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 2016."

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.

PART II. CURRENT OPERATIONS AND EXPANSION GENERAL FUND

CURRENT OPERATIONS AND EXPANSION/GENERAL FUND
SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for the fiscal biennium ending June 30, 2017, according to the following schedule:

Current Operations – General Fund	2016‑2017

EDUCATION

Community Colleges System Office	$ 32,800,746

Department of Public Instruction	545,098,969
University of North Carolina – Board of Governors
	Appalachian State University	0
	East Carolina University
		Academic Affairs	0
		Health Affairs	0
	Elizabeth City State University	0
	Fayetteville State University	0
	North Carolina Agricultural and Technical State
		University	0
	North Carolina Central University	0
	North Carolina State University
		Academic Affairs	0
		Agricultural Extension	0
Agricultural Research	0
	University of North Carolina at Asheville	0
	University of North Carolina at Chapel Hill
		Academic Affairs	0
		Health Affairs	0
		Area Health Education Centers	0
	University of North Carolina at Charlotte	0
	University of North Carolina at Greensboro	0
	University of North Carolina at Pembroke	0
	University of North Carolina School of the Arts	0
	University of North Carolina at Wilmington	0
	Western Carolina University	0
	Winston‑Salem State University	0
	General Administration	0
	University Institutional Programs	98,909,109
	Related Educational Programs	2,000,000
	North Carolina School of Science and Mathematics	0
	Aid to Private Colleges	0

Total University of North Carolina – Board of Governors	$100,909,109

HEALTH AND HUMAN SERVICES

Department of Health and Human Services
	Central Management and Support	$ 14,819,907
	Division of Aging and Adult Services	1,000,000
	Division of Blind Services/Deaf/Hard of Hearing	0
	Division of Child Development and Early Education	0
	Health Service Regulation	0
	Division of Medical Assistance	(307,925,901)
	Division of Mental Health	31,940,274
	NC Health Choice	348,062
	Division of Public Health	27,050,000
	Division of Social Services	8,866,699
	Division of Vocation Rehabilitation	0

Total Health and Human Services	($ 223,900,959)

NATURAL AND ECONOMIC RESOURCES

Department of Agriculture and Consumer Services	$ 4,374,876

Department of Commerce
	Commerce	6,333,349
	Commerce State‑Aid	0

Wildlife Resources Commission	229,328
Department of Environmental Quality	6,828,794

Department of Labor	602,904

Department of Natural and Cultural Resources
	Natural and Cultural Resources	4,162,536
	Roanoke Island Commission	0
JUSTICE AND PUBLIC SAFETY

Department of Public Safety	57,310,302

Judicial Department	19,124,375

Judicial Department – Indigent Defense	5,763,410

Department of Justice	4,794,909

GENERAL GOVERNMENT

Department of Administration	3,344,306

Office of Administrative Hearings	143,385

Department of State Auditor	368,695

Office of State Controller	742,185

State Board of Elections	1,100,251

General Assembly	1,319,275

Office of the Governor
	Office of the Governor	114,904
	Office of State Budget and Management	320,330
	OSBM – Reserve for Special Appropriations	5,000,000

Housing Finance Agency	0

Department of Insurance
	Insurance	945,085

Office of Lieutenant Governor	21,197

Department of Revenue	6,310,070

Department of Secretary of State	900,264

Department of State Treasurer
	State Treasurer	293,076
	State Treasurer – Retirement for Fire and Rescue Squad
		Workers	0

Department of Military & Veterans Affairs	514,717

Department of Information Technology	8,220

RESERVES, ADJUSTMENTS, AND DEBT SERVICE

Contingency and Emergency Fund	0
	
Salary Adjustment Reserve	27,000,000

State Health Plan Contribution	0
OSHR Minimum of Market Adjustment	0

Reserve for Future Benefit Needs	(71,000,000)

Workers' Compensation Reserve	0

Information Technology Fund	0

Information Technology Reserve Fund	11,434,239

IT Reserve – Budget Transparency Project	0

Connect NC Bonds and Capital Improvement Reserve	1,142,267

One North Carolina Fund	(417,883)

Job Development Investment Grants (JDIG)	(10,000,000)

Film and Entertainment Grant Fund	0

Public Schools Average Daily Membership (ADM)	(107,000,000)

UNC System Enrollment Growth Reserve	(31,000,0000)

Debt Service
	General Debt Service	1,253,000
	Federal Reimbursement	0

TOTAL CURRENT OPERATIONS –
ADJUSTMENTS TO THE GENERAL FUND	$405,880,268

CAPITAL

Capital Improvements	8,561,000

TOTAL CAPITAL ADJUSTMENTS	$ 8,561,000

TOTAL GENERAL FUND ADJUSTED BUDGET	$ 414,441,268

TOTAL REVISED GENERAL FUND BUDGET	$ 22,335,319,309

GENERAL FUND AVAILABILITY STATEMENT
SECTION 2.2.  The General Fund availability used in developing the 2016‑2017 budget is shown below:
	FY 2016‑2017
Description	(In Millions)
Beginning Availability
	Unappropriated Balance from Prior Fiscal Year	$   175,488,544
	Anticipated Over Collections	330,200,000
	Anticipated Reversions	358,439,524
	FY 2015‑2016 Savings from Deduction for Teachers' Classroom Expenses	(1,500,000)
	Transfer to Medicaid Transformation Reserve	(150,000,000)
	Less: Credit to Savings Reserve Account	(300,000,000)
	Less: Credit to Repairs and Renovations Reserve Account	(178,157,017)
Beginning Unreserved Credit Balance	$    234,471,051

Revenues Based on Existing Tax Structure	$   21,417,800,000

Nontax Revenues
Investment Income	$   31,300,000
Judicial Fees	242,600,000
Disproportionate Share	147,000,000
Insurance	77,000,000
Master Settlement Agreement	127,500,000
Other Nontax Revenues	178,700,000
Highway Trust Fund Transfer	0
Highway Fund Transfer	0
Subtotal Nontax Revenues 	$    810,200,000

Total General Fund Availability	$   22,462,471,051
Adjustments to Availability: 2016 Session
	Transfer to Highway Trust Fund Future Transportation Bond Reserve	($  52,500,000)
	Transfer to Highway Fund Economic Development Critical Infrastructure	(68,000,000)
	Adjustment of Transfer from Insurance Regulatory Fund	146,887
	Deduction for Teachers' Classroom Expenses	(1,500,000)
Subtotal Adjustments to Availability	($  121,853,113)
	
Total Availability	$   22,340,617,938

Less: Total General Fund Appropriations for 2016‑2017	$   22,335,319,309
	Fiscal Year

Unappropriated Balance Remaining	$   5,298,629

PART III. CURRENT OPERATIONS/HIGHWAY FUND

CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND
SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2017, according to the following schedule:

Current Operations – Highway Fund	FY 2016‑2017
Department of Transportation
	General Administration	0

	Division of Highways
		Administration	0
		Construction	2,800,000
		Maintenance	27,476,344
		OSHA Program	0

Ferry Operations	0

State Aid to Municipalities	0

Intermodal Divisions
		Public Transportation	4,000,000
		Aviation	34,500,000
		Rail	0
		Bicycle and Pedestrian	250,000

Governor's Highway Safety	0
Division of Motor Vehicles	6,989,125

Other State Agencies, Reserves, Transfers	51,148,382

Capital Improvements	135,000
		
Total Revised Adjustments to Highway Fund Appropriation	$ 127,298,851

Total Highway Fund Appropriations	$2,116,900,000

HIGHWAY FUND/AVAILABILITY STATEMENT
SECTION 3.2.  The Highway Fund availability used in developing the 2016‑2017 fiscal year budget is shown below:

Highway Fund Availability Statement	2016‑2017

Tax Revenue	$ 24,499,525
Non‑Tax Revenue	34,799,326
Transfer from the General Fund	68,000,000

Total Adjustment for Highway Fund Availability	$ 127,298,851

Total Revised Highway Fund Availability	$ 2,116,900,000

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

HIGHWAY TRUST FUND APPROPRIATIONS
SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2017, according to the following schedule:

Highway Trust Fund	FY 2016‑2017

Department of Transportation:
	Program Administration	$       1,004,184

Construction:
	Strategic Prioritization Program	29,860,816
	
Bonds:
	Bond Redemption	52,500,000
	Bond Interest	0
NC Turnpike Authority	0
Reserve for Visitor Centers	0
Total Highway Trust Fund Appropriation Adjustments	$ 83,365,000

Total Revised Highway Trust Fund Appropriations	$1,422,600,000

HIGHWAY TRUST FUND AVAILABILITY STATEMENT
SECTION 4.2.  Section 4.2 of Session Law 2015‑241 only applies to fiscal year 2015‑2016. The Highway Fund availability used in adjusting the 2016‑17 fiscal year budget is shown below:

Highway Trust Fund Availability Statement	FY 2016‑2017

Tax Revenue	$ 30,000,000
Non‑Tax Revenue	865,000
Transfer from General Fund	52,500,000
Total Highway Trust Fund Availability Adjustments	$ 83,365,000

Total Revised Highway Trust Fund Availability	$ 1,422,600,000

PART V. OTHER APPROPRIATIONS

EDUCATION LOTTERY FUNDS
SECTION 5.1.  Section 5.2(a) of S.L. 2015‑241 reads as rewritten:
"SECTION 5.2.(a)  The appropriations made from the Education Lottery Fund for the 2015‑17 fiscal biennium are as follows:
	FY 2015‑2016	FY 2016‑2017
Noninstructional Support Personnel	$310,455,157	$316,352,729
Prekindergarten Program	78,252,110	82,252,110
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
Digital Learning Plan		29,000,000
School Facilities Needs Study	1,000,000
Instructional Supplies	10,000,000
K‑12 Special Education Scholarships	5,800,000
UNC STEM and Health Merit Scholarships	5,000,000
UNC Technology to Improve Student Achievement	6,000,000
TOTAL	$529,902,000	$596,599,572"

CIVIL PENALTY AND FORFEITURE FUND
SECTION 5.2.  Section 5.3(a) of S.L. 2015‑241 reads as rewritten:
"SECTION 5.3.(a)  Appropriations are made from the Civil Penalty and Forfeiture Fund for the fiscal biennium ending June 30, 2017, as follows:
	FY 2015‑2016	FY 2016‑2017
School Technology Fund	$18,000,000	$18,000,000
Drivers Education	0	27,393,768
State Public School Fund	132,320,490	129,099,877
Total Appropriation	$150,320,490	$174,493,645"

PART VI. GENERAL PROVISIONS

RECURRING TRANSFER TO HIGHWAY TRUST FUND FOR DEBT SERVICE ON FUTURE TRANSPORTATION BONDS
SECTION 6.1A.  There is established in the Highway Trust Fund, the Future Transportation Bond Reserve. The Office of the State Controller shall annually transfer from funds available in the General Fund the sum of fifty‑two million five hundred thousand dollars ($52,500,000) in recurring funds to the Future Transportation Bond Reserve established by this section in the Highway Trust Fund. Funds in the Future Transportation Bond Reserve shall be used only for debt service payments on future issuance of General Obligation bonds for critical transportation infrastructure. Unexpended funds shall not revert.

ONE‑TIME TRANSFER TO HIGHWAY FUND FOR CRITICAL INFRASTRUCTURE FOR ECONOMIC DEVELOPMENT
SECTION 6.1B.(a)  The State Controller shall transfer sixty‑eight million dollars ($68,000,000) from the unreserved fund balance to the Highway Fund on June 30, 2016. This section becomes effective June 30, 2016.
SECTION 6.1B.(b)  Of the sixty‑eight million dollars ($68,000,000) transferred in subsection (a) of this section, thirty‑five million dollars ($35,000,000) is appropriated from the Highway Fund to a reserve fund for use by the North Carolina State Ports Authority for prioritized capital improvements to State Port infrastructure and facilities. Thirty‑three million dollars ($33,000,000) is appropriated from the Highway Fund to the Division of Aviation of the Department of Transportation for prioritized capital improvements to public airports and time‑sensitive aviation capital improvement projects for economic development purposes.

UNIVERSITY INNOVATION COMMERCIALIZATION GRANT PROGRAM
SECTION 6.1.(a)  Purpose. – In order to increase the number of high‑tech, start‑up companies and enhance job creation resulting from research conducted by North Carolina's universities, the University Innovation Commercialization Grant Program is established.
SECTION 6.1.(b)  Funding. – The sum of two million five hundred thousand dollars ($2,500,000) for fiscal year 2016‑2017 is appropriated to a reserve in the Office of State Budget and Management for the University Innovation Commercialization Grant Program.
SECTION 6.1.(c)  Grants. – The Office of Science, Technology, and Innovation in the Department of Commerce shall establish a competitive award process to provide funding to develop and implement processes for technology proof of concept, validation, IP protection and early/mid‑stage product development/production, commercialization, and translation for technologies developed by North Carolina Universities.
SECTION 6.1.(d)  Eligibility. – Upon recommendation and guidance from a nonprofit corporation contracted pursuant to this section, the Department of Commerce may make grant awards from the funds provided in subsection (b) of this section only to a:
(1)	Constituent institution of The University of North Carolina.
(2)	Private college or university located in North Carolina.
SECTION 6.1.(e)  Administration. – The Department of Commerce may use up to ten percent (10%) of funds provided in this section to contract with one or more nonprofit corporations to assist with the following:
(1)	Select university technologies for development based on commercial potential.
(2)	Create a development plan of key activities to make the technologies more attractive to investors.
(3)	Guide implementation of these activities to assure efficient deployment of funds and commercial‑quality results.
Each nonprofit organization must demonstrate expertise in either life science technologies including medical, biological, agricultural or nonlife sciences technologies, including information technology, materials, and cyber security.
SECTION 6.1.(f)  Reports. – The Office of Science, Technology, and Innovation in the Department of Commerce and nonprofit corporation selected in subsection (c) of this section shall provide an annual report to the Office of State Budget and Management and Fiscal Research Division of the General Assembly no later than January 1 of each fiscal year. The report shall detail expenditures and grants made from these funds and provide evidence of return on investment, including, but not limited to, (i) the number of technologies brought to market; (ii) the number of new companies founded; and (iii) data on jobs created, including occupational classifications and salary ranges.
SECTION 6.1.(g)  Oversight. – The Department of Commerce, in consultation with the Office of State Budget and Management, shall provide monitoring and oversight of the performance of a contract entered into pursuant to this section with a North Carolina nonprofit corporation and of the funds granted to institutes of higher education.
SECTION 6.1.(h)  Public Funds. – A North Carolina nonprofit corporation or institute of higher education with which the Department contracts or grants funds pursuant to this section shall use interest earned on State funds after receipt of the funds by the nonprofit corporation only for the same purposes identified in subsection (c) of this section.

RALLYING INVESTORS AND SKILLED ENTREPRENEURS OF NC (RISE NC)
SECTION 6.2.(a)  Purpose. – In order to increase the number of high‑tech, start‑up companies and enhance job creation, RISE NC creates a statewide network that develops and leverages existing North Carolina entrepreneurial management talent and recruits world‑class investors, skilled entrepreneurs, and managers to North Carolina.
SECTION 6.2.(b)  Funding. – The sum of two million five hundred thousand dollars ($2,500,000) of nonrecurring funds for fiscal year 2016‑2017 is appropriated to a reserve in the Office of State Budget and Management for the Rallying Investors and Skilled Entrepreneurs of NC (RISE NC) program.
SECTION 6.2.(c)  Grant. – The Office of Science, Technology, and Innovation in the Department of Commerce shall establish a competitive award process to provide funding to one or more North Carolina nonprofit corporations to perform the following:
(1)	The development of a statewide entrepreneurial network to connect serial entrepreneurs to university start‑ups.
(2)	The development of an entrepreneurship fellowship program; Grant funds shall be matched on the basis of one dollar ($1.00) in grant funds for every two dollars ($2.00) nongrant funds. Matching funds shall not include other State funds.
SECTION 6.2.(d)  Administration. – The Department of Commerce may use up to five percent (5%) of funds provided in this section to administer this program.
SECTION 6.2.(e)  Reports. – The Office of Science, Technology, and Innovation in the Department of Commerce and nonprofit corporation selected in subsection (c) of this section shall provide an annual report to the Office of State Budget and Management and Fiscal Research Division of the General Assembly no later than January 1 of each fiscal year. The report shall detail expenditures and grants made from these funds and provide evidence of return on investment, including, but not limited to, (i) the number of new companies founded and (ii) data on jobs created, including occupational classifications and salary ranges.
SECTION 6.2.(f)  Oversight. – The Department of Commerce, in consultation with the Office of State Budget and Management, shall provide monitoring and oversight of the performance of a contract entered into pursuant to this section with a North Carolina nonprofit corporation.
SECTION 6.2.(g)  Public Funds. – A North Carolina nonprofit corporation with which the Department contracts pursuant to this section shall use interest earned on State funds after receipt of the funds by the nonprofit corporation only for the same purposes identified in subsection (c) of this section.
SECTION 6.2.(h)  Funds appropriated for the 2016‑2017 fiscal year shall not revert at the end of the fiscal year but shall remain available until expended.

CONTINUING BUDGET AUTHORITY
SECTION 6.3.  G.S. 143C‑5‑4 reads as rewritten:
"§ 143C‑5‑4.  Enactment deadline; procedures to be followed when the Current Operations Appropriations Act does not become law prior to the end of certain fiscal years.
(a)	Enactment Deadline. – The General Assembly shall enact the Current Operations Appropriations Act by June 15 of odd‑numbered years and by June 30 of even‑numbered years in which a Current Operations Appropriations Act is enacted.
(b)	If Appropriations Act Does Not Become Law Prior to End of Certain Fiscal Years. – If a fiscal year begins for which no current operations appropriations act has become law, then the following procedures shall be followed and the following limitations shall apply:
(1)	Authority. – Unless otherwise provided by law, the Director of the Budget may continue to allocate funds from all funds for expenditure by State departments, institutions, and agencies at a level not to exceed the level of recurring expenditures from those funds for the prior fiscal year. If the Director of the Budget finds that projected revenues for the fiscal year will not support expenditures at the level of recurring expenditures for the prior fiscal year, the Director of the Budget shall allot funds at a lower level. In making these allocations, the Director of the Budget shall ensure the prompt payment of the principal and interest on bonds and notes of the State according to their terms. Except as otherwise provided by this section, the limitations and directions on the expenditure of funds for the prior fiscal biennium shall remain in effect.
(2)	Appropriation of Funds Necessary to Implement. – There is appropriated from the appropriate State funds, cash balances, federal receipts, and departmental receipts sums sufficient to implement the authority described in this subsection for the applicable fiscal year.
(3)	Relation to Current Operations Appropriations Act. – The appropriations and the authorizations to allocate and spend funds which are set out in this subsection shall remain in effect until the Current Operations Appropriations Act for the applicable biennium becomes law, at which time that act shall become effective and shall govern appropriations and expenditures. When the Current Operations Appropriations Act for that biennium becomes law, the Director of the Budget shall adjust allotments to give effect to that act from July 1 of the fiscal year.
(4)	State Employee Salaries. – The salary schedules and specific salaries established for the prior fiscal year and in effect on June 30 of the prior fiscal year for offices and positions shall remain in effect until the Current Operations and Capital Improvements Appropriations Act for the current fiscal year becomes law. State employees subject to G.S. 7A‑102(c), 7A‑171.1, or 20‑187.3 shall not move up on salary schedules or receive automatic increases, including automatic step increases, until authorized by the General Assembly.
(5)	School Employee Salaries. – Public school employees paid on the teacher salary schedule or the school‑based administrator salary schedule shall not move up on salary schedules or receive automatic step increases until authorized by the General Assembly.
(6)	State's Employer Contribution Rate. – The State's employer contribution rates budgeted for retirement and related benefits for the current fiscal year shall remain the same as they are on June 30 of the prior fiscal year. These rates are effective until the Current Operations Appropriations Act for the current fiscal year becomes law and are subject to revision in that act. If that act modifies those rates, the Director of the Budget shall further modify the rates set in that act for the remainder of the fiscal year so as to compensate for the different amount contributed between July 1 and the date the Current Operations Appropriations Act becomes law so that the effective rates for the entire year reflect the rates set in the Current Operations Appropriations Act.
(7)	Statutory Transfers to Reserves. – Notwithstanding G.S. 143C‑4‑2 and G.S. 143C‑4‑3, funds shall not be reserved to the Savings Reserve Account or the Repairs and Renovations Reserve Account, and the State Controller shall not transfer funds from the unreserved credit balance to the those accounts on June 30 of the prior fiscal year.
(8)	Federal Block Grant Funds and Other Grant Funds. – Notwithstanding G.S. 143C‑6‑4, State agencies may, with approval of the Director of the Budget, spend funds received from grants awarded during the current fiscal year, including federal block grants that are for less than two million five hundred thousand dollars ($2,500,000) that do not require State matching funds and will not be used for a capital project. State agencies shall report to the Joint Legislative Commission on Governmental Operations within 30 days of receipt of such funds. State agencies may spend all other funds from grants awarded during the current fiscal year, including federal block grants, only with approval of the Director of the Budget and after consultation with the Joint Legislative Commission on Governmental Operations. The Office of State Budget and Management shall work with the recipient State agencies to budget grant awards according to the annual program needs and within the parameters of the respective granting entities. Depending on the nature of the award, additional State personnel may be employed on a time‑limited basis. Funds received from such grants are hereby appropriated and shall be incorporated into the authorized budget of the recipient State agency. Notwithstanding the provisions of this subdivision, no State agency may accept a grant if acceptance of the grant would obligate the State to make future expenditures relating to the program receiving the grant or would otherwise result in a financial obligation as a consequence of accepting the grant funds."

ENHANCE STATEWIDE GRANTS OVERSIGHT
SECTION 6.4.  G.S. 143C‑6‑23 reads as rewritten:
"§ 143C‑6‑23.  State assistance and grant funds: administration; oversight and reporting requirements.
(a)	Definitions. – The following definitions apply in this section:
(1)	Contractor. – An entity subject to the contractor requirements, as well as any entity that would be subject to the contractor requirements but for a specific statute or rule exempting that entity from the contractor requirements.
(1a)	Contractor requirements. – Article 3, 3C, 3D, 3E, 3G, or 8 of Chapter 143 of the General Statutes and related Administrative Code Rules.
(1b)	State financial assistance. – State funds disbursed by a State agency as a grant, cooperative agreement, noncash contribution, food commodities, direct appropriation, or other transfer of funds to a recipient as defined in subdivision (2) of this subsection.
(2)	 Recipient. – A non‑State entity that receives State financial assistance directly from a State agency to carry out part of a State program.
(3)	Encumbrance. – A financial obligation created by a purchase order, contract, salary commitment, unearned or prepaid collections for services provided, or other legally binding agreement. A financial obligation is not an encumbrance for purposes of this section unless it (i) is in writing and has been signed by a person or entity who has authority to legally bind the recipient or subrecipient to spend the funds or (ii) was created by the provision of goods or services to the recipient or subrecipient by a third party under circumstances that create a legally binding obligation to pay for the goods or services.
(4)	Subrecipient. – A non‑State entity that receives State financial assistance from a recipient to carry out part of a State program but does not include an individual that is a beneficiary of such program.
(b)	Conflict of Interest Policy. – Every recipient shall file with the State agency disbursing funds to the recipient a copy of that recipient's policy addressing conflicts of interest that may arise involving the recipient's management employees and the members of its board of directors or other governing body. The policy shall address situations in which any of these individuals may directly or indirectly benefit, except as the recipient's employees or members of its board or other governing body, from the recipient's disbursing of State funds, and shall include actions to be taken by the recipient or the individual, or both, to avoid conflicts of interest and the appearance of impropriety. The policy shall be filed before the disbursing State agency may disburse the State assistance funds.
(c)	No Overdue Tax Debts. – Every recipient shall file with the State agency or department disbursing funds to the recipient a written statement completed by that recipient's board of directors or other governing body stating that the recipient does not have any overdue tax debts, as defined by G.S. 105‑243.1, at the federal, State, or local level. The written statement shall be made under oath and shall be filed before the disbursing State agency or department may disburse the State assistance funds. A person who makes a false statement in violation of this subsection is guilty of a criminal offense punishable as provided by G.S. 143C‑10‑1.
(d)	Office of State Budget and Management. – The Office of State Budget and Management shall adopt policies and procedures to ensure the uniform administration of State assistance funds by all grantor State agencies and recipients or subrecipients. The policies and procedures shall provide for disbursements of State assistance funds and for State agency oversight, monitoring, and evaluation of recipients and subrecipients. The policies and procedures shall:
(1)	Ensure that the purpose and reporting requirements of the State assistance funds are specified to the recipient.
(2)	Ensure that recipients specify the purpose and reporting requirements for State assistance funds made to subrecipients.

(5)	Require each recipient and subrecipient to ensure that, for accounting purposes, State funds and interest earned on those funds remain separate and apart from other funds in the possession or control of the recipient and subrecipient.
(6)	Establish minimum periodic reporting requirements to be established by State agencies for recipients and subrecipients, including methods of reporting, to provide separate accounting of all State funds, a separate accounting of funds used for administration, and other financial and program performance information.
(7)	Require recipients and subrecipients to maintain reports, records, and other information to properly account for the expenditure of all State assistance funds and to make such reports, records, and other information available to the awarding State agency for oversight, monitoring, and evaluation purposes.

(9a)	Require a State agency that oversees a State assistance program to develop a monitoring plan for that program and to submit the plan and any additional information regarding the plan to the Office of State Budget and Management.
(10)	Provide procedures for the suspension of further disbursements or use of State assistance funds for noncompliance with these policies and procedures or other inappropriate use of the funds.
(11)	Provide procedures for use in appropriate circumstances for reinstatement of disbursements that have been suspended for noncompliance with these policies and procedures or other inappropriate use of State assistance funds.
(12)	Provide procedures for the recovery and return to the awarding State agency of unexpended State assistance funds from a recipient or subrecipient (i) in accordance with subsection (f1) of this section or (ii) in the event that the recipient or subrecipient is unable to fulfill the purposes of the State assistance for a reason not set forth in that subsection.
(d1)	Required State Assistance Terms. – The terms of each agreement governing the use of the State assistance shall include all of the following, which shall be deemed a part of the award of State assistance:
(1)	The limitation contained in G.S. 143C‑6‑8 concerning the availability of appropriated funds.
(2)	The relevant provisions of any legislation authorizing or governing the administration of the State assistance funds.
(3)	The terms of this section.
(e)	Policies and Procedures Are Not Subject to the Administrative Procedure Act. – Policies and procedures adopted pursuant to subsection (d) of this section are not subject to the provisions of Chapter 150B of the General Statutes.
(f)	Suspension and Recovery of Funds to State Assistance Recipients for Noncompliance. – Where a recipient or subrecipient is noncompliant with this Part or the policies and procedures adopted pursuant to subsection (d) of this section, or where a recipient or subrecipient is unable to fulfill the obligations or purposes of the State assistance, has inappropriately used State assistance funds or is noncompliant with relevant reporting or other requirements, the Office of State Budget and Management may take the actions set forth below in this subsection. If the State assistance funds are a pass‑through of funds awarded by an agency of the United States, then the Office of State Budget and Management must consult with the awarding agency of the United States and the State agency that is the recipient of the pass‑through funds prior to taking the actions authorized by this subsection. The authorized actions are as follows:
(1)	With respect to a recipient or a subrecipient, and after consultation with the administering State agency, suspend disbursement of State assistance funds, prevent further use of State assistance funds already disbursed, and recover State assistance funds already disbursed.
(2)	With respect to an administering State agency, and after 90 days' notice to give the administering State agency an opportunity to correct the noncompliance, suspend disbursement of State assistance funds.
(f1)	Return of State Assistance Funds. – Except as otherwise required by federal law, a recipient or subrecipient shall return to the State all affected State assistance funds and interest earned on those funds if any of the following occurs:
(1)	The funds are in the possession or control of a recipient and are not expended, made subject to an encumbrance, or disbursed to a subrecipient by August 31 immediately following the fiscal year in which the funds are appropriated by the General Assembly, or a different period set forth in the terms of the applicable appropriation or federal grant.
(2)	The funds remain unexpended at the time that the recipient or subrecipient dissolves, ceases operations, or otherwise indicates that it does not intend to spend the funds.
(3)	The Office of State Budget and Management seeks to recover the funds pursuant to subsection (f) of this act.
(f2)	Use of Returned State Assistance Funds. – Encumbered funds returned to the State pursuant to subsection (f1) of this section by a recipient or subrecipient shall upon appropriation by the General Assembly be spent in accordance with the terms of the encumbrance. All other funds returned to the State by a recipient or subrecipient pursuant to subsection (f1) of this section shall be credited to the fund from which they were appropriated and shall remain unexpended and unencumbered until appropriated by the General Assembly. Nothing in this section shall be construed to authorize an expenditure pursuant to an unlawful encumbrance or in a manner that would violate the terms of the appropriation of the State assistance funds at issue.
(g)	Audit Oversight. – The State Auditor has audit oversight, with respect to State assistance funds received by the recipient or subrecipient, pursuant to Article 5A of Chapter 147 of the General Statutes, of every recipient or subrecipient, that receives, uses, or expends State assistance funds. A grantee or subgrantee recipient or subrecipient must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State assistance funds received by the recipient or subrecipient. The recipient or subrecipient must furnish any additional financial or budgetary information requested by the State Auditor, including audit work papers in the possession of any auditor of a recipient or subrecipient directly related to the use and expenditure of State assistance funds.
(h)	Noncompliance Reports. – The Office of State Budget and Management shall maintain a list that is publicly available of all recipient or subrecipient that failed to comply with this section with respect to State assistance funds received in the prior fiscal year.
	
(j)	Use of Interest Earned on State Assistance Funds. – Except as otherwise required by federal law or the terms of a federal grant, interest earned on State assistance funds after receipt of the funds by a recipient or subrecipient shall be credited to the recipient or subrecipient and shall be used for the same purposes for which the State assistance or sub‑award was made.
(k)	Reporting by Recipient or Subrecipient That Cease Operations. – A recipient or subrecipient that intends to dissolve or cease operations shall report that decision in writing to the Office of State Budget and Management and to the Fiscal Research Division at least 30 days prior to taking that action.
(l)	The reporting and audit requirements of this Subchapter do not apply to:
(1)	Awards to non‑State entities subject to the audit and other reporting requirements of the Local Government Commission;
(2)	Tuition assistance to students;
(3)	Public assistance payments from Federal entitlement programs to or on behalf of enrolled individuals; or
(4)	State funds disbursed to a contractor as defined in this subchapter."

CONFORMING CHANGES TO BOARD OF BARBER EXAMINERS
SECTION 6.5.(a)  G.S. 86A‑6 reads as rewritten:
"§ 86A‑6.  Office; seal; officers and executive director; funds.
The Board shall maintain a suitable office in Raleigh, and shall adopt and use a common seal for the authentication of its orders and records. The Board shall annually elect its own officers, and in addition, may elect or appoint a full‑time executive director who shall not be a member of the Board, and whose salary shall be fixed by the Board."
SECTION 6.5.(b)  G.S. 86A‑7 reads as rewritten:
"§ 86A‑7.  Salary and expenses; employees; audits; annual reports to the Governor.
(a)	Each member of the Board of Barber Examiners shall be reimbursed for his actual expenses and shall receive compensation and travel allowance according to G.S. 93B‑5 for the distance traveled in performance of his duties. The expenses, compensation and all other salaries and expenses in connection with the administration of this Chapter, shall be paid solely from the funds derived from fees collected and received under this Chapter.
(b)	The Board shall employ such agents, assistants and attorneys as it deems necessary.
(c)	Repealed by Session Laws 1981, c. 884, s. 6.
(d)	Repealed by Session Laws 1983, c. 913, s. 8.
(e)	The Board shall report annually to the Governor, a full statement of its receipts and expenditures, and also a full statement of its work during the year, together with such recommendations as it may deem expedient."

CONFORMING CHANGES TO BOARD OF COSMETIC ARTS
SECTION 6.6.  G.S. 88B‑6 reads as rewritten:
"§ 88B‑6.  Board office, employees, funds, budget requirements.
(a)	The Board shall maintain its office in Raleigh, North Carolina.
(b)	The Board shall employ an executive director who shall not be a member of the Board. The executive director shall keep all records of the Board, issue all necessary notices, and perform any other duties required by the Board.
(c)	The Board may employ as many inspectors, investigators, and other staff as necessary to perform inspections and other duties prescribed by the Board. Inspectors and investigators shall be experienced in all parts of cosmetic art and shall have authority to examine cosmetic art shops and cosmetic art schools during business hours to determine compliance with this Chapter.
(d)	The executive director shall serve at the pleasure of the Board.
		"

CONFORMING CHANGES TO BOARD OF OPTICIANS
SECTION 6.7.(a)  G.S. 90‑245 reads as rewritten:
"§ 90‑245.  Collection of fees.
The secretary to the Board is hereby authorized and empowered to collect in the name and on behalf of this Board the fees prescribed by this Article. The funds shall be expended exclusively for the administration and enforcement of the provisions of this Article."
SECTION 6.7.(b)  G.S. 90‑270.18(a) is repealed.

CONFORMING CHANGES TO BOARD OF AUCTIONEERS
SECTION 6.8.(a)  G.S. 85B‑4.1 reads as rewritten:
"§ 85B‑4.1.  Auctioneer Recovery Fund.
(a)	In addition to license fees, upon application for a license or renewal of a license, the Commission may charge the applicant or licensee up to fifty dollars ($50.00) per year to be included in the Fund.
(b)	The Commission shall maintain at least two hundred thousand dollars ($200,000) in the Fund for use as provided in this Chapter. The Fund may be invested in interest bearing accounts, and any interest accrued shall be added to the Fund. Sufficient liquidity shall be maintained to insure that funds will be available to satisfy claims processed through the Board."
SECTION 6.8.(b)  G.S. 85B‑6 reads as rewritten:
"§ 85B‑6.  Fees; local governments not to charge fees or require licenses.
(a)	The Commission shall collect and remit to the State Treasurer fees in an amount not to exceed the following:
…."

CONFORMING CHANGES TO BOARD OF ELECTROLYSIS
SECTION 6.9.  G.S. 88A‑7 reads as rewritten:
"§ 88A‑7.  Audit oversight.
The provisions of the Executive Budget Act apply to this Chapter. The Board is subject to the oversight of the State Auditor under Article 5A of Chapter 147 of the General Statutes."

CONFORMING CHANGES TO BOARD OF PSYCHOLOGY
SECTION 6.10.  G.S. 90‑270.18(a) is repealed.

STATEWIDE MISDEMEANANT CONFINEMENT FUND
SECTION 6.11.  G.S. 148‑10.4(d) reads as rewritten:
"(d)	Fund Uses. – Moneys in the Fund may be used for the following:
(1)	Reimbursements by the Sheriffs' Association to counties for the costs of housing misdemeanants under the Program, including the care, supervision, and transportation of those misdemeanants.
(2)	Reimbursements to the Division of Adult Correction for the cost of housing misdemeanants transferred to the Division pursuant to G.S. 148‑32.1(b3), including the care, supervision, and transportation of those misdemeanants.
(3)	To pay the Sheriffs' Association for administrative and operating expenses pursuant to subsection (e) of this section.
(4)	To pay the Division of Adult Correction for administrative and operating expenses pursuant to subsection (e) of this section.
(5)	Reimbursements to counties pursuant to Article IX, Section 7(a) of the North Carolina Constitution. The Administrative Office of the Courts (AOC) shall calculate the amount collected from each county and sent to the Fund from July 1, 2011, to September 18, 2015, as a result of the fifty dollars ($50.00) improper equipment fee established by Section 31.26(c) S.L. 2011‑145. After calculating the amounts, AOC shall report them to the Department of Public Safety by June 25, 2016. Beginning on July 1, 2016, the Department of Public Safety shall reimburse each county its respective amount from the Fund."

USE OF PROCEEDS FROM SALE OR LEASE OF STATE‑OWNED PROPERTY IN WAKE COUNTY
SECTION 6.12.(a)  G.S. 146‑30 is amended by adding a new subsection to read:
"(d)	Notwithstanding subsection (a) of this section, the net proceeds of any disposition by sale or lease of State‑owned real property located in Wake County made in accordance with this Subchapter shall be handled in accordance with the following priority: First, in accordance with the provisions of any trust or other instrument of title whereby title to such real property was heretofore acquired or is hereafter acquired; and second, any remaining net proceeds shall be transferred to the State Government Facility Modernization Fund established by G.S. 146‑26.2."
SECTION 6.12.(b)  Article 6 of Chapter 146 of the General Statutes is amended by adding a new section to read:
"§ 146‑26.2.  State Government Facility Modernization Fund.
The State Government Facility Modernization Fund is established as a special fund to be administered by the Office of State Budget and Management. The Fund consists of the net proceeds of real property dispositions transferred to it pursuant to G.S. 146‑30(d) and any other funds appropriated to it by the General Assembly. Moneys in the Fund may be used (i) to acquire real property in Wake County to be used for State purposes; (ii) to fund improvements to State‑owned real property; and (iii) to engage in demolition activities in connection with the acquisition or rehabilitation of State‑owned real property. Any funds in the Fund are hereby appropriated for these purposes. Acquisitions and projects funded with funds from this Fund shall accord in all respects with the provisions of this Article."
SECTION 6.12.(c)  G.S. 146‑30(d) and G.S. 146‑26.2, as enacted by this section, shall not apply to the disposition of proceeds of any portion of the Dorothea Dix property.

HEALTH CONTINGENCY RESERVE
SECTION 6.13.(a)  Section 12H.38(a) of S.L. 2014‑100 reads as rewritten:
"SECTION 12H.38.(a)  There is established in the General Fund the Medicaid Contingency Reserve. The Office of the State Controller shall reserve from funds available in the General Fund the sum of one hundred eighty‑six million three hundred seventy‑two thousand six hundred seventy‑three dollars ($186,372,673) in recurring funds to the Medicaid Contingency Reserve. Funds in the Medicaid Contingency Reserve shall be appropriated to a statewide reserve for the following purposes:
(1)	Seventy‑one million dollars ($71,000,000) for the State Health Plan for Teachers and State Employees if the General Assembly deems that the State Health Plan has met the requirements of Section 30.26 of S.L. 2015‑241.
(2)	Fifty million dollars ($50,000,000) for the Division of Medical Assistance to cover budget shortfalls in the Medicaid or Health Choice Programs that occur during the 2015‑2016 and 2016‑2017 fiscal year. These funds shall be available for expenditure only upon an appropriation by act of the General Assembly or approval by the Director of the Budget.
a.	It is the intent of the Director of the Budget to transfer cash out of reserve, not to exceed fifty million dollars ($50,000,000) during the 2016‑2017 fiscal year only if:
1.	The Director of the Budget, after the State Controller has verified that receipts are being used appropriately, has found that additional funds are needed to cover a shortfall in the Medicaid budget for the State fiscal year.
2.	The Director of the Budget has reported immediately to the Fiscal Research Division on the amount of the shortfall found in accordance with subdivision (1) of this subsection. This report shall include an analysis of the causes of the shortfall such as, (i) unanticipated enrollment and mix of enrollment, (ii) unanticipated growth or utilization within particular service areas, (iii) errors in the data or analysis used to project the Medicaid budget, (iv) the failure of the program to achieve budgeted savings, (v) other factors and market trends that have impacted the price of or spending for services, (vi) variations in receipts from prior years or from assumptions used to prepare the Medicaid budget for the current fiscal year, or (vii) other factors. The report shall also include data in an electronic format that is adequate for the Fiscal Research Division to confirm the amount of the shortfall and its causes."
SECTION 6.13.(b)  Section 12H.38(b) of S.L. 2014‑100 reads as rewritten:
"SECTION 12H.38.(b)  The sixty‑five million three hundred seventy‑two thousand six hundred seventy–three dollars ($65,372,673) remaining in the reserve may only be used for budget shortfalls in the Medicaid Program that occur during the 2016‑2017 fiscal year. These funds shall be available for expenditure only upon an appropriation by act of the General Assembly.

	"
SECTION 6.13.(c)  Nothing in this section shall be construed to limit the authority of the Governor to carry out his duties under the Constitution.

PART VII. INFORMATION TECHNOLOGY

INFORMATION TECHNOLOGY FUND
SECTION 7.1.(a)  Section 7.1 of S.L. 2015‑241 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 2015‑2016	FY 2016‑2017
General Fund Appropriation for IT Fund	$21,755,191	$31,956,093
Appropriations are made from the Information Technology Fund for the 2015‑2017 fiscal biennium as follows:
Criminal Justice Information Network	$193,085	$193,085
Center for Geographic Information and Analysis	$503,810	$503,810
Enterprise Security Risk Management	$871,497	$1,421,479
Staffing and Strategic Projects	$7,873,903	$17,273,903
First Net (State Match)	$140,000	$140,000
Enterprise Project Management Office	$1,501,234	$1,501,234
IT Strategy and Standards	$865,326	$865,326
State Portal	$233,510	$233,510
Process Management	$398,234	$398,234
IT Consolidation	$0	$0
Government Data Analytics Center	$9,101,255	$9,101,255
Compensation Reserve	$73,337	$324,239
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 in writing to the chairs of the Joint Legislative Oversight Committee on Information Technology, the chair and cochair of the House Appropriations Committee on Information Technology, and the Fiscal Research Division."

INFORMATION TECHNOLOGY INTERNAL SERVICE FUND
SECTION 7.2.  Section 7.2 of S.L. 2015‑241 reads as rewritten:
"SECTION 7.2.(a)  IT Internal Service Fund. – For the 2015‑2016 fiscal year, receipts for the IT Internal Service Fund shall not exceed one hundred eighty‑eight million dollars ($188,000,000). For fiscal year 2016‑2017, receipts for the Internal Service Fund shall not exceed one hundred eighty million seven hundred thousand dollars ($180,700,000). For the 2015‑2016 fiscal year, receipts may be increased for specific purposes to a maximum of one hundred ninety‑five million dollars ($195,000,000). For the 2016‑2017 fiscal year, receipts may be increased to a maximum of one hundred eighty‑six million seven hundred thousand dollars ($186,700,000) following consultation with the Joint Legislative Commission on Governmental Operations each time a requirement for an increase is identified. 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.
"SECTION 7.2.(b)  For the 2015‑2016 fiscal year, receipts in excess of requirements, including information technology equipment and fixtures, shall be maintained in a separate account to be managed by the Office of State Budget and Management. The amounts received shall be used for the following purposes:
(1)	To offset agency budget shortfalls resulting from Department of Information Technology rate increases.
(2)	To offset Department of Information Technology Internal Service Fund budget shortfalls, if approved by the Office of State Budget and Management. Any use of excess receipts shall be reported to the Joint Legislative Oversight Committee of Information Technology and the Fiscal Research Division.
"SECTION 7.2.(c)  For the 2016‑2017 fiscal year, budget requirements and associated rates shall be developed based on actual service costs for fiscal year 2014‑2015. These budget requirements and associated rates shall be developed and reported to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division by October 1, 2016.
"SECTION 7.2.(d)  For the 2016‑2017 fiscal year, receipts collected for IT Internal Service Fund services shall only be used for the specific purposes for which they were collected and are hereby appropriated for those purposes. Funds collected for information technology equipment and fixtures shall be separately maintained and accounted for by the Department of Information Technology, and such funds shall be used only for the replacement of the fixtures and equipment for which the funds were collected. By December 1, 2016, the Department of Information Technology shall report to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the means and methods by which it is in compliance with the requirements of this subsection.
"SECTION 7.2.(e)  Agency Billing and Payments. – The State Chief Information Officer shall ensure that bills from the Department of Information Technology are easily understandable and fully transparent. If a State agency fails to pay its IT Internal Service Fund bill within 30 days of receipt, the Office of State Budget and Management may transfer funds from the agency to fully or partially cover the cost of the bill from that agency to the IT Internal Service Fund following notification of the affected agency."

INFORMATION TECHNOLOGY RESERVE
SECTION 7.3.  Section 7.3 of S.L. 2015‑241, as amended by Section 2.1 of S.L. 2015‑268, reads as rewritten:
"SECTION 7.3.(a)  The appropriations for the Information Technology Reserve Fund for the 2015‑2017 fiscal biennium are as follows:
	FY 2015‑2016	FY 2016‑2017
Government Data Analytics Center	$8,100,000	$9,260,000
Improve Efficiency and Customer
Service through IT Modernization	$8,127,991	$8,061,512
IT Restructuring	$2,775,184	$2,978,812
Economic Modeling Initiative	$500,000	$500,000
Maintenance Management System Replacement	$173,180	$129,901
NC Connect	$593,899	$788,503
E‑Forms/Digital Signatures	$762,115	$762,115
Law Enforcement Information Exchange	$288,474	0
"SECTION 7.3.(b)  Of the funds appropriated for Information Technology Modernization, four hundred twenty‑four thousand nine hundred seventy‑four dollars ($424,974) for fiscal year 2015‑2016 and four hundred six thousand three hundred seventy‑four dollars ($406,374) for fiscal year 2016‑2017 shall be transferred to the Department of Revenue to fund three security positions. The security positions shall include a Security Design Engineer, a Security Impact Analyst, and a Security Specialist.
"SECTION 7.3.(c)  The funds appropriated for Maintenance Management System Replacement shall be transferred to the Department of Administration to support the acquisition of a cloud‑based facilities management system. The system shall include core system functionality consisting of maintenance, inventory, and utility management systems. The system shall also include three additional modules for system failure alerts, automation of utility bills, and the extension of maintenance management to mobile devices.
"SECTION 7.3.(d)  The funds appropriated for IT Restructuring shall be used solely for information technology restructuring planning and implementation.
"SECTION 7.3.(e)  Funds appropriated to the Information Technology Reserve Fund shall be spent only as specified in this section unless a change is approved by the State Chief Information Officer after consultation with the Office of State Budget and Management. An authorized change may 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 for the funds shall be reported immediately, in writing, to the chairs of the Joint Legislative Oversight Committee on Information Technology, the chairs of the House Appropriations Committee on Information Technology, and the Fiscal Research Division.
"SECTION 7.3.(f)  The Office of State Budget and Management shall establish a fund code for the Information Technology Reserve Fund and shall manage it separately from other funding for the Department of Information Technology and the State Chief Information Officer."

PERMIT REALLOCATION OF FUNDS APPROPRIATED FOR IT RATE INCREASES
SECTION 7.4.  The Office of State Budget and Management may reallocate funds, appropriated in this act for the purpose of paying IT Internal Service Fund bills, as necessary between agencies, to fund increases resulting from the new rate structure that was implemented by the Department of Information Technology in the 2015‑2016 fiscal year.

ADJUST BUDGETS AS NECESSARY DUE TO TRANSFER OF FUNCTIONS
SECTION 7.4A.  The Office of State Budget and Management may, after coordination with the Department of Information Technology, the Department of Environmental Quality, and the Department of Natural and Cultural Resources, adjust IT budgets as appropriate to support the programs, divisions, entities, commissions, boards, and councils transferred to the Department of Natural and Cultural Resources under S.L. 2015‑241.

INFORMATION TECHNOLOGY SPENDING TRANSPARENCY
SECTION 7.5.(a)  In order to provide full transparency into IT spending, all State Agencies identified as participating agencies in G.S. 143B‑1305(c), together with all divisions, boards, commissions, or other State entities for which the participating agencies have budgetary authority, shall realign IT budgets and expenditures in a fund code (or codes) separate from the remainder of the agency's budget. Changes shall be completed by September 30, 2016, and effective July 1, 2016.
SECTION 7.5.(b)  As outlined in G.S. 143B‑1305(d), the Department of Public Safety, the Community College System Office, and the State Board of Elections shall work with the State CIO to plan their transition to the Department. In preparation for this transition, these entities shall realign IT budgets and expenditures in a fund code (or codes) separate from the remainder of the agency's budget by October 1, 2018.
SECTION 7.5.(c)  It is the intent of this legislation that all remaining State agencies together with all divisions, boards, commissions, or other State entities for which the agencies have budgetary authority, shall realign IT budgets and expenditures in a fund code (or codes) separate from the remainder of the agency's budget by the conclusion of the 2018‑2019 fiscal year. This section does not apply to the legislative or judicial branches of government or The University of North Carolina and its constituent institutions, who are exempt under G.S. 143B‑1300(b).

APPRENTICESHIPS AND CAREER‑BASED OPPORTUNITIES IN CYBERSECURITY FOR DISABLED VETERANS
SECTION 7.6.(a)  The cybersecurity apprenticeship program created pursuant to this act shall provide training, apprenticeships and career‑based opportunities for disabled veterans within the State of North Carolina. Opportunities may be offered to qualifying veterans with at least a ten percent (10%) disability rating established by the Veterans Administration and at the discretion of the State Chief Information Officer.
SECTION 7.6.(b)  The State Chief Information Officer shall conduct a competitive process to select disabled veterans to participate in the cybersecurity apprenticeship program. Participants will have the opportunity to apply concepts, protocols, and tools acquired through the program by working side‑by‑side with experts in cybersecurity within the State of North Carolina.
SECTION 7.6.(c)  Of the funds appropriated by this act for the support of the cybersecurity apprenticeship program, the Department of Information Technology may use up to five percent (5%) for costs associated with administering this program.

ESTABLISH GENERAL FUND BUDGET
SECTION 7.7.  Notwithstanding G.S. 143C‑6‑4, the Office of State Budget and Management shall adjust the Department of Information Technology's certified and authorized budget and expenditures by making transfers among purposes or programs for the purpose of establishing the Department's General Fund appropriated operating budget within General Fund budget code 14660 and thereby reducing the need to utilize the Statewide Reserve budget code 19044. Changes shall be completed by September 30, 2016, with an effective date of July 1, 2016.

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 nine hundred eighty‑five dollars and fifty‑three cents ($3,985.53) per child. 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 one‑half percent (12.5%) of its 2016‑2017 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.(a)  Section 8.2 of S.L. 2015‑241 reads as rewritten:
"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 eighty dollars and seventy cents ($1,280.70) per child for fiscal year 2015‑2016 and one thousand two hundred ninety‑five dollars and twenty‑seven cents ($1,295.27) per child for fiscal year 2016‑2017. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2015‑2016 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 be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children."

LITIGATION RESERVE FUNDS
SECTION 8.3.  The State Board of Education may expend up to five hundred thousand dollars ($500,000) for the 2016‑2017 fiscal year from unexpended funds for licensed employees' salaries to pay expenses related to litigation.

UMSTEAD ACT EXEMPTION FOR NC VIRTUAL PUBLIC SCHOOL
SECTION 8.4.(a)  G.S. 66‑58(a) reads as rewritten:
"§ 66‑58.  Sale of merchandise or services by governmental units.
(a)	Except as may be provided in this section, it shall be unlawful for any unit, department or agency of the State government, or any division or subdivision of the unit, department or agency, or any individual employee or employees of the unit, department or agency in his, or her, or their capacity as employee or employees thereof, to engage directly or indirectly in the sale of goods, wares or merchandise in competition with citizens of the State, or to engage in the operation of restaurants, cafeterias or other eating places in any building owned by or leased in the name of the State, or to maintain service establishments for the rendering of services to the public ordinarily and customarily rendered by private enterprises, or to provide transportation services, or to contract with any person, firm or corporation for the operation or rendering of the businesses or services on behalf of the unit, department or agency, or to purchase for or sell to any person, firm or corporation any article of merchandise in competition with private enterprise. The leasing or subleasing of space in any building owned, leased or operated by any unit, department or agency or division or subdivision thereof of the State for the purpose of operating or rendering of any of the businesses or services herein referred to is hereby prohibited.
(b)	The provisions of subsection (a) of this section shall not apply to:
(1)	Counties and municipalities.
(2)	The Department of Health and Human Services or the Department of Agriculture and Consumer Services for the sale of serums, vaccines, and other like products.
(3)	The Department of Administration, except that the agency shall not exceed the authority granted in the act creating the agency.
(4)	The State hospitals for the mentally ill.
(5)	The Department of Health and Human Services.
(6)	The North Carolina School for the Blind at Raleigh.
(6a)	The Division of Juvenile Justice of the Department of Public Safety.
(7)	The North Carolina Schools for the Deaf.
(7a)	The North Carolina Virtual Public School.
…."
SECTION 8.4.(b)  G.S. 66‑58(c)(20) is repealed.

DIGITAL LEARNING PLAN IMPLEMENTATION
SECTION 8.6.  Funds appropriated in this act for the State Board of Education to implement the Digital Learning Plan shall be used to support local education agencies (LEAs) for (i) delivering educator professional development focused on using digital and other instructional technologies to provide high‑quality, integrated digital teaching and learning to all students, (ii) for the State Board of Education to contract with the Friday Institute at NCSU to manage implementation of the NC Digital Learning Plan, and (iii) acquiring quality digital content to enhance instruction. Up to six million dollars ($6,000,000) may be used by the Department of Public Instruction to (i) provide educational resources that remain current, are aligned with curriculum, selected in collaboration with a task force of superintendents, are electronically available to all local education agencies (LEAs), and are effective for all learners.

DIFFERENTIATED PAY FOR ADVANCED TEACHER ROLES
SECTION 8.7.(a)  Funds appropriated to the North Carolina Endowment Fund shall be used to support the pilot implementation of the Performance Plus initiative. The purpose of this initiative is to provide local school administrative units with funds to prototype advanced teaching roles and pay supplements to teachers based on teachers' demonstrated effectiveness and the assumption of additional responsibilities.
SECTION 8.7.(b)  A teacher, for the purpose of this pilot, is a certified teacher who works in the classroom to provide instruction and who is not instructional support personnel.
SECTION 8.7.(c)  Supplements paid for the purpose of this initiative are in addition to salary earned according to the North Carolina School Personnel salary schedule and other applicable local and State supplements.
SECTION 8.7.(d)  Management. – The State Board of Education shall administer and have complete governance over the program, working in cooperation with the North Carolina Department of Public Instruction, North Carolina universities engaged in teacher preparation, elected officials, business leaders, other organizations and entities supporting educational excellence, superintendents, and principals and teachers in affected schools. The State Board of Education may allocate up to five percent (5%) of an approved individual grant for technical assistance, to the local school administrative unit for the purposes of implementing the local pilot.
SECTION 8.7.(e)  No later than June 1, 2016, the State Board of Education shall issue a Request for Proposals (RFP) for local boards of education to develop advanced teaching roles. In the RFP the State Board of Education shall establish minimum requirements for advanced roles for classroom teachers. Local boards of education shall submit a letter of intent no later than August 31, 2016, that shall focus on the capacity and commitment of the local school administrative unit and the local board of education to develop advanced teaching roles that meet the requirements of subsection (f) of this section, as demonstrated by prior local efforts to advance teaching excellence such as on‑the‑job development for teachers, teacher leadership, or innovation in school design; and by indication of willingness to reallocate funds to pay at least the minimum supplements as described in subsection (h) of this section. Draft plans shall be submitted to the State Board of Education no later than January 20, 2017. The State Board of Education shall approve plans as soon as is practicable for implementation in the 2017‑2018 school year.
SECTION 8.7.(f)  Requirements for Advanced Roles – Advanced teaching role plans developed by participating districts must meet, at a minimum, the following criteria:
(1)	Advanced teacher role eligibility and duties. –
a.	Enable eligible classroom teachers to progress within their careers by assuming advanced roles that:
1.	Include accountability for student growth as the teacher of record of all students served by a team of teachers; or
2.	Include accountability for student growth as the teacher of record for more students.
(2)	Implementation. – Have been implemented previously for the 2015‑2016 school year.
SECTION 8.7.(g)  Recipient local school administrative units shall ensure that implementation includes:
(1)	Provide information in a form readily accessible to both teachers and the public on the criteria and procedures for the selection of teachers for advanced roles.
(2)	Require that supplement recipients are highly effective classroom teachers. 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. In addition, teachers who exceed expected student growth on the NC Educator Evaluation instrument for two of the previous three years of teacher evaluation data, or the equivalent on an out‑of‑state teacher's state or district evaluation are considered highly effective. Teachers without three years of student growth data shall be considered highly effective if their rating on the NC Educator Evaluation instrument rating is at least Accomplished on each of the teacher evaluation standards.
(3)	Ensure adequate time during the school day for an advanced‑role teacher, and that teachers' teaching team if applicable, to plan, collaborate, and participate in on‑the‑job development or leadership of others.
(4)	Establish equally stringent eligibility requirements for a teacher to remain in an advanced role as those required to initially attain that role.
(5)	Establish a procedure for determining whether an advanced‑role teacher is successfully performing the additional duties associated with the advanced role.
(7)	Ensure that advanced‑role teachers may opt out of the plan by voluntarily relinquishing additional duties associated with the advanced role. Voluntary relinquishment of duties associated with the advanced role shall not be considered a demotion under Part 3 or Part 3A of Article 22 of Chapter 115C of the General Statutes.
SECTION 8.7.(h)  Advanced Teaching Roles and Supplements. – Local school administrative units shall design and implement pilots to ensure:
(1)	Supplements for highly effective teachers who are extended reach teachers receive a supplement when there is an increase in their class size of at least thirty‑three percent (33%).
(2)	Supplements for team leads for two or more teachers or teachers who are the teacher of record for all students served by the teaching team, are limited to thirty percent (30%) of teachers in a school.
SECTION 8.7.(i)  The Department of Public Instruction shall ensure the advanced‑role supplements paid are not included in the statewide average salary calculation used for budgeting state allotments.
SECTION 8.7.(j)  Methods. – Local school administrative units may use one of two supplement payment methods for the purposes of this initiative:
(1)	Pay specified supplements only for teachers in each designated advanced role directly from funds allocated to the local school administrative unit not to exceed the balance of funds allocated to it for this purpose after deducting funds allocated to it for technical assistance; or
(2)	Allow teacher salary conversions at the beginning salary of the A teacher salary schedule only to pay supplements for each designated advanced role, not to exceed the funds allocated to the local school administrative unit for this purpose after deducting funds allocated to it for technical assistance.
SECTION 8.7.(k)  Pilot Cohorts. – By October 15, 2016, The State Board of Education shall review the letters of intent submitted by local boards of education in accordance with subsection (b) of this section and shall select for the first cohort of the prototype development program seven local school administrative units or consortia of local school administrative units that meet the following criteria:
(1)	One to three school districts (or consortia of districts) each with an average daily membership (ADM) equal to or less than 4,000.
(2)	One to three school districts (or consortia of districts) each with an ADM of 4,001 to 10,000.
(3)	One to three school districts (or consortia of districts) each with an ADM of 10,001 to 30,000.
(4)	One to three school districts (or consortia of districts) each with an ADM of 30,001 or more.
SECTION 8.7.(l)  Cohort 2. – The State Board of Education shall follow the time line and procedures outlined to enable a second cohort of local school administrative units to indicate intent, plan, and participate in the pilot beginning with the 2017‑2018 school year.
SECTION 8.7.(m)  Implementation Requirements. – Recipient local school administrative units shall fully implement the pilot in a minimum of twenty‑five percent (25%) of schools within the local school administrative unit by the 2017‑2018 school year, and fifty percent (50%) of school by 2018‑2019.
Participating local school administrative units shall submit a plan to the State Board of Education by June 30, 2016, that includes a schedule for full implementation in a minimum of ninety percent (90%) of the schools in the local school administrative unit by the 2021‑2022 school year.
SECTION 8.7.(n)  Evaluation. – The local board of education of participating local school administrative units shall report no later than August 15, 2017, and by that date each subsequent year on the following:
(1)	The extent to which the advanced roles plan and implementation meets each requirement of section (b) of this section. If the State Board of Education determines that a local school administrative unit's plan does not meet the requirements of section (b) of this section, it shall require the unit to make needed changes in return for continued participation in the program and receipt of transition funds provided pursuant to subdivision (b)(3) of this section.
(2)	The percentage of students with a highly effective teacher as their teacher of record for English Language Arts, math, social studies, and science.
(3)	The Educator Effectiveness ratings of each teacher in advanced roles and the Educator Effectiveness ratings of each member of teams led by teachers in advanced roles.
(4)	The extent to which the advanced teaching roles program has increased the attractiveness of the teaching profession in the district, as measured by the number of applicants per advanced role job posting compared with the typical number of applicants per teaching job posting in the district; and the retention rates of advanced role teachers and members of their teams compared with typical retention rates in the district.
(5)	The use of local or other non‑State funds used to support this initiative.
(6)	Documented future sustainability of pilot within State and local resources in the absence of pilot grant funds.
(7)	Other measures determined relevant by the State Board of Education to the purposes of this legislation and to assessing the benefit to the State.
SECTION 8.7.(o)  Reporting. – The State Board of Education shall provide reporting forms and tools to participating local school administrative units to ensure consistency of data gathering.
The State Board shall report on implementation status in participating local school administrative units including successes and obstacles annually beginning December 15, 2018, to 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, the Joint Legislative Education Oversight Committee, the Governor, the Lieutenant Governor, and the Office of State Budget and Management.

SCHOOL PERFORMANCE GRADE SCALE
SECTION 8.9.  Notwithstanding G.S. 115C‑83.15(d), for the 2016‑2017 school year only, 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 is equivalent to an overall school performance grade of F.

REMOVE PANIC ALARM CARRY FORWARD LANGUAGE
SECTION 8.10.  Section 8.8 of S.L. 2013‑360, as amended by S.L. 2014‑100, is repealed.

DIRECT STATE BOARD OF EDUCATION TO ESTABLISH STATEWIDE STRATEGIC PLAN FOR FINANCIAL LITERACY
SECTION 8.15.(a)  The State Board of Education shall develop a statewide strategic plan for financial literacy. The State Board of Education will consult with Financial Literacy Council on the strategic plan, including a review of the proposed Choice$ Matter campaign.
SECTION 8.15.(b)  The State Board of Education shall include in the strategic an inventory of all financial literacy spending to ensure that efforts are aligned with ongoing programs. This should include, but not limited to, programs within the Department of State Treasurer, the State Board of Education, the Department of Public Instruction, and the Attorney General.

PART IX. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES

TEACHER SALARY SCHEDULE
SECTION 9.1.(a)  The following monthly teacher salary schedule shall apply for 2016‑2017 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.
2016‑2017 Teacher Monthly Salary Schedule
	Years of Experience	"A" Teachers
	0	$3,500
	1	$3,550
	2	$3,600
	3	$3,650
	4	$3,700
	5	$3,800
	6	$3,850
	7	$3,900
	8	$3,950
	9	$4,000
	10	$4,100
	11	$4,160
	12	$4,220
	13	$4,280
	14	$4,340
	15	$4,450
	16	$4,550
	17	$4,650
	18	$4,750
	19	$4,850
	20	$5,000
	21	$5,000
	22	$5,000
	23	$5,000
	24	$5,000
	25+	$5,000
SECTION 9.1.(b)  Salary Supplements for Teachers Paid on This Salary Schedule.
(1)	Licensed teachers who have NBPTS certification shall receive a salary supplement each month of twelve percent (12%) of their monthly salary on the "A" salary schedule.
(2)	Licensed teachers who are classified as "M" teachers shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.
(3)	Licensed teachers with licensure 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 supplement provided to them as "M" teachers.
(4)	Licensed teachers with licensure 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 supplement provided to them as "M" teachers.
(5)	Certified school nurses shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.
SECTION 9.1.(c)  The first step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists as the master's degree level of higher shall be equivalent to Step 5 of the "A" salary schedule. These employees shall receive a salary supplement each month of ten percent (10%) of their monthly salary and are eligible to receive salary supplements equivalent to those of teachers for academic preparation at the six‑year degree level or the doctoral degree level.
SECTION 9.1.(d)  The twenty‑first step and all subsequent steps of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level of higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be seven and one‑half percent (7.5%) higher than the salary received by these same employees on the twentieth step of the salary schedule.
SECTION 9.1.(e)  Beginning with the 2014‑2015 fiscal year, in lieu of providing annual longevity payments to teacher paid on the teacher salary schedule, the amounts of those longevity payments are included in the monthly amounts under the teacher salary schedule.
SECTION 9.1.(f)  A teacher compensated in accordance with this salary schedule for the 2016‑2017 school year and all subsequent school years shall receive an amount equal to the greater of the following:
(1)	The applicable amount on the salary schedule for the applicable school year.
(2)	For teachers who were eligible for longevity for the 2013‑2014 school year, the sum of the following:
a.	The teacher's salary provided in Section 35.11 of S.L. 2013‑360.
b.	The longevity that the teacher would have received under the longevity system in effect for the 2013‑2014 school year provided in Section 35.11 of S.L. 2013‑360, based on the teacher's current years of service.
c.	The annual bonus provided in Section 9.1(e) of S.L. 2014‑100.
(3)	For teachers who were not eligible for longevity for the 2013‑2014 school year, the sum of the teacher's salary and annual bonus provided in Section 9.1 of S.L. 2014‑100.
SECTION 9.1.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.

SCHOOL‑BASED ADMINISTRATOR SALARY
SECTION 9.2.(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 2015‑2016 fiscal year commencing July 1, 2015.

2015‑2016 Principal and Assistant Principal Salary Schedules
Classification
Years of Exp	Assistant	Prin I	PrinII	Prin III	Prin IV
	Principal	(0‑10)	(11‑21)	(22‑32)	(33‑43)
0‑9	$3,909	‑	‑	‑	‑
10	$3,977	‑	‑	‑	‑
11	$4,123	‑	‑	‑	‑
12	$4,240	‑	‑	‑	‑
13	$4,323	$4,323	‑	‑	‑
14	$4,377	$4,377	‑	‑	‑
15	$4,434	$4,434	$4,489	‑	‑
16	$4,489	$4,489	$4,547	‑	‑
17	$4,547	$4,547	$4,606	$4,665	‑
18	$4,606	$4,606	$4,665	$4,726	$4,788
19	$4,665	$4,665	$4,726	$4,788	$4,851
20	$4,726	$4,726	$4,788	$4,851	$4,918
21	$4,788	$4,788	$4,851	$4,918	$4,983
22	$4,851	$4,851	$4,918	$4,983	$5,050
23	$4,918	$4,918	$4,983	$5,050	$5,119
24	$4,983	$4,983	$5,050	$5,119	$5,188
25	$5,050	$5,050	$5,119	$5,188	$5,263
26	$5,119	$5,119	$5,188	$5,263	$5,335
27	$5,188	$5,188	$5,263	$5,335	$5,409
28	$5,263	$5,263	$5,335	$5,409	$5,483
29	$5,335	$5,335	$5,409	$5,483	$5,561
30	$5,409	$5,409	$5,483	$5,561	$5,641
31	$5,483	$5,483	$5,561	$5,641	$5,722
32	$5,561	$5,561	$5,641	$5,722	$5,794
33	$5,641	$5,641	$5,722	$5,794	5,909
34	$5,722	$5,722	$5,794	$5,909	$6,027
35	$5,794	$5,794	$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

2015‑2016 Principal and Assistant Principal Salary Schedules
Classification
Years of Exp	Prin V	Prin VI	Prin VII	Prin VIII
(44‑54)	(55‑65)	(66‑100)	(101+)
0‑19	$4,918	‑	‑	‑
20	$4,983	‑	‑	‑
21	$5,050	$5,119	‑	‑
22	$5,119	$5,188	$5,335	‑
23	$5,188	$5,263	$5,409	$5,483
24	$5,263	$5,335	$5,483	$5,561
25	$5,335	$5,409	$5,561	$5,641
26	$5,409	$5,483	$5,641	$5,722
27	$5,483	$5,561	$5,722	$5,794
28	$5,561	$5,641	$5,794	$5,909
29	$5,641	$5,722	$5,909	$6,027
30	$5,722	$5,794	$6,027	$6,148
31	$5,794	$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 9.2.(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 9.2.(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 9.2.(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 9.2.(e)  Longevity pay for principals and assistant principals shall be as provided for State employees under the North Carolina Human Resources Act.
SECTION 9.2.(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 9.2.(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 9.2.(h)  During the 2016‑2017 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.
SECTION 9.2.(i)  Effective July 1, 2016, any person paid on the State Salary Schedule in the 2014‑2015 school year and employed on July 1, 2016, who does not receive a salary increase on this salary schedule shall receive a nonrecurring salary bonus of eight hundred nine dollars ($809.00).
(1)	Any employee eligible for this bonus shall continue to receive this bonus in subsequent years whereas the employee does not receive a salary increase on  subsequent salary schedules that exceeds the eight hundred nine dollar ($809) nonrecurring bonus.
(2)	Should an employee receive a salary increase from a change to the salary schedules, but the amount is less than eight hundred nine dollars ($809), the bonus shall be reduced by the amount of the increase from the salary schedule.

REWARD DEPARTMENT OF PUBLIC INSTRUCTION STAFF WITH ONE‑TIME BONUS
SECTION 9.3.  One million four hundred nine thousand nine hundred sixty‑three dollars ($1,409,963) of unreserved fund balance will be used to provide an average three percent (3%) one‑time bonus, up to a maximum of three thousand dollars ($3,000), for Department of Public Instruction staff. The State Board of Education, in consultation with the Office of State Human Resources, will determine the distribution of the bonus. This bonus shall not be considered part of an employee's annual salary or base rate of pay for retirement purposes.

COMPENSATION BONUS AWARDED FOR FISCAL YEAR 2016‑2017 FOR TEACHERS AND OTHER CERTIFIED PERSONNEL
SECTION 9.4.(a)  Any teacher or other certified personnel (i) whose salary is set by this Section, pursuant to the North Carolina Human Resources Act, or as otherwise authorized in this act and (ii) who is employed in a State‑funded position on August 1, 2016, shall receive an award of a one‑time, lump‑sum compensation bonus of five thousand dollars ($5,000) if the employee has twenty‑five or more years of experience on the Teacher Salary Schedule, or one thousand one hundred dollars ($1,100) if the employee has twenty‑four or fewer years of experience on the Teacher Salary schedule, for the 2016‑17 fiscal year, payable during the month of September 2016.
SECTION 9.4.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonus awarded by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.
SECTION 9.4.(c)  The compensation bonus awarded by this section is not part of annual salary and shall be paid out separately. The compensation bonus shall be awarded to eligible permanent employees without regard to an employee's placement within the salary range, including employees at the top of the salary range. The compensation bonus shall be adjusted pro rata for permanent part‑time employees.

COMPENSATION BONUS AWARDED FOR FISCAL YEAR 2016‑2017 FOR NONINSTRUCTIONAL SUPPORT STAFF AND CENTRAL OFFICE STAFF
SECTION 9.5.(a)  Any noninstructional support staff or central office staff (i) whose salary is set by this Section, pursuant to the North Carolina Human Resources Act, or as otherwise authorized in this act and (ii) who is employed in a State‑funded position on August 1, 2016, is eligible to be considered by each superintendent, or equivalent position for charter schools, for an award of a one‑time, lump‑sum compensation bonus, up to a maximum of three thousand dollars ($3,000), for the 2016‑2017 fiscal year, payable during the month of September 2016.
SECTION 9.5.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonus awarded by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.
SECTION 9.5.(c)  The compensation bonus awarded by this section is not part of annual salary and shall be paid out separately. The compensation bonus shall be awarded to eligible permanent employees without regard to an employee's placement within the salary range, including employees at the top of the salary range. The compensation bonus shall be adjusted pro rata for permanent part‑time employees.

COMPENSATION BONUS AWARDED FOR FISCAL YEAR 2016‑2017 FOR SCHOOL BASED ADMINISTRATORS
SECTION 9.6.(a)  Any school based administrator (i) whose salary is set by this Section, pursuant to the North Carolina Human Resources Act, or as otherwise authorized in this act and (ii) who is employed in a State‑funded position on August 1, 2016, is eligible to be considered by each superintendent, or equivalent position for charter schools, for an award of a one‑time, lump‑sum compensation bonus, up to a maximum of three thousand five hundred dollars ($3,500), for the 2016‑2017 fiscal year, payable during the month of September 2016.
SECTION 9.6.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonus awarded by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.
SECTION 9.6.(c)  The compensation bonus awarded by this section is not part of annual salary and shall be paid out separately. The compensation bonus shall be awarded to eligible permanent employees without regard to an employee's placement within the salary range, including employees at the top of the salary range. The compensation bonus shall be adjusted pro rata for permanent part‑time employees.

PART X. COMMUNITY COLLEGES

CARRYFORWARD OF COLLEGE INFORMATION SYSTEM FUNDS
SECTION 10.1.(a)  Of the funds appropriated to the Community Colleges System Office for the 2015‑2017 fiscal biennium for the College Information System, up to one million two hundred fifty thousand dollars ($1,250,000) shall not revert at the end of each fiscal year but shall remain available until expended. These funds may be used only to purchase periodic system upgrades.
SECTION 10.1.(b)  Subsection (a) of this section becomes effective June 29, 2016.

CODIFY MANUFACTURING SOLUTIONS CENTER AUTHORIZATION
SECTION 10.2.  Chapter 115D of the General Statutes is amended by adding a new Article to read:
"Article 5A.
"The Manufacturing Solutions Center at Catawba Valley Community College.
"§ 115D‑67.5.  Purpose.
The purpose of the Manufacturing Solutions Center is to create and maintain jobs in North Carolina through support of traditional and emerging industries. The Center's services include training, testing, market development, entrepreneur support, product sourcing, prototyping, applied research and managing a manufacturing business incubator.
"§ 115D‑67.6.  Director and other Center personnel.
The president of Catawba Valley Community College shall appoint an individual to serve as the executive director of the Manufacturing Solutions Center. The executive director shall select other staff members of the Center, subject to approval of the president of Catawba Valley Community College. The executive director and other staff members of the Center are employees of Catawba Valley Community College and are subject to the personnel policies of the college.
"§ 115D‑67.7.  Fees collected by the Center; purchases using Center funds.
Notwithstanding any other provision of law, all fees collected by the Manufacturing Solutions Center for services to industry shall be retained by the Center and used for the operations of the Center. Purchases made by the Center using these funds are not subject to the provisions of Article 3 of Chapter 143 of the General Statutes. The Center shall include in all agreements or contracts to be awarded by the Center under this section a standard clause which provides that the State Auditor and internal auditors of the Center 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 Center shall not award a cost‑plus‑percentage‑of‑cost agreement or contract for any purpose."

UPDATE PERFORMANCE MEASURES
SECTION 10.3.  G.S. 115D‑31.3 reads as rewritten:
"§ 115D‑31.3.  Institutional performance accountability.
…
(e)	Mandatory Performance Measures.–The State Board of Community Colleges shall evaluate each college on the following eight performance measures:
(1)	Progress of basic skills students.
	
(3)	Performance of students who transfer to a four‑year institution.
(3a)	Success rate of students in credit‑bearing English courses.
(3b)	Success rate of students in credit‑bearing Math courses.

(5a)	Progress of first‑year curriculum students.
(6)	Repealed by Session Laws 2012‑142, s. 8.5, effective July 1, 2012.
(7)	Curriculum student retention and graduation.
(8)	Repealed by Session Laws 2012‑142, s. 8.5, effective July 1, 2012.
(9)	Attainment of licensure and certifications by students.
The State Board may also evaluate each college on additional performance measures.
(f)	Publication of Performance Ratings.–Each college shall publish its performance on the measures set out in subsection (e) of this section (i) annually in its electronic catalog or on the Internet and (ii) in its printed catalog each time the catalog is reprinted.
The Community Colleges System Office shall publish the performance of all colleges on all measures.
(g)	Recognition of Successful Institutional Performance. – For the purpose of recognition of successful institutional performance, the State Board of Community Colleges shall evaluate each college on the performance measures set out in subsection (e) of this section. Subject to the availability of funds, the State Board may allocate funds among colleges based on the evaluation of each institution's performance, including at least the following components:
(1)	Program quality evaluated by determining a college's rate of student success on each measure as compared to a systemwide performance baseline and goal.
(2)	Program impact on student outcomes evaluated by the number of students succeeding on each measure."

INCENTIVIZE INSTITUTIONAL PERFORMANCE ACCOUNTABILITY
SECTION 10.4.  G.S. 115D‑31.3(g1) reads as rewritten:
"§ 115D‑31.3.  Institutional performance accountability.
…
(g1)	Carryforward of Funds Allocated Based on Performance.–A college that receives funds under subsection (g) of this section may retain and carry forward an amount up to or equal to its performance‑based funding allocation for that year into the next fiscal year. Funds retained under this subsection may be used for the purposes listed in G.S. 115D‑31(a)(1) and (2) as well as one‑time faculty and staff bonuses."

EXTEND VOLUNTARY SHARED LEAVE TO COMMUNITY COLLEGE EMPLOYEES
SECTION 10.5.  G.S. 115D‑25.3 reads as rewritten:
"§ 115D‑25.3.  Voluntary shared leave.
(a)	The State Board of Community Colleges, in cooperation with the State Human Resources Commission, shall adopt rules and policies to allow any employee at a community college to share leave voluntarily with an immediate family member who is an employee of a community college, public school, or State agency; and with a coworker's immediate family member who is an employee of a community college, public school, or State agency. For the purposes of this section, the term "immediate family member" means a spouse, parent, child, brother, sister, grandparent, or grandchild. The term includes the step, half, and in‑law relationships. The term "coworker" means that the employee donating the leave is employed by the same agency, department, institution, university, local school administrative unit, or community college as the employee whose immediate family member is receiving the leave.
(b)	The State Board of Community Colleges, in cooperation with the State Human Resources Commission, shall adopt rules and policies consistent with policies set forth in the State Human Resources Manual to allow any employee at a community college to share sick leave voluntarily with a non‑family member who is an employee of a community college. A community college employee who donates sick leave to a community college employee who is a nonfamily member shall not donate more than five days of sick leave per year to any one nonfamily community college employee. The combined total of sick leave donated to a community college employee from nonfamily community college donors shall not exceed 20 days per year. Donated sick leave shall not be used for retirement purposes, and community college employees who donate sick leave shall be notified in writing of the State retirement credit consequences of donating sick leave."

REPORT ON FUNDS REINVESTED FROM ENROLLMENT DECLINE INTO STUDENT SUPPORTS
SECTION 10.6.  The State Board of Community Colleges shall report, no later than February 1, 2017, to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget Management on the use of funds reinvested from the enrollment decline into student support services that encourage students to complete degrees and credentials. The report shall include the cost of each type of student support service, and the amount expended by each community college.

PART XI. UNIVERSITIES

EXPAND INTERNSHIPS AND CAREER‑BASED OPPORTUNITIES FOR STUDENTS ATTENDING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES (HBCU)
SECTION 11.1.  Section 11.12(b) of S.L. 2015‑241, Appropriations Act of 2015, reads as rewritten:
"SECTION 11.12.(b)  The Board of Governors shall conduct a competitive process to select institutions of higher education that are Historically Black Colleges and Universities to participate in the internship program which links a minimum of 60 students attending Historically Black Colleges and Universities with North Carolina‑based companies. The Board of Governors shall determine the number of institutions that may participate in the program; however, at least two of the institutions shall be private institutions. Funds appropriated by this act for this internship program shall be allocated only to constituent institutions of The University of North Carolina that are designated as an HBCU and private colleges and universities located in North Carolina that are designated as an HBCU."

MODIFY NC GUARANTEED ADMISSION PROGRAM (NCGAP)
SECTION 11.2.(a)  Section 11.7(b) of S.L. 2015‑241 reads as rewritten:
"SECTION 11.7.(b)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall jointly study and evaluate how a deferred admission program, to be known as the North Carolina Guaranteed Admission Program (NCGAP), for students identified as academically at risk and designed pursuant to subsection (c) of this section, would address the issues and help achieve the goals set out in subsection (a) of this section. In its study the Board of Governors and State Board of Community Colleges shall also consider the best procedure for implementing NCGAP and the fiscal impact it may have with respect to enrollment. The Board of Governors and State Board of Community Colleges shall evaluate other measures currently in place designed to improve completion rates and consider any potential overlap with NCGAP."
SECTION 11.2.(b)  Section 11.7(d) of S.L. 2015‑241 reads as rewritten:
"SECTION 11.7.(d)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall report their initial finding and recommendations to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management by March 1, 2016, and their final finding and recommendations by January 1, 2017. The report shall include an analysis of the fiscal impact NCGAP may have with regard to enrollment at constituent institutions of The University of North Carolina and at community colleges, the number of students who may participate in NCGAP, and its effect on FTEs."
SECTION 11.2.(c)  Section 11.7(e) of S.L. 2015‑241 reads as rewritten:
"SECTION 11.7.(e)  Based on the analysis conducted by the Board of Governors and the State Board of Community Colleges pursuant to subsection (b) of this section and the recommendations made pursuant to subsection (d) of this section, each constituent institution shall design a deferred admission program as part of NCGAP for implementation at the institution. The institution shall design the program so that it may be implemented at the institution beginning with the 2017‑2018 fiscal year and applied to the institution's admission process for the 2018‑2019 academic year and each subsequent academic year."
SECTION 11.2.(d)  Section 11.7(g) of S.L. 2015‑241 reads as rewritten:
"SECTION 11.7.(g)  NCGAP shall be implemented at all constituent institutions and all community colleges beginning with the 2017‑2018 fiscal year and shall apply to admissions policies at each constituent institution and community college beginning with the 2018‑2019 academic year and each subsequent academic year."

REPORT ON USE OF LOTTERY FUNDS FOR LEVERAGING TECHNOLOGY FOR PART‑WAY HOME STUDENTS
SECTION 11.3.  Beginning September 1, 2017, and annually thereafter, the President of the University of North Carolina shall report to the Office of State Budget and Management and the Fiscal Research Division of the General Assembly on prior fiscal year expenditures of Education Lottery funds for the purpose of leveraging technology to recruit, retain, and graduate "part‑way home" and other nontraditional students. The report shall include line item expenditures, descriptions of program activities and accomplishments, and data on outcome measures used assess program effectiveness.

REPORT ON USE OF LOTTERY FUNDS FOR IMPROVING STUDENT SUCCESS WITH DATA‑CENTRIC SYSTEMS
SECTION 11.4.  Beginning September 1, 2017, and annually thereafter, the President of the University of North Carolina shall report to the Office of State Budget and Management and the Fiscal Research Division of the General Assembly on prior fiscal year expenditures of Education Lottery funds for the purpose of improving student success and completion rates through data‑centric systems. The report shall include line item expenditures, descriptions of program activities and accomplishments, and data on outcome measures used assess program effectiveness.

REPEAL LIMITATION OF STATE FUNDS FOR UNC ADVANCEMENT PROGRAMS
SECTION 11.5.(a)  Section 11.6 of S.L. 2015‑241 is repealed.
SECTION 11.5.(b)  The reduction associated with the advancement activities limitation of sixteen million three hundred fifty‑four thousand three hundred ninety‑six dollars ($16,354,396) in recurring funds shall be eliminated for the 2016‑2017 fiscal year.
SECTION 11.5.(c)  The management flexibility reduction for the operating budget of the University of North Carolina shall be increased by sixteen million three hundred fifty‑four thousand three hundred ninety‑six dollars ($16,354,396) in recurring funds for the 2016‑2017 fiscal year so that the total management flexibility reduction for the 2016‑2017 fiscal year shall be fifty‑nine million nine hundred forty‑seven nine hundred sixty‑three ($59,947,963) in recurring funds and three million dollars ($3,000,000) in nonrecurring funds.

MODIFICATIONS TO THE SPECIAL EDUCATION SCHOLARSHIP GRANT PROGRAM FOR CHILDREN WITH DISABILITIES
SECTION 11.6.(a)  G.S. 115C‑112.5(2) reads as rewritten:
"(2)	Eligible student. – A child under the age of 22 who meets all of the following criteria:
a.	Is a child with a disability.
b.	Is eligible to attend a North Carolina public school pursuant to G.S. 115C‑366(a), including pursuant to G.S. 115C‑366(a1) through G.S. 115C‑366(a8).
c.	Has not been placed in a nonpublic school or facility by a public agency at public expense.
d.	Has not been enrolled in a postsecondary institution as a full‑time student taking at least 12 hours of academic credit.
e.	Has not received a high school diploma.
f.	Meets at least one of the following requirements:
1.	Was enrolled in a North Carolina public school during the previous semester.
2.	Received special education or related services through the North Carolina public schools as a preschool child with a disability during the previous semester.
3.	Was approved for a scholarship for the previous semester.
4.	Is a child who is identified as a child with a disability prior to the end of the year of initial enrollment in kindergarten or first grade. An award by the Authority based on eligibility under this sub‑sub‑subdivision shall be conditional. If documentation is not provided to the Authority that the child is a child with a disability prior to the end of the year of initial enrollment, (i) no reimbursement shall be awarded and (ii) the child shall not qualify the following year as an eligible student under sub‑sub‑subdivision 3. of this section.
5.	Is a child who (i) was enrolled during the previous semester in a Department of Defense Elementary and Secondary School established pursuant to 10 U.S.C. § 2164 and located within the State of North Carolina and (ii) whose parent or legal guardian is on full‑time duty status in the active uniformed service of the United States, including members of the National Guard and Reserve on active duty orders pursuant to 10 U.S.C. § 12301, et. seq. and 10 U.S.C. § 12401, et seq."
SECTION 11.6.(b)  G.S. 115C‑112.6(b1)(1) reads as rewritten:
"(1)	Tuition endorsement and reimbursement. – The Authority shall disburse scholarship funds awarded to eligible students for tuition based upon whether or not the nonpublic school has elected to participate in the scholarship grant program authorized under Part 1H of this Article. Scholarship funds shall not be provided for tuition for home schooled students. Scholarship funds for tuition shall be disbursed as follows:
a.	Scholarship endorsement for tuition. – The Authority shall remit, at least two times each school year, scholarship funds awarded to eligible students for endorsement by at least one of the student's parents or guardians for tuition to attend a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter as identified by the Department of Administration, Division of Nonpublic Education, is deemed eligible by the Division pursuant to G.S. 115C‑562.4, and is subject to the requirements of G.S. 115C‑562.5. The parent or guardian shall restrictively endorse the scholarship funds awarded to the eligible student to the school for deposit into the account of the school. The parent or guardian shall not designate any entity or individual associated with the school as the parent's attorney‑in‑fact to endorse the scholarship funds but shall endorse the scholarship funds in person at the site of the school. A parent's or guardian's failure to comply with this section shall result in forfeiture of the scholarship funds. A scholarship forfeited for failure to comply with this section shall be returned to the Authority to be awarded to another student.
b.	Reimbursement for tuition. – The parent or guardian of an eligible student who enrolls in a school that is (i) a North Carolina public school other than the public school to which that student has been assigned as provided in G.S. 115C‑366 or (ii) a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter as identified by the Department of Administration, Division of Nonpublic Education, is deemed eligible by the Division pursuant to G.S. 115C‑562.4, and is not subject to G.S. 115C‑562.5, shall pay tuition directly to the school. The Authority shall reimburse the parent or guardian no sooner than the mid‑point of each semester. A parent or guardian may receive reimbursement for tuition only after the parent or guardian provides documentation that the student was enrolled in a school under this sub‑subdivision."
SECTION 11.6.(c)  G.S. 115C‑112.6 is amended by adding a new subsection to read:
"(f)	Unexpended Scholarship Funds – Scholarship funds that are unexpended at the end of each fiscal year shall revert except that the State Education Assistance Authority may carry forward to the next fiscal year an amount necessary to ensure that all outstanding, allowable reimbursements can be paid in full. Funds carried forward from a prior fiscal year shall not be used to award or expand the number of scholarships in subsequent years."
SECTION 11.6.(d)  Except as otherwise provided in this act, this section is effective when it becomes law and applies beginning with the 2016‑2017 school year.

MODIFICATIONS to the opportunity scholarship grant program
SECTION 11.7.(a)  G.S. 115C‑562.1(3) reads as rewritten:
"(3)	Eligible students. – A student who has not yet received a high school diploma and who meets all of the following requirements:
a.	Meets one of the following criteria:
1.	Was a full‑time student assigned to and attending a public school pursuant to G.S. 115C‑366 during the previous semester.
2.	Received a scholarship grant during the previous school year.
3.	Is entering either kindergarten or the first grade.
4.	Is a child in foster care as defined in G.S. 131D‑10.2(9).
5.	Is a child whose adoption decree was entered not more than one year prior to submission of the scholarship grant application.
6.	Is a child who (i) was enrolled during the previous semester in a Department of Defense Elementary and Secondary School established pursuant to 10 U.S.C. § 2164 and located within the State of North Carolina and (ii) whose parent or legal guardian is on full‑time duty status in the active uniformed service of the United States, including members of the National Guard and Reserve on active duty orders pursuant to 10 U.S.C. § 12301, et seq. and 10 U.S.C. § 12401, et seq.
b.	Is eligible to attend a North Carolina public school in accordance with G.S. 115C‑366(a), including pursuant to G.S. 115C‑366(a1) through G.S. 115C‑366(a8).
c.	Has not enrolled in a postsecondary institution in a matriculated status eligible for 12 hours of academic credit.
d.	Resides in a household with an income level not in excess of one hundred thirty‑three percent (133%) of the amount required for the student to qualify for the federal free or reduced‑price lunch program."
SECTION 11.7.(b)  G.S. 115C‑562.2(a)(2) reads as rewritten:
"(2)	After scholarship grants have been awarded to prior recipients as provided in subdivision (1) of this subsection, scholarships shall be awarded with remaining funds as follows:
a.	At least fifty percent (50%) of the remaining funds shall be used to award scholarship grants to eligible students residing in households with an income level not in excess of the amount required for the student to qualify for the federal free or reduced‑price lunch program.
b.	No more than thirty‑five percent (35%) of the remaining funds shall be used to award scholarship grants to eligible students entering either kindergarten or first grade.
c.	Any remaining funds shall be used to award scholarship grants to all other eligible students."
SECTION 11.7.(c)  Except as otherwise provided in this act, this section is effective when it becomes law and applies beginning with the 2016‑2017 school year.

UNC MERIT SCHOLARSHIP PROGRAM
SECTION 11.8.(a)  Merit Scholarships for Math, Science, and Health Degrees. – In addition to the funds appropriated in Section 5.2(a) of S.L. 2015‑241 for the 2015‑2017 biennium, an additional amount not to exceed five million dollars ($5,000,000) is appropriated from the Education Lottery Fund to the Board of Governors of The University of North Carolina for the 2016‑2017 fiscal year and allocated to the State Education Assistance Authority (SEAA) for scholarships to exemplary North Carolina students who, as entering freshman, qualified transfer students, and continuing students, exhibit exceptional academic credentials and intend to pursue undergraduate degrees in math, science or health‑related programs of study at constituent institutions of The University of North Carolina. Only students who are classified as residents for tuition purposes and admitted to a constituent institution of higher education as a full‑time student are eligible for the merit scholarships. The Board of Governors shall establish guidelines for awarding the scholarships on a campus basis not inconsistent with this section. Notwithstanding the foregoing, no scholarship shall be awarded to a qualified student for enrollment commencing prior to August 1, 2017.
SECTION 11.8.(b)  Administration of Merit Scholarships. – The SEAA shall administer the scholarships provided for in this section in consultation with the General Administration of The University of North Carolina and pursuant to guidelines and procedures established by the SEAA consistent with its practices for administering State‑funded financial aid, provided that such guidelines and procedures include an application process and schedule, notification and disbursement procedures, standards for reporting, and standards for return of scholarship funds when a student withdraws. The maximum amount of the scholarship for the 2017‑2018 academic year shall be five thousand dollars ($5,000) per semester. In no event, however, shall the amount of the scholarship, when accounted for in combination with all other grants, educational benefits, and any other financial aid available to the student, cause the total of all such assistance to exceed the total cost of attendance at the in‑State tuition rate at the constituent institution as determined in accordance with Title IV of the Higher Education Act of 1965, as amended.
The Authority may use five percent (5%) of the funds appropriated for scholarships under this section for administrative purposes.
SECTION 11.8.(c)  North Carolina Math, Science and Health Merit Scholarship Fund. – There is established the North Carolina Math, Science and Health Merit Scholarship Fund to be administered by the SEAA. All funds appropriated to or otherwise received by the SEAA to provide scholarships under this section, all returned scholarship monies, and all interest earned on these funds shall be placed in the Fund. The Fund shall be used only for scholarships made pursuant to this section and the administrative costs of the SEAA, provided that no more than five percent (5%) of the funds appropriated for scholarships is expended for administrative purposes.

STEM TEACHER RECRUITMENT SCHOLARSHIP PROGRAM (FORGIVABLE LOAN)
SECTION 11.9.(a)  Part 1 of Article 23 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑209.45A.  STEM Teacher Recruitment Program.
(a)	Policy. – The General Assembly finds that, in response to critical employment shortages of licensed teachers in certain fields, it is in the public interest to target financial assistance in the form of forgivable loans for service to exemplary students who are committed to teaching in the fields of science, technology, engineering, or mathematics (STEM) in the North Carolina public schools as part of the Forgivable Education Loans for Service Program.
(b)	Definitions. – The following definitions apply in this section:
(1)	Eligible institution. – Notwithstanding G.S. 116‑201(b)(5) and G.S. 116‑201(b)(6) and for purposes of this section only, an institution of higher education that is either of the following:
a.	A postsecondary constituent institution of The University of North Carolina as defined in G.S. 116‑2(4).
b.	An eligible private postsecondary institution as defined in G.S. 116‑280(3).
(2)	Fund. – Has the same meaning as G.S. 116‑209.45(b)(2).
(3)	Loan. – A forgivable loan made under the North Carolina STEM Teacher Recruitment Program.
(4)	Program. – The North Carolina STEM Teacher Recruitment Program.
(c)	Establishment of the North Carolina STEM Teacher Recruitment Program. – There is established the North Carolina STEM Teacher Recruitment Program to be administered by the Authority as part of, yet distinct in its purpose, the Forgivable Education Loans for Service Program. The purpose of the Program is to provide forgivable loans for service to exemplary students who are committed to working as licensed teachers in the fields of science, technology, engineering, or mathematics.
(d)	The North Carolina STEM Teacher Recruitment Funds. – Funds appropriated for the Program shall be allocated to the Forgivable Education Loans for Service Fund established under G.S. 116‑209.45(d) and administered by the Authority consistent with this section. All funds appropriated to or otherwise received by the Authority to provide loans through the Program, all funds received as repayment of loans, and all interest earned on these funds shall be placed in the Fund. Such STEM Teacher Recruitment Funds shall be accounted for separately within the Fund and used only for loans made pursuant to this section and the administrative costs of the Authority.
(e)	Eligibility for Loans. – The Authority shall establish the criteria for initial and continuing eligibility to participate in the Program. All loan recipients shall be residents of North Carolina and shall attend an eligible institution. The Authority shall adopt very stringent standards, including minimum grade point average and scholastic aptitude test scores, for awarding loans to ensure that only highly qualified and committed students receive loans. A recipient of a loan shall not be eligible to receive concurrently a loan under the Forgivable Education Loans for Service Program pursuant to G.S. 116‑209.45(c).
(f)	Loan Terms and Conditions. – The terms and conditions applicable to loans made under the Forgivable Education Loans for Service Program established under G.S. 116‑209.45 shall apply to loans made under the Program except as follows:
(1)	Loan amount. – The initial maximum loan amount shall be six thousand five hundred dollars ($6,500). The maximum loan amount may be adjusted by the Authority for subsequent years of the Program based on funds available for the Program.
(2)	Repayment. – The Authority shall forgive the loan if, within six years after graduation, the recipient teaches one academic year at a North Carolina public school or at a school operated by the United States government in North Carolina for each year of loan funding received. The Authority may provide an accelerated repayment forgiveness option for any recipient who accepts employment at a North Carolina public school that, at the time the recipient accepts employment with the local school administrative unit in which the school is located, is low‑performing as identified by the State Board of Education pursuant to G.S. 115C‑105.37. The Authority, in exercise of its sole discretion, shall have the authority to extend the period of time in which repayment must be completed by one additional year due to extenuating circumstances.
(3)	Other. – The Authority may establish other terms and conditions that are necessary or convenient to effectuate the purpose of the Program and align the administration of the Program with that of the Forgivable Loans for Service Program.
(g)	Rule‑Making Authority. – The Authority may adopt rules as necessary to implement, administer, and enforce the provisions of this section.
(h)	Report to the General Assembly. – The Authority shall report no later than December 1, 2018, and annually thereafter, to the Office of State Budget and Management and the Joint Legislative Education Oversight Committee regarding loans awarded from the Fund for the Program."
SECTION 11.9.(b)  G.S. 116‑209.45(h) reads as rewritten:
"(h)	Use of Fund Monies. – All funds appropriated to or otherwise received by the Authority to provide loans through the Program, all funds received as repayment of loans, and all interest earned on these funds shall be placed in the Fund. The Fund shall be used only for loans made pursuant to this section, loans made pursuant to G.S. 116‑209.45A, and administrative costs of the Authority, including costs of administering the former Teaching Fellows Program transferred to the Authority under G.S. 116‑209.27.
SECTION 11.9.(c)  There is appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of two million one hundred fifty thousand dollars ($2,000,000) for the 2016‑2017 fiscal year to be allocated to the Forgivable Education Loans for Service Fund for the STEM Teacher Recruitment Program administered by the State Education Assistance Authority in accordance with this section. Of these funds:
(1)	Two million dollars ($1,900,000) shall be used to provide loans under the STEM Teacher Recruitment Program for enrollment in the 2017‑18 academic year; and
(2)	One hundred fifty thousand dollars ($100,000) shall be transferred to the State Education Assistance Authority in the 2016‑17 fiscal year for the administration and implementation of the Program.

MODIFY REQUIREMENT FOR NON‑GENERAL FUND ADVANCED PLANNING
SECTION 11.10.  G.S. 143C‑3‑3 reads as rewritten:
"§ 143C‑3‑3.  Budget requests from State agencies in the executive branch.
…
(b)	University of North Carolina System Request.–Notwithstanding the requirement in G.S. 116‑11 that the Board of Governors prepare a unified budget request for all of the constituent institutions of The University of North Carolina., budget requests of the University shall be subject to all of the following:
(1)	Repairs and renovations requests, capital fund requests, and information technology requests shall comply with subsections (c), (d), and (e) of this section.
(2)	The University of North Carolina shall not make a capital funds request proposing to construct a new facility, expand the building area (square feet) of an existing facility, or rehabilitate an existing facility to accommodate new or expanded uses unless the University has completed advanced planning through schematic design of the project. 12F.7.(g)The Board of Governors shall establish and implement requirements for constituent institutions to match a minimum of one dollar ($1.00) from funds other than General Fund appropriations for every one dollar ($1.00) of General Fund appropriations used to complete advance planning of capital projects. The Board of Governors shall not establish the minimum matching requirement in this subdivision for all consistent institutions and shall require higher matching dollar amounts from funds other than General Fund appropriations based on a constituent institution's financial ability to generate and contribute funds other than General Fund appropriations. For purposes of this subdivision, "funds other than General Fund appropriations" includes funds carried forward from one fiscal year to another pursuant to G.S. 116‑30.3 and G.S. 116‑30.3B."

PART XII. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SUBPART XII‑A. CENTRAL MANAGEMENT AND SUPPORT

FUNDS FOR NCTRACKS, THE REPLACEMENT MULTIPAYER MEDICAID MANAGEMENT INFORMATION SYSTEM
SECTION 12A.1.(b)  Beginning on November 15, 2015, and monthly thereafter, the Department of Health and Human Services shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the status of the implementation of ICD‑10. The Department shall continue to submit the report by the 15th of each month until three consecutive months have passed in which the Department did not issue any hardship advances. Thereafter, either the new Department of Information Technology (DIT), created by this act, or the Department, as appropriate, shall submit this report upon request of the Joint Legislative Oversight Committee on Health and Human Services. The report shall include all of the following items:
(1)	An analysis of claims payments prior to the implementation compared to post implementation by major provider category that identifies any variations in claims payment levels.
(2)	For variations attributable to the implementation of ICD‑10, the report shall include corrective actions and communications that resulted from the identification of the variation.
(3)	An update on hardship advances made to providers for payment issues arising for the implementation of ICD‑10 that specifies the total amount advanced and the total amount recovered to date listed by provider.

FUNDS FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST)
SECTION 12A.2.(a)  Funds appropriated in this act in the amount of five million eight hundred three thousand dollars ($5,803,000) for the 2015‑2016 fiscal year and thirteen million fifty‑two thousand dollars ($13,052,000) for the 2016‑2017 fiscal year along with prior year earned revenue in the amount of nine million four hundred thousand dollars ($9,400,000) for the 2015‑2016 fiscal year and ten million nine hundred eighty‑nine thousand seventeen dollars ($10,989,017) for the 2016‑2017 fiscal year; 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 the 2015‑2016 and 2016‑2017 fiscal years. 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 NC FAST. The funds shall be utilized to expedite the development and implementation of Child Care, Low Income Energy Assistance, Crisis Intervention Programs, Child Services, NC FAST Federally‑Facilitated Marketplace (FFM) Interoperability, and Additional Medicaid Eligibility Requirements & Enterprise Program Integrity components of the NC FAST program. The Department shall report any changes in approved federal funding or federal match rates within 30 days after the change to the Joint Legislative Oversight Committees on Health and Human Services and Information Technology and the Fiscal Research Division.

FUNDS FOR COMMUNITY PARAMEDICINE PILOT PROGRAM 
SECTION 12A.3.  Section 12A.12 of S.L. 2015‑241 reads as rewritten:
"SECTION 12A.12.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2015‑2016 fiscal year, the sum of three hundred fifty thousand dollars ($350,000) shall be used to implement a community paramedicine pilot program. The pilot program shall focus on expanding the role of paramedics to allow for community‑based initiatives that result in providing care that avoids nonemergency use of emergency rooms and 911 services and avoids unnecessary admissions into health care facilities.
"SECTION 12A.12.(b)  The North Carolina Office of Emergency Medical Services (NCOEMS) shall set the education standards and other requirements necessary to qualify as a community paramedic eligible to participate in the pilot program established in subsection (a) of this section. The Department shall consult with the NCOEMS to define the objectives, set standards, and establish the required outcomes for the pilot program.
"SECTION 12A.12.(c)  The Department of Health and Human Services shall establish up to three program sites to implement the community paramedicine pilot program, one of which shall be New Hanover Regional Emergency Medical Services. For the 2015‑2016 fiscal year, the New Hanover Regional Emergency Medical Services program site shall be awarded up to two hundred ten thousand dollars ($210,000), and each of the remaining program sites may be awarded up to seventy thousand dollars ($70,000). In selecting the remaining program sites, the Department may give preference to counties that currently have an established community paramedic program.
"SECTION 12A.12.(d)  The Department of Health and Human Services shall submit a report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Committee on Health and Human Services, and the Fiscal Research Division by June 1, 2016, on the progress of the pilot program and shall include an evaluation plan based on the U.S. Department of Health and Human Services, Health Resources and Services Administration Office of Rural Health Policy's Community Paramedicine Evaluation Tool published in March 2012.
"SECTION 12A.12.(e)  The Department of Health and Human Services shall submit a final report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by March 31, 2017. At a minimum, the final report shall include all of the following:
(1)	An updated version of the evaluation plan required by subsection (d) of this section.
(2)	An estimate of the cost to expand the program incrementally and statewide.
(3)	An estimate of any potential savings of State funds associated with expansion of the program. 
(4)	If expansion of the program is recommended, a time line for expanding the program."

MEDICAID GRADUATE MEDICAL EDUCATION (GME) FUNDS
SECTION 12A.4.  The Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, shall receive the sum of three million five hundred thousand dollars ($3,500,000) in appropriations for the 2016‑2017 fiscal year. These funds shall be used for Graduate Medical Education (GME) residency slots that focus on rural and underserved areas and specialties needed to meet the health care needs of the State's population.

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

CHILD CARE ALLOCATION FORMULA
SECTION 12B.1.(a)  For SFY 2016‑2017, the Department of Health and Human Services shall allocate one‑time Temporary Assistance for Needy Families funds in the amount of four million two hundred fifty‑nine thousand nine hundred eighteen dollars ($4,259,918) for the purpose of increasing access to high‑quality early care and education to children. These funds shall not be allocated according to Section 12B.3(a) of this act, but shall be distributed by the Department for the following purposes:
(1)	For eligible four‑year‑old children who have never been served to receive NC Pre‑K services or subsidized child care in child care facilities with ratings of 4 or 5 stars.
(2)	For children in vulnerable populations who are eligible for subsidized child care, such as children receiving child welfare services, children experiencing homelessness, children with special needs, etc., to receive subsidized child care in child care facilities with ratings of 4 or 5 stars.
(3)	For children currently receiving subsidized child care services who move to another county within the State where there are insufficient subsidized child care program funds to continue their services.

SUBPART XII‑C. DIVISION OF SOCIAL SERVICES

REQUIRE TRANSFER OF CERTAIN SERVICES TO EASTERN BAND OF CHEROKEE INDIANS
SECTION 12C.1.(a)  Approval for the Eastern Band of Cherokee Indians to administer the eligibility process for Medicaid and NC Health Choice is contingent upon federal approval of State Plan amendments and Medicaid waivers by the Centers for Medicare & Medicaid Services (CMS). The Department of Health and Human Services, Division of Medical Assistance (DMA), shall submit any State Plan amendments and Medicaid waivers necessary for the delegation of authority and administrative transfer of function to the Eastern Band of Cherokee Indians or to effectuate the changes required by this section and Section 12C.3 of S.L. 2014‑100. All State Plan amendments and Medicaid waivers submitted as allowed under this subsection shall have an effective date of April 1, 2017. DMA shall submit the State Plan amendments and waivers allowed under this subsection and any related responses to CMS requests for additional information to the Eastern Band of Cherokee Indians for review prior to submission to CMS. If CMS does not approve the State Plan amendments and Medicaid waivers allowed by this subsection, the counties shall continue serving individuals living on the federal lands held in trust by the United States.
SECTION 12C.1.(b)  The Department of Health and Human Services shall submit an Advanced Planning Document Update (APDU) to CMS, the United States Department of Agriculture (USDA), and the Administration for Children and Families (ACF). If CMS, USDA, and ACF do not approve the APDU, the counties shall continue serving individuals living on the federal lands held in trust by the United States.
SECTION 12C.1.(c)  Section 12C.3(b) of S.L. 2014‑100 reads as rewritten:
"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 April 1, 2017, 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."

ENHANCED CHILD SAFETY: FEDERAL IMPROVEMENT PLAN IMPLEMENTATION
SECTION 12C.2.(a)  It is the intent of the Governor and the General Assembly to fund eight million six hundred thousand dollars ($8,600,000) in support of the State's federal program improvement plan and other improvements for the Child Welfare System, including Child Protective Services to prevent children from needing Foster Care Services and to provide effective and efficient services to families who have a child served by the Foster Care program to safely return the child(ren) to the family's care in their home. This multi‑faceted approach includes the following initiatives:
(1)	Development of a comprehensive plan to provide initial and on‑going training and support to county staff providing Child Welfare Services. The plan shall address (i) a system to assess the current capacity of a local agency staff, (ii) identification of a training and support action plan to address the areas identified in the assessment, and (iii) a local plan to maintain staff competencies. Further, to develop a competency and performance based Child Welfare workforce support system through contractual partnerships with public and private post‑secondary schools of social work and community colleges. 
(2)	Increase the availability and expansion of evidenced‑based services to families in their own homes in order to reduce maltreatment and the likelihood of children entering care.
SECTION 12C.2.(b)  The Department of Health and Human Services, Division of Social Services, shall develop a data analytics team under the direction of a project manager. The data analytics efforts will center on program and fiscal data to identify areas of strengths and opportunities for improvement in key indicators of Safety, Permanency, and Well‑Being for children and families served by the Foster Care program or are at risk of entering the Foster Care program.

ENHANCED CHILD SAFETY: PROTECT VULNERABLE CHILDREN
SECTION 12C.3.(a)  G.S. 7B‑101(3) reads as rewritten:
"§ 7B‑101.  Definitions.
As used in this Subchapter, unless the context clearly requires otherwise, the following words have the listed meanings:
…
(3)	Caretaker. – Any person other than a parent, guardian, or custodian who has responsibility for the health and welfare of a juvenile in a residential setting. A person responsible for a juvenile's health and welfare means a stepparent, foster parent, an adult member of the juvenile's household, an adult relative entrusted with the juvenile's care, a potential adoptive parent during a visit or trial placement with a juvenile in the custody of a department, any person such as a house parent or cottage parent who has primary responsibility for supervising a juvenile's health and welfare in a residential child care facility or residential educational facility, or any employee or volunteer of a division, institution, or school operated by the Department of Health and Human Services. Nothing in this subdivision shall be construed to impose a legal duty of support under Chapter 50 or Chapter 110 of the General Statutes. The duty imposed upon a caretaker as defined in this subdivision shall be for the purpose of this Subchapter only."
SECTION 12C.3.(b)  G.S. 7B‑302(a1)(1) reads as rewritten:
"§ 7B‑302.  Assessment by director; access to confidential information; notification of person making the report.
…
(a1)	All information received by the department of social services, including the identity of the reporter, shall be held in strictest confidence by the department, except under the following circumstances:
(1)	The department shall disclose confidential information to any federal, State, or local government entity or its agent, or any private child placing or adoption agency licensed by the Department of Health and Human Services, in order to protect a juvenile from abuse or neglect. Any confidential information disclosed to any federal, State, or local government entity or its agent under this subsection shall remain confidential with the other government entity or its agent and shall only be redisclosed for purposes directly connected with carrying out that entity's mandated responsibilities."
SECTION 12C.3.(c)  G.S. 7B‑401.1(h) reads as rewritten:
"§ 7B‑401.1.  Parties.
…
(h)	Intervention. – Except as provided in G.S. 7B‑1103(b), the court shall not allow intervention by a person who is not the juvenile's parent, guardian, or custodian but may allow intervention by another county department of social services that has an interest in the proceeding. This section shall not prohibit the court from consolidating a juvenile proceeding with a civil action or claim for custody pursuant to G.S. 7B‑200."

ENHANCED CHILD SAFETY: JUDICIAL DISCRETION
SECTION 12C.4.  G.S. 7B‑901(c) reads as rewritten:
"§ 7B‑901.  Dispositional Initial dispositional hearing.
…
(c)	If the disposition order places a juvenile in the custody of a county department of social services, the court shall direct that reasonable efforts for reunification as defined in G.S. 7B‑101 shall not be required if the court makes written findings of fact pertaining to any of the following, unless the court concludes that there is compelling evidence warranting continued reunification efforts:
(1)	A court of competent jurisdiction has determined that the parent has committed or encouraged the commission of, or allowed the continuation of, any of the following upon the juvenile:
a.	Sexual abuse.
b.	Chronic physical or emotional abuse.
c.	Torture.
d.	Abandonment.
e.	Chronic or toxic exposure to alcohol or controlled substances that causes impairment of or addiction in the juvenile.
f.	Any other act, practice, or conduct that increased the enormity or added to the injurious consequences of the abuse or neglect.
(2)	A court of competent jurisdiction has terminated involuntarily the parental rights of the parent to another child of the parent. 
(3)	A court of competent jurisdiction has determined that (i) the parent has committed murder or voluntary manslaughter of another child of the parent; (ii) has aided, abetted, attempted, conspired, or solicited to commit murder or voluntary manslaughter of the child or another child of the parent; (iii) has committed a felony assault resulting in serious bodily injury to the child or another child of the parent; (iv) has committed sexual abuse against the child or another child of the parent; or (v) has been required to register as a sex offender on any government‑administered registry."

ENHANCED CHILD SAFETY: CONCURRENT PLANNING ENDING
SECTION 12C.5.  G.S. 7B‑906.2 is amended by adding a new subsection to read:
"(a1)	Concurrent planning shall continue until a permanent plan has been achieved."

SUBPART XII‑D. DIVISION OF AGING AND ADULT SERVICES

INCREASE ACCESS TO PUBLIC BENEFITS FOR OLDER DUAL ELIGIBLE SENIORS PILOT PROGRAM
SECTION 12D.1.(a)  It is the intent of the Governor and the General Assembly to fund and support an evidence‑based pilot that will increase access to public benefits for seniors aged 65 and older who are enrolled in Medicare and Medicaid to improve the health and independence of seniors and to reduce health care costs.
SECTION 12D.1.(b)  Of the funds appropriated to the Department of Health and Human Services, up to one million two hundred thousand dollars ($1,200,000) may be used each year for the next three years starting in fiscal year 2016‑2017 to establish this pilot program. The Department may leverage any eligible federal funding sources towards this effort.
SECTION 12D.1.(c)  By January 1, 2017, the Department may partner with a not‑for‑profit firm for the purposing of engaging in a data‑driven campaign to help seniors aged 65 and over enrolled in Medicare and Medicaid meet their basic social needs. This partner shall have demonstrated experience in this area and the partnership shall accomplish the following:
(1)	Identify through data sharing, dual eligible seniors aged 65 and older who qualify for the Supplemental Nutrition Assistance Program (SNAP) but are not currently enrolled;
(2)	Conduct an outreach program towards those seniors for the purpose of enrolling them into SNAP;
(3)	Provide comprehensive application assistance through outreach specialists to complete public benefits application process;
(4)	Evaluate project‑effectiveness and explore how data can be utilized to achieve optimal outcomes; and
(5)	Make recommendations regarding policy options available to the State to streamline access to benefits.
SECTION 12D.1.(d)  The Department shall report back to the Office of the Governor and the Joint Legislative Oversight Committee on Health and Human Services on its progress in the pilot program by February 1 following each year the pilot program is in place. The report should include:
(1)	The number of seniors age 65 and older who are dual eligible but are not enrolled in SNAP;
(2)	The number of those identified that would be included in the sample population;
(3)	Methods of outreach towards those seniors in the sample population;
(4)	Number of to‑date enrollments in SNAP as a direct result of outreach during the pilot program;
(5)	Participation rate to‑date in SNAP of those seniors in the sample population; and
(6)	Any other findings of interest.
SECTION 12D.1.(e)  If funding and capacity exist, the department may expand this pilot program to include other public benefit programs.
SECTION 12D.1.(f)  The Department shall submit a final report with findings to the Office of the Governor and the Joint Legislative Oversight Committee on Health and Human Services by February 1, 2020. The final report shall include:
(1)	Number of seniors reached during the pilot program;
(2)	Number of applications processed during the pilot program;
(3)	Number of new enrollments as a result of the pilot program;
(4)	Cost per application;
(5)	Total amount of public benefit distributed to the beneficiaries enrolled as a result of the pilot program; and
(6)	Projected reduction in health care utilization costs to the State associated with hospital stays and deferred nursing home placements.

SUBPART XII‑E. DIVISION OF PUBLIC HEALTH

PUBLIC HEALTH VECTOR CONTROL PROGRAM
SECTION 12E.1.  The Department of Health and Human Services, Division of Public Health, is authorized, through funds appropriated in this act, to establish a Vector Control Program (VCP) to be housed in the Communicable Disease Branch of the Epidemiology Section. The VCP will develop infrastructure to conduct vector surveillance, characterize vector‑borne disease risk, recommend appropriate control measures, evaluate the effectiveness of those measures, and provide comprehensive vector‑borne disease education.

CONVERSION TO MAGI (MODIFIED ADJUSTED GROSS INCOME) FOR AIDS DRUG ASSISTANCE PROGRAM (ADAP) ELIGIBILITY DETERMINATION
SECTION 12E.2.(a)  Effective January 1, 2017, the Department shall initiate the use of the Modified Adjusted Gross Income (MAGI) formula in the calculation of income for the purpose of eligibility determination for the AIDS Drug Assistance Program (ADAP), to ensure consistency with the method of eligibility determination currently used by Medicaid, Medicare, and Qualified Health Plan Subsidies.
SECTION 12E.2.(b)  The Department shall use existing State appropriations, federal Ryan White funds, and 340B rebates available to it to develop and implement the conversion to MAGI for determining ADAP financial eligibility.

STATEWIDE STANDING ORDER FOR OPIOID ANTAGONIST BY STATE HEALTH DIRECTOR
sECTION 12E.3.  G.S. 90‑106.2 reads as rewritten:
"§ 90‑106.2.  Treatment of overdose with opioid antagonist; immunity.
(a)	As used in this section, "opioid antagonist" means naloxone hydrochloride that is approved by the federal Food and Drug Administration for the treatment of a drug overdose.
(b)	A practitioner acting in good faith and exercising reasonable care may directly or by standing order prescribe an opioid antagonist to (i) a person at risk of experiencing an opiate‑related overdose or (ii) a family member, friend, or other person in a position to assist a person at risk of experiencing an opiate‑related overdose. As an indicator of good faith, the practitioner, prior to prescribing an opioid under this subsection, may require receipt of a written communication that provides a factual basis for a reasonable conclusion as to either of the following:
(1)	The person seeking the opioid antagonist is at risk of experiencing an opiate‑related overdose.
(2)	The person other than the person who is at risk of experiencing an opiate‑related overdose, and who is seeking the opioid antagonist, is in relation to the person at risk of experiencing an opiate‑related overdose:
a.	A family member, friend, or other person.
b.	In the position to assist a person at risk of experiencing an opiate‑related overdose.
(b1)	The State Health Director may prescribe an opioid antagonist pursuant to subsection (b) of this section by means of a statewide standing order. A pharmacist may dispense an opioid antagonist to a person described in subsection (b) of this section pursuant to a prescription issued in accordance with subsection (b) of this section. For purposes of this section, the term "pharmacist" is as defined in G.S. 90‑85.3.
(c)	A person who receives an opioid antagonist that was prescribed pursuant to subsection (b) of this section may administer an opioid antagonist to another person if (i) the person has a good faith belief that the other person is experiencing a drug‑related overdose and (ii) the person exercises reasonable care in administering the drug to the other person. Evidence of the use of reasonable care in administering the drug shall include the receipt of basic instruction and information on how to administer the opioid antagonist.
(d)	All of the following individuals are immune from any civil or criminal liability for actions authorized by this section:
(1)	The State Health Director and any practitioner who prescribes an opioid antagonist pursuant to subsection (b) of this section.
(1a)	Any pharmacist who dispenses an opioid antagonist pursuant to subsection (b1) of this section.
(2)	Any person who administers an opioid antagonist pursuant to subsection (c) of this section."

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

FUNDS FOR LOCAL INPATIENT PSYCHIATRIC BEDS OR BED DAYS
SECTION 12F.1.(a)  Use of Funds. – Of the funds appropriated in Section 2.1 of this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for crisis services, the sum of forty million five hundred eighty‑three thousand three hundred ninety‑four dollars ($40,583,394) for the 2015‑2016 fiscal year and the sum of forty million five hundred eighty‑three thousand three hundred ninety‑four dollars ($40,583,394) for the 2016‑2017 fiscal year shall be used to purchase additional new or existing local inpatient psychiatric beds or bed days not currently funded by or though LME/MCOs. The Department shall continue to implement a two‑tiered system of payment for purchasing these local inpatient psychiatric beds or bed days based on acuity level with an enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels, as defined by the Department. The enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels shall not exceed the lowest average cost per patient bed day among the State psychiatric hospitals. Funds designated in this subsection for the purchase of local inpatient psychiatric beds or bed days shall not be used to supplant other funds appropriated or otherwise available to the Department for the purchase of inpatient psychiatric services through contracts with local hospitals. No more than ten percent (10%) of current recurring three‑way funds may be available for use for other services across the crisis service continuum (Facility‑Based Crisis and Non‑Hospital Detox), to increase access to post acute care medications to 30 days, and to provide peer transition supports to help facilitate stabilization in the community for the first few months.
SECTION 12F.1.(b)  Distribution and Management of Beds or Bed Days. – The Department shall work to ensure that any local inpatient psychiatric beds or bed days purchased in accordance with this section are utilized solely for individuals who are medically indigent, defined as uninsured persons who (i) are financially unable to obtain private insurance coverage as determined by the Department and (ii) are not eligible for government‑funded health coverage such as Medicare or Medicaid; and distributed across the State in LME/MCO catchment areas and according to need as determined by the Department. The Department shall ensure that beds or bed days for individuals with higher acuity levels are distributed across the State in LME catchment areas, including any catchment areas served by managed care organizations, and according to greatest need based on hospital bed utilization data. The Department shall enter into contracts with LME/MCOs and local hospitals for the management of these beds or bed days. The Department shall work to ensure that these contracts are awarded equitably around all regions of the State. LME/MCOs shall manage and control these local inpatient psychiatric beds or bed days, including the determination of the specific local hospital or State psychiatric hospital to which an individual should be admitted pursuant to an involuntary commitment order.
SECTION 12F.1.(c)  Funds to Be Held in Statewide Reserve. – Funds appropriated to the Department for the purchase of local inpatient psychiatric beds or bed days shall not be allocated to LME/MCOs but shall be held in a statewide reserve at the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, to pay for services authorized by the LME/MCOs and billed by the hospitals through the LME/MCOs. LME/MCOs shall remit claims for payment to the Department within 15 working days after receipt of a clean claim from the hospital and shall pay the hospital within 30 working days after receipt of payment from the Department.
SECTION 12F.1.(d)  Ineffective LME/MCO Management of Beds or Bed Days. – If the Department determines that (i) an LME/MCO is not effectively managing the beds or bed days for which it has responsibility, as evidenced by beds or bed days in the local hospital not being utilized while demand for services at the State psychiatric hospitals has not reduced or (ii) the LME/MCO has failed to comply with the prompt payment provisions of subsection (c) of this section, the Department may contract with another LME/MCO to manage the beds or bed days or, notwithstanding any other provision of law to the contrary, may pay the hospital directly.
SECTION 12F.1.(e)  Reporting by LME/MCOs. – The Department shall establish reporting requirements for LME/MCOs regarding the utilization of these beds or bed days.
SECTION 12F.1.(f)  Reporting by Department. – By no later than December 1, 2016, and by no later than December 1, 2017, the Department shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on all of the following:
(1)	A uniform system for beds or bed days purchased during the preceding fiscal year from (i) funds appropriated in this act that are designated for this purpose in subsection (a) of this section, (ii) existing State appropriations, and (iii) local funds.
(2)	Other Department initiatives funded by State appropriations to reduce State psychiatric hospital use.

DOROTHEA DIX HOSPITAL PROPERTY FUND AND USE OF FUNDS
SECTION 12F.2.(a)  Notwithstanding G.S. 146‑30 or any other provision of law, the State Controller shall transfer a total of forty‑nine million eight hundred ninety‑nine thousand four hundred fifty‑six dollars ($49,899,456) for the 2015‑2016 fiscal year from the net proceeds of the sale of the Dorothea Dix Hospital property into the Dorothea Dix Hospital Property Fund established in G.S. 143C‑9‑2(b1), as enacted by subsection (b) of this section. These funds shall be available for expenditure only upon an appropriation by act of the General Assembly and do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.
SECTION 12F.2.(b)  Section 12F.7(d), (e), and (f) are repealed.
SECTION 12F.2.(c)  Section 12F.7 of S.L. 2015‑241 is amended by adding a new subsection to read:
"SECTION 12F.7.(g)  Funds appropriated by act of the General Assembly to the Dorothea Dix Hospital Property Fund shall be available until the purposes are fulfilled as outlined below and shall be used in support of increasing availability of short‑term behavioral health inpatient services and care of individuals experiencing an acute mental health, substance abuse, or developmental disability crisis and to carry out one‑time funding recommendations of the Governor's Task Force on Mental Health and Substance Use as follows:
(1)	Rural Beds: Twelve million dollars ($12,000,000) is appropriated for the purpose of expanding inpatient capacity, especially in rural areas near counties with limited inpatient capacity relative to their needs through constructing new beds or renovating existing beds to form new inpatient psychiatric units or new facility‑based crisis centers, prioritizing rural hospitals in the process.
(2)	Child Facility‑Based Crisis: Two million dollars ($2,000,000) is appropriated to DMHDDSAS for start‑up costs (renovation or construction) to establish one‑ or two‑child facility‑based crisis centers, at least one of which will be in the south/east/central region. Funds will be awarded on a competitive basis and will be available across two years because construction and renovation tends to take longer than a year.
(3)	Veterans Housing: Two hundred fifty thousand dollars ($250,000) is appropriated on a one‑time basis to expand the TCLI and Veterans Rapid Rehousing teams and support Rapid Rehousing teams in 10 new counties with the largest populations of homeless veterans, as well as improve outreach to 100,000 veterans.
(4)	Broaden Workforce Serving Individuals Who are Deaf/Hard of Hearing: One hundred fifty thousand dollars ($150,000) is appropriated to support six individuals who are proficient in American Sign Language to fund one behavioral health‑related Master's Degree per individual that will result in licensure in the mental health and/or substance use field, and the individual will agree to provide services in North Carolina for at least three years. Scholarships will be provided on a competitive basis.
(5)	Psychiatric Advanced Directives: Three hundred thousand dollars ($300,000) is appropriated to DMHDDSAS to support training and dissemination of psychiatric advanced directives, which may increase the effectiveness and efficiency of crisis services, and in many cases, prevent crises.
(6)	Mental Health First Aid: Two million five hundred thousand dollars ($2,500,000) is appropriated to DMHDDSAS to expand Mental Health First Aid training for youth and adults.
(7)	Local Efforts to Divert From Jail to Treatment: Three million dollars ($3,000,000) is appropriated to DMHDDSAS to offer mini grants to local community behavioral health and justice system leaders to collaborate to address the community health and safety needs. To be eligible for funding, the county or groups of counties must have joined the Stepping Up Initiative, a national effort spearheaded by the National Association of Counties, to divert people with behavioral health disorders from jail to treatment (stepuptogether.org) and agree to use the Sequential Intercept Model as the framework for planning the interface between the justice and behavioral health systems. Using the model, a community can develop targeted strategies that evolve over time to increase diversion from the justice system and linkage to community treatment."

IMPROVE CONTROLLED SUBSTANCES REPORTING SYSTEM ACCESS AND UTILIZATION
SECTION 12F.3.(d)  G.S. 90‑113.74(c) reads as rewritten:
"(c)	The Department shall release data in the controlled substances reporting system to the following persons only:
…
(8)	Any county medical examiner appointed by the Chief Medical Examiner pursuant to G.S. 130A‑382 and the Chief Medical Examiner, for the purpose of investigating the death of an individual.
(9)	The federal Drug Enforcement Administration's Office of Diversion Control, through the area Greensboro Office, and who is assigned to investigate the diversion and illegal use of prescription medication or pharmaceutical products identified in Article 5 of this Chapter of the General Statutes as Schedule II through V controlled substances and who is engaged in a bona fide specific investigation related to the enforcement of laws governing licit drugs.
(10)	The North Carolina Health Information Exchange Authority (NC HIE Authority), established under Article 29B of this Chapter, through Web‑service calls."

IMPROVE CONTROLLED SUBSTANCES REPORTING SYSTEM CONTRACT
SECTION 12F.4.(a)  The Department of Health and Human Services (DHHS) shall modify the contract for the Controlled Substances Reporting System (CSRS) to improve performance, establish user access controls, establish data security protocols, and ensure availability of data for advanced analytics. Specifically, the contract shall be modified to include the following:
(1)	A connection to the HIE Network administered by the North Carolina Health Information Exchange Authority (NC HIE Authority).
(2)	The establishment of interstate connectivity.
(3)	Data security protocols that meet or exceed the Federal Information Processing Standards (FIPS) established by the National Institute of Standards and Technology (NIST).
SECTION 12F.4.(b)  DHHS shall complete the contract modifications required by subsection (f) of this section by December 31, 2015. DHHS shall report by November 15, 2015, to the Joint Legislative Program Evaluation Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services regarding the progress to modify the contract.
SECTION 12F.4.(c)  DHHS shall apply for grant funding from the National Association of Boards of Pharmacy to establish interstate connectivity. The Department shall request forty thousand thirty‑five dollars ($40,035) to establish the initial interface for interstate connection and thirty thousand dollars ($30,000) for two years of ongoing service, maintenance, and support for interstate connection in order to create interstate connectivity for the drug monitoring program as required by subdivision (2) of subsection (a) of this section.
SECTION 12F.4.(d)  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 CSRS shall be used as follows:
(1)	For the 2015‑2016 fiscal year, the sum of forty thousand thirty‑five dollars ($40,035) shall be used to connect the CSRS and the HIE Network administered by the NC HIE Authority, as required by subdivision (1) of subsection (a) of this section.
(2)	For the 2015‑2016 fiscal year and for the 2016‑2017 fiscal year, the sum of fifteen thousand dollars ($15,000) shall be used to maintain a connection between the CSRS and the HIE Network administered by the NC HIE Authority, as required by subdivision (1) of subsection (a) of this section.
(3)	For the 2015‑2016 fiscal year, the sum of forty thousand thirty‑five dollars ($40,035) shall be used to establish the initial interface for interstate connectivity, as required by subdivision (2) of subsection (a) of this section. This amount shall be adjusted or eliminated if DHHS is successful in obtaining grant awards or identifying other allowable receipts for this purpose. If receipts are used for this purpose, this nonrecurring appropriation shall revert to the General Fund.
(4)	For the 2015‑2016 fiscal year, the sum of fifteen thousand dollars ($15,000) shall be used for the cost of annual service fees for the interstate connection for the drug monitoring program, as required by subdivision (2) of subsection (a) of this section. This amount shall be adjusted or eliminated if DHHS is successful in obtaining grant awards or identifying other allowable receipts for this purpose. If receipts are used for this purpose, this nonrecurring appropriation shall revert to the General Fund.

STATEWIDE STRATEGIC PLAN
SECTION 12F.5.  Section 12F.16(m) of S.L. 2015‑241 reads as rewritten:
"SECTION 12F.16.(m)  There is hereby created the Prescription Drug Abuse Advisory Committee, to be housed in and staffed by the Department of Health and Human Services (DHHS). The Committee shall develop and, through its members, implement a statewide strategic plan to combat the problem of prescription drug abuse. The Committee shall include representatives from the following, as well as any other persons designated by the Secretary of Health and Human Services:
(1)	The Division of Medical Assistance, DHHS.
(2)	The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, DHHS.
(3)	The Division of Public Health, DHHS.
(4)	The Rural Health Section of the Division of Public Health, DHHS.
(5)	The State Bureau of Investigation.
(6)	The Attorney General's Office.
(7)	The following health care regulatory boards with oversight of prescribers and dispensers of prescription drugs:
a.	North Carolina Board of Dental Examiners.
b.	North Carolina Board of Nursing.
c.	North Carolina Board of Podiatry Examiners.
d.	North Carolina Medical Board.
e.	North Carolina Board of Pharmacy.
(8)	The UNC Injury Prevention Research Center.
(9)	The substance abuse treatment community.
(10)	Governor's Institute on Substance Abuse, Inc.
(11)	The Department of Insurance's drug take‑back program.
(12)	The Department of Public Safety (DPS), Division of Adult Correction.
After developing the strategic plan, the Committee shall be the State's steering committee to monitor achievement of strategic objectives and receive regular reports on progress made toward reducing prescription drug abuse in North Carolina."

IMPLEMENTATION OF MENTAL HEALTH AND SUBSTANCE USE TASK FORCE RECOMMENDATIONS
SECTION 12F.6.(a)  Whereas the Governor's Task Force on Mental Health and Substance Use was established through Executive Order No. 76 with the purpose of submitting findings and strategic recommendations to the Governor for improving the lives of North Carolina children and adults with mental illness and substance use disorders and their families; the Governor and the General Assembly support the implementation of key recommendations that have been made by this Task Force as follows:
SECTION 12F.6.(b)  The sum of thirty million dollars ($30,000,000) is appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, to address:
(1)	Emergency housing for adults diagnosed with a primary substance use disorder or serious mental illness who are transitioning out of emergency departments, correctional facilities, or institutions.
(2)	Improved connections for individuals with mental health and substance use issues by funding more proactive, regular, and often face‑to‑face contact and support through case management services. This case management model for adults will work closely with individuals during transition periods to create personalized plans and prevent hospitalization or interactions with the justice system. For children, this type of case management will focus on those in foster care, the juvenile justice system, and children with intellectual and developmental disabilities.
(3)	The State's heroin and prescription drug use epidemic by increasing access of individuals and families to publicly supported Medication Assisted Treatment (MAT) through the identification and implementation of comprehensive strategies to improve access, quality, safety, and effectiveness in intervention, treatment, and recovery services and implementation of the NC Strategic Plan to Reduce Prescription Drug Abuse.
(4)	Individuals entering the justice system whose needs are better addressed through treatment by supporting therapeutic courts (mental health, substance use disorder recovery, and veteran courts) and assure sustained funding of these courts and their associated treatment. Further support for diversion from criminal justice is provided through the LEAD program which is a pre‑booking jail diversion program that trains law enforcement officers to divert low level drug offenders to services and treatment, rather than jail.
The Administrative Office of the Courts shall conduct or contract for a study to develop the most effective program model, develop criteria and standards, and identify appropriate judicial districts of establishing new specialty courts leveraging existing resources for such courts currently operating.

SUBPART XII‑G. DIVISION OF HEALTH SERVICE REGULATION

MORATORIUM ON HOME CARE AGENCY LICENSES FOR IN‑HOME AIDE SERVICES
SECTION 12G.1.(a)  Section 12G.4 of S.L. 2014‑100 reads as rewritten:
"SECTION 12G.4.(a)  For the period commencing on the effective date July 1, 2016, of this section, and ending June 30, 2017, 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, sitter, and respite 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."
SECTION 12G.1.(b)  This section is effective when it becomes law.

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

ACCOUNTING FOR MEDICAID RECEIVABLES AS NONTAX REVENUE
SECTION 12H.1.(a)  Receivables reserved at the end of the 2015‑2016 and 2016‑2017 fiscal years shall, when received, be accounted for as nontax revenue for each of those fiscal years.
SECTION 12H.1.(b)  For the 2015‑2016 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred thirty‑nine million dollars ($139,000,000) with the Department of State Treasurer to be accounted for as nontax revenue. For the 2016‑2017 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred forty‑seven million dollars ($147,000,000) with the Department of State Treasurer to be accounted for as nontax revenue. These deposits shall represent the total amount of the return of General Fund appropriations, nonfederal revenue, fund balances, or other resources from State‑owned and State‑operated hospitals which are used to provide indigent and nonindigent care services. The return from State‑owned and State‑operated hospitals to DHHS will be made from nonfederal resources in an amount equal to the amount of the payments from the Division of Medical Assistance for uncompensated care. The treatment of any revenue derived from federal programs shall be in accordance with the requirements specified in the Code of Federal Regulations, Title 2, Part 225.

AUTISM SPECTRUM DISORDER SERVICES FOR MEDICAID BENEFICIARIES
SECTION 12H.2.(a)  The Department of Health and Human Services shall issue clear guidance to the local management entities/managed care organizations (LME/MCOs) to ensure that children with Autism Spectrum Disorder receive consistent statewide services under Early and Periodic Screening, Diagnostic, and Treatment program, immediately upon the effective date of this act.
SECTION 12H.2.(b)  The Department of Health and Human Services shall submit a Medicaid State Plan Amendment to the CMS to include treatment of Autism Spectrum Disorder for Medicaid beneficiaries as a covered service effective July 1, 2017.
SECTION 12H.2.(c)  The State plan amendment submitted to implement this section shall not be subject to the 90‑day prior submission requirement of G.S. 108A‑54.1A(d).

EXPAND INNOVATIONS WAIVER SLOT AVAILABILITY
SECTION 12H.3.  In order to achieve cost‑savings, improve health outcomes, and allow individuals who meet the requirements for an Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF‑IID) level of care to receive services in the least restrictive setting possible, the Department of Health and Human Services, Division of Medical Assistance, shall expand the Innovations Waiver by an additional 250 slots for State Fiscal Year 2016‑2017.

MEDICAID ESTATE RECOVERY AND ABLE ACCOUNTS
SECTION 12H.4.  G.S. 147‑86.53(g) reads as rewritten:
"(g)	Notice for Designated Beneficiary Receiving Medicaid. –The ABLE account application form approved in accordance with G.S. 147‑86.51(b)(1) shall include notice of the State's right under subsection (e) of this section to file a claim for payment from a designated beneficiary's ABLE account following the death of a beneficiary who received medical assistance.

	
(4)	That a claim against the estate may be waived in the case of undue hardship and the procedure for claiming an undue hardship."

MEDICAID AND HEALTH CHOICE PROVIDER SCREENING
SECTION 12H.5.  G.S. 108C‑3 reads as rewritten:
"§ 108C‑3.  Medicaid and Health Choice provider screening.
…
(g)	High Categorical Risk Provider Types.–The following provider types are hereby designated as "high" categorical risk:
…
(10)	Providers that were excluded, or whose owners, operators, or managing employees were excluded, by the U.S. Department of Health and Human Services Office of Inspector General, the Medicare program, or another state's Medicaid or Children's Health Insurance Program within the previous 10 years.
…
(j)	For out‑of‑state providers, the Department may rely on the results of the provider screening performed by the Medicaid or Children's Health Insurance Program agencies of other states."

CRIMINAL HISTORY RECORD CHECKS FOR CERTAIN PROVIDERS
SECTION 12H.6.  G.S. 108C‑4 reads as rewritten:
"§ 108C‑4.  Criminal history record checks for certain providers.
(a)	The Department shall conduct criminal history records checks, including fingerprinting, of provider applicants, enrolled providers, and individuals with a five percent (5%) or more direct or indirect ownership interest in the providers who are subject to G.S. 108C‑3(g) in accordance with federal law and regulation.
(1)	The Department shall notify providers subject to this subsection in writing.
(2)	A provider or other individual subject to this subsection shall submit documentation verifying fingerprinting to the Department or its designated contractor within 30 calendar days of the date of the notice requiring the documentation.
(3)	The Department of Public Safety shall forward the provider's or other individual's fingerprints 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 the fingerprints to the Federal Bureau of Investigation for a national criminal history check. The State Bureau of Investigation shall submit the results of the criminal history check to the Department or its designated contractor. The Department shall keep all information pursuant to this subsection privileged, in accordance with applicable State law and federal guidelines, and the information shall be confidential and shall not be a public record under Chapter 132 of the General Statutes.
(a1)	The Division shall deny or terminate the enrollment of a provider who has been convicted of a criminal offense related to that person's involvement with the Medicare, Medicaid, or Children's Health Insurance Program in the last 10 years, unless the Division determines that denial or termination of enrollment is not in the best interest of Medicaid, and the State Medicaid agency documents that determination in writing. The Department shall honor civil and criminal settlement agreements entered into with a provider or any person with a five percent (5%) or greater direct or indirect ownership interest in the provider within 10 years of the effective date of this act.
(b)	The Division shall deny or terminate the enrollment of a provider where any person with a five percent (5%) or greater direct or indirect ownership interest in the provider has been convicted of a criminal offense related to that person's involvement with the Medicare, Medicaid, or Children's Health Insurance Program in the last 10 years, unless the Division determines that denial or termination of enrollment is not in the best interests of Medicaid and the State Medicaid agency documents that determination in writing. The Department shall honor civil and criminal settlement agreements entered into with a provider or any person with a five percent (5%) or greater direct or indirect ownership interest in the provider within 10 years of the effective date of this act.
(c)	The Division may deny enrollment or terminate the enrollment of a provider subject to G.S. 108C‑3(g) for any of the following offenses of the provider, an owner and/or operator, or employee if, after review of the seriousness, age, and other circumstances involving the offense, the Division determines it is in the best interest of the integrity of Medicaid or Health Choice to do so: any criminal offenses as set forth in any of the following Articles of Chapter 14 of the General Statutes: Article 5, Counterfeiting and Issuing Monetary Substitutes; Article 5A, Endangering Executive, Legislative, and Court Officers; Article 6, Homicide; Article 7B, Rape and Other Sex Offenses; Article 8, Assaults; Article 10, Kidnapping and Abduction; Article 13, Malicious Injury or Damage by Use of Explosive or Incendiary Device or Material; Article 14, Burglary and Other Housebreakings; Article 15, Arson and Other Burnings; Article 16, Larceny; Article 17, Robbery; Article 18, Embezzlement; Article 19, False Pretenses and Cheats; Article 19A, Obtaining Property or Services by False or Fraudulent Use of Credit Device or Other Means; Article 19B, Financial Transaction Card Crime Act; Article 20, Frauds; Article 21, Forgery; Article 26, Offenses Against Public Morality and Decency; Article 26A, Adult Establishments; Article 27, Prostitution; Article 28, Perjury; Article 29, Bribery; Article 31, Misconduct in Public Office; Article 35, Offenses Against the Public Peace; Article 36A, Riots and Civil Disorders; Article 39, Protection of Minors; Article 40, Protection of the Family; Article 59, Public Intoxication; and Article 60, Computer‑Related Crime. The crimes also include possession or sale of drugs in violation of the North Carolina Controlled Substances Act, Article 5 of Chapter 90 of the General Statutes, and alcohol‑related offenses such as sale to underage persons in violation of G.S. 18B‑302, or driving while impaired in violation of G.S. 20‑138.1 through G.S. 20‑138.5."

DELINQUENT PROVIDER ASSESSMENTS
SECTION 12H.8.  G.S. 108C‑5 is amended by adding a new subsection to read:
"(u)	The Department may collect payments for delinquent provider health care assessments as defined 42 C.F.R. § 433.55(a) in the same manner as set forth in G.S. 105‑242 and G.S. 105‑242.1. The collection of delinquent assessments from a PIHP, MCO, or PLE for money owed by a provider and on behalf of the provider to the State agency shall not constitute a donation as defined in 42 C.F.R. § 433.52."

TRANSFER OF MEDICAID POSITIONS
SECTION 12H.9.  Any new positions established by the Department of Health and Human Services, Division of Medical Assistance, through this Act shall be subject to G.S. 126‑5(c1)(33) and (34). These positions shall transfer to the Division of Health Benefits (DHB) when the DHB assumes operational responsibility for the State's Medicaid program.

MEDICAID TRANSFORMATION
SECTION 12H.10.(a)  Section 3 of S.L. 2015‑245 reads as rewritten:
"SECTION 3.  Time Line for Medicaid Transformation. – The following milestones for Medicaid transformation shall occur no later than the following dates:
(1)	When this act becomes law. –
a.	The Division of Health Benefits of the Department of Health and Human Services (DHHS) is created pursuant to Section 10 of this act.
b.	The Joint Legislative Oversight Committee on Medicaid and NC Health Choice is created pursuant to Section 15 of this act to oversee the Medicaid and NC Health Choice programs.
c.	DHHS shall begin development of the 1115 waiver and any other State Plan amendments and waiver amendments necessary to effectuate the Medicaid transformation required by this act.
(2)	March 1, 2016. – DHHS shall report its plans and progress on Medicaid transformation, including recommended statutory changes, to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice, as required by subdivision (12) of Section 5 of this act.
(3)	On or before June 1, 2016. – DHHS shall submit the waivers and State Plan amendments required by this act to the Centers for Medicare & Medicaid Services (CMS).
(4)	Eighteen months after approval of all necessary waivers and State Plan amendments by CMS. – Capitated contracts shall begin and initial recipient enrollment shall be complete."
SECTION 12H.10.(b)  Section 4 of S.L. 2015‑245 reads as rewritten:
"SECTION 4. Structure of Delivery System. – The transformed Medicaid and NC Health Choice programs described in Section 1 of this act shall be organized according to the following principles and parameters:
(1)	DHHS authority. – The Department of Health and Human Services (DHHS) shall have full authority to manage the State's Medicaid and NC Health Choice programs provided that the total expenditures, net of agency receipts, do not exceed the authorized budget for each program, except the General Assembly shall determine eligibility categories and income thresholds. DHHS shall be responsible for planning and implementing the Medicaid transformation required by this act.
(2)	Prepaid Health Plan. – For purposes of this act, a Prepaid Health Plan (PHP) shall be defined as an entity, which may be a commercial plan or provider‑led entity, that operates or will operate a capitated contract for the delivery of services pursuant to subdivision (3) of this section. For purposes of this act, the terms "commercial plan" and "provider‑led entity" are defined as follows:
a.	Commercial plan or CP. – Any person, entity, or organization, profit or nonprofit, that undertakes to provide or arrange for the delivery of health care services to enrollees on a prepaid basis except for enrollee responsibility for copayments and deductibles and holds a PHP license issued by the Department of Insurance.
b.	Provider‑led entity or PLE. – An entity that meets all of the following criteria:
1.	A majority of the entity's ownership is held by an individual or entity that has as its primary business purpose the ownership or operation of one or more Medicaid and NC Health Choice providers.
2.	A majority of the entity's governing body is composed of physicians, physician assistants, nurse practitioners, or psychologists.
3.	Holds a PHP license issued by the Department of Insurance.
(3)	Capitated contracts. – The Division of Health Benefits, created in Section 10 of this act, shall enter into capitated contracts with PHPs for the delivery of Medicaid and NC Health Choice services as specified in this act. All capitated contracts shall be the result of requests for proposals (RFPs) issued by the Division of Health Benefits and the submission of competitive bids by PHPs, pursuant to subdivision (6) of Section 5 of this act.
(4)	Services covered by PHPs. – Capitated PHP contracts shall cover all Medicaid and NC Health Choice services, including physical health services, prescription drugs, long‑term services and supports, and behavioral health services for NC Health Choice recipients, except as otherwise provided in this subdivision. The capitated contracts required by this subdivision shall not cover the following:
a.	Behavioral health services for Medicaid recipients currently covered by the local management entities/managed care organizations (LME/MCOs) until four years after the date capitated contracts begin.
b.	Dental services.
c.	Program of All‑inclusive Care for The Elderly (PACE) services.
d.	Audiology, speech therapy, occupational therapy, physical therapy, nursing, and psychological services prescribed in an Individualized Education Program (IEP) and performed by schools or individuals contracted with Local Education Agencies.
e.	Services contracted with Children's Developmental Services Agencies.
f.	Services for Medicaid program applicants during the three month retroactive eligibility period authorized by 42 U.S.C. § 1902(a)(34). Services covered during a prospective, 12‑month continuous enrollment period shall be covered by the capitated contracts.
(5)	Populations covered by PHPs. – Capitated PHP contracts shall cover all Medicaid and NC Health Choice program aid categories except recipients who are:
a.	Dually eligible for Medicaid and Medicare.
b.	Qualified aliens subject to the five‑year bar for means‑tested public assistance under 8 U.S.C. § 1613 who qualify for emergency services under 8 U.S.C. § 1611.
c.	Undocumented aliens who qualify for emergency services under 8 U.S.C. § 1611.
d.	Medically needy Medicaid recipients.
e.	Members of federally recognized tribes. – Members of federally recognized tribes shall have the option to enroll voluntarily in PHPs.
f.	Presumptively eligible. – Individuals who submit a full Medicaid application and qualify for Medicaid program eligibility shall be covered by capitated contracts during a prospective, 12‑month continuous enrollment period.
g.	North Carolina Health Insurance Premium Payment program (NC HIPP).
Recipients in the aged program aid category that are eligible for Medicare shall be considered recipients who are dually eligible for Medicaid and Medicare. The Division of Health Benefits shall develop a long‑term strategy to cover dual eligibles through capitated PHP contracts, as required by subdivision (11) of Section 5 of this act.
(6)	Number and nature of capitated PHP contracts. – The number and nature of the contracts required under subdivision (3) of this section shall be as follows:
a.	Three contracts between the Division of Health Benefits and PHPs to provide coverage to Medicaid and NC Health Choice recipients statewide (statewide contracts).
b.	Up to 12 contracts between the Division of Health Benefits and PLEs for coverage of regions specified by the Division of Health Benefits pursuant to subdivision (2) of Section 5 of this act (regional contracts). Regional contracts shall be in addition to the three statewide contracts required under sub‑subdivision a. of this subdivision. Each regional contract shall provide coverage throughout the entire region for the Medicaid and NC Health Choice services required by subdivision (4) of this section. A PLE may bid for more than one regional contract, provided that the regions are contiguous.
c.	Initial capitated PHP contracts may be awarded on staggered terms of three to five years in duration to ensure against gaps in coverage that may result from termination of a contract by the PHP or the State.
(6a)	To the extent allowed by Medicaid federal law and regulations and consistent with the requirements of this act, PHPs shall comply with the requirements of Chapter 58 of the General Statutes. This requirement shall not be construed to require PHPs to cover services that are not covered by the Medicaid program pursuant to federal law and regulations. The Department of Health and Human Services, Division of Health Benefits, and the Department of Insurance shall jointly review the applicability of provisions of Chapter 58 of the General Statutes to PHPs, and report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice by March 1, 2016, on the following:
a.	Proposed exceptions to the applicability of Chapter 58 of the General Statutes for PHPs.
b.	Recommendations for resolving conflicts between Chapter 58 of the General Statutes and the requirements of Medicaid federal law and regulations.
c.	Proposed statutory changes necessary to implement this subdivision.
(7)	Defined measures and goals. – The new delivery system and capitated PHP contracts shall be built on defined measures and goals for risk‑adjusted health outcomes, quality of care, patient satisfaction, access, and cost. Each component shall be subject to specific accountability measures, including penalties. The Division of Health Benefits may use organizations such as National Committee for Quality Assurance (NCQA), Physician Consortium for Performance Improvement (PCPI), or any others necessary to develop effective measures for outcomes and quality.
(8)	Administrative functions. – PHPs shall be responsible for all administrative functions for recipients enrolled in their plan, including, but not limited to, claims processing, care and case management, grievances and appeals, and other necessary administrative services.
(9)	LME/MCOs. – LME/MCOs shall continue to manage the behavioral health services currently covered for their enrollees under all existing waivers, including the 1915(b) and (c) waivers, for four years after the date capitated PHP contracts begin. During this four‑year period, the Division of Health Benefits shall continue to negotiate actuarially sound capitation rates directly with the LME/MCOs in the same manner as currently utilized. Capitation payments under contracts between the Division of Health Benefits and the LME/MCOs shall be made directly to the LME/MCO by the Division of Health Benefits during the four‑year period."
SECTION 12H.10.(c)  Section 5 of S.L. 2015‑245 reads as rewritten:
"SECTION 5.  Role of DHHS. – The role and responsibility of DHHS during Medicaid transformation shall include the following activities and functions:
(1)	Submit to CMS a demonstration waiver application pursuant to Section 1115 of the Social Security Act and any other waivers and State Plan amendments necessary to accomplish the requirements of this act within the required time frames.
(2)	Define six regions comprised of whole contiguous counties that reasonably distribute covered populations across the State to ensure effective delivery of health care and achievement of the goals of Medicaid transformation set forth in Section 1 of this act. Every county in the State must be assigned to a region.
(3)	Oversee, monitor, and enforce capitated PHP contract performance.
(4)	Ensure sustainability of the transformed Medicaid and NC Health Choice programs.
(5)	Set rates, including the following:
a.	Capitation rates that are actuarially sound. Actuarial calculations must include utilization assumptions consistent with industry and local standards. Capitation rates shall be risk adjusted and shall include a portion that is at risk for achievement of quality and outcome measures, including value‑based payments.
b.	Appropriate rate floors for in‑network primary care physicians, specialist physicians, and pharmacy dispensing fees to ensure the achievement of transformation goals.
c.	Rates for services in the remaining fee‑for‑service programs.
(6)	Enter into capitated PHP contracts for the delivery of the Medicaid and NC Health Choice services described in subdivision (4) of Section 4 of this act. All contracts shall be the result of requests for proposals (RFPs) issued by DHHS and the submission of competitive bids by PHPs. DHHS shall develop standardized contract terms, to include at a minimum, the following:
a.	Risk‑adjusted cost growth for its enrollees must be at least two percentage (2%) points below national Medicaid spending growth as documented and projected in the annual report prepared for CMS by the Office of the Actuary for nonexpansion states.
b.	A requirement that PHP spending for prescribed drugs, net of rebates, ensures the State realizes a net savings for the spending on prescription drugs. All PHPs shall be required to use the same drug formulary, which shall be established by DHHS.
c.	Until final federal regulations are promulgated governing medical loss ratio, a minimum medical loss ratio of eighty‑eight percent (88%) for health care services, with the components of the numerator and denominator to be defined by DHHS.
d.	A requirement that PHPs develop and maintain provider networks that meet access to care requirements for their enrollees. PHPs may not exclude providers from their networks except for failure to meet objective quality standards or refusal to accept network rates. Notwithstanding the previous sentence, PHPs must include all providers in their geographical coverage area that are designated essential providers by DHHS pursuant to subdivision (13) of this section, unless DHHS approves an alternative arrangement for securing the types of services offered by the essential providers.
e.	A requirement that all PHPs assure that enrollees who do not elect a primary care provider will be assigned to one.
(7)	Prior to issuing the RFPs required by subdivision (6) of this section, consult, in accordance with G.S. 12‑3(15), with the Joint Legislative Oversight Committee on Medicaid and NC Health Choice on the terms and conditions of the requests for proposals (RFPs) for the solicitation of bids for statewide and regional capitated PHP contracts.
(8)	Develop and implement a process for recipient assignment to PHPs. Criteria for assignment shall include at least the recipient's family unit, including foster family and adoptive placement, quality measures, and primary care physician.
(9)	Define methods to ensure program integrity against provider fraud, waste, and abuse at all levels.
(10)	Require all PHPs and Medicaid and NC Health Choice providers to submit data through the Health Information Exchange Network, as required by Section 12A.5 of House Bill 97, 2015 Regular Session, in order to ensure effective systems and connectivity to support clinical coordination of care, the exchange of information, and the availability of data to DHHS and the Division of Health Benefits to manage the Medicaid and NC Health Choice programs for the State.
(11)	Develop a Dual Eligibles Advisory Committee, which must include at least a reasonably representative sample of the populations receiving long‑term services and supports covered by Medicaid. DHHS, upon the advice of the Dual Eligibles Advisory Committee, shall develop a long‑term strategy to cover dual eligibles through capitated PHP contracts and report the strategy to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice by January 31, 2017.
(12)	Report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice by March 1, 2016. At a minimum, this report shall include:
a.	The proposed waiver application.
b.	The expected time frame for the submission of the proposed waiver to CMS.
c.	Proposed statutory changes required.
d.	Status of staffing of the Division of Health Benefits, including a description of staff's key competencies and expertise.
e.	Anticipated distribution of regional capitated PHP contracts.
f.	Plans for recipient enrollment.
g.	Recipient access standards.
h.	Performance measures.
i.	A plan for the proposed inclusion of the following features as part of Medicaid and NC Health Choice transformation:
1.	Rate floors in addition to those required by subdivision (5) of Section 5 of this act.
2.	Antitrust policies.
3.	Protections against the exclusion of certain provider types.
4.	Prompt pay requirements.
5.	Uniform credentialing requirements.
6.	Good‑faith negotiations.
j.	Time line for issuance of RFP and solicitation of bids.
k.	Measures for sustainability of the transformed system.
l.	A plan for transition of features of the contract with the North Carolina Community Care Network, Inc., (NCCCN) to the new delivery system, including a plan for utilizing, at the appropriate time, the Health Information Exchange Network to perform certain functions presently being performed by NCCCN's Informatics Center in conjunction with the primary care case management program.
m.	A plan to stabilize the Division of Medical Assistance during the transition of the Medicaid and NC Health Choice programs to the Division of Health Benefits.
n.	A plan that will ensure continuity of services for individuals in foster care and adoptive placements in the transformed Medicaid and NC Health Choice programs.
(13)	Designate Medicaid and NC Health Choice providers as essential providers if the provider either offers services that are not available from any other provider within a reasonable access standard or provides a substantial share of the total units of a particular service utilized by Medicaid and NC Health Choice recipients within the region during the last three years, and the combined capacity of other service providers in the region is insufficient to meet the total needs of the Medicaid and NC Health Choice enrollees. DHHS shall not classify physicians and other practitioners as essential providers. At a minimum, providers in the following categories shall be designated essential providers:
a.	Federally qualified health centers.
b.	Rural health centers.
c.	Free clinics.
d.	Local health departments.
e.	State Veterans Homes."
SECTION 12H.10.(d)  Section 8 of S.L. 2015‑245 reads as rewritten:
"SECTION 8.  Innovations Center. – DHHS shall submit a program design and budget proposal no later than May 1, 2016, to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice that will create a Medicaid and NC Health Choice Transformation Innovations Center with the purpose of assisting Medicaid and NC Health Choice providers in achieving the ultimate goals of better health, better care, and lower costs for North Carolinians. The center should be designed to support providers through technical assistance and learning collaboratives that foster peer‑to‑peer sharing of best practices. DHHS shall use the Oregon Health Authority's Transformation Center as a design model and shall consider at least the following features:
(1)	Learning collaboratives, peer‑to‑peer networks.
(2)	Clinical standards and supports.
(3)	Innovator agents.
(4)	Council of Clinical Innovators.
(5)	Community and stakeholder engagement.
(6)	Conferences and workshops.
(7)	Technical assistance.
(8)	Infrastructure support."
SECTION 12H.10.(e)  Section 9 of S.L. 2015‑245 reads as rewritten:
"SECTION 9.  Maintain Funding Mechanisms. – In developing the waivers and State Plan amendments necessary to implement this act, DHHS shall work with the Centers for Medicare & Medicaid Services (CMS) to attempt to preserve existing levels of funding generated from Medicaid‑specific funding streams, such as assessments, to the extent that the levels of funding may be preserved. If such Medicaid‑specific funding cannot be maintained as currently implemented, DHHS shall advise the Joint Legislative Oversight Committee on Medicaid and NC Health Choice, created in Section 15 of this act, of any modifications necessary to maintain as much revenue as possible within the context of Medicaid transformation. If such Medicaid‑specific funding streams cannot be preserved through the transformation process or if revenue would decrease, it is the intent of the Governor and the General Assembly to modify such funding streams so that any supplemental payments to providers are more closely aligned to improving health outcomes and achieving overall Medicaid goals."
SECTION 12H.10.(f)  Section 10 of S.L. 2015‑245 reads as rewritten:
"SECTION 10.  Creation of the Division of Health Benefits. – The Division of Health Benefits is established as a new division of the Department of Health and Human Services. The Division of Medical Assistance shall continue to operate the current Medicaid and NC Health Choice programs until the Division of Medical Assistance is eliminated. Upon the elimination of the Division of Medical Assistance, all functions, powers, duties, obligations, and services vested in the Division of Medical Assistance of the Department of Health and Human Services are vested in the Division of Health Benefits. The Department of Health and Human Services shall remain the Medicaid single State agency and shall be responsible for implementing Medicaid transformation required by this act and administer and operate all functions, powers, duties, obligations, and services related to the transformed Medicaid and NC Health Choice programs. Prior to the effective date of G.S. 143B‑216.85, the Secretary of DHHS may appoint a Director of the Division of Health Benefits."
SECTION 12H.10.(g)  G.S. 143B‑216.80 reads as rewritten:
"§ 143B‑216.80.  Division of Health Benefits – creation and organization.
(a)	There is hereby established the Division of Health Benefits of the Department of Health and Human Services. The Director shall be the head of the Division of Health Benefits. Upon the elimination of the Division of Medical Assistance, the Division of Health Benefits shall be vested with all functions, powers, duties, obligations, and services previously vested in the Division of Medical Assistance. The Department of Health and Human Services shall have the powers and duties described in G.S.  108A‑54(e) in addition to the power and duties already vested in the Department.
(b)	Although generally subject to the laws of this State, the following exemptions, limitations, and modifications apply to the Department of Health and Human Services, Division of Health Benefits, notwithstanding any other provision of law:
(1)	Employees of the Division of Health Benefits shall not be subject to the North Carolina Human Resources Act, except as provided in G.S. 126‑5(c1)(31).
(2)	The Secretary may retain private legal counsel and is not subject to G.S. 114‑2.3 or G.S. 147‑17(a) through (c).
(3)	The Division of Health Benefits' employment contracts offered pursuant to G.S. 108A‑54(e)(2) are not subject to review and approval by the Office of State Human Resources.
(4)	If the Secretary establishes alternative procedures for the review and approval of contracts, then the Division of Health Benefits is exempt from State contract review and approval requirements but may still choose to utilize the State contract review and approval procedures for particular contracts."
SECTION 12H.10.(h)  G.S. 108A‑54 reads as rewritten:
"§ 108A‑54.  Authorization of Medical Assistance Program; administration.
…
(e)	The Department of Health and Human Services shall continue to administer and operate the Medicaid and NC Health Choice programs through the Division of Medical Assistance until the Division of Medical Assistance is eliminated at which time all functions, powers, duties, obligations, and services vested in the Division of Medical Assistance are vested in the Division of Health Benefits. Prior to and following the exchange of powers and duties from the Division of Medical Assistance to the Division of Health Benefits, and in addition to the powers and duties already vested in the Secretary of the Department of Health and Human Services, the Secretary of the Department of Health and Human Services shall have the following powers and duties in connection with any activity related to obtaining, implementing, or operating a demonstration waiver pursuant to section 1115 of the Social Security Act:
(1)	Administer and operate the Medicaid and NC Health Choice programs, provided that the total expenditures, net of agency receipts, do not exceed the authorized budget for each program. None of the powers and duties enumerated in the other subdivisions of this subsection shall be construed to limit the broad grant of authority to administer and operate the Medicaid and NC Health Choice programs.
(2)	Employ clerical and professional staff of the Division of Health Benefits, including consultants and legal counsel, necessary to carry out the powers and duties of the division. In hiring staff for the Division of Health Benefits, the Secretary may offer employment contracts for a term and set compensation for the employees, which may include performance‑based bonuses based on meeting budget or other targets.
(3)	Notwithstanding G.S. 143‑64.20, enter into contracts for the administration of the Medicaid and NC Health Choice programs, as well as manage such contracts, including contracts of a consulting or advisory nature.
(4)	Establish and adjust all program components, except for eligibility categories and income thresholds, of the Medicaid and NC Health Choice programs within the appropriated and allocated budget.
(5)	Adopt rules related to the Medicaid and NC Health Choice programs.
(6)	Develop midyear budget correction plans and strategies and then take midyear budget corrective actions necessary to keep the Medicaid and NC Health Choice programs within budget.
(7)	Approve or disapprove and oversee all expenditures to be charged to or allocated to the Medicaid and NC Health Choice programs by other State departments or agencies.
(8)	Develop and present to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice and the Office of State Budget and Management by January 1 of each year, beginning in 2017, the following information for the Medicaid and NC Health Choice programs:
a.	A detailed four‑year forecast of expected changes to enrollment growth and enrollment mix.
b.	What program changes will be made by the Department in order to stay within the existing budget for the programs based on the next fiscal year's forecasted enrollment growth and enrollment mix.
c.	The cost to maintain the current level of services based on the next fiscal year's forecasted enrollment growth and enrollment mix.
(9)	Publish on its Web site and update on at least a monthly basis, at a minimum, the following information about the Medicaid and NC Health Choice programs:
a.	Enrollment by program aid category by county.
b.	Per member per month spending by category of service.
c.	Spending and receipts by fund along with a detailed variance analysis.
d.	A comparison of the above figures to the amounts forecasted and budgeted for the corresponding time period.
(f)	The General Assembly shall determine the eligibility categories and income thresholds for the Medicaid and NC Health Choice programs. The Department of Health and Human Services is expressly authorized to adopt temporary and permanent rules regarding eligibility requirements and determinations, to the extent that they do not conflict with the parameters set by the General Assembly.

	
	
	"

SUBPART XII‑I. DIVISION OF SERVICES FOR THE BLIND, DEAF, AND HARD OF HEARING

DIVISION OF SERVICES FOR THE BLIND, DEAF, AND THE HARD OF HEARING FUNDS TRANSFER
SECTION 12I.1.  The Department of Health and Human Services shall develop and implement a Data Collection and Service Management Information System to replace the current system in use by the Division of Services for the Deaf and Hard of Hearing. The project shall not proceed until the Business Case has been approved by the State Budget Director and State Chief Information Officer in the Enterprise Project Management Office's Touchdown System. With the approval of the Director of the Budget, funds available in Budget Code 67425, Fund Code 6726, may be budgeted for transfer to Budget Code 24410 for Information Technology projects in an amount not to exceed seven hundred fifty thousand dollars ($750,000).

TELECOMMUNICATIONS RELAY SERVICE
SECTION 12I.2.  G.S. 62‑157 reads as rewritten:
"§ 62‑157.  Telecommunications relay service.
…
(a1)	Definitions. – For purposes of this section:
(1)	"Exchange access facility" means a connection from a particular telephone subscriber's premises to the telephone system of a provider, and includes company‑provided local access lines, private branch exchange trunks, and centrex network access registers.
…
(d)	Funds to Be Deposited in Special Account. – The local service providers shall collect the surcharge from their customers and deposit the moneys collected with the State Treasurer, who shall maintain the funds in an interest‑bearing, nonreverting account. After consulting with the State Treasurer, the Commission shall direct how and when the local service providers shall deposit these moneys. Revenues from this fund shall be available only to the Department of Health and Human Services to administer the statewide telecommunications relay service program, including its establishment, operation, and promotion. The Commission may allow the Department of Health and Human Services to use up to four cents (4¢) per exchange access facility over a rolling 12‑month period, of the surcharge for the purpose of providing telecommunications devices for hearing impaired or speech impaired persons, including those who also have vision impairment, through a distribution program. The Commission shall prepare such guidelines for the distribution program as it deems appropriate and in the public interest. Both the Commission and the Public Staff may audit all aspects of the telecommunications relay service program, including the distribution programs, as they do with any public utility subject to the provisions of this Chapter. Equipment paid for with surcharge revenues, as allowed by the Commission, may be distributed only by the Department of Health and Human Services.
…."

SUBPART XII‑J. DHHS BLOCK GRANTS

REVISE DHHS BLOCK GRANTS
SECTION 12J.1.  Section 12I.1 of S.L. 2015‑241 reads as rewritten:
"DHHS BLOCK GRANTS
"SECTION 12I.1.(a)  Except as otherwise provided, appropriations from federal block grant funds are made for each year of the fiscal biennium ending June 30, 2017, according to the following schedule:

TEMPORARY ASSISTANCE FOR NEEDY		REVISED
FAMILIES (TANF) FUNDS	FY 2016‑2017	FY 2016‑2017
Local Program Expenditures

	Division of Social Services

	01. Work First Family Assistance	$57,167,454	$54,167,454

	02. Work First County Block Grants	78,073,437	80,093,566

	02A. Employment Services		3,600,000

	03. Work First Electing Counties	2,378,213	2,378,213

	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. Child Welfare Initiatives		1,400,000

Division of Child Development and Early Education

	07. Subsidized Child Care Program	37,419,801	37,419,801

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

	09. Pre‑K Swap Out	12,333,981	12,333,981

Division of Public Health

	10. Teen Pregnancy Prevention Initiatives	2,950,000	2,950,000

DHHS Administration

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

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

	13. Eligibility Systems – Operations and
	Maintenance	4,206,640	4,206,640

	14. NC FAST Implementation	1,865,799	1,865,799

Transfers to Other Block Grants

Division of Child Development and Early Education

	15. Transfer to the Child Care and
	Development Fund	71,773,001	76,032,919

Division of Social Services

	16. Transfer to Social Services Block
	Grant for Child Protective Services –
	Training	1,300,000	1,300,000

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

	18. Transfer to Social Services Block
	Grant for County Departments of
	Social Services for Children's Services	4,148,001	4,500,000

	19. Transfer to Social Services Block
	Grant – Foster Care Services	1,385,152	1,385,152

TOTAL TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES (TANF) FUNDS	$300,982,109	$309,614,155

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)
EMERGENCY CONTINGENCY FUNDS

Local Program Expenditures

Division of Child Development and Early Education

	01. Subsidized Child Care	28,600,000	28,600,000

	02. County Child Welfare Program Improvement
		Resources		603,580

	03. State Child Welfare Program Improvement
		Resources		400,000

TOTAL TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES (TANF) EMERGENCY
CONTINGENCY FUNDS	$28,600,000	$29,603,580

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)	$27,108,324	$27,108,324

	01A. EBCI Tribal Public Health and Human
	Services		244,740

	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

	08A. Child Protective Services – Child Welfare
	Training for Counties		737,067

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

	10. Child Advocacy Centers	375,000	375,000

	11. Guardianship	4,035,704	4,035,704

	12. Foster Care Services
	(Transfer From TANF)	1,385,152	1,385,152

Division of Central Management and Support

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

	14. NC FAST – Operations and
	Maintenance	939,315	939,315

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 and
	Early Education	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	$61,337,027	$62,420,093

LOW‑INCOME ENERGY ASSISTANCE BLOCK GRANT

Local Program Expenditures

Division of Social Services

	01. Low‑Income Energy Assistance
	Program (LIEAP)	$39,303,674	$37,156,492

	02. Crisis Intervention Program (CIP)	39,303,674	37,156,492

Local Administration

Division of Social Services

	03. County DSS Administration	6,454,961	6,102,324

DHHS Administration

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

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

	06. NC FAST Development	3,381,373	3,381,373

Transfers to Other State Agencies

Department of Environment and Natural
Resources (DENR)

	07. Weatherization Program	11,570,050	10,937,968

	08. Heating Air Repair and Replacement
	Program (HARRP)	6,156,147	5,819,833

	09. Local Residential Energy Efficiency Service
	Providers – Weatherization	475,046	449,094

	10. Local Residential Energy Efficiency Service
	Providers – HARRP	252,761	238,953

	11. DENR – Weatherization Administration	475,046	449,094

	12. DENR – HARRP Administration	252,760	238,952

Department of Administration

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

TOTAL LOW‑INCOME ENERGY
	ASSISTANCE BLOCK GRANT	$108,144,094	$102,449,177

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)	$152,370,856	$154,577,717

	02. Electronic Tracking System	401,492	1,601,834

	03. Transfer from TANF Block Grant
	for Child Care Subsidies	71,773,001	76,032,919

	04. Quality and Availability Initiatives
	(TEACH Program $3,800,000)	26,019,987	35,878,600

DHHS Administration

Division of Child Development and Early Education

	05. DCDEE Administrative Expenses	9,049,505	9,042,159

Division of Social Services

	06. Local Subsidized Child Care
	Services Support	15,930,279	15,930,279

	06A. Direct Deposit for Child Care
	Payments		969,610

	07. NC FAST Development	586,152	586,152

Division of Central Administration

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

	09. Central Regional Maintenance	202,000	202,000

	09A. DHHS Central Administration Indirect Cost		7,346

Division of Public Health

	10. Child Care Health Consultation Contracts	62,205	62,205

TOTAL CHILD CARE AND DEVELOPMENT
	FUND BLOCK GRANT	$277,170,477	$296,077,423

MENTAL HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

	01. Mental Health Services – Child	$3,619,833	$3,619,833

	02. Administration	200,000	200,000

	03. Mental Health Services – Adult/Child	11,755,152	11,755,152

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

	05. Mental Health Services – First
	Psychotic Symptom Treatment	643,491	1,430,851

TOTAL MENTAL HEALTH SERVICES
	BLOCK GRANT	$16,968,476	$16,904,761

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

Local Program Expenditures

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

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

	02. Substance Abuse Prevention	8,669,284	8,669,284

	03. Substance Abuse Services – Treatment for
	Children/Adults	29,519,883	30,178,039

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

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

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

	07. Crisis Solutions Initiatives – Innovative
	Technologies	41,000	41,000

	08. Crisis Solutions Initiatives – Veteran's Crisis	250,000	250,000

	09. Administration	454,000	454,000

Division of Public Health

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

TOTAL SUBSTANCE ABUSE PREVENTION
	AND TREATMENT BLOCK GRANT	$45,184,839	$45,842,995

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;
	Community‑Based
	Sickle Cell Centers $100,000)	$7,574,703	$7,674,703

	02. Women's Health
	(March of Dimes $350,000; Teen Pregnancy
	Prevention Initiatives $650,000;
	17P Project $52,000; Nurse‑Family
	Partnership $509,018; Carolina Pregnancy
	Care Fellowship $300,000)	6,520,148	6,920,148

	03. Oral Health	44,901	44,901

	04. Evidence‑Based Programs in Counties
	With Highest Infant Mortality Rates	1,575,000	1,575,000

DHHS Program Expenditures

Division of Public Health

	05. Children's Health Services	1,342,928	1,427,323

	06. Women's Health – Maternal Health	107,714	169,864

	07. State Center for Health Statistics	158,583	158,583

	08. Health Promotion – Injury and
	Violence Prevention	87,271	87,271

DHHS Administration

Division of Public Health

	09. Division of Public Health Administration	552,571	552,571

TOTAL MATERNAL AND CHILD
	HEALTH BLOCK GRANT	$17,963,819	$18,610,364

PREVENTIVE HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

	01. Physical Activity and Prevention	$2,642,322	$2,642,322

	02. Injury and Violence Prevention
	(Services to Rape Victims – Set‑Aside)	173,476	237,707

	03. Community‑Focused Eliminating Health
	Disparities Initiative Grants	0	0

DHHS Program Expenditures

Division of Public Health

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

	05. Oral Health Preventive Services	451,809	451,809

	06. Laboratory Services – Testing,
	Training, and Consultation	21,012	21,012

	07. Injury and Violence Prevention
	(Services to Rape Victims – Set‑Aside)	192,315	172,561

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

	09. Performance Improvement and
	Accountability	768,717	768,717

	10. State Center for Health Statistics	107,291	107,291

DHHS Administration

Division of Public Health

	11. Division of Public Health	172,820	172,820

	12. Division of Public Health –
	Physical Activity and Nutrition Branch	68,073	68,073

TOTAL PREVENTIVE HEALTH
SERVICES BLOCK GRANT	$4,943,288	$4,987,765

COMMUNITY SERVICES BLOCK GRANT

Local Program Expenditures

Office of Economic Opportunity

	01. Community Action Agencies	$24,047,065	$24,428,074

	02. Limited Purpose Agencies	1,335,948	1,190,448

DHHS Administration

	03. Office of Economic Opportunity	1,335,948	1,190,448

TOTAL COMMUNITY SERVICES
	BLOCK GRANT	$26,718,961	$23,808,970"

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 2014‑20164 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 Children's 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.

MENTAL HEALTH SERVICES BLOCK GRANT
SECTION 12J.1.(y)  The sum of six hundred forty-three thousand four hundred ninety-one dollars ($643,491) appropriated in this section in the Mental Health Services Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for each year of the 2015-2017 fiscal biennium is allocated for Mental Health Services  First Psychotic Symptom Treatment. The Division shall report on (i) the specific evidence-based treatment and services provided, (ii) the number of persons treated, and (iii) the measured outcomes or impact on the participants served. The Division shall report to the House of Representatives Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than December 31, 2016.

PART XIII. DEPARTMENT OF AGRICULTURE

AGWRAP CLARIFICATION
SECTION 13.1.  G.S. 139‑60(b) reads as rewritten:
"(b)	Program Administration. – The Agricultural Water Resources Assistance Program shall be implemented by the Soil and Water Conservation Commission through the soil and water conservation districts in the same manner as the Agriculture Cost Share Program for Nonpoint Source Pollution Control under Article 72 of Chapter 106 of the General Statutes. The Soil and Water Conservation Commission shall supervise and administer this Program as provided in this section and as provided in Article 72 of Chapter 106 of the General Statutes for the Agriculture Cost Share Program for Nonpoint Source Pollution Control. The Soil and Water Conservation Commission may use up to fifteen percent (15%) of these funds for the costs of the Division of Soil and Water Conservation and the costs of the Soil and Water Conservation Districts to provide engineering assistance, to provide technical assistance, and to administer the Agricultural Water Resources Assistance Program. At least once each calendar year, the Director of the Division of Soil and Water Conservation of the Department of Agriculture and Consumer Services and the Commissioner of Agriculture shall meet with stakeholders for the purpose of advising the Soil and Water Conservation Commission on the development and administration of the Program, including the development of annual goals for the Program."

PART XIV. DEPARTMENT OF NATURAL AND CULTURAL RESOURCES

ESTABLISH STATE PARKS FUND AS A SPECIAL REVENUE FUND
SECTION 14.1.  Article 2 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑135.57.  State Parks Fund.
(a)	Fund. – The State Parks Fund is created as a special revenue fund. The State Parks Fund shall be used for the following types of projects for the Divisions of Parks and Recreation and to match private funds raised for:
(1)	Operations.
(2)	Repair, renovation, expansion, maintenance, and construction.
(3)	The acquisition, maintenance, or replacement of equipment as required to maintain adequate service to the public.
(b)	Disposition of Fees. – All fee receipts shall be credited to the Division of Parks and Recreation's General Fund operating budget. At the end of each fiscal year, the Secretary may transfer the remaining balance of funds from the Division of Parks and Recreation's General Fund operating budget to the State Parks Fund.
(c)	Approval. – The Secretary may approve the use of the State Parks Fund for repair and renovation projects at the Parks and Recreation provided that:
(1)	The total project cost is less than three hundred thousand dollars ($300,000); and
(2)	The project meets the requirements of G.S. 143C‑4‑3(b).
(d)	Report. – The Department shall submit to the House and Senate appropriations committees with jurisdiction over natural and economic resources and the Fiscal Research Division by September 30 of each year a report on the State Parks Fund that shall include the source and amounts of all funds credited to the Fund and the purpose and amount of all expenditures from the Fund during the prior fiscal year."

QUEEN ANNE'S REVENGE CARRYFORWARD
SECTION 14.2.(a)  Funds appropriated in the 2015‑2017 fiscal biennium for the continued archaeological work for the Queen Anne's Revenge excavation project shall not revert but shall remain available until expended.
SECTION 14.2.(b)  Subsection (a) of this section becomes effective June 29, 2016.

PROMOTE NORTH CAROLINA HISTORICAL SITES
SECTION 14.3.  G.S. 136‑42.3 reads as rewritten:
"§ 136‑42.3.  Historical marker program.
The Department of Transportation may spend up to sixty thousand dollars ($60,000) a year to purchase historical markers prepared and delivered to it by the Department of Natural and Cultural Resources. The Department of Transportation shall erect the markers on sites selected by the Department of Natural and Cultural Resources. This expenditure is hereby declared to be a valid expenditure of State highway maintenance funds. No provision in this section shall be construed to prevent the expenditure of any federal highway funds that may be available for this purpose."

MODIFY NORTH CAROLINA ZOO SPECIAL FUND
SECTION 14.4.  G.S. 143B‑135.209(b) reads as rewritten:
"(b)	Disposition of Fees. – All receipts derived from the lease or rental of property or facilities, disposition of structures or products of the land, private donations, and admissions and fees collected shall be credited to the North Carolina Zoological Park's General Fund operating budget. At the end of each fiscal year, the Secretary may transfer from the North Carolina Zoological Park's General Fund operating budget to the North Carolina Zoo Fund an amount not to exceed one million five hundred thousand dollars ($1,500,000)."

MODIFY NORTH CAROLINA AQUARIUM SPECIAL FUND
SECTION 14.5.  G.S. 143B‑135.188(c) reads as rewritten:
"(c)	Disposition of Fees. – All receipts derived from the lease or rental of property or facilities, disposition of structures or products of the land, private donations, and admissions and fees collected shall be credited to the aquariums' General Fund operating budget. At the end of each fiscal year, the Secretary may transfer from the North Carolina aquariums' General Fund operating budget to the North Carolina Aquariums Fund an amount not to exceed the sum of the following:
(1)	One million five hundred thousand dollars ($1,500,000).
(2)	The amount needed to cover the expenses described by subdivision (2) of subsection (b) this section."

TECHNICAL CORRECTION TO G.S. 121‑25
SECTION 14.6.  G.S. 121‑25 reads as rewritten:
"(b)	All photographs, video recordings, or other documentary materials of a derelict vessel or shipwreck or its contents, relics, artifacts, or historic materials in the custody of any agency of North Carolina government or its subdivisions shall be subject to G.S. 132‑1, et seq."

GRASSROOTS SCIENCE PROGRAM/COMPETITIVE GRANT PROGRAM
SECTION 14.7.(a)  Effective July 1, 2016, the Grassroots Science Program is renamed the North Carolina Science Museum Grant Program. The Museum of Natural Sciences may use no more than ten percent (10%) of the North Carolina Science Museum Grant funds to cover the costs of administering the grant program.
SECTION 14.7.(b)  G.S. 143B‑135.227 reads as rewritten:
"(a)	The North Carolina State Museum of Natural Sciences (hereinafter "Museum of Natural Sciences") shall administer the North Carolina Science Museums Grant Program as a competitive grant program. Any museum in the State may apply for a grant under the program, including a museum that has received a grant‑in‑aid as a grassroots science museum or through the North Carolina Science Museums Grant Program in prior fiscal years, but grant funds shall be awarded only if the museum meets the criteria established in subsection (d) of this section. No museum shall be guaranteed a grant under the competitive grant program.
(b)	For the 2016‑2017 fiscal year, the Museum of Natural Sciences shall reserve seven hundred fifty thousand dollars ($750,000) for the purpose of awarding grants to museums located in development tier one counties and six hundred thousand dollars ($600,000) for museums located in development tier two counties. The development tier designation of a county shall be determined as provided in G.S. 143B‑437.08. If, after the initial awarding of grants to all museum applicants who meet the eligibility criteria provided for in subsection (d) of this section, there are funds remaining in any development tier category, the Museum of Natural Sciences may reallocate those funds to another development tier category. The maximum amount of each grant awarded in the 2016‑2017 fiscal year shall be (i) seventy‑five thousand dollars ($75,000) for a museum in a development tier one county; (ii) sixty thousand dollars ($60,000) for a museum in a development tier two county; and (iii) fifty thousand dollars ($50,000) for a museum in a development tier three county. If, after the awarding of grants to all museum applicants who meet the eligibility criteria provided for in subsection (d) of this section, there are funds still remaining, the remaining balance of funds shall be distributed equally to all museum applicant awardees regardless of award maximums.
(c)	Beginning July 1, 2017, it is the intent of the Governor and the General Assembly that the Museum of Natural Sciences shall award grants under this program for a two‑year period. For each two‑year grant cycle, the Museum of Natural Sciences shall reserve the amounts for development tier one and tier two counties and shall award the maximum grant amounts for each year of the grant cycle as provided in subsection (b) of this section. All other provisions of subsections (b), (d), and (e) of this section shall apply to the two‑year grants.
(d)	To be eligible to receive a grant under the competitive grant program, a museum shall demonstrate:
(1)	That it is a science center or museum or a children's museum that is physically located in the State.
(2)	That it has been open, operating, and exhibiting science or science, technology, engineering, and math (STEM) education objects to the general public at least 120 days of each year for the past two or more years.
(3)	That it is a nonprofit organization that is exempt from federal income taxes pursuant to section 501(c)(3) of the Internal Revenue Code or is local government‑owned.
(4)	That it has on its staff at least one full‑time professional person.
(5)	That its governing body has adopted a mission statement that includes language that shows the museum has a concentration on science or STEM education.
(e)	The Museum of Natural Sciences shall, in awarding grants under this section, give priority to museums that:
(1)	When compared to other museum applicants:
a.	Are located in counties that are more economically distressed according to the annual rankings prepared by the Department of Commerce pursuant to G.S. 143B‑437.08(c).
b.	Generate a larger portion of their operating funds from non‑State revenue.
c.	Have a higher attendance‑to‑population ratio.
(2)	Partner with other museums in the State to share exhibits, programs, or other activities.
(3)	Are not located in close proximity to other science or STEM education museums."

SALE OF MERCHANDISE AND SERVICES AT DNCR LOCATIONS
SECTION 14.8.(a)  G.S. 66‑58 reads as rewritten:
"§ 66‑58.  Sale of merchandise or services by governmental units.
…
(b)	The provisions of subsection (a) of this section shall not apply to:
…
(9b)	The Department of Natural and Cultural Resources, except that the Department shall not construct, maintain, operate, or lease a hotel or tourist inn in any site or facility over which it has jurisdiction, other than those in the Division of Parks and Recreation and the North Carolina Zoological Park.
…
(c)	The provisions of subsection (a) shall not prohibit:
…
(9b)	The Department of Natural and Cultural Resources for the sale of food pursuant to G.S. 111‑47.2 and the sale of books, crafts, gifts, and other tourism‑related items and revenues from public and private special events, activities, and programming administered by the Department, provided that the resulting profits are used to support the Department's operations and provided further that the Department shall not construct, maintain, operate, or lease a hotel or tourist inn in any site or facility over which it has jurisdiction, other than those in the Division of Parks and Recreation and the North Carolina Zoological Park.
…."
SECTION 14.8.(b)  G.S. 111‑47.1 is repealed.
SECTION 14.8.(c)  G.S. 111‑47.2 reads as rewritten:
"§ 111‑47.2.  Food service at locations operated by the Department of Natural and Cultural Resources.
(a)	Notwithstanding this Article, the North Carolina Department of Natural and Cultural Resources may operate or contract for the operation of food or vending services at any location operated by the Department. Notwithstanding G.S. 111‑43, the net proceeds of revenue generated by food and vending services by the Department or a vendor with whom the Department has contracted shall be credited to the appropriate fund of the Department where the funds were generated.
(b)	This section shall not be construed to alter any contract for food or vending services at any location in the Department that is in force on July 1, 2016."

PUBLIC LIBRARIAN CERTIFICATION COMMISSION MEMBERSHIP
SECTION 14.9.  G.S. 143B‑68 reads as rewritten:
"§ 143B‑68.  Public Librarian Certification Commission–members; selection; quorum; compensation.
The Public Librarian Certification Commission of the Department of Natural and Cultural Resources shall consist of five members as follows: (i) the chairman of the public libraries section of the North Carolina Library Association, (ii) two individuals named by the Governor upon the nomination of the North Carolina Library Association, (iii) the dean of a State or regionally accredited graduate school of librarianship in North Carolina appointed by the Governor, and (iv) one member at large appointed by the Governor.
The members shall serve four‑year terms or while holding the appropriate chairmanships. Any appointment to fill a vacancy created by the resignation, dismissal, death or disability of a member shall be for the balance of the unexpired term.
The Governor shall have the power to remove any member of the Commission from office for misfeasance, malfeasance, and nonfeasance according to the provisions of G.S. 143B‑13 of the Executive Organization Act of 1973.
The members of the Commission shall receive per diem, and necessary travel expenses in accordance with the provisions of G.S. 138‑5.
A majority of the Commission shall constitute a quorum for the transaction of business.
All clerical and other services required by the Commission shall be supplied by the Secretary of the Department through the regular staff of the Department."

CLARIFY ZOO RULE‑MAKING AUTHORITY
SECTION 14.10.  G.S. 143B‑135.205 reads as rewritten:
"§ 143B‑135.205.  North Carolina Zoological Park Council–creation; powers and duties.
(a)	There is hereby created the North Carolina Zoological Park Council of the Department of Natural and Cultural Resources. The North Carolina Zoological Park Council shall have the following functions and duties:
(1)	To advise the Secretary on the basic concepts of and for the Zoological Park, approve conceptual plans for the Zoological Park and its buildings.
(2)	To advise on the construction, property, and operations of the North Carolina Zoological Park. "Property" shall be construed to include animals, lands, buildings, vehicles, equipment, markers, posted signs and other notices, trees, plants, shrubs, artificial constructions, and all other real and personal property owned, leased, controlled, or cooperatively managed by or on behalf of the North Carolina Zoological Park.
(3)	To establish and set admission fees with the approval of the Secretary of Natural and Cultural Resources as provided in G.S. 143B‑135.213.
(4)	To recommend programs to promote public appreciation of the North Carolina Zoological Park.
(5)	To disseminate information on animals and the park as deemed necessary.
(6)	To develop effective public support of the North Carolina Zoological Park through whatever means are desirable and necessary.
(7)	To solicit financial and material support from various private sources within and without the State of North Carolina.
(8)	To advise the Secretary of Natural and Cultural Resources upon any matter the Secretary may refer to it.
(b)	The Secretary may adopt any rules and procedures necessary to implement this section."

ROANOKE ISLAND COMMISSION MEETINGS
SECTION 14.11.  G.S. 143B‑131.6(g) reads as rewritten:
"(g)	The chair shall convene the Commission. Meetings shall be held as often as necessary, but not less than two times a year."

TECHNICAL CORRECTIONS TO RECODIFIED CITATIONS
SECTION 14.12.  The Revisor of Statutes may correct the recodified citations listed in Sections 14.30(e) through (k2) of S.L. 2015‑241 by renumbering the citations to ensure consecutive numbering thereof.

PART XV. DEPARTMENT OF COMMERCE

INDUSTRIAL COMMISSION STUDY AND IMPLEMENTATION OF DRUG FORMULARY
SECTION 15.1.(a)  The Industrial Commission shall continue to study the implementation of a drug formulary in workers' compensation claims as directed in Section 15.13A(a) of S.L. 2015‑241. This continued study shall consider all insured and self‑insured claims within the Industrial Commission's jurisdiction. The Industrial Commission shall not adopt a drug formulary prior to July 1, 2018.
SECTION 15.1.(b)  The funds appropriated by this act to the Industrial Commission for the purposes of conducting this study and implementing a drug formulary may be used for retaining outside assistance with data gathering and data analysis, obtaining expert advice regarding the implementation of a drug formulary, and obtaining any other assistance and resources necessary for study and implementation of a drug formulary. These funds shall not revert at the end of the 2016‑2017 fiscal year but shall remain available until expended.

USE OF DEOBLIGATED COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS AND SURPLUS FEDERAL ADMINISTRATIVE FUNDS
SECTION 15.2.(a)  Section 15.6(b) of S.L. 2015‑241 reads as rewritten:
"SECTION 15.6.(b)  To allow the Department of Commerce and the Department of Environment and Natural Resources to quickly deploy deobligated CDBG funds and surplus federal administrative funds as they are identified throughout each program year, the following shall apply to the use of deobligated CDBG funds and surplus federal administrative funds, unless otherwise expressly provided by law:
(1)	All surplus federal administrative funds shall be divided equally between the Department of Commerce and the Department of Environment and Natural Resources and shall be used as provided in subdivisions (3) and (4) of this subsection.
(2)	In the 2015‑2017 fiscal biennium, the Department of Commerce may use the sum of nine million five hundred ninety thousand six hundred forty‑eight dollars ($9,590,648) in deobligated CDBG funds as follows:
a.	Four million six hundred fifty eight thousand four hundred ninety seven dollars ($4,658,497) for:
1.	Providing public services and public facilities. The category of public services includes providing substance abuse services and employment services, including job training, to homeless and at risk veterans in the State.
2.	If House Bill 108, 2015 Regular Session, becomes law, providing up to one million dollars ($1,000,000) in the 2016 2017 fiscal year to be used to fund a loan fund for site, infrastructure, and building development. Program income generated from awards made from the loan fund shall be captured in the existing CDBG revolving loan fund.
b.	Five hundred thousand dollars ($500,000) for existing CDBG programs that encounter cost overruns.
c.	Up to seven hundred fifty thousand dollars ($750,000) for providing training and guidance to local governments relative to the CDBG program, its management, and administration requirements.
d.	Up to three million six hundred eighty‑two thousand one hundred fifty‑one dollars ($3,682,151) for activities related to an economic development benefit regarding a broadband initiative. Broadband infrastructure assisted with grant funds under this provision may be privately owned to the extent allowed by federal law, regulation, and policy.
(3)	All deobligated CDBG funds that arise in a category that the Department of Commerce is responsible for administering after the provisions of subdivision (2) of this subsection have been met, and any surplus federal administrative funds, as provided for in subdivision (1) of this subsection, may be used by the Department for all of the following:
a.	To issue grants in the CDBG economic development program category.
b.	For providing training and guidance to local governments relative to the CDBG program, its management, and administrative requirements.
c.	For any other purpose consistent with the Department's administration of the CDBG program if an equal amount of State matching funds is available.
(4)	All deobligated CDBG funds that arise in a category that the Department of Environment and Natural Resources is responsible for administering and any surplus federal administrative funds, as provided for in subdivision (1) of this subsection, may be used by the Department for all of the following:
a.	To issue grants in the CDBG infrastructure program category.
b.	For any other purpose consistent with the Department's administration of the CDBG program if an equal amount of State matching funds is available."
SECTION 15.2.(b)  Section 15.5(g) of S.L. 2015‑241 reads as rewritten:
"SECTION 15.5.(g)  For purposes of this section, eligible activities under the category of Infrastructure in subsection (a) of this section .shall be defined as provided in the HUD State Administered Community Development Block Grant definition of the term "infrastructure.""

PART XVI. DEPARTMENT OF ENVIRONMENTAL QUALITY

CULTCH MATERIAL PURCHASING
SECTION 16.1.  For the purpose of shellfish rehabilitation projects, the Division of Marine Fisheries of the Department of Environmental Quality shall be permitted to carry forward from one fiscal year to the next, up to five hundred thousand dollars ($500,000) annually of the State‑appropriated Shellfish Rehabilitation budget to purchase material and contract with contractors.

MARINE PATROL/SHELLFISH SANITATION EQUIPMENT SALES
SECTION 16.2.  The Division of Marine Fisheries of the Department of Environmental Quality shall sell the following aircraft and water vessel from its fleet as expeditiously as possible in order to modernize the fleet:
(1)	1999 48' Sea Ark – patrol vessel "Roanoke."
(2)	1995 Husky airplane.
(3)	1998 25' Parker boat hull with trailer.
(4)	1993 18' Parker boat with engine and trailer.
Proceeds from these sales shall be credited to a nonreverting reserve within Marine Fisheries to be used for future equipment acquisitions to (i) support the enforcement efforts of the Marine Patrol and (ii) to support the Shellfish Sanitation and Recreational Water Quality Program.

NONREVERSION OF WATER TREATMENT FACILITY OPERATOR FEES
SECTION 16.3. G.S. 90A‑27 reads as rewritten:
"§ 90A‑27.  Application fee.
(a)	The Board may establish a schedule of fees for the issuance or renewal of a certificate to cover the costs of administering the certification programs. The fee for issuing or renewing a certificate may not exceed fifty dollars ($50.00). The Board may impose a penalty not to exceed thirty dollars ($30.00) for the late renewal of a certificate.
(b)	The Water Treatment Facility Operator 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."

NON‑REVERSION OF LABORATORY CERTIFICATION FEES
SECTION 16.4.  G.S. 143‑215.3A(a) reads as rewritten:
"(a)	The Water and Air Quality Account is established as an account within the Department. Revenue in the Account shall be applied to the costs of administering the programs for which the fees were collected. Revenue credited to the Account pursuant to G.S. 105‑449.43, G.S. 105‑449.125, and G.S. 105‑449.136 shall be used to administer the air quality program. Any other funds credited to the Account that are not expended at the end of each fiscal year shall not revert. Except for the following fees, all application fees and permit administration fees collected by the State for permits issued under Articles 21, 21A, 21B, and 38 of this Chapter shall be credited to the Account:
(1)	Fees collected under Part 2 of Article 21A and credited to the Oil or Other Hazardous Substances Pollution Protection Fund.
(2)	Fees credited to the Title V Account.
(3)	Repealed by Session Laws 2005‑454, s. 7, effective January 1, 2006.
(4)	Fees collected under G.S. 143‑215.28A.
(5)	Fees collected under G.S. 143‑215.94C shall be credited to the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund.
(6)	Fees collected under G.S. 143‑215.3(a)(10)."

NONREVERSION OF PUBLIC WATER SYSTEM OPERATING PERMIT FEES
SECTION 16.5.  G.S. 130A‑328 is amended by adding two new subsections to read:
"(f)	The Community Water System Permit Fees Account is established as a nonreverting account within the Department. Fees collected under subsection (b) of this section shall be credited to the account and applied to the costs of administering this Article.
(g)	The Public Water System Plan Review Fee is established as a nonreverting account within the Department. Fees collected under subsection (c) of this section shall be credited to the account and applied to the costs of administering this Article."

ELIMINATE TRANSFER TO THE DEPARTMENT OF AGRICULTURE FOR UST
SECTION 16.6.  Section 15(c) of S.L. 1995‑377 is repealed.

LIMITED AUTHORIZATION OF COMMERCIAL FUND EXPENDITURES TO COMPLETE RISK‑BASED MANAGEMENT ACTIONS
SECTION 16.7.  G.S. 143‑215.94E(e5) reads as rewritten:
"(e5)	(1)	As used in this subsection:
…
(10)	Each fiscal year, the Department may preapprove and authorize tasks, the cost of which is to be paid or reimbursed from the Commercial Fund and the sum total of which shall not exceed five hundred thousand dollars ($500,000), that have not been authorized pursuant to subdivisions (5) and (6) of this subsection for the purpose of completing risk‑based management actions leading to no further action or closure. A claim for payment or reimbursement of costs for tasks that are authorized under this subdivision shall be paid or reimbursed on the same basis as tasks that are authorized under subdivisions (5) and (6) of this subsection."

SHORELINE RIGHT‑OF‑WAY ENTRY
SECTION 16.8.  G.S. 130A‑17 reads as rewritten:
"§ 130A‑17.  Right of entry.
(a)	The Secretary and a local health director shall each have the delegable right of entry upon the premises of any place where entry is necessary to enforce the provisions of this Chapter or the rules adopted by the Commission or a local board of health. If consent for entry is not obtained, an administrative search and inspection warrant shall be obtained pursuant to G.S. 15‑27.2. However, if an imminent hazard exists, no warrant is required for entry upon the premises.
(b)	The Secretary of Environmental Quality and a local health director shall each have the same rights enumerated in subsection (a) of this section to enforce the provisions of Articles 9 and 10 of this Chapter and G.S. 113‑221.2."

FRANCHISE WATER COLUMN TERM
SECTION 16.9.  G.S. 113‑202.2(d) reads as rewritten:
"(d)	Water column leases to perpetual franchises shall be issued for a period of 10 years and may be renewed pursuant to subsection (g) of this section. The rental for an initial water column lease issued under this section is the same as the rental set in G.S. 113‑202.1 for an initial water column amendment issued under that section, and the rental for a renewed water column lease issued under this section is the same as the rental set in G.S. 113‑202.1 for a renewed water column amendment issued under that section."

OCEAN FISHING PIER BLANKET COASTAL RECREATIONAL FISHING LICENSE
SECTION 16.10.  G.S. 113‑174.1(f) reads as rewritten:
"(f)	Cancellation of Fraudulent License; Penalties.–The Wildlife Resources Commission may cancel a license issued by the Commission under this Article or Article 25A of this Chapter if the license was issued on the basis of false information supplied by the license applicant. The Division may cancel a For Hire Blanket License issued under § 113‑174.3 if the license was issued on the basis of false information supplied by the license applicant."

CONFORMING CHANGES/COAL ASH
SECTION 16.11.(a)  G.S. 130A‑309.202 is repealed.
SECTION 16.11.(b)  G.S. 62‑302.1 reads as rewritten:
"§ 62‑302.1.  Regulatory fee for combustion residuals surface impoundments.
(a)	Fee Imposed. – Each public utility with a coal combustion residuals surface impoundment shall pay a regulatory fee for the purpose of defraying the costs of oversight of coal combustion residuals. The fee is in addition to the fee imposed under G.S. 62‑302. The fees collected under this section shall only be used to pay the expenses of the Department of Environmental Quality in providing oversight of coal combustion residuals.
(b)	Rate. – The combustion residuals surface impoundment fee shall be three‑hundredths of one percent (0.03%) of the North Carolina jurisdictional revenues of each public utility with a coal combustion residuals surface impoundment. For the purposes of this section, the term "North Carolina jurisdictional revenues" has the same meaning as in G.S. 62‑302.
(c)	When Due. – The fee shall be paid in quarterly installments. The fee is payable to the Department of Environmental Quality on or before the 15th of the second month following the end of each quarter. Each public utility subject to this fee shall, on or before the date the fee is due for each quarter, prepare and render a report on a form prescribed by the Department of Environmental Quality. The report shall state the public utility's total North Carolina jurisdictional revenues for the preceding quarter and shall be accompanied by any supporting documentation that the Department of Environmental Quality may by rule require. Receipts shall be reported on an accrual basis.
(d)	Use of Proceeds. – A special fund in the Office of State Treasurer and the Department of Environmental Quality is created. The fees collected pursuant to this section and all other funds received by the Department of Environmental Quality shall be deposited in the Coal Combustion Residuals Management 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. Subject to appropriation by the General Assembly, the moneys in the Fund shall be used by the Department of Environmental Quality. The Department of Environmental Quality shall be subject to the provisions of the State Budget Act, except that no unexpended surplus of the Coal Combustion Residuals Management Fund shall revert to the General Fund. All funds credited to the Fund shall be used only to pay the expenses of the Department of Environmental Quality in providing oversight of coal combustion residuals.
(e)	Recovery of Fee. – The North Carolina Utilities Commission shall not allow an electric public utility to recover this fee from the retail electric customers of the State."
SECTION 16.11.(c)  G.S. 130A‑309.201 reads as rewritten:
"§ 130A‑309.201.  Definitions.
Unless a different meaning is required by the context, the definitions of G.S. 130A‑290 and the following definitions apply throughout this Part:
…
(7)	"Department" means the Department of Environmental Quality.
…."
SECTION 16.11.(d)  G.S. 130A‑309.204(a) reads as rewritten:
"(a)	The Department shall submit quarterly written reports to the Environmental Review Commission and the Department of Environmental Quality on its operations, activities, programs, and progress with respect to its obligations under this Part concerning all coal combustion residuals surface impoundments. At a minimum, the report shall include information concerning the status of assessment, corrective action, prioritization, and closure for each coal combustion residuals surface impoundment and information on costs connected therewith. The report shall include an executive summary of each annual Groundwater Protection and Restoration Report submitted to the Department by the operator of any coal combustion residuals surface impoundments pursuant to G.S. 130A‑309.211(d) and a summary of all groundwater sampling, protection, and restoration activities related to the impoundment for the preceding year. The report shall also include an executive summary of each annual Surface Water Protection and Restoration Report submitted to the Department by the operator of any coal combustion residuals surface impoundments pursuant to G.S. 130A‑309.212(e) and a summary of all surface water sampling, protection, and restoration activities related to the impoundment for the preceding year, including the status of the identification, assessment, and correction of unpermitted discharges from coal combustion residuals surface impoundments to the surface waters of the State. The Department shall supplement the written reports required by this subsection with additional written and oral reports as may be requested by the Environmental Review Commission. The Department shall submit the written reports required by this subsection whether or not the General Assembly is in session at the time the report is due."
SECTION 16.11.(e)  G.S. 130A‑309.211(d) reads as rewritten:
"(d)	Reporting. – In addition to any other reporting required by the Department, the owner of a coal combustion residuals surface impoundment shall submit an annual Groundwater Protection and Restoration Report to the Department no later than January 31 of each year. The Report shall include a summary of all groundwater monitoring, protection, and restoration activities related to the impoundment for the preceding year, including the status of the Groundwater Assessment Plan, the Groundwater Assessment Report, the Groundwater Corrective Action Plan, the Drinking Water Supply Well Survey, and the replacement of any contaminated drinking water supply wells. The owner of a coal combustion residuals surface impoundment shall also submit all information required to be submitted to the Department pursuant to this section to the Department of Environmental Quality."
SECTION 16.11.(f)  G.S. 130A‑309.212(e) reads as rewritten:
"(e)	Reporting. – In addition to any other reporting required by the Department, the owner of a coal combustion residuals surface impoundment shall submit an annual Surface Water Protection and Restoration Report to the Department no later than January 31 of each year. The Report shall include a summary of all surface water sampling, protection, and restoration activities related to the impoundment for the preceding year, including the status of the identification, assessment, and correction of unpermitted discharges from coal combustion residuals surface impoundments to the surface waters of the State. The owner of a coal combustion residuals surface impoundment shall also submit all information required to be submitted to the Department pursuant to this section to the Department of Environmental Quality."
SECTION 16.11.(g)  G.S. 130A‑309.213(c) reads as rewritten:
"(c)	Parties aggrieved by a final decision of the Department pursuant to this subsection may appeal the decision as provided under Article 3 of Chapter 150B of the General Statutes."
SECTION 16.11.(h)  G.S. 130A‑309.215 reads as rewritten:
"§ 130A‑309.215.  Variance authority.
(a)	In recognition of the complexity and magnitude of the issues surrounding the management of coal combustion residuals and coal combustion residuals surface impoundments, the General Assembly authorizes the Department to grant a variance to extend any deadline for closure of an impoundment established under G.S. 130A‑309.214 in conformance with the requirements of this section. To request such a variance the owner of an impoundment shall, no earlier than two years prior to the applicable deadline, submit an application in a form acceptable to the Department which shall include, at a minimum, all of the following information: identification of the site, applicable requirements, and applicable deadlines for which a variance is sought, and the site‑specific circumstances that support the need for the variance. The owner of the impoundment shall also provide detailed information that demonstrates (i) the owner has substantially complied with all other requirements and deadlines established by this Part; (ii) the owner has made good faith efforts to comply with the applicable deadline for closure of the impoundment; and (iii) that compliance with the deadline cannot be achieved by application of best available technology found to be economically reasonable at the time and would produce serious hardship without equal or greater benefits to the public. As soon as practicable, but no later than 60 days from receipt of an application, the Secretary shall evaluate the information submitted in conjunction with the application, and any other information the Secretary deems relevant, to determine whether the information supports issuance of a variance. After such evaluation, if the Secretary finds that the information supports issuance of a variance from the deadline, the Secretary shall issue a proposed variance. Within 10 days after a proposed variance has been issued, the Secretary shall issue a written declaration, including findings of fact, documenting the proposed variance. The Department shall provide for public participation on the proposed variance in the manner provided by G.S. 130A‑309.214(b) and shall take the public input received through the process into account in its decision concerning the proposed variance. The Department pursuant to this subsection may appeal the decision as provided under Article 3 of Chapter 150B of the General Statutes.
…."

PART XVII. DEPARTMENT OF PUBLIC SAFETY

SUBPART XVII‑A. GENERAL PROVISIONS

AUTHORIZE THE NC GEODETIC SURVEY TO RATIFY RESULTS OF REQUESTED COUNTY BOUNDARY RESURVEYS
SECTION 17A.1.  G.S. 153A‑18 reads as rewritten:
"§ 153A‑18.  Uncertain or disputed boundary.
(a)	If two or more counties are uncertain as to the exact location of the boundary between them, the North Carolina Geodetic Survey (NCGS) on a cooperative basis shall assist counties in defining and monumenting the location of the uncertain or disputed boundary as established in accordance with law. Upon receiving written request from all counties adjacent to the uncertain or disputed boundary, they may cause the boundary to be surveyed, marked, and mapped. The counties may appoint special commissioners to supervise the surveying, marking, and mapping. A commissioner so appointed or a person surveying or marking the boundary may enter upon private property to view and survey the boundary or to erect boundary markers. Upon ratification of the survey by the board of commissioners of each county, a map showing the surveyed boundary shall be recorded in the office of the register of deeds of each county in the manner provided by law for the recordation of maps or plats and in the Secretary of State's office. The map shall contain a reference to the date of each resolution of ratification and to the page in the minutes of each board of commissioners where the resolution may be found. Upon recordation, the map is conclusive as to the location of the boundary. Upon reestablishing all or some portion of a county boundary, and if after NCGS submits the results of the survey to the requesting counties and the requesting counties have not ratified the reestablished boundary within one year of receiving the (map) survey plat denoting the location of the reestablished boundary, the survey plat will become conclusive as to the location of the boundary and will be recorded in the Register of Deeds in each affected county and in the Secretary of State's office.
….
(c)	Two or more counties may establish the boundary between them pursuant to subsection (a), above, those boundaries defined by natural monuments such as rivers, streams, and ridgeline the use of base maps prepared from orthophotography may be used if said natural monuments are visible, which base maps show the monuments of the United States Geological Survey and North Carolina State Plane Coordinate System established pursuant to Chapter 102 of the General Statutes. The Orthophotograpy shall be prepared in compliance with the States' adopted orthophotography standard. Upon ratification of the location of the boundary determined from orthophotography by the board of commissioners of each county, the map showing the boundary and the monuments of the United States Geological Survey and North Carolina State Plane Coordinate System shall be recorded in the Office of the Register of Deeds of each county and in the Secretary of State's office. The map shall contain a reference to the date of each resolution of ratification and to the page in the minutes of each board of commissioners where the resolution may be found. Upon recordation, the map is conclusive as to the location of the boundary.
(d)	As used in this section, an "affected party" means the governing body of a county that the reestablished boundary denotes the extent of their jurisdiction."

ENHANCE SCHOOL SAFETY
SECTION 17B.1.(a)  G.S. 115C‑47(40) reads as rewritten:
"(40)	Adopt School Risk Management Plans. – Each local school administrative unit shall ensure that the school under its control shall construct a School Risk Management Plan (SRMP) relating to hazardous incidents including school violence. In constructing and maintaining these plans, local school administrative units shall consult with its local board of education, local law enforcement, and emergency management. Schools shall construct SRMPs utilizing the School Risk and Response Management System (SRRMS) established pursuant to G.S. 115C‑105.49A. These plans are not 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 17B.1.(b)  G.S. 115C‑105.49 reads as rewritten:
"§ 115C‑105.49.  School safety exercises.
(a)	At least once annually, each local school administrative unit shall conduct a coordinated school system‑wide table top exercise for the purpose of enabling schools to (i) view the curriculum and video provided statewide by the NC Center for Safer Schools entitled Critical Incident Response for School Faculty and Staff, (ii) discuss simulated emergency situations in a low‑stress environment, (iii) clarify their roles and responsibilities and the overall logistics of dealing with an emergency, and (iv) identify areas in which the SRMP needs to be modified. The table top shall test documented procedures associated with, but not limited to, a school lockdown due to an intruder on school grounds. During the table top, each school system is encouraged to test procedures associated with other hazards included in its SRMP. Participants of the table top should include local school unit administrators, school principals, and/or their designees. Schools are strongly encouraged to include local law enforcement and emergency management agencies in their tabletop exercises. Schools may utilize digital conferencing technology to alleviate the need for travel by participants.
(b)	At least once annually, each local school administrative unit shall ensure that each school under its control shall conduct a drill on a lockdown due to an intruder on school grounds. The purpose of this drill is to apply responses and practices learned from Critical Incident Response for School Faculty and Staff Training that is supported and made available through the NC Center for Safer Schools.
(c)	For the purposes of this section, a table top is a school‑wide simulated emergency for purposes of emergency planning and coordination.
(d)	For the purposes of this section, a drill is a school‑specific practice exercise in which simulated scenarios related to emergency planning are conducted.
(e)	The Department of Public Safety, Division of Emergency Management, and the Center for Safer Schools shall provide guidance and recommendations to local school administrative units on the types of multiple hazards to plan and respond to, including intruders on school grounds."
SECTION 17B.1.(c)  G.S. 115C‑105.52 reads as rewritten:
"§ 115C‑105.52.  School crisis kits.
The Department of Public Safety and the North Carolina Center for Safer Schools, in consultation with the Department of Public Instruction, shall suggest that schools adopt policies on the placement of school crisis kits in schools and on the contents of those kits. The kits should include, at a minimum, basic first‑aid supplies, updated class lists or rosters, emergency evacuation plans, and any other items that are recommended by the North Carolina Center for Safer Schools in the Critical Incident Response for School Faculty and Staff Training Manual.
The principal of each school, in coordination with the law enforcement agencies that are part of the local board of education's School Risk Management Plan, may place one or more crisis kits at appropriate locations in the school."
SECTION 17B.1.(d)  G.S. 115C‑105.51 reads as rewritten:
"§ 115C‑105.51.  Anonymous tip lines and monitoring and response applications.
(a)	Each local school administrative unit shall operate an anonymous tip line, in coordination with local law enforcement and social services agencies, to receive anonymous information on internal or external risks to the school population, school buildings, and school‑related activities. The Department of Public Safety, in consultation with the Department of Public Instruction, shall develop standards and guidelines for the development, operation, and staffing of tip lines.
(b)	The Department of Public Safety, the Center for Safer Schools, and the Division of Emergency Management, in collaboration with the Department of Public Instruction, shall implement and maintain an anonymous safety tip line application for purposes of receiving anonymous student information on internal or external risks to the school population, school buildings, and school‑related activities.
…."
SECTION 17B.1.(e)  Section 8.26(n) of S.L. 2015‑295 reads as rewritten:
"SECTION 8.26.(n)  By December 1, 2017, the Department of Public Safety shall implement an anonymous safety tip line application and a statewide panic alarm system as required under G.S. 115C‑105.51, as amended by subsection (d) of this section."

SUBPART XVII‑C. DIVISION OF ADULT CORRECTION 

INMATE MEDICAL OUTSOURCING CLAIMS PROCESSING
SECTION 17C.1.  The Department of Public Safety may use funds available, including any savings generated from reorganization and restructuring through the elimination of positions in its Controller's Office, to outsource the processing of inmate medical claims.

PART XVIII. JUDICIAL DEPARTMENT

SUBPART XVIII‑A. OFFICE OF INDIGENT DEFENSE SERVICES

OFFICE OF INDIGENT DEFENSE SERVICES POSITIONS
SECTION 18A.1.  The Office of Indigent Defense Services, may use appropriated funds during Fiscal Year 2016‑2017 for the expansion of existing offices currently providing legal services to the indigent population under the oversight of the Office of Indigent Defense Services, considering cost‑effectiveness and other needs. Funds may be used for the creation of new positions or offices within existing public defender programs, including satellite offices of the Office of Capital Defender, for the establishment of regional public defender programs, or for positions related to the contract system of providing legal services. Notwithstanding the defender districts established by G.S. 7A‑498.7, the Office of Indigent Defense Services may use a portion of these funds to create positions within existing public defender programs to handle cases in adjacent counties or districts. These funds may be used for the salaries, benefits, equipment, and related expenses for up to eight attorney positions and 4 nonattorney positions during the fiscal year with the total annualized cost of these positions no more than one million two hundred fifty thousand dollars ($1;250,000). Prior to using funds for this purpose, the Office of Indigent Defense Services shall report to the chairs of the House of Representatives and the Senate Appropriations Subcommittees on Justice and Public Safety on the proposed expansion.

PART XIX. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS

TRANSFER POSITIONS TO DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
SECTION 19.1.  Within the funds appropriated for the Department of Public Safety, four positions shall be transferred to support the operations of the Department of Military and Veterans Affairs. Three positions with salary and benefits totaling two hundred ninety‑nine thousand two hundred forty‑four dollars ($299,244) shall be transferred to the Department of Military and Veterans Affairs. One Budget Manager position with salary and benefits of ninety‑one thousand five hundred fifty dollars ($91,550) shall be transferred to the Department of Administration for support provided to the Department of Military and Veterans Affairs. This transfer shall be reflected in the 2017‑2019 Base Budget as a permanent transfer of appropriation.

PART XX. OFFICE OF STATE BUDGET AND MANAGEMENT

LITIGATION FUNDING
SECTION 20.1.  The sum of two million dollars ($2,000,000) shall be transferred from Budget Code 21000 to Budget Code 19068. With the approval of the Director of the Budget, the Office of State Budget and Management may distribute these funds to State agencies to hire private counsel and for other litigation expenses for pending litigation.

OSBM/DOA SCHOOL FACILITIES NEEDS STUDY
SECTION 20.2.(a)  Of the funds appropriated from the Education Lottery Fund for 2016‑2017, the sum of one million dollars ($1,000,000) shall be provided to the Department of Administration to contract with an outside entity (i) to perform an independent assessment of school construction needs in local school administrative units in the 50 counties determined under the low‑wealth school funding formula to have the lowest ability to pay for school facilities and (ii) to determine which of those units have the highest facility needs in relation to their capacity to raise revenue to meet those needs.
SECTION 20.2.(b)  The Department of Administration shall consult with the Office of State Budget and Management before conducting a competitive process to select a qualified vendor who will perform the study required in subsection (a) of this section.
SECTION 20.2.(c)  The Department of Administration shall report the results of this study to the Joint Legislative Commission on Governmental Operations prior to May 1, 2017.

CONNECT NC BOND IMPLEMENTATION
SECTION 20.3.(a)  The Office of State Budget and Management shall provide six positions to the Department of Administration, three positions to the Office of State Budget and Management, and two positions to the North Carolina Community College System from the Connect NC Bond reserve.
SECTION 20.3.(b)  One of the positions established within the North Carolina Community College System Office shall be designated as a Small and Historically Underutilized Business Coordinator and assigned the responsibility of providing support to local community colleges in the identification of business opportunities, recruitment of underrepresented and locally‑owned businesses, and facilitate assistance in the implementation of federal and State regulations and statutes related to enhancement of economic growth and viability of small and historically underutilized businesses.
SECTION 20.3.(c)  Every agency participating with Connect NC shall use the Primavera cash flow and scheduling software for Connect NC Bond projects.

PART XXI. STATE BOARD OF ELECTIONS

DMV RECORDS/STATE BOARD OF ELECTIONS
SECTION 21.1.  G.S. 20‑43 reads as rewritten:
"§ 20‑43.  Records of Division.
(a)	All records of the Division, other than those declared by law to be confidential for the use of the Division, shall be open to public inspection during office hours in accordance with G.S. 20‑43.1. A signature recorded in any format by the Division for a drivers license or a special identification card is confidential and shall not be released except for law enforcement purposes, to the State Chief Information Officer for the purposes of G.S. 143B‑1385, or to the State Board of Elections in connection with the agency's official duties. A photographic image recorded in any format by the Division for a drivers license or a special identification card is confidential and shall not be released except for law enforcement purposes, to the State Chief Information Officer for the purposes of G.S.  143B‑1385, or to the State Board of Elections in connection with the agency's official duties.
…."

PART XXII. DEPARTMENT OF ADMINISTRATION

STATE LAND FUND APPROPRIATION
SECTION 22.1.  Notwithstanding any provision of law, if General Fund reversions exceed the sum of three hundred fifty‑eight million four hundred thirty‑nine thousand five hundred twenty‑four dollars ($358,439,524), the amount of the excess up to two million ($2,000,000) is appropriated to the State Land Fund.

IMPROVE TRANSPARENCY AND ACCOUNTABILITY IN ETHICS REQUIREMENTS
SECTION 22.2.  Funds appropriated to improve transparency and accountability in ethics requirements for the 2016‑2017 fiscal year shall not revert at the end of the fiscal year but shall remain available until expended.

TRANSFER FUNDING FOR AUTOCLAVE MAINTENANCE
SECTION 22.3.  The Department of Health and Human Services shall transfer the sum of eighty‑eight thousand dollars ($88,000) in General Fund appropriation to the Department of Administration for the cost of the maintenance of the autoclave at the Public Health Lab. This transfer shall be reflected in the 2017‑2019 Base Budget as a permanent transfer of appropriation.

MODIFY STATE EMPLOYEE SUGGESTION PROGRAM
SECTION 22.4.(a)  G.S. 126‑3(b)(10) is repealed.
SECTION 22.4.(b)  G.S. 143‑340(1) is repealed.
SECTION 22.4.(c)  Article 36A of Chapter 143 of the General Statutes is repealed.
SECTION 22.4.(d)  The Office of State Human Resources (OSHR) shall continue the mission of the NCThinks program by awarding State employees through the Governor's Awards for Excellence Program pursuant to G.S. 126‑4(15) and 25 NCAC 01C .0900. The Governor's Awards for Excellence is the highest honor that an employee may receive for noteworthy service to State government and the citizens of North Carolina. Nominations may be made for an individual or a team in several categories that reflect the core values of NCThinks including, Efficiency and Innovation and Outstanding Government Service.

DOA/UMSTEAD ACT EXEMPTIONS
SECTION 22.5.  G.S. 66‑58(b)(14) reads as rewritten:
"(14)	Nothing herein contained shall be construed to prohibit the engagement in any of the activities described in subsection (a) hereof for the following:
a.	A lease of space from the State of North Carolina or any of its departments or agencies; provided the leases shall be awarded by the Department of Administration to the highest bidder, as provided by law in the case of State contracts and which lease shall be for a term of not less than one year and not more than five years.
b.	A lease of parking spaces, whether surface parking or in a State‑owned parking structure, in accordance with the procedures set forth for leases in Chapter 146 of the General Statutes for only so long as such spaces are determined by the Department of Administration to be in excess of needs, in accordance with its powers under Chapter 143 of the General Statutes.
c.	A ground lease of State owned land in accordance with the procedures set forth for leases in Chapter 146 of the General Statutes."

PART XXIII. DEPARTMENT OF INSURANCE

INSURANCE REGULATORY CHARGE
SECTION 23.1.  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 2017 calendar year.

PART XXIIIA. DEPARTMENT OF STATE TREASURER

IMPROVE TRANSPARENCY IN INVESTMENT AND RETIREMENT FUND EXPENDITURES
SECTION 23A.1.  Notwithstanding any other provision of law, the Office of State Budget and Management shall adjust the 2017‑2019 Base Budget for Budget Code 13410 to be one hundred percent (100%) of the General Fund appropriation. Increase to appropriation that replaces receipts from the Retirement System Division and State Health Plan Division shall be offset by corresponding adjustments to the agency employer contribution rates and amounts. Receipts that have been transferred from the Investment Management Division, the Escheat Fund, and the Local Government Operations Division Fund shall be instead deposited in Nontax Revenue to offset the increase in appropriations, in the amounts certified for fiscal year 2016‑2017.
Adjustments shall be made in the retirement contribution rate and the State's General Fund appropriations to the Retirement Fund for State employee salaries to make all budgeted requirements in Retirement Operations Division Fund 1410 one hundred percent (100%) appropriation‑supported. Adjustments shall be made to the Nontax Revenue appropriation to reflect that the Investment Management Division Fund 1210 and all budgeted requirements in that fund are one hundred percent (100%) appropriation‑supported. Interest earnings on the Escheat Fund currently budgeted for the Escheat Fund Administration Division Fund 1130 shall be reflected in Nontax Revenue and all budgeted requirements for Fund 1130 shall be made one hundred percent (100%) appropriation‑supported. Professional services receipts budgeted for the Local Government Operations Division Fund 1310 shall be reflected in Nontax Revenue and all budgeted requirements shall be made one hundred percent (100%) appropriation‑supported. All transfers from Funds 1130, 1210, 1310, and 1410 to pay for administration in Funds 1110, 1150, and 1510 shall be eliminated. Funds 1110, 1150, and 1510 shall be made one hundred percent (100%) appropriation‑supported.
All expenditures of the Department of State Treasurer shall be recorded in the North Carolina Accounting System in the appropriate Budget Code, Fund Code, and Account Code. No expenditures of the Department of State Treasurer shall be charged directly to the Investment Asset Classes.

PART XXIV. DEPARTMENT OF TRANSPORTATION

CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATION
SECTION 24.1.(a)  Section 29.1(a) of S.L. 2015‑241 reads as rewritten:
"SECTION 29.1.(a)  The General Assembly authorizes and certifies anticipated revenues for the Highway Fund as follows:
For Fiscal Year 2017‑2018	$2,027.8 million
For Fiscal Year 2018‑2019	$ 2,077.8 million
For Fiscal Year 2019‑2020	$2,121.9 million
For Fiscal Year 2020‑2021	$2,170.2 million"
SECTION 24.1.(b)  Section 29.1(b) of S.L. 2015‑241 reads as rewritten:
"SECTION 29.1.(b)  The General Assembly authorizes and certifies anticipated revenues for the Highway Trust Fund as follows:
For Fiscal Year 2017‑2018	$1,393.0 million
For Fiscal Year 2018‑2019	$1,423.8 million
For Fiscal Year 2019‑2020	$ 1,441.9 million
For Fiscal Year 2020‑2021	$ 1,463.3 million"

MEDICAL REVIEW CHANGES
SECTION 24.2.(a)  G.S. 20‑7 reads as rewritten:
"§ 20‑7.  Issuance and renewal of drivers licenses.
…
(e)	Restrictions. – The Division may impose any restriction it finds advisable on a drivers license. It is unlawful for the holder of a restricted license to operate a motor vehicle without complying with the restriction and is the equivalent of operating a motor vehicle without a license. If any applicant shall suffer from any physical or mental disability or disease which affects his or her operation of a motor vehicle, the Division may require to be filed with it a certificate of such applicant's condition signed by some medical authority of the applicant's community designated by the Division; the Division may, in its discretion, require said certificate to be completed and submitted after a license or renewal has been issued based on the applicant's performance during a road test. The certificate shall be reviewed in accordance with the procedure outlined in G.S. 20‑9(g)(3). This certificate shall in all cases be treated as confidential. Nothing in this subsection shall be construed to prevent the Division from refusing to issue a license, either restricted or unrestricted, to any person deemed to be incapable of safely operating a motor vehicle based on information from a variety of sources to include, but not limited to, observations during a road test and information learned from medical information supplied about the applicant. Any license issued to a licensee required to submit the certificate continues in force until it expires or is cancelled or revoked so long as the licensee submits the certificate to the Division at the intervals determined by the Division to be in the best interest of public safety. Licensing decisions made on the basis of a physical or mental condition are reviewable under G.S. 20‑9(g)(4). This subsection does not prohibit deaf persons from operating motor vehicles who in every other way meet the requirements of this section."
SECTION 24.2.(b)  G.S. 20‑9 reads as rewritten:
"§ 20‑9.  What persons shall not be licensed.
…
(e)	The Division shall not issue a driver's license to any person when in the opinion of the Division such person is unable to exercise reasonable and ordinary control over a motor vehicle while operating the same upon the highways, nor shall a license be issued to any person who is unable to understand highway warning or direction signs.
…
(g)	The Division may issue a driver's license, restricted or unrestricted, to any applicant suffering from a physical or mental disability or disease which affects his or her ability to exercise reasonable and ordinary control of a motor vehicle, who is otherwise eligible to obtain a license, under the following conditions:
(1)	The applicant submits to the Division a certificate in the form prescribed in subdivision (2) of this subsection. Such certificate may be requested at the initial application by the applicant or at any time following the issuance of the license, if in the opinion of the Division, such license can be issued without a certificate at the initial application. Until a license issued under this subdivision expires or is cancelled or revoked, the license continues in force as long as the licensee presents to the Division a certificate in the form prescribed in subdivision (2) of this subsection at the intervals determined by the Division to be in the best interests of public safety.
(2)	The Division may request a signed certificate from a health care provider duly licensed to practice medicine in this State or in any other state of the United States that the applicant or licensee has submitted to a physical examination by the health care provider. Such certificate shall be devised by the Commissioner with the advice of qualified experts in the field of diagnosing and treating physical and mental disabilities or diseases as he may select to assist him and shall be designed to elicit the maximum medical information necessary to aid in determining whether or not it would be a hazard to public safety to permit the applicant to operate a motor vehicle, including, if such is the fact, the examining provider's statement that the applicant or licensee is under medication and treatment and that such person's physical or mental disability or diseases is controlled. The certificate shall contain a waiver of privilege and the recommendation of the examining provider to the Commissioner as to whether a license should be issued to the applicant and whether the person can safely operate a motor vehicle.
(3)	The Commissioner is not bound by the recommendation of the examining health care provider but shall give fair consideration to such recommendation in exercising his discretion in making licensing decisions, the criterion being whether or not, upon all the evidence, it appears that it is safe to permit the applicant to operate a motor vehicle. The burden of proof of such fact is upon the applicant or licensee. In deciding whether to issue, restrict, cancel, or deny a license, the Commissioner may be guided by the opinion of experts in the field of diagnosing and treating the specific physical or mental disability or disease suffered by an applicant, or licensee, and such experts may be compensated for their services on an equitable basis. The Commissioner may also take into consideration any other factors which bear on the issue of public safety.
(4)	Whenever a license is restricted, cancelled, or denied by the on the basis of a physical or mental disability or disease, said action may be reviewed by a reviewing board upon written request of the applicant filed with the Division within 10 days after receipt of notice of said action as delineated under G.S. 20‑48. The reviewing board shall consist of the Commissioner or his authorized representative and at least two medical professionals duly licensed by the appropriate licensing authority in the State of North Carolina, selected by the Commissioner of Motor Vehicles. The medical professionals selected by the Commissioner may be compensated for their services on an equitable basis to include reimbursement for ordinary and necessary travel expenses. Two of the medical professionals selected by the Commissioner shall constitute a quorum. The procedure for hearings authorized by this section shall be as follows:
a.	Applicants shall be afforded an opportunity for hearing, after reasonable notice of not less than 10 days, before the review board established by subdivision (4). The notice shall be in writing and shall be delivered to the applicant in person or sent by certified mail, with return receipt requested. The notice shall state the time, place, and subject of the hearing. A request for a hearing shall stay any adverse action pending against the applicant or licensee as a result of the review specified in subdivision (3) of this subsection so long as the hearing is being requested to contest driver license restrictions and there is no imminent threat to public safety if continued driving is permitted. Adverse action shall not be stayed if the hearing is being requested to contest the denial or cancellation of driving privileges.
b.	The review board may compel the attendance of witnesses and the production of such books, records and papers as it desires at a hearing authorized by the section. Upon request of an applicant, a subpoena to compel the attendance of any witness or a subpoena duces tecum to compel the production of any books, records, or papers shall be issued by the board. Subpoenas shall be directed to the sheriff of the county where the witness resides or is found and shall be served and returned in the same manner as a subpoena in a criminal case. Fees of the sheriff and witnesses shall be the same as that allowed in the district court in cases before that court and shall be paid in the same manner as other expenses of the Division of Motor Vehicles are paid. In any case of disobedience or neglect of any subpoena served on any person, or the refusal of any witness to testify to any matters regarding which he may be lawfully interrogated, the district court or superior court where such disobedience, neglect or refusal occurs, or any judge thereof, on application by the board, shall compel obedience or punish as for contempt.
c.	A hearing may be continued upon motion of the applicant or licensee for good cause shown with approval of the board or upon order of the board.
d.	The board shall pass upon the admissibility of evidence at a hearing but the applicant affected may at the time object to the board's ruling, and, if evidence offered by an applicant or licensee is rejected the party may proffer the evidence, and such proffer shall be made a part of the record. The board shall not be bound by common law or statutory rules of evidence which prevail in courts of law or equity and may admit and give probative value to evidence which possesses probative value commonly accepted by reasonably prudent men in the conduct of their affairs. They may exclude incompetent, immaterial, irrelevant and unduly repetitious evidence. Uncontested facts may be stipulated by agreement between an applicant or licensee and the board and evidence relating thereto may be excluded. All evidence, including records and documents in the possession of the Division of Motor Vehicles or the board, of which the board desires to avail itself shall be made a part of the record. Documentary evidence may be received in the form of copies or excerpts, or by incorporation by reference. The board shall prepare an official record, which shall include testimony and exhibits. A record of the testimony and other evidence submitted shall be taken, but it shall not be necessary to transcribe shorthand notes or electronic recordings unless requested for purposes of court review.
e.	Every decision and order adverse to an applicant or licensee shall be in writing or stated in the record and shall be accompanied by findings of fact and conclusions of law. The findings of fact shall consist of a concise statement of the board's conclusions on each contested issue of fact. The applicant or licensee shall be notified of the board's decision in person or by certified mail with return receipt requested. In all other cases, a copy of the board's decision with accompanying findings and conclusions shall be delivered or mailed upon request to the applicant's or the licensee's attorney of record or to applicant or licensee, if he has no attorney.
f.	Actions of the reviewing board are subject to judicial review as provided under Chapter 150B of the General Statutes.
g.	Repealed by Session Laws 1977, c. 840.
h.	All records and evidence collected and compiled by the Division and the reviewing board shall not be considered public records within the meaning of Chapter 132 of the General Statutes of North Carolina and may be made available to the public only upon an order of a court of competent jurisdiction. An applicant or licensee may obtain a copy of the aforementioned records without a court order by submitting a written request to the Division, signing any required release forms, and remitting the required fee. All information furnished by, or about, or on behalf of an applicant under this section shall be without prejudice and shall be for the use of the Division, the reviewing board or the court in administering this section and shall not be used in any manner as evidence, or for any other purposes in any trial, civil or criminal. The foregoing prohibition against release and use applies without regard to who authored or produced the information for use by the Division under this section.
…."
SECTION 24.2.(c)  G.S. 20‑9.1(c) reads as rewritten:
"(c)	A physician, psychologist, or other medical provider disclosing or not disclosing information pursuant to this section or conducting evaluations and making recommendations to the Division regarding a person's ability to safely operate a motor vehicle is immune from any civil or criminal liability that might otherwise be incurred or imposed based on the disclosure or lack of disclosure provided that the physician or psychologist was acting in good faith and without malice. In any proceeding involving liability, good faith and lack of malice are presumed."
SECTION 24.2.(d)  G.S. 20‑15(a) reads as rewritten:
"(a)	The Division shall have authority to cancel any driver's license upon determining any of the following:
(1)	The licensee was not entitled to the issuance of the license under this Chapter.
…
(4)	The licensee has failed to submit the certificate required as a condition of licensure under G.S. 20‑7(e) or G.S. 20‑9(g).
(5)	The licensee suffers from a physical or mental disability or disease that affects his or her ability to safely operate a commercial or noncommercial motor vehicle as determined by applicable State and federal statutes and regulations."

ELIMINATE SPECIAL REGISTRATION FEE FOR CERTAIN MILITARY LICENSE PLATES
SECTION 24.3.  G.S. 20‑79.7(a1) reads as rewritten:
"(a1)	Fees. – All other special registration plates are subject to the regular motor vehicle registration fee in G.S. 20‑87 or G.S. 20‑88 plus an additional fee in the following amount:
Special Plate	Additional Fee Amount
American Red Cross	$30.00
…
Active Member of the National Guard	None
Air Medal Recipient	None
Bronze Star Combat Recipient	None
Bronze Star Recipient	None
Combat Veteran	None
100% Disabled Veteran	None
Distinguished Flying Cross	None
Ex‑Prisoner of War	None
...."

CONTINUATION REVIEW OF CERTAIN FUNDS/PROGRAMS/DIVISIONS
SECTION 24.5.(a)  According to Section 6.20 of S.L. 2015‑241, certain funding of select funds, agencies, divisions, and programs financed by State government were subject to the Continuation Review Program, which is intended to assist decision‑makers in determining whether to continue, reduce, or eliminate funding for the funds, agencies, divisions, and programs subject to continuation review.
SECTION 24.5.(b)  Section 6.20(b) of S.L. 2015‑241 reads as rewritten:
"SECTION 6.20.(b)  The Senate Appropriations/Base Budget Committee and the House of Representatives Appropriations Committee may review the funds, programs, divisions, and transfers from the Highway Fund listed in this section and shall determine whether to continue, reduce, or eliminate these funds, programs, divisions, and transfers from the Highway Fund, subject to the Continuation Review Program. The Fiscal Research Division may issue instructions to the State departments and agencies subject to continuation review regarding the expected content and format of the reports required by this section. The following funds, agencies, divisions, programs, and transfers from the Highway Fund are subject to continuation review, as well as recommended amounts of funding for fiscal year 2016‑2017, are:
(1)	Funds, agencies, divisions, and programs financed by transfers from the Highway Fund:
a.	Department of Environmental Quality –
1.	Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund–$20,600,000.
2.	Division of Air Quality Inspection and Maintenance Fees–$2,000,000.
3.	Division of Air Quality Water and Air Quality Account–$7,299,805.
	
5.	Mercury Pollution Prevention Account – Utilize existing cash balance.
b.	Department of Insurance –
1.	Rescue Squad Workers' Relief Fund–$1,456,931.
2.	Volunteer Rescue/EMS Grant Program–$957,352.
3.	State Fire Protection–$158,000.
c.	Department of Public Safety – Inmate Road Squads and Litter Crews–$9,040,000.
d.	Office of the State Controller – Funding transferred for BEACON support–$496,578.
e.	Wildlife Resources Commission – Boating Account–$2,361,660.
(2)	Other agencies, divisions, and programs:
a.	North Carolina Human Relations Commission.
b.	Department of Health and Human Services –
1.	Office of Minority Health.
2.	Maternal and Child Health Programs."

PART XV. SALARIES AND BENEFITS

JUDICIAL BRANCH SALARIES
SECTION 25.1.(a)  Section 30.3(c) of S.L. 2015‑241 reads as rewritten:
"SECTION 30.3.(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‑six thousand four hundred thirty‑seven dollars ($76,437) 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, 2016."

STATE AGENCY TEACHERS
SECTION 25.2.  Section 30.7 of S.L. 2015‑241 is amended by adding a new subsection to read:
"SECTION 30.7.(a)  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 any experience step increases authorized in Section 9.1 of this act.
"SECTION 30.7.(b)  Teachers at the North Carolina School of Science and Mathematics and the North Carolina School of the Arts shall receive any pay and experience step increases as if they were paid in accordance with the Teacher Salary Schedule in Section 9.1 of this act."

ALL STATE‑SUPPORTED PERSONNEL
SECTION 25.3.  Section 30.8 of S.L. 2015‑241 reads as rewritten:
"SECTION 30.8.(a)  For the 2015‑2017 fiscal biennium:
(1)	Except as provided by Part 9, Section 30.5, Section 30.7, and Section 30.15 of this act, the annual salaries of all employees subject to or exempt from the North Carolina Human Resources Act shall not be legislatively increased, but may be increased as otherwise provided by law.
(2)	All eligible State‑supported personnel shall receive a compensation bonus as authorized by this Part.
"SECTION 30.8.(b)  Salaries and Related Benefits for Positions That Are Funded. –
(1)	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.
(2)	Fully from sources other than the General Fund or Highway Fund shall be increased as provided by this act. The Director of the Budget may increase expenditures of receipts from these sources by the amount necessary to provide the legislative increase to receipt‑supported personnel in the certified budget.
"SECTION 30.8.(c)  Except as otherwise provided, the salary increases provided in this act 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, 2016.
"SECTION 30.8.(d)  Employees shall receive the statutory increases provided by G.S. 20‑187.3, 7A‑102, and 7A‑171.1. Notwithstanding G.S. 20‑187.3, the increases authorized by that statute for members of the State Highway Patrol become effective July 1, 2016. Notwithstanding any provision of law to the contrary, the salary increases authorized on the employee anniversary date by G.S. 7A‑171.1 for magistrates and G.S. 7A‑102 for assistant and deputy clerks of superior court shall become effective July 1, 2016.
"SECTION 30.8.(e)  Payroll checks issued to employees after July 1, 2016, that represent payment of services provided prior to July 1, 2016, 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 30.8.(f)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases."

SALARY ADJUSTMENT FUND
SECTION 25.4.(a)  Section 30.12A(b) of S.L. 2015‑241 reads as rewritten:
"SECTION 30.12A.(b)  The following salary increases shall be awarded from funds available in the Salary Adjustment Fund for the 2015‑2017 fiscal biennium, as follows:
(1)	To increase the salary of the Secretary of Military and Veterans Affairs, the sum of thirty‑three thousand seven hundred forty‑nine dollars ($33,749).
(2)	To increase the salary of the Transportation Museum Director, the sum of thirty thousand seven hundred fifteen dollars ($30,715).
(3)	To increase the salaries of the State Capitol Police, a sum not to exceed one hundred thousand dollars ($100,000)."
SECTION 25.4.(b)  Section 30.12A(c) of S.L. 2015‑241 reads as rewritten:
"SECTION 30.12A.(c)  The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations prior to transferring any salary adjustment funds for any State agency. No increases from the Salary Adjustment Fund shall be effective before January 1, 2016."
SECTION 25.4.(c)  Section 30.12A of S.L. 2015‑241 is amended by adding a new subsection to read:
"SECTION 30.12A.(h)  Section 30.11 of S.L. 2015‑241 is repealed."

COMPENSATION BONUS AWARDED FOR FISCAL YEAR 2016‑2017
SECTION 25.5.(a)  Any person (i) whose salary is set by this act in Part 9 or this Part, pursuant to the North Carolina Human Resources Act, or as otherwise authorized in this act and (ii) who is employed in a State‑funded position on August 1, 2016, is eligible to be considered by each agency head, in consultation with the Office of State Human Resources, for an award of a one‑time, lump‑sum compensation bonus, up to a maximum bonus of three thousand dollars ($3,000) for the 2016‑2017 fiscal year, payable during the month of September 2016.
SECTION 25.5.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonus awarded by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.
SECTION 25.5.(c)  The compensation bonus awarded by this section is not part of annual salary and shall be paid out separately. The compensation bonus shall be awarded to eligible permanent employees without regard to an employee's placement within the salary range, including employees at the top of the salary range. The compensation bonus shall be adjusted pro rata for permanent part‑time employees.

SALARY‑RELATED CONTRIBUTIONS
SECTION 25.6.(a)  Section 30.20(a) of S.L. 2015‑241 reads as rewritten:
"SECTION 30.20.(a)  Effective for the 2015‑2016 fiscal year, required employer salary‑related contributions for employees whose salaries are paid from department, office, institution, or agency receipts shall be paid from the same source as the source of the employee's salary. If an employee's salary is paid in part from the General Fund or Highway Fund and in part from department, office, institution, or agency receipts, required employer salary‑related contributions may be paid from the General Fund or Highway Fund only to the extent of the proportionate part paid from the General Fund or Highway Fund in support of the salary of the employee, and the remainder of the employer's requirements shall be paid from the source that supplies the remainder of the employee's salary. The requirements of this section as to source of payment are also applicable to payments on behalf of the employee for hospital medical benefits, longevity pay, unemployment compensation, accumulated leave, workers' compensation, severance pay, separation allowances, and applicable disability income benefits."
SECTION 25.6.(b)  Effective July 1, 2016, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 2015‑2017 fiscal biennium are (i) fifteen and thirty‑two hundredths percent (15.32%) – Teachers and State Employees; (ii) twenty and thirty‑two hundredths percent (20.32%) – State Law Enforcement Officers; (iii) twelve and eighty‑five hundredths percent (12.85%) – University Employees' Optional Retirement Program; (iv) twelve and eighty‑five hundredths percent (12.85%) – Community College Optional Retirement Program; (v) thirty‑two and eighty‑one hundredths percent (34.81%) – Consolidated Judicial Retirement System; and (vi) seven and forty hundredths percent (7.40%) – Legislative Retirement System. Each of the foregoing contribution rates includes five and sixty hundredths percent (5.60%) 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 hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement.
SECTION 25.6.(c)  Effective July 1, 2016, the maximum annual employer contributions, payable monthly, by the State for each covered employee or retiree for the 2016‑2017 fiscal year to the State Health Plan for Teachers and State Employees are (i) Medicare‑eligible employees and retirees – four thousand two hundred fifty‑one dollars ($4,251) and (ii) non‑Medicare‑eligible employees and retirees – five thousand four hundred seventy‑one dollars ($5,471).

PART XXVI. CAPITAL APPROPRIATIONS

CAPITAL APPROPRIATIONS/GENERAL FUND
SECTION 26.1.  There is appropriated from the General Fund for the 2016‑2017 fiscal biennium the following amounts for capital improvements:

Capital Improvements – General Fund	2016‑2017

Department of Environmental Quality
	Water Resources Development	$7,961,000

Department of Cultural Resources
	Archives and History/State Library Building Remodel	600,000

TOTAL CAPITAL IMPROVEMENTS –
GENERAL FUND	$8,561,000

WATER RESOURCES DEVELOPMENT PROJECT FUNDS
SECTION 26.2.(a)  The Department of Environmental Quality 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 twenty‑five million seven hundred seventy‑four thousand dollars ($25,774,000) in federal funds.
Name of Project	2016‑2017
(1)	Neuse River – Goldsboro, Section 1135	150,000
(2)	Carolina Beach Coastal Storm Damage Reduction	75,000
(3)	Kure Beach Coastal Storm Damage Reduction	81,000
(4)	Wrightsville Beach Coastal Storm Damage Reduction	361,000
(5)	Ocean Isle Beach Coastal Storm Damage Reduction	1,506,000
(6)	Eastern NC Stream Debris Removal	500,000
(7)	State/Local Water Resources Development Grants	1,000,000
(8)	Cape Fear Lock & Dam #2 Fish Ramp – Phase 1	500,000
(9)	North Topsail Beach Shoreline Protection Project – Phase 2	500,000
(10)	Environmental Quality Incentives Program – NRCS	1,500,000
(11)	Town of Burgaw – Pender Hospital Drainage Improvements	347,000
(12)	Ararat River, Surry County	500,000
(13)	Town of Rutherfordton Stream Restoration	500,000
(14)	Reedy Creek Road Boathouse and Storage Area	218,000
(15)	Wilmington Harbor 96 Act Loan Repayment	223,000
(16)	Wilmington Harbor Maintenance	0.00
(17)	Morehead City Harbor Maintenance	0.00
TOTALS	$7,961,000
SECTION 26.2.(b)  It is the intent of the Governor and the General Assembly that funds carried forward from previous fiscal years be used to supplement the seven million nine hundred sixty‑one thousand dollars ($7,961,000) appropriated for water resources development projects in Section 31.3(a) of this act. Therefore, the following funds carried forward from previous fiscal years shall be used for the following projects:
Name of Project	Amount Carried Forward
(1)	Morehead City Harbor Maintenance	$ 2,000,000
(2)	Ocean Isle Beach CSDR	29,000
(3)	NRCS Equipment	500,000
(4)	Planning Assistant to Communities	25,000
(5)	Wilmington Harbor Navigation 96 Act Loan Repayment	2,500,000
(6)	Wrightsville Beach CSDR	200,000
TOTALS	$ 5,254,000

NON‑GENERAL FUND CAPITAL IMPROVEMENT AUTHORIZATIONS
SECTION 26.3.  The General Assembly authorizes the following capital projects to be funded with receipts from other non‑General Fund sources available to the appropriate department:
Name of Project	Amount of Non‑General Fund
	Funding Authorized for FY 2016‑2017
Department of Public Safety
Nash Print Plant Roof Replacement	$ 1,508,000
Harnett Visitor Center	549,000

Department of Transportation
Ferry Division Encapsulated area for Sandblasting	210,000

TOTAL AMOUNT OF NON‑GENERAL FUND CAPITAL
PROJECTS AUTHORIZED	$ 2,267,000

PART XVII. MISCELLANEOUS PROVISIONS

STATE BUDGET ACT APPLIES
SECTION 27.1.  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.

MOST TEXT APPLIES ONLY TO THE 2015‑2016 FISCAL YEAR
SECTION 27.2.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2015‑2016 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2015‑2016 fiscal year.

EFFECT OF HEADINGS
SECTION 27.3.  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 27.4.(a)  Except where expressly repealed or amended by this act, the provisions of S.L. 2013‑360 and S.L. 2013‑363 remain in effect.
SECTION 27.4.(b)  Notwithstanding any modifications by this act in the amounts appropriated, except where expressly repealed or amended, the limitations and directions for the 2015‑2016 fiscal year in S.L. 2013‑360 and S.L. 2013‑363 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 CLAUSE
SECTION 27.5.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

EFFECTIVE DATE
SECTION 27.6.  Except as otherwise provided, this act becomes effective July 1, 2016.