission and related activity fees and operating hours.
The Department of Cultural Resources may charge a reasonable admission and related activity fee to any historic site or museum administered by the Department. Admission and related activity fees collected under this section are receipts of the Department and shall be deposited in the appropriate special fund. The revenue collected pursuant to this section shall be used only for the individual historic site or museum where the receipts were generated. The Secretary may adopt rules necessary to carry out the provisions of this section. The Department is exempt from the requirements of Chapter 150B of the General Statutes and G.S. 12‑3.1 when adopting, amending, or repealing rules for operating hours and admission fees or related activity fees at historic sites and museums. The Department shall submit a report to the Joint Legislative Commission on Governmental Operations on the amount and purpose of a fee change within 30 days following its effective date."
SECTION 19.5.(b)  G.S. 143B‑71 reads as rewritten:
"§ 143B‑71.  Tryon Palace Commission – creation, powers and duties.
There is hereby created the Tryon Palace Commission of the Department of Cultural Resources with the power and duty to adopt, amend and rescind rules and regulations concerning the restoration and maintenance of the Tryon Palace complex, and other powers and duties as provided in Article 2 of Chapter 121 of the General Statutes of North Carolina, including the authority to charge reasonable admission and related activity fees. The Commission is exempt from the requirements of Chapter 150B of the General Statutes and G.S. 12‑3.1 when adopting, amending, or repealing rules for operating hours and admission fees or related activity fees at Tryon Palace Historic Sites and Gardens. The Commission shall submit a report to the Joint Legislative Commission on Governmental Operations on the amount and purpose of a fee change within 30 days following its effective date."
SECTION 19.5.(c)  G.S. 143B‑73 reads as rewritten:
"§ 143B‑73.  U.S.S. North Carolina Battleship Commission – creation, powers, and duties.
There is hereby created the U.S.S. North Carolina Battleship Commission of the Department of Cultural Resources with the power and duty to adopt, amend, and rescind rules and regulations under and not inconsistent with the laws of this State necessary in carrying out the provisions and purposes of this Part.
…
(3)	The Commission shall adopt rules and regulations consistent with the provisions of this Chapter. The Commission is exempt from the requirements of Chapter 150B of the General Statutes and G.S. 12‑3.1 when adopting, amending, or repealing rules for operating hours and admission fees or related activity fees at the U.S.S. North Carolina Battleship. The Commission shall submit a report to the Joint Legislative Commission on Governmental Operations on the amount and purpose of a fee change within 30 days following its effective date."

Closure of Mountain Gateway Museum Prohibited
SECTION 19.6.  The Department of Cultural Resources, Division of History Museums, shall not close the Mountain Gateway Museum during the 2014‑2015 fiscal year.

DCR Budget Integrity
SECTION 19.7.  In the development of the 2015‑2017 biennial continuation budget, the Office of State Budget and Management shall restore various underfunded accounts for Archives and Records, Historic Preservation, and Personal Services within the Department of Cultural Resources.

Modify Roles of Roanoke Island Commission and Department of Cultural Resources in Managing Roanoke Island Festival Park
SECTION 19.8.  Part 27A of Article 2 of Chapter 143B of the General Statutes reads as rewritten:
"Part 27A. Roanoke Island Commission.
"§ 143B‑131.1.  Commission established.
There is established the Roanoke Island Commission within the Department of Cultural Resources to advise and assist the Secretary of the Department of Cultural Resources in the protection, preservation, development, and interpretation of the historical and cultural assets of Roanoke Island.
"§ 143B‑131.2.  Roanoke Island Commission – Purpose, powers, and duties.
(a)	The Commission is created to fundraise for and to operate and administer the Roanoke Island Festival Park and all other properties under the administration of the Department of Cultural Resources located on Roanoke Island having historical significance to the State of North Carolina, Dare County, or the Town of Manteo, except as otherwise determined by the Department.
(b)	The Commission shall have the following powers and duties:
(1)	To advise the Secretary of the Department of Transportation and adopt rules on matters pertaining to, affecting, and encouraging restoration, preservation, and enhancement of the appearance, maintenance, and aesthetic quality of U.S. Highway 64/264 and the U.S. 64/264 Bypass travel corridor on Roanoke Island and the grounds on Roanoke Island Festival Park. However, the local government that has jurisdiction over the affected portion of the travel corridor shall process the applications for and issue the certificates of appropriateness and shall be responsible for the enforcement of those certificates and any rules adopted pursuant to this subdivision that apply to the portion of the travel corridor within the jurisdiction of the local government. No reimbursement shall be made by the Commission to the local government for the processing of applications or issuance of certificates of appropriateness, or the enforcement of those certificates or the rules.
(2)	To operate Roanoke Island Festival Park, including the Elizabeth II State Historic Site and Visitor Center and the Elizabeth II as permanent memorials commemorating the Roanoke Voyages, 1584‑1587.
	
(4)	To advise the Secretary of the Department of Cultural Resources on matters pertinent to historical and cultural events on Roanoke Island.
(5)	With the assistance of the Department of Cultural Resources, to identify, preserve, and protect properties located on Roanoke Island having historical significance to the State of North Carolina, Dare County, or the Town of Manteo consistent with applicable State laws and rules.
(6)	With the approval of the Secretary of the Department of Cultural Resources, establish and collect a charge for admission to any property or event operated by the Commission.
	
(8)	To cooperate with the Secretary and Department of Cultural Resources, the Secretary and Department of Transportation, the Secretary and Department of Environment and Natural Resources, and other governmental agencies, officials, and entities, and provide them with assistance and advice.
(9)	To adopt and enforce the bylaws, rules, and guidelines, not inconsistent with the rules and guidelines of the Department of Cultural Resources, that the Commission deems to be reasonably necessary in order to carry out its powers and duties. Notwithstanding the foregoing, Chapter 150B of the General Statutes does not apply to the adoption of rules by the Commission.
(10)	To fundraise, accept monies, gifts, donations, grants, or devises, which funds will be used by the Commission for purposes of carrying out its duties and purposes herein set forth. The Friends of Elizabeth II, Inc., shall use the balance of any unencumbered funds that were transferred to it pursuant to this subdivision only for expenses of the Commission or the properties operated by the Commission that are identified as operating or for maintenance costs by the Commission and that are requested by the Commission.
(11)	By cooperative arrangement with other agencies, groups, individuals, and other entities, to coordinate and schedule historical and cultural events on Roanoke Island.
(12)	Make recommendations to the Secretary of Cultural Resources concerning personnel and budgetary matters.

(15)	The provisions of G.S. 143‑129 and Article 3 of Chapter 143 of the General Statutes do not apply to purchases by the Roanoke Island Commission of equipment, supplies, and services. However, the Commission shall: (i) submit all proposed contracts for supplies, materials, printing, equipment, and contractual services that exceed one million dollars ($1,000,000) authorized by this subdivision to the Attorney General or the Attorney General's designee for review as provided in G.S. 114‑8.3; and (ii) include in all proposed contracts to be awarded by the Commission under this subdivision a standard clause which provides that the State Auditor and internal auditors of the Commission may audit the records of the contractor during and after the term of the contract to verify accounts and data affecting fees and performance. The Commission shall not award a cost plus percentage of cost agreement or contract for any purpose.
"

"§ 143B‑131.4.  Commission reports.
The Commission shall submit a quarterly report to the Chairs of the House Appropriations Subcommittee on General Government and the Chairs of the Senate Appropriations Committee on General Government and Information Technology and to the Fiscal Research Division of the General Assembly. The report shall include:
…
"§ 143B‑131.5.  Roanoke Island Commission – Additional powers and duties; transfer of assets and liabilities.
(a)	To the extent that Chapter 1194 of the 1981 Session Laws is inconsistent with this Part, the powers and duties in this Part shall control.
…
"§ 143B‑131.6.  Roanoke Island Commission – Members; terms; vacancies; expenses; officers.
(a)	The Commission shall consist of 22 voting members appointed as follows:
(1)	Six members appointed by the Governor;
(2)	Six members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, at least two of whom reside in Dare County;
(3)	Six members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives, at least two of whom reside in Dare County; and
(4)	The following persons, or their designees shall serve ex officio:
	
b.	The Attorney General;
	
d.	The Secretary of the Department of Transportation;
e.	The Chair of the Dare County Board of Commissioners; and
f.	The Mayor of Manteo.
(5)	The Secretary of the Department of Cultural Resources, or the Secretary's designee, shall serve ex officio as a nonvoting member.
…
(c)	The Governor shall appoint a chair biennially from among the membership of the Commission. The initial term of the chair shall commence on October 1, 1994. The Commission shall elect from its membership a vice‑chair, a secretary, and treasurer to serve two‑year terms.
…
(g)	The chair shall convene the Commission. Meetings shall be held as often as necessary, but not less than four times a year.
…
(i)	The Commission shall make its recommendations by March 15 of each year that terms expire for appointments for terms commencing July 1 of that year.
…
"§ 143B‑131.8A.  Historic Roanoke Island Fund.
(a)	The Historic Roanoke Island Fund is established as a nonreverting enterprise fund and shall be administered by the Department of Cultural Resources. All operating revenues generated by the Roanoke Island Commission, including revenues collected from any property operated by the Roanoke Island Commission, together with all gifts, grants, donations, or other financial assets of whatever kind received or held by the Roanoke Island Commission shall be credited to the Historic Roanoke Island Fund and shall be used only (i) for the expenses of operating and maintaining the Roanoke Island Commission and the properties managed by the Roanoke Island Commission, including the salaries and benefits of Roanoke Island Festival Park staff, (ii) to carry out any of the other duties and purposes set out by this Part, or (iii) for capital expenditures for the properties operated by the Commission.
(b)	The Department of Cultural Resources shall transfer to the Fund on a monthly basis a pro rata share of the utilities, maintenance, and operating expenses of the Outer Banks History Center, which is located in the Roanoke Island Festival Park. The funds received pursuant to this subsection shall be credited to the Historic Roanoke Island Fund.
(c)	The Department of Cultural Resources shall credit to the Historic Roanoke Island Fund all rental proceeds received by the Department from the rental properties located near the Outer Banks Island Farm.
"§ 143B‑131.9.  Roanoke Island Festival Park staff.
The Commission shall serve as a search committee to seek out, interview, and recommend to the Secretary of the Department of Cultural Resources an Executive Director of Roanoke Island Festival Park. All employees of the Commission shall be transferred to the Department of Cultural Resources and shall be paid from the Historic Roanoke Island Fund as provided in G.S. 143B‑181.8A. Except as otherwise provided in this section, or G.S. 126-5, all employees who are transferred from the Commission to the Department of Cultural Resources shall retain the same designations under the North Carolina Human Resources Act, Chapter 126 of the General Statutes, as they had prior to the transfer.
…."

PART XX. DEPARTMENT OF INSURANCE

Insurance Regulatory Charge
SECTION 20.2.(a)  The percentage rate to be used in calculating the insurance regulatory charge under G.S. 58-6-25 is six and one‑half percent (6.5%) for the 2015 calendar year.
SECTION 20.2.(b)  G.S. 58‑6‑25 reads as rewritten:
"§ 58‑6‑25.  Insurance regulatory charge.
…
(d)	Use of Proceeds. – The Insurance Regulatory Fund is created in the State treasury, under the control of the Office of State Budget and Management. The proceeds of the charge levied in this section and all fees collected under Articles 69 through 71 of this Chapter and under Articles 9 and 9C of Chapter 143 of the General Statutes shall be credited to the Fund. The Fund shall be placed in an interest‑bearing account and any interest or other income derived from the Fund shall be credited to the Fund. Moneys in the Fund may be spent only pursuant to appropriation by the General Assembly and in accordance with the line item budget enacted by the General Assembly. The Fund is subject to the provisions of the Executive Budget Act, except that no unexpended surplus of the Fund shall revert to the General Fund. All money credited to the Fund shall be used to reimburse the General Fund for the following:
…
(11)	Money appropriated to the North Carolina Industrial Commission for support of the Commission's duties excepted from its statutory fee authority as set forth in G.S. 97‑73(e).
(e)	Definitions. – The following definitions apply in this section:
(1)	Repealed by Session Laws 2003‑284, s. 43.2, effective for taxable years beginning on or after January 1, 2004.
(1a)	Captive insurance company. – Defined in G.S. 105‑228.3.
(2)	Insurance company. – A company that pays the gross premiums tax levied in G.S. 105‑228.5 and G.S. 105‑228.8.
(3)	Insurer. – Defined in G.S. 105‑228.3."
SECTION 20.2.(c)  Subsection (a) of this section is effective when it becomes law. Subsection (b) of this section is effective January 1, 2015.

PART XXI. RESERVED

PART XXII. GENERAL ASSEMBLY

CREATE JOINT LEGISLATIVE COMMITTEE ON GENERAL GOVERNMENT
SECTION 22.1.(a)  Chapter 120 of the General Statutes is amended by adding a new Article to read:
"Article 34.
"Joint Legislative Oversight Committee on General Government.
"§ 120‑295.  Creation and membership of Joint Legislative Oversight Committee on General Government.
(a)	The Joint Legislative Oversight Committee on General Government is established. The Committee consists of 14 members as follows:
(1)	Seven members of the Senate appointed by the President Pro Tempore of the Senate, at least two of whom are members of the minority party; and
(2)	Seven members of the House of Representatives appointed by the Speaker of the House of Representatives, at least two of whom are members of the minority party.
(b)	Terms on the Committee are for two years and begin on the convening of the General Assembly in each odd‑numbered year. Members may complete a term of service on the Committee even if they do not seek reelection or are not reelected to the General Assembly, but resignation or removal from service in the General Assembly constitutes resignation or removal from service on the Committee.
(c)	A member continues to serve until a successor is appointed. A vacancy shall be filled within 30 days by the officer who made the original appointment.
"§ 120‑296.  Purpose and powers of Committee.
(a)	The Joint Legislative Oversight Committee on General Government shall examine on a continuing basis the services provided by the departments and agencies set out in this subsection in order to make ongoing recommendations to the General Assembly on ways to improve the effectiveness, efficiency, and quality of State government services. The Committee has the following powers and duties:
(1)	Study the programs, organization, operations, and policies of the following agencies:
a.	Department of Administration.
b.	Department of State Auditor.
c.	Department of Cultural Resources.
d.	Housing Finance Agency.
e.	Department of Insurance.
f.	Office of Administrative Hearings.
g.	Office of State Human Resources.
h.	Department of Revenue.
i.	Department of Secretary of State.
j.	State Ethics Commission.
k.	Department of State Treasurer.
(2)	Review compliance of budget actions directed by the General Assembly.
(3)	Monitor expenditures, deviations, and changes made by the agencies set out in subsection (a) of subdivision (1) of this section to the certified budget.
(4)	Review policy changes as directed by law.
(5)	Receive presentations of reports from agencies directed in the law, including audits, studies, and other reports.
(6)	Review any issues that arise during the interim period between sessions of the General Assembly and provide a venue for any of these issues to be heard in a public setting.
(7)	Monitor the quality of services provided by general government agencies to other agencies and the public.
(8)	Identify opportunities for general government agencies to coordinate and collaborate to eliminate duplicative functions.
(9)	Have presentations and reports on any other matters that the Committee considers necessary to fulfill its mandate.
(b)	The Committee may make reports to the General Assembly. A report to the General Assembly may contain legislation needed to implement a recommendation of the Committee.
"§ 120‑297.  Organization of Committee.
(a)	The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate a cochair of the Joint Legislative Oversight Committee on General Government. The Committee shall meet upon the joint call of the cochairs.
(b)	A quorum of the Committee is five members. No action may be taken except by a majority vote at a meeting at which a quorum is present. While in the discharge of its official duties, the Committee has the powers of a joint committee under G.S. 120‑19 and G.S. 120‑19.1 through G.S. 120‑19.4.
(c)	Members of the Committee shall receive subsistence and travel expenses as provided in G.S. 120‑3.1. The Committee may contract for consultants or hire employees in accordance with G.S. 120‑32.02. The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work. Upon the direction of the Legislative Services Commission, the Directors of Legislative Assistants of the Senate and of the House of Representatives shall assign clerical staff to the Committee. The expenses for clerical employees shall be borne by the Committee.
(d)	The Committee cochairs may establish subcommittees for the purpose of examining issues relating to services provided by particular divisions within the State's general government departments.
"§ 120‑298.  Reports to Committee.
Whenever a department, office, or agency set out in subdivision (a)(1) of G.S. 120‑296 is required by law to report to the General Assembly or to any of its permanent committees or subcommittees on matters affecting the services the department or agency provides, the department or agency shall transmit a copy of the report to the cochairs of the Joint Legislative Oversight Committee on General Government."
SECTION 22.1.(b)  This section is effective when it becomes law.

Study of the Costs of Health Insurance Mandates
SECTION 22.2.(a)  The Legislative Research Commission may study the issue of existing health insurance mandates. The goal of the study would be to provide a complete picture of the overall impact of the health insurance mandates on individuals, employers, health insurance companies, the providers of health care, the General Fund, and the State economy. To that end, the study should consider the following:
(1)	The costs to individuals and employers of the health insurance mandates, including increased premiums or other cost sharing. This analysis shall include estimates of additional premium costs attributable to particular mandates.
(2)	The cost to the State for mandates that apply to the State Health Plan for Teachers and State Employees. This analysis shall include estimates of additional premium costs attributable to particular mandates.
(3)	The cost to health insurance companies of adding mandated coverage to their plans, including the costs of modifying existing plans to include new mandates.
(4)	The benefits to individuals of the health insurance mandates, including an estimate of how many individuals benefit from particular mandates and a comparison of the costs of mandated covered procedures to the costs of the procedures if coverage were not mandated.
(5)	The benefits to employers through increased productivity, less time absent from work, or other appropriate benefits from mandating the insurance coverage of particular services or treatments.
(6)	For mandates of a screening or preventative nature, a cost estimate of the savings attributable to early detection and treatment.
(7)	The benefits to providers of services mandated to be covered by health insurance.
(8)	Any other related items deemed appropriate by the Legislative Research Commission.
SECTION 22.2.(b)  The Legislative Research Commission may study the creation of a process to review the costs of proposed future health benefit mandates and make recommendations based on its study. Such a process should be designed to aid the General Assembly to better understand the complete costs and benefits of proposed health insurance mandates, both to the individual beneficiaries of the mandates and to the State's health system and economy. Such a process should be more involved than the current actuarial note process for mandates that apply to the State Health Plan for Teachers and State Employees and should consider the same items listed in the subdivisions of subsection (a) of this section for proposed future health benefit mandates.
SECTION 22.2.(c)  In order to assess the feasibility and cost of (i) the study contemplated by subsection (a) of this section and (ii) the review process contemplated by subsection (b) of this section, the Legislative Research Commission may engage the services of a contract manager to design, issue, and manage requests for information (RFIs) from experts in health insurance and economics who may be able to study health insurance mandates.
SECTION 22.2.(d)  The Legislative Research Commission may use up to the sum of five hundred thousand dollars ($500,000), which is appropriated in this act for fiscal year 2014‑2015, nonrecurring, for the studies authorized under this section and for engaging the services of a contract manager as provided in subsection (c) of this section.

statute of repose study commission
SECTION 22.3.(a)  There is created the Statute of Repose Study Commission.
SECTION 22.3.(b)  Membership. – The Statute of Repose Study Commission shall consist of 10 members, five members of the Senate appointed by the President Pro Tempore of the Senate and five members of the House of Representatives appointed by the Speaker of the House of Representatives.
SECTION 22.3.(c)  Cochairs; Vacancies; Quorum. – The Statute of Repose Study Commission shall have two cochairs, one designated by the President Pro Tempore of the Senate and one designated by the Speaker of the House of Representatives from among their respective appointees. The Commission shall meet upon the joint call of the cochairs. Any vacancy on the Commission shall be filled by the original appointing authority. A majority of the members of the Commission constitutes a quorum.
SECTION 22.3.(d)  Compensation; Administration. – Members of the Statute of Repose Study Commission shall receive per diem, subsistence, and travel allowances in accordance with G.S. 120‑3.1. The Commission, while in the discharge of its official duties, may exercise all powers provided for under G.S. 120‑19 and G.S. 120‑19.1 through G.S. 120‑19.4. The Commission may meet in the Legislative Building or the Legislative Office Building.
The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Commission in its work. The House of Representatives' and the Senate's Directors of Legislative Assistants shall assign clerical staff to the Commission, and the expenses relating to the clerical employees shall be borne by the Commission.
SECTION 22.3.(e)  Purpose. – The Statute of Repose Study Commission shall study whether the 10‑year period of repose set out in G.S. 1‑52(16) should be amended, or whether other change in the laws of North Carolina should be enacted, in light of the opinion of the United States Supreme Court in CTS Corp. v. Waldburger et al., No. 13‑339 (June 9, 2014) (slip op.). The Commission shall report its findings and recommendations and any legislative proposals to the 2015 Regular Session of the General Assembly.
SECTION 22.3.(f)  Commission Termination. – The Statute of Repose Study Commission shall terminate on the filing of its report or upon the convening of the 2015 General Assembly, whichever is earlier.
SECTION 22.3.(g)  The Legislative Services Commission shall allocate monies to fund the work of the Statute of Repose Study Commission from funds available to the General Assembly.

PART XXII-A. OFFICE OF STATE HUMAN RESOURCES

discontinue use of automatic scoring and screening of applications for state government employment
SECTION 22A.1.(a)  The Office of State Human Resources (OSHR) shall discontinue, as soon as practicable, utilization of its current online job application and career portal providing automatic scoring and screening of applications for State government employment. In order to effectuate the provisions of this section, the State Chief Information Officer shall not allocate any funds to continue or renew licenses for the online job application and career portal currently utilized by OSHR.
SECTION 22A.1.(b)  Nothing in this section is intended, nor shall it be construed, to impair any valid contract relating to its subject matter.

Office of State Human RESOURCES/JLOCGG Review of Temporary Solutions
SECTION 22A.2.(a)  The Joint Legislative Oversight Committee on General Government (Committee) created by Section 22.1 of this act shall review the effectiveness and efficiency of the Temporary Solutions staffing service of the Office of State Human Resources (OSHR). As part of its review, the Committee shall:
(1)	Review the OSHR's administrative surcharge charged to State agencies.
(2)	Review the administrative structure of the Temporary Solutions staffing service.
(3)	Review the total number of full‑time equivalent positions, workload per staff, and operations costs of the Temporary Solutions staffing service.
(4)	Review the status of the accounts billable and payable of the Temporary Solutions staffing service, and the average time each State agency takes to remit payment for services rendered.
(5)	Compare the Temporary Solutions staffing service to the same or similar staffing services in other states and the private sector.
(6)	Examine whether State agencies would be better served by allowing agencies to contract with the private sector for temporary staffing services.
(7)	Consider any other matters pertaining to the Temporary Solutions staffing service.
By January 30, 2015, the Committee shall report to the 2015 General Assembly on its recommendations and any legislative proposals relating to the Temporary Solutions staffing service.
SECTION 22A.2.(b)  By September 1, 2014, the OSHR shall:
(1)	Conduct a customer satisfaction survey that focuses on measuring State agencies' perceptions of the Temporary Solutions staffing service. At a minimum, the survey shall provide for ratings in the categories of promptness in placements, responsiveness to agency staffing needs, and identification and referral of qualified persons for temporary staffing requirements.
(2)	Report the results of the survey required by this subsection to the Committee, along with OSHR's plan to address any issues identified by the survey.

Extend Reorganization Through Reduction Program
SECTION 22A.3.(a)  Section 8.3 of S.L. 2013‑382 reads as rewritten:
"SECTION 8.3.  This Part is effective when it becomes law and expires June 30, 2015. The Office of State Personnel and the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations on January 31, 2014, April 30, 2014, September 1, 2014, January 31, 2015, April 30, 2015, and September 1, 2015."
SECTION 22A.3.(b)  This section is effective when it becomes law.

PART XXIII. OFFICE OF THE GOVERNOR

Education and Workforce Innovation Program
SECTION 23.1.(a)  Of the funds appropriated for the Education and Workforce Innovation Program, established under G.S. 115C‑64.11, up to five percent (5%) each fiscal year may be used by the Office of the Governor to provide technical assistance and administrative assistance, including staff, to the commission and reimbursement expenses for the Commission and five percent (5%) each fiscal year shall be allocated to North Carolina New Schools Project. North Carolina New Schools Project shall use the funds to establish a peer learning network for all grantees to ensure high-quality implementation of grant programs that lead to strong results for students. The peer learning network shall (i) share effective practices and lessons learned among grantees; (ii) bring together grantee teachers and leaders for intensive development that sustains focus on instruction, academic rigor, and skills development; and (iii) benchmark grantee data against State and national standards. North Carolina New Schools Project shall also advise grantees in fund-raising.
SECTION 23.1.(b)  G.S. 115C‑64.16(f) reads as rewritten:
"(f)	Reporting Requirements. – No later than September 1 of each year, a grant recipient shall submit to the Commission an annual report for the preceding grant year that describes the academic progress made by the students and the implementation of program initiatives."
SECTION 23.1.(c)  Funds appropriated for the Education and Workforce Innovation Program authorized by G.S. 115C‑64.16 shall not revert at the end of each fiscal year but shall remain available until expended.
SECTION 23.1.(d)  G.S. 115C‑64.16(d) reads as rewritten:
"(d)	Matching Private and Local Funds. –   All grant applicants must match fifty percent (50%) of all State dollars. Matching funds shall not include other State funds. Matching funds may include in‑kind contributions."
SECTION 23.1.(e)  G.S. 115C‑64.15 reads as rewritten:
"§ 115C‑64.15.  North Carolina Education and Workforce Innovation Commission.
…
(b)	The Commission shall consist of the following 14 members:
(1)	The Secretary of Commerce.
(2)	The State Superintendent of Public Instruction.
(3)	The Chair of the State Board of Education.
(4)	The President of The University of North Carolina.
(5)	The President of the North Carolina Community College System.
(6)	Three members appointed by the Governor who have experience in education.
(7)	Three members appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives, as provided in G.S. 120‑121, who have experience in businesses operating in North Carolina.
(8)	Three members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, as provided in G.S. 120‑121, who have experience in businesses operating in North Carolina.
(b1)	Members appointed by the Governor or the General Assembly shall serve for three‑year terms and can be reappointed at the completion of their terms.
…."
SECTION 23.1.(f)  This section becomes effective June 30, 2014.

PART XXIV. OFFICE OF STATE BUDGET AND MANAGEMENT

STAFFING ANALYSIS OF STATE AGENCY BUSINESS FUNCTIONS AND REDEPLOYMENT OF RESOURCES FROM HR/PAYROLL MANAGEMENT
SECTION 24.3.  Section 6.7 of S.L. 2007‑323 is repealed.

PART XXV. OFFICE OF THE STATE AUDITOR

PRIVATE AUDIT OF PENSION FUND
SECTION 25.1.(a)  In addition to all other audits and reports required by law, the State Treasurer shall prepare and issue, for the 2014‑2015 fiscal year, a set of financial statements regarding the investment programs for the Retirement Systems enumerated in G.S. 147‑69.2(b)(8). These financial statements shall be audited by a commercial independent third‑party audit firm selected and engaged by the State Auditor based upon selection criteria developed by the State Auditor in consultation with the State Treasurer. The audit firm's report and the financial statements shall be provided to the State Controller and the General Assembly no later than January 1, 2016.
SECTION 25.1.(b)  Supplementary information accompanying the financial statements required by subsection (a) of this section shall include a discussion of the Retirement Systems' risk and returns compared to benchmarks, total management fees and incentives paid, and comparisons to peer cost benchmarks.
SECTION 25.1.(c)  The State Treasurer shall transfer to the State Auditor, from the assets of the Retirement Systems, the funds necessary to conduct the third‑party audit required under this section.

Expand the State Auditor's Authority to Publish Reports and Provide Discretion When Charging and Collecting Costs of Certain Audits
SECTION 25.2.  G.S. 147‑64.6(c) reads as rewritten:
"(c)	The Auditor shall be responsible for the following acts and activities:
…
(3)	The Auditor, on the Auditor's own initiative and as often as the Auditor deems necessary, or as requested by the Governor or the General Assembly, shall, to the extent deemed practicable and consistent with the Auditor's overall responsibility as contained in this act, make or cause to be made audits of all or any part of the activities of the State agencies.
(4)	The Auditor, at the Auditor's own discretion, may, in selecting audit areas and in evaluating current audit activity, consider and utilize, in whole or in part, the relevant audit coverage and applicable reports of the audit staffs of the various State agencies, independent contractors, and federal agencies. The Auditor shall coordinate, to the extent deemed practicable, the auditing conducted within the State to meet the needs of all governmental bodies.
…
(6)	The Auditor is authorized and directed in the Auditor's reports of audits or reports of special investigations to make any comments, suggestions, or recommendations the Auditor deems appropriate concerning any aspect of such agency's activities and operations.
(7)	The Auditor may charge and collect from each examining and licensing board the actual cost of each audit of such board. Costs collected under this subdivision shall be based on the actual expense incurred by the Auditor's office in making such audit and the affected agency shall be entitled to an itemized statement of such costs. Amounts collected under this subdivision shall be deposited into the general fund as nontax revenue.
(8)	The Auditor shall examine as often as may be deemed necessary the accounts kept by the Treasurer, and if the Auditor discovers any irregularity or deficiency therein, unless the same be rectified or explained to his satisfaction, report the same forthwith in writing to the General Assembly, with copy of such report to the Governor and Attorney General. In addition to regular audits, the Auditor shall check the treasury records at the time a Treasurer assumes office (not to succeed himself or herself), and therein charge the Treasurer with the balance in the treasury, and shall check the Treasurer's records at the time the Treasurer leaves office to determine that the accounts are in order.
(9)	The Auditor may examine the accounts and records of any bank or financial institution relating to transactions with the State Treasurer, or with any State agency, or the Auditor may require banks doing business with the State to furnish the Auditor information relating to transactions with the State or State agencies.
(10)	The Auditor may, as often as the Auditor deems advisable, conduct a detailed review of the bookkeeping and accounting systems in use in the various State agencies which are supported partially or entirely from State funds. Such examinations will be for the purpose of evaluating the adequacy of systems in use by these agencies and institutions. In instances where the Auditor determines that existing systems are outmoded, inefficient, or otherwise inadequate, the Auditor shall recommend changes to the State Controller. The State Controller shall prescribe and supervise the installation of such changes, as provided in G.S. 143B‑426.39(2).
(11)	The Auditor shall, through appropriate tests, satisfy himself or herself concerning the propriety of the data presented in the Comprehensive Annual Financial Report and shall express the appropriate auditor's opinion in accordance with generally accepted auditing standards.
(12)	The Auditor shall provide a report to the Governor and Attorney General, and other appropriate officials, of such facts as are in the Auditor's possession which pertain to the apparent violation of penal statutes or apparent instances of malfeasance, misfeasance, or nonfeasance by an officer or employee.
(13)	At the conclusion of an audit, the Auditor or the Auditor's designated representative shall discuss the audit with the official whose office is subject to audit and submit necessary underlying facts developed for all findings and recommendations which may be included in the audit report. On audits of economy and efficiency and program results, the auditee's written response shall be included in the final report if received within 30 days from receipt of the draft report.
(14)	The Auditor shall notify the General Assembly, the Governor, the Chief Executive Officer of each agency audited, and other persons as the Auditor deems appropriate that an audit report has been published, its subject and title, and the locations, including State libraries, at which the report is available. The Auditor shall then distribute copies of the report only to those who request a report. The copies shall be in written or electronic form, as requested. He shall also file a copy of the audit report in the Auditor's office, which will be a permanent public record. In addition, the Auditor may publish on his or her Web site any reports from audits of State agencies not directly conducted by the Auditor. Nothing in this subsection shall be construed as authorizing or permitting the publication of information whose disclosure is otherwise prohibited by law.
…."

State Auditor/Report Evidence of Criminal Misconduct
SECTION 25.3.(a)  G.S. 147‑64.6(c) is amended by adding a new subdivision to read:
"(c)	The Auditor shall be responsible for the following acts and activities:
…
(19)	Whenever the Auditor believes that information received or collected by the Auditor may be evidence of a violation of any of the provisions of Chapter 138A of the General Statutes, Chapter 120C of the General Statutes, or Article 14 of Chapter 120 of the General Statutes, the Auditor shall report that information to the State Ethics Commission and the Secretary of State as appropriate. The Auditor shall be bound by interpretations issued by the State Ethics Commission as to whether or not any information reported by the Auditor under this subdivision involves or may involve a violation of Chapter 138A of the General Statutes, Chapter 120C of the General Statutes, or Article 14 of Chapter 120 of the General Statutes. Nothing in this subdivision shall be construed to limit the Auditor's authority under subdivision (1) of this subsection.
(20)	Whenever the Auditor believes that information received or collected by the Auditor may be evidence of criminal misconduct, the Auditor shall report that information to either the State Bureau of Investigation or the District Attorney for the county where the alleged misconduct occurred. Nothing in this subdivision shall be construed to limit the Auditor's authority under subdivision (1) of this subsection."

PART XXVI. DEPARTMENT OF REVENUE

MODIFY TAX LOCATOR SERVICES CAP
SECTION 26.1.(a)  G.S. 105‑243.1(e) reads as rewritten:
"(e)	Use. – The fee is a receipt of the Department and must be applied to the costs of collecting overdue tax debts. The proceeds of the fee must be credited to a special account within the Department and may be expended only as provided in this subsection. The proceeds of the fee may not be used for any purpose that is not directly and primarily related to collecting overdue tax debts. The Department may apply the proceeds of the fee for the purposes listed in this subsection. The remaining proceeds of the fee may be spent only pursuant to appropriation by the General Assembly. The fee proceeds do not revert but remain in the special account until spent for the costs of collecting overdue tax debts. The Department and the Office of State Budget and Management must account for all expenditures using accounting procedures that clearly distinguish costs allocable to collecting overdue tax debts from costs allocable to other purposes and must demonstrate that none of the fee proceeds are used for any purpose other than collecting overdue tax debts.
The Department may apply the fee proceeds for the following purposes:
…
(3)	To pay for taxpayer locator services, not to exceed two hundred fifty thousand dollars ($250,000) a year.
…."
SECTION 26.1.(b)  This section becomes effective July 1, 2014.

PART XXVII. DEPARTMENT OF THE SECRETARY OF STATE

Secretary of State/Statutory Changes Related to the Disposition of Settlement Funds
SECTION 27.1.(a)  G.S. 114‑2.4A(c), as enacted by Section 6.6(a) of this act, reads as rewritten:
"(c)	Exception. – This section does not apply to any of the following:
(1)	Funds received by the Department of Health and Human Services to the extent those funds represent the recovery of previously expended Medicaid funds.
(2)	Funds received by the Office of the Secretary of State for the Auction Rate Securities Investigation Special Fund established by Section 24.2 of S.L. 2009‑451 to maintain uniformity in the administration of State securities laws, to protect the investing public, and to promote financial capital formation and economic development."
SECTION 27.1.(b)  This section becomes effective July 1, 2014, and applies to settlements entered into on or after that date and other final orders or judgments of the court entered on or after that date.

PART XXVIII. RESERVED

PART XXIX. RESERVED

PART XXX. DEPARTMENT OF ADMINISTRATION

ELIMINATE AUTHORITY FOR STATE CONTRIBUTION TO COUNTY VETERANS SERVICE PROGRAMS
SECTION 30.1.  G.S. 165‑6(9) is repealed.

CLOSURE OF CERTAIN NC DIVISION OF VETERANS AFFAIRS OFFICES PROHIBITED
SECTION 30.2.  The District Offices of the North Carolina Division of Veterans Affairs located in the Town of Garner and the City of Wilson shall not be closed during the 2013‑2015 fiscal biennium.

Transfer Internship Council to Office of Governor/Eliminate State Youth Advisory Council/Transfer Youth general assembly and fund to General Assembly
SECTION 30.3.(a)  The North Carolina Internship Council is transferred from the Department of Administration to the Office of the Governor in the same manner as a Type I transfer pursuant to G.S. 143A‑6.
SECTION 30.3.(b)  Part 18 of Article 9 of Chapter 143B of the General Statutes, G.S. 143B‑417 through G.S. 143B‑419, is recodified as Part 4 of Article 1 of Chapter 143B, G.S. 143B‑31 through G.S. 143B‑33.
SECTION 30.3.(c)  G.S. 143B‑418, as recodified by subsection (b) of this section, reads as rewritten:
"§ 143B‑32.  North Carolina Internship Council – members; selection; quorum; compensation; clerical, etc., services.
The North Carolina Internship Council shall consist of 15 members, including one member to be designated by and to serve at the pleasure of the President Pro Tempore of the Senate, one member to be designated by and to serve at the pleasure of the Speaker of the House of Representatives and the following 14 members to be appointed by the Governor to a two‑year term commencing on July 1 of odd‑numbered years: two representatives of community colleges; four representatives of The University of North Carolina system; two representatives of private colleges or universities; three representatives of colleges or universities with an enrollment of less than 5,000 students; and two former interns.
At the end of the respective terms of office of the 13 members of the Council appointed by the Governor, the appointment of their successors shall be for terms of two years and until their successors are appointed and qualify. The Governor may remove any member appointed by the Governor.
Any appointment to fill a vacancy on the Council created by the resignation, dismissal, death, or disability of a member shall be for the balance of the unexpired term.
The Council shall meet at the call of the chairman or upon written request of at least five members.
The Governor shall designate a member of the Council as chairman to serve at the pleasure of the Governor.
Members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138‑5.
A majority of the Council shall constitute a quorum for the transaction of business.
All clerical and other services required by the Council shall be supplied by the Secretary of Administration."
SECTION 30.3.(d)  G.S. 143B‑419, recodified as G.S. 143B‑33 by subsection (b) of this section, reads as rewritten:
"§ 143B‑33.  North Carolina Internship Council – committees for screening applications.
The North Carolina Internship Council may designate one representative from each office or department enumerated in G.S. 143B‑31 to serve on a committee to assist pursuant to guidelines adopted by the Council, in the screening and selection of applicants for student internships."
SECTION 30.3.(e)  Part 7 of Article 9 of Chapter 143B, except for G.S. 143B‑387.1, of the General Statutes is repealed.
SECTION 30.3.(f)  G.S. 143B‑387.1 is recodified as Article 11A of Chapter 120 of the General Statutes, G.S. 120‑58.1, and entitled "North Carolina Youth General Assembly."
SECTION 30.3.(g)  G.S. 143B‑387.1, recodified as G.S. 120‑58.1 by subsection (f) of this section, reads as rewritten:
"§ 120‑58.1.  North Carolina Youth General Assembly Fund.
The North Carolina Youth General Assembly Fund is created as a special and nonreverting fund. Conference registration fees, gifts, donations, or contributions to or for the North Carolina Youth General Assembly (YGA) program shall be credited to the Fund.
The Fund shall be used solely to support planning and execution of the YGA program."
SECTION 30.3.(h)  The General Assembly shall coordinate and conduct the North Carolina Youth General Assembly program.

Transfer DVC to DPS/Allow DPS to Administer Sexual Assault & Rape Crisis Ctr Fund and Domestic Violence Ctr Funds
SECTION 30.4.(a)  The Domestic Violence Commission is transferred from the Department of Administration to the Department of Public Safety as a Type I transfer, as defined in G.S. 143A‑6.
SECTION 30.4.(b)  G.S. 143B‑602 reads as rewritten:
"§ 143B‑602.  Powers and duties of the Secretary of Public Safety.
The Secretary of Public Safety shall have the powers and duties as are conferred on the Secretary by this Article, delegated to the Secretary by the Governor, and conferred on the Secretary by the Constitution and laws of this State. These powers and duties include the following:
…
(8)	Other powers and duties. – The Secretary has the following additional powers and duties:
…
i.	Making grants to centers for victims of sexual assault or rape crisis, the North Carolina Coalition Against Sexual Assault, Inc., centers for victims of domestic violence, and The North Carolina Coalition Against Domestic Violence, Inc."
SECTION 30.4.(c)  Part 10C of Article 9 of Chapter143B of the General Statutes, G.S. 143B‑394.15 and G.S. 143B‑394.16, is recodified as Part 8 of Article 13 of Chapter 143B of the General Statutes, G.S. 143B‑1300 and G.S. 143B‑1301, and entitled "Domestic Violence Commission."
SECTION 30.4.(d)  G.S. 143B‑394.15, as recodified by subsection (c) of this section, reads as rewritten:
"§ 143B‑1300.  Domestic Violence Commission established; purpose; membership; transaction of business.
(a)	Establishment. – There is established the Domestic Violence Commission. The Commission shall be located within the Department of Public Safety for organizational, budgetary, and administrative purposes.
…
(c)	Membership. – The Commission shall consist of 39 members, who reflect the geographic and cultural regions of the State, as follows:
(1)	Nine persons appointed by the Governor, one of whom is a clerk of superior court; one of whom is an academician who is knowledgeable about domestic violence trends and treatment; one of whom is a member of the medical community; one of whom is a United States Attorney for the State of North Carolina or that person's designee; one of whom is a member of the North Carolina Bar Association who has studied domestic violence issues; one of whom is a representative of a victims' service program eligible for funding by the Governor's Crime Commission; one of whom is a member of the North Carolina Coalition Against Domestic Violence; one of whom is a former victim of domestic violence; and one of whom is a member of the public at large.
(2)	Nine persons appointed by the General Assembly, upon recommendation of the President Pro Tempore of the Senate, one of whom is a member of the Senate; one of whom is a district court judge; one of whom is a district attorney or assistant district attorney; one of whom is a representative of the law enforcement community with specialized knowledge of domestic violence issues; one of whom is a county manager; one of whom is a representative of a community legal services agency who works with domestic violence victims; one of whom is a representative of the linguistic and cultural minority communities; one of whom is a representative of a victims' service program eligible for funding by the Governor's Crime Commission; and one of whom is a member of the public at large.
(3)	Nine persons appointed by the General Assembly, upon recommendation of the Speaker of the House of Representatives, one of whom is a member of the House of Representatives; one of whom is a magistrate; one of whom is a member of the business community; one of whom is a district court judge; one of whom is a representative of a victims' service program eligible for funding by the Governor's Crime Commission;  one of whom is a representative of the law enforcement community with specialized knowledge of domestic violence issues; one of whom provides offender treatment and is approved by the Domestic Violence Commission as provided in G.S. 50B‑3(a)(12); one of whom is a representative of the linguistic and cultural minority communities; and one of whom is a public member.
…
(k)	Office Space. – The Department of Public Safety shall provide office space in Raleigh for use as offices by the Domestic Violence Commission, and the Department of Public Safety shall receive no reimbursement from the Commission for the use of the property during the life of the Commission.
(l)	Staffing. – The Secretary of the Department of Public Safety shall be responsible for staffing the Commission."
SECTION 30.4.(e)  Part 10D of Article 9 of Chapter 143B of the General Statutes, G.S. 143B‑394.21, is recodified as Part 9 of Article 13 of Chapter 143B of the General Statutes, G.S. 143B‑1320, and entitled "Sexual Assault and Rape Crisis Center Fund."
SECTION 30.4.(f)  G.S. 143B‑394.21, as recodified by subsection (e) of this section, reads as rewritten:
"§ 143B‑1320.  Sexual Assault and Rape Crisis Center Fund.
(a)	The Sexual Assault and Rape Crisis Center Fund is established within the State Treasury. The fund shall be administered by the Department of Public Safety and shall be used to make grants to centers for victims of sexual assault or rape crisis and to the North Carolina Coalition Against Sexual Assault, Inc. This fund shall be administered in accordance with the provisions of the State Budget Act under Chapter 143C of the General Statutes. The Department of Public Safety shall make quarterly grants to each eligible sexual assault or rape crisis center and to the North Carolina Coalition Against Sexual Assault, Inc. To be eligible to receive funds under this section, a sexual assault or rape crisis center shall meet the following requirements:
…
(b)	Funds appropriated from the General Fund to the Department of Public Safety for the Sexual Assault and Rape Crisis Center Fund shall be distributed in two shares. The North Carolina Coalition Against Sexual Assault, Inc., and sexual assault or rape crisis centers whose services are confined to rape crisis or sexual assault services shall receive an equal share of thirty‑five percent (35%) of the funds. Organizations whose services contain sexual assault or rape crisis services and domestic violence services or other support services shall receive an equal share of the remaining sixty‑five percent (65%) of the funds."
SECTION 30.4.(g)  G.S. 50B‑9 reads as rewritten:
"§ 50B‑9.  Domestic Violence Center Fund.
The Domestic Violence Center Fund is established within the State Treasury. The fund shall be administered by the Department of Public Safety and shall be used to make grants to centers for victims of domestic violence and to The North Carolina Coalition Against Domestic Violence, Inc. This fund shall be administered in accordance with the provisions of the Executive Budget Act. The Department of Public Safety shall make quarterly grants to each eligible domestic violence center and to The North Carolina Coalition Against Domestic Violence, Inc. Each grant recipient shall receive the same amount. To be eligible to receive funds under this section, a domestic violence center must meet the following requirements:
(1)	It shall have been in operation on the preceding July 1 and shall continue to be in operation.
(2)	It shall offer all of the following services: a hotline, transportation services, community education programs, daytime services, and call forwarding during the night and it shall fulfill other criteria established by the Department of Public Safety.
(3)	It shall be a nonprofit corporation or a local governmental entity."
SECTION 30.4.(h)  G.S. 114‑2.7 reads as rewritten:
"§ 114‑2.7.  Reporting system and database on certain domestic‑violence‑related homicides; reports by law enforcement agencies required; annual report to the General Assembly.
The Attorney General's Office, in consultation with the North Carolina Domestic Violence Commission, the North Carolina Sheriffs' Association, and the North Carolina Association of Chiefs of Police, shall develop a reporting system and database that reflects the number of homicides in the State where the offender and the victim had a personal relationship, as defined by G.S. 50B‑1(b). The information in the database shall also include the type of personal relationship that existed between the offender and the victim, whether the victim had obtained an order pursuant to G.S. 50B‑3, and whether there was a pending charge for which the offender was on pretrial release pursuant to G.S. 15A‑534.1. All State and local law enforcement agencies shall report information to the Attorney General's Office upon making a determination that a homicide meets the reporting system's criteria. The report shall be made in the format adopted by the Attorney General's Office. The Attorney General's Office shall report to the Joint Legislative Committee on Domestic Violence, no later than February 1 of each year, with the data collected for the previous calendar year."
SECTION 30.4.(i)  G.S. 161‑11.2 reads as rewritten:
"§ 161‑11.2.  Fees for domestic violence centers.
Thirty dollars ($30.00) of each fee collected by a register of deeds for issuance of a marriage license pursuant to G.S. 161‑10(a)(2) shall be forwarded by the register of deeds to the county finance officer, who shall forward the funds to the Department of Public Safety to be credited to the Domestic Violence Center Fund established under G.S. 50B‑9. The register of deeds shall forward the fees to the county finance officer as soon as practical. The county finance officer shall forward the fees to the Department of Public Safety within 60 days after receiving the fees. The Register of Deeds shall inform the applicants that thirty dollars ($30.00) of the fee for a marriage license shall be used for Domestic Violence programs."

PART XXXI. HOUSING FINANCE AGENCY

WORKFORCE HOUSING LOAN PROGRAM
SECTION 31.1.(a)  Of the funds appropriated in this act to the North Carolina Housing Trust Fund, the sum of ten million dollars ($10,000,000) in nonrecurring funds for the 2014‑2015 fiscal year shall be used by the North Carolina Housing Finance Agency for the purpose of making loans for qualified North Carolina low‑income housing development.
SECTION 31.1.(b)  The following definitions apply in this section:
(1)	Code. – As defined in G.S. 105‑228.90.
(2)	Qualified North Carolina low‑income housing development. – A qualified low‑income project or building that is allocated a federal tax credit under section 42(h)(1) of the Code.
(3)	Qualified residential unit. – A housing unit that meets the requirements of section 42 of the Code.
SECTION 31.1.(c)  Of the funds referred to in subsection (a) of this section, the Housing Finance Agency shall, pursuant to criteria established by the Agency, make loans to a taxpayer who is allocated a federal low‑income housing tax credit under section 42 of the Code in the 2015 calendar year to construct or substantially rehabilitate a qualified North Carolina low‑income housing development. The criteria shall support the financing of similar types of developments as provided in G.S. 105‑129.42, and shall be developed in partnership with developers of low‑income housing in the State who receive a federal low‑income housing tax credit under section 42 of the Code. The Agency shall take into consideration all eligible sources of funding for each development project, including whether there are other eligible sources of funding available for the development project. No loan made to a taxpayer under this subsection shall exceed one million dollars ($1,000,000) if the low‑income housing development is located in a low‑income county, as designated by the Agency; seven hundred fifty thousand dollars ($750,000) in a moderate‑income county, as designated by the Agency; and two hundred fifty thousand dollars ($250,000) in a high‑income county, as designated by the Agency.
SECTION 31.1.(d)  By February 1, 2016, the Housing Finance Agency shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the number of loans made under this section, the amount of each loan, and whether the low‑income housing development is located in a low‑, moderate‑, or high‑income county, as designated by the Agency.

PART XXXII. RESERVED

PART XXXIII. DEPARTMENT OF THE STATE TREASURER

Receipt-Supported Compliance Positions for Retirement System
SECTION 33.1.  Two receipt‑supported positions are hereby created in the Department of State Treasurer, Retirement Systems Division, in order to staff a compliance unit within the Division. The unit is tasked with reducing the risk of fraud, abuse, and waste within the retirement systems. Receipts for the positions may come from investment income from, contributions to, or other assets of the retirement systems managed by the Department. The Department may use up to two hundred twenty-five thousand dollars ($225,000) to fund these two positions.

INVESTMENTS INTERNALIZATION
SECTION 33.2.  Notwithstanding any other provision of this act, funds appropriated by this act to the Department of Treasurer for the Investments Division for Investments Internalization shall be allocated to budget code 1210 instead of budget code 1510.

PART XXXIV. DEPARTMENT OF TRANSPORTATION

STATE AID TO MUNICIPALITIES APPROPRIATION BASELINE
SECTION 34.1.  G.S. 136‑41.1 reads as rewritten:
"§ 136‑41.1.  Appropriation to municipalities; allocation of funds generally; allocation to Butner.
(a)	There is annually appropriated out of the State Highway Fund a sum equal to ten and four‑tenths percent (10.4%) of the net amount after refunds that was produced during the fiscal year by the tax imposed under Article 36C of Chapter 105 of the General Statutes and on the equivalent amount of alternative fuel taxed under Article 36D of that Chapter. One‑half of the amount appropriated shall be allocated in cash on or before October 1 of each year to the cities and towns of the State in accordance with this section. The second one‑half of the amount appropriated shall be allocated in cash on or before January 1 of each year to the cities and towns of the State in accordance with this section. The appropriation from the Highway Fund shall be based on revenue collected during the fiscal year preceding the date the distribution is made.
Seventy‑five percent (75%) of the funds appropriated for cities and towns shall be distributed among the several eligible municipalities of the State in the percentage proportion that the population of each eligible municipality bears to the total population of all eligible municipalities according to the most recent annual estimates of population as certified to the Secretary of Revenue by the State Budget Officer. This annual estimation of population shall include increases in the population within the municipalities caused by annexations accomplished through July 1 of the calendar year in which these funds are distributed. Twenty‑five percent (25%) of said fund shall be distributed among the several eligible municipalities of the State in the percentage proportion that the mileage of public streets in each eligible municipality which does not form a part of the State highway system bears to the total mileage of the public streets in all eligible municipalities which do not constitute a part of the State highway system.
It shall be the duty of the mayor of each municipality to report to the Department of Transportation such information as it may request for its guidance in determining the eligibility of each municipality to receive funds under this section and in determining the amount of allocation to which each is entitled. Upon failure of any municipality to make such report within the time prescribed by the Department of Transportation, the Department of Transportation may disregard such defaulting unit in making said allotment.
The funds to be allocated under this section shall be paid in cash to the various eligible municipalities on or before October 1 and January 1 of each year as provided in this section. Provided that eligible municipalities are authorized within the discretion of their governing bodies to enter into contracts for the purpose of maintenance, repair, construction, reconstruction, widening, or improving streets of such municipalities at any time after January 1 of any calendar year in total amounts not to exceed ninety percent (90%) of the amount received by such municipality during the preceding fiscal year, in anticipation of the receipt of funds under this section during the next fiscal year, to be paid for out of such funds when received.
The Department of Transportation may withhold each year an amount not to exceed one percent (1%) of the total amount appropriated for distribution under this section for the purpose of correcting errors in allocations: Provided, that the amount so withheld and not used for correcting errors will be carried over and added to the amount to be allocated for the following year.
The word "street" as used in this section is hereby defined as any public road maintained by a municipality and open to use by the general public, and having an average width of not less than 16 feet. In order to obtain the necessary information to distribute the funds herein allocated, the Department of Transportation may require that each municipality eligible to receive funds under this section submit to it a statement, certified by a registered engineer or surveyor of the total number of miles of streets in such municipality. The Department of Transportation may in its discretion require the certification of mileage on a biennial basis.
…."

CLARIFY DOT PRIVATE DEVELOPER REPORTING
SECTION 34.2.  G.S. 136‑28.6 reads as rewritten:
"§ 136‑28.6.  Participation by the Department of Transportation with private developers.
…
(h)	The Secretary shall report in writing, on a quarterly basis, to the Joint Legislative Commission on Governmental Operations on all agreements entered into between a private developer and the Department of Transportation for participation in private engineering and construction contracts under this section, as well as (i) agreements by counties and municipalities to participate in private engineering and construction contracts under subsection (i) of this section and (ii) pass‑through funding from private developers to counties or municipalities for State transportation projects.
(i)	Counties and municipalities may participate financially in private engineering, land acquisition, and construction contracts for transportation projects which meet the requirements of subsection (b) of this section within their jurisdiction.
…."

REPEAL RIGHT TURN ON RED REPORT
SECTION 34.3.  G.S. 20‑158(b)(2)d. is repealed.

TURNPIKE AUTHORITY ANNUAL AUDIT DATE CHANGE
SECTION 34.4.  G.S. 136‑89.193 reads as rewritten:
"§ 136‑89.193.  Annual plan of work; annual and quarterly reports.
(a)	Annual Plan of Work. – The Authority shall annually develop a plan of work for the fiscal year, describing the activities and projects to be undertaken, accompanied by a budget. This annual plan of work shall be subject to the concurrence of the Board of Transportation.
(b)	Annual Reports. – The Authority shall, promptly following the close of each fiscal year, submit an annual report of its activities for the preceding fiscal year and an annual audit of its books and accounts for the preceding fiscal year to the Governor, the General Assembly, and the Department of Transportation. The report and audit shall be submitted no later than October 31 of the fiscal year in which the report and audit are completed.
…."

DEPARTMENT OF TRANSPORTATION OUT-OF-STATE TRAVEL
SECTION 34.5.  Expenditures for out‑of‑state travel by the Department of Transportation for the 2014‑2015 fiscal year and all subsequent fiscal years shall not exceed the amount expended during the 2009‑2010 fiscal year. For purposes of this section, "expenditures for out‑of‑state travel" includes transportation, conference, registration, and education expenses, lodging, and meals for Department of Transportation employees traveling outside of the State.

Highway use tax and Fuel excise tax changes
SECTION 34.6.(a)  Section 34.29 of S.L. 2013‑360, as amended by Section 8.1 of S.L. 2013‑363, is repealed.
SECTION 34.6.(b)  G.S. 105‑449.106(b) is repealed.
SECTION 34.6.(c)  Subsection (b) of this section becomes effective for taxable years beginning on or after January 1, 2015.

CONVERSION OF PAPER TITLES
SECTION 34.7.(a)  G.S. 20‑58.4A is amended by adding a new subsection to read:
"(l)	The Division may convert an existing paper title to an electronic lien upon request of a primary lienholder. The Division or a party contracting with the Division under this section is authorized to collect a fee not to exceed three dollars ($3.00) for each conversion."
SECTION 34.7.(b)  G.S. 20‑63(h) is amended by adding a new subdivision to read:
"(11)	Conversion of an existing paper title to an electronic lien upon request of a primary lienholder."

REMOTE DRIVERS LICENSE RENEWAL
SECTION 34.8.(a)  G.S. 20‑7(f) reads as rewritten:
"(f)	Duration and Renewal of Licenses. – Drivers licenses shall be issued and renewed pursuant to the provisions of this subsection:
…
(6)	Remote renewal. – The Division may offer remote renewal of a drivers license issued by the Division. For purposes of this subdivision, "remote renewal" means renewal of a drivers license by mail, telephone, electronic device, or other secure means approved by the Commissioner.
a.	Requirements. – To be eligible for remote renewal under this subdivision, a person must meet all of the following requirements:
1.	The license holder possesses a valid, unexpired Class C drivers license that was issued when the person was at least 18 years old.
2.	The license holder's current license includes no restrictions other than a restriction for corrective lenses.
3.	The license holder attests, in a manner designated by the Division, that (i) the license holder is a resident of the State and currently resides at the address on the license to be renewed, (ii) the license holder's name as it appears on the license to be renewed has not changed, and (iii) all other information required by the Division for an in‑person renewal under this Article has been provided completely and truthfully.
4.	The most recent renewal was an in‑person renewal and not a remote renewal under this subdivision.
5.	The license holder is otherwise eligible for renewal under this subsection.
b.	Waiver of requirements. – When renewing a drivers license pursuant to this subdivision, the Division may waive the examination and photograph that would otherwise be required for the renewal.
c.	Duration of remote renewal. – A renewed drivers license issued to a person by remote renewal under this subsection expires on the birthday of the licensee in the fourth year after issuance.
d.	Rules. – The Division shall adopt rules to implement this subdivision.
e.	Federal law. – Nothing in this subdivision shall be construed to supersede any more restrictive provisions for renewal of drivers licenses prescribed by federal law or regulation."
SECTION 34.8.(b)  This section is effective when it becomes law and applies to drivers licenses renewed on or after the Division of Motor Vehicles adopts rules under G.S. 20‑7(f)(6)d., as enacted by subsection (a) of this section.

DEPARTMENT OF TRANSPORTATION AIRCRAFT FLEET
SECTION 34.10.(a)  The Division of Aviation of the Department of Transportation shall sell the following aircraft from its fleet as expeditiously as possible in order to modernize the fleet:
(1)	Sikorsky S‑76C helicopter.
(2)	Cessna 550 Citation Bravo airplane.
Proceeds from these sales as well as any future sales under the plan required by subsection (b) of this section shall be credited to a nonreverting reserve within the Highway Fund to be used for future aircraft or equipment acquisitions by the Division of Aviation. The Division shall not acquire or dispose of additional aviation assets prior to its report to the Joint Legislative Transportation Oversight Committee required by subsection (c) of this section.
SECTION 34.10.(b)  The Division of Aviation shall develop a plan to further reduce operating requirements and optimize its fleet to fulfill its regional passenger and photogrammetry missions, addressing, at a minimum, the following:
(1)	Asset utilization.
(2)	Assets recommended for disposal or acquisition.
(3)	Contracted services.
(4)	Cost efficiencies.
(5)	Recommendations for adjustments to passenger transport rates.
(6)	Interagency coordination of assets and personnel.
SECTION 34.10.(c)  The Division shall report on the plan required by subsection (b) of this section to the Joint Legislative Transportation Oversight Committee no later than October 1, 2014.

Highway Maintenance improvement Program and PAVEMENT PRESERVATION PROGRAM
SECTION 34.11.(a)  G.S. 143B‑350(f) reads as rewritten:
"(f)	Duties of the Board. – The Board of Transportation has the following duties and powers:
…
(4)	To approve a schedule of all major transportation improvement projects and their anticipated cost. This schedule is designated the Transportation Improvement Program. The Board shall publish the schedule and make copies available for distribution. The document that contains the Transportation Improvement Program, or a separate document that is published at the same time as the Transportation Improvement Program, shall include the anticipated funding sources for the improvement projects included in the Program, a list of any changes made from the previous year's Program, and the reasons for the changes.
(4a)	To approve a schedule of State highway maintenance projects and their anticipated cost. This schedule is designated the Highway Maintenance Improvement Program and is established in G.S. 136‑44.3A. The Board shall publish the schedule on the Department's Web site by April 1 of each year. The document that contains the Highway Maintenance Improvement Program shall include the anticipated funding sources for the improvement projects included in the Highway Maintenance Improvement Program, a list of any changes made from the previous year's Highway Maintenance Improvement Program, and the reasons for the changes.
(5)	To consider and advise the Secretary of Transportation upon any other transportation matter that the Secretary may refer to it.
…."
SECTION 34.11.(b)  Article 2A of Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136‑44.3A. Highway Maintenance Improvement Program.
(a)	Definitions. – The following definitions apply in this Article:
(1)	Cape seal treatment. – A chip seal treatment followed by a slurry seal treatment.
(2)	Chip seal treatment. – A type of pavement preservation treatment applied to existing asphalt pavement. The treatment involves spraying an asphalt emulsion onto the roadway, applying a layer of aggregate chips, and rolling the chips into the emulsion. This term includes single, double, and triple chip seal treatments.
(3)	Highway Maintenance Improvement Program. – The schedule of State highway maintenance projects required under G.S. 143B‑350(f)(4a).
(4)	Highway Maintenance Improvement Program Needs Assessment. – A report of the amount of funds needed, the number of affected lane miles, and the percentage of the primary and secondary system roads that are rated to need a resurfacing or pavement preservation treatment within the Highway Maintenance Improvement Program's three‑year time period but are not programmed due to funding constraints.
(5)	Microsurfacing treatment. – A type of pavement preservation treatment that involves mixing fine aggregate, asphalt emulsion, minerals, water, and a polymer additive and applying the mixture to the roadway. 
(6)	Pavement preservation treatment. – Include full width surface treatments used to extend or renew the pavement life prior to resurfacing.
(7)	Rehabilitation. – A contract resurfacing maintenance program that involves applying multiple layers of pavement that exceed two inches.
(8)	Resurfacing. – A contract resurfacing program that involves applying one layer that does not exceed two inches of pavement.
(9)	Slurry seal treatment. – A type of pavement preservation treatment that involves mixing fine aggregate, asphalt emulsion, minerals, and water and applying the mixture to the roadway.
(b)	Road Quality Improvement of Pavement Preservation Treatments. – It is the intent of the General Assembly that (i) the Department use asphalt pavement preservation treatments that are high quality, long lasting, and provide a smooth road surface and (ii) the Department increase its contractual use of slurry seals on secondary system roads and microsurfacing treatments on primary system roads for pavement preservation treatments. Except as otherwise provided in this section, the Department shall only use slurry seal treatment, microsurfacing treatment, triple chip seal treatment, or cape seal treatment for asphalt pavement preservation treatments.
(c)	Highway Maintenance Improvement Program. – After the annual inspection of roads within the State highway system, each highway division shall determine and report to the Chief Engineer on the need for rehabilitation, resurfacing, or pavement preservation treatments. The Chief Engineer shall establish a three‑year priority list for each highway division based on the Chief Engineer's estimate of need. In addition, the Chief Engineer shall establish a three‑year improvement schedule, sorted by county, for rehabilitation, resurfacing, and pavement preservation treatment activities. The schedule shall be based on the amount of funds appropriated to the contract resurfacing program and the pavement preservation program in the fiscal year preceding the issuance of the Highway Maintenance Improvement Program for all three years of the Highway Maintenance Improvement Program. State funding for projects included in the Highway Maintenance Improvement Program shall be limited to funds appropriated from the State Highway Fund. 
(d)	Contract Maintenance Resurfacing Program Letting Schedule. – Beginning in the 2015‑2016 fiscal year, and based on the amount of funds appropriated in the prior fiscal year by the General Assembly to the Department for the contract maintenance resurfacing program, the Department shall let contracts that total at least seventy percent (70%) of contract resurfacing program funds included in the certified budget annually by September 1.
(e)	Single Chip Seal Treatment Prohibited on Certain Roads, Streets, and Access Routes. – Except as authorized in subsection (f) of this section, and unless used in combination with a slurry seal treatment or microsurfacing treatment, the Department shall not use chip seal treatment on primary roads, subdivision streets, or access routes for Surface Transportation Assistance Act Dimensioned Vehicles. 
(f)	Authorized Use of Single Chip Seal Treatment on Secondary Roads. – The Department may use single chip seal treatments on secondary roads only under any of the following conditions:
(1)	The secondary road has a daily traffic volume of less than 100 vehicles.
(2)	The chip seal treatment is used in combination with a slurry seal treatment or microsurfacing treatment.
(3)	The condition of the secondary road requires a rough surface to improve traction, such as a secondary road in a mountainous community or another area with low skid resistance. 
(g)	Report – The Department shall submit the Highway Maintenance Improvement Program and Highway Maintenance Improvement Program Needs Assessment to the General Assembly by April 1 each year. If the General Assembly is in session, the Department shall report to the House of Representatives Appropriations Subcommittee on Transportation, the Senate Appropriations Committee on the Department of Transportation, and the Fiscal Research Division. If the General Assembly is not in session, the Department shall report to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division."
SECTION 34.11.(c)  G.S. 136‑44.3 reads as rewritten:
"§ 136‑44.3.  Report on the condition of the State highway system and maintenance funding needs.
The Department shall establish performance standards for the maintenance and operation of the State highway system. In each even‑numbered year, the Department of Transportation shall survey the condition of the State highway system and shall prepare a report of the findings of the survey. The report shall provide both quantitative and qualitative descriptions of the condition of the system and shall provide estimates of the following:
(1)	The annual cost to meet and sustain the established performance standards for the primary and secondary highway system, to include: (i) routine maintenance and operations, (ii) system preservation, and (iii) pavement and bridge rehabilitation.
(2)	Projected system condition and corresponding optimal funding requirements for a seven‑year plan to sustain established performance standards.
(3)	Any significant variations in system conditions among highway divisions.
(4)	An assessment of the level of congestion throughout the primary highway system based on traffic data, and a ranking of the most congested areas based on travel time reliability and the average number of congested hours, together with the Department's recommendations for congestion reduction and mobility improvement.

…."
SECTION 34.11.(d)  G.S. 136‑44.16 reads as rewritten:
"§ 136‑44.16.  Authorized use of contract maintenance resurfacing program funds.
(a)	Of the contract maintenance resurfacing program funds appropriated by the General Assembly to the Department of Transportation, an amount not to exceed fifteen percent (15%) of the Board of Transportation's allocation of these funds may be used for widening existing narrow pavements.
(b)	The use of slurry seal and microsurfacing treatments for pavement preservation treatments are authorized uses of contract maintenance resurfacing program funds."
SECTION 34.11.(e)  2014‑2015 Contract Maintenance Resurfacing Program Letting Schedule. – Beginning in the 2014‑2015 fiscal year, and based on the amount of funds appropriated in the prior fiscal year by the General Assembly to the Department for the contract maintenance resurfacing program, the Department shall let contracts that total at least sixty percent (60%) of contract resurfacing program funds included in its certified budget by September 1, 2014. The Department shall let contracts that total a minimum of seventy percent (70%) of the current fiscal year's contract maintenance resurfacing program funds by October 1, 2014.
SECTION 34.11.(f)  Article 2A of Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136‑44.17.  Pavement preservation program.
(a)	Program Established. – The Department of Transportation shall establish the pavement preservation program.
(b)	Eligible Activities or Treatments. – Applications eligible for funding under the pavement preservation program include the following preservation activities or treatments for asphalt pavement structures:
(1)	Chip seals, slurry seals, and cape seals.
(2)	Microsurfacing.
(3)	Profile milling not covered by resurfacing.
(4)	Asphalt rejuvenators.
(5)	Open graded asphalt friction course.
(6)	Overlays less than 1,000 feet in length.
(7)	Diamond grinding.
(8)	Joint sealing.
(9)	Dowel bar retrofit.
(10)	Partial‑depth or full-depth repairs and reclamations.
(11)	Ultra‑thin whitetopping.
(12)	Thin lift and sand asphalt overlays.
(c)	Ineligible Activities or Treatments. – The pavement preservation program shall not include the following preservation activities or treatments:
(1)	Contract resurfacing activities or major pavement rehabilitation treatments and pretreatments that are used in combination with a resurfacing treatment, such as profile milling or chip seals.
(2)	Routine maintenance activities used to maintain and preserve the condition of roads. Treatments include, but are not limited to, asphalt crack sealing, pothole patching, rut filling, cleaning of roadside ditches and structures, shoulder maintenance, and retracing of pavement markings.
(3)	Maintenance and preservation activities performed on bridges or culverts.
(4)	Activities related to positive guidance or signal maintenance program functions."
SECTION 34.11.(g)  Establishment of Account. – The Department of Transportation shall establish a new account within its maintenance account to receive funds allocated under this section for pavement preservation. Except for slurry seal and microsurfacing treatments, the Department shall only use funds from this account to pay for eligible pavement preservation activities and treatments listed in G.S. 136‑44.17(b), as enacted by subsection (f) of this section.
SECTION 34.11.(h)  2014‑2015 Outsourcing Target. – Of funds allocated in this act for pavement preservation, no more than eighty‑five percent (85%) may be used for projects undertaken by the Department, with the remaining funds used for projects outsourced to private contractors.
SECTION 34.11.(i)  Future Outsourcing Targets. – The Department shall increase its use of outsourcing of pavement preservation activities to reach the following targets for outsourcing of pavement preservation projects:
(1)	Thirty percent (30%) of pavement preservation program funds allocated by the 2015‑2016 fiscal year.
(2)	Fifty‑five percent (55%) of pavement preservation program funds allocated by the 2016‑2017 fiscal year.
(3)	Eighty percent (80%) of pavement preservation program funds allocated by the 2017‑2018 fiscal year and subsequent fiscal years thereafter.
SECTION 34.11.(j)  Minimum Lane Mile Treatment. – From funds allocated in this act for pavement preservation, the Department shall treat a minimum of 3,300 lane miles with eligible pavement preservation treatments and activities listed in G.S. 136‑44.17(b), as enacted by subsection (f) of this section.
SECTION 34.11.(k)  Report. – The Department shall report to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by no later than August 1, 2014, on its plan for increasing its use of outsourcing of pavement preservation activities in accordance with subsection (i) of this section. The Department shall report no later than December 1, 2014, and annually thereafter, to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division on the Department's progress toward achieving the goals set forth in subsection (i) of this section. The annual report shall include the following:
(1)	A monthly examination of expenditures, by treatment type, indicating the amount and percentage performed by contract.
(2)	The number of lane miles covered, by treatment type, along with an average cost per lane miles, by treatment type, indicating costs for each type for work performed by the Department and by contract.
(3)	The statewide cost per lane mile (hereafter "unit cost") along with unit cost for each division and for each type of treatment. The Department shall provide an explanation for unit costs that vary by more than twenty percent (20%) from the statewide unit cost.
SECTION 34.11.(l)  Subsection (k) of this section expires December 31, 2018.

OUTSOURCING OF PRECONSTRUCTION ACTIVITY
SECTION 34.13.(a)  The Department of Transportation shall seek to increase the use of contracts to further privatize preconstruction work where practical, economical, and likely to lead to increased efficiency. In doing so, the Department of Transportation shall meet each of the following privatization requirements:
(1)	Increase the outsourcing of all activities performed by the Department's Preconstruction and Technical Services units to seventy percent (70%) of the total cost of activities performed by those units in fiscal year 2014‑2015, excluding the cost of activities performed by the Turnpike Authority, the Structures Design and Management unit, and the Bridge Program.
(2)	Increase the outsourcing of all activities performed by the Department's Roadway Design unit to sixty percent (60%) of the total cost of activities performed by that unit in fiscal year 2014‑2015.
(3)	Increase the outsourcing of all activities performed by the Department's Project Development and Environmental Analysis unit to sixty‑five percent (65%) of the total cost of activities performed by that unit in fiscal year 2014‑2015.
(4)	The Department's Right‑of‑Way unit shall increase the total expenditures for outsourced activity by five percent (5%) in fiscal year 2014‑2015.
SECTION 34.13.(b)  The Department may credit any reduction in expenditures due to a reduction in force towards meeting the requirements imposed by subsection (a) of this section.
SECTION 34.13.(c)  The Department shall increase contracts for construction of transportation projects on a design‑build basis awarded under the provisions of G.S. 136‑28.11.
SECTION 34.13.(d)  The Department shall report no later than October 1, 2014, and quarterly thereafter, to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division regarding its implementation of this section, including any reductions in force used to meet privatization requirements.

DOT SIGNAGE
SECTION 34.14.(a)  G.S. 136‑89.56 reads as rewritten:
"§ 136‑89.56.  Commercial enterprises.
No commercial enterprises or activities shall be authorized or conducted by the Department of Transportation, or the governing body of any city or town, within or on the property acquired for or designated as a controlled‑access facility, as defined in this Article, except for:
(1)	Materials displayed at welcome centers which shall be directly related to travel, accommodations, tourist‑related activities, tourist‑related services, and attractions. The Department of Transportation shall issue rules regulating the display of these materials. These materials may contain advertisements for real estate; and
(2)	Vending machines permitted by the Department of Transportation and placed by the Division of Services for the Blind, Department of Health and Human Services, as the State licensing agency designated pursuant to Section 2(a)(5) of the Randolph‑Sheppard Act (20 USC 107a(a)(5)). The Department of Transportation shall regulate the placing of the vending machines in highway rest areas and shall regulate the articles to be dispensed. In order to permit the establishment of adequate fuel and other service facilities by private owners or their lessees for the users of a controlled‑access facility, the Department of Transportation shall permit access to service or frontage roads within the publicly owned right‑of‑way of any controlled‑access facility established or designated as provided in this Article, at points which, in the opinion of the Department of Transportation, will best serve the public interest. The location of such fuel and other service facilities may be indicated to the users of the controlled‑access facilities by appropriate signs, the size, style, and specifications of which shall be determined by the Department of Transportation.
The location of fuel, gas, food, lodging, camping, and attraction facilities may be indicated to the users of the controlled‑access facilities by appropriate logos placed on signs owned, controlled, and erected by the Department of Transportation. The owners, operators or lessees of fuel, gas, food, lodging, camping, and attraction facilities who wish to place a logo identifying their business or service on a sign shall furnish a logo meeting the size, style and specifications determined by the Department of Transportation and shall pay the Department a fee set by the Board of Transportation. The Board shall set the fee to cover the initial costs of signs, sign installation, and maintenance, and the costs of administering the program."
SECTION 34.14.(b)  G.S. 136‑140.19 reads as rewritten:
"§ 136‑140.19.  Board of Transportation to adopt rules to implement the TODS program.
The Board of Transportation shall adopt rules to implement the TODS program created by this Article. The rules shall include all of the following:
(1)	The Board shall set fees to cover the initial costs of signs, sign installation, and maintenance, and the costs of administering the program.
(2)	The Board shall establish a standard for the size, color, and letter height of the TODS as specified in the National Manual of Uniform Traffic Control Devices for Streets and Highways.
…
(8)	The Board shall limit the placement of TODS to highways other than fully controlled access highways and to rural areas in and around towns or cities with a population of less than 40,000."
SECTION 34.14.(c)  G.S. 106‑22.5(a) reads as rewritten:
"§ 106‑22.5.  Agricultural tourism signs.
(a)	The Department of Agriculture and Consumer Services shall work with the Department of Transportation to provide directional signs on major highways at or in reasonable proximity to the nearest interchange leading to an agricultural facility that promotes tourism by providing tours and on‑site sales or samples of North Carolina agricultural products to area tourists. The Department shall follow the sign location and placement rules for the Department of Transportation's Tourist‑Oriented Directional Signs as authorized by G.S. 136‑140.19."

STATE PARKS AND TRAILS SIGNAGE
SECTION 34.15.(a)  The Department of Transportation, in conjunction with the State Parks and Recreation Division of the Department of Environment and Natural Resources, the Department of Commerce, and Friends of the Mountains‑to‑Sea Trail, Inc., a nonprofit corporation, shall study the use of highway signage as a means of improving the North Carolina residents' and tourists' awareness of State parks, including historic and cultural sites as well as the Mountains‑to‑Sea Trail. The study shall include the creation of an action plan and five-month implementation time line, which shall include measures to address all of the following:
(1)	Whether signs currently located on or near highways in this State are sufficient in number, location, and size and presentation to make travelers on the highways of this State aware of the existence and location of all State parks, including historic and cultural sites as well as the Mountains‑to‑Sea Trail.
(2)	Whether signs currently located on or near highways in this State adequately inform travelers that portions of the roads they travel on are part of the current route of the Mountains‑to‑Sea Trail.
(3)	What measures could be taken to improve the efficacy of highway signage in achieving the goals described in subdivisions (1) and (2) of this subsection.
(4)	What the costs and benefits of implementing the measures described in subdivision (3) of this subsection would be.
SECTION 34.15.(b)  No later than December 1, 2014, the Department of Transportation shall report the results of the study required by this section, including the action plan and implementation time line, to the chairs of the Joint Legislative Transportation Oversight Committee and to the Fiscal Research Division. The action plan shall be implemented by April 1, 2015.

DOT STAFFING
SECTION 34.16.(a)  The Department of Transportation shall review the organization and staffing of the Division of Highways and the Division of Preconstruction and identify areas of unnecessary duplication within management structures and variations in the number of employees reporting to persons identified as supervisors. Based on its review, the Department shall create and implement a plan for staffing changes and staffing efficiencies. The plan should reduce layers of management to the level needed for carrying out the Department's functions and responsibilities and ensure that employees designated as supervisors have workloads and staff size that are appropriate given the function or task for which that supervisor has responsibility.
SECTION 34.16.(b)  The Department shall report its progress on implementing this section to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division no later than December 1, 2014.

BOARD OF TRANSPORTATION TO STUDY FEES, SPONSORSHIP, AND PRIVATIZATION
SECTION 34.17.(a)  The Board of Transportation shall study how fees, sponsorship, or privatization might be used to reduce the use of public funds for services provided by the Department. The services the Board shall study include, but are not limited to, the following:
(1)	Inspection of streets and bridges within a private development for future addition to the State highway system.
(2)	Inspection, site review, and permitting of the installation of driveways by private parties providing access to a component of the State highway system.
(3)	Review and inspection of encroachments onto the State highway system.
(4)	Lease or sale of property related to the resolution of encroachments or the disposition of surplus right-of-way.
(5)	Review of or consultation on development plats or plans.
(6)	Review, engineering, or consultation regarding drainage issues, improvements, or maintenance adjacent to components of the State highway system.
(8)	Training sessions or workshops offered to private consultants and contractors.
(9)	Review and engineering consultation regarding traffic plans.
SECTION 34.17.(b)  The Board shall also study the existing fee structure for services performed by Highway Division personnel and identify any fees that no longer cover the direct and indirect costs incurred by the Department to perform the service.
SECTION 34.17.(c)  The Department of Transportation shall report on the Board's study and recommendations for fee adjustments or additions to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division no later than December 1, 2014. This report shall also include recommendations from the Board on the use of sponsorships for activities, programs, or functions currently performed by the Department or the privatization of these functions, and include the following information:
(1)	The current cost of activities proposed for sponsorship support or privatization.
(2)	The potential receipts that could reasonably be collected through sponsorships or the cost-savings achieved through privatization.
(3)	A proposed process for the screening and selection of sponsors.
(4)	Mock‑ups of potential sponsorship signage on materials, buildings, vehicles, vessels, or other locations.
(5)	Any administrative, statutory, or regulatory changes needed for the Department to proceed with sponsorship or privatization programs.

RENAME SYSTEM PRESERVATION PROGRAM
SECTION 34.18.  The Department of Transportation shall rename the "system preservation program" (fund center 1500/157839) the "bridge program." Funds allocated to this program shall be used for improvements to culverts associated with a component of the State highway system or for structurally deficient and functionally obsolete bridges. All projects funded under this program, with the exception of inspection, pre‑engineering, contract preparation, contract administration and oversight, and planning activities, shall be outsourced to private contractors.

HIGHWAY FUND CREDIT RESERVE
SECTION 34.19.(a)  G.S. 136‑44.2 is amended by adding a new subsection to read:
"§ 136‑44.2.  Budget and appropriations.
…
(f1)	The credit reserve for the Highway Fund consists of the following:
(1)	The unreserved credit balance in the Highway Fund on the last day of the fiscal year to the extent the balances exceed the amount estimated for that date in the Current Operations Appropriations Act for the following fiscal year.
(2)	The unallotted and unencumbered balances on the last day of the fiscal year for the following:
a.	Funds appropriated from the Highway Fund for the multimodal programs of the Department, consisting of funds for bicycle and pedestrian, railroad, aviation, and public transportation programs, excluding funds deposited in the Freight Rail & Rail Crossing Safety Improvement Fund.
b.	Funds appropriated from the Highway Fund for the construction programs of the Department, consisting of funds for secondary construction, access and public service roads, spot safety improvement, contingency, small urban construction, and economic development programs.
(3)	The unencumbered and unexpended balances on the last day of the fiscal year for the following:
a.	Central and program administration.
b.	Transfers to other State agencies or departments not used or returned.
(4)	The remaining balance for (i) any open project that has been inactive for two or more years after construction of the project has been completed or (ii) any project that is not obligated during the first two fiscal years in which funds are appropriated."
SECTION 34.19.(b)  The sum of twelve million dollars ($12,000,000) of the unallotted and unexpended balance of funds within the Bicycle program (fund center 1500/0036), Ferry Operations (fund center 1500/7825), Railroad program (fund center 1500/7829), Airports program (fund center 1500/7830), and the Public Transportation program (fund center 1500/7831), excluding funds deposited in the Freight Rail & Rail Crossing Safety Improvement Fund, shall be transferred to the Highway Fund as appropriated and allocated by this act.

SALE OF CERTAIN FORMER NC RAILROAD PROPERTIES
SECTION 34.20.(a)  Subject to the right of first refusal in subsection (b) of this section, the Department of Administration shall dispose of the following parcels following the procedures set out in Chapter 146 of the General Statutes:
Property Description	County	Nearest Town	Parcel ID
4th Street Lot	Carteret	Morehead	638620808907000
Station & Former Industrial Lot	Carteret	Morehead	638620718127000
Waterfront & Riparian Rights	Carteret	Morehead	638620708857000 &
	638620709868000
SECTION 34.20.(b)  Before the Department disposes of any property described in subsection (a) of this section, the city of Morehead City, Carteret County, or the city and county jointly, shall be given the right of first refusal to purchase, lease, or rent any or all of the parcels. The right of first refusal shall expire on June 30, 2015.
SECTION 34.20.(c)  Following expiration of the right of first refusal period set forth in subsection (b) of this section, or upon written notice from the city of Morehead City and Carteret County waiving the right of first refusal, the Department shall dispose of the properties in any manner authorized by Chapter 146 of the General Statutes other than by gift.
SECTION 34.20.(d)  Notwithstanding G.S. 146‑30, the Department shall deposit the net proceeds from the disposition of the properties into the Freight Rail & Rail Crossing Safety Improvement Fund of the Highway Fund.

MAINTENANCE CONDITION ASSESSMENT PROGRAM CHANGES
SECTION 34.21.  G.S. 136‑44.3 reads as rewritten:
"§ 136‑44.3.  Maintenance program.
The Department shall establish performance standards for the maintenance and operation of the State highway system. In each even‑numbered year, the Department of Transportation shall survey the condition of the State highway system and shall prepare a report of the findings of the survey. The report shall provide both quantitative and qualitative descriptions of the condition of the system and shall provide estimates of the following:
(1)	The annual cost to meet and sustain the established performance standards for the State highway system, delineated by costs to the primary or secondary system, to include the following categories of work: (i) contract resurfacing, (ii) pavement preservation, (iii) routine highway maintenance, (iv) disasters and emergencies, (v) structurally sound bridge maintenance, and (vi) structurally unsound bridge rehabilitation, repair, or replacement.
(2)	Projected system condition and corresponding optimal funding requirements for a seven‑year plan to sustain established performance standards. The report shall also identify target levels of service for each maintenance activity and assess historical program performance across divisions, including project delivery rates, staffing, and direct and indirect costs. The Department shall clearly denote prioritized maintenance needs and recommended resource allocations and distribution methods to achieve each target.
(3)	Any significant variations in system conditions among highway divisions. The report should include an examination of how well the highway divisions streamline project delivery, maximize efficiency, and prioritize spending based on needs and make recommendations on ways to improve these processes. The report should analyze the cost of delivering maintenance activities by division and make recommendations on how to reduce these costs regionally and statewide.
(4)	An assessment of the level of congestion throughout the primary highway system based on traffic data, and a ranking of the most congested areas based on travel time reliability and the average number of congested hours, together with the Department's recommendations for congestion reduction and mobility improvement.
(5)	An analysis of existing highway division staffing levels and recommendations to ensure staffing levels are distributed appropriately based on need.
(6)	A cross‑divisional comparison summary document, not to exceed one page in length, which includes the divisional performance data described in subdivision (2) of this section as well as the most deficient roads and bridges in each division.
On the basis of the report and from funds available, the Department of Transportation shall develop a statewide annual maintenance program for the State highway system, which shall be subject to the approval of the Board of Transportation and is consistent with performance standards.
The report on the condition of the State highway system and maintenance funding needs shall be presented to the Joint Legislative Transportation Oversight Committee by December 31 of each even‑numbered year, and copies shall be made available to any member of the General Assembly upon request."

DIVISION OF MOTOR VEHICLES POSITION FUNDING
SECTION 34.22.  Notwithstanding any other provision of law, the Department of Transportation may use funds appropriated for the 2014‑2015 fiscal year from the Highway Trust Fund to continue funding positions within the Division of Motor Vehicles that were funded by the Highway Trust Fund during the 2013‑2014 fiscal year.

DOT CASH MANAGEMENT
SECTION 34.23.(a)  G.S. 143C‑6‑11 reads as rewritten:
"§ 143C‑6‑11.  Highway appropriation.
…
(f)	Seven and One-Half Percent (7.5%) Cash Balance Required. – The Department of Transportation shall maintain an available cash balance at the end of each month equal to at least seven and one‑half percent (7.5%) of the total appropriations for the current fiscal year from the Highway Fund and the Highway Trust Fund. In projecting cash balances in future years, the Department shall use the estimated cash flow as specified in the Current Operations Appropriation Act. In the event this cash position is not maintained, no further transportation project contract commitments may be entered into until the cash balance has been regained. Any federal funds on hand shall not be considered as cash for the purposes of this subsection.
…
(k)	The Department of Transportation shall do all of the following:
(1)	Utilize cash flow financing to the extent possible to fund transportation projects with the goal of reducing the combined average daily cash balance of the Highway Fund and the Highway Trust Fund to an amount equal to  between fifteen and twenty percent (15‑20%) of the total appropriations for the current fiscal year from those funds. In projecting cash balances in future years, the Department shall use the estimated cash flow as specified in the Current Operations Appropriation Act. Any federal funds on hand shall not be considered as cash for the purposes of this subsection. The target amount shall include an amount necessary to make all municipal‑aid funding requirements of the Department.
(2)	Establish necessary management controls to facilitate use of cash flow financing, such as establishment of a financial planning committee, development of a monthly financing report, establishment of appropriate fund cash level targets, review of revenue forecasting procedures, and reduction of accrued unbilled costs.
(3)	Report annually, on October 1 of each year, to the Joint Legislative Transportation Oversight Committee on its cash management policies and results."
SECTION 34.23.(b)  The Board of Transportation shall study the Department's cash management policies and identify ways to strengthen these policies in order to prevent excessive cash balances. The Department shall report to the House of Representatives Appropriations Subcommittee on Transportation, the Senate Appropriations Committee on Department of Transportation, and the Fiscal Research Division by April 1, 2015, on the findings from this study and any resulting policy changes made based on the findings of the study.
SECTION 34.23.(c)  In any month in which the Department's total cash balance on hand from the Highway Fund and the Highway Trust Fund exceeds one billion dollars ($1,000,000,000), the Department shall report its cash balance no later than the 15th day of the following month as follows:
(1)	To the Board of Transportation.
(2)	If the General Assembly is in session, to the Chairs of the House of Representatives Appropriations Subcommittee on Transportation, the Chairs of the Senate Appropriations Committee on Department of Transportation, and the Fiscal Research Division.
(3)	If the General Assembly is not in session, to the Chairs of the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division.
The report shall include an explanation from the Department of the reasons the cash balance has exceeded the amount specified in this subsection, the actions to be taken by the Department to reduce the cash balance, and the estimated amount of time it will take to bring the cash balance to the target identified in G.S. 143C‑6‑11(k)(1), as amended by subsection (a) of this section.
SECTION 34.23.(d)  Subsection (c) of this section becomes effective July 1, 2015.

DOT LEGAL SERVICES
SECTION 34.24.(a)  Section 34.27 of S.L. 2013‑360 reads as rewritten:
"SECTION 34.27.  The Department of Transportation may engage the services of private counsel with the pertinent expertise to provide legal services related to transportation projects undertaken by the Department. The Department shall supervise and manage the private counsel engaged under this section and shall not be required to obtain written permission or approval from the Attorney General under G.S. 114‑2.3.
	
	"
SECTION 34.24.(b)  It is the intent of the General Assembly that the Department of Transportation exercise the authority granted by subsection (a) of this section to maximize operational and project delivery benefits attributed to the avoidance or successful defense of litigation. To accomplish this intent, the Department is directed to increase its utilization of external counsel to no less than ten percent (10%) of new cases arising during the 2014‑2015 fiscal year, increasing to no less than twenty percent (20%) of new cases arising during the 2015‑2016 fiscal year.
SECTION 34.24.(c)  The Department shall develop performance metrics to evaluate its utilization of in‑house and outside counsel, to include the following:
(1)	A summary of new matters opened by legal area.
(2)	Case cycle times.
(3)	Resolution of cases.
(4)	A comparison of in‑house costs to billable rates for external counsel.
(5)	The process for procurement for legal services.
The Department shall report no later than January 1, 2015, and quarterly thereafter, to the Joint Legislative Transportation Oversight Committee and the Joint Legislative Justice and Public Safety Oversight Committee regarding the performance metrics set forth in this subsection.
SECTION 34.24.(d)  G.S. 136‑103.1 reads as rewritten:
"§ 136‑103.1.  Outside counsel.
The Secretary of Transportation is authorized to employ outside counsel as the Secretary deems necessary for the purpose of obtaining title abstracts and title certificates for transportation system rights‑of‑way and for assistance in the trial of condemnation cases involving the acquisition of rights‑of‑way and other interests in land for the purpose of transportation construction. Compensation, as approved by the Secretary, shall be paid out of the appropriations from the Highway Fund."
SECTION 34.24.(e)  Legal positions assigned to the Department from the Department of Justice which become vacant during the 2014‑2015 fiscal year shall not be filled.

Ferry Tolling
SECTION 34.26.(a)  G.S. 136‑82 reads as rewritten:
"§ 136‑82.  Department of Transportation to establish and maintain ferries.
(a)	Powers of Department. – The Department of Transportation is vested with authority to provide for the establishment and maintenance of ferries connecting the parts of the State highway system, whenever in its discretion the public good may require.

	
…
(f)	Authority to Generate Certain Receipts. – The Department of Transportation, notwithstanding any other provision of law, may operate or contract for the following receipt‑generating activities and use the proceeds for ferry passenger vessel replacement and other ferry system capital needs:
(1)	Operation of, concessions on the ferries and at ferry facilities to provide to passengers on the ferries food, drink, and other refreshments, personal comfort items, Internet access, and souvenirs publicizing the ferry system.
(2)	Sponsorships, including, but not limited to, the sale of naming rights to any ferry vessel, ferry route, or ferry facility.
(3)	Advertising on or within any ferry vessel or at any ferry facility, including, but not limited to, display advertising and advertising delivered to passengers through the use of video monitors, public address systems installed in passenger areas, and other electronic media.
(4)	Any other receipt‑generating activity not otherwise forbidden by applicable law pertaining to public health or safety.
The Department may issue rules to implement this subsection.
(f1)	Ferry Capital Improvement Account. – The following shall be credited to a reserve account in the Highway Fund which shall be designated as the Ferry Capital Improvement Account:
(1)	Net receipts generated under subsection (f) of this section.
(2)	The unallotted and unencumbered balances on the last day of the fiscal year of funds appropriated from the Highway Fund to the Ferry Division.
(3)	Any other funds available from appropriations by the General Assembly or from contributions and grants from public or private sources.
Funds credited to the account shall be used for prioritized improvements to the vessels and facilities of the North Carolina Ferry System.
(g)	Confidentiality of Personal Information. – Identifying information obtained by the Department related to operation of the ferry system is not a public record under Chapter 132 of the General Statutes and is subject to the disclosure limitations in 18 U.S.C. § 2721 of the federal Driver's Privacy Protection Act. The Department shall maintain the confidentiality of all information required to be kept confidential under 18 U.S.C. § 2721(a), as well as any financial information, transaction history, and information related to the collection of a user fee from a person, including, but not limited to, photographs or other recorded images or automatic vehicle identification or driver account information generated by radio‑frequency identification or other electronic means. The Department may use identifying information only for purposes of collecting and enforcing user fees. Nothing in this section is intended to limit the right of any person to examine that person's own account information, or the right of any party, by authority of a proper court order, to inspect and examine identifying information."
SECTION 34.26.(b)  The Board of Transportation shall cease collecting ferry tolls on the effective date of this act and shall take action as expeditiously as possible to repeal its regulations implementing ferry tolls. Prepaid tolls or commuter pass payments received by the Department for ferry trips after the effective date of this act shall be refunded or, in the case of prepaid commuter passes, partially refunded based on the proportion of the time period covered by the commuter pass for which tolls were in effect.
SECTION 34.26.(c)  From funds appropriated by this act from the Highway Fund to the Department of Transportation, the sum of six million two hundred thousand dollars ($6,200,000) shall be allocated to the Ferry Capital Improvement Account created by G.S. 136‑82(f1) as amended by subsection (a) of this section.
SECTION 34.26.(d)  G.S. 136‑189.11(b)(8) is repealed.

Historic Bridge Preservation Program Clarification
SECTION 34.27.  G.S. 136‑18 is amended by adding a new subdivision to read:
"(44)	The Department shall not transfer ownership of a State-owned concrete arch bridge to any public, private, or nonprofit entity as part of any bridge relocation or reuse program project unless the entity posts a bond or other financial assurance acceptable to the Department to cover the present value of future maintenance costs, as well as any right‑of‑way or other additional costs if the bridge transfer would require the Department to change the planned route of any replacement structure."

"First in Freedom" Registration Plates
SECTION 34.28.(a)  G.S. 20‑63 reads as rewritten:
"§ 20‑63.  Registration plates furnished by Division; requirements; replacement of regular plates with First in Flight plates or First in Freedom plates; surrender and reissuance; displaying; preservation and cleaning; alteration or concealment of numbers; commission contracts for issuance.
…
(b)	Every license plate must display the registration number assigned to the vehicle for which it is issued, the name of the State of North Carolina, which may be abbreviated, and the year number for which it is issued or the date of expiration. A plate issued for a commercial vehicle, as defined in G.S. 20‑4.2(1), and weighing 26,001 pounds or more, must bear the word "commercial," unless the plate is a special registration plate authorized in G.S. 20‑79.4 or the commercial vehicle is a trailer or is licensed for 6,000 pounds or less. The plate issued for vehicles licensed for 7,000 pounds through 26,000 pounds must bear the word "weighted," unless the plate is a special registration plate authorized in G.S. 20‑79.4.
A registration plate issued by the Division for a private passenger vehicle or for a private hauler vehicle licensed for 6,000 pounds or less shall be, at the option of the owner, either (i) a "First in Flight" plate or (ii) a "First in Freedom" plate. A "First in Flight" plate shall have the words "First in Flight" printed at the top of the plate above all other letters and numerals. The background of the "First in Flight" plate shall depict the Wright Brothers biplane flying over Kitty Hawk Beach, with the plane flying slightly upward and to the right. A "First in Freedom" plate shall have the words "First in Freedom" printed at the top of the plate above all other letters and numerals. The background of the "First in Freedom" plate may include an image chosen by the Division that is representative of the Mecklenburg Declaration of 1775 or the Halifax Resolves of 1776.
(b1)	The following special registration plates do not have to be a "First in Flight" plate or "First in Freedom" plate as provided in subsection (b) of this section. The design of the plates that are not "First in Flight" plates or "First in Freedom" plates must be developed in accordance with G.S. 20‑79.4(a3). For special plates authorized in G.S. 20‑79.7 on or after July 1, 2013, the Division may not issue the plate on a background under this subsection unless it receives at least 200 applications for the plate in addition to the applications required under G.S. 20‑79.4 or G.S. 20‑81.12.
…."
SECTION 34.28.(b)  G.S. 20‑79(c) reads as rewritten:
"(c)	Form and Duration. – A dealer license plate is subject to G.S. 20‑63, except for the requirement that the plate display the registration number of a motor vehicle and the requirement that the plate be a "First in Flight" plate or a "First in Freedom" plate. A dealer license plate must have a distinguishing symbol identifying the plate as a dealer license plate. The symbol may vary depending upon the classification of dealer license plate issued. The Division must provide suitably reduced sized license plates for motorcycle dealers and manufacturers.
…."
SECTION 34.28.(c)  G.S. 20‑79.2(c) reads as rewritten:
"(c)	Form, Duration, and Transfer. – A transporter plate is subject to G.S. 20‑63, except for the requirement that the plate display the registration number of a motor vehicle and the requirement that the plate be a "First in Flight" plate or a "First in Freedom" plate. A transporter plate shall have a distinguishing symbol identifying the plate as a transporter plate. The symbol may vary depending upon the classification of transporter plate issued. A transporter plate is issued for a period of one year. The Division shall vary the expiration dates of transporter registration renewals so that an approximately equal number expires at the end of each month, quarter, or other period consisting of one or more months. When the Division issues a transporter plate, it may issue a registration that expires at the end of any monthly interval. During the year for which it is issued, a business or dealer may transfer a transporter plate from one vehicle to another as long as the vehicle is driven only for a purpose authorized by subsection (a) of this section. The Division must rescind a transporter plate that is displayed on a motor vehicle driven for a purpose that is not authorized by subsection (a) of this section."
SECTION 34.28.(d)  This section becomes effective January 1, 2015, and applies to registration plates issued on or after that date.

Report on Use of Economic Development Program Funds
SECTION 34.29.(a)  Section 34.7 of S.L. 2013‑360 reads as rewritten:
"ECONOMIC DEVELOPMENT PROGRAM FUNDS
…
"SECTION 34.7.(b)  Of the funds appropriated to the Economic Development fund, the sum of three million three hundred forty‑six thousand two hundred fifteen dollars ($3,346,215) in nonrecurring funds for fiscal year 2013‑2014 and eight million dollars ($8,000,000) in recurring funds for fiscal year 2014‑2015 shall be used for prioritized transportation improvements and infrastructure that expedite commercial growth as well as either job creation or job retention. Projects funded under this section shall be jointly approved by the Secretary of Transportation and the Secretary of Commerce.
"SECTION 34.7.(c)  The Department of Commerce and the Department of Transportation shall both develop guidelines and procedures related to the administration of the Economic Development funds referred to in subsection (b) of this section and to the selection of projects to receive allocations of those funds, including project evaluation measures. The guidelines and procedures shall include a process for submitting, evaluating, and prioritizing projects on a monthly basis. The Department of Commerce shall publish the guidelines and procedures it develops on its Web site, and the Department of Transportation shall publish the guidelines and procedures it develops on its Web site. Both Departments shall develop guidelines and procedures no later than October 1, 2014.
"SECTION 34.7.(d)  Beginning October 1, 2014, the Department of Commerce and the Department of Transportation shall do both of the following:
(1)	Meet quarterly to select projects for funding based on the prioritization rankings developed in subsection (c) of this section and assigned by each Department.
(2)	Report quarterly to the Joint Legislative Transportation Oversight Committee and the Joint Legislative Commission on Governmental Operations on the commitment, disbursement, and use of funds referred to in subsection (b) of this section. The report is due no later than one month after the end of the fiscal quarter."
SECTION 34.29.(b)  This section becomes effective June 30, 2014.

Administration Costs/Regulation of Unmanned Aircraft Systems
SECTION 34.30.  If House Bill 1099 or substantially similar legislation becomes law during the 2014 Regular Session of the 2013 General Assembly, the Division of Aviation of the Department of Transportation shall use funds appropriated in this act to the Division to cover the administration costs incurred from developing and implementing the knowledge and skills test and licensing system for commercial operation required by that law.

Use of Funds Appropriated to Global TransPark Authority
SECTION 34.31.  Of the funds appropriated to the Global TransPark Authority during the 2014‑2015 fiscal year, the sum of two hundred fifty thousand dollars ($250,000) shall be used exclusively for costs incurred for on‑site projects.

REDIRECT NONADMINISTRATIVE INSPECTION TAX PROCEEDS TO THE LEAKING UNDERGROUND STORAGE TANK FUND
SECTION 34.33.  G.S. 119‑18(b) reads as rewritten:
"(b)	Proceeds. – The proceeds of the inspection tax levied by this section shall be applied first to the costs of administering this Article and Subchapter V of Chapter 105 of the General Statutes. The remainder of the proceeds shall be credited on a monthly basis to the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund and the Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund as set forth in this subsection. If the amount of revenue in the Noncommercial Fund at the end of a month is at least five million dollars ($5,000,000), one‑half of the remainder of the proceeds shall be credited to the Noncommercial Fund, and one‑half of the remainder of the proceeds shall be credited to the Commercial Fund. If the amount of revenue in the Noncommercial Fund at the end of a month is less than this threshold amount, all of the remainder of the proceeds shall be credited to the Noncommercial Fund."

Drivers License Technical Standards
SECTION 34.34.  G.S. 20‑7(n) reads as rewritten:
"(n)	Format. – A drivers license issued by the Division must be tamperproof and must contain all of the following information:
(1)	An identification of this State as the issuer of the license.
(2)	The license holder's full name.
(3)	The license holder's residence address.
(4)	A color photograph of the license holder applied to material that is measured by the industry standard of security and durability and is resistant to tampering and reproduction.
(5)	A physical description of the license holder, including sex, height, eye color, and hair color.
(6)	The license holder's date of birth.
(7)	An identifying number for the license holder assigned by the Division. The identifying number may not be the license holder's social security number.
(8)	Each class of motor vehicle the license holder is authorized to drive and any endorsements or restrictions that apply.
(9)	The license holder's signature.
(10)	The date the license was issued and the date the license expires.
The Commissioner shall ensure that applicants 21 years old or older are issued drivers licenses and special identification cards that are printed in a horizontal format. The Commissioner shall ensure that applicants under the age of 21 are issued drivers licenses and special identification cards that are printed in a vertical format, that distinguishes them from the horizontal format, for ease of identification of individuals under age 21 by members of industries that regulate controlled products that are sale restricted by age and law enforcement officers enforcing these laws.
At the request of an applicant for a drivers license, a license issued to the applicant must contain the applicant's race."

PART XXXV. SALARIES AND BENEFITS

GOVERNOR AND COUNCIL OF STATE
SECTION 35.1.(a)  G.S. 147‑11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred forty‑two thousand two hundred sixty‑five dollars ($142,265) annually, payable monthly."
SECTION 35.1.(b)  Section 35.1(b) of S.L. 2013‑360 reads as rewritten:
"SECTION 35.1.(b)  The annual salaries for members of the Council of State, payable monthly, shall be increased by one thousand dollars ($1,000) as follows:
	Council of State	Annual Salary
	Lieutenant Governor	$125,676
	Attorney General	125,676
	Secretary of State	125,676
	State Treasurer	125,676
	State Auditor	125,676
	Superintendent of Public Instruction	125,676
	Agriculture Commissioner	125,676
	Insurance Commissioner	125,676	Labor Commissioner	125,676"
SECTION 35.1.(c)  Section 35.1(a) of S.L. 2013‑360 is repealed.

CERTAIN EXECUTIVE BRANCH OFFICIALS
SECTION 35.2.  Section 35.2 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.2.  The annual salaries, payable monthly, for the following executive branch officials shall be increased by one thousand dollars ($1,000) as follows:
Executive Branch Officials	Annual Salary
	Chairman, Alcoholic Beverage Control Commission	$111,868
	State Controller	156,159
	Commissioner of Banks	125,676
	Chair, Board of Review, Division of Employment Security	123,255
	Members, Board of Review, Division of Employment Security	121,737
	Chairman, Parole Commission	102,235
	Members of the Parole Commission	94,464
	Chairman, Utilities Commission	139,849
	Members of the Utilities Commission	125,676
	Executive Director, North Carolina
Agricultural Finance Authority	108,915"

JUDICIAL BRANCH
SECTION 35.3.(a)  Section 35.3 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.3.(a) The annual salaries, payable monthly, for specified judicial branch officials shall be increased by one thousand dollars ($1,000) as follows:
Judicial Branch Officials	Annual Salary
	Chief Justice, Supreme Court	$143,623
	Associate Justice, Supreme Court	139,896
	Chief Judge, Court of Appeals	137,682
	Judge, Court of Appeals	134,109
	Judge, Senior Regular Resident Superior Court	130,492
	Judge, Superior Court	126,875
	Chief Judge, District Court	115,301
	Judge, District Court	111,684
	District Attorney	121,737
	Administrative Officer of the Courts	129,259
	Assistant Administrative Officer of the Courts	118,152
	Public Defender	121,737
	Director of Indigent Defense Services	125,498
"

	
	"
SECTION 35.3.(b)  The annual salaries of permanent full‑time employees of the Judicial Department whose salaries are not itemized in this act shall be increased by one thousand dollars ($1,000), effective July 1, 2014, except for employees eligible to receive step increases under G.S. 7A‑102(c1) at any time during the 2014-2015 fiscal year.
SECTION 35.3.(c)  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‑two thousand seven hundred ninety‑seven dollars ($72,797) and the minimum salary of any assistant district attorney or assistant public defender is at least thirty‑eight thousand six hundred twenty‑eight dollars ($38,628), effective July 1, 2014.
SECTION 35.3.(d)  G.S. 7A‑101(a) reads as rewritten:
"(a)	The clerk of superior court is a full‑time employee of the State and shall receive an annual salary, payable in equal monthly installments, based on the population of the county as determined in subsection (a1) of this section, according to the following schedule:
Population	Annual Salary
Less than 100,000	$84,390
100,000 to 149,999	94,578
150,000 to 249,999	104,766
250,000 and above	114,958
When a county changes from one population group to another, the salary of the clerk shall be changed, on July 1 of the fiscal year for which the change is reported, to the salary appropriate for the new population group, except that the salary of an incumbent clerk shall not be decreased by any change in population group during his continuance in office."
SECTION 35.3.(e)  G.S. 7A‑102(c1) reads as rewritten:
"(c1)	A full‑time assistant clerk or a full‑time deputy clerk, and up to one full‑time deputy clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the following minimum and maximum rates:
Assistant Clerks and Head Bookkeeper	Annual Salary
Minimum	$32,609
Maximum	 56,424
Deputy Clerks	Annual Salary
Minimum	$28,223
Maximum	44,107."
SECTION 35.3.(f)  G.S. 7A‑171.1(a)(1) reads as rewritten:
"(a)	The Administrative Officer of the Courts, after consultation with the chief district judge and pursuant to the following provisions, shall set an annual salary for each magistrate.
(1)	A full‑time magistrate shall be paid the annual salary indicated in the table set out in this subdivision. A full‑time magistrate is a magistrate who is assigned to work an average of not less than 40 hours a week during the term of office. The Administrative Officer of the Courts shall designate whether a magistrate is full‑time. Initial appointment shall be at the entry rate. A magistrate's salary shall increase to the next step every two years on the anniversary of the date the magistrate was originally appointed for increases to Steps 1 through 3, and every four years on the anniversary of the date the magistrate was originally appointed for increases to Steps 4 through 6.
Table of Salaries of Full‑Time Magistrates
Step Level	Annual Salary
Entry Rate	$35,275
Step 1	37,950
Step 2	40,835
Step 3	43,890
Step 4	47,550
Step 5	51,960
Step 6	56,900."
SECTION 35.3.(g)  G.S. 7A‑171.1(a1)(1) reads as rewritten:
"(a1)	Notwithstanding subsection (a) of this section, the following salary provisions apply to individuals who were serving as magistrates on June 30, 1994:
(1)	The minimum and maximum salaries of magistrates who on June 30, 1994, were paid at a salary level of less than five years of service under the table in effect that date shall be as follows:
Minimum	Maximum
Less than 1 year of service	$27,846
1 or more but less than 3 years of service	28,027  –	29,027
3 or more but less than 5 years of service	30,405  –	31,405
	Upon completion of five years of service, those magistrates shall receive the salary set as the Entry Rate in the table in subsection (a)."
SECTION 35.3.(h)  Salary reserves generated by the clerk of superior court offices during the 2014-2015 fiscal year shall be used exclusively by the clerks of superior court. The clerks of superior court may use these funds to award salary increases in addition to those specifically provided for deputy and assistant clerks under the respective salary plans. Any additional increases may be awarded at the discretion of each elected clerk of superior court. The Administrative Office of the Courts shall (i) allocate funds for additional discretionary salary adjustments on a per capita basis and (ii) adopt a plan for distribution of the funds in consultation with the Conference of Clerks of Superior Court.

LEGISLATIVE BRANCH
SECTION 35.4.(a)  Section 35.4 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.4.  For the 2013‑2015 fiscal biennium, the salaries of members and officers of the General Assembly shall remain unchanged at the amounts set under G.S. 120‑3, as provided in 1994 by the 1993 General Assembly.

	"
SECTION 35.4.(b)  G.S. 120‑37(b) reads as rewritten:
"(b)	The sergeant‑at‑arms and the reading clerk in each house shall be paid a salary of four hundred four dollars ($404.00) per week plus subsistence at the same daily rate provided for members of the General Assembly, plus mileage at the rate provided for members of the General Assembly for one round trip only from their homes to Raleigh and return. The sergeants‑at‑arms shall serve during sessions of the General Assembly and at such time prior to the convening of, and subsequent to adjournment or recess of, sessions as may be authorized by the Legislative Services Commission. The reading clerks shall serve during sessions only."
SECTION 35.4.(c)  G.S. 120‑37(c) reads as rewritten:
"(c)	The principal clerks shall be full‑time officers. Each principal clerk shall be entitled to other benefits available to permanent legislative employees and shall be paid an annual salary of one hundred six thousand three hundred thirty‑three dollars ($106,333), payable monthly. Each principal clerk shall also receive such additional compensation as approved by the Speaker of the House of Representatives or the President Pro Tempore of the Senate, respectively, for additional employment duties beyond those provided by the rules of their House. The Legislative Services Commission shall review the salary of the principal clerks prior to submission of the proposed operating budget of the General Assembly to the Governor and shall make appropriate recommendations for changes in those salaries. Any changes enacted by the General Assembly shall be by amendment to this paragraph."
SECTION 35.4.(d)  The annual salaries of the Legislative Services Officer and of nonelected employees of the General Assembly in effect on June 30, 2014, shall be increased by one thousand dollars ($1,000).

COMMUNITY COLLEGES PERSONNEL
SECTION 35.5.  Section 35.5 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.5.(a)  The annual salaries of all full‑time community college nonfaculty and professional staff whose salaries are supported from the State's General Fund shall be increased by one thousand dollars ($1,000).
"SECTION 35.5.(b)  Effective July 1, 2014, the annual salaries of all full‑time community college faculty whose salaries are supported from the State's General Fund shall be increased by one thousand dollars ($1,000). The minimum salaries for nine‑month, full‑time curriculum community college faculty shall be increased as follows:
Education Level	Minimum Salary
Vocational Diploma/Certificate or Less	$35,314
Associate Degree or Equivalent	35,819
Bachelor's Degree	38,009
Masters Degree or Education Specialist	39,952
Doctoral Degree	42,753
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
SECTION 35.6.(a)  Section 35.6 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.6.(a)  The annual compensation of all full‑time University of North Carolina EHRA faculty, EHRA nonfaculty, SHRA employees, and teachers employed by the North Carolina School of Science and Mathematics shall remain unchanged for the 2013‑2014 fiscal year. Effective for the 2014-2015 fiscal year:
(1)	The annual compensation of all full-time University of North Carolina SHRA employees shall be increased by one thousand dollars ($1,000).
(2)	The funds appropriated in this act to The University of North Carolina for EHRA faculty and EHRA nonfaculty compensation increases (except for teachers at the North Carolina School of Science and Mathematics) may be used to award compensation increases to EHRA employees, pursuant to policies adopted by the Board of Governors, including, but not limited to, any one or more of the following: (i) merit pay increases, (ii) across‑the‑board increases, (iii) recruitment bonuses, and (iv) retention increases.
"SECTION 35.6.(b)  The annual compensation of all full‑time employees of the University of North Carolina Health Care System and the Medical Faculty Practice Plan at East Carolina University shall remain unchanged for the 2013‑2014 fiscal year."
SECTION 35.6.(b)  For the 2014‑2015 fiscal year, the Board of Trustees of the North Carolina School of Science and Mathematics shall award the step increases authorized by the Teacher Salary Schedule under Section 9.1 of this act.

State Agency Teachers
SECTION 35.6A.  Employees of schools operated by the Department of Health and Human Services, the Department of Public Safety, and the State Board of Education who are paid on the Teacher Salary Schedule shall receive the experience step increases authorized in Section 9.1 of this act.

State Highway Patrol step Increases
SECTION 35.6B.  Notwithstanding G.S. 20‑187.3 for the 2014‑2015 fiscal year, the annual salary of a member of the State Highway Patrol whose salary does not exceed the maximum of the applicable salary range shall be increased on a percentage basis according to the date the member received sworn law enforcement officer status with the Patrol, as follows, in the amount of:
(1)	Six percent (6%) for a member sworn between 2012 and June 30, 2014.
(2)	Five and five-tenths percent (5.5%) for a member sworn between 2008 and 2011.
(3)	Five percent (5%) for a member sworn between 2005 and 2007.

SALARY ADJUSTMENT REQUIREMENTS
SECTION 35.7.  Section 35.8 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.8.(a)  The annual compensation of all employees subject to or exempt from the North Carolina Human Resources Act, including employees of local boards of education, community colleges, and The University of North Carolina, for the 2013‑2014 fiscal year shall remain unchanged from that authorized on June 30, 2013, or the last date in pay status during the 2011‑2013 fiscal biennium, if earlier, unless an increase is authorized by this section or under the Salary Adjustment Fund established by this act.
"SECTION 35.8.(b)  Salary increases may be awarded during the 2013‑2014 fiscal year under this subsection only for the following special circumstances:
(1)	For all State employees regardless of funding source, and for employees of the North Carolina Community College System and local school boards who are paid from State funds, salaries may be increased for reallocations or promotions, in‑range adjustments for job change, career progression adjustments for demonstrated competencies, or any other adjustment related to an increase in job duties or responsibilities, none of which are subject to the salary freeze otherwise provided by this Part. All other salary increases are prohibited.
(1a)	For employees of the North Carolina Community College System, notwithstanding subdivision (1) of this subsection, salaries may be increased if the increase is (i) funded from local funding sources or (ii) for the purposes of retention or equity.
(2)	For The University of North Carolina, (i) faculty using funds from the Faculty Recruiting and Retention Fund, the Distinguished Professors Endowment Fund, or the University Cancer Research Fund in the case of faculty involved in cancer research supported by that fund; (ii) faculty, nonfaculty, and other employee adjustments, including retention adjustments, funded from non‑State funding sources; (iii) faculty, nonfaculty, and other employees for the purposes of retention or equity.
(3)	For employees of the judicial branch, for local supplementation as authorized by G.S. 7A‑300.1.
The cumulative salary adjustment allowed under this subsection during the 2013‑2014 fiscal year may exceed ten percent (10%) of annual salary only if the adjustment is approved in advance by the Office of State Budget and Management, The University of North Carolina Board of Governors, the Board of the North Carolina Community College System, the Legislative Services Commission, the local board of education, or other authorized body as appropriate.
"SECTION 35.8.(c)  The automatic salary step increases for assistant and deputy clerks of superior court and magistrates are suspended for the 2013‑2014 fiscal year.
"SECTION 35.8.(d)  The salary increase provisions of G.S. 20‑187.3 are suspended for the 2013‑2014 fiscal year.
"SECTION 35.8.(e)  For the 2013‑2014 fiscal year, notwithstanding G.S. 53C‑2‑3(c), employees of the Office of the Commissioner of Banks shall not be awarded (i) compensation increases unless allowed under subdivision (1) of subsection (b) of this section or (ii) compensation bonuses.
"SECTION 35.8.(f)  Employees of the Lottery Commission shall not receive compensation bonuses during the 2013‑2014 fiscal year."

USE OF FUNDS APPROPRIATED FOR LEGISLATIVELY MANDATED SALARY INCREASES
SECTION 35.8.(a)  The appropriations set forth in Section 2.1 of this act include appropriations for legislatively mandated salary increases in amounts set forth in the committee report described in Section 38.2 of this act. The Office of State Budget and Management shall ensure that those funds are used only for legislatively mandated salary increases.
SECTION 35.8.(b)  If the Director of the Budget determines that funds appropriated to a State agency for legislatively mandated salary increases exceed the amount required by that agency for that purpose, the Director may reallocate those funds to other State agencies that received insufficient funds for legislatively mandated salary increases. 
SECTION 35.8.(c)  No later than October 1, 2014, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations on the expenditure of funds for legislatively mandated salary increases. This report shall include at least the following information for each State agency for the 2014‑2015 fiscal year:
(1)	The total amount of funds that the agency received for legislatively mandated salary increases.
(2)	The total amount of funds transferred from the agency to other State agencies pursuant to subsection (b) of this section. This section of the report shall identify the amounts transferred to each recipient State agency.
(3)	The total amount of funds used by the agency for legislatively mandated salary increases.
(4)	The total amount of funds received by the agency for legislatively mandated salary increases that are anticipated to revert at the end of the fiscal year.

ALL STATE‑SUPPORTED PERSONNEL/SALARY INCREASES
SECTION 35.9.(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 shall be increased from the General Fund or Highway Fund appropriation only to the extent of the proportionate part of the salaries paid from the General Fund or Highway Fund.
SECTION 35.9.(b)  The salary increases provided in this act become effective July 1, 2014, and do not apply to persons separated from State service due to resignation, dismissal, reduction in force, death, or retirement, or whose last workday is prior to July 1, 2014.
SECTION 35.9.(c)  Payroll checks issued to employees after July 1, 2014, which represent payment of services provided prior to July 1, 2014, shall not be eligible for salary increases provided for in this act. This subsection applies to all employees paid from State funds, whether or not subject to or exempt from the North Carolina Human Resources Act, including employees of public schools, community colleges, and The University of North Carolina.
SECTION 35.9.(d)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.
SECTION 35.9.(e)  Unless otherwise provided by this act, for the 2014‑2015 fiscal year, permanent, full‑time State agency employees and State‑funded public school employees who work a nine‑, 10‑, or 11‑month work year schedule shall receive the one thousand dollar ($1,000) annual increase provided by this act.

MOST STATE EMPLOYEES
SECTION 35.10.(a)  Section 35.7 of S.L. 2013‑360 reads as rewritten:
"SECTION 35.7.  Except as otherwise specifically set forth in this act, the salaries in effect for the following employees on June 30, 2014, shall be increased by one thousand dollars ($1,000):
(1)	Permanent full‑time State officials and persons whose salaries are set in accordance with the North Carolina Human Resources Act.
(2)	Permanent full‑time State officials and persons in positions exempt from the North Carolina Human Resources Act.
(3)	Permanent part‑time State employees and temporary and permanent hourly State employees, on a prorated and equitable basis subject to the availability of funds in the employing State agency, department, or institution and within regular State Budget Act procedures.
	"
SECTION 35.10.(b)  Except as otherwise specifically provided, any employee who is paid on a step schedule who:
(1)	Does not receive a step increase, shall receive the one thousand dollar ($1,000) salary increase authorized by this act.
(2)	Does receive a step increase, shall not receive the one thousand dollar ($1,000) salary increase authorized by this act. Further, such employees are not eligible to move more than one step on the applicable salary schedule.

SPECIAL ANNUAL LEAVE BONUS
SECTION 35.10A.  Any person (i) who was on July 1, 2014, a full‑time permanent employee of the State, a community college institution, or a local board of education or was under contract on July 1, 2014, to be employed for the 2014‑2015 school year in such a position and (ii) who is eligible to earn annual leave shall have a one‑time additional five days of annual leave credited on July 1, 2014. The additional leave shall be accounted for separately from the annual leave bonus provided by Section 28.3A of S.L. 2002‑126, by Section 30.12B(a) of S.L. 2003‑284, by Section 29.14A of S.L. 2005‑276, and by Section 35.10C of S.L. 2013-360, and must be used by June 30, 2015. Annual leave bonus not used during fiscal year 2014‑2015 shall expire on June 30, 2015, and shall not be paid in a lump sum upon termination of employment unless the person effects a retirement from a State‑supported retirement system immediately upon termination of employment. Part‑time permanent employees shall receive a pro rata amount of the five days.

STATE EMPLOYEES REASSIGNMENT/NO THIRTY-FIVE-MILE RADIUS REQUIREMENT
SECTION 35.11.(a)  G.S. 126‑5(e)(2) reads as rewritten:
"(e)	An exempt employee may be transferred, demoted, or separated from his or her position by the department head authorized to designate the exempt position except:
…
(2)	When an employee who has 10 years or more cumulative service, including the immediately preceding 12 months, in subject positions prior to placement in an exempt position is removed from an exempt position, for reasons other than just cause, the employee shall be reassigned to a subject position within the same department or agency, or if necessary within another agency, at the same grade and salary, including all across‑the‑board increases since placement in the position designated as exempt, as the employee's most recent subject position."
SECTION 35.11.(b)  This section is effective when it becomes law and applies to State employees hired before June 30, 2013.

Study Granting Experience and Education Credit to Prospective State Highway Patrol Members with Prior Law Enforcement or Military Experience
SECTION 35.11A.  The State Highway Patrol, in consultation with the Criminal Justice Education and Training Standards Commission and the Fiscal Research Division, shall study granting law enforcement experience and education credit to prospective members of the State Highway Patrol who have prior law enforcement or military police experience. No later than February 1, 2015, the State Highway Patrol shall report its findings to the Chairs of the House Appropriations Committee, the Chairs of the Senate Appropriations/Base Budget Committee, the Chairs of the House Appropriations Subcommittee on Justice and Public Safety, and the Chairs of the Senate Appropriations Committee on Justice and Public Safety. The report shall include at least the following:
(1)	An analysis of potential costs and benefits of granting experience and education credit to prospective members of the State Highway Patrol who have prior law enforcement or military police experience.
(2)	Identification of additional resources that may be needed to facilitate the granting of credit under these circumstances.
(3)	Identification of obstacles that may need to be addressed before a program of granting credit under these circumstances can be implemented.

LOTTERY COMMISSION/LIMITS ON certain salary INCREASES
SECTION 35.12A.  For the 2014‑2015 fiscal year, notwithstanding the provisions of G.S. 18C‑114(a)(11) and G.S. 18C‑120(b)(3), the Lottery Commission shall not expend funds for merit‑based or performance-based increases.

SALARY‑RELATED CONTRIBUTIONS
SECTION 35.13.(a)  Section 35.15(b) of S.L. 2013‑360 reads as rewritten:
"SECTION 35.15.(b)  Effective July 1, 2013, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 2013‑2014 fiscal year are (i) fourteen and sixty‑nine hundredths percent (14.69%) – Teachers and State Employees; (ii) nineteen and sixty‑nine hundredths percent (19.69%) – State Law Enforcement Officers; (iii) twelve and sixty‑eight hundredths percent (12.68%) – University Employees' Optional Retirement Program; (iv) twelve and sixty‑eight hundredths percent (12.68%) – Community College Optional Retirement Program; (v) thirty‑three and forty‑one hundredths percent (33.41%) – Consolidated Judicial Retirement System; and (vi) five and forty hundredths percent (5.40%) – Legislative Retirement System. Each of the foregoing contribution rates includes five and forty hundredths percent (5.40%) for hospital and medical benefits. The rate for the Teachers and State Employees, State Law Enforcement Officers, University Employees' Optional Retirement Program, and the Community College Optional Retirement Program includes forty‑four hundredths percent (0.44%) 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. The rate for Teachers and State Employees and State Law Enforcement Officers includes one hundredths percent (0.01%) for the Qualified Excess Benefit Arrangement."
SECTION 35.13.(b)  Effective July 1, 2014, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 2014‑2015 fiscal year are (i) fifteen and thirty‑six hundredths percent (15.36%) – Teachers and State Employees; (ii) twenty and thirty‑six hundredths percent (20.36%) – State Law Enforcement Officers; (iii) twelve and seventy‑four hundredths percent (12.74%) – University Employees' Optional Retirement Program; (iv) twelve and seventy‑four hundredths percent (12.74%) – Community College Optional Retirement Program; (v) thirty‑two and eighty‑nine hundredths percent (32.89%) – Consolidated Judicial Retirement System; and (vi) five and forty‑nine hundredths percent (5.49%) – Legislative Retirement System. Each of the foregoing contribution rates includes five and forty‑nine hundredths percent (5.49%) for hospital and medical benefits. The rate for the Teachers and State Employees, State Law Enforcement Officers, University Employees' Optional Retirement Program, and the Community College Optional Retirement Program includes forty‑one hundredths percent (0.41%) 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. The rate for Teachers and State Employees and State Law Enforcement Officers includes one hundredths percent (0.01%) for the Qualified Excess Benefit Arrangement.
SECTION 35.13.(c)  Section 35.15(d) of S.L. 2013‑360 reads as rewritten:
"SECTION 35.15.(d)  Effective July 1, 2014, the maximum annual employer contributions, payable monthly, by the State for each covered employee or retiree for the 2014‑2015 fiscal year to the State Health Plan for Teachers and State Employees are (i) Medicare eligible employees and retirees – four thousand one hundred seventy‑nine dollars ($4,179) and (ii) non‑Medicare eligible employees and retirees – five thousand three hundred seventy‑eight dollars ($5,378)."

PROVIDE COST‑OF‑LIVING INCREASES FOR RETIREES OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT SYSTEM
SECTION 35.14.(a)  G.S. 135‑5 is amended by adding a new subsection to read:
"(ttt)	From and after July 1, 2014, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 2013, shall be increased by one and forty‑four hundredths percent (1.44%) of the allowance payable on June 1, 2014, in accordance with G.S. 135‑5(o). Furthermore, from and after July 1, 2014, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 2013, but before June 30, 2014, shall be increased by a prorated amount of one and forty‑four hundredths percent (1.44%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 2013, and June 30, 2014."
SECTION 35.14.(b)  G.S. 135‑65 is amended by adding a new subsection to read:
"(ee)	From and after July 1, 2014, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 2013, shall be increased by one and forty‑four hundredths percent (1.44%) of the allowance payable on June 1, 2014. Furthermore, from and after July 1, 2014, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 2013, but before June 30, 2014, shall be increased by a prorated amount of one and forty‑four hundredths percent (1.44%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 2013, and June 30, 2014."
SECTION 35.14.(c)  G.S. 120‑4.22A is amended by adding a new subsection to read:
"(y)	In accordance with subsection (a) of this section, from and after July 1, 2014, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before January 1, 2014, shall be increased by one and forty‑four hundredths percent (1.44%) of the allowance payable on June 1, 2014. Furthermore, from and after July 1, 2014, the retirement allowance to or on account of beneficiaries whose retirement commenced after January 1, 2014, but before June 30, 2014, shall be increased by a prorated amount of one and forty‑four hundredths percent (1.44%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between January 1, 2014, and June 30, 2014."

USE OF FUNDS APPROPRIATED FOR STATE RETIREMENT SYSTEM CONTRIBUTION INCREASES
SECTION 35.15.(a)  The appropriations set forth in Section 2.1 of this act include appropriations for State Retirement System contribution increases in amounts set forth in the committee report described in Section 38.2 of this act. The Office of State Budget and Management shall ensure that those funds are used only for State Retirement System contribution increases.
SECTION 35.15.(b)  If the Director of the Budget determines that funds appropriated to a State agency for increases exceed the amount required by that agency for that purpose, the Director may reallocate those funds to other State agencies that received insufficient funds for State Retirement System contribution increases.
SECTION 35.15.(c)  No later than October 1, 2014, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations on the expenditure of funds for State Retirement System contribution increases. This report shall include at least the following information for each State agency for the 2014‑2015 fiscal year:
(1)	The total amount of funds that the agency received for State Retirement System contribution increases.
(2)	The total amount of funds transferred from the agency to other State agencies pursuant to subsection (b) of this section. This section of the report shall identify the amounts transferred to each recipient State agency.
(3)	The total amount of funds used by the agency for State Retirement System contribution increases.
(4)	The total amount of funds received by the agency for State Retirement System contribution increases that are anticipated to revert at the end of the fiscal year.

FUNDING FOR north carolina PUBLIC SCHOOL TEACHERS' AND PROFESSIONAL EDUCATORS' INVESTMENT PLAN
SECTION 35.15A.  Notwithstanding the provisions of G.S. 135‑151(e), the assets of the Qualified Excess Benefit Arrangement (QEBA) established under Article 7 of Chapter 135 of the General Statutes may be used to loan the sum of one hundred fifty thousand dollars ($150,000) to the administrative account of the North Carolina Public School Teachers' and Professional Educators' Investment Plan established under G.S. 115C‑341.2. The Plan shall repay the QEBA when the balance in its administrative account exceeds the sum of two hundred fifty thousand dollars ($250,000). The repayment shall be made with interest at a rate set by the Board of Trustees established under G.S. 135‑6.

Fire and Rescue Squad Supplemental Pensions and Grant Funds
SECTION 35.15B.(a)  G.S. 58‑86‑55 reads as rewritten:
"§ 58‑86‑55.  Monthly pensions upon attaining the age of 55 years.
(a)	Any member who has served 20 years as an "eligible firefighter" or "eligible rescue squad worker" in the State of North Carolina, as provided in G.S. 58‑86‑25 and G.S. 58‑86‑30, and who has attained the age of 55 years is entitled to be paid a monthly pension from this fund. The monthly pension shall be in the amount of one hundred seventy dollars ($170.00) per month. Any retired firefighter receiving a pension shall, effective July 1, 2008, receive a pension of one hundred seventy dollars ($170.00) per month.
(b)	Members shall pay ten dollars ($10.00) per month as required by G.S. 58‑86‑35 and G.S. 58‑86‑40 for a period of no longer than 20 years. No "eligible rescue squad member" shall receive a pension prior to July 1, 1983.
(c)	A member who is totally and permanently disabled while in the discharge of the member's official duties as a result of bodily injuries sustained or as a result of extreme exercise or extreme activity experienced in the course and scope of those official duties and who leaves the fire or rescue squad service because of this disability shall be entitled to be paid from the fund a monthly benefit in an amount of one hundred seventy dollars ($170.00) per month beginning the first month after the member's fifty‑fifth birthday. All applications for disability are subject to the approval of the board who may appoint physicians to examine and evaluate the disabled member prior to approval of the application, and annually thereafter. Any disabled member shall not be required to make the monthly payment of ten dollars ($10.00) as required by G.S. 58‑86‑35 and G.S. 58‑86‑40.
(d)	A member who is totally and permanently disabled for any cause, other than line of duty, who leaves the fire or rescue squad service because of this disability and who has at least 10 years of service with the pension fund, may be permitted to continue making a monthly contribution of ten dollars ($10.00) to the fund until the member has made contributions for a total of 240 months. The member shall upon attaining the age of 55 years be entitled to receive a pension as provided by this section. All applications for disability are subject to the approval of the board who may appoint physicians to examine and evaluate the disabled member prior to approval of the application and annually thereafter.
(e)	A member who, because the member's residence is annexed by a city under Part 2 or Part 3 of Article 4A of Chapter 160A of the General Statutes, or whose department is closed because of an annexation by a city under Part 2 or Part 3 of Article 4A of Chapter 160A of the General Statutes, or whose volunteer department is taken over by a city or county, and because of such annexation or takeover is unable to perform as a firefighter or rescue squad worker of any status, and if the member has at least 10 years of service with the pension fund, may be permitted to continue making a monthly contribution of ten dollars ($10.00) to the fund until the member has made contributions for a total of 240 months. The member upon attaining the age of 55 years and completion of such contributions shall be entitled to receive a pension as provided by this section. Any application to make monthly contributions under this section shall be subject to a finding of eligibility by the Board of Trustees upon application of the member.
(f)	The pensions provided shall be in addition to all other pensions or benefits under any other statutes of the State of North Carolina or the United States, notwithstanding any exclusionary provisions of other pensions or retirement systems provided by law."
SECTION 35.15B.(b)  G.S. 105‑228.5(d)(3) reads as rewritten:
"(3)	Additional Rate on Property Coverage Contracts. – An additional tax at the rate of seventy‑four hundredths percent (0.74%) applies to gross premiums on insurance contracts for property coverage. The tax is imposed on ten percent (10%) of the gross premiums from insurance contracts for automobile physical damage coverage and on one hundred percent (100%) of the gross premiums from all other contracts for property coverage. Twenty percent (20%) of the net proceeds of this additional tax must be credited to the Volunteer Fire Department Fund established in Article 87 of Chapter 58 of the General Statutes. Twenty percent (20%) of the net proceeds must be credited to the Department of Insurance for disbursement pursuant to G.S. 58‑84‑25. Up to twenty percent (20%), as determined in accordance with G.S. 58‑87‑10(f), must be credited to the Workers' Compensation Fund. The remaining net proceeds must be credited to the General Fund.
…."
SECTION 35.15B.(c)  The Department of State Treasurer shall report by March 1, 2015, and for two years thereafter, to the House Committee on State Personnel and the Senate Committee on Pensions & Retirement and Aging on the Department's progress toward the following efforts related to the North Carolina Firefighters' and Rescue Squad Workers' Pension Fund:
(1)	Building appropriate lapse assumptions into the State's annual required contribution to the pension fund.
(2)	Collecting timely member contributions to the pension fund.
SECTION 35.15B.(d)  Effective January 1, 2015, and applicable to the 2015 grant process, G.S. 58‑87‑1(a1) reads as rewritten:
"(a1)	Grant Program. – An eligible fire department may apply to the Commissioner for a grant under this section. In awarding grants under this section, the Commissioner must, to the extent possible, select applicants from all parts of the State based upon need. The Commissioner must award the grants on May 15, or on the first business day after May 15 if May 15 falls on a weekend or a holiday, of each year subject to the following limitations:
(1)	The size of a grant may not exceed thirty thousand dollars ($30,000).
(2)	The applicant shall match the grant on a dollar‑for‑dollar basis, unless the applicant receives less than fifty thousand dollars ($50,000) per year from municipal and county funding, in which case the applicant shall match one dollar ($1.00) for each three dollars ($3.00) of grant funds.
(3)	The grant may be used only for equipment purchases, payment of highway use taxes on those purchases, costs of putting property acquired from the Department of Defense through the Firefighter Property (FFP) and federal Excess Property (FEPP) programs in service, or capital expenditures necessary to provide fire protection services.
…."
SECTION 35.15B.(e)  G.S. 58‑87‑1(c) reads as rewritten:
"(c)	Report. – The Commissioner must submit a written report to the General Assembly within 60 days after the grants have been made. This report must contain the following:
(1)	The amount of the grant and the name of the recipient.
(2)	The Fund balance at the beginning of the grant cycle.
(3)	Cash receipts through the grant cycle.
(4)	Cash disbursements through the grant cycle.
(5)	The Fund balance at the end of the grant cycle."
SECTION 35.15B.(f)  G.S. 58‑87‑5 reads as rewritten:
"§ 58‑87‑5.  Volunteer Rescue/EMS Fund.
(a)	There is created in the Department of Insurance the Volunteer Rescue/EMS Fund to provide grants to volunteer rescue units, rescue/EMS units, and EMS units providing rescue or rescue and emergency medical services to purchase equipment and make capital improvements. An eligible unit may apply to the Department of Insurance for a grant under this section. The application form and criteria for grants shall be established by the Department. The North Carolina Association of Rescue and Emergency Medical Services, Inc., shall provide the Department with an advisory priority listing for rescue equipment eligible for funding, and the Department of Health and Human Services shall provide the Department with an advisory priority listing of EMS equipment eligible for funding. The State Treasurer shall invest the Fund's assets according to law, and the earnings shall remain in the Fund. On December 15, or on the first business day after December 15 if December 15 falls on a weekend or a holiday, of each year, the Department shall make grants to eligible  units subject to all of the following limitations:
(1)	A grant to an applicant who is required to match the grant with non‑State funds may not exceed twenty‑five thousand dollars ($25,000), and a grant to an applicant who is not required to match the grant with non‑State funds may not exceed three thousand dollars ($3,000).
(2)	An applicant whose liquid assets, when combined with the liquid assets of any corporate affiliate or subsidiary of the applicant, are more than one thousand dollars ($1,000) shall match the grant on a dollar‑for‑dollar basis with non‑State funds.
(3)	The grant may be used only for equipment purchases or capital expenditures.
(4)	An applicant may receive no more than one grant per fiscal year.
(5)	The grant may be used only for purposes related to emergency medical services that the unit is authorized to provide.
In awarding grants under this section, the Department shall to the extent possible select applicants from all parts of the State based upon need, subject to the following priority order: (i) rescue units, (ii) rescue/EMS units, (iii) EMS units that are licensed as EMS providers under G.S 131E‑155.1, and, finally, (iv) EMS units that are volunteer fire departments that are a part of a county's EMS system plan. Up to two percent (2%) of the Fund may be used for additional staff and resources to administer the Fund in each fiscal year. In addition, notwithstanding G.S. 58‑78‑20, up to four percent (4%) of the Fund may be used for additional staff and resources for the North Carolina Fire and Rescue Commission.
(b)	A unit is eligible for a grant under this section if it meets all of the following conditions:
(1)	Repealed by Session Laws 1989 (Regular Session, 1990), c. 1066, s. 33(a).
(2)	It consists entirely of volunteer members, with the exception that the unit may have paid members to fill the equivalent of 10 full‑time paid positions.
(3)	It has been recognized by the Department as a rescue unit, a rescue/EMS unit, or an EMS unit.
(4)	It satisfies the eligibility criteria established by the Department under subsection (a) of this section.
(c)	For the purpose of this section and Article 88 of this Chapter, "rescue" means the removal of individuals facing external, nonmedical, and nonpatient related peril to areas of relative safety. A "rescue unit" or "rescue squad" means a group of individuals who are not necessarily trained in emergency medical services, fire fighting, or law enforcement, but who expose themselves to an external, nonmedical, and nonpatient related peril to effect the removal of individuals facing the same type of peril to areas of relative safety. The unit or squad must comply with existing State statutes and with eligibility criteria established by the North Carolina Association of Rescue and Emergency Medical Services, Inc.
(d)	For the purposes of this section, "emergency medical services" or "EMS" has the same meaning as in G.S. 131E‑155(6). Unless otherwise more narrowly specified, an "EMS unit" means either (i) an EMS provider licensed under G.S 131E‑155.1 or (ii) a volunteer fire or fire/rescue department that is part of its county's EMS system plan. The unit or squad must comply with existing State statutes and with eligibility criteria established by the North Carolina Association of Rescue and Emergency Medical Services, Inc.
(e)	Report. – The Commissioner must submit a written report to the General Assembly within 60 days after the grants have been made. This report must contain the following:
(1)	The amount of the grant and the name of the recipient.
(2)	The Fund balance at the beginning of the grant cycle.
(3)	Cash receipts through the grant cycle.
(4)	Cash disbursements through the grant cycle.
(5)	The Fund balance at the end of the grant cycle."
SECTION 35.15B.(g)  Effective July 1, 2015, G.S. 58‑87‑7 reads as rewritten:
"§ 58‑87‑7.  Oversight and accountability of grant awards.
(a)	Examination of Purchased Equipment and Supplies. – To increase accountability and to expedite receipt of certain grant awards, notwithstanding any other provision, the Office of the State Fire Marshal and other employees of the Department of Insurance may in their discretion conduct on‑site examinations of fire, rescue, and EMS equipment and supplies purchased with funds awarded from either the Volunteer Fire Department Fund or the Volunteer Rescue/EMS Fund for up to five years from the date of the grant award. The on‑site examinations may include the inspection of equipment purchased from prior grants and may be conducted prior to or simultaneous with the delivery of the grant awards. The on‑site examination shall document what equipment and supplies have been purchased by the volunteer fire department or volunteer rescue/EMS department and whether those items were received by the department and visually reviewed by the on‑site examiner. Items that have already been distributed or put in the field shall be noted by the on‑site examiner. The Office of the State Fire Marshal shall maintain records of on‑site inspections and provide reports of such inspections, upon request, to the State Auditor or the Office of State Budget and Management.
(b)	Reimbursement to Funds. – If equipment purchased with grant funds is disposed of within five years of the date of the grant award funding its purchase, then the grant recipient shall reimburse the appropriate fund the amount of matching funds used for the purchase of the equipment, less depreciation.
(c)	Transfer of Purchased Equipment. – If a grant recipient shall cease to exist within five years of the date of award of the grant, it shall transfer, subject to the approval of the Department of Insurance, any and all equipment purchased with such grant funds to whichever department shall assume responsibility for providing service to the grant recipient's area of service or to another appropriate department that may effectively use the equipment."
SECTION 35.15B.(h)  By the effective date of subsection (g) of this section, the Department of Insurance shall take the following actions to facilitate the implementation and enforcement of G.S. 58‑87‑7:
(1)	Adopt rules to establish specific guidelines for the following:
a.	G.S. 58‑87‑7(b), enacted by subsection (g) of this section.
b.	G.S. 58‑87‑7(c), enacted by subsection (g) of this section, including guidelines for determining which department receives the equipment of a dissolved department and under what circumstances.
(2)	Provide transfer of equipment forms to fire and rescue departments that receive grant equipment from dissolved departments.
Additionally, in time for the 2015 grant cycle, the Department shall add language to the Agreement of Payment form departments must fill out as part of the grant application process to ensure that departments understand what will happen to grant equipment in the event of dissolution.
SECTION 35.15B.(i)  No later than January 1, 2015, the Department of Insurance shall report to the Joint Program Evaluation Oversight Committee on the Department's efforts to update and correct its computer code that assigns points to grant applicants for funds awarded under Article 87 of Chapter 58 of the General Statutes.

ENHANCE BENEFITS PAYABLE THROUGH THE NATIONAL GUARD PENSION FUND
SECTION 35.15C.  G.S. 127A‑40(a) reads as rewritten:
"(a)	Every member and former member of the North Carolina National Guard who meets the requirements of this section shall receive, commencing at age 60, a pension of one hundred dollars ($100.00) per month for 20 years' creditable military service with an additional ten dollars ($10.00) per month for each additional year of such service; provided, however, that the total pension shall not exceed two hundred dollars ($200.00) per month. The requirements for a pension are that each member shall:
(1)	Have served and qualified for at least 20 years' creditable military service, including National Guard, reserve and active duty, under the same requirement specified for entitlement to retired pay for nonregular service under Chapter 67, Title 10, United States Code.
(2)	Have at least 15 years of the aforementioned service as a member of the North Carolina National Guard.
(3)	Have received an honorable discharge from the North Carolina National Guard."

Alternative Health Benefit Coverage for Nonpermanent Full‑Time State Employees
SECTION 35.16.(a)  Section 1 of S.L. 2013‑324 is repealed. The amendment to G.S. 135‑48.43(a)(2) made in Section 4 of S.L. 2013‑324 is repealed.
SECTION 35.16.(b)  G.S. 135‑48.22 reads as rewritten:
"§ 135‑48.22.  Board powers and duties.
The Board of Trustees shall have the following powers and duties:
(1)	Approve benefit programs, as provided in G.S. 135‑48.30(a)(2).
(2)	Approve premium rates, co‑pays, deductibles, and coinsurance percentages and maximums for the Plan, as provided in G.S. 135‑48.30(a)(2).
(2a)	Approve the benefit program, premium rates, co‑pays, deductibles, and coinsurance percentages and maximums for the coverage offered under G.S. 135‑48.40(e).
(3)	Oversee administrative reviews and appeals, as provided in G.S. 135‑48.24.
(4)	Approve large contracts, as provided in G.S. 135‑48.33(a).
(5)	Consult with and advise the State Treasurer as required by this Article and as requested by the State Treasurer.
(6)	Develop and maintain a strategic plan for the Plan."
SECTION 35.16.(c)  G.S. 135‑48.40 is amended by adding a new subsection to read:
"(e)	Other Contributory Coverage. – Any employee of an employing unit is eligible for coverage under this section on a contributory basis, subject to the provisions of G.S. 135‑48.43 and of this section, if (i) the employee's employing unit determines that the employee is a full‑time employee and (ii) the employee does not qualify for coverage under subdivision (1), (5), (6), (7), (8), (9), or (10) of G.S. 135‑48.40(b). For the purposes of this subsection, the full‑time status of an employee shall be determined by the employing unit, in its sole discretion, in accordance with Section 4980H of the Internal Revenue Code and the applicable regulations, as amended. The coverage offered and the contribution required for coverage under this section shall be determined by the Treasurer and approved by the Board of Trustees. Such coverage shall do all of the following:
(1)	Be designed to meet the requirements of minimum essential coverage under the Patient Protection and Affordable Care Act, P.L. 111‑148, and the applicable regulations, as amended (Affordable Care Act).
(2)	Provide no greater coverage than a bronze‑level plan, as defined under the Affordable Care Act.
(3)	Minimize the required employer contribution in an administratively feasible manner."
SECTION 35.16.(d)  G.S. 135‑48.43 (a)(2) reads as rewritten:
"(2)	New employees may apply for coverage to be effective on the first day of the month following employment, or on a like date the following month if the employee has enrolled, except that the effective date of coverage for employees who become eligible in accordance with G.S. 135‑48.40(e) will be determined by the employing unit in a manner that is consistent with section 4980H of the Internal Revenue Code and the applicable regulations, as amended."
SECTION 35.16.(e)  Subsection (a) of this section is effective when this act becomes law. Subsections (b) through (d) of this section become effective January 1, 2015, and apply to plan years beginning on or after that date.

Clarify That Re‑Hired State Retirees Shall Be Offered Coverage in State Health Plan as Active Employees Rather Than As Retirees
SECTION 35.16A.(a)  G.S. 135‑48.41 is amended by adding the following new subsection:
"§ 135‑48.41.  Additional eligibility provisions.
…
(j)	If a retiree has been hired by an employing unit and is eligible for coverage under subdivision (1), (5), (6), (7), (8), (9), or (10) of G.S. 135‑48.40(b) or under G.S. 135‑48.40(e), then the hired retiree shall not, during the time of employment, be eligible for retiree coverage under G.S. 135‑48.40(a)(1), G.S. 135‑48.40(b)(3), G.S. 135‑48.40(c)(2), or G.S. 135‑48.40(d)(11)."
SECTION 35.16A.(b)  The second paragraph of Section 35.15(a) of S.L. 2013‑360 is repealed.

SEPARATE INSURANCE BENEFITS PLAN FOR LAW ENFORCEMENT
SECTION 35.17.  Section 35.17(c) of S.L. 2013‑360 reads as rewritten:
"SECTION 35.17.(c)  For each fiscal year of the 2013‑2015 fiscal biennium, the Department of State Treasurer shall calculate the total compensation for which the Department of Public Safety and Department of Justice have paid retirement contributions on behalf of sworn law enforcement officers. The Department of State Treasurer shall multiply this total compensation by five and forty hundredths percent (5.40%) for months during the 2013‑2014 fiscal year and by five and forty‑nine hundredths percent (5.49%) for months during the 2014‑2015 fiscal year and shall ensure that the General Fund is fully reimbursed for these costs by executing periodic transfers of the resulting amounts from the Separate Insurance Benefits Plan established under G.S. 143‑166.60 to the General Fund."

PART XXXVI. CAPITAL APPROPRIATIONS

CAPITAL APPROPRIATIONS/GENERAL FUND
SECTION 36.1.  Section 36.2(a) of S.L. 2013‑360 reads as rewritten:
"SECTION 36.2.(a)  There is appropriated from the General Fund for the 2013‑2015 fiscal biennium the following amounts for capital improvements:
Capital Improvements – General Fund	2013‑2014	2014‑2015

Department of Administration
	Sandhills State Veterans Facility – Committal
	Enclosure	$	125,000	‑
	Goldsboro State Veterans' Cemetery	600,000	‑

Department of Cultural Resources
	NC History Museum	1,800,000

Department of Environment and Natural Resources
	Water Resources Development Projects	11,522,000	5,810,000

Department of Justice
	Western Crime Lab Planning	1,442,000	‑

Department of Public Safety
	Samarkand Training Facility	5,250,000	5,173,000
	National Guard	5,000,000	3,250,000

Office of State Budget and Management
	USS North Carolina Battleship Hull Repairs Challenge Grant	3,000,000

The University of North Carolina System
	University of North Carolina Asheville – 
	Land Purchases	2,000,000	‑
	Appalachian State University – Health Sciences
	Building Advance Planning	2,000,000	4,000,000

TOTAL CAPITAL IMPROVEMENTS – 
	GENERAL FUND	$ 27,939,000	
	$23,033,000"

WATER RESOURCES DEVELOPMENT PROJECTS
SECTION 36.2.(a)  The Department of Environment and Natural Resources shall allocate funds for water resources development projects in accordance with the schedule that follows. The amounts set forth in the schedule include funds appropriated in this act for water resources development projects and funds carried forward from previous fiscal years in accordance with subsection (b) of this section. These funds will provide a State match for an estimated nine million six hundred fifty thousand dollars ($9,650,000) in federal funds.

Name of Project	2014‑2015
(1)	B. Everett Jordan Lake Water Supply Storage	$	200,000
(2)	Wilmington Harbor Maintenance – Disposal Area 8 & 10	4,000,000
(3)	Morehead City Harbor Maintenance	‑
(4)	Wilmington Harbor Deepening	600,000
(5)	Wilmington Harbor Improvements Feasibility Study	200,000
(6)	Natural Resources Conservation Service (NRCS) Equipment Projects	2,000,000
(7)	Planning Assistance to Communities	25,000
(8)	Hookerton, NC – Stream Bank Erosion Repair (Sec 14)	410,000
(9)	State/Local Water Resource Development Grants	1,000,000

TOTALS	$ 8,435,000

SECTION 36.2.(b)  It is the intent of the General Assembly that funds carried forward from previous fiscal years be used to supplement the five million eight hundred ten thousand dollars ($5,810,000) appropriated for water resources development projects in Section 36.2(a) of S.L. 2013-360, as amended by Section 36.1(a) of this section. Therefore, the following funds carried forward from previous fiscal years shall be used for the following projects:

Name of Project	Amount Carried Forward
(1)	Wilmington Harbor Maintenance – Disposal Area 8 & 10	$ 2,000,000
(2)	Wilmington Harbor Deepening	600,000
(3)	Planning Assistance to Communities	25,000

TOTALS	$ 2,625,000
SECTION 36.2.(c)  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 2014‑2015 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 the 2014‑2015 fiscal year.
(3)	State‑local water resources development projects.
Funds subject to this subsection that are not expended or encumbered for the purposes set forth in subdivisions (1) through (3) of this subsection shall revert to the General Fund at the end of the 2015‑2016 fiscal year.
SECTION 36.2.(d)  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.
SECTION 36.2.(e)  Notwithstanding any provision of law to the contrary, funds appropriated for a water resources development project shall be used to provide no more than fifty percent (50%) of the nonfederal portion of funds for the project. This subsection applies to funds appropriated in this act and to funds appropriated prior to the 2013‑2015 fiscal biennium that are unencumbered and proposed for reallocation to provide the nonfederal portion of funds for water resources development projects. The limitation on fund usage contained in this subsection applies only to projects in which a local government or local governments participate.

NON‑GENERAL FUND CAPITAL IMPROVEMENT AUTHORIZATIONS
SECTION 36.3.  The General Assembly authorizes the following capital projects to be funded with receipts or from other non‑General Fund sources available to the appropriate department:
Name of Project	Amount of Non‑General Fund
	Funding Authorized for FY 2014‑2015
Department of Administration
	Salisbury Veterans Home Renovation	$ 3,715,000

Department of Agriculture and Consumer Services
	Alexander, Richmond County, District Three Head Quarters 
	Site Development and Modular Placement	210,000
	Alexander County Office Purchase	100,000
	Tidewater Research Station – Deer Fence	80,000
	DuPont Recreational State Forest – Trail Improvement	100,000
	Raleigh Farmers Market
	Parking	200,000
	New Vendor Building	700,000
	Research Stations 
	Safety Improvements	80,000
	Land Acquisitions	1,000,000
	Jordan Lake Classroom Development and Modular Placement	75,000
	Western North Carolina Agricultural Center
	Livestock Improvements	3,000,000
	E&F Barns Roof Replacements	500,000
	Restrooms	750,000
	North Carolina State Fairgrounds
	HVAC Improvements	1,500,000
	Renovations to Existing Buildings	2,000,000
	Infrastructure Repairs	1,550,000
	Horse Complex Improvements	2,000,000
	Mountain Island Educational Forest – Visitor and Interpretive Center	3,000,000
	Holmes Educational State Forest – Repair and Renovation of Facilities	15,000
	Tuttle Education Forest – Repair and Renovation of Facilities 	15,000
	Piedmont Research Station – New Bridge	200,000
	Western North Carolina Farmers Market – Paving Improvements	100,000
	Rendezvous Mountain Education State Forest – Repair and Renovation	15,000
	Umstead Research Farm‑Infrastructure	800,000

Department of Cultural Resources
	Museum of Art – East Building Technology Improvement	1,118,750
Department of Environment and Natural Resources
	NC Zoo – Solar Pointe Restrooms	475,000
	Fort Fisher Aquarium – Renovations	5,800,000

Department of Justice
	Raleigh Crime Lab Renovation	807,000

Department of Public Safety
	Caledonia Farms Grain Station	361,340
	Maury Correctional Institution – Industrial Area Uplift	2,830,499
	Raleigh Facilities Maintenance – Latrine Renovations	165,000
	Raleigh Troop Motor Pool – Latrine Renovations	130,000
	Camp Butner Training Site
	Range Control Building	738,000
	Training Building	495,000
	Multipurpose Building 	800,000
	Water Tower and System Improvements	494,000
	Land Buffer Acquisitions	300,000
	Youngsville Field Maintenance Shop – Lighting Upgrade	95,000
	High Point Field Maintenance Shop
	Office and Storage Building	525,000
	Military- Owned Vehicle Lot Paving	525,000
	Morrisville Army Aviation Support Facility
	Latrine Renovations	88,000
	Guard Shack and Access Improvements	525,000
	Fort Bragg Regional Training Site
	Fire Alarm System	27,000
	Wash Rack Addition	525,000
	Red Springs Field Maintenance Shop Expansion	788,000
	Winston‑Salem Field Maintenance Shop – Addition and Alteration	775,000

Wildlife Resources Commission
	Land Acquisition	3,750,000
	Fishing Access Areas – New Construction	200,000 
	Boating Access Areas
	New Construction	900,000
	Renovations	900,000
	Balsam Depot – Renovation	1,300,000

TOTAL AMOUNT OF NON‑GENERAL FUND CAPITAL
	PROJECTS AUTHORIZED	$47,142,589

JUVENILE FACILITIES PROJECTS
SECTION 36.4.(a)  Of the funds allocated to the Department of Public Safety from the Reserve for Repairs and Renovations for the 2013‑2014 fiscal year, the sum of one million seven hundred seventy‑four thousand dollars ($1,774,000) for Dobbs Youth Development Center Kitchen Renovations may be used by the Department to support construction, expansions, renovations, and repairs necessary to implement the Department's 2014 Juvenile Justice Facilities Strategic Plan. Notwithstanding G.S. 143C‑4‑3, no report to the Joint Legislative Commission on Governmental Operations on this allocation shall be required.
SECTION 36.4.(b)  Section 16D.9 of S.L. 2013‑360 is repealed.

USE OF CERTAIN FUNDS CARRIED FORWARD BY UNC FOR CAPITAL PROJECTS
SECTION 36.5.  G.S. 143C‑8‑12 reads as rewritten:
"§ 143C‑8‑12.  University system capital improvement projects from sources that are not General Fund sources: approval of new project or change in scope of existing project.
(a)	Notwithstanding any other provision of this Chapter, the Board of Governors of The University of North Carolina may approve: (i) expenditures to plan a capital improvement project of The University of North Carolina the planning for which is to be funded entirely with non‑General Fund money, (ii) expenditures for a capital improvement project of The University of North Carolina that is to be funded and operated entirely with non‑General Fund money, or (iii) a change in the scope of any previously approved capital improvement project of The University of North Carolina provided that both the project and change in scope are funded entirely with non‑General Fund money. The Board of Governors shall report any expenditure made pursuant to this section to the Office of State Budget and Management and to the Joint Legislative Commission on Governmental Operations.
(b)	For purposes of this section, the term "non‑General Fund money" includes funds carried forward from one fiscal year to another pursuant to G.S. 116‑30.3 and G.S. 116‑30.3B. These funds shall only be used for projects listed in G.S. 143C‑4‑3(b)."

INCREASE NATIONAL GUARD FLEXIBILITY WITH RESPECT TO CERTAIN CAPITAL PROJECTS
SECTION 36.8.(a)  G.S. 143C‑8‑12, as amended by Section 36.5 of this act, reads as rewritten:
"§ 143C‑8‑12.  Capital improvement projects from sources other than the General Fund.
(a)	University Projects. – Notwithstanding any other provision of this Chapter, the Board of Governors of The University of North Carolina may approve any of the following:
(1)	Expenditures to plan a capital improvement project of The University of North Carolina, the planning for which is to be funded entirely with non‑General Fund money.
(2)	Expenditures for a capital improvement project of The University of North Carolina that is to be funded and operated entirely with non‑General Fund money.
(3)	A change in the scope of any previously approved capital improvement project of The University of North Carolina provided that both the project and change in scope are funded entirely with non‑General Fund money.
(b)	Carryforward Funds. – For purposes of this section, the term 'non‑General Fund money' includes funds carried forward from one fiscal year to another pursuant to G.S. 116‑30.3 and G.S. 116‑30.3B. These funds shall only be used for projects listed in G.S. 143C‑4‑3(b).
(c)	National Guard Projects. – Notwithstanding any other provision of this Chapter, the North Carolina National Guard may approve expenditures for a capital project of the North Carolina National Guard but only if (i) the project will be funded entirely with federal funds and (ii) any operating costs associated with the project will be paid entirely with federal funds.
(d)	Reporting. – The Board of Governors and the National Guard shall report any expenditure made pursuant to this section to the Office of State Budget and Management and to the Joint Legislative Commission on Governmental Operations."
SECTION 36.8.(b)  Section 36.11(c) of S.L. 2013‑360 reads as rewritten:
"SECTION 36.11.(c)  Where the actual costs are different from the estimated costs under subsection (a) of this section, the Adjutant General of the National Guard may adjust the allocations among projects as needed. However, State funds shall not be allocated to a project in excess of the maximum amount of State funds authorized to be allocated to the project under subsection (a) of this section. If any projects funded under subsection (a) of this section are delayed or cancelled and the budgeted State funds cannot be used during the 2013‑2015 fiscal biennium, 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)	Future project feasibility studies.
(2)	Survey, testing, and permitting.
(3)	Planning and execution for reversion of facilities no longer in use.
(4)	Armory and facilities projects approved by the Congress of the United States that are not listed in subsection (a) of this section and that require State-matching funds."
SECTION 36.8.(c)  Article 8 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑129.6.  Exemption for certain training projects of the North Carolina National Guard.
Expenditures, excluding design fees, for a capital project, construction, or repair work (i) that is for training purposes and for a single exercise or undertaking at a National Guard facility; (ii) that has a total cost that does not exceed applicable federal limits; and (iii) that will be funded entirely with federal funds, shall not be subject to this Article."

USS NORTH CAROLINA BATTLESHIP CHALLENGE GRANT/OSBM SPECIAL APPROPRIATIONS
SECTION 36.10.(a)  Of the funds appropriated in Section 36.2 of S.L. 2013‑360, as amended by Section 36.1 of this act, to the Office of State Budget and Management, the sum of three million dollars ($3,000,000) in nonrecurring funds for the 2014‑2015 fiscal year shall be allocated to the Office of State Budget and Management and transferred to the Department of Cultural Resources in order to establish a Capital Improvement Project for the North Carolina Battleship in accordance with this section. It is the intent of the General Assembly that the North Carolina Battleship Commission raise at least five million dollars ($5,000,000) in non‑State funds for the 2014‑2015 fiscal year. The North Carolina Battleship Commission shall not use funds transferred from the organization's endowment to its operating budget to achieve the fund‑raising targets set out in subsection (b) of this section.
SECTION 36.10.(b)  For the 2014‑2015 fiscal year, the Department of Cultural Resources shall establish a Capital Improvement Project to construct a cofferdam for the North Carolina Battleship that will enable completion of major hull repairs. Funds shall be transferred to the Department of Cultural Resources from the Office of State Budget and Management as follows:
(1)	Upon raising the initial sum of three million dollars ($3,000,000) in non‑State funding, the sum of one million dollars ($1,000,000) shall be transferred.
(2)	Upon raising an additional sum of one million dollars ($1,000,000) in non‑State funding for a total amount of four million dollars ($4,000,000) in non‑State funds, the sum of one million dollars ($1,000,000) shall be transferred.
(3)	Upon raising an additional sum of one million dollars ($1,000,000) in non‑State funding for a total sum of five million dollars ($5,000,000) in non‑State funds, the final sum of one million dollars ($1,000,000), for a total sum of three million dollars ($3,000,000) shall be transferred to the Capital Improvement Project for the North Carolina Battleship in the 2014‑2015 fiscal year.

TWO‑THIRDS BONDS ACT OF 2014
SECTION 36.12.(a)  Short Title. – This section may be cited as the "Two‑Thirds Bonds Act of 2014."
SECTION 36.12.(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.
SECTION 36.12.(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 bond insurance, investment contracts, credit enhancement facilities and liquidity facilities, interest‑rate swap agreements or other derivative products, financial and legal consultants, and related costs of the incurrence or issuance of any bond or note.
h.	The cost of reimbursing the State for any payments made for any cost described in this subdivision.
i.	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 the following:
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 36.12.(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 of the State to be designated "State of North Carolina General Obligation Bonds," with any additional designations as may be determined, or notes of the State, in the aggregate principal amount of up to two hundred sixty‑three million seven hundred twenty-five thousand dollars ($263,725,000), this amount being not in excess of two-thirds of the amount by which the State's outstanding indebtedness was reduced during the fiscal biennium ended June 30, 2013, for the purpose of providing funds, with any other available funds, for the purposes authorized by this section.
SECTION 36.12.(e)  Uses of Bond and Note Proceeds. – The proceeds of bonds and notes shall be used for financing the cost of 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 or special indebtedness 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 shall provide semiannual reports to the Chairs of the Senate Appropriations Committees and the House Appropriations Subcommittees and to 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 36.12.(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 fifteen million four hundred thousand dollars ($15,400,000) to finance the capital facility costs of a Western Crime Lab.
(2)	A maximum aggregate principal amount of two hundred six million dollars ($206,000,000) to finance the capital facility costs of projects previously authorized or subsequently to be authorized by the General Assembly to be financed pursuant to Article 9 of Chapter 142 of the General Statutes but for which some or all of the amount of bonds authorized to be issued under that Article have not yet been issued. To the extent that bonds and notes are issued pursuant to this subdivision, there shall be a corresponding reduction in the amount of debt that has been authorized to be issued but has not been issued pursuant to Article 9 of Chapter 142 of the General Statutes.
(3)	A maximum aggregate principal amount of forty‑two million three hundred twenty-five thousand dollars ($42,325,000) to finance the capital facility costs of renovating the Albemarle Building.
SECTION 36.12.(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 36.12.(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 36.12.(i)  Interpretation of Section. – 
(1)	Additional method. – The foregoing subsections 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 36.12.(j)  This section is effective when it becomes law.

Transfer Unspent Capital Funds to Project Reserve Account
SECTION 36.14.  G.S. 143C‑8‑11 reads as rewritten:
"§ 143C‑8‑11.  Reversion of appropriation; lapse of project authorization; transfer of funds remaining after project completion.
…
(c)	Funds Remaining After Project Completion. – The State Controller shall transfer any balance of State funds appropriated for a capital project that remains unspent and unencumbered two years after completion of the project in accordance with this section. If applicable law requires a particular disposition of the funds, then the transfer shall be made in accordance with that requirement. Otherwise, the transfer shall be made in accordance with the following requirements:
(1)	If the funds were initially allocated from the Reserve for Repairs and Renovations, then the funds shall be transferred to that Reserve.
(2)	All other funds shall be transferred to the Project Reserve Account created by G.S. 143C‑8‑10."

SITE PLANNING FOR NC SCHOOL OF SCIENCE AND MATHEMATICS
SECTION 36.15.(a)  Having considered the study conducted by the Board of Governors, the North Carolina School of Science and Mathematics, and the Department of Public Instruction on the feasibility for a western campus of the North Carolina School of Science and Mathematics (School of Science and Math), the General Assembly finds that the establishment of a western School of Science and Math located on the campus of the North Carolina School for the Deaf or other State property adjoining that campus is desirable. The General Assembly further finds that the establishment of a western School of Science and Math at that location would be beneficial to the economic growth and workforce preparedness in western North Carolina and would extend the opportunity for the unique study experience provided by the School of Science and Math to a significant number of additional students with excellent academic records. Therefore, the Board of Governors and the Board of Trustees of the North Carolina School of Science and Mathematics shall jointly determine the most appropriate location, including the repurposing of property, at either the North Carolina School for the Deaf or other State‑owned property adjoining the North Carolina School for the Deaf for the proposed western School of Science and Math.
SECTION 36.15.(b)  The General Assembly authorizes advanced planning of the Western School of Science and Mathematics described in subsection (a) of this section to be funded in accordance with the following for the 2014‑2015 fiscal year:
(1)	Notwithstanding G.S. 143C‑8‑12, as amended by Section 36.5 of this act, the Board of Governors of The University of North Carolina may use up to the sum of one million two hundred thousand dollars ($1,200,000) in funds carried forward pursuant to G.S. 116‑30.3 and G.S. 116‑30.3B for advanced planning of the facility.
(2)	The Board of Governors may use up to the sum of eight hundred thousand dollars ($800,000) in funds provided to it by a non-State entity, or combination of non-State entities, for advanced planning of the facility.
(3)	Once the two million dollars ($2,000,000) that has been made available pursuant to subdivisions (1) and (2) of this section has been spent or encumbered, the Board of Governors may continue to fund advanced planning in accordance with G.S. 143C‑8‑7.
SECTION 36.15.(b1)  The Board of Governors shall ensure that the one million two hundred thousand dollars ($1,200,000) described in subdivision (b)(1) of this section is not spent for any purpose other than advanced planning of the facility described in subsection (a) of this section. The Board of Governors may commence advanced planning with these funds as soon as this section is effective, and if the eight hundred thousand dollars ($800,000) described in subdivision (b)(2) of this section is provided to the Board of Governors, the Board shall use the one million two hundred thousand dollars ($1,200,000) described in subdivision (b)(1) of this section for this purpose.
SECTION 36.15.(c)  No later than November 30, 2014, the Board of Governors and the School of Science and Math shall report to the Joint Legislative Education Oversight Committee regarding its progress on site selection and any other advanced planning for the western School of Science and Math as described in subsection (a) of this section.

Report on Appalachian State University Health Sciences Building
SECTION 36.16.(a)  No later than October 1, 2014, Appalachian State University shall submit to the Board of Governors and to the Fiscal Research Division a detailed plan for the construction and operation of the Health Sciences Building that will be located on its campus. The report shall include information about the construction planning as well as several options for financing the construction and operation of the facility.
SECTION 36.16.(b)  The General Assembly authorizes planning of the Health Sciences Building at Appalachian State University in an amount not to exceed the sum of seven million two hundred two thousand eight hundred eighty‑three dollars ($7,202,883). This amount represents the total amount authorized to be spent for planning this project. The General Assembly has appropriated six million dollars ($6,000,000) for this purpose in the 2013‑2015 fiscal biennium and does not intend to appropriate additional funds for planning this project in the future. Accordingly, the General Assembly hereby authorizes the remaining sum of one million two hundred two thousand eight hundred eighty‑three dollars ($1,202,883) to be funded with receipts or from other non‑General Fund sources available to Appalachian State University during the 2014‑2015 fiscal year.

PART XXXVII. FINANCE PROVISIONS

Clarify "Net General Fund Tax Collected" for Purposes of the Corporate Income Tax Rate Reduction Trigger
SECTION 37.1.(a)  G.S. 105‑130.3C reads as rewritten:
"§ 105‑130.3C.  Rate reduction trigger.
(a)	Trigger. – If the amount of net General Fund tax collected in fiscal year 2014‑2015 or fiscal year 2015‑2016 exceeds the targeted amount for that fiscal year, the rate of tax set in G.S. 105‑130.3 may be decreased in accordance with this section effective for the taxable year that begins on the following January 1. The Secretary must notify taxpayers if the rate decreases under this section. The rate is decreased by one percent (1%) if net General Fund tax collections for fiscal year 2014‑2015 exceed the targeted amount of twenty billion two hundred million dollars ($20,200,000,000). The rate is decreased by one percent (1%) if net General Fund tax collections for fiscal year 2015‑2016 exceed the targeted amount of twenty billion nine hundred seventy‑five million dollars ($20,975,000,000). Effective for taxable years beginning on or after January 1, 2017, the rate of tax set in G.S. 105‑130.3 is the rate determined in accordance with this section.
(b)	Tax Collections. – For purposes of this section, the amount of net General Fund tax collected for a fiscal year is the amount of net revenue as reported by the Department of Revenue's June Statement of Collection as "Total General Fund Revenue" for the 12-month period that ended the previous June 30, modified as follows:
(1)	Less any large one‑time, nonrecurring revenue as reported to the Fiscal Research Division of the General Assembly by the Department and verified by the Fiscal Research Division of the General Assembly.
(2)	Adjusted by any changes in net collections resulting from the suspension or termination of transfers out of General Fund tax collections."
SECTION 37.1.(b)  This section is effective when it becomes law.

Modify County Hold Harmless for Repealed Local Taxes
SECTION 37.2.(a)  Effective July 1, 2014, G.S. 105‑523 reads as rewritten:
"§ 105‑523.  County hold harmless for repealed local taxes.
(a)	Intent. – It is the intent of the General Assembly that each county benefit by at least three hundred seventy‑five thousand dollars ($375,000) annually from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non‑administrative costs of Medicaid.
(b)	Definitions. – The following definitions apply in this section:
…
(2)	Hold harmless threshold. – The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A‑54 for the fiscal year, less three hundred seventy‑five thousand dollars ($375,000). A county's Medicaid service costs for fiscal years 2008‑2009, 2009‑2010, and 2010‑2011 are determined without regard to the changes made to the Federal Medical Assistance Percentage by section 5001 of the American Recovery and Reinvestment Act of 2009.
…."
SECTION 37.2.(b)  Effective July 1, 2015, G.S. 105‑523, as amended by subsection (a) of this section, reads as rewritten:
"§ 105‑523.  County hold harmless for repealed local taxes.
(a)	Intent. – It is the intent of the General Assembly that each county benefit by at least two hundred fifty thousand dollars ($250,000) annually from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non‑administrative costs of Medicaid.
(b)	Definitions. – The following definitions apply in this section:
…
(2)	Hold harmless threshold. – The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A‑54 for the fiscal year, less two hundred fifty thousand dollars ($250,000). A county's Medicaid service costs for fiscal years 2008‑2009, 2009‑2010, and 2010‑2011 are determined without regard to the changes made to the Federal Medical Assistance Percentage by section 5001 of the American Recovery and Reinvestment Act of 2009.
…."
SECTION 37.2.(c)  Effective July 1, 2016, G.S. 105‑523, as amended by subsection (b) of this section, reads as rewritten:
"§ 105‑523.  County hold harmless for repealed local taxes.
(a)	Intent. – It is the intent of the General Assembly that each county benefit by at least one hundred twenty‑five thousand dollars ($125,000) annually from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non‑administrative costs of Medicaid.
(b)	Definitions. – The following definitions apply in this section:
…
(2)	Hold harmless threshold. – The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A‑54 for the fiscal year, less one hundred twenty‑five thousand dollars ($125,000). A county's Medicaid service costs for fiscal years 2008‑2009, 2009‑2010, and 2010‑2011 are determined without regard to the changes made to the Federal Medical Assistance Percentage by section 5001 of the American Recovery and Reinvestment Act of 2009.
…."
SECTION 37.2.(d)  Effective July 1, 2017, G.S. 105‑523, as amended by subsection (c) of this section, reads as rewritten:
"§ 105‑523.  County hold harmless for repealed local taxes.
(a)	Intent. – It is the intent of the General Assembly that each county be held harmless from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non‑administrative costs of Medicaid.
(b)	Definitions. – The following definitions apply in this section:
…
(2)	Hold harmless threshold. – The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A‑54 for the fiscal year. A county's Medicaid service costs for fiscal years 2008‑2009, 2009‑2010, and 2010‑2011 are determined without regard to the changes made to the Federal Medical Assistance Percentage by section 5001 of the American Recovery and Reinvestment Act of 2009.
…."

Modular/Manufactured Home Sales Tax
SECTION 37.3.(a)  G.S. 105‑164.13 is amended by adding a new subdivision to read:
"§ 105‑164.13.  Retail sales and use tax.
The sale at retail and the use, storage, or consumption in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article:
…
(64)	Fifty percent (50%) of the sales prices of a modular home or a manufactured home, including all accessories attached when delivered to the purchaser."
SECTION 37.3.(b)  This section becomes effective July 1, 2014, and applies to sales made on or after that date.

Phase in sales tax rate on piped natural gas for gas cities and customers of gas cities
SECTION 37.4.(a)  G.S. 105‑164.4(a) is amended by adding a new subdivision to read:
"(a)	A privilege tax is imposed on a retailer at the following percentage rates of the retailer's net taxable sales or gross receipts, as appropriate. The general rate of tax is four and three‑quarters percent (4.75%).
…
(14)	The rate of three and one‑half percent (3.5%) applies to the gross receipts derived from sales of piped natural gas (i) received by a gas city for consumption by that city and (ii) delivered by a gas city to a sales customer or transportation customer of the gas city. For purposes of this subdivision, the following definitions apply:
a.	Gas city. – A city in this State that operated a piped natural gas distribution system as of July 1, 1998. These cities are Bessemer City, Greenville, Kings Mountain, Lexington, Monroe, Rocky Mount, Shelby, and Wilson.
b.	Sales customer. – An end user who does not have direct access to an interstate gas pipeline and whose piped natural gas is delivered by the seller of the gas.
c.	Transportation customer. – An end user who does not have direct access to an interstate gas pipeline and whose piped natural gas is delivered by a person who is not the seller of the gas."
SECTION 37.4.(b)  G.S. 105‑164.44L(b) reads as rewritten:
"(b)	Excise Tax Share. – The quarterly excise tax share of a city is the amount of piped natural gas excise tax distributed to the city under repealed G.S. 105‑187.44 for the same related quarter that was the last quarter in which taxes were imposed on piped natural gas under repealed Article 5E of this Chapter. The determination made by the Department with respect to a city's excise tax share is final and is not subject to administrative or judicial review.
The excise tax share of a city that has dissolved, merged with another city, or divided into two or more cities since it received a distribution under repealed G.S. 105‑187.44 is adjusted as follows:
(1)	If a city dissolves and is no longer incorporated, the excise tax share of the city is added to the amount distributed under subsection (c) of this section.
(2)	If two or more cities merge or otherwise consolidate, their excise tax shares are combined.
(3)	If a city divides into two or more cities, the excise tax share of the city that divides is allocated among the new cities in proportion to the total amount of ad valorem taxes levied by each on property having a tax situs in the city."
SECTION 37.4.(c)  G.S. 105‑164.44L(a) reads as rewritten:
"(a)	Distribution. – The Secretary must distribute to cities twenty percent (20%) of the net proceeds of the tax collected under G.S. 105‑164.4 on piped natural gas, less the cost to the Department of administering the distribution. Each city's share of the amount to be distributed is its excise tax share calculated under subsection (b) of this section plus its ad valorem share calculated under subsection (c) of this section. A gas city will also receive an amount calculated under subsection (b1) of this section as part of its excise tax share. If the net proceeds of the tax allocated under this section are not sufficient to distribute the excise tax share of each city under subsection (b) of this section and the gas city share under subsection (b1) of this section, the proceeds shall be distributed to each city on a pro rata basis. The Secretary must make the distribution within 75 days after the end of each quarter."
SECTION 37.4.(d)  G.S. 105‑164.44L is amended by adding a new subsection to read:
"(b1)	Gas Cities. – In addition to the excise tax share calculated under subsection (b) of this section, a gas city shall receive as part of its excise tax share a distribution calculated under this subsection. The Secretary must determine the amount the gas city would have received under repealed G.S. 105‑187.44 for the last year in which taxes were imposed under repealed Article 5E of this Chapter if piped natural gas consumed by the city or delivered by the city to a customer had not been exempt from tax under repealed G.S. 105‑187.41(c)(1) and (c)(2), divide that amount by four to calculate the quarterly distribution amount for a gas city under this subsection. A gas city must report the information required by the Secretary to make the distribution under this section in the form, manner, and time required by the Secretary. The determination made by the Department with respect to a gas city's share under this subsection is final and is not subject to administrative or judicial review. For purposes of this section, the term "gas city" is a city in this State that operated a piped natural gas distribution system as of July 1, 1998. These cities are Bessemer City, Greenville, Kings Mountain, Lexington, Monroe, Rocky Mount, Shelby, and Wilson."
SECTION 37.4.(e)  Subsection (a) of this section becomes effective July 1, 2014, and expires July 1, 2015. Subsection (b) of this section is effective for quarters beginning on or after July 1, 2014. Subsections (c) and (d) of this section are effective for quarters beginning on or after July 1, 2015.

Modify Renewable Energy Tax credit
SECTION 37.5.(a)  G.S. 105‑129.16A reads as rewritten:
"§ 105‑129.16A.  Credit for investing in renewable energy property.
…
(e)	Sunset. – Except for taxpayers covered by subsection (e1) of this section, this section is repealed effective for renewable energy property placed into service on or after January 1, 2016.
(e1)	Delayed Sunset. – For taxpayers that have incurred more than five percent (5%) of the cost of constructing renewable energy property on or before January 1, 2016, this section is repealed effective for renewable energy property placed into service after July 1, 2017."
SECTION 37.5.(b)  This section is effective when it becomes law.

Modify historic rehabilitation tax credit
SECTION 37.6.(a)  Article 3D of Chapter 105 of the General Statutes reads as rewritten:
"Article 3D.
"Historic Rehabilitation Investment Program.
"§ 105‑129.35.  Credit for rehabilitating income‑producing historic structure.
(a)	Credit. – A taxpayer who is allowed a federal income tax credit under section 47 of the Code for making qualified rehabilitation expenditures for a certified historic structure located in this State is allowed a credit equal to a percentage of the expenditures that qualify for the federal credit, as follows:
(1)	Base credit one: Fifteen percent (15%) of qualified rehabilitation expenditures up to ten million dollars ($10,000,000).
(2)	Base credit two: Ten percent (10%) of qualified rehabilitation expenditures greater than ten million dollars ($10,000,000) and up to twenty million dollars ($20,000,000).
(3)	Development tier additive credit: Five percent (5%) of qualified rehabilitation expenditures not exceeding twenty million dollars ($20,000,000) if the certified historic structure is located in a development tier one or two area.
(4)	Targeted investment additive credit: Five percent (5%) of qualified rehabilitation expenditures not exceeding twenty million dollars ($20,000,000) if the certified historic structure is located in an eligible targeted investment site.
To claim the base credit or credits allowed by this subsection, the taxpayer must provide a copy of the certification obtained from the State Historic Preservation Officer verifying that the historic structure has been rehabilitated in accordance with this subsection. To claim the targeted investment additive credit allowed by this subsection, the taxpayer must provide to the Secretary a copy of the eligibility certification.
(b)	Notwithstanding the provisions of G.S. 105‑131.8 and G.S. 105‑269.15, a pass‑through entity that qualifies for the credit provided in this section may allocate the credit among any of its owners in its discretion. Owners to whom a credit is allocated are allowed the credit as if they had qualified for the credit directly. A pass‑through entity and its owners must include with their tax returns for every taxable year in which an allocated credit is claimed a statement of the allocation made by the pass‑through entity and the allocation that would have been required under G.S. 105‑131.8 or G.S. 105‑269.15.
(c)	Definitions. – The following definitions apply in this section:
(1)	Certified historic structure. – Defined in section 47 of the Code.
(1a)	Development tier area. – Defined in G.S. 143B‑437.08.
(1b)	Eligibility certification. – A certification obtained from the State Historic Preservation Officer that the site comprises an eligible targeted investment site.
(1c)	Eligible targeted investment site. – A site located in this State that satisfies all of the following conditions:
a.	It was used as a manufacturing facility or for purposes ancillary to manufacturing, as a warehouse for selling agricultural products, or as a public or private utility.
b.	It is a certified historic structure.
c.	It has been at least sixty‑five percent (65%) vacant for a period of at least two years immediately preceding the date the eligibility certification is made.
(2)	Pass‑through entity. – Defined in G.S. 105‑228.90.
(3)	Qualified rehabilitation expenditures. – Defined in section 47 of the Code.
(4)	State Historic Preservation Officer. – The Deputy Secretary of the Office of Archives and History of the North Carolina Department of Cultural Resources, or the Deputy Secretary's designee who acts to administer the historic preservation programs within the State.
"§ 105‑129.35A.  Rules; fees.
(a)	Rules. – The North Carolina Historical Commission, in consultation with the State Historic Preservation Officer, may adopt rules needed to administer the certification process required by this Article.
(b)	Fees. – The North Carolina Historical Commission, in consultation with the State Historic Preservation Officer, may adopt a schedule of fees for providing certifications required by this Article. In establishing the fee schedule, the Commission shall consider the administrative and personnel costs incurred by the Department of Cultural Resources. An application fee may not exceed one percent (1%) of the completed qualifying rehabilitation expenditures. The proceeds of the fees are receipts of the Department of Cultural Resources and must be used for performing the duties under this Article. 
"§ 105‑129.36.  Credit for rehabilitating nonincome‑producing historic structure.
(a)	Credit. – A taxpayer who is not allowed a federal income tax credit under section 47 of the Code and who makes rehabilitation expenses for a State‑certified historic structure located in this State is allowed a credit equal to the following:
(1)	Base credit one: Twenty percent (20%) of rehabilitation expenses incurred up to two hundred thousand dollars ($200,000) over any one 24‑month period per discrete property parcel with an assessed value equal to or less than the statewide median home value.
(2)	Base credit two: Fifteen percent (15%) of rehabilitation expenses incurred up to two hundred thousand dollars ($200,000) over any one 24‑month period per discrete property parcel with an assessed value greater than the statewide median home value but equal to or less than one hundred fifty percent (150%) of the statewide median home value; provided that the taxpayer's rehabilitation expenses exceed ten thousand dollars ($10,000) within the 24‑month period and the rehabilitation expenses have not been on a single State‑certified historic property for more than five years.
To claim the credit allowed by subdivision (2) of this subsection, the taxpayer must provide a copy of the certification obtained from the State Historic Preservation Officer verifying that the historic structure has been rehabilitated in accordance with this subsection.
(b)	Definitions. – The following definitions apply in this section:
(1)	Assessed value. – The tax value of the property upon which the State‑certified historic structure is sited on the county listing as of the beginning of the year in which rehabilitation expenses on the State‑certified historical structure commence.
(1a)	Certified rehabilitation. – Repairs or alterations consistent with the Secretary of the Interior's Standards for Rehabilitation and certified as such by the State Historic Preservation Officer.
(2)	Rehabilitation expenses. – Expenses incurred in the certified rehabilitation of a certified historic structure and added to the property's basis if the expense is incurred for any of the following of the historic structure: (i) the exterior, (ii) the interior of a window sash if work is done to the exterior of the same window sash, (iii) structural elements, (iv) heating or ventilation systems, (v) electrical or plumbing systems, other than fixtures, or (vi) insulation. The term does not include the cost of acquiring the property, the cost attributable to the enlargement of an existing building, the cost of sitework expenditures, the cost of personal property, or the cost of any interior repair not specifically listed in this subdivision.
(3)	State‑certified historic structure. – A structure that is individually listed in the National Register of Historic Places or is certified by the State Historic Preservation Officer as contributing to the historic significance of a National Register Historic District or a locally designated historic district certified by the United States Department of the Interior.
(4)	State Historic Preservation Officer. – The Deputy Secretary of Archives and History or the Deputy Secretary's designee who acts to administer the historic preservation programs within the State.
(5)	Statewide median home value. – The median value of owner‑occupied housing units for the State, as determined by the five‑year American Community Survey estimates published by the United States Census Bureau in the year prior to the year in which the State Historic Preservation Officer issues the certification verifying that the historic structure has been rehabilitated in accordance with this Article.
(c)	Recodified as G.S. 105‑129.36A by Session Laws 2003‑284, s. 35A.2, effective July 15, 2003.
"§ 105‑129.36A.  Rules; fees.
(a)	Rules. – The North Carolina Historical Commission, in consultation with the State Historic Preservation Officer, may adopt rules needed to administer the certification process required by this section.
(b)	Fees. – The North Carolina Historical Commission, in consultation with the State Historic Preservation Officer, may adopt a schedule of fees for providing certifications required by this Article. In establishing the fee schedule, the Commission shall consider the administrative and personnel costs incurred by the Department of Cultural Resources. An application fee may not exceed one percent (1%) of the completed qualifying rehabilitation expenditures. The proceeds of the fees are receipts of the Department of Cultural Resources and must be used for performing its duties under this Article.
"§ 105‑129.37.  Tax credited; credit limitations.
(a)	Tax Credited. – The credits provided in this Article are allowed against the franchise tax imposed in Article 3 of this Chapter, the income taxes levied in Article 4 of this Chapter, or the gross premiums tax imposed in Article 8B of this Chapter. The taxpayer may take the credits allowed by this Article against only one of the taxes against which it is allowed. The taxpayer must elect the tax against which a credit will be claimed when filing the return on which it is claimed, and this election is binding. The credit may be claimed in the year in which the certified historic structure is placed into service. When the certified historic structure is placed into service in two or more phases in different years, the amount of credit that may be claimed in a year is the amount based on the qualified rehabilitation expenditures associated with the phase placed into service during that year.
(b)	Credit Limitations. – A credit allowed under this Article may not exceed the amount of the tax against which it is claimed for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer. Any unused portion of the credit may be carried forward for the succeeding nine years. Any carryforwards of the credit must be claimed against the same tax.
(c)	Forfeiture for Disposition. – A taxpayer who is required under section 50 of the Code to recapture all or part of the federal credit for rehabilitating an income‑producing historic structure located in this State forfeits the corresponding part of the State credit allowed under G.S. 105‑129.35 with respect to that historic structure. If the credit was allocated among the owners of a pass‑through entity, the forfeiture applies to the owners in the same proportion that the credit was allocated.
(d)	Forfeiture for Change in Ownership. – If an owner of a pass‑through entity that has qualified for the credit allowed under G.S. 105‑129.35 disposes of all or a portion of the owner's interest in the pass‑through entity within five years from the date the rehabilitated historic structure is placed in service and the owner's interest in the pass‑through entity is reduced to less than two‑thirds of the owner's interest in the pass‑through entity at the time the historic structure was placed in service, the owner forfeits a portion of the credit. The amount forfeited is determined by multiplying the amount of credit by the percentage reduction in ownership and then multiplying that product by the forfeiture percentage. The forfeiture percentage equals the recapture percentage found in the table in section 50(a)(1)(B) of the Code.
(e)	Exceptions to Forfeiture. – Forfeiture as provided in subsection (d) of this section is not required if the change in ownership is the result of any of the following:
(1)	The death of the owner.
(2)	A merger, consolidation, or similar transaction requiring approval by the shareholders, partners, or members of the taxpayer under applicable State law, to the extent the taxpayer does not receive cash or tangible property in the merger, consolidation, or other similar transaction.
(f)	Liability From Forfeiture. – A taxpayer or an owner of a pass‑through entity that forfeits a credit under this section is liable for all past taxes avoided as a result of the credit plus interest at the rate established under G.S. 105‑241.21, computed from the date the taxes would have been due if the credit had not been allowed. The past taxes and interest are due 30 days after the date the credit is forfeited. A taxpayer or owner of a pass‑through entity that fails to pay the taxes and interest by the due date is subject to the penalties provided in G.S. 105‑236.
"§ 105‑129.38.  Report; tracking.
(a)	The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by taxpayer:
(1)	The number of taxpayers that took the credits allowed in this Article.
(2)	The amount of rehabilitation expenses and qualified rehabilitation expenditures with respect to which credits were taken.
(3)	The total cost to the General Fund of the credits taken per taxpayer per project.
(b)	The Department shall track the credits, including credits carried forward, allowed to each taxpayer by use of a project number generated by the State Historic Preservation Office and shall develop a method for reporting the project number on North Carolina annual tax returns.
(c)	The Department shall include in the economic incentives report required by G.S. 105‑256 the following information:
(1)	The total amount of tax credits awarded and the total amount of tax credits claimed against current taxes, by type of tax, during the relevant tax year.
(2)	The total amount of tax credits carried forward, by type of tax.
"§ 105‑129.39.  Sunset.
This Article expires for qualified rehabilitation expenditures and rehabilitation expenses incurred on or after January 1, 2020."
SECTION 37.6.(b)  This section becomes effective January 1, 2015, and applies to qualified rehabilitation expenditures and rehabilitation expenses incurred on or after that date.

modify Mill Rehabilitation Tax Credit
SECTION 37.7.(a)  G.S. 105‑129.75 reads as rewritten:
"§ 105‑129.75.  Sunset.
This Article expires January 1, 2015, for rehabilitation projects for which an application for an eligibility certification is submitted on or after that date. Eligibility certifications under this section expire January 1, 2020."
SECTION 37.7.(b)  G.S. 105‑129.75A reads as rewritten:
"§ 105‑129.75A.  Report.
(a)	The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by taxpayer:
(1)	The number of taxpayers that took the credits allowed in this Article.
(2)	The amount of rehabilitation expenses and qualified rehabilitation expenditures with respect to which credits were taken.
(3)	The total cost to the General Fund of the credits taken.
(b)	The Department shall track the allowable credits, including credits carried forward, to each taxpayer by use of a project number generated by the State Historic Preservation Office and shall develop a method for reporting said project number on North Carolina annual tax returns.
(c)	The Department must also include in the economic incentives report required by G.S. 105‑256 the following information:
(1)	The total amount of tax credits awarded and the total amount of tax credits claimed against current taxes, by type of tax, during the relevant tax year.
(2)	The total amount of tax credits carried forward for future tax years, by type of tax."

THE FILM AND ENTERTAINMENT GRANT FUND
SECTION 37.8.(a)  Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑437.02A.  The Film and Entertainment Grant Fund.
(a)	Creation and Purpose of Fund. – There is created in the Department of Commerce a special, nonreverting account to be known as the Film and Entertainment Grant Fund to provide funds to encourage the production of motion pictures, television shows, and commercials and to develop the film‑making industry within the State. The Department of Commerce shall adopt guidelines providing for the administration of the program. Those guidelines may provide for the Secretary to award the grant proceeds over a period of time, not to exceed three years. Those guidelines shall include the following provisions, which shall apply to each grant from the account:
(1)	The funds are reserved for a production on which the production company has qualifying expenses of at least the following:
a.	For a feature‑length film, ten million dollars ($10,000,000).
b.	For a video or television production, one million dollars ($1,000,000) per episode.
c.	For a commercial for theatrical or television viewing, five hundred thousand dollars ($500,000).
(2)	The funds are not used to provide a grant in excess of any of the following:
a.	An amount more than twenty‑five percent (25%) of the qualifying expenses for the production.
b.	An amount more than five million dollars ($5,000,000) for a feature‑length film, more than five million dollars ($5,000,000) for a single episode of a television or video production, or two hundred fifty thousand dollars ($250,000) for a commercial for theatrical or television viewing.
(3)	The funds are not used to provide a grant to more than one production company for a single production.
(4)	The funds are not used to provide a grant for a production that meets one or more of the following:
a.	It contains material that is obscene, as defined in G.S. 14-190.1 or material that is "harmful to minors" as defined in G.S. 14-190.13.
b.	It has the primary purpose of political advertising, fund-raising, or marketing, other than by commercial, a product, or service.
c.	News programming, including weather, financial market, and current events reporting.
d.	Live sporting event programming, including pre‑event and post‑event coverage and scripted sports entertainment. For purposes of this exception, a live sporting event is a scheduled sporting competition, game, or race that is originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape‑delayed television or satellite broadcast. The term does not include commercial advertising, an episodic television series, a television pilot, a music video, a motion picture, or a documentary production in which sporting events are presented through archived historical footage or similar footage taken at least 30 days before it is used.
e.	Radio productions.
f.	It is a talk, game, or awards show or other gala event. For purposes of this exception, an awards show is television programming involving the filming of a ceremony in which individuals, groups, or organizations are given an award.
g.	It fails to contain, in the end credits of the production, a statement that the production was "Filmed in North Carolina," a logo provided by the North Carolina Film Office, and an acknowledgement of the regional film office responsible for the geographic area in which the filming of the production occurred. Additionally, the production company will offer marketing opportunities to be evaluated by the North Carolina Film Office to ensure that they offer promotional value to the State.
(5)	Priority for the use of funds shall be given to productions that, based on results of an economic impact assessment conducted by the Labor and Economic Analysis Division, are reasonably anticipated to maximize the economic benefits accruing to the State. The assessment shall include consideration of at least the following factors:
a.	Percentage of employees that are permanent residents in the State.
b.	The extent to which the production features identifiable attractions or State locales in a manner that would be reasonably expected to induce visitation by nonresidents of the State to the attraction or locale.
c.	The extent to which the production invests in permanent improvements to open, public spaces, commercial districts, traditional downtown areas, public landmarks, residential areas, or similar properties or areas.
d.	The extent to which the production will be filmed in an economically distressed county or area of the State.
e.	The duration of production activities in the State.
(b)	Definitions. – The following definitions apply in this section:
(1)	Department. – The Department of Commerce.
(2)	Employee. – A person who is employed for consideration for at least 35 hours a week and whose wages are subject to withholding under Article 4A of Chapter 105 of the General Statutes.
(3)	Highly compensated individual. – An individual who directly or indirectly receives compensation in excess of one million dollars ($1,000,000) for personal services with respect to a single production. An individual receives compensation indirectly when a production company pays a personal service company or an employee leasing company that pays the individual.
(4)	Loan out company. – A personal service corporation that employs an individual who is hired by a film or digital media production company.
(5)	Production. – Any of the following:
a.	A motion picture intended for commercial distribution to a motion picture theater or directly to the consumer viewing market that has a running time of at least 75 minutes.
b.	A video or television production or a commercial for theatrical or television viewing. For a television series or any other production intended to be shown in two or more episodes, the applicant may elect to treat each episode as a separate production or to treat two or more episodes as a single production for all purposes of this section.  A single application may be filed for two or more productions, provided that the application clearly describes each separate production.
(6)	Production company. – Defined in G.S. 105‑164.3.
(7)	Qualifying expenses. – The sum of the amounts listed in the sub-subdivisions of this subdivision substantiated pursuant to subsection (d) of this section and spent in this State by a production company in connection with a production, less the amount paid in excess of one million dollars ($1,000,000) to a highly compensated individual.  The term does not include the cost of financing for the production, bonding related to the production, production-related insurance coverage obtained on the production, or expenses for insurance coverage purchased from a related member.
a.	Goods and services leased or purchased. For goods with a purchase price of twenty‑five thousand dollars ($25,000) or more, the amount included in qualifying expenses is the purchase price less the fair market value of the good at the time the production is completed. Goods and services includes the costs of tangible and intangible property used for, and services performed primarily and customarily in, production, including preproduction and postproduction and other direct costs of producing the project in accordance with generally accepted entertainment industry practices. Goods and services exclude costs for development, marketing, and distribution.
b.	Compensation and wages and payments on which withholding payments are remitted to the Department of Revenue under Article 4A of Chapter 105 of the General Statutes. Payments made to a loan out company for services provided in North Carolina shall be subject to gross income tax withholding at the applicable rate under the Article 4 of Chapter 105 of the General Statutes.
c.	Employee fringe contributions, including health, pension, and welfare contributions.
d.	Per diems, stipends, and living allowances paid for work being performed in this State.
(8)	Related member. – Defined in G.S. 105‑130.7A.
(9)	Secretary. – The Secretary of Commerce.
(c)	Application. – A production company shall apply, under oath, to the Secretary for a grant on a form prescribed by the Secretary. The Secretary shall evaluate the applications to ensure the production's content is created for entertainment purposes. The application shall include all documentation and information the Secretary deems necessary to evaluate the grant application.
(d)	Substantiation. – The Secretary shall work with the North Carolina Film Office to adopt guidelines to provide a process to verify the actual qualifying expenses of a certified production. The Secretary may not release grant funds until the substantiation process required by this subsection is complete and the final verified amount of qualified expenses is determined. The process shall require each of the following:
(1)	The production company shall submit all the qualifying expenses for the production and data substantiating the qualifying expenses, including documentation on the net expenditure on equipment and other tangible personal property to an independent certified public accountant licensed in this State.
(2)	The accountant shall conduct a compliance audit, at the certified production's expense, pursuant to guidelines established by the Secretary and submit the results as a report, along with the required substantiating data, to the production company and the North Carolina Film Office.
(3)	The North Carolina Film Office shall review the report and advise the Department on the final verified amount of qualifying expenses made by the certified production.
(e)	Report. – The Department shall provide to the Department of Revenue, and the Department of Revenue must include in the economic incentives report required by G.S. 105‑256, the following information, itemized by production company:
(1)	The location of sites used in a production for which a grant was awarded.
(2)	The qualifying expenses, classified by whether the expenses were for goods, services, or compensation paid by the production company.
(3)	The number of people employed in the State with respect to grants awarded, including the number of residents of the State employed.
(4)	The total cost of the grants awarded.
(f)	NC Film Office. – To claim a grant under this section, a production company must notify the Division of Tourism, Film, and Sports Development in the Department of Commerce of its intent to apply for a grant. The notification must include the title of the production, the name of the production company, a financial contact for the production company, the proposed dates on which the production company plans to begin filming the production, and any other information required by the Division.
(g)	Guidelines. – The Department of Commerce shall develop guidelines related to the administration of the Film and Entertainment Grant Fund and to the selection of productions that will receive grants from the Fund. At least 20 days before the effective date of any guidelines or nontechnical amendments to the guidelines, the Department of Commerce shall publish the proposed guidelines on the Department's Web site and provide notice to persons who have requested notice of proposed guidelines. In addition, the Department must accept oral and written comments on the proposed guidelines during the 15 business days beginning on the first day that the Department has completed these notifications."
SECTION 37.8.(b)  G.S. 150B-1(d) is amended by adding a new subdivision to read:
"(d)	Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:
…
(18)	The Department of Commerce and the Economic Investment Committee in developing criteria and administering the Job Maintenance and Capital Development Fund under G.S. 143B‑437.012.
(18a)	The Department of Commerce in administering the Film and Entertainment Grant Fund under G.S. 143B‑437.02A.  
…."
SECTION 37.8.(c)  Notwithstanding anything in this act or in the N.C. House of Representatives Appropriations Committee Report on the Continuation, Expansion, and Capital Budgets for Senate Bill 744, dated June 11, 2014, to the contrary, the reduction for the Management Flexibility Reserve for the Department of Commerce shall be five dollars ($5.00) greater than the amount in the Report, and five dollars ($5.00) shall be used for grants for the Film and Entertainment Grant Fund created by this section. No funds appropriated to the following divisions of the Department of Commerce, regardless of whether any of those funds are later transferred to a nonprofit entity to perform any functions performed by the divisions, may be used for the Film and Entertainment Grant Fund created by this section:
(1)	Small Business & Entrepreneurship.
(2)	Tourism, Film, and Sports Development.
(3)	Marketing and Customer Service.
(4)	Business and Industry Development.
(5)	International Trade Division.
SECTION 37.8.(d)  This Part becomes effective January 1, 2015, and expires July 1, 2020. The Secretary shall not award a grant for any qualifying expenses for which a taxpayer receives a tax credit under G.S. 105‑130.47 or G.S. 105‑151.29.

PART XXXVIII. MISCELLANEOUS PROVISIONS

STATE BUDGET ACT APPLIES
SECTION 38.1.  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 38.2.(a)  The N.C. House of Representatives Appropriations Committee Report on the Continuation, Expansion, and Capital Budgets for Senate Bill 744, dated June 11, 2014, which was distributed in the House of Representatives and used to explain this act, shall indicate action by the House of Representatives 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, as appropriate, 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 38.2.(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 2014‑2015 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 May 2014 in the document "The Governor of North Carolina's Recommended Budget Adjustments" for the 2014‑2015 fiscal year 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 38.2.(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.

REPORT BY FISCAL RESEARCH DIVISION ON CHANGES TO 2014‑2015 BUDGET/PUBLICATION
SECTION 38.3.(a)  The Fiscal Research Division of the Legislative Services Commission shall issue a report on budget actions taken by the 2013 Regular Session of the General Assembly in 2014. The report shall be in the form of a revision of the Committee Report adopted for Senate Bill 744 pursuant to G.S. 143C‑5‑5 and shall include all modifications made to the 2014‑2015 budget prior to sine die adjournment of the 2013 Regular Session.
SECTION 38.3.(b)  The Director of the Fiscal Research Division of the Legislative Services Commission shall send a copy of the report issued pursuant to this section to the Director of the Budget. The report shall be published on the General Assembly's Internet Web site for public access.

MOST TEXT APPLIES ONLY TO 2014‑2015 FISCAL YEAR
SECTION 38.4.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2014‑2015 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2014‑2015 fiscal year.

EFFECT OF HEADINGS
SECTION 38.5.  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.

APPROPRIATIONS LIMITATIONS AND DIRECTIONS APPLY
SECTION 38.6.(a)  Except where expressly repealed or amended by this act, the provisions of S.L. 2013‑360, S.L. 2013‑363, S.L. 2013‑364, and S.L. 2013‑397 remain in effect.
SECTION 38.6.(b)  Notwithstanding any modifications by this act in the amounts appropriated, except where expressly repealed or amended, the limitations and directions for the 2014‑2015 fiscal year in S.L. 2013‑360, S.L. 2013‑363, S.L. 2013‑364, and S.L. 2013‑397 that applied to appropriations to particular agencies or for particular purposes apply to the newly enacted appropriations and budget reductions of this act for those same particular purposes.

SEVERABILITY
SECTION 38.7.  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 38.8.  Except as otherwise provided, this act becomes effective July 1, 2014.