AN ACT to modernize the business court by making TECHNICAL, CLARIFYING, AND ADMINISTRATIVE CHANGES TO the procedures for complex business cases, TO STREAMLINE THE PROCESS OF CORPORATE REORGANIZATION UTILIZING HOLDING COMPANIES, AND TO ESTABLISH A BUSINESS COURT MODERNIZATION SUBCOMMITTEE OF THE JOINT LEGISLATIVE ECONOMIC DEVELOPMENT AND GLOBAL ENGAGEMENT OVERSIGHT COMMITTEE.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 7A‑27 reads as rewritten:
"§ 7A‑27.  Appeals of right from the courts of the trial divisions.
(a)	Appeal lies of right directly to the Supreme Court in any of the following cases:
(1)	All cases in which the defendant is convicted of murder in the first degree and the judgment of the superior court includes a sentence of death.
(2)	From any final judgment in a case designated as a mandatory complex business case pursuant to G.S. 7A‑45.4 or designated as a discretionary complex business case pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts.
(3)	From any interlocutory order of a Business Court Judge that does any of the following:
a.	Affects a substantial right.
b.	In effect determines the action and prevents a judgment from which an appeal might be taken.
c.	Discontinues the action.
d.	Grants or refuses a new trial.
(b)	Appeal lies of right directly to the Court of Appeals in any of the following cases:
(1)	From any final judgment of a superior court, other than the one described in subsection (a) of this section, or one based on a plea of guilty or nolo contendere, including any final judgment entered upon review of a decision of an administrative agency, except for a final judgment entered upon review of a court martial under G.S. 127A‑62.
(2)	From any final judgment of a district court in a civil action.
(3)	From any interlocutory order or judgment of a superior court or district court in a civil action or proceeding that does any of the following:
a.	Affects a substantial right.
b.	In effect determines the action and prevents a judgment from which an appeal might be taken.
c.	Discontinues the action.
d.	Grants or refuses a new trial.
e.	Determines a claim prosecuted under G.S. 50‑19.1.
(4)	From any other order or judgment of the superior court from which an appeal is authorized by statute."
SECTION 2.  G.S. 7A‑45.3 reads as rewritten:
"§ 7A‑45.3.  Superior court judges designated for complex business cases.
The Chief Justice may exercise the authority under rules of practice prescribed pursuant to G.S. 7A‑34 to designate one or more of the special superior court judges authorized by G.S. 7A‑45.1 to hear and decide complex business cases as prescribed by the rules of practice. Any judge so designated 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. The presiding Business Court Judge shall issue a written opinion in connection with any order granting or denying a motion under G.S. 1A‑1, Rule 12, 56, 59, or 60, or any order finally disposing of a complex business case, other than an order effecting a settlement agreement or jury verdict."
SECTION 3.  G.S. 7A‑45.4 reads as rewritten:
"§ 7A‑45.4.  Designation of complex business cases.
(a)	Any party may designate as a mandatory complex business case an action that involves a material issue related to any of the following:
(1)	Disputes involving the law governing corporations, except charitable and religious organizations qualified under G.S. 55A‑1‑40(4) on the grounds of religious purpose, partnerships, and limited liability companies, including disputes arising under Chapters 55, 55A, 55B, 57D, and 59 of the General Statutes.
(2)	Disputes involving securities, including disputes arising under Chapter 78A of the General Statutes.
(3)	Disputes involving antitrust law, including disputes arising under Chapter 75 of the General Statutes that do not arise solely under G.S. 75‑1.1 or Article 2 of Chapter 75 of the General Statutes.
(4)	Disputes involving trademark law, including disputes arising under Chapter 80 of the General Statutes.
(5)	Disputes involving the ownership, use, licensing, lease, installation, or performance of intellectual property, including computer software, software applications, information technology and systems, data and data security, pharmaceuticals, biotechnology products, and bioscience technologies.

(8)	Disputes involving trade secrets, including disputes arising under Article 24 of Chapter 66 of the General Statutes.
(9)	Contract disputes in which all of the following conditions are met:
a.	At least one plaintiff and at least one defendant is a corporation, partnership, or limited liability company, including any entity authorized to transact business in North Carolina under Chapter 55, 55A, 55B, 57D, or 59 of the General Statutes.
b.	The complaint asserts a claim for breach of contract or seeks a declaration of rights, status, or other legal relations under a contract.
c.	The amount in controversy computed in accordance with G.S. 7A‑243 is at least one million dollars ($1,000,000).
d.	All parties consent to the designation.
(b)	The following actions shall be designated as mandatory complex business cases:
(1)	An action involving a material issue related to tax law that has been the subject of a contested tax case for which judicial review is requested under G.S. 105‑241.16, or a civil action under G.S. 105‑241.17 containing a constitutional challenge to a tax statute, shall be designated as a mandatory complex business case by the petitioner or plaintiff.
(2)	An action described in subdivision (1), (2), (3), (4), (5), or (8) of subsection (a) of this section in which the amount in controversy computed in accordance with G.S. 7A‑243 is at least five million dollars ($5,000,000) shall be designated as a mandatory complex business case by the party whose pleading caused the amount in controversy to equal or exceed five million dollars ($5,000,000).
(3)	An action involving regulation of pole attachments brought pursuant to G.S. 62‑350 shall be designated as a mandatory complex business case by the plaintiff.
(c)	A party designating an action as a mandatory complex business case shall file a Notice of Designation in the Superior Court in which the action has been filed, shall contemporaneously serve the notice on each opposing party or counsel and on the Special Superior Court Judge for Complex Business Cases who is then the senior Business Court Judge, and shall contemporaneously send a copy of the notice by e‑mail to the Chief Justice of the Supreme Court for approval of the designation of the action as a mandatory complex business case. The Notice of Designation shall, in good faith and based on information reasonably available, succinctly state the basis of the designation and include a certificate by or on behalf of the designating party that the civil action meets the criteria for designation as a mandatory complex business case pursuant to subsection (a) or (b) of this section.
(d)	The Notice of Designation shall be filed:
(1)	By the plaintiff, the third‑party plaintiff, or the petitioner for judicial review contemporaneously with the filing of the complaint, third‑party complaint, or the petition for judicial review in the action.
(2)	By any intervenor when the intervenor files a motion for permission to intervene in the action.
(3)	By any defendant or any other party within 30 days of receipt of service of the pleading seeking relief from the defendant or party.
(4)	By any party whose pleading caused the amount in controversy computed in accordance with G.S. 7A‑243 to equal or exceed five million dollars ($5,000,000) contemporaneously with the filing of that pleading.
(e)	Within 30 days after service of the Notice of Designation, any other party may, in good faith, file and serve an opposition to the designation of the action as a mandatory complex business case. The opposition to the designation of the action shall assert all grounds on which the party opposing designation objects to the designation, and any grounds not asserted shall be deemed conclusively waived. Within 30 days after the entry of an order staying a pending action pursuant to subsection (g) of this section, any party opposing the stay shall file an objection with the Business Court asserting all grounds on which the party objects to the case proceeding in the Business Court, and any grounds not asserted shall be deemed conclusively waived. Based on the opposition or on its own motion, the Business Court Judge shall rule by written order on the opposition or objection and determine whether the action should be designated as a mandatory complex business case. If a party disagrees with the decision, the party may appeal in accordance with G.S. 7A‑27(a).
(f)	Once a designation is filed under subsection (d) of this section, and after preliminary approval by the Chief Justice, a case shall be designated and administered a complex business case. All proceedings in the action shall be before the Business Court Judge to whom it has been assigned unless and until an order has been entered under subsection (e) of this section ordering that the case not be designated a mandatory complex business case or the Chief Justice revokes approval. If complex business case status is revoked or denied, the action shall be treated as any other civil action, unless it is designated as an exceptional civil case or a discretionary complex business case pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts.
(g)	If an action required to be designated as a mandatory complex business case pursuant to subsection (b) of this section is not so designated, the Superior Court in which the action has been filed shall, by order entered sua sponte, stay the action until it has been designated as a mandatory complex business case by the party required to do so in accordance with subsection (b) of this section.
(h)	Nothing in this section is intended to permit actions for personal injury grounded in tort to be designated as mandatory complex business cases or to confer, enlarge, or diminish the subject matter jurisdiction of any court."
SECTION 4.  G.S. 7A‑305 reads as rewritten:
"§ 7A‑305.  Costs in civil actions.
(a)	In every civil action in the superior or district court, except for actions brought under Chapter 50B of the General Statutes, shall be assessed:
…
(2)	For support of the General Court of Justice, the sum of one hundred eighty dollars ($180.00) in the superior court and the sum of one hundred thirty dollars ($130.00) in the district court except that if the case is assigned to a magistrate the sum shall be eighty dollars ($80.00). If a case is designated as a mandatory complex business case under G.S. 7A‑45.4, upon assignment to a Business Court Judge, the party filing the designation shall pay an additional one thousand one hundred dollars ($1,100) for support of the General Court of Justice. If a case is designated as a complex business case under Rule 2.1 and Rule 2.2 of the General Rules of Practice for the Superior and District Courts, upon assignment to a Business Court Judge, the plaintiff shall pay an additional one thousand one hundred dollars ($1,100) for support of the General Court of Justice. Sums collected under this subdivision shall be remitted to the State Treasurer. The State Treasurer shall remit the sum of one dollar and fifty cents ($1.50) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.4, and ninety‑five cents ($.95) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.19.
…
(d)	The following expenses, when incurred, are assessable or recoverable, as the case may be. The expenses set forth in this subsection are complete and exclusive and constitute a limit on the trial court's discretion to tax costs pursuant to G.S. 6‑20:
…
(12)	The fee assessed pursuant to subdivision (2) of subsection (a) of this section upon assignment of a case to a special superior court judge as a complex business case.
…."
SECTION 5.  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 each member of the General Assembly. 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.
(8a)	Prepare and submit a semiannual report on the activities of each North Carolina business court site to the Chief Justice and to each member of the General Assembly. The semiannual report required under this subdivision shall be separate from the report required under subdivision (8) of this section and shall include the total number of civil cases pending in each business court site over three years after being designated as a mandatory complex business case, motions pending over six months after being filed, and civil cases in which bench trials have been concluded for over six months without entry of judgment, including any accompanying explanation provided by the Business Court.
…."
SECTION 6.(a)  Article 11 of Chapter 55 of the General Statutes is amended by adding a new section to read:
"§ 55‑11‑11.  Merger to effect a holding company reorganization.
(a)	The following definitions apply in this section:
(1)	"Company official" has the same meaning as in G.S. 57D‑1‑03.
(2)	"Constituent corporation" means the original corporation incorporated under the laws of this State or limited liability company organized under the laws of this State that is a party to a merger that is intended to create a holding company structure under a plan of merger that satisfies the requirements of this section.
(3)	"Holding company" means a corporation incorporated under the laws of this State or limited liability company organized under the laws of this State that from its incorporation or organization until consummation of a merger governed by this section was at all times a direct or indirect wholly owned subsidiary of the constituent corporation and whose capital stock is issued in the merger.
(4)	"Manager" has the same meaning as in G.S. 57D‑1‑03.
(5)	"Organizational documents" means the articles of incorporation of a corporation or the articles of organization of a limited liability company.
(6)	"Surviving entity" means the corporation incorporated under the laws of this State or limited liability company organized under the laws of this State that is the surviving entity in a merger of a constituent corporation with or into a single direct or indirect wholly owned subsidiary of the constituent corporation, which immediately following the merger is a direct or indirect wholly owned subsidiary of the holding company.
(b)	Notwithstanding the requirements of G.S. 55‑11‑03, unless expressly required by its articles of incorporation, no vote of shareholders of a constituent corporation is required to authorize a merger with or into a single direct or indirect wholly owned subsidiary of the constituent corporation if all of the following conditions are satisfied:
(1)	The constituent corporation and the direct or indirect wholly owned subsidiary of the constituent corporation are the only constituent entities to the merger.
(2)	Each share or fraction of a share of the capital stock of the constituent corporation outstanding immediately prior to the effective time of the merger is converted in the merger into a share or equal fraction of a share of capital stock of a holding company having the same designations, rights, powers, and preferences, and the qualifications, limitations, and restrictions thereof, as the share or fraction of a share of the capital stock of the constituent corporation being converted in the merger.
(3)	The holding company and the constituent corporation are both corporations of this State and the direct or indirect wholly owned subsidiary that is the other constituent entity to the merger is a corporation or limited liability company of this State.
(4)	The articles of incorporation and bylaws of the holding company immediately following the effective time of the merger contain provisions identical to the articles of incorporation and bylaws of the constituent corporation immediately prior to the effective time of the merger other than provisions, if any, regarding any of the following:
a.	The incorporator or incorporators.
b.	The corporate name.
c.	The registered office and agent.
d.	The initial board of directors and the initial subscribers for shares.
e.	Any provisions contained in any amendment to the articles of incorporation that were necessary to effect a change, exchange, reclassification, subdivision, combination, or cancellation of stock, if the change, exchange, reclassification, subdivision, combination, or cancellation has become effective.
(5)	As a result of the merger the constituent corporation or its successor becomes or remains a direct or indirect wholly owned subsidiary of the holding company.
(6)	The directors of the constituent corporation become or remain the directors of the holding company upon the effective time of the merger.
(7)	Except as provided in subsections (c) and (d) of this section, the organizational documents of the surviving entity immediately following the effective time of the merger contain provisions identical to the articles of incorporation of the constituent corporation immediately prior to the effective time of the merger other than provisions, if any, regarding any of the following:
a.	The incorporator or incorporators.
b.	The corporate or entity name.
c.	The registered office and agent.
d.	The initial board of directors and the initial subscribers for shares.
e.	References to members rather than stockholders or shareholders.
f.	References to interests, units, or other similar terms rather than stock or shares.
g.	References to managers, managing members, or other members of the governing body rather than directors.
h.	Any provisions contained in any amendment to the articles of incorporation that were necessary to effect a change, exchange, reclassification, subdivision, combination, or cancellation of stock, if the change, exchange, reclassification, subdivision, combination, or cancellation has become effective.
(8)	The shareholders of the constituent corporation do not recognize gain or loss for United States federal income tax purposes as determined by the board of directors of the constituent corporation.
(c)	Notwithstanding the provisions of subdivision (7) of subsection (b) of this section, if the organizational documents of the surviving entity do not contain the following provisions, they shall be amended in the merger to contain provisions requiring all of the following:
(1)	Any act or transaction by or involving the surviving entity, other than the election or removal of directors or managers, managing members, or other members of the governing body of the surviving entity, that requires for its adoption under this Chapter or its organizational documents the approval of the shareholders or members of the surviving entity shall, by specific reference to this subsection, require, in addition, the approval of the shareholders of the holding company, or any successor by merger, by the same vote as is required by this Chapter or by the organizational documents of the surviving entity. For purposes of this subdivision, any surviving entity that is not a corporation shall include in the amendment a requirement that the approval of the shareholders of the holding company be obtained for any act or transaction by or involving the surviving entity, other than the election or removal of directors or managers, managing members, or other members of the governing body of the surviving entity, which would require the approval of the shareholders of the surviving entity if the surviving entity were a corporation subject to this Chapter.
(2)	Any amendment of the organizational documents of a surviving entity that is not a corporation that would, if adopted by a corporation subject to this Chapter, be required to be included in the articles of incorporation of the corporation shall, by specific reference to this subsection, require, in addition, the approval of the shareholders of the holding company, or any successor by merger, by the same vote as is required by this Chapter or by the organizational documents of the surviving entity.
(3)	The business and affairs of a surviving entity that is not a corporation shall be managed by or under the direction of a board of directors, board of managers, or other governing body consisting of individuals who are subject to the same fiduciary duties applicable to, and who are liable for breach of those duties to the same extent as, directors of a corporation subject to this Chapter.
(d)	Notwithstanding the provisions of subdivision (7) of subsection (b) of this section, the organizational documents of the surviving entity may be amended in the merger to reduce the number of classes and shares of capital stock or other equity interests or units that the surviving entity is authorized to issue and to eliminate any provision authorized by G.S. 55‑8‑06.
(e)	Neither subsection (c) of this section nor any provision of a surviving entity's organizational documents required by this section shall be deemed or construed to require approval of the shareholders of the holding company to elect or remove directors or managers, managing members, or other members of the governing body of the surviving entity.
(f)	From and after the effective time of a merger adopted by a constituent corporation by action of its board of directors and without any vote of shareholders pursuant to this section, the following provisions apply:
(1)	To the extent the restrictions of Articles 9 and 9A of this Chapter applied to the constituent corporation and its shareholders at the effective time of the merger, such restrictions shall apply to the holding company and its shareholders immediately after the effective time of the merger as though it were the constituent corporation.
(2)	If the corporate name of the holding company immediately following the effective time of the merger is the same as the corporate name of the constituent corporation immediately prior to the effective time of the merger, the shares of capital stock of the holding company into which the shares of capital stock of the constituent corporation are converted in the merger shall be represented by the stock certificates that previously represented shares of capital stock of the constituent corporation.
(3)	To the extent a shareholder of the constituent corporation immediately prior to the merger had standing to institute or maintain derivative litigation on behalf of the constituent corporation, nothing in this section limits or extinguishes that standing.
(g)	If a plan of merger is adopted by a constituent corporation by action of its board of directors and without any vote of shareholders pursuant to this section, but otherwise in accordance with G.S. 55‑11‑01, the secretary or assistant secretary of the constituent corporation shall certify on the plan of merger that the plan has been adopted pursuant to this section and that the conditions specified in subsection (b) of this section have been satisfied. This certification on the plan of merger is not required if a certificate of merger or consolidation is registered in lieu of filing the plan of merger. The plan so adopted and certified shall then be filed and become effective, in accordance with G.S. 55‑11‑05. That filing is a representation by the person who executes the agreement that the facts stated in the certificate remain true immediately prior to the filing.
(h)	Except as otherwise provided in this section:
(1)	The provisions of G.S. 55‑11‑06(a) and G.S. 55‑11‑06(c) shall apply to any merger effected pursuant to this section.
(2)	The provisions of Article 13 of this Chapter shall not apply to any merger effected pursuant to this section."
SECTION 6.(b)  G.S. 55‑11‑06(a) reads as rewritten:
"§ 55‑11‑06.  Effect of merger or share exchange.
(a)	When a merger pursuant to G.S. 55‑11‑01, 55‑11‑04, 55‑11‑07, ‑‑55‑11‑09, or 55‑11‑11 takes effect:
…."
SECTION 7.  G.S. 1A‑1, Rule 8(a)(2) reads as rewritten:
"Rule 8. General rules of pleadings.
…
…
(2)	A demand for judgment for the relief to which he deems himself entitled. Relief in the alternative or of several different types may be demanded. In all actions involving a material issue related to any of the subjects listed in G.S. 7A‑45.4(a)(1), (2), (3), (4), (5), or (8), the pleading shall state whether or not relief is demanded for damages incurred or to be incurred in an amount equal to or exceeding five million dollars ($5,000,000). In all negligence actions, and in all claims for punitive damages in any civil action, wherein the matter in controversy exceeds the sum or value of ten thousand dollars ($10,000), the pleading shall not state the demand for monetary relief, but shall state that the relief demanded is for damages incurred or to be incurred in excess of ten thousand dollars ($10,000). However, at any time after service of the claim for relief, any party may request of the claimant a written statement of the monetary relief sought, and the claimant shall, within 30 days after such service, provide such statement, which shall not be filed with the clerk until the action has been called for trial or entry of default entered. Such statement may be amended in the manner and at times as provided by Rule 15."
SECTION 8.(a)  A Subcommittee on Business Court Modernization ("Subcommittee") is created within the Joint Legislative Economic Development and Global Engagement Oversight Committee ("Committee").
SECTION 8.(b)  The Subcommittee shall consist of no fewer than six members, with an equal number of Senate and House members appointed by the President Pro Tempore of the Senate and the Speaker of the House of Representatives from among their respective chambers' membership on the Committee. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate one member to serve as co‑chairs of the Subcommittee. The Subcommittee may meet at any time upon the call of either co‑chair. A co‑chair or other member of the Subcommittee continues to serve until a successor is appointed.  Members of the Subcommittee serve at the pleasure of the appointing officer.
SECTION 8.(c)  The Subcommittee may study the implementation of this act and its efforts to modernize complex business cases and legislative improvement to the operations and management of the General Court of Justice.
SECTION 8.(d)  A quorum is a majority of members of the Subcommittee. No action may be taken except by a majority vote at a meeting at which a quorum is present.
SECTION 8.(e)  The Subcommittee, while in the discharge of its official duties, may exercise all powers provided for under G.S. 120‑19 and Article 5A of Chapter 120 of the General Statutes. The Subcommittee may contract for professional, clerical, or consultant services, as provided by G.S. 120‑32.02.
SECTION 8.(f)  Members of the Subcommittee shall receive per diem, subsistence, and travel allowance as provided in G.S. 120‑3.1, 138‑5 and 138‑6, as appropriate.
SECTION 8.(g)  All expenses of the Subcommittee shall be paid from the Legislative Services Commission's Reserve for Studies. Individual expenses of five thousand dollars ($5,000) or less, including per diem, travel, and subsistence expenses of members of the Subcommittee, and clerical expenses shall be paid upon the authorization of a co‑chair of the Subcommittee. Individual expenses in excess of five thousand dollars ($5,000) shall be paid upon the written approval of the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
SECTION 8.(h)  The Legislative Services Officer shall assign professional and clerical staff to assist the Subcommittee in its work. The Director of Legislative Assistants of the House of Representatives and the Director of Legislative Assistants of the Senate shall assign clerical support staff to the Subcommittee.
SECTION 8.(i)  The Subcommittee may submit an interim report on the results of its study, including any proposed legislation, to the Committee at any time. The Subcommittee shall submit a final report on the results of its study, including any proposed legislation, to the Committee prior to the convening of the 2015 General Assembly. The Committee shall submit a final report of its findings and recommendations to the 2015 General Assembly by filing the report with the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Legislative Library. The Subcommittee shall terminate upon the convening of the 2015 General Assembly or upon the filing of its final report with the Committee, whichever occurs first.
SECTION 9.  Section 1 of this act becomes effective October 1, 2014, and applies to actions designated as mandatory complex business cases on or after that date. Sections 3 and 4 of this act become effective October 1, 2014, and apply to actions commenced or petitions filed on or after that date. Section 6 of this act becomes effective October 1, 2014, and applies to plans of merger adopted on or after that date. Section 7 of this act is effective when it becomes law and applies to actions commenced on or after that date. Unless otherwise provided by this act, the remainder of this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 2nd day of August, 2014.

	s/	 Chad Barefoot
	 Presiding Officer of the Senate

	s/	 Thom Tillis
	 Speaker of the House of Representatives

	s/	 Pat McCrory
	 Governor

Approved 5:05 p.m. this 6th day of August, 2014