S.L. 2000-67

SESSION 1999

SESSION LAW 2000-67

AN ACT TO MODIFY THE CURRENT OPERATIONS AND CAPITAL IMPROVEMENTS APPROPRIATIONS ACT OF 1999 AND TO MAKE OTHER CHANGES IN THE BUDGET OPERATION OF THE STATE.

The General Assembly of North Carolina enacts:

PART I. INTRODUCTION AND TITLE OF ACT

INTRODUCTION

Section 1. The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and, except as allowed by the Executive Budget Act, or this act, the savings shall revert to the appropriate fund at the end of each fiscal year.

TITLE OF ACT

Section 1.1. This act shall be known as "The Current Operations and Capital Improvements Appropriations Act of 2000."

PART II. CURRENT OPERATIONS/GENERAL FUND

Section 2. 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 year ending June 30, 2001, according to the schedule that follows. Amounts set out in brackets are reductions from General Fund appropriations for the 2000-01 fiscal year.

Current Operations - General Fund 2000-01

General Assembly $ (272,500)

Judicial Department 14,289,072

Office of the Governor

01. Office of State Budget

and Management 200,000

02. Office of State Budget and Management

Special Appropriations 420,000

Department of Secretary of State 2,854,671

Department of State Auditor 28,054

Department of State Treasurer 8,181,082

Department of Public Instruction (6,480,392)

Department of Justice (238,316)

Department of Administration 627,428

Office of the Governor - Housing Finance 3,000,000

Department of Agriculture and

Consumer Services 2,176,618

Department of Labor (300,000)

Department of Insurance 428,597

Department of Environment and

Natural Resources (1,670,030)

Office of Administrative Hearings (64,368)

Rules Review Commission 48,000

Department of Health and Human Services

01. Office of the Secretary (17,595,000)

02. Division of Aging 250,000

03. Division of Child Development (4,600,000)

04. Division of Services for the

Deaf and Hard of Hearing 1,251,250

05. Division of Social Services 5,450,000

06. Division of Health Services (3,329,871)

07. Division of Medical Assistance (107,176,129)

08. Division of Services

for the Blind 803,750

09. Division of Mental Health,

Developmental Disabilities, and

Substance Abuse Services 22,758,474

10. Division of Facility Services 1,649,000

11. Division of Vocational

Rehabilitation Services 5,358,672

Total Department of Health and Human Services (95,179,854)

Department of Correction (13,685,942)

Department of Commerce

01. Commerce 2,882,671

02. Biotechnology Center 1,000,000

03. Rural Economic Development

Center 1,650,000

04. State Aid to non-State

Entities 4,700,000

Department of Revenue (497,071)

Department of Cultural Resources 3,107,142

Department of Crime Control

and Public Safety (568,000)

Office of the State Controller (115,000)

University of North Carolina - Board

of Governors

01. General Administration (473,190)

02. University Institutional

Programs 39,762,236

03. Related Educational Programs 3,257,457

04. University of North Carolina

at Chapel Hill

a. Health Affairs (385,467)

05. North Carolina State University

at Raleigh

a. Academic Affairs (493,514)

06. University of North Carolina at

Wilmington (140,039)

07. Western Carolina University (159,178)

08. Winston-Salem State University (69,448)

09. North Carolina Central

University 10,646

Total University of North

Carolina - Board of Governors 41,309,503

Community Colleges System Office 17,806,602

Debt Service (52,200,000)

Office of Juvenile Justice 966,726

Reserve for Compensation Increase 456,750,000

Reserve for Compensation Bonus 83,500,000

Premium Reserve (Retirees) (50,000,000)

Retirement Contribution Adjustment (191,294,000)

Premium Reserve (Employees) (32,700,000)

State Employee Reserve 48,000,000

Death Benefit Contribution Adjustment (10,864,400)

Statewide Reserve for Salary Increases (11,000,000)

Reserve for Repairs and Renovations 100,000,000

Clean Water Management Trust Fund 30,000,000

Savings Reserve 120,000,000

GRAND TOTAL CURRENT OPERATIONS –

GENERAL FUND $ 476,796,293

PART III. CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

Section 3. Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the fiscal year ending June 30, 2001, according to the schedule that follows. Amounts set out in brackets are reductions from Highway Fund appropriations for the 2000-2001 fiscal year.

Current Operations - Highway Fund 2000-2001

Department of Transportation

01. Administration $ 1,214,914

02. Operations -

03. Construction and Maintenance

a. Construction

(01) Primary Construction -

(02) Secondary Construction 192,000

(03) Urban Construction -

(04) Access and Public

Service Roads -

(05) Discretionary Fund -

(06) Spot Safety Construction -

b. State Funds to Match Federal

Highway Aid -

c. State Maintenance 20,577,486

d. Ferry Operations -

e. Capital Improvements 9,000,000

f. State Aid to Municipalities 192,000

g. State Aid for Public

Transportation and Railroads 7,700,000

h. OSHA - State -

04. Governor's Highway Safety Program -

05. Division of Motor Vehicles 765,284

06. Reserves and Transfers 25,958,316

GRAND TOTAL CURRENT OPERATIONS/

HIGHWAY FUND $ 65,600,000

PART IV. HIGHWAY TRUST FUND

Section 4. Appropriations from the Highway Trust Fund are made for the fiscal year ending June 30, 2001, according to the schedule that follows. Amounts set out in brackets are reductions from Highway Trust Fund appropriations for the 2000-2001 fiscal year.

Highway Trust Fund 2000-2001

01. Intrastate System $ 48,538,626

02. Secondary Roads Construction 6,102,120

03. Urban Loops 19,626,998

04. State Aid - Municipalities 5,092,834

05. Program Administration 4,119,422

GRAND TOTAL/HIGHWAY TRUST FUND $ 83,480,000

PART V. BLOCK GRANT FUNDS

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

DHHS BLOCK GRANT PROVISIONS

Section 5.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2001, according to the following schedule:

COMMUNITY SERVICES BLOCK GRANT

01. Community Action Agencies $ 12,377,017

02. Limited Purpose Agencies 687,612

03. Department of Health and Human Services

to administer and monitor

the activities of the

Community Services Block Grant 687,612

TOTAL COMMUNITY SERVICES BLOCK GRANT $ 13,752,241

SOCIAL SERVICES BLOCK GRANT

01. County departments of social services $ 27,395,663

(Transfer from TANF - $4,500,000)

02. Allocation for in-home services provided

by county departments of

social services 2,101,113

03. Division of Mental Health, Developmental

Disabilities, and Substance Abuse Services 3,234,601

04. Division of Services for the Blind 3,105,711

05. Division of Facility Services 426,836

06. Division of Aging - Home and Community

Care Block Grant 1,840,234

07. Child Care Subsidies 3,000,000

08. Division of Vocational Rehabilitation -

United Cerebral Palsy 71,484

09. State administration 1,693,368

10. Child Medical Evaluation Program 238,321

11. Adult day care services 2,155,301

12. County departments of social services for

child abuse prevention and

permanency planning 394,841

13. Transfer to Preventive Health Services

Block Grant for emergency medical services 213,128

14. Transfer to Preventive Health Services Block

Grant for AIDS education, counseling, and

testing 66,939

15. Department of Administration

for the N.C. Commission of Indian Affairs

In-Home Services Program for the elderly 203,198

16. Division of Vocational Rehabilitation -

Easter Seals Society 116,779

17. UNC-CH CARES Program for training and

consultation services 247,920

18. Office of the Secretary - Office of Economic

Opportunity for N.C. Senior Citizens'

Federation for outreach services to

low-income elderly persons 41,302

19. Special Children Adoption Fund 511,687

20. Transfer from TANF Block Grant for

Enhanced Employee Assistance Program 1,000,000

21. Transfer from TANF Block Grant for

Division of Social Services - Child

Caring Agencies 1,500,000

22. Division of Mental Health,

Developmental Disabilities, and

Substance Abuse Services - Developmentally

Disabled Waiting List for services 5,000,000

TOTAL SOCIAL SERVICES BLOCK GRANT $ 54,558,426

LOW-INCOME ENERGY BLOCK GRANT

01. Energy Assistance Programs $ 8,092,113

02. Crisis Intervention 7,078,114

03. Administration 1,988,234

04. Department of Commerce -

Weatherization Program 2,684,116

05. Department of Administration -

N.C. Commission of Indian Affairs 39,765

TOTAL LOW-INCOME ENERGY BLOCK GRANT $ 19,882,342

MENTAL HEALTH SERVICES BLOCK GRANT

01. Provision of community-based

services in accordance with the

Mental Health Study Commission's

Adult Severe and Persistently

Mentally Ill Plan $ 4,301,361

02. Provision of community-based

services to children 1,898,520

03. Establish Child Residential

Treatment Services Program 1,500,000

04. Administration 783,911

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT $ 8,483,792

SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT

01. Provision of community-based

alcohol and drug abuse services,

tuberculosis services, and services

provided by the Alcohol and Drug Abuse

Treatment Centers $ 15,043,841

02. Continuation of services for

pregnant women and women

with dependent children 6,567,532

03. Continuation of services to

IV drug abusers and others at risk

for HIV diseases 5,210,497

04. Provision of services to children

and adolescents 7,216,992

05. Juvenile Services - Family Focus 893,811

06. Juvenile offender services and substance

abuse pilot 300,000

07. Establish Child Residential Treatment

Services Program 1,000,000

08. Administration 2,623,049

TOTAL SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT $ 38,855,722

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

01. Child care subsidies $117,145,326

02. Quality and availability initiatives 12,332,039

03. Administrative expenses 6,814,598

04. Transfer from TANF Block Grant for

child care subsidies 57,957,188

05. Transfer from TANF Block Grant for

child care rate increases and quality

initiatives 18,717,812

TOTAL CHILD CARE AND DEVELOPMENT FUND

BLOCK GRANT $212,966,963

TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT

01. Work First Cash Assistance

Standard Counties $ 81,859,561

Electing Counties 24,331,095

02. Work First County Block Grants 92,018,855

03. Transfer to the Child Care and

Development Fund Block Grant

for child care subsidies 57,957,188

04. Allocation to the Division of Mental

Health, Developmental Disabilities, and

Substance Abuse Services for Work First

substance abuse screening, diagnostic, and

support treatment services and drug testing 3,500,000

05. Allocation to the Division of Social

Services for Work First Evaluation 1,500,000

06. Allocation to the Division of Social

Services for staff development 500,000

07. Reduction of out-of-wedlock births 1,600,000

08. Substance Abuse Services for Juveniles 1,182,280

09. Special Children Adoption Fund 2,300,000

10. Employment Security Commission -

First Stop Employment Assistance 1,000,000

11. Transfer to Social Services Block Grant -

Enhanced Employee Assistance Program 1,000,000

12. Work First Job Retention and Follow-Up

Initiatives 1,607,529

13. Allocation to the Division of Public Health

for teen pregnancy prevention 2,000,000

14. Transfer to Social Services Block Grant

for Child Caring Agencies 1,500,000

15. Child Care Subsidies for TANF Recipients 26,621,241

16. Work First Housing Initiative 3,000,000

17. Transfer to Child Care and Development Fund

Block Grant for Child Care Rate Increases 18,717,812

18. Allocation to the Division of Social

Services for Domestic Violence

Prevention and Awareness 1,000,000

19. County Child Protective Services,

Foster Care and Adoption Workers 2,727,550

20. Intensive Family Preservation Program 2,000,000

21. Work First/Boys and Girls Clubs 1,000,000

22. Transfer to Social Services Block Grant for

County Departments of Social Services for

Children's Services 4,500,000

23. Adolescent Pregnancy Prevention Program 239,261

24. Expand Support Our Students -

Office of Juvenile Justice 2,750,674

25. Residential Substance Abuse Services

for Women with Children 5,000,000

26. Domestic Violence Services

for Work First families 3,000,000

27. Responsible Fatherhood Initiative 1,000,000

28. After-School Services for

At-Risk Children 2,000,000

29. Division of Social Services -

Administration 500,000

30. Child Welfare workers for local

departments of social services 7,260,000

31. Work First Pilots 5,400,000

32. Child Welfare Training 2,000,000

33. Work First Business Council 100,000

34. JobLink Pilots 300,000

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT $362,973,046

MATERNAL AND CHILD HEALTH BLOCK GRANT

01. Healthy Mothers/Healthy Children

Block Grants to Local Health

Departments $ 9,838,074

02. High-Risk Maternity Clinic Services,

Perinatal Education and Training,

Childhood Injury Prevention,

Public Information and Education, and

Technical Assistance to Local Health

Departments 2,012,102

03. Services to Children With Special Health

Care Needs 5,078,647

TOTAL MATERNAL AND CHILD

HEALTH BLOCK GRANT $ 16,928,823

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01. Statewide Health Promotion Programs $3,184,399

02. Dental Services/Fluoridation 100,800

03. Rape Crisis/Victims' Services

Program - Council for Women 190,134

04. Rape Prevention and Education

Program - Division of Public

Health and Council for Women 1,137,186

05. Transfer from Social Services

Block Grant -

AIDS/HIV Education, Counseling,

and Testing 66,939

06. Transfer from Social Services

Block Grant -

Emergency Medical Services 213,128

07. Office of Minority Health 159,459

08. Administrative Costs 143,151

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT $5,195,196

Section 5.(b) Decreases in Federal Fund Availability. – If the United States Congress reduces federal fund availability in the Social Services Block Grant below the amounts appropriated in this section, then the Department of Health and Human Services shall allocate these decreases giving priority first to those direct services mandated by State or federal law, then to those programs providing direct services that have demonstrated effectiveness in meeting the federally and State-mandated services goals established for the Social Services Block Grant. The Department shall not include transfers from TANF for specified purposes in any calculations of reductions to the Social Services Block Grant.

If the United States Congress reduces the amount of TANF funds below the amounts appropriated in this section after the effective date of this act, then the Department shall allocate the decrease in funds after considering any underutilization of the budget and the effectiveness of the current level of services. Any TANF Block Grant fund changes shall be reported to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Decreases in federal fund availability shall be allocated for the Maternal and Child Health and Preventive Health Services federal block grants by the Department of Health and Human Services after considering the effectiveness of the current level of services.

Section 5.(c) Increases in Federal Fund Availability. – Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Health and Human Services, with the approval of the Office of State Budget and Management, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.

Section 5.(d) Changes to the budgeted allocations to the block grants appropriated in this act due to decreases or increases in federal funds shall be reported immediately to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 5.(e) Limitations on Preventive Health Services Block Grant Funds. – Twenty-five percent (25%) of funds allocated for Rape Prevention and Rape Education shall be allocated as grants to nonprofit organizations to provide rape prevention and education programs targeted for middle, junior high, and high school students.

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 2000-2001 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an Abstinence Until Marriage Education Program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C-81(e1)(4). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.

Section 5.(f) The sum of one million five hundred thousand dollars ($1,500,000) appropriated to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant for the 2000-2001 fiscal year for the evaluation of the Work First Program shall be used to do each of the following:

(1) Expand the current evaluation of the Work First Program to assess former recipients' earnings, barriers to advancement to economic self-sufficiency, utilization of community support services, and other longitudinal employment data. Assessment periods shall include six and 18 months following closure of the case.

(2) Expand the current evaluation of the Work First Program to profile the State's child-only caseload to include indicators of economic and social well-being, academic and behavioral performance, demographic data, description of living arrangements including length of placement out of the home, social and other human services provided to families, and other information needed to assess the needs of the child-only Work First Family Assistance clients and families.

(3) Expand the current evaluation to profile clients and families exempted from federal and State work participation requirements. The evaluation shall include an assessment of the client and family needs including why clients and families have been exempted.

The Department of Health and Human Services shall make a report on its progress in complying with this subsection to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than September 30, 2001, and shall make a final report no later than September 30, 2002.

Section 5.(g) The sum of one million six hundred seven thousand five hundred twenty-nine dollars ($1,607,529) appropriated to the Department of Health and Human Services, Division of Social Services, in this section in the TANF Block Grant in the 2000-2001 fiscal year for the Work First job retention and follow-up model programs shall be used to continue pilots and strategies that support TANF recipients in attaining and maintaining self-sufficiency through job retention, family support services, and pre- and post-TANF follow-up.

The Department of Health and Human Services shall make a report on its use of TANF funds for the Work First job retention pilots. This report shall include each of the following:

(1) A description of the clients served by the program. This description shall include demographic and geographic information about the clients.

(2) A description of services provided by the program.

(3) The effectiveness of services to clients. Effectiveness of services to clients shall be measured, in part, by the percentage of clients who remain employed at intervals of six months and one year after commencement of employment.

(4) The estimated cost of services per client.

(5) A description of the development and design of the program and of any evaluation mechanisms.

(6) A description of coordination efforts among local departments of social services with other human services agencies.

(7) A description of progress in achieving other outcome goals such as family economic progress and child/family well-being.

This report shall be made to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than April 1, 2001.

Section 5.(h) The sum of five hundred eleven thousand six hundred eighty-seven dollars ($511,687) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 2000-2001 fiscal year shall be used to implement this subsection. 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 5.(i) If funds appropriated through the Child Care and Development Fund 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 other programs, in accordance with federal requirements of the grant, in order to use the federal funds fully.

Section 5.(j) The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this act in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for child caring agencies for the 2000-2001 fiscal year shall be allocated to the State Private Child Caring Agencies Fund. These funds shall be combined with all other funds allocated to the State Private Child Caring Agencies Fund for the reimbursement of the State's portion of the cost of care for the placement of certain children by the county departments of social services who are not eligible for federal IV-E funds. These funds shall not be used to match other federal funds.

Section 5.(k) The sum of one million dollars ($1,000,000) appropriated in this section in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall be used for the Enhanced Employee Assistance Program, to continue a grant program of financial incentives for private businesses employing former and current Work First recipients. These grants may supply funds to private employers who agree to hire former or current Work First recipients or their spouses at entry-level positions and wages and to supply enhanced grant funds to private employers who agree to hire former or current Work First recipients or their spouses at a level higher than entry-level positions, paying more than the minimum wage, including fringe benefits.

The Department of Health and Human Services shall report no later than April 1, 2001, on the use of these funds to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. This report shall include each of the following:

(1) The number of clients served since the inception of the program by fiscal year.

(2) The amount of funds expended each fiscal year.

(3) A description of the clients served. This description shall include demographic information about these clients.

(4) A description of coordination efforts with other human services agencies, including local departments of social services.

(5) A description of specific services provided to clients.

(6) Statistics related to job retention, measured at least at intervals of six months and one year after the commencement of employment.

(7) Statistics related to the wage history of clients.

(8) Any other information the Department and the Employment Security Commission find relevant to an evaluation of the program.

Section 5.(l) The sum of two million dollars ($2,000,000) appropriated in this act in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2000-2001 fiscal year for the Intensive Family Preservation Services (IFPS) Program shall be used by the Division, in consultation with local departments of social services and other human services agencies, to plan and implement a revised IFPS Program.

Notwithstanding the provisions of G.S. 143B-150.6, the Program shall provide intensive services to children and families in cases of abuse, neglect, and dependency where a child is at imminent risk of removal from the home and to children and families in cases of abuse where a child is not at imminent risk of removal. The Program shall be developed and implemented statewide on a regional basis. The revised IFPS Program shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out-of-home placement.

The Department shall reexamine the existing IFPS Program design to ensure the application of a standardized assessment and clear criteria for the determination of imminent risk of removal. Additionally, the Department shall assess the education and skill levels required of staff providing intensive family preservation services in existing programs.

The Department shall develop a revised evaluation model for the current and expanded IFPS Program. This evaluation shall not include area mental health or juvenile justice programs. The model shall be scientifically rigorous, including the use of treatment comparison groups, a review and description of interventions provided to families as compared to customary services provided to other child welfare children and families, and data regarding the number and type of referrals made for other human services and the utilization of those services.

The Department shall report on the use of the funds appropriated under this subsection, including the revised evaluation model and IFPS Program, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than April 1, 2001.

Section 5.(m) The Department of Health and Human Services and the Employment Security Commission shall report on the use of funds appropriated under this section from the TANF Block Grant to the First Stop Employment Assistance Program. This report shall include each of the following:

(1) The number of clients served since the inception of the program by fiscal year.

(2) The amount of funds expended each fiscal year.

(3) A description of the clients served. This description shall include demographic information about these clients.

(4) A description of coordination efforts with other human services agencies, including local departments of social services.

(5) A description of specific services provided to both initial and intensive First Stop clients.

(6) The placement rates of clients in both the initial and intensive programs.

(7) Statistics related to job retention, measured at least at intervals of six months and one year after the commencement of employment.

(8) Statistics related to the wage history of clients.

(9) Any other information the Department and the Employment Security Commission find relevant to an evaluation of the program.

Section 5.(n) The sum of one million dollars ($1,000,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant for Boys and Girls Clubs shall be used to make grants for approved programs. The Department of Health and Human Services, in accordance with federal regulations for the use of TANF Block Grant funds, shall administer a grant program to award funds to the Boys and Girls Clubs across the State in order to implement programs that improve the motivation, performance, and self-esteem of youth and to implement other initiatives that would be expected to reduce school dropout and teen pregnancy rates. The Department shall encourage and facilitate collaboration between the Boys and Girls Clubs and Support Our Students, Communities in Schools, and similar programs to submit joint applications for the funds if appropriate. The Department shall report on its progress in complying with this subsection to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later that April 1, 2001.

Section 5.(o) 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 5.(p) The sum of three million dollars ($3,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the Work First Housing Initiative shall be used for direct housing support to Work First clients and families. Direct housing support includes using funds for rental assistance, loans, moving expenses, and other financial assistance. No more than ten percent (10%) of these funds may be used for administration. These funds may be used for counseling or similar services only if it is demonstrated that those services are not otherwise available in the community.

Section 5.(q) The sum of five hundred thousand dollars ($500,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2000-2001 fiscal year shall be used to support administration of TANF-funded programs.

Section 5.(r) The sum of five million dollars ($5,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2000-2001 fiscal year shall be used to establish and expand regional residential substance abuse treatment and services for women with children. The Department of Health and Human Services, the Division of Social Services, and the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, in consultation with local departments of social services, area mental health programs, and other State and local agencies or organizations, shall coordinate this effort in order to facilitate the expansion of regionally based substance abuse services for women with children. These services shall be culturally appropriate and designed for the unique needs of TANF women with children.

In order to expedite the expansion of these services, the Secretary of the Department of Health and Human Services may enter into contracts with service providers.

The Department of Health and Human Services, the Division of Social Services, and the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall report on their progress in complying with this subsection no later than October 1, 2000, and March 1, 2001, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. These reports shall include all of the following:

(1) The number and location of additional beds created.

(2) The types of facilities established.

(3) The delineation of roles and responsibilities at the State and local levels.

(4) Demographics of the women served, the number of women served, and the cost per client.

(5) Demographics of the children served, the number of children served, and the services provided.

(6) Job placement services provided to women.

(7) A plan for follow-up and evaluation of services provided with an emphasis on outcomes.

(8) Barriers identified to the successful implementation of the expansion.

(9) Identification of other resources needed to appropriately and efficiently provide services to Work First recipients.

(10) Other information as requested.

Section 5.(s) The sum of two million seven hundred fifty thousand six hundred seventy-four dollars ($2,750,674) appropriated under this section in the TANF Block Grant to the Department of Health and Human Services and transferred to the Office of Juvenile Justice for the 2000-2001 fiscal year shall be used to support the existing Support Our Students Program and to expand the Program statewide. These funds shall not be used for administration of the program.

Section 5.(t) The sum of three million dollars ($3,000,000) appropriated under this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2000-2001 fiscal year shall be used to provide domestic violence services to Work First recipients. The Division of Social Services, in consultation with the Council for Women and local departments of social services, shall develop and implement a mechanism by which these funds may be used to facilitate delivery of domestic violence counseling, support, and other direct services to clients. These funds shall not be used to establish new domestic violence shelters, for State administration, or to facilitate lobbying efforts. The Department of Health and Human Services and the Council for Women shall report on the uses of these funds no later than February 1, 2001, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 5.(u) The sum of one million dollars ($1,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Public Health, for the 2000-2001 fiscal year shall be used to support the Responsible Fatherhood Initiative. These funds shall be used for responsible parenting programs targeted at young-adult males. These funds shall be targeted at counties with the highest needs as determined by the Division of Public Health. The evaluation of this initiative shall be incorporated into the overall evaluation of the pregnancy prevention and responsible parenting activities currently in place. This initiative shall be administered as directed in subsection (v) of this section.

Section 5.(v) The funds appropriated to the Department of Health and Human Services, Division of Public Health, in this act for the 2000-2001 fiscal year for teen pregnancy prevention shall be used in accordance with the provisions of this subsection.

Effective July 1, 2000, the Department of Health and Human Services, Division of Public Health, in collaboration with local program administrators, the Adolescent Pregnancy Prevention Coalition of North Carolina, and other organizations, shall adopt guidelines for the administration of funds for teen pregnancy prevention and for parenting programs. The guidelines shall include the following programmatic requirements:

(1) Council development at the local level is encouraged but not required for program funding. Councils that received first-year funding for the 1999-2000 fiscal year for administrative expenses for coalition building and partnership development shall receive funds committed for the second year of organizational development. The Division shall encourage programs that receive funding under this section to involve other health service organizations, nonprofit organizations, and task forces in program efforts.

(2) In awarding grants, the Department shall target counties with the highest teen pregnancy rates, increasingly higher teen pregnancy rates, high rates within demographic subgroups, or greatest need for parenting programs. Grants may be renewed annually based on program efficiency and effectiveness, teen pregnancy rates, and the level of need for parenting programs. Grants shall be funded at a particular level and may be funded on a multiyear cycle.

(3) The Division shall encourage all programs to implement best practice models. While best practice models are encouraged, the Department may fund innovative and promising projects that have not yet been recognized as best practice. All existing programs not using best practice models shall be encouraged to transition to the use of best practice models.

(4) Programs are not required to provide a cash match for these funds, however, the Department may require an in-kind match.

Funds for State-level administrative expenses of the Program shall not exceed ten percent (10%) of the total budget for teen pregnancy prevention and parenting programs. Administrative expenses include staffing and contracted services for evaluation and coalition-building activities.

The Department shall contract with an independent private consulting firm to evaluate the programs. The evaluation shall include standard data collection utilizing the mechanism that has been developed by the University of North Carolina at Chapel Hill, School of Social Work, and shall be conducted in a manner that objectively measures the effectiveness of each program evaluated.

The Department shall report annually on March 1, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division. The report shall include information on all of the following for each teen pregnancy prevention and parenting program:

(1) The program budget delineating all administrative expenses, contracts for services, and technical assistance.

(2) A narrative describing each project funded and the amount of funds received by the project.

(3) Effectiveness of the program in reducing teen pregnancy or developing responsible parenting skills in young adults, as applicable.

(4) Status of the evaluation.

Section 5.(w) The sum of two million dollars ($2,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used to expand after-school programs and services for at-risk children. The Department shall develop and implement a grant program to award grants to community-based programs that demonstrate the ability to reach children at risk of teen pregnancy and school dropout. The Department shall award grants to community-based organizations that demonstrate the ability to develop and implement linkages with local departments of social services, area mental health programs, schools, and other human services programs in order to provide support services and assistance to the child and family. These funds may be used to establish one position within the Division of Social Services to coordinate at-risk after-school programs and shall not be used for other State administration. The Department shall report no later than March 1, 2001, on its progress in complying with this section to the Senate Appropriations Committee on Human Resources, the House of Representatives Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 5.(x) The Department of Health and Human Services may use available block grant funds up to the sum of five million twelve thousand dollars ($5,012,000) in the 2000-2001 fiscal year to continue the Business Process Reengineering Project. The Department shall report directly on the use of any funds under this subsection to the Information Resource Management Commission in accordance with the Commission's requirements. The Department shall report on the use of these funds no later than April 1, 2001, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 5.(y) The sum of seven million two hundred sixty thousand dollars ($7,260,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2000-2001 fiscal year for Child Welfare Improvements shall be allocated to the county departments of social services for hiring or contracting additional staff on or after July 1, 2000, to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post-adoption services for eligible families.

Section 5.(z) The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this section in the Mental Health Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2000-2001 fiscal year and the sum of one million dollars ($1,000,000) 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 2000-2001 fiscal year shall be used to establish a Child Residential Treatment Services Program in accordance with Section 11.19 of this act.

Section 5.(aa) The Department of Health and Human Services, the Department of Commerce, and the Department of Public Instruction may allocate available block grant funds for pilot programs established pursuant to Section 11.4A of this act. These funds may be used for the planning, implementation, and evaluation of those pilot programs.

Section 5.(bb) The sum of two million dollars ($2,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for fiscal year 2000-2001 shall be used to support various child welfare training projects as follows:

(1) The sum of three hundred fifty thousand dollars ($350,000) shall be used to establish a regional training center in southeastern North Carolina.

(2) The sum of seven hundred fifty thousand dollars ($750,000) shall be used to support the Masters Degree in Social Work/Baccalaureate Degree in Social Work Collaborative.

(3) The sum of one hundred eighty thousand dollars ($180,000) to provide training for residential child care facilities.

(4) The sum of seven hundred twenty thousand dollars ($720,000) to provide for various other child welfare training initiatives.

Section 5.(cc) The sum of three hundred thousand dollars ($300,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2000-2001 fiscal year for JobLink pilots shall be used to replicate the Ladders to Success model program at community colleges.

The Department shall make two reports no later than February 15, 2001, and May 15, 2001, respectively, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. These reports shall include the following:

(1) A detailed explanation by each recipient of start-up funds on the use of these funds.

(2) A detailed explanation of the incentives offered to each county department of social services to encourage collaboration with JobLink programs including an explanation of the necessity of the incentives and an explanation of the benefits obtained as a result of the incentives.

(3) A detailed explanation of services offered by JobLink as a result of the incentives including an explanation of why the services are not otherwise offered.

(4) A description of and justification for the use of incentive funds.

(5) A report on the individuals hired or contracted to staff JobLink programs including the number of individuals hired or contracted, the positions and primary responsibilities of individuals hired or contracted, and the impact of these additional positions on JobLink clients.

(6) A detailed report on the employment outcomes of Work First clients who have participated in JobLink programs including information on job retention rates and salary level.

(7) Demographic information on clients served in the program.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

NER BLOCK GRANT FUNDS

Section 5.1.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2001, according to the following schedule:

COMMUNITY DEVELOPMENT BLOCK GRANT

01. State Administration $ 1,000,000

02. Urgent Needs and Contingency 1,000,000

03. Scattered Site Housing 10,340,000

04. Economic Development 8,710,000

05. Community Revitalization 13,500,000

06. State Technical Assistance 450,000

07. Housing Development 3,000,000

08. Infrastructure 7,000,000

TOTAL COMMUNITY DEVELOPMENT

BLOCK GRANT - 2001 Program Year $ 45,000,000

Section 5.1.(b) Decreases in Federal Fund Availability. – Decreases in federal fund availability for the Community Development Block Grants. – If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.

Section 5.1.(c) Increases in Federal Fund Availability for Community Development Block Grant. – Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows: – Each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.

Section 5.1.(d) Limitations on Community Development Block Grant Funds. – Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State administration; up to one million dollars ($1,000,000) may be used for Urgent Needs and Contingency; up to ten million three hundred forty thousand dollars ($10,340,000) may be used for Scattered Site Housing; up to eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development; not less than thirteen million five hundred thousand dollars ($13,500,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to three million dollars ($3,000,000) may be used for Housing Development; up to seven million dollars ($7,000,000) may be used for Infrastructure. If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.

Section 5.1.(e) Increase Capacity for Nonprofit Organizations. – Assistance to nonprofit organizations to increase their capacity to carry out CDBG-eligible activities in partnership with units of local government is an eligible activity under any program category in accordance with federal regulations. Capacity building grants may be made from funds available within program categories, program income, or unobligated funds.

Section 5.1.(f) Future CDBG Proposals. – In developing future CDBG proposals, the Department of Commerce shall consider ways in which to address the abatement of outhouses in the State.

PART VI. GENERAL FUND AND HIGHWAY FUND AVAILABILITY STATEMENTS

GENERAL FUND AVAILABILITY STATEMENT

Section 6.(a) The General Fund availability used to adjust the 2000-2001 fiscal year budget is shown below:

FY 2000-2001

Budget Reform Statement ($ million)

Beginning Unreserved Credit Balance 0.0

Tax Revenues - Current Tax Law 13,216.3

Non-Tax Revenues:

Investment Income 214.0

Judicial Fees 106.7

Disproportionate Share 105.0

Insurance 42.1

Highway Trust Fund Transfer 170.0

Highway Fund Transfer 13.8

Other Non-Tax Revenues 103.9

Subtotal 13,971.8

HB 1854 - 2000 Fee Bill 6.1

Y2K Reserve Transfer 9.0

Hurricane Fran Reserve Transfer 48.0

11TH/12TH Month Carryforward Revision 11.0

HB 1559 IRC Conformity Adjustment (2.0)

Disproportionate Share Reserve Transfer 1.0

Crime Victims Compensation Fund Reversion 1.0

State/Federal Retirees Administrative

Cost Reimbursement 0.1

Federal Retirees Refund Reversion 0.3

SB 1305 UCC Revision 3.9

TOTAL GENERAL FUND AVAILABILITY 14,050.2

Section 6.(b) Effective June 30, 2000, the Director of the Budget shall transfer from the 11th/12th month carryforward balance in the State Aid to Local School Administrative Units the sum of two hundred forty million dollars ($240,000,000) to a reserve in the Department of State Treasurer. These funds shall be held in reserve for allocation pursuant to a consent order entered in Wake County Superior Court for the Class B plaintiffs in Smith, et al. v. State, 95 CVS 06715 and for all plaintiffs in Shaver, et al. v. State, 98 CVS 00625. Of funds remaining in the 11th/12th month carryforward balance on July 1, 2000, the sum of eleven million dollars ($11,000,000) shall revert to the General Fund.

Section 6.(c) The unencumbered balance remaining in the Department of Commerce Y2K Conversion Fund shall be transferred to the General Fund on July 1, 2000.

Section 6.(d) Of the unencumbered balance remaining in Budget Code 13017-1710, the Hurricane Fran Disaster Relief Fund, the sum of forty-eight million dollars ($48,000,000) shall be transferred to the General Fund on July 1, 2000.

Section 6.(e) Of the unencumbered balance in budget code 24701 in the Department of Revenue, the sum of three hundred fifty thousand dollars ($350,000) shall be transferred to the General Fund on July 1, 2000.

Section 6.(f) The Commissioner of Insurance shall transfer funds quarterly from the Department of Insurance Fund to the General Fund to repay the funds appropriated to the Department of Insurance from the General Fund for each fiscal year, plus accrued interest at a rate determined by the State Treasurer.

Section 6.(g) Disproportionate Share Receipts reserved at the end of the 1999-2000 fiscal year shall be deposited with the Department of State Treasurer as a nontax revenue for the 2000-2001 fiscal year.

HIGHWAY FUND AVAILABILITY

Section 6.1. The Highway Fund appropriations availability used in developing modifications to the 2000-2001 Highway Fund budget contained in this act is shown below:

2000-2001

Beginning Credit Balance $6,980,000

Estimated Revenue 1,240,030,000

Additional Reversions –

TOTAL HIGHWAY FUND AVAILABILITY $1,247,010,000

PART VII. GENERAL PROVISIONS

Requested by: Representatives Easterling, Redwine, Senators Plyler, Perdue, Odom

CONTROLLER FINANCIAL STATEMENT REPORTING CLARIFICATION

Section 7.(a) G.S. 143-20.1 reads as rewritten:

"§ 143-20.1. Annual financial statements.

~~Beginning with fiscal years ending in 1984 and each and every year thereafter,~~ Every fiscal year, all State agencies and component units of the State, as defined by generally accepted accounting principles, shall prepare annual financial statements on all funds administered by them no later than 60 days ~~subsequent to the close~~ after the end of the State's fiscal year then ended in accordance with generally accepted accounting principles as described in authoritative pronouncements and interpreted ~~and/or~~ or prescribed by the State Controller, and in ~~such form as he may require.~~ the form required by the State Controller. The State Controller shall publish guidelines specifying the procedures to implement the necessary records, procedures, and accounting systems to reflect these statements on the proper basis of accounting.

Accordingly, the State Controller shall combine the financial statements for the various agencies into a Comprehensive Annual Financial Report for the State of North Carolina in accordance with generally accepted accounting principles. These statements, along with the opinion of the State Auditor, shall be published as the official financial statements of the State and shall be distributed to the Governor, the Office of State Budget and Management, members of the General Assembly, heads of departments, ~~agencies~~ agencies, and institutions of the State, and other interested parties. The State Controller shall notify the Director of the Budget of any ~~and all~~ State agencies ~~which~~ and component units of the State, as defined by generally accepted accounting principles, that have not complied fully with the requirements of this ~~provision~~ section within the specified time, and the Director of the Budget shall employ whatever means necessary, including the withholding of allotments, to ensure immediate corrective actions."

Section 7.(b) G.S. 143B-426.39 reads as rewritten:

"§ 143B-426.39. Powers and duties of the State Controller.

The State Controller shall:

(1) Prescribe, develop, operate, and maintain in accordance with generally accepted principles of governmental accounting, a uniform state accounting system for all state agencies. The system shall be designed to assure compliance with all legal and constitutional requirements including those associated with the receipt and expenditure of, and the accountability for public funds.

(2) On the recommendation of the State Auditor, prescribe and supervise the installation of any changes in the accounting systems of an agency that, in the judgment of the State Controller, are necessary to secure and maintain internal control and facilitate the recording of accounting data for the purpose of preparing reliable and meaningful statements and reports. The State Controller shall be responsible for seeing that a new system is designed to accumulate information required for the preparation of budget reports and other financial reports.

(3) Maintain complete, accurate and current financial records that set out all revenues, charges against funds, fund and appropriation balances, interfund transfers, outstanding vouchers, and encumbrances for all State funds and other public funds including trust funds and institutional funds available to, encumbered, or expended by each State agency, in a manner consistent with the uniform State accounting system.

(4) Prescribe the uniform classifications of accounts to be used by all State agencies including receipts, expenditures, assets, liabilities, fund types, organization codes, and purposes. The State Controller shall also, after consultation with the Office of State Budget and Management, prescribe a form for the periodic reporting of financial accounts, transactions, and other matters that is compatible with systems and reports required by the State Controller under this section. Additional records, accounts, and accounting systems may be maintained by agencies when required for reporting to funding sources provided prior approval is obtained from the State Controller.

(4a) Prescribe that, unless exempted by the State Controller, newly created or acquired component units of the State are required to have the same fiscal year as the State.

(5) Prescribe the manner in which disbursements of the State agencies shall be made, in accordance with G.S. 143-3.

(6) Operate a central payroll system, in accordance with G.S. 143-3.2 and 143-34.1.

(7) Keep a record of the appropriations, allotments, expenditures, and revenues of each State agency, in accordance with G.S. 143-20.

(8) Make appropriate reconciliations with the balances and accounts kept by the State Treasurer.

(9) Develop, implement, and amend as necessary a uniform statewide cash management plan for all State agencies in accordance with G.S. 147-86.11.

(9a) Implement a statewide accounts receivable program in accordance with Article 6B of Chapter 147 of the General Statutes.

(10) Prepare and submit to the Governor, the State Auditor, the State Treasurer, and the Office of State Budget and Management each month, a report summarizing by State agency and appropriation or other fund source, the results of financial transactions. This report shall be in the form that will most clearly and accurately set out the current fiscal condition of the State. The State Controller shall also furnish each State agency a report of its transactions by appropriation or other fund source in a form that will clearly and accurately present the fiscal activities and condition of the appropriation or fund source.

(11) Prepare and submit to the Governor, the State Auditor, the State Treasurer, and the Office of State Budget and Management, at the end of each quarter, a report on the financial condition and results of operations of the State entity for the period ended. This report shall clearly and accurately present the condition of all State funds and appropriation balances and shall include comments, recommendations, and concerns regarding the fiscal affairs and condition of the State.

(12) Prepare on or before October 31 of each year, a Comprehensive Annual Financial Report in accordance with generally accepted accounting principles of the preceding fiscal year, in accordance with G.S. 143-20.1. The report shall include State agencies and component units of the State, as defined by generally accepted accounting principles.

(13) Perform additional functions and duties assigned to the State Controller, within the scope and context of the Executive Budget Act, Chapter 143, Article 1 of the General Statutes.

(14) through (16) Recodified by Session Laws 1997-148, s. 3."

Section 7.(c) G.S. 115D-58.5(a) reads as rewritten:

"(a) Each institution shall establish and maintain an accounting system consistent with procedures as prescribed by the Community Colleges System Office and the State ~~Auditor,~~ Controller, which shows its assets, liabilities, equities, revenues, and expenditures."

Requested by: Representatives Nesbitt, Walend, Easterling, Redwine, Baddour, Senators Plyler, Perdue, Odom, Miller

RAISE STATE TORT CLAIMS LIMIT

Section 7A.(a) G.S. 143-291(a) reads as rewritten:

"(a) The North Carolina Industrial Commission is hereby constituted a court for the purpose of hearing and passing upon tort claims against the State Board of Education, the Board of Transportation, and all other departments, institutions and agencies of the State. The Industrial Commission shall determine whether or not each individual claim arose as a result of the negligence of any officer, employee, involuntary servant or agent of the State while acting within the scope of his office, employment, service, agency or authority, under circumstances where the State of North Carolina, if a private person, would be liable to the claimant in accordance with the laws of North Carolina. If the Commission finds that there was ~~such~~ negligence on the part of an officer, employee, involuntary servant or agent of the State while acting within the scope of his office, employment, service, agency or ~~authority, which~~ authority that was the proximate cause of the injury and that there was no contributory negligence on the part of the claimant or the person in whose behalf the claim is asserted, the Commission shall determine the amount of damages ~~which~~ that the claimant is entitled to be paid, including medical and other expenses, and by appropriate order direct the payment of ~~such~~ damages ~~by the department, institution or agency concerned,~~ as provided in subsection (a1) of this section, but in no event shall the amount of damages awarded exceed the ~~sum of one hundred fifty thousand dollars ($150,000)~~ amounts authorized in G.S. 143-299.2 cumulatively to all claimants on account of injury and damage to any one ~~person.~~ person arising out of a single occurrence. Community colleges and technical colleges shall be deemed State agencies for purposes of this Article. The fact that a claim may be brought under more than one Article under this Chapter shall not increase the foregoing maximum liability of the State."

Section 7A.(b) G.S. 143-291 is amended by adding a new subsection to read:

"(a1) The unit of State government that employed the employee at the time the cause of action arose shall pay the first one hundred fifty thousand dollars ($150,000) of liability, and the balance of any payment owed shall be paid in accordance with G.S. 143-299.4."

Section 7A.(c) G.S. 143-291.3 reads as rewritten:

"§ 143-291.3. Counterclaims by State.

The filing of a claim under this Article shall constitute consent by the ~~plaintiff(s)~~ plaintiff to the jurisdiction of the Industrial Commission to hear and determine any counterclaim of ~~one hundred fifty thousand dollars ($150,000)~~ the maximum amount authorized for a claim in G.S. 143-299.2 or less ~~which~~ that may be filed on behalf of a State department, ~~institution, or agency~~ institution or agency, or a county or city board of education. A final award of the Industrial Commission awarding damages on a counterclaim shall be filed with the ~~Clerk of the Superior Court~~ clerk of the superior court of the county ~~wherein~~ where the case was heard. These awards shall be docketed and shall be enforceable in the same manner as judgments of the General Court of Justice. Notwithstanding the provisions of Rule 12 of the Rules of Civil Procedure, nothing in this section shall require the filing of ~~such~~ a counterclaim."

Section 7A.(d) G.S. 143-299.2 reads as rewritten:

"§ 143-299.2. Limitation on payments by the State.

(a) The maximum amount ~~which~~ that the State may pay cumulatively to all claimants on account of injury and damage to any one ~~person,~~ person arising out of any one occurrence, whether the claim or claims are brought under this ~~Article~~ Article, or Article 31A or ~~Article 31B, shall be one hundred fifty thousand dollars ($150,000),~~ Article 31B of this Chapter, shall be five hundred thousand dollars ($500,000), less any commercial liability insurance purchased by the State and applicable to the claim or claims under G.S. 143-291(b), 143-300.6(c), or 143-300.16(c).

(b) The fact that a claim or claims may be brought under more than one Article under this Chapter shall not increase the above maximum liability of the State."

Section 7A.(e) Article 31 of Chapter 143 of the General Statutes is amended by adding a new section to read:

"§ 143-299.4. Payment of State excess liability.

For each claim payable during any fiscal year in excess of one hundred fifty thousand dollars ($150,000) per claim arising under this Article, or Article 31A or 31B of this Chapter, on account of injury or damage to any one person, each State agency shall transfer to the Office of State Budget and Management its proportionate share of that agency's estimated lapsed salaries, as determined by the Director of the Budget, and the Director of the Budget shall use these transferred funds to pay the balance of that claim in excess of one hundred fifty thousand dollars ($150,000)."

Section 7A.(f) G.S. 143-300.1(c) reads as rewritten:

"(c) In the event that the Industrial Commission ~~shall make award of~~ awards damages against any county or city board of education ~~pursuant to~~ under this section, the Attorney General shall draw a voucher for the amount required to pay ~~such~~ the award. The funds necessary to cover the first one hundred fifty thousand dollars ($150,000) of liability per claim ~~vouchers written by the Attorney General~~ for claims against county and city boards of education for accidents involving school buses and school transportation service vehicles shall be made available from funds appropriated to the ~~Department of Public Instruction.~~ State Board of Education. The balance of any liability owed shall be paid in accordance with G.S. 143-299.4. Neither the county or city boards of education, or the county or city administrative unit shall be liable for the payment of any award made pursuant to the provisions of this section in excess of the amount paid upon ~~such~~ a voucher by the Attorney General. Settlement and payment may be made by the Attorney General as provided in G.S. 143-295."

Section 7A.(g) G.S. 143-300.1(d) reads as rewritten:

"(d) The Attorney General may defend any civil action ~~which may be~~ brought against the driver, transportation safety assistant, or monitor of a public school bus or school transportation service vehicle or school bus maintenance mechanic when ~~such~~ the driver or mechanic is employed and paid by the local school administrative unit, when the monitor is acting in accordance with G.S. 115C-245(d), when the transportation safety assistant is acting in accordance with G.S. 115C-245(e), or when the driver is an unpaid school bus driver trainee under the supervision of an authorized employee of the Department of Transportation, Division of Motor Vehicles, or an authorized employee of a county or city board of education or administrative ~~unit thereof.~~ unit. The Attorney General may afford this defense through the use of a member of his staff or, in his discretion, employ private counsel. The Attorney General is authorized to pay any judgment rendered in ~~such~~ the civil action not to exceed the limit provided under the Tort Claims Act. The funds necessary to cover the first one hundred fifty thousand dollars ($150,000) of liability per claim shall be made available from funds appropriated to the State Board of Education. The balance of any liability owed shall be paid in accordance with G.S. 143-299.4. The Attorney General may compromise and settle any claim covered by this section to the extent that he finds the same to be valid, up to the limit provided in the Tort Claims Act, provided that the authority granted in this subsection shall be limited to only those claims ~~which~~ that would be within the jurisdiction of the Industrial Commission under the Tort Claims Act."

Section 7A.(h) G.S. 143-300.6(a) reads as rewritten:

"(a) Payment of Judgments and Settlements. In an action to which this Article applies, the State shall pay (i) a final judgment awarded in a court of competent jurisdiction against a State employee or (ii) the amount due under a settlement of the action under this section. The unit of State government ~~by which~~ that employed the employee ~~was employed~~ shall ~~make the payment.~~ pay the first one hundred fifty thousand dollars ($150,000) of liability, and the balance of any payment owed shall be paid in accordance with G.S. 143-299.4. This section does not waive the sovereign immunity of the State with respect to any claim. A payment of a judgment or settlement of a claim against a State employee or several State employees as joint tort-feasors may not exceed the amount payable for one claim under the Tort Claims Act."

Section 7A.(i) G.S. 143-300.16(a) reads as rewritten:

"(a) Any final judgment awarded against an employee in an action ~~which~~ that meets the requirements of G.S. 143-300.14, or any amount payable under a settlement of ~~such an~~ the action, shall be paid by the State. The first one hundred fifty thousand dollars ($150,000) of liability shall be paid from funds appropriated to the State Board of Education for the payment of State Tort Claims. The balance of any payment owed shall be paid in accordance with G.S. 143-299.4. ~~from the appropriation for the payment of State Tort Claims, except that no~~ No payment shall be made from ~~that appropriation~~ either funds appropriated to the State Board of Education or funds transferred from State agencies under G.S. 143-299.4 for any judgment for punitive damages. Nothing in this section shall be deemed to waive the sovereign immunity of the State with respect to a claim covered under this section or authorize the payment of any judgment or settlement against a public school employee in excess of the limit provided in the Tort Claims Act."

Section 7A.(j) Notwithstanding the limitations of G.S. 143-291.3, for claims pending on the effective date of this act, any counterclaim made by the State under G.S. 143-291.3 shall not exceed the greater of one hundred fifty thousand dollars ($150,000) or the amount of the plaintiff's claim.

Section 7A.(k) Subsections (a), (b), and (d) through (j) of this section apply to claims or actions pending on or after the effective date of this section. Subsection (c) of this section applies to claims filed on or after the effective date of this section.

Requested by: Representatives Easterling, Redwine, Senators Gulley, Dalton, Plyler, Perdue, Odom

NORTH CAROLINA RAILROAD DIVIDENDS/REPORT

Section 7.2.(a) Chapter 124 of the General Statutes is amended by adding a new section to read:

"§ 124-5.1. State use of North Carolina Railroad dividends.

(a) Notwithstanding the provisions of G.S. 136-16.6, in order to increase the capital of the North Carolina Railroad Company, any dividends of the North Carolina Railroad Company received by the State shall be applied to reduce the obligations described in subsection (c) of Section 32.30 of S.L. 1997-443, as amended by subsection (d) of Section 27.11 of S.L. 1999-237. Any dividends of the North Carolina Railroad Company received by the State shall be used by the Department of Transportation for the improvement of the property of the North Carolina Railroad Company as recommended and approved by the Board of Directors of the North Carolina Railroad Company.

(b) Effective January 1, 2000, interest shall not be accrued or otherwise charged on the remaining balance of the obligations described in subsection (c) of Section 32.30 of S.L. 1997-443, as amended by subsection (d) of Section 27.11 of S.L. 1999-237. Interest accrued on those obligations relating to periods prior to January 1, 2000, shall be deemed paid and contributed by the State to the capital of the North Carolina Railroad Company."

Section 7.2.(b) G.S. 124-3 reads as rewritten:

"§ 124-3. Report of railroad, canal, etc.; contents.

The president or other chief officer of every railroad, canal, or other public work of internal improvement in which the State owns an interest, shall, ~~when required to do so by the Governor,~~ report annually to the Joint Legislative Commission on Governmental Operations. ~~make or cause to be made to the Governor and Council of State a written report of its affairs.~~ This report shall ~~show:~~ include:

(1) Number of shares owned by the State.

(2) Number of shares owned otherwise.

(3) ~~Face~~ Par value of ~~such~~ the shares.

~~(4)~~ ~~Market value of each of such shares.~~

(5) Amount of bonded debt, and for what purpose contracted.

(6) Amount of other debt, and how incurred.

(7) If interest on bonded debt has been punctually paid as agreed; if not, how much in arrears.

(8) Amount of gross receipts for past year, and from what sources derived.

(9) An itemized account of expenditures for past year.

(10) ~~Any lease or sale of said property, or any part thereof, to whom made, for what consideration, and for what length of time.~~ A summary of all leases, sales, or acquisitions of real property to which the company has been a party since the last report.

(11) Suits at law pending against his company concerning its bonded debt, or in which title to all or any part of such road or canal is concerned.

(12) Any sales of stock owned by the State, by whose order made, and disposition of the proceeds.

(13) Annual financial statements, including notes, audited by an independent certified public accounting firm.

~~Any person failing to report as required by this section shall be guilty of a Class 1 misdemeanor.~~ Upon the request of the Governor or any committee of the General Assembly, a State-owned railroad company shall provide all additional information and data within its possession or ascertainable from its records."

Requested by: Representatives Easterling, Redwine, Senators Plyler, Perdue, Odom

STATE-SUPPORTED SCIENCE/TECHNOLOGY RECOMMENDATIONS/STUDY

Section 7.3.(a) The General Assembly finds that significant State funding or in-kind support of scientific or technological development activity by a non-State entity has been provided, but questions have arisen about whether there has been adequate provision for reimbursement of these expenses or a sharing by the State of the returns on the activities. The General Assembly desires to develop a policy to ensure that the State will share in any gain on these development activities in return for the substantial investment provided by the State, without discouraging traditional scientific or technological development activities provided through research institutions in the University system. The General Assembly finds that any solution should not cause unintended consequences, but shall protect the interest of the taxpayers who have provided the funds.

The General Assembly further finds that the constituent institutions of The University of North Carolina and the North Carolina Community Colleges System already have in place licensing, royalty, intellectual property, and other arrangements.

Section 7.3.(b) The Legislative Research Commission may study whether, consistent with the findings of subsection (a) of this section, the following should be required from the non-State entity as conditions of the funding or in-kind support:

(1) An acknowledgement that State funding or in-kind support is provided to serve a public purpose.

(2) A copy of the non-State entity's audited annual financial report for the year before and then each year after the extension of State funding or in-kind support.

(3) A quarterly report of marketing activities related to any of its scientific or technological development activity that has received State funding or in-kind support.

(4) Prior notice of any acquisition, merger, or corporate activity by the non-State entity that would:

a. Affect the public purpose and public benefit contemplated in the extension of State funding or in-kind support.

b. Benefit any of its corporate officers in the form of receiving directly or indirectly stock, stock options, or other valuable interest in a for-profit or nonprofit entity.

Section 7.3.(c) The Legislative Research Commission shall further study, consistent with the findings in subsection (a) of this section, whether the State shall provide funding or in-kind support to a non-State entity for scientific or technological development only as a contractual agreement and whether a condition of the contract shall be that the non-State entity do the following:

(1) Reimburse the State for all State support of any invention, innovation, discovery, or process that is transferred or marketed for a profit by the non-State entity.

(2) Agree to provide to the State prospectively a share in the future profits generated by a State-supported scientific or technological development.

Section 7.3.(d) The Legislative Research Commission may consult with The University of North Carolina and the North Carolina Community Colleges System regarding policy and practices relative to licensing and royalty arrangements.

Section 7.3.(e) The Legislative Research Commission shall report its recommendations to the 2001 Session of the General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

BUDGETING OF FUNDS TO IMPLEMENT THE ABCs OF PUBLIC EDUCATION PROGRAM

Section 7.4. The Director of the Budget shall include in the proposed continuation budget for the 2001-2003 fiscal biennium funds necessary to provide:

(1) Incentive funding for schools that meet or exceed the projected levels of improvement in student performance in accordance with the ABCs of Public Education Program; and

(2) Financial awards for personnel in schools that obtain the goals of the pilot program established in Section 8.36 of S.L. 1999-237. The purpose of this program is to test and evaluate a revised school accountability model for the ABCs of Public Education Program.

Requested by: Representatives Easterling, Redwine, Senators Plyler, Perdue, Odom

DISASTER RELIEF FUNDS

Section 7.5. The Director of the Budget may use lapsed salary funds for the 2000-2001 fiscal year to match federal funds for disaster relief.

Requested by: Representatives Easterling, Redwine, Senators Plyler, Perdue, Odom, Martin of Pitt, Robinson, Carter, Metcalf

CLEAN WATER MANAGEMENT TRUST FUND

Section 7.7.(a) Notwithstanding G.S. 143-15.3B(a), the State Controller shall not reserve to the Clean Water Management Trust Fund any portion of the unreserved credit balance remaining in the General Fund at the end of the 2000-2001 fiscal year.

Section 7.7.(b) Effective July 1, 2001, G.S. 143-15.3B(a) reads as rewritten:

"(a) The Clean Water Management Trust Fund is established in G.S. 113-145.3. The State Controller shall reserve to the Clean Water Management Trust Fund six and one-half percent (6.5%) of any unreserved credit balance remaining in the General Fund at the end of each fiscal year or thirty million dollars ($30,000,000), whichever is greater. The General Assembly finds that, due to the critical need in this State to clean up pollution in the State's surface waters and to protect and conserve those waters that are not yet polluted, it is imperative that the State provide a minimum of forty million dollars ($40,000,000) each calendar year to the Clean Water Management Trust Fund; therefore, there is annually appropriated from the General Fund to the Clean Water Management Trust Fund the sum of forty million dollars ($40,000,000)."

Section 7.7.(c) Effective July 1, 2002, G.S. 143-15.3B(a), as rewritten by subsection (b) of this section, reads as rewritten:

"(a) The Clean Water Management Trust Fund is established in G.S. 113-145.3. The General Assembly finds that, due to the critical need in this State to clean up pollution in the State's surface waters and to protect and conserve those waters that are not yet polluted, it is imperative that the State provide a minimum of ~~forty million dollars ($40,000,000)~~ seventy million dollars ($70,000,000) each calendar year to the Clean Water Trust Fund; therefore, there is annually appropriated from the General Fund to the Clean Water Management Trust Fund the sum of ~~forty million dollars ($40,000,000).~~ seventy million dollars ($70,000,000)."

Section 7.7.(d) Effective July 1, 2003, G.S. 143-15.3B(a), as rewritten by subsections (b) and (c) of this section, reads as rewritten:

"(a) The Clean Water Management Trust Fund is established in G.S. 113-145.3. The General Assembly finds that, due to the critical need in this State to clean up pollution in the State's surface waters and to protect and conserve those waters that are not yet polluted, it is imperative that the State provide a minimum of ~~seventy million dollars ($70,000,000)~~ one hundred million dollars ($100,000,000) each calendar year to the Clean Water Management Trust Fund; therefore, there is annually appropriated from the General Fund to the Clean Water Management Trust Fund the sum of ~~seventy million dollars ($70,000,000).~~ one hundred million dollars ($100,000,000)."

Section 7.7.(e) G.S. 143-15.2 reads as rewritten:

"§ 143-15.2. Use of General Fund credit balance; priority uses.

(a) As used in G.S. 143-15.3, 143-15.3A, and 143-15.3B, the term 'unreserved credit balance' means the credit balance amount, as determined on a cash basis, before funds are reserved by the State Controller to the Savings Reserve ~~Account, the~~ Account or the Repairs and Renovations Reserve ~~Account, or the Clean Water Management Trust Fund~~ Account pursuant to ~~G.S. 143-15.3, 143-15.3A, and 143-15.3B.~~ G.S. 143-15.3 and G.S. 143-15.3A.

(b) The State Controller shall transfer funds from the unreserved credit balance to the Savings Reserve Account in accordance with G.S. 143-15.3(a).

(c) The State Controller shall transfer funds from the unreserved credit balance to the Repairs and Renovation Reserve Account in accordance with G.S. 143-15.3A(a).

~~(d)~~ ~~The State Controller shall transfer funds from the unreserved credit balance to the Clean Water Management Trust Fund in accordance with G.S. 143-15.3B(a).~~

(e) The General Assembly may appropriate that part of the anticipated General Fund credit balance not expected to be reserved only for capital improvements or other one-time expenditures."

Section 7.7.(f) G.S. 143-15.3(a) reads as rewritten:

"(a) There is established a Savings Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Savings Reserve Account one-fourth of any unreserved credit balance remaining in the General Fund at the end of each fiscal year until the account contains funds equal to five percent (5%) of the amount appropriated the preceding year for the General Fund operating budget, including local government tax-sharing funds, that were directly appropriated. In the event that the one-fourth exceeds the amount necessary to reach the five percent (5%) level, only funds necessary to reach that level shall be reserved. If there are insufficient funds in the unreserved credit balance for the Savings Reserve ~~Account, the~~ Account and the Repairs and Renovations Reserve Account, ~~and the Clean Water Management Trust Fund,~~ then the requirements of this section shall be complied with first, and any remaining funds shall be reserved to the Repairs and Renovations Reserve Account, in accordance with ~~G.S. 143-15.3A, and the Clean Water Management Trust Fund, in accordance with G.S. 143-15.3B.~~ G.S. 143-15.3A."

Section 7.7.(g) Except as otherwise provided in this section, this section becomes effective June 30, 2001.

Requested by: Representatives Tolson, Easterling, Redwine, Senators Reeves, Plyler, Perdue, Odom

ELECTRONIC PROCUREMENT

Section 7.8. Article 10 of Chapter 143B of the General Statutes is amended by adding a new Part to read:

" Part 17. Electronic Procurement in Government.

"§ 143B-472.70. Electronic procurement.

(a) The Department of Administration and the Office of the State Controller, in conjunction with the Office of Information Technology Services (ITS), the Department of State Auditor, the Department of State Treasurer, The University of North Carolina General Administration, the Community Colleges System Office, and the Department of Public Instruction shall collaborate to develop electronic or digital procurement standards.

(b) The Department of Administration, in conjunction with the Office of the State Controller and the Office of Information Technology Services may, upon request, provide to all State agencies, universities, local school administrative units, and the community colleges, training in the use of the electronic procurement system.

(c) The Office of Information Technology shall act as an Application Service Provider for an electronic procurement system and shall establish, manage, and operate this electronic procurement system, through State ownership or commercial leasing, in accordance with the requirements and operating standards developed by the Department of Administration, the Office of the State Controller, and ITS.

(d) Nothing in this section modifies existing law relating to procurement between The University of North Carolina, UNC Health Care, local school administrative units, community colleges, and the Department of Administration."

Requested by: Representatives Easterling, Redwine, Senators Reeves, Plyler, Perdue, Odom

DEVELOPMENT AND IMPLEMENTATION OF WEB PORTALS/PUBLIC AGENCY LINKS

Section 7.9. Chapter 66 of the General Statutes is amended by adding a new Article to read:

"Article 11B.

"Electronic Access to State Services.

"§ 66-58.12. Development and implementation of Web portals; public agency links.

(a) The Office of Information Technology Services (ITS) shall develop the architecture, requirements, and standards for the development, implementation and operation of one or more centralized Web portals that will allow persons to access State government services on a 24-hour basis. ITS shall submit its plan for the implementation of the Web portals to the Information Resource Management Commission (IRMC) for its review and approval. When the plan is approved by the IRMC, ITS shall move forward with development and implementation of the statewide Web Portal system.

(b) Each State department, agency, and institution under the review of the IRMC shall functionally link its Internet or electronic services to a centralized Web portal system established pursuant to subsection (a) of this section."

Requested by: Representatives Easterling, Redwine, Senators Hagan, Plyler, Perdue, Odom

DATE LABELS FOR MEAT/POULTRY/SEAFOOD

Section 7.10. G.S. 106-130 is amended by adding a new subdivision to read:

"§ 106-130. Foods deemed misbranded.

A food shall be deemed to be misbranded:

…

(15) If the labeling provided by the manufacturer, packer, distributor, or retailer on meat, meat products, poultry, or seafood includes a 'sell-by' date or other indicator of a last recommended day of sale, and the date has been removed, obscured, or altered by any person other than the customer. This subdivision does not prohibit the removal of a label for the purpose of repackaging and relabeling a food item so long as the new package or new label does not bear a 'sell-by' date or other indicator of a last recommended day of sale later than the original package. This subdivision does not prohibit relabeling of meat, meat products, poultry, or seafood that has had its shelf life extended through freezing, cooking, or other additional processing that extends the shelf life of the product."

Requested by: Representatives Easterling, Redwine, Senators Plyler, Perdue, Odom, Hartsell

TRAINING FOR MEMBERS OF THE PROPERTY TAX COMMISSION

Section 7.11. G.S. 105-288(d) reads as rewritten:

"(d) Expenses. – The members of the Property Tax Commission shall receive travel and subsistence expenses in accordance with G.S. 138-5 and a salary of two hundred dollars ($200.00) a day when hearing ~~cases.~~ cases, meeting to decide cases, and attending training or continuing education classes on property taxes or judicial procedure. The Secretary of Revenue shall supply all the clerical and other services required by the Commission. All expenses of the Commission and the Department of Revenue in performing the duties enumerated in this Article shall be paid as provided in G.S. 105-501."

PART VIII. PUBLIC SCHOOLS

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EXPENDITURE OF FUNDS TO IMPROVE STUDENT ACCOUNTABILITY

Section 8. Section 8.17 of S.L. 1999-237 reads as rewritten:

"Section 8.17. (a) Funds appropriated for the ~~1999-2001 fiscal biennium~~ 2000-2001 fiscal year for Student Accountability Standards shall be used to assist students in performing at or above grade level in reading and mathematics in grades 3-8 as measured by the State's end-of-grade tests. The State Board of Education shall allocate these funds to local school administrative units based on the number of students who score at Level I or Level II on either reading or mathematics end-of-grade tests in grades 3-8. Funds in this allocation category shall be ~~spent only~~ used to improve the academic performance of ~~children~~ (i) students who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and ~~children~~ (ii) students who are performing at Level I or II on the writing tests in grades 4 and 7. These funds may also be used to improve the academic performance of students who are performing at Level I or II on the high school end-of-course tests. These funds shall not be transferred to other allocation categories or otherwise used for other purposes. Except as otherwise provided by law, local boards of education may transfer other funds available to them into this allocation category.

The principal of a school receiving these funds, in consultation with the faculty and the site-based management team, shall implement plans for expending these funds to improve the performance of students.

Continuation budget funds previously appropriated for NC Helps and for the middle school pilot project shall be transferred to this allocation category.

Local boards of education are encouraged to use federal funds such as Goals 2000 and Title I Comprehensive School Reform Development Funds and to examine the use of State funds to ensure that every student is performing at or above grade level in reading and mathematics.

The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to the convening of the 2000 Regular Session of the General Assembly on the implementation of this section. The report may include recommendations regarding the transfer of other funds into this allocation category.

Section 8.17.(b) Funds appropriated for Student Accountability Standards shall not revert at the end of each fiscal year but shall remain available for expenditure until August 31 of the subsequent fiscal year."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

USE OF STAFF DEVELOPMENT FUNDS MENTOR TRAINING

Section 8.1. G.S. 115C-105.27 reads as rewritten:

"§ 115C-105.27. Development and approval of school improvement plans.

In order to improve student performance, each school shall develop a school improvement plan that takes into consideration the annual performance goal for that school that is set by the State Board under G.S. 115C-105.35. The principal of each school, representatives of the assistant principals, instructional personnel, instructional support personnel, and teacher assistants assigned to the school building, and parents of children enrolled in the school shall constitute a school improvement team to develop a school improvement plan to improve student performance. Representatives of the assistant principals, instructional personnel, instructional support personnel, and teacher assistants shall be elected by their respective groups by secret ballot. Unless the local board of education has adopted an election policy, parents shall be elected by parents of children enrolled in the school in an election conducted by the parent and teacher organization of the school or, if none exists, by the largest organization of parents formed for this purpose. Parents serving on school improvement teams shall reflect the racial and socioeconomic composition of the students enrolled in that school and shall not be members of the building-level staff. Parental involvement is a critical component of school success and positive student achievement; therefore, it is the intent of the General Assembly that parents, along with teachers, have a substantial role in developing school improvement plans. To this end, school improvement team meetings shall be held at a convenient time to assure substantial parent participation. The strategies for improving student ~~performance shall~~ performance:

(1) Shall include a plan for the use of staff development funds that may be made available to the school by the local board of education to implement the school improvement ~~plan and shall~~ plan. The plan may provide that a portion of these funds is used for mentor training and for release time and substitute teachers while mentors and teachers mentored are meeting;

(2) Shall include a plan to address school safety and discipline concerns in accordance with the safe school plan developed under Article 8C of this ~~Chapter. The strategies may~~ Chapter;

(3) May include a decision to use State funds in accordance with ~~G.S. 115C-105.25. The strategies for improving student performance shall~~ G.S. 115C-105.25;

(4) Shall include a plan that specifies the effective instructional practices and methods to be used to improve the academic performance of students identified as at risk of academic failure or at risk of dropping out of ~~school. The strategies may also~~ school;

(5) May include requests for waivers of State laws, rules, or policies for that school. A request for a waiver shall meet the requirements of G.S. 115C-105.26.

Support among affected staff members is essential to successful implementation of a school improvement plan to address improved student performance at that school. The principal of the school shall present the proposed school improvement plan to all of the principals, assistant principals, instructional personnel, instructional support personnel, and teacher assistants assigned to the school building for their review and vote. The vote shall be by secret ballot. The principal shall submit the school improvement plan to the local board of education only if the proposed school improvement plan has the approval of a majority of the staff who voted on the plan.

The local board of education shall accept or reject the school improvement plan. The local board shall not make any substantive changes in any school improvement plan that it accepts. If the local board rejects a school improvement plan, the local board shall state with specificity its reasons for rejecting the plan; the school improvement team may then prepare another plan, present it to the principals, assistant principals, instructional personnel, instructional support personnel, and teacher assistants assigned to the school building for a vote, and submit it to the local board to accept or reject. If no school improvement plan is accepted for a school within 60 days after its initial submission to the local board, the school or the local board may ask to use the process to resolve disagreements recommended in the guidelines developed by the State Board under G.S. 115C-105.20(b)(5). If this request is made, both the school and local board shall participate in the process to resolve disagreements. If there is no request to use that process, then the local board may develop a school improvement plan for the school. The General Assembly urges the local board to utilize the school's proposed school improvement plan to the maximum extent possible when developing such a plan.

A school improvement plan shall remain in effect for no more than three years; however, the school improvement team may amend the plan as often as is necessary or appropriate. If, at any time, any part of a school improvement plan becomes unlawful or the local board finds that a school improvement plan is impeding student performance at a school, the local board may vacate the relevant portion of the plan and may direct the school to revise that portion. The procedures set out in this subsection shall apply to amendments and revisions to school improvement plans."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EXCEPTIONAL CHILDREN

Section 8.2. The funds appropriated for exceptional children for the 2000-2001 fiscal year shall be allocated as follows:

(1) Each local school administrative unit shall receive for academically or intellectually gifted children the sum of eight hundred forty-three dollars and fifty-nine cents ($843.59) per child for four percent (4%) of the 2000-2001 allocated average daily membership in the local school administrative unit, regardless of the number of children identified as academically or intellectually gifted in the local school administrative unit. The total number of children for which funds shall be allocated pursuant to this subdivision is 51,542 for the 2000-2001 school year.

(2) Each local school administrative unit shall receive for children with special needs the sum of two thousand five hundred forty-nine dollars and seventy-four cents ($2,549.74) per child for the lesser of (i) all children who are identified as children with special needs or (ii) twelve and five-tenths percent (12.5%) of the 2000-2001 allocated average daily membership in the local school administrative unit. The maximum number of children for which funds shall be allocated pursuant to this subdivision is 156,296 for the 2000-2001 school year.

The dollar amounts allocated under this section for exceptional children shall also increase in accordance with legislative salary increments for personnel who serve exceptional children.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

LIMITED ENGLISH PROFICIENCY

Section 8.3. Section 8.10 of S.L. 1999-237 reads as rewritten:

"Section 8.10. The State Board of Education shall develop guidelines for identifying and providing services to students with limited proficiency in the English language.

The State Board shall allocate these funds to local school administrative units and to charter schools under a formula that takes into account the average percentage of students in the units or the charters over the past three years who have limited English proficiency. If data for the prior three years are not available, the State Board shall use the most recent reliable data. The State Board shall allocate funds to a unit or a charter school only if (i) average daily membership of the unit or the charter school includes at least 20 students with limited English proficiency or (ii) students with limited English proficiency comprise at least two and one-half percent (2 1/2%) of the average daily membership of the unit or charter school. ~~No unit or charter school shall receive funds for more than~~ For the portion of the funds that is allocated on the basis of the number of identified students, the maximum number of identified students for whom a unit or charter school receives funds shall not exceed ten and six-tenths percent (10.6%) of its average daily membership.

Local school administrative units shall use funds allocated to them to pay for classroom teachers, teacher assistants, tutors, textbooks, classroom materials/instructional supplies/equipment, transportation costs, and staff development for students with limited English proficiency.

A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EXCEPTIONAL CHILDREN HEAD COUNT

Section 8.4. The Commission on Children with Special Needs shall study the issue of when the head count of children with special needs should be performed and whether a single head count during a school year is adequate. The Commission shall report the results of its study to the 2001 General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

REDUCE IMPACT OF SIGNIFICANT REDUCTIONS IN ADM IN SMALL SCHOOL SYSTEMS

Section 8.5. If a county school administrative unit with 3,000 or fewer students experiences a greater than four percent (4%) loss in projected average daily membership due to shifts of enrollment to charter schools located within the unit, the State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for the 2000-2001 fiscal year to reduce the loss of funds to the unit's schools, other than charter schools, to a maximum of four percent (4%).

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

FUNDS FOR THE TESTING AND IMPLEMENTATION OF THE NEW STUDENT INFORMATION SYSTEM

Section 8.6. The State Board of Education may transfer up to one million dollars ($1,000,000) in funds appropriated for the Uniform Education Reporting System for the 2000-2001 fiscal year to the Department of Public Instruction to lease or purchase equipment necessary for the testing and implementation of NC WISE, the new student information system in the public schools.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

USES OF THE ADM RESERVE

Section 8.7. If a local school administrative unit has inadequate resources due to (i) the establishment of a new charter school or (ii) authorization from the State Board of Education to increase the enrollment of an existing charter school by more than ten percent (10%), the State Board of Education may allocate additional funds to the unit from the Reserve for Average Daily Membership Adjustment. The State Board shall develop policies for the implementation of this section.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

CLASS-SIZE COMPUTATION FOR K-2

Section 8.8. Local school administrative units shall use teacher positions allocated for kindergarten through second grade (i) to hire classroom teachers and reading teachers for children in kindergarten through second grade and (ii) to otherwise reduce the student-teacher ratio in kindergarten through second grade.

Notwithstanding the provisions of G.S. 115C-301(c), both the maximum average class size for the grade span kindergarten, first grade, and second grade, and the maximum size of an individual class within the grade span shall be 26 students.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

LITIGATION RESERVE

Section 8.9.(a) Funds in the State Board of Education's Litigation Reserve that are not expended or encumbered on June 30, 2000, shall not revert on July 1, 2000, but shall remain available for expenditure until June 30, 2001.

Section 8.9.(b) Subsection (a) of this section becomes effective June 30, 2000.

Section 8.9.(c) The State Board of Education may expend up to five hundred thousand dollars ($500,000) for the 2000-2001 fiscal year from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TEACHER SALARY SCHEDULES

Section 8.10.(a) Effective for the 2000-2001 school year, the Director of the Budget may transfer from the Reserve for Compensation Increase for the 2000-2001 fiscal year funds necessary to implement the teacher salary schedule set out in subsection (b) of this section, including funds for the employer's retirement and social security contributions and funds for annual longevity payments at one and one-half percent (1.5%) of base salary for 10 to 14 years of State service, two and twenty-five hundredths percent (2.25%) of base salary for 15 to 19 years of State service, three and twenty-five hundredths percent (3.25%) of base salary for 20 to 24 years of State service, and four and one-half percent (4.5%) of base salary for 25 or more years of State service, commencing July 1, 2000, for all teachers whose salaries are supported from the State's General Fund. These funds shall be allocated to individuals according to rules adopted by the State Board of Education. The longevity payment shall be paid in a lump sum once a year.

Section 8.10.(b) For the 2000-2001 school year, the following monthly salary schedules shall apply to certified personnel of the public schools who are classified as teachers. The schedule contains 30 steps with each step corresponding to one year of teaching experience.

2000-2001 Monthly Salary Schedule

"A" Teachers

Years of "A" NBPTS

Experience Teachers Certification

0 $2,500 N/A

1 $2,542 N/A

2 $2,585 N/A

3 $2,737 $3,065

4 $2,875 $3,220

5 $3,006 $3,366

6 $3,133 $3,508

7 $3,234 $3,622

8 $3,281 $3,674

9 $3,329 $3,728

10 $3,378 $3,783

11 $3,427 $3,838

12 $3,476 $3,893

13 $3,526 $3,949

14 $3,578 $4,007

15 $3,631 $4,066

16 $3,685 $4,127

17 $3,740 $4,188

18 $3,796 $4,251

19 $3,853 $4,315

20 $3,911 $4,380

21 $3,971 $4,447

22 $4,032 $4,515

23 $4,095 $4,586

24 $4,158 $4,656

25 $4,222 $4,728

26 $4,287 $4,801

27 $4,354 $4,876

28 $4,423 $4,953

29+ $4,493 $5,032

2000-2001 Monthly Salary Schedule

"M" Teachers

Years of "M" NBPTS

Experience Teachers Certification

0 $2,750 N/A

1 $2,796 N/A

2 $2,844 N/A

3 $3,011 $3,372

4 $3,163 $3,542

5 $3,307 $3,703

6 $3,446 $3,859

7 $3,557 $3,983

8 $3,609 $4,042

9 $3,662 $4,101

10 $3,716 $4,161

11 $3,770 $4,222

12 $3,824 $4,282

13 $3,879 $4,344

14 $3,936 $4,408

15 $3,994 $4,473

16 $4,054 $4,540

17 $4,114 $4,607

18 $4,176 $4,677

19 $4,238 $4,746

20 $4,302 $4,818

21 $4,368 $4,892

22 $4,435 $4,967

23 $4,505 $5,045

24 $4,574 $5,122

25 $4,644 $5,201

26 $4,716 $5,281

27 $4,789 $5,363

28 $4,865 $5,448

29+ $4,942 $5,535

Section 8.10.(b1) Certified public school teachers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "M" teachers. Certified public school teachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "M" teachers.

Section 8.10.(c) Effective for the 2000-2001 school year, the first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "M" teachers. Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience. Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.

Certified psychologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified psychologists. Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.

Section 8.10.(d) Effective for the 2000-2001 school year, speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.

Speech pathologists and audiologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for speech pathologists and audiologists. Speech pathologists and audiologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for speech pathologists and audiologists.

Section 8.10.(e) Certified school nurses who are employed in the public schools as nurses shall be paid on the "M" salary schedule.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SCHOOL-BASED ADMINISTRATOR SALARIES

Section 8.11.(a) Funds appropriated to the Reserve for Compensation Increase shall be used for the implementation of the salary schedule for school-based administrators as provided in this section. These funds shall be used for State-paid employees only.

Section 8.11.(b) The base salary schedule for school-based administrators shall apply only to principals and assistant principals. The base salary schedule for the 2000-2001 fiscal year, commencing July 1, 2000, is as follows:

2000-2001

Principal and Assistant Principal Salary Schedules

Classification

Yrs of Assistant Prin I Prin II Prin III Prin IV

Exp Principal (0-10) (11-21) (22-32) (33-43)

0-4 $3,195

5 $3,340

6 $3,480

7 $3,593

8 $3,645 $3,645

9 $3,699 $3,699

10 $3,753 $3,753 $3,808

11 $3,808 $3,808 $3,862

12 $3,862 $3,862 $3,918 $3,975

13 $3,918 $3,918 $3,975 $4,034 $4,095

14 $3,975 $3,975 $4,034 $4,095 $4,155

15 $4,034 $4,034 $4,095 $4,155 $4,218

16 $4,095 $4,095 $4,155 $4,218 $4,280

17 $4,155 $4,155 $4,218 $4,280 $4,345

18 $4,218 $4,218 $4,280 $4,345 $4,412

19 $4,280 $4,280 $4,345 $4,412 $4,479

20 $4,345 $4,345 $4,412 $4,479 $4,550

21 $4,412 $4,412 $4,479 $4,550 $4,620

22 $4,479 $4,479 $4,550 $4,620 $4,690

23 $4,550 $4,550 $4,620 $4,690 $4,763

24 $4,620 $4,620 $4,690 $4,763 $4,837

25 $4,690 $4,690 $4,763 $4,837 $4,914

26 $4,763 $4,763 $4,837 $4,914 $4,991

27 $4,837 $4,837 $4,914 $4,991 $5,091

28 $4,914 $4,914 $4,991 $5,091 $5,193

29 $4,991 $4,991 $5,091 $5,193 $5,297

30 $5,091 $5,091 $5,193 $5,297 $5,403

31 $5,193 $5,193 $5,297 $5,403 $5,511

32 $5,297 $5,403 $5,511 $5,621

33 $5,511 $5,621 $5,733

34 $5,621 $5,733 $5,848

35 $5,848 $5,965

36 $5,965 $6,084

37 $6,206

2000-2001

Principal and Assistant Principal Salary Schedules

Classification

Yrs of Prin V Prin VI Prin VII Prin VIII

Exp (44-54) (55-65) (66-100) (101+)

14 $4,218

15 $4,280

16 $4,345 $4,412

17 $4,412 $4,479 $4,620

18 $4,479 $4,550 $4,690 $4,763

19 $4,550 $4,620 $4,763 $4,837

20 $4,620 $4,690 $4,837 $4,914

21 $4,690 $4,763 $4,914 $4,991

22 $4,763 $4,837 $4,991 $5,091

23 $4,837 $4,914 $5,091 $5,193

24 $4,914 $4,991 $5,193 $5,297

25 $4,991 $5,091 $5,297 $5,403

26 $5,091 $5,193 $5,403 $5,511

27 $5,193 $5,297 $5,511 $5,621

28 $5,297 $5,403 $5,621 $5,733

29 $5,403 $5,511 $5,733 $5,848

30 $5,511 $5,621 $5,848 $5,965

31 $5,621 $5,733 $5,965 $6,084

32 $5,733 $5,848 $6,084 $6,206

33 $5,848 $5,965 $6,206 $6,330

34 $5,965 $6,084 $6,330 $6,457

35 $6,084 $6,206 $6,457 $6,586

36 $6,206 $6,330 $6,586 $6,718

37 $6,330 $6,457 $6,718 $6,852

38 $6,457 $6,586 $6,852 $6,989

39 $6,718 $6,989 $7,129

40 $6,852 $7,129 $7,272

41 $7,272 $7,417

Section 8.11.(c) The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools, shall be determined in accordance with the following schedule:

Number of Teachers

Classification Supervised

Assistant Principal

Principal I Fewer than 11 Teachers

Principal II 11-21 Teachers

Principal III 22-32 Teachers

Principal IV 33-43 Teachers

Principal V 44-54 Teachers

Principal VI 55-65 Teachers

Principal VII 66-100 Teachers

Principal VIII More than 100 Teachers

The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non-State funds or the principal or teacher assistants.

The beginning classification for principals in alternative schools 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 8.11.(d) A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal.

Section 8.11.(e) For the 2000-2001 fiscal year, a principal or assistant principal shall be placed on the appropriate step plus one percent (1%) if:

(1) The employee's school met or exceeded the projected levels of improvement in student performance for the 1997-98 fiscal year, in accordance with the ABCs of Public Education Program;

(2) The local board of education found in 1997-98 that the employee's school met objectively measurable goals set by the local board of education for maintaining a safe and orderly school;

(3) The employee's school met or exceeded the projected levels of improvement in student performance for the 1998-99 fiscal year, in accordance with the ABCs of Public Education Program;

(4) The local board of education found in 1998-99 that the employee's school met objectively measurable goals set by the local board of education for maintaining a safe and orderly school;

(5) The employee's school met or exceeded the projected levels of improvement in student performance for the 1999-2000 fiscal year, in accordance with the ABCs of Public Education Program; or

(6) The local board of education found in 1999-2000 that the employee's school met objectively measurable goals set by the local board of education for maintaining a safe and orderly school.

The principal or assistant principal shall be placed on the appropriate step plus an additional one percent (1%) for meeting each additional condition set out in subdivisions (1) through (6). Under no circumstance shall placement of a principal or assistant principal be higher than six percent (6%) above the appropriate step on the salary schedule.

Section 8.11.(f) For the 2000-2001 fiscal year, a principal or assistant principal shall receive a lump-sum payment of:

(1) One percent (1%) of his or her State-paid salary if the employee's school meets or exceeds the projected levels of improvement in student performance for the 2000-2001 fiscal year, in accordance with the ABCs of Public Education Program.

(2) One percent (1%) of his or her State-paid salary if the local board of education finds that the employee's school has met the 2000-2001 goals of the local plan for maintaining a safe and orderly school.

The principal or assistant principal shall receive a lump-sum payment of two percent (2%) if the conditions set out in both subdivisions (1) and (2) are satisfied.

The lump sum shall be paid as determined by guidelines adopted by the State Board. Except as provided in subsection (l) of this section, placement on the salary schedule in the following year shall be based upon these increases.

Section 8.11.(g) 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 8.11.(h) There shall be no State requirement that superintendents in each local school unit shall receive in State-paid salary at least one percent (1%) more than the highest paid principal receives in State salary in that school unit: Provided, however, the additional State-paid salary a superintendent who was employed by a local school administrative unit for the 1992-93 fiscal year received because of that requirement shall not be reduced because of this subsection for subsequent fiscal years that the superintendent is employed by that local school administrative unit so long as the superintendent is entitled to at least that amount of additional State-paid salary under the rules in effect for the 1992-93 fiscal year.

Section 8.11.(i) Longevity pay for principals and assistant principals shall be as provided for State employees under the State Personnel Act.

Section 8.11.(j)

(1) 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.

(2) 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 subdivision 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 subdivision for one calendar year following the date of the merger.

Section 8.11.(k) Participants in an approved full-time masters 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 masters program. Certification of eligible full-time interns shall be supplied to the Department of Public Instruction by the Principal Fellows Program or a school of education where the intern participates in a full-time masters in school administration.

Section 8.11.(l) During the 2000-2001 fiscal year, the placement on the salary schedule of an administrator with a one-year provisional assistant principal's certificate shall be at the entry-level salary for an assistant principal or the appropriate step on the teacher salary schedule, whichever is higher. Lump-sum payments received pursuant to subsection (f) of this section shall not be considered in placing the employee on the salary schedule in subsequent years that the employee is employed under either a provisional or a full certificate.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SCHOOL CENTRAL OFFICE SALARIES

Section 8.12.(a) The following monthly salary ranges apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2000-2001 fiscal year, beginning July 1, 2000:

School Administrator I $2,932 $5,214

School Administrator II $3,112 $5,534

School Administrator III $3,303 $5,873

School Administrator IV $3,436 $6,110

School Administrator V $3,574 $6,358

School Administrator VI $3,792 $6,747

School Administrator VII $3,945 $7,020

The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents. The category in which an employee is placed shall be included in the contract of any employee hired on or after July 1, 2000.

Section 8.12.(b) The following monthly salary ranges apply to public school superintendents for the 2000-2001 fiscal year, beginning July 1, 2000:

(1) Superintendent I (Up to 2,500 ADM) $4,187 $7,451

(2) Superintendent II (2,501 - 5,000 ADM) $4,445 $7,904

(3) Superintendent III (5,001 - 10,000 ADM) $4,716 $8,389

(4) Superintendent IV (10,001 - 25,000 ADM) $5,005 $8,901

(5) Superintendent V (Over 25,000 ADM) $5,312 $9,447

The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.

Notwithstanding the provisions of this subsection, a local board of education may pay an amount in excess of the applicable range to a superintendent who is entitled to receive the higher amount under Section 8.11(h) of this act.

Section 8.12.(c) Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the State Personnel Act.

Section 8.12.(d) Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for pursuant to this section. Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for under this section.

Section 8.12.(e) The State Board shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.

Section 8.12.(f) The Director of the Budget shall transfer from the Reserve for Compensation Increase created in this act for fiscal year 2000-2001, beginning July 1, 2000, funds necessary to provide an average annual salary increase of four and two-tenths percent (4.2%), including funds for the employer's retirement and social security contributions, commencing July 1, 2000, for all permanent full-time personnel paid from the Central Office Allotment. The State Board of Education shall allocate these funds to local school administrative units. The local boards of education shall establish guidelines for providing their salary increases to these personnel.

Section 8.12.(g) Effective October 1, 2000, any person who was employed on or before April 1, 2000, and who is still employed on October 1, 2000, as a permanent public school employee whose salary is set by or under this section shall receive a compensation bonus, payable at the end of the employee's first pay date after October 1, 2000, of five hundred dollars ($500.00). For permanent part-time employees, the compensation bonus provided by this section shall be adjusted pro rata. Notwithstanding G.S. 135-1(7a), the compensation bonus provided by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

NONCERTIFIED PERSONNEL SALARY FUNDS

Section 8.13.(a) The Director of the Budget may transfer from the Reserve for Compensation Increase created in this act for fiscal year 2000-2001, commencing July 1, 2000, funds necessary to provide a salary increase of four and two-tenths percent (4.2%), including funds for the employer's retirement and social security contributions, commencing July 1, 2000, for all noncertified public school employees, except for teacher assistants, whose salaries are supported from the State's General Fund.

Section 8.13.(b) Except as provided in subsection (c) of this section, local boards of education shall increase the rates of pay for all such employees who were employed for fiscal year 1999-2000 and who continue their employment for fiscal year 2000-2001 by at least four and two-tenths percent (4.2%), commencing July 1, 2000.

Section 8.13.(c) A local board of education may adopt a policy that provides for raises of less than four and two-tenths percent (4.2%) for all such employees who were employed for less than two-thirds of the employment period for fiscal year 1999-2000 and who continue their employment for fiscal year 2000-2001. A local board of education adopting such a policy shall increase the salaries of those employees in accordance with the local policy.

Section 8.13.(d) These funds shall not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.

Section 8.13.(e) The State Board of Education may adopt salary ranges for noncertified personnel to support increases of four and two-tenths percent (4.2%) for the 2000-2001 fiscal year.

Section 8.13.(f) Effective October 1, 2000, any person who was employed on or before April 1, 2000, and who is still employed on October 1, 2000, as a permanent public school employee whose salary is set by or under this section shall receive a compensation bonus, payable at the end of the employee's first pay date after October 1, 2000, of five hundred dollars ($500.00). For permanent part-time employees, the compensation bonus provided by this section shall be adjusted pro rata. Notwithstanding G.S. 135-1(7a), the compensation bonus provided by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Nesbitt, Bonner, Warner, Yongue, Senators Lee, Dalton, Plyler, Perdue, Odom

TEACHER ASSISTANT SALARY SCHEDULE

Section 8.13A.(a) The allotment formula for teacher assistants for the 2000-2001 fiscal year shall be a dollar allotment. Local boards of education shall use these funds to increase the rates of pay for teacher assistants who were employed for fiscal year 1999-2000 and who continue their employment for fiscal year 2000-2001. This increase shall be at least four and two tenths percent (4.2%), commencing July 1, 2000, for all such teacher assistants unless a local board of education adopts a policy that provides for raises of less than four and two tenths percent (4.2%) for all those teacher assistants who were employed for less than two-thirds of the employment period for fiscal year 1999-2000 and who continue their employment for fiscal year 2000-2001. A local board of education adopting such a policy shall increase the salaries of those teacher assistants who were employed for less than two-thirds of the employment period for fiscal year 1999-2000 in accordance with the local policy; that local board shall increase the salaries of those teacher assistants who were employed for two-thirds or more of the employment period for fiscal year 1999-2000 by at least four and two tenths percent (4.2%).

Section 8.13A.(b) Effective October 1, 2000, any person who was employed on or before April 1, 2000, and who is still employed on October 1, 2000, as a permanent public school employee whose salary is set by or under this section shall receive a compensation bonus, payable at the end of the employee's first pay date after October 1, 2000, of five hundred dollars ($500.00). For permanent part-time employees, the compensation bonus provided by this section shall be adjusted pro rata. Notwithstanding G.S. 135-1(7a), the compensation bonus provided by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

Section 8.13A.(c) Prior to the adoption and implementation of a minimum experience-based salary schedule for teacher assistants, the General Assembly is committed to determining the cost of implementing such a schedule. Such a salary schedule should: (i) be based on a teacher assistant's years of experience as a teacher or teacher assistant in North Carolina's public schools, (ii) reflect an annual increase of a set percentage based on the teacher assistant's years of experience with an experience level maximum of 21 to 30 years, (iii) have a minimum monthly salary of the Office of State Personnel's Pay Grade 56 classification or one thousand three hundred eighty dollars ($1,380) whichever is less, and (iv) include incremental increases for teacher assistants for educational certification and degree standards.

The State Board of Education shall develop a proposed salary schedule that reflects the above conditions. The State Board also must assure that the schedule meets guidelines of the federal wage and hour laws, meets the needs of public schools regarding flexible use of teacher assistant resources, minimizes the administrative burden on local boards of education and the Department of Public Instruction to implement the schedule, and assures that the schedule can be implemented consistently in all public schools. The State Board of Education shall report to the Joint Legislative Education Oversight Committee by December 11, 2000, on its recommendations regarding the Teacher Assistant Salary Schedule and the costs of implementation.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

FUNDS TO IMPLEMENT THE ABCs OF PUBLIC EDUCATION PROGRAM

Section 8.14. The State Board of Education shall use funds appropriated for State Aid to Local School Administrative Units for the 1999-2000 fiscal year and the 2000-2001 fiscal year to provide incentive funding for schools that met or exceeded the projected levels of improvement in student performance during the 1999-2000 school year, in accordance with the ABCs of Public Education Program. In accordance with State Board of Education policy:

(1) Incentive awards in schools that achieve higher than expected improvements may be up to:

a. $1,500 for each teacher and for certified personnel; and

b. $500.00 for each teacher assistant.

(2) Incentive awards in schools that meet the expected improvements may be up to:

a. $750.00 for each teacher and for certified personnel; and

b. $375.00 for each teacher assistant.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES

Section 8.15. Section 8.5(b) of S.L. 1999-237 reads as rewritten:

"Section 8.5.(b) Use of Funds for Supplemental Funding. – All funds received pursuant to this section shall be used only (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, school computer technicians, instructional supplies and equipment, staff development, and textbooks, and (ii) for salary supplements for instructional personnel and instructional support personnel.

Local boards of education are encouraged to use at least ~~twenty percent (20%)~~ twenty-five percent (25%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose, and the State Board shall report this information to the Joint Legislative Education Oversight Committee."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS CERTIFICATION

Section 8.16. Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C-296.2. National Board for Professional Teaching Standards Certification.

(a) State Policy. – It is the goal of the State to provide opportunities and incentives for good teachers to become excellent teachers and to retain them in the teaching profession; to attain this goal, the State shall support the efforts of teachers to achieve national certification by providing approved paid leave time for teachers participating in the process, paying the participation fee, and paying a significant salary differential to teachers who attain national certification from the National Board for Professional Teaching Standards (NBPTS).

The National Board for Professional Teaching Standards (NBPTS) was established in 1987 as an independent, nonprofit organization to establish high standards for teachers' knowledge and performance and for development and operation of a national voluntary system to assess and certify teachers who meet those standards. Participation in the program gives teachers the time and the opportunity to analyze in a systematic way their professional development as teachers, successful teaching strategies, and the substantive areas in which they teach. Participation also gives teachers an opportunity to demonstrate superior ability and to be compensated as superior teachers. To receive NBPTS certification, a teacher must successfully (i) complete a process of developing a portfolio of student work and videotapes of teaching and learning activities and (ii) participate in NBPTS assessment center simulation exercises, including performance-based activities and a content knowledge examination.

(b) Definitions. – As used in this subsection:

(1) A 'North Carolina public school' is a school operated by a local board of education, the Department of Health and Human Services, the Department of Correction, the Office of Juvenile Justice or The University of North Carolina; a school affiliated with The University of North Carolina; or a charter school approved by the State Board of Education.

(2) A 'teacher' is a person who:

a. Either:

1. Is certified to teach in North Carolina; or

2. Holds a certificate or license issued by the State Board of Education that meets the professional license requirement for NBPTS certification;

b. Is a State-paid employee of a North Carolina public school;

c. Is paid on the teacher salary schedule; and

d. Spends at least seventy percent (70%) of his or her work time:

1. In classroom instruction, if the employee is employed as a teacher. Most of the teacher's remaining time shall be spent in one or more of the following: mentoring teachers, doing demonstration lessons for teachers, writing curricula, developing and leading staff development programs for teachers; or

2. In work within the employee's area of certification or licensure, if the employee is employed in an area of NBPTS certification other than direct classroom instruction.

(c) Payment of the NBPTS Participation Fee; Paid Leave. – The State shall pay the NBPTS participation fee and shall provide up to three days of approved paid leave to all teachers participating in the NBPTS program who:

(1) Have completed three full years of teaching in a North Carolina public school; and

(2) Have (i) not previously received State funds for participating in any certification area in the NBPTS program, (ii) repaid any State funds previously received for the NBPTS certification process, or (iii) received a waiver of repayment from the State Board of Education.

Teachers participating in the program shall take paid leave only with the approval of their supervisors.

(d) Repayment by a Teacher Who Does Not Complete the Process. – A teacher for whom the State pays the participation fee who does not complete the process shall repay the certification fee to the State.

Repayment is not required if a teacher does not complete the process due to the death or disability of the teacher. Upon the application of the teacher, the State Board of Education may waive the repayment requirement if the State Board finds that the teacher was unable to complete the process due to the illness of the teacher, the death or catastrophic illness of a member of the teacher's immediate family, parental leave to care for a newborn or newly adopted child, or other extraordinary circumstances.

(e) Repayment by a Teacher Who Does Not Teach for a Year After Completing the Process. – A teacher for whom the State pays the participation fee who does not teach for a year in a North Carolina public school after completing the process shall repay the certification fee to the State.

Repayment is not required if a teacher does not teach in a North Carolina public school for at least one year after completing the process due to the death or disability of the teacher. Upon the application of the teacher, the State Board of Education may extend the time before which a teacher must either teach for a year or repay the participation fee if the State Board finds that the teacher is unable to teach the next year due to the illness of the teacher, the death or catastrophic illness of a member of the teacher's immediate family, parental leave to care for a newborn or newly adopted child, or other extraordinary circumstances.

(f) Rules. – The State Board shall adopt policies and guidelines to implement this section."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

ALLOCATION OF CENTRAL OFFICE ADMINISTRATION FUNDS

Section 8.17. Expansion budget funds appropriated to State Aid to Local School Administrative Units for the 2000-2001 fiscal year for Central Office Administration shall be used to ensure that every local school administrative unit receives the amount calculated under the State Board of Education's distribution formula used for allocation of these funds.

Requested by: Representatives Rogers, Oldham, Boyd-McIntyre, Easterling, Redwine, Nesbitt, Senators Lee, Dalton, Plyler, Perdue, Odom

REDUCTION OF PAPERWORK IN PUBLIC SCHOOLS

Section 8.18.(a) G.S. 115C-307(g) reads as rewritten:

"(g) To Make Required Reports. – ~~Every teacher of a public school shall make such reports as are~~ A teacher shall make all reports required by the ~~boards of education, and the~~ local board of education. The superintendent shall not approve the ~~vouchers for the pay of teachers~~ voucher for a teacher's pay until the required monthly and annual reports are ~~made: Provided, that the superintendents may require teachers~~ made.

The superintendent may require a teacher to make reports to the ~~principals.~~ principal.

A teacher shall be given access to the information in the student information management system to expedite the process of preparing reports or otherwise providing information. A teacher shall not be required by the local board, the superintendent, or the principal to (i) provide information that is already available on the student information management system; (ii) provide the same written information more than once during a school year unless the information has changed during the ensuing period; or (iii) complete forms, for children with disabilities, that are not necessary to ensure compliance with the federal Individuals with Disabilities Education Act (IDEA). Notwithstanding the forgoing, a local board may require information available on its student information management system or require the same information twice if the local board can demonstrate a compelling need and can demonstrate there is not a more expeditious manner of getting the information.

~~Provided further, that any~~ Any teacher who knowingly and willfully makes or procures another to make any false report or records, requisitions, or payrolls, respecting daily attendance of pupils in the public schools, payroll data sheets, or other reports required to be made to any board or officer in the performance of their duties, shall be guilty of a Class 1 misdemeanor and the certificate of such person to teach in the public schools of North Carolina shall be revoked by the Superintendent of Public Instruction."

Section 8.18.(b) G.S. 115C-47(18) reads as rewritten:

"(18) To Make Rules Concerning the Conduct and Duties of Personnel. – Local boards of education, upon the recommendation of the superintendent, shall have full power to make all just and needful rules and regulations governing the conduct of teachers, principals, and supervisors, the kind of reports they shall make, and their duties in the care of school property.

Prior to the beginning of each school year, each local board of education shall identify all reports, including local school required reports, that are required at the local level for the school ~~year.~~ year and shall, to the maximum extent possible, eliminate any duplicate or obsolete reporting requirements. No additional reports shall be required at the local level after the beginning of the school year without the prior approval of the local board of education.

Each local board of education shall appoint a person or establish a paperwork control committee to monitor all reports and other paperwork produced by or required by the central office."

Section 8.18.(c) The State Board of Education shall:

(1) Review requirements for reports from local school administrative units and, to the extent possible, eliminate any duplicate or obsolete reporting requirements;

(2) Develop a plan for the implementation of a paperless student information management system prior to the 2005-2006 school year and request funds necessary for the implementation of the system;

(3) Work with the United States Department of Education to standardize all compliance requirements of the federal Individuals with Disabilities Education Act (IDEA) and review and simplify the paperwork established by the Department of Public Instruction to verify compliance with this law;

(4) Study the amount of State and local funds expended to meet compliance standards established under IDEA and State law;

(5) Develop a plan to cut spending for compliance issues related to special education by fifty percent (50%) for the 2001-2002 fiscal year without jeopardizing procedural safeguards under federal IDEA. Any savings should be directed to services for children with special needs; and

(6) Develop a plan to fund compliance issues related to special education only with federal funds provided specifically for that purpose for the 2002-2003 fiscal year and to eliminate all State funding for compliance issues.

The State Board shall report to the Joint Legislative Education Oversight Committee prior to December 15, 2001, on its and the school systems' progress with implementing this section.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Metcalf, Carter, Soles, Plyler, Perdue, Odom

SCHOOL LEADERSHIP PILOT PROJECT

Section 8.19. Local school administrative units that participate in the School Leadership Pilot Project of the Center for Leadership in School Reform shall receive State funds for this purpose for no more than three fiscal years.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

HIGH SCHOOL EXIT EXAMS

Section 8.21. Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to three million dollars ($3,000,000) for the 2000-2001 fiscal year to:

(1) Continue to develop a high school exit examination;

(2) Develop the computer skills test;

(3) Purchase equipment for scoring tests and for ABCs reporting; and

(4) Retest for standards and assessments and for revisions to the science and English language arts tests.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

GUIDELINES FOR CHARTER SCHOOL EXPANDED ENROLLMENT

Section 8.23. G.S. 115C-238.29D(d) reads as rewritten:

"(d) The State Board of Education may grant the initial charter for a period not to exceed five years and may renew the charter upon the request of the chartering entity for subsequent periods not to exceed five years each. A material revision of the provisions of a charter application shall be made only upon the approval of the State Board of Education. Beginning with the charter school's second year of operation and annually thereafter, the State Board shall allow a charter school to increase its enrollment by ten percent (10%) of the school's previous year's enrollment or as is otherwise provided in the charter. This enrollment growth shall not be considered a material revision of the charter application and shall not require the prior approval of the State Board.

An enrollment growth of greater than ten percent (10%) shall be considered a material revision of the charter application. The State Board may approve an enrollment growth of greater than ten percent (10%) only if the State Board finds that:

(1) The actual enrollment of the charter school is within ten percent (10%) of its maximum authorized enrollment;

(2) The charter school has commitments for ninety percent (90%) of the requested maximum growth;

(3) The board of education of the local school administrative unit in which the charter school is located has had an opportunity to be heard by the State Board of Education on any adverse impact the proposed growth would have on the unit's ability to provide a sound basic education to its students;

(4) The charter school is not currently identified as low-performing;

(5) The charter school meets generally accepted standards of fiscal management; and

(6) It is otherwise appropriate to approve the enrollment growth."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

ENCOURAGE RETIRED TEACHERS TO RETURN TO THE CLASSROOM

Section 8.24.(a) G.S. 135-3(8)c., as amended by Section 28.24(a) of S.L. 1998-212, reads as rewritten:

"c. (Effective until July 1, 2003) Should a beneficiary who retired on an early or service retirement allowance under this Chapter be reemployed, or otherwise engaged to perform services, by an employer participating in the Retirement System on a part-time, temporary, interim, or on a fee-for-service basis, whether contractual or otherwise, and if such beneficiary earns an amount in any calendar year which exceeds fifty percent (50%) of the reported compensation, excluding terminal payments, during the 12 months of service preceding the effective date of retirement, or twenty thousand dollars ($20,000), whichever is greater, as hereinafter indexed, then the retirement allowance shall be suspended as of the first day of the month following the month in which the reemployment earnings exceed the amount above, for the balance of the calendar year. The retirement allowance of the beneficiary shall be reinstated as of January 1 of each year following suspension. The amount that may be earned before suspension shall be increased on January 1 of each year by the ratio of the Consumer Price Index to the Index one year earlier, calculated to the nearest tenth of a percent (1/10 of 1%).

The computation of postretirement earnings of a beneficiary under this sub-subdivision, G.S 135-3(8)c., who has been retired at least 12 months and has not been employed in any capacity, except as a substitute teacher, with a public school for at least 12 ~~months,~~ months immediately preceding the effective date of reemployment, shall not include earnings ~~while:~~

1. ~~The beneficiary is employed to teach on a substitute or interim basis, and not on a permanent basis, in a public school;~~

2. The beneficiary is employed to teach in the teacher's area of certification in a low-performing school. As used in this sub-subdivision, a low-performing school is a public elementary or middle school at which forty-eight percent (48%) or more of the students were below grade level during either of the prior two school years or a public high school identified by the State Board of Education as low-performing. If the designation of low-performing is removed while the beneficiary is employed to teach at the school, the provisions of this sub-subdivision apply for the next two school years after the designation is removed; or

3. The beneficiary is employed to teach in a public school in the teacher's area of certification in a geographical area in which the State Board of Education determines that there is a shortage of teachers in the beneficiary's area of certification.

while the beneficiary is employed to teach on a substitute, interim, or permanent basis in a public school. The Department of Public Instruction shall certify to the Retirement System that a beneficiary is employed to teach by a local school administrative unit under the provisions of this sub-subdivision and as a retired teacher as the term is defined under the provisions of G.S. 115C-325(a)(5a).

Beneficiaries employed under this sub-subdivision are not entitled to any benefits otherwise provided under this Chapter as a result of this period of employment."

Section 8.24.(b) G.S. 115C-325(a)(5a), as enacted by Section 28.24(c) of S.L. 1998-212, reads as rewritten:

"(5a) "Retired teacher" means a beneficiary of the Teachers' and State Employees' Retirement System of North Carolina who has been retired at least 12 months, has not been employed in any capacity, other than as a substitute teacher, with a local board of education for at least 12 ~~months,~~ months immediately preceding the effective date of reemployment, is determined by a local board of education to have had satisfactory performance during the last year of employment by a local board of education, and who is employed to teach as provided in G.S. 135-3(8)c. A retired teacher shall be treated the same as a probationary teacher except that a retired teacher is not eligible for career status."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING

Section 8.25. Section 8.6 of S.L. 1999-237 reads as rewritten:

"Section 8.6.(a) Funds for Small School Systems. – Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of fewer than 3,150 students and (ii) to each county school administrative unit with an average daily membership of from 3,150 to 4,000 students if the county in which the local school administrative unit is located has a county-adjusted property tax base per student that is below the State-adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,150 to 4,000 students. The allocation formula shall:

(1) Round all fractions of positions to the next whole position.

(2) Provide five and one-half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or fewer.

(3) Provide additional program enhancement teachers adequate to offer the standard course of study.

(4) Change the duty-free period allocation to one teacher assistant per 400 average daily membership.

(5) Provide a base for the consolidated funds allotment of at least ~~three hundred fifty-five thousand dollars ($355,000),~~ four hundred sixty-six thousand dollars ($466,000) excluding textbooks.

(6) Allot vocational education funds for grade 6 as well as for grades 7-12.

If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fund fully the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis. This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

PROSPECTIVE TEACHER SCHOLARSHIP LOAN PROGRAM

Section 8.26. Of the funds appropriated for State Aid to Local School Administrative Units, the State Board of Education may use up to five hundred thousand dollars ($500,000) for the 2000-2001 fiscal year to assure that all scholarships awarded under the Prospective Teacher Scholarship Loan Program prior to June 15, 2000, are funded.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senator Martin of Guilford, Lee, Dalton, Plyler, Perdue, Odom

CLOSING THE ACHIEVEMENT GAP

Section 8.28.(a) The State Board of Education (Board) shall study the connection between the identification of minority and at-risk students as students with behavioral or emotional disabilities and the gap in student achievement. As part of this study, the Board shall examine the following:

(1) The criteria used to identify whether a student has a behavioral or emotional disability and requires special education. The study shall determine whether identification and placement decisions of these students are based primarily on valid and objective criteria.

(2) The curricula for these students, to determine whether they are sufficiently rigorous and the teaching methodologies are sound and appropriate.

(3) Utilization of other services, such as mental health, mentoring, and consultation, to improve academic and social success for these students.

(4) Qualifications of teachers who are assigned to teach these students.

The Board shall make an interim report by January 15, 2001, and a final report by May 15, 2001, on the results of this study, including findings and any recommendations, to the Committee on Improving the Academic Achievement of Minority and At-Risk Students (Academic Achievement Committee) and to the Joint Legislative Education Oversight Committee (Education Oversight Committee).

Section 8.28.(b) The Board shall study the underrepresentation of minority and at-risk students in honors classes, advanced placement classes, and academically gifted programs. The Board shall evaluate whether this underrepresentation contributes to the gap in student achievement. In particular, the Board shall examine the criteria used to identify whether a student is eligible for one of these classes or programs. The study shall determine whether identification and placement decisions of these students are based primarily on valid and objective criteria. The Board also shall examine whether low academic expectations or certain instructional practices, such as tracking, contribute to this underrepresentation. The Board shall make an interim report by January 15, 2001, and a final report by May 15, 2001, on the results of this study, including findings and any recommendations needed to increase representation of students in these programs, to the Committee on Improving the Academic Achievement of Minority and At-Risk Students (Academic Achievement Committee) and to the Joint Legislative Education Oversight Committee (Education Oversight Committee).

Section 8.28.(c) The Board shall design an annual Minority Achievement Report Card to be implemented fully beginning with the 2001-2002 school year. The report card shall be based on data the Board collects from local school administrative units and individual schools. Local school administrative units shall collect, maintain, and submit data needed to prepare the report card. The Board shall establish a baseline in accordance with its plan for the report card. The Board may combine this information with another report, as long as the information reported under this section is readily discernible. The Board shall condense and publicly disseminate the data in a form that can be accessed easily, such as through a web site.

The Board shall report to the Academic Achievement Committee and Education Oversight Committee by November 15, 2000, on the development of the report card under this section.

Section 8.28.(d) The Board shall develop guidelines to enable the formation of a local task force in each local school administrative unit. The purpose of this task force is to advise and work with the local board of education and administration on closing the gap in academic achievement and on developing a collaborative plan for achieving that goal. The guidelines shall provide for the following:

(1) Each local school administrative unit shall have a task force, if appropriate.

(2) Each task force shall be racially diverse and shall include parents, school personnel, and representatives from human service agencies, nonprofit organizations, and the business sector.

The Board shall determine the funding needed to implement these guidelines and shall report this information to the Academic Achievement Committee and the Education Oversight Committee by November 15, 2000.

Section 8.28.(e) The Board shall develop a plan and budget (projecting five-year cost) to:

(1) Provide sufficient staff development activities so as to ensure teachers have the tools needed for success in teaching a diverse student population and interacting with their families. These activities shall include understanding and respecting racial, ethnic, religious, and cultural impact on a child's development and personality.

(2) Provide sufficient funding for Limited English Proficiency (LEP) students.

(3) Translate the State-level forms and basic school information that will be made available to parents or to the general public into Spanish and include them on the Department of Public Instruction's web site in English and Spanish.

(4) Evaluate the level of funding needed to have LEAs hire translators to work with Spanish-speaking parents and those school personnel whose jobs require regular contact with those parents.

(5) Provide appropriate staff development funds for training in English as Second Language (ESL) methodologies and pedagogy for teachers, administrators, and support personnel.

(6) Review implementation guidelines for student accountability standards and promotion policies for LEP students.

(7) Develop guidelines for evaluating students' instructional portfolios and for waiving test standards for LEP students. In its development of guidelines, the Board shall consider extending the End-of-Grade testing exemption period to more than two years for LEP students, to the extent that this extension does not conflict with federal law or regulation.

The Board shall report to the Academic Achievement Committee and to the Education Oversight Committee on the plan and budget developed under this subsection by November 15, 2000.

Section 8.28.(f) The Board shall develop a plan to establish a hotline to collect complaints alleging disparate treatment of minority students and students from low-income families. In developing the plan, the Board shall give strong consideration to the following:

(1) The establishment of teams to review and categorize the complaints for reporting annually to the General Assembly.

(2) The appropriate number of hotline personnel who speak and understand Spanish.

(3) A mechanism, where warranted, for the Board to respond to and secure an independent and impartial investigation of systemic problems revealed through the complaints.

(4) A procedure for the Board to report individual complaints, unless the person making the complaint requests otherwise, to the appropriate local school administrative unit so that it also may investigate.

(5) The criteria for a local investigation that assures fair and impartial investigation.

(6) Any additional information that is required so that the hotline is fully implemented by the beginning of the 2001-2002 school year.

The Board shall report to the Academic Achievement Committee and to the Education Oversight Committee by November 15, 2000, on the implementation of this subsection. This report may include recommendations and a request for funding to establish the hotline.

Section 8.28.(g) The Board shall report data, to the extent those data are reasonably available, from the 1998-99 and 1999-2000 school years on student suspensions and expulsions. All such data shall be collected and reported beginning with the effective date of this act. The report shall show, for each local school administrative unit and by race, gender, and the reason for the suspensions and expulsions, the number of students suspended for less than 11 days, the number of students suspended for more than 10 days, the number of students expelled, and the number of students placed in an alternative program as the result of student conduct which could have led to a suspension or expulsion. Each local school administrative unit shall submit to the Board by October 15, 2000, any information the Board needs to make this report. The Board shall report to the Academic Achievement Committee and to the Education Oversight Committee by January 15, 2001.

Section 8.28.(h) Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to four hundred thousand dollars ($400,000) to implement this section.

Section 8.28.(i) The Education Cabinet, through its Research Council, shall review the findings and recommendations of the State Board of Education required in this section, the results of the consortium of Historically Minority College and University initiative to close the achievement gap, the evaluations and results of the pilot programs of the Department of Health and Human Services required in Section 11.4A of this act, and the results of the pilot programs established pursuant to Section 8.36 of S.L. 1999-237. The Research Council shall report to the Education Cabinet and to the Joint Legislative Education Oversight Committee on the best practices and methodologies identified in the above efforts that are most effective in closing the achievement gap for children of various demographic groups who are performing below grade level. The Research Council and the Education Cabinet shall make recommendations to the Joint Legislative Education Oversight Committee by March 15, 2002, on the most cost-effective methods of improving student achievement among the targeted groups.

Requested by: Representatives Culpepper, Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TYRRELL COUNTY SCHOOL PAY

Section 8.29. Notwithstanding the provisions of G.S. 115C-302.1, G.S. 115C-316, or any other provision of law, the Tyrrell County Board of Education may elect to pay all or part of its monthly-paid employees every two weeks rather than on a monthly basis.

PART IX. COMMUNITY COLLEGES

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EXPAND FOCUSED INDUSTRIAL TRAINING PROGRAM

Section 9. The State Board of Community Colleges may expand the scope of the Focused Industrial Training (FIT) Program. The expanded program may provide customized training programs for manufacturing industries and for companies and industries involved in the design and programming of computers and telecommunications systems.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

STATE BOARD RESERVE ALLOCATIONS

Section 9.1. Section 9.6 of S.L. 1999-237 reads as rewritten:

"Section 9.6.(a) The State Board of Community Colleges shall use funds from the State Board Reserve in the amount of one hundred thousand dollars ($100,000) for each fiscal year to assist small rural low-wealth community colleges with operation and maintenance of plant costs if they need to assist new or expanding industries in their service delivery areas.

Section 9.6.(b) The State Board of Community Colleges shall use funds from the State Board Reserve in the amount of forty thousand dollars ($40,000) for the 1999-2000 fiscal year to support the recruitment activities of the North Carolina Industries for Technical Education (NCITE). NCITE recruits students to community colleges with Heavy Equipment and Transportation Technology Programs in an effort to revitalize those programs.

Section 9.6.(c) The State Board of Community Colleges, in consultation with Cape Fear Community College, Brunswick Community College, and Southeastern Community College, shall use funds from the State Board Reserve in the amount of one hundred thousand dollars ($100,000) for the 1999-2000 fiscal year for planning a Southeastern North Carolina Regional Fire Training Program and twenty thousand dollars ($20,000) for the 1999-2000 fiscal year for other fire training programs.

Section 9.6.(d) The State Board of Community Colleges shall use funds from the State Board Reserve in the amount of seventy-five thousand dollars ($75,000) for the 2000-2001 fiscal year for surveys, research, data collection, and analysis required to implement performance budgeting and improve accountability.

Section 9.6.(e) The State Board of Community Colleges shall use funds from the State Board Reserve in the amount of one hundred thousand dollars ($100,000) for the 2000-2001 fiscal year to provide funds to the Community Colleges System Office to continue development of the virtual learning community."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

REPORT CARD ON TEACHER EDUCATION PROGRAMS/STUDY OF HIGH SCHOOL PROGRAMS

Section 9.2.(a) G.S. 115C-296(b1) reads as rewritten:

"(b1) The State Board of Education shall develop a plan to provide a focused review of teacher education programs and the current process of accrediting these programs in order to ensure that the programs produce graduates that are well prepared to teach. The plan shall include the development and implementation of a school of education performance report for each teacher education program in North Carolina. The performance report shall include at least the following elements: (i) quality of students entering the schools of education, including the average grade point average and average score on preprofessional skills tests that assess reading, writing, math and other competencies; (ii) graduation rates; (iii) time-to-graduation rates; (iv) average scores of graduates on professional and content area examination for the purpose of certification; (v) percentage of graduates receiving initial certification; (vi) percentage of graduates hired as teachers; (vii) percentage of graduates remaining in teaching for four years; (viii) graduate satisfaction based on a common survey; and (ix) employer satisfaction based on a common survey. The performance reports shall follow a common format. The performance reports shall be submitted annually for the 1998-99, 1999-2000, and 2000-2001 school years. The performance reports shall be submitted biannually thereafter to coincide with the Board of Governors' biannual report institutional effectiveness. annually. The State Board of Education shall develop a plan to be implemented beginning in the 1998-99 school year to reward and sanction approved teacher education programs and masters of education programs and to revoke approval of those programs based on the performance reports and other criteria established by the State Board of Education.

The State Board also shall develop and implement a plan for annual performance reports for all masters degree programs in education and school administration in North Carolina. To the extent it is appropriated, the performance report shall include similar indicators to those developed for the performance report for teacher education programs. The performance reports shall follow a common format.

Both plans for performance reports also shall include a method to provide the annual performance reports to the Board of Governors of The University of North Carolina, the State Board of Education, and the boards of trustees of the independent colleges. The State Board of Education shall review the schools of education performance reports and the performance reports for masters degree programs in education and school administration each year the performance reports are submitted. The State Board shall submit the performance report for the 1999-2000 school year to the Joint Legislative Education Oversight Committee by December 15, 2000. Subsequent performance reports shall be submitted to the Joint Legislative Education Oversight Committee on an annual basis by October 1."

Section 9.2.(b) The General Assembly believes educational programs for high school students should provide student accountability, program accountability, access, and efficiency. Therefore, the Education Cabinet, created under G.S. 116C-1, shall study public school, community college, and university programs offered to high school students. These programs include the cooperative high school program, the adult high school diploma program, advanced placement courses, honors courses, and university courses offered to high school students. The Cabinet shall do the following:

(1) Examine these programs for overlap.

(2) Consider which education entity is the most appropriate one to offer each program.

(3) Consider distance learning options.

(4) Examine whether there should be tuition waivers for high school students who take courses at community colleges or universities.

(5) Determine whether there should be a minimum age for participation in the adult high school program.

(6) Determine the feasibility, advantages and disadvantages, procedures, and costs for requiring students who participate in the adult high school program to take tests required of high school students taking the same courses.

(7) Evaluate the recent recommendations concerning the cooperative high school program that were made to the Joint Legislative Education Oversight Committee by the State Board of Education and the State Board of Community Colleges. In particular, the Cabinet shall determine whether students should receive weighted credit on their high school transcripts for college level courses taken at community colleges, universities, or colleges, and whether this program is an appropriate venue for developmental courses.

The Cabinet shall report its findings, including any recommendations, to the Joint Legislative Education Oversight Committee by January 8, 2001.

Section 9.2.(c) This section is effective when it becomes law.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

BUDGET REALIGNMENT TO IMPLEMENT REORGANIZATION AUTHORIZED

Section 9.3. Notwithstanding G.S. 143-23 or any other provision of law, the State Board of Community Colleges may transfer funds within the budget of the Community Colleges System Office to the extent necessary to implement the departmental reorganization plan recommended by the President of the North Carolina Community College System and adopted by the State Board in September 1999.

The State Board of Community Colleges shall report on its implementation of this section to the Joint Legislative Education Oversight Committee, the chairs of the Education Appropriations Subcommittees of the House of Representatives and the Senate, and the Fiscal Research Division within 30 days of completion of the budget realignment.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

USE OF 1999-2000 OVER-REALIZED RECEIPTS

Section 9.4.(a) Notwithstanding the provisions of G.S. 115D-31(e), over-realized receipts for the 1999-2000 fiscal year in the amount of two million dollars ($2,000,000) shall be used for the operations of the Community Colleges System Office for the 2000-2001 fiscal year. These funds are used in this act to offset a base budget reduction of an equal amount.

Section 9.4.(b) This section becomes effective June 30, 2000.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Nesbitt, Senators Lee, Dalton, Plyler, Perdue, Odom, Metcalf, Carter

ASHEVILLE-BUNCOMBE TECHNICAL COMMUNITY COLLEGE FUNDS DO NOT REVERT

Section 9.5.(a) Funds appropriated to Asheville-Buncombe Technical Community College in S.L. 1999-237 for its Small Business Center shall not revert at the end of the 1999-2000 fiscal year, but shall remain available for expenditure in the 2000-2001 fiscal year.

Section 9.5.(b) This section becomes effective June 30, 2000.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

STUDY DISTANCE LEARNING/EDUCATION PROGRAMS

Section 9.6. The State Board of Community Colleges shall contract with an independent consultant to study funding methods and delivery of distance learning and education programs. Distance learning and education shall include, but not be limited, to telecourses, two-way interactive video, Internet-based courses, and a combination of these technologies.

The study shall include:

(1) An analysis of tuition rates, registration fees, and other related charges for in-State and out-of-state students enrolling in distance course offerings;

(2) A survey of current distance course offerings, delivery systems, and sources of funding, including an assessment of the ability of individual colleges to provide and support distance learning now and in the future; and

(3) A plan for efficient and effective expansion of course offerings and delivery systems to (i) improve workforce education and training, (ii) avoid duplication within the Community College System and with distance learning programs offered by The University of North Carolina, and (iii) promote coordination of distance learning programs among the institutions of the Community College System and The University of North Carolina.

The consultant shall take into account two approaches to distance learning currently being considered by the Community College System. One model emphasizes a regional approach involving consolidation of equipment and staff at six regional operating centers across the State with all colleges having equal access to a designated center. The other model emphasizes a decentralized approach with a minimum level of distance programs supported at each of the 59 institutions.

The State Board of Community Colleges shall use funds from the State Board Reserve to implement this section.

The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division by January 15, 2001, on the results of the study and the recommendations of the consultant.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

PERFORMANCE BUDGETING/CLARIFICATIONS

Section 9.7. G.S. 115D-31.3 reads as rewritten:

"§ 115D-31.3. Performance budgeting.

(a) Creation of Accountability Measures and Performance Standards. – The State Board of Community Colleges shall create new accountability measures and performance standards to be used for performance budgeting for the Community College System. ~~The results of a survey may~~ Survey results shall be used as a performance standard only if the survey is statistically valid. The State Board of Community Colleges shall review annually the accountability measures and performance standards to ensure that they are appropriate for use in performance budgeting.

~~(b)~~ Notwithstanding any other provision of law, the State Board shall authorize each institution meeting the new performance standards to carryforward funds remaining in its budget at the end of each fiscal year in an amount not to exceed two percent (2%) of the State funds allocated to the institution for that fiscal year. The funds carried forward shall be used for the purchase of equipment and initial program start-up costs excluding regular faculty salaries. These funds shall not be used for continuing salary increases or for other obligations beyond the fiscal year into which they were carried forward. These funds shall be encumbered within 12 months of the fiscal year into which they were carried forward.

~~(c)~~ The five required performance measures are (i) progress of basic skills students, (ii) passing rate for licensure and certification examinations, (iii) goal completion of program completers, (iv) employment status of graduates, and (v) performance of students who transfer to the university system. Colleges may choose one other performance measure from the list contained in the State Board's Phase 4 Funding Formula Study, which was presented to the Joint Legislative Education Oversight Committee. Successful performance on each of the six performance measures shall allow a college to retain and carry forward up to one-third of one percent ( 1/3 of 1%) of its final fiscal year General Fund appropriations into the next fiscal year.

~~(d)~~ ~~Each college shall publish its performance on these six measures in its catalog each year beginning with the 2001 academic year.~~

(e) Mandatory Performance Measures. – The State Board of Community Colleges shall evaluate each college on the following 12 performance standards:

(1) Progress of basic skills students,

(2) Passing rate for licensure and certification examinations,

(3) Goal completion of program completers and noncompleters,

(4) Employment status of graduates,

(5) Performance of students who transfer to the university system,

(6) Passing rates in developmental courses,

(7) Success rates of developmental students in subsequent college-level courses,

(8) The level of satisfaction of students who complete programs and those who do not complete programs,

(9) Curriculum student retention and graduation,

(10) Employer satisfaction with graduates,

(11) Client satisfaction with customized training, and

(12) Program enrollment.

(f) Publication of Performance Ratings. – Each college shall publish its performance on the 12 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 12 measures in its annual Critical Success Factors Report.

(g) Performance Budgeting; Recognition for Successful Performance. – For the purpose of performance budgeting, the State Board of Community Colleges shall evaluate each college on six performance measures. These six shall be the five set out in subdivisions (1) through (5) of subsection (e) of this section and one selected by the college from the remainder set out in subdivisions (6) through (11). For each of these six performance measures on which a college performs successfully or attains the standard of significant improvement, the college may retain and carry forward into the next fiscal year one-third of one percent (1/3 of 1%) of its final fiscal year General Fund appropriations.

(h) Performance Budgeting; Recognition for Superior Performance. – Funds not allocated to colleges in accordance with subsection (g) of this section shall be used to reward superior performance. After all State aid budget obligations have been met, the State Board of Community Colleges shall distribute the remainder of these funds equally to colleges that perform successfully on at least five of the six performance measures.

(i) Permissible Uses of Funds. – Funds retained by colleges or distributed to colleges pursuant to this section shall be used for the purchase of equipment, initial program start-up costs including faculty salaries for the first year of a program, and one-time faculty and staff bonuses. These funds shall not be used for continuing salary increases or for other obligations beyond the fiscal year into which they were carried forward. These funds shall be encumbered within 12 months of the fiscal year into which they were carried forward."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, C. Wilson, Senators Lee, Dalton, Plyler, Perdue, Odom

COMMUNITY COLLEGE TUITION/LEGAL IMMIGRANTS

Section 9.8. G.S. 115D-39 reads as rewritten:

"§ 115D-39. Student tuition and fees.

The State Board of Community Colleges shall fix and regulate all tuition and fees charged to students for applying to or attending any institution pursuant to this Chapter.

The receipts from all student tuition and fees, other than student activity fees, shall be State funds and shall be deposited as provided by regulations of the State Board of Community Colleges.

The legal resident limitation with respect to tuition, set forth in G.S. 116-143.1 and G.S. 116-143.3, shall apply to students attending institutions operating pursuant to this Chapter; provided, however, that when an employer other than the armed services, as that term is defined in G.S. 116-143.3, pays tuition for an employee to attend an institution operating pursuant to this Chapter and when the employee works at a North Carolina business location, the employer shall be charged the in-State tuition rate; provided further, however, a community college may charge in-State tuition to up to one percent (1%) of its out-of-state students, rounded up to the next whole number, to accommodate the families transferred by business, the families transferred by industry, or the civilian families transferred by the military, consistent with the provisions of G.S. 116-143.3, into the State. Notwithstanding these requirements, a refugee who lawfully entered the United States and who is living in this State shall be deemed to qualify as a domiciliary of this State under G.S. 116-143.1(a)(1) and as a State resident for community college tuition purposes as defined in G.S. 116-143.1(a)(2). Also, a nonresident of the United States who has resided in North Carolina for a 12-month qualifying period and has filed an immigrant petition with the United States Immigration and Naturalization Service shall be considered a State resident for community college tuition purposes."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Baddour, Senators Lee, Dalton, Plyler, Perdue, Odom

SUPPLEMENTAL FUNDING FOR SUMMER TERM CURRICULUM INSTRUCTION

Section 9.9.(a) Funds appropriated in this act for summer term curriculum instruction are provided as a supplement to curriculum enrollment funding for the regular academic year. These funds are for direct instructional costs, including faculty salaries and benefits, and instructional supplies and materials ("other costs") and shall be budgeted as such by the community college institutions. These funds may be carried forward beyond the fiscal year in which they are appropriated, only for the purpose of fulfilling a contractual obligation for summer term curriculum instructional faculty.

Funding for summer term curriculum instruction shall be allocated from a separate line item in State aid fund code 1600 based on full-time equivalent student enrollment in summer term curriculum course offerings for the prior fiscal year. Funding for summer term curriculum instruction shall not be included in the continuing budget concept for full-time equivalent (FTE) enrollment funding as enacted in Section 10.4(b) of S.L. 1998-212.

It is the intent of the General Assembly to review annually the objectives, use of funds, and benefits of funding for summer term curriculum instruction to determine whether to provide increased funding for this purpose.

Nothing in this section shall be construed as the intent of the General Assembly to provide additional funding for summer term curriculum enrollment increases or to increase the rate of funding per FTE for summer term enrollment.

The State Board of Community Colleges shall adopt a calendar for curriculum instruction, designating the dates on which the fall, spring, and summer terms shall begin and end. The calendar shall provide for flexibility among community college institutions for actual starting and ending dates within a range established by the State Board of Community Colleges. The session for the summer term shall not overlap either the fall or spring semesters in such a way as to allow summer term earned FTE to be counted as fall or spring earned FTE for the purposes of determining enrollment funding under the continuing budget concept.

Section 9.9.(b) The State Board of Community Colleges shall hold harmless, from monetary penalties, repayment of State resources, and reimbursement of uncollected tuition, any community college for which the Program Audit Services Section of the Community Colleges System Office notes an audit exception for membership hours reported on the Spring 1999 Curriculum Institution Class Report (ICR) for classes which began after the institution's published ending date for that term. This subsection shall only apply for curriculum membership hours reported for the Spring 1998 to Spring 1999 reporting period. This subsection applies to all final audit exceptions noted previously or in the future.

Section 9.9.(c) The State Board of Community Colleges shall report on the implementation of this section to the Joint Legislative Education Oversight Committee by January 8, 2001. The report shall include the calendar adopted by the State Board, a summary of anticipated summer term course offerings by institution, and an explanation of the planned use of funds provided as a supplement for summer term curriculum instruction by institution.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

FUNDS FOR REGIONAL AND COOPERATIVE INITIATIVES

Section 9.11. Section 9.11(a) of S.L. 1999-237 read, as rewritten by Section 7 of S.L. 1999-321, reads as rewritten:

"(a) There is appropriated from the Employment Security Commission Training and Employment Account created in G.S. 96-6.1 to the Community Colleges System Office the sum of eighteen million dollars ($18,000,000) for the 1999-2000 fiscal year and the sum of forty-eight million five hundred thousand dollars ($48,500,000) for the 2000-2001 fiscal year. These funds shall be used as follows:

1999-2000 2000-2001

1. Nonreverting Equipment,

Technology, and MIS Reserve $10,000,000 $38,000,000

2. Nonreverting Start-Up Fund

for Regional and Cooperative

Initiatives $ 3,000,000 $ 3,000,000

3. New and Expanding Industry

Training Program $ 4,000,000 $5,500,000

4. Enhanced Focused Industrial

Training Programs $ 1,000,000 $ 2,000,000

TOTAL: $18,000,000 $48,500,000

Funds allocated for the Nonreverting Start-Up Fund for Regional and Cooperative Initiatives shall be used for community college projects that foster regional cooperation among community colleges, between public schools and community colleges, and between universities and community colleges. In considering funding requests for this Fund, the Board may take into account significant job losses and other indicators of economic distress in the county or region served by the community college applicant.

Funds allocated for the Nonreverting Start-Up Fund for Regional and Cooperative Initiatives shall be used only for the nonrecurring costs of starting new programs, expanding existing regional and cooperative programs, or both. Nonrecurring costs include but are not limited to the costs of equipment, program development, and instructional development. Funds for regional and cooperative initiatives shall not be used for construction, renovation or other capital related costs."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

ENCOURAGE TRAINING PROGRAMS IN BOAT-BUILDING

Section 9.12. The General Assembly recognizes and acknowledges the important role North Carolina Community Colleges are playing in the development of the boat-building industry through such means as its New and Expanding Industry Training Program, enhanced Focused Industrial Training, and Continuing Education and Curriculum programs. Many of North Carolina's boat-builders are significantly expanding their operations and North Carolina Community Colleges are supporting this growth through customized training and by retraining through the new Manufacturing Certification Program. The General Assembly encourages the North Carolina Community Colleges System to continue to develop and provide specialized programs to support this important industry.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

REGULATION OF PROPRIETARY SCHOOLS/STUDY

Section 9.13. The Legislative Research Commission shall study current State programs governing the licensure and regulation of proprietary schools under Article 8 of Chapter 115D of the General Statutes. In the course of the study, the Commission shall consider:

(1) The appropriate State agency to license and regulate proprietary schools,

(2) The level of personnel required to to license and regulate the schools,

(3) The level of funding required to license and regulate the schools,

(4) The proportion of required funding that should be supported by license fees,

(5) An appropriate fee schedule for proprietary schools; and

(6) A plan for effective enforcement of the provisions of the current law regarding the licensing and regulation of proprietary schools.

The Commission shall report the results of this study to the 2001 General Assembly.

PART X. UNIVERSITIES

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

REALIGN CENTER FOR SCHOOL LEADERSHIP DEVELOPMENT PROGRAMS

Section 10.(a) Effective October 1, 2000, the Principals Executive Program and all of its statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, is transferred from the University of North Carolina at Chapel Hill to the Board of Governors of The University of North Carolina. The Board of Governors shall coordinate the program within the University of North Carolina Center for School Leadership Development.

Section 10.(b) Effective October 1, 2000, the University of North Carolina Mathematics and Science Education Network and all of its statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, is transferred from the University of North Carolina at Chapel Hill to the Board of Governors of The University of North Carolina. The Board of Governors shall coordinate the program within the University of North Carolina Center for School Leadership Development.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

UNC NEED-BASED STUDENT FINANCIAL AID PROGRAM

Section 10.1. Of the funds appropriated by this act to the Board of Governors of The University of North Carolina the sum of five million dollars ($5,000,000) in recurring funds shall be used to establish and begin the implementation of the new need-based student financial aid program for in-State students attending constituent institutions of The University of North Carolina. The program shall provide grants to needy North Carolina students who are seeking undergraduate degrees or masters degrees. Eligibility of a student for a program grant shall be based on a formula that offsets Pell grants and federal tax credits before determining eligibility to receive one of the new grants. In addition, to be eligible for a program grant, a student shall also be required to contribute a combination of personal savings, borrowed funds, institutional aid, and personal earnings, called self-help.

The new program shall be administered by the North Carolina State Education Assistance Authority. The North Carolina State Education Assistance Authority shall coordinate offers of institutional aid and program grants made to a student to ensure that the student does not receive more in grants and scholarships than the actual cost of attendance.

In the absence of full funding for the program, the North Carolina State Education Assistance Authority may modify the formula for distribution as needed to accommodate the reduced amount.

The program shall be established and implemented in accordance with the recommendations regarding its creation adopted by the Board of Governors in November 1999. The goals of the program shall be to make The University of North Carolina more affordable for low-income students and to reduce student indebtedness by setting a limit on the funds that needy students will be asked to borrow each year. This program will provide financial assistance to constituent institutions that enroll disproportionate numbers of low-income students, particularly at the seven institutions targeted for major enrollment growth.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom, Dannelly, Clodfelter

UNC CHARLOTTE RETAIN LAND SALE PROCEEDS

Section 10.2. Notwithstanding any other provision of law, the University of North Carolina at Charlotte may retain the proceeds from the sale of the existing chancellor's residence. The University of North Carolina at Charlotte may use the proceeds from the sale of the existing chancellor's residence, and any other nonappropriated funds available, to construct a new chancellor's residence. Proceeds from the sale not used for that purpose shall revert.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE

Section 10.3. Section 10 of S.L. 1999-237 reads as rewritten:

"Section 10.(a) Funds appropriated in this act to the Board of Governors of The University of North Carolina for aid to private colleges shall be disbursed in accordance with the provisions of G.S. 116-19, 116-21, and 116-22. These funds shall provide up to one thousand fifty dollars ($1,050) per full-time equivalent North Carolina undergraduate student enrolled at a private institution as of October 1, 1999, for the 1999-2000 fiscal year and up to one thousand ~~fifty~~ one hundred dollars ~~($1,050)~~ ($1,100) per full-time equivalent North Carolina undergraduate student enrolled at a private institution as of October 1, 2000, for the 2000-2001 fiscal year.

These funds shall be placed in a separate, identifiable account in each eligible institution's budget or chart of accounts. All funds in this account shall be provided as scholarship funds for needy North Carolina students during the fiscal year. Each student awarded a scholarship from this account shall be notified of the source of the funds and of the amount of the award. Funds not utilized under G.S. 116-19 shall be available for the tuition grant program as defined in subsection (b) of this section.

Section 10.(b) In addition to any funds appropriated pursuant to G.S. 116-19 and in addition to all other financial assistance made available to private educational institutions located within the State, or to students attending these institutions, there is granted to each full-time North Carolina undergraduate student attending an approved institution as defined in G.S. 116-22, a sum, not to exceed one thousand seven hundred fifty dollars ($1,750) for the 1999-2000 academic year and one thousand ~~seven hundred fifty~~ eight hundred dollars ~~($1,750)~~ ($1,800) for the 2000-2001 academic year, which shall be distributed to the student as hereinafter provided.

The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section. The State Education Assistance Authority shall not approve any grant until it receives proper certification from an approved institution that the student applying for the grant is an eligible student. Upon receipt of the certification, the State Education Assistance Authority shall remit at such times as it shall prescribe the grant to the approved institution on behalf, and to the credit, of the student.

In the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority. Each approved institution shall be subject to examination by the State Auditor for the purpose of determining whether the institution has properly certified eligibility and enrollment of students and credited grants paid on behalf of the students.

In the event there are not sufficient funds to provide each eligible student with a full grant:

(1) The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a) and (b) of this section; and

(2) Each eligible student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.

Any remaining funds shall revert to the General Fund.

Section 10.(c) Expenditures made pursuant to this section may be used only for secular educational purposes at nonprofit institutions of higher learning. Expenditures made pursuant to this section shall not be used for any student who:

(1) Is incarcerated in a State or federal correctional facility for committing a Class A, B, B1, or B2 felony; or

(2) Is incarcerated in a State or federal correctional facility for committing a Class C through I felony and is not eligible for parole or release within 10 years.

Section 10.(d) The State Education Assistance Authority shall document the number of full-time equivalent North Carolina undergraduate students that are enrolled in off-campus programs and the State funds collected by each institution pursuant to G.S. 116-19 for those students. The State Education Assistance Authority shall also document the number of scholarships and the amount of the scholarships that are awarded under G.S. 116-19 to students enrolled in off-campus programs. An 'off-campus program' is any program offered for degree credit away from the institution's main permanent campus.

The State Education Assistance Authority shall include in its annual report to the Joint Legislative Education Oversight Committee the information it has compiled and its findings regarding this program."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

UNC DISTANCE EDUCATION

Section 10.4. This act provides funding to the Board of Governors of The University of North Carolina for degree-related courses provided away from the campus sites of the constituent institutions. The intent of this commitment is to provide expanded opportunities for higher education to more North Carolina residents, including nontraditional students, and to increase the number of North Carolina residents who earn postsecondary degrees.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

HIGHER EDUCATION COMPENSATION

Section 10.5. The Joint Legislative Education Oversight Committee shall study the need for an "Excellent Universities and Community Colleges Act" that addresses the need and ability of The University of North Carolina and the State's community college system to attract and retain excellent faculty.

In its deliberations regarding university faculty, the Committee shall consider the study conducted by The University of North Carolina on compensation for the faculty at its constituent institutions, how compensation for similar faculty positions compares among the constituent institutions, and how compensation for faculty positions compares with that paid by other public universities for similar faculty positions.

In its deliberations regarding compensation for faculty in the State's community college system, the Committee shall consider any relevant studies on community college faculty compensation conducted by the community college system, how compensation for similar faculty positions compares among the community colleges, and how compensation for faculty positions compares with that paid by other public community college systems for similar faculty positions.

If the Committee determines in its study that there are critical issues regarding faculty compensation, then the Committee shall include in its recommendations and report whether a major, new legislative initiative is needed to address those issues. The Committee shall report its findings and recommendations to the 2001 General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

JOINT LEGISLATIVE EDUCATION OVERSIGHT COMMITTEE STUDY GLOBAL EDUCATION PROGRAMS

Section 10.6. The Joint Legislative Education Oversight Committee may study the various international studies and global education programs offered within the State's university system. In its study the Committee shall consider the number of international studies or global education programs that are offered within the university system, the source of funds, the curriculum for each program, and the teaching methodology used in each of those programs. The Committee shall evaluate the programs and determine how the programs compare with regard to quality, curriculum, teaching methodology, and student enrollment and identify any duplication.

The Committee may report its findings and recommendations to the 2001 General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Baddour, Senators Lee, Dalton, Plyler, Perdue, Odom

MODEL TEACHER CONSORTIUM

Section 10.7. Of the funds appropriated to the Board of Governors of The University of North Carolina for the 2000-2001 fiscal year the sum of one million three hundred thousand dollars ($1,300,000) is allocated to restore the model teacher consortium program to the 21 counties that were part of that program in 1998-99 and to add the following eight counties to the program: Bladen, Caswell, Camden, Wayne, Alamance, Beaufort, Washington, and Onslow Counties.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

STATE PURCHASING SYSTEM AVAILABLE TO PRIVATE UNIVERSITIES

Section 10.9.(a) G.S. 143-49(6) reads as rewritten:

"§ 143-49. Powers and duties of Secretary.

The Secretary of Administration shall have power and authority, and it shall be his duty, subject to the provisions of this Article:

…

(6) To make available to nonprofit corporations operating charitable hospitals, to local nonprofit community sheltered workshops or centers that meet standards established by the Division of Vocational Rehabilitation of the Department of Health and Human Services, to private nonprofit agencies licensed or approved by the Department of Health and Human Services as child placing agencies, residential child-care facilities, private nonprofit rural, community, and migrant health centers designated by the Office of Rural Health and Resource Development, to private higher education institutions that are defined as 'institutions' in G.S. 116-22(1), and to counties, cities, towns, governmental entities and other subdivisions of the State and public agencies thereof in the expenditure of public funds, the services of the Department of Administration in the purchase of materials, supplies and equipment under such rules, regulations and procedures as the Secretary of Administration may adopt. In adopting rules and regulations any or all provisions of this Article may be made applicable to such purchases and contracts made through the Department of Administration, and in addition the rules and regulations shall contain a requirement that payment for all such purchases be made in accordance with the terms of the contract. Prior to adopting rules and regulations under this subdivision, the Secretary of Administration may consult with the Advisory Budget Commission.

… ."

Section 10.9.(b) The Secretary of Administration may adopt temporary rules in accordance with Chapter 150B of the General Statutes to implement G.S. 143-49(6), as rewritten by subsection (a) of this section.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Dalton, Lee, Plyler, Perdue, Odom

TRANSFER CENTER FOR ERGONOMICS FUNDS TO NCSU

Section 10.10. The Office of State Budget and Management shall transfer the sum of five hundred thousand dollars ($500,000) from the Department of Labor to the Board of Governor's of The University of North Carolina. These funds shall be allocated to North Carolina State University as part of the continuation budget for North Carolina State University for the 2001-2003 fiscal biennium for the Center for Ergonomics.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Redwine, Senators Dalton, Lee, Plyler, Perdue, Odom

ACCOUNTABILITY FOR SCHOOL LEADERSHIP DEVELOPMENT PROGRAMS/STUDY PRINCIPAL FELLOWS PROGRAM

Section 10.11.(a) The Board of Governors of The University of North Carolina shall review the programs under the UNC Center for School Leadership Development. In the course of this review, the Board of Governors of The University of North Carolina shall study and recommend to the Joint Legislative Education Oversight Committee, by March 1, 2001:

(1) A proposal for implementing specific and validated accountability and performance measures that clearly demonstrate the strengths, weaknesses, and costs of each program under the Center; and

(2) Any recommendations for improving program coordination and efficiencies.

Section 10.11.(b) The Board of Governors of The University of North Carolina shall, in collaboration with the State Board of Education, convene a representative committee to study the policies and legislation creating the Principal Fellows Program and to make recommendations that would increase the flexibility necessary for the Program to attract a broader age, racial, and ethnic makeup of the applicant pool. The committee shall report to the Joint Legislative Education Oversight Committee by January 15, 2001.

PART XI. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SUBPART 1. ADMINISTRATION

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Purcell, Plyler, Perdue, Odom

STATE HEALTH STANDARDS

Section 11. Effective October 1, 2000, Article 1 of Chapter 130A of the General Statutes is amended by adding the following new section to read:

"§ 130A-5.1. State health standards.

(a) The Secretary shall adopt measurable standards and goals for community health against which the State's actions to improve the health status of its citizens will be measured. The Secretary shall report annually to the General Assembly upon its convening or reconvening and to the Governor on all of the following:

(1) How the State compares to national health measurements and established State goals for each standard. Comparisons shall be reported using disaggregated data for health standards.

(2) Steps taken by State and non-State entities to meet established goals.

(3) Additional steps proposed or planned to be taken to achieve established goals.

(b) The Secretary may coordinate and contract with other entities to assist in the establishment of standards and preparation of the report. The Secretary may use resources available to implement this section."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

DHHS STUDY OF NEW FACILITIES DIVISION

Section 11.1. The Department of Health and Human Services shall study whether a new facilities division to consolidate physical plant operations of all State institutions should be established in the Department. Not later than January 1, 2001, the Department shall report its findings and recommendations to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ELIMINATION OF VACANT DHHS POSITIONS

Section 11.2. The Department of Health and Human Services shall eliminate 29 vacant positions effective November 1, 2000. Positions eliminated shall not be those that impact direct patient care, services, or safety and shall not be positions at the State psychiatric hospitals, alcohol and drug abuse treatment centers, the Wright School, or Whitaker School.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

QUALITY CRITERIA FOR LONG-TERM CARE

Section 11.3. The Department of Health and Human Services in conjunction with the North Carolina Institute of Medicine shall convene a special work group to develop criterion-based indicators for the monitoring of quality of care in North Carolina nursing homes, adult care homes, assisted living facilities, and home health care programs. The Institute of Medicine and the Department of Health and Human Services shall work together to implement these criteria for the monitoring of long-term care in the State and pursue options for the use of these criteria in lieu of current HCFA-mandated standards for surveying North Carolina nursing homes under the federal Medicaid and Medicare programs.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

LONG-TERM CARE SERVICES DATA

Section 11.4.(a) By January 1, 2001, the Department of Health and Human Services in conjunction with the North Carolina Institute of Medicine shall:

(1) Identify screening, level of services, and care planning instruments to be used for all DHHS long-term care services;

(2) Develop a timetable for testing and implementing these instruments; and

(3) Compile county level data on the number of people age 18 years or older who use DHHS long-term care services and expenditures by Division and type of program.

Section 11.4.(b) Subsection (a) of Section 11.7A of S.L. 1999-237 reads as rewritten:

"Section 11.7A.(a) The Department of Health and Human Services shall, in cooperation with other appropriate State and local agencies and representatives of consumer and provider organizations, develop a system that provides a continuum of long-term care for elderly and disabled individuals and their families. The Department shall define the system of long-term care services to include:

(1) A structure and means for screening, assessment, and care management across settings of care;

(2) A process to determine outcome measures for care;

(3) An integrated data system to track expenditures, consumer characteristics, and consumer outcomes;

(4) Relationships between the Department and the State's universities to provide policy analysis and program evaluation support for the development of long-term care system reforms;

(5) An implementation plan that addresses testing of models, reviewing existing models, evaluation of components, and steps needed to achieve development of a coordinated system; and

(6) Provision for consumer, provider, and agency input into the system design and implementation development.

Effective January 1, ~~2001,~~ 2002, the system developed by the Department shall do the following:

(1) Implement the initial phase of a comprehensive data system that tracks long-term care expenditures, services, consumer profiles, and consumer preferences; and

(2) Develop a system of statewide long-term care services coordination and case management to minimize administrative costs, improve access to services, and minimize obstacles to the delivery of long-term care services to people in need."

Requested by: Representatives Oldham, Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CLOSING THE ACHIEVEMENT GAP

Section 11.4A. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of two hundred fifty thousand dollars ($250,000) for the 2000-2001 fiscal year shall be used to establish and administer a pilot program to assist families that have children who are performing below school grade level in strengthening family cohesiveness, functioning, and economic progress and improving the academic performance of their children. The program shall be developed and implemented no later than August 1, 2001, as follows:

(1) Each pilot program shall be family-focused and designed to improve family success in addressing issues pertaining to:

a. Family functioning and economic progress;

b. Academic success for children in the family in a manner that reduces the likelihood that the children will have a life of poverty; and

c. Strengthening the communities in which the family lives.

(2) There shall be at least eight pilot programs initially established which shall be based on components of successful models and concepts. Any nonprofit, tax-exempt organization or local government agency that is part of the collaborative effort to develop the pilot program may serve as the lead agency in applying for and administering grant funds.

(3) Families eligible for participation in a pilot program shall be those families:

a. Who have at least one child in elementary or middle school who is performing academically at least one year below the child's grade level;

b. At least one adult member of which agrees to participate in the program and in a culturally appropriate assessment of family functioning; and

c. Whose income is below two hundred percent (200%) of the federal poverty level or whose income is at or above two hundred percent (200%) of the federal poverty level if authorized by the requirements of the funding source.

(4) The Department and other entities collaborating to develop the program shall identify resources currently available to address the concerns of below-grade-level academic performance and problems related to family cohesiveness, functioning, and family economic progress and shall strive to harness these resources in a manner that increases effectiveness and reduces overall costs of the pilot program. The Department shall also determine which entities can best operate which components of the total pilot program and how those entities can contribute to the abilities of others to be more successful in operating their components.

(5) The Department may obtain the services of consultants in the planning, coordination, implementation, and evaluation of the program.

(6) The Department of Health and Human Services shall establish a task force to collaborate with and advise the Department on the development and implementation of the program. The task force shall consist of, at a minimum, representatives of:

a. The Department of Public Instruction;

b. The Cooperative Extension Services at North Carolina Agricultural and Technical State University and at North Carolina State University;

c. The Office of Juvenile Justice;

d. Workforce Development Boards;

e. Local education agencies;

f. Local departments or boards of social services, county commissioners, and health departments;

g. Community-based organizations, specifically those that work within low-income communities;

h. Religious organizations or institutions; and

i. Charter schools.

(7) Each of the pilot programs shall have comparable structures for administration, advice, and technical assistance.

(8) Each pilot program shall be developed in a way that results in observable and measurable outcomes and that is subject to sound evaluation techniques. Evaluation measures and techniques shall be designed and implemented to:

a. Identify and explain the components of the pilot program that are successful and those that are not successful;

b. Recommend systemic changes through integration of positive outcomes; and

c. Produce outcomes that, if successful, can be replicated.

(9) The Department shall present a progress report to the Committee on Improving the Academic Achievement of Minority and At-Risk Students, the Senate Appropriations Committee on Human Resources, and the House of Representatives Appropriations Subcommittee on Health and Human Services by March 1, 2001. This report shall contain a plan to implement and evaluate the program, including:

a. Pilot sites selected;

b. Identification of evaluation tools;

c. Identification of existing sources of federal and State funding that can be used to implement and evaluate the program;

d. Identification of additional resources, fiscal and otherwise, that are available to implement and evaluate the program; and

e. Strategies that utilize school facilities to the maximum reasonable extent possible and that do not place undue burdens on school personnel.

(10) The Department shall make a final report to the Committee on Improving the Academic Achievement of Minority and At-Risk Students, the Senate Appropriations Committee on Human Resources, and the House of Representatives Appropriations Subcommittee on Health and Human Services by February 1, 2002. This report shall include a recommendation as to whether the program should be extended statewide. If so, the Department shall present a plan that includes the projected cost, process, and time frame for implementation of the program statewide.

SUBPART 2. MEDICAL ASSISTANCE

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MEDICAID PROGRAM

Section 11.5. Section 11.12 of S.L. 1999-237 reads as rewritten:

"Section 11.12.(a) Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy. Funds appropriated for these services shall be expended in accordance with the following schedule of services and payment bases. All services and payments are subject to the language at the end of this subsection.

Services and payment bases:

(1) Hospital-Inpatient - Payment for hospital inpatient services will be prescribed in the State Plan as established by the Department of Health and Human Services.

(2) Hospital-Outpatient - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Health and Human Services.

(3) Nursing Facilities - Payment for nursing facility services will be prescribed in the State Plan as established by the Department of Health and Human Services. Nursing facilities providing services to Medicaid recipients who also qualify for Medicare, must be enrolled in the Medicare program as a condition of participation in the Medicaid program. State facilities are not subject to the requirement to enroll in the Medicare program.

(4) Intermediate Care Facilities for the Mentally Retarded - As prescribed in the State Plan as established by the Department of Health and Human Services.

(5) Drugs - Drug costs as allowed by federal regulations plus a professional services fee per month excluding refills for the same drug or generic equivalent during the same month. Reimbursement shall be available for up to six prescriptions per recipient, per month, including refills. Payments for drugs are subject to the provisions of subsection (h) of this section and to the provisions at the end of subsection (a) of this section, or in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal reimbursement regulations. Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. The professional services fee shall be five dollars and sixty cents ($5.60) per prescription. Adjustments to the professional services fee shall be established by the General Assembly.

(6) Physicians, Chiropractors, Podiatrists, Optometrists, Dentists, Certified Nurse Midwife ~~Services~~ Services, Nurse Practitioners - Fee schedules as developed by the Department of Health and Human Services. Payments for dental services are subject to the provisions of subsection (g) of this section.

(7) Community Alternative Program, EPSDT Screens - Payment to be made in accordance with rate schedule developed by the Department of Health and Human Services.

(8) Home Health and Related Services, Private Duty Nursing, Clinic Services, Prepaid Health Plans, Durable Medical Equipment - Payment to be made according to reimbursement plans developed by the Department of Health and Human Services.

(9) Medicare Buy-In - Social Security Administration premium.

(10) Ambulance Services - Uniform fee schedules as developed by the Department of Health and Human Services. Public ambulance providers will be reimbursed at cost.

(11) Hearing Aids - Actual cost plus a dispensing fee.

(12) Rural Health Clinic Services - Provider-based, reasonable cost; nonprovider-based, single-cost reimbursement rate per clinic visit.

(13) Family Planning - Negotiated rate for local health departments. For other providers - see specific services, for instance, hospitals, physicians.

(14) Independent Laboratory and X-Ray Services - Uniform fee schedules as developed by the Department of Health and Human Services.

(15) Optical Supplies - One hundred percent (100%) of reasonable wholesale cost of materials.

(16) Ambulatory Surgical Centers - Payment as prescribed in the reimbursement plan established by the Department of Health and Human Services.

(17) Medicare Crossover Claims - An amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Health and Human Services.

(18) Physical Therapy and Speech Therapy - Services limited to EPSDT eligible children. Payments are to be made only to qualified providers at rates negotiated by the Department of Health and Human Services.

(19) Personal Care Services - Payment in accordance with the State Plan approved by the Department of Health and Human Services.

(20) Case Management Services - Reimbursement in accordance with the availability of funds to be transferred within the Department of Health and Human Services.

(21) Hospice - Services may be provided in accordance with the State Plan developed by the Department of Health and Human Services.

(22) Other Mental Health Services - Unless otherwise covered by this section, coverage is limited to to:

a. ~~agencies~~ Agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services, and reimbursement is made in accordance with a State Plan developed by the Department of Health and Human Services not to exceed the upper limits established in federal ~~regulations.~~ regulations, and

b. For children eligible for EPSDT services:

1. Licensed or certified psychologists, certified mental health nurse practitioners, and licensed clinical social workers when Medicaid-eligible children are referred by the primary care physician or the area mental health program, and

2. Institutional providers of residential services for children and Psychiatric Residential Treatment Facility services, that meet federal and State requirements as defined by the Department.

The Department of Health and Human Services may adopt temporary rules in accordance with Chapter 150B of the General Statutes further defining the qualifications of providers and referral procedures in order to implement this subdivision.

(23) Medically Necessary Prosthetics or Orthotics for EPSDT Eligible Children - Reimbursement in accordance with the State Plan approved by the Department of Health and Human Services.

(24) Health Insurance Premiums - Payments to be made in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal regulations.

(25) Medical Care/Other Remedial Care - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates. Services addressed by this paragraph are limited to those prescribed in the State Plan as established by the Department of Health and Human Services. Except for related services in schools, providers of these services shall be certified as meeting program standards of the Department of Health and Human Services, Division of Women's and Children's Health.

(26) Pregnancy Related Services - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.

Services and payment bases may be changed with the approval of the Director of the Budget.

Reimbursement is available for up to 24 visits per recipient per year to any one or combination of the following: physicians, clinics, hospital outpatient, optometrists, chiropractors, and podiatrists. Prenatal services, all EPSDT children, ~~and~~ emergency ~~rooms~~ rooms, and mental health services subject to independent utilization review are exempt from the visit limitations contained in this paragraph. Exceptions may be authorized by the Department of Health and Human Services where the life of the patient would be threatened without such additional care. Any person who is determined by the Department to be exempt from the 24-visit limitation may also be exempt from the six-prescription limitation.

Section 11.12.(b) Allocation of Nonfederal Cost of Medicaid. The State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section.

Section 11.12.(c) Copayment for Medicaid Services. The Department of Health and Human Services may establish copayment up to the maximum permitted by federal law and regulation.

Section 11.12.(d) Medicaid and Work First Family Assistance, Income Eligibility Standards. The maximum net family annual income eligibility standards for Medicaid and Work First Family Assistance and the Standard of Need for Work First Family Assistance shall be as follows:

Categorically Needy Medically Needy

WFFA*

Family Standard Families and

Size of Need Children Income

Level AA, AB, AD*

1 $ 4,344 $ 2,172 $ 2,900

2 5,664 2,832 3,800

3 6,528 3,264 4,400

4 7,128 3,564 4,800

5 7,776 3,888 5,200

6 8,376 4,188 5,600

7 8,952 4,476 6,000

8 9,256 4,680 6,300

*Work First Family Assistance (WFFA); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).

The payment level for Work First Family Assistance shall be fifty percent (50%) of the standard of need.

These standards may be changed with the approval of the Director of the Budget with the advice of the Advisory Budget Commission.

Section 11.12.(e) The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to all elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines, as revised each April 1.

Section 11.12.(f) ICF and ICF/MR Work Incentive Allowances. The Department of Health and Human Services may provide an incentive allowance to Medicaid-eligible recipients of ICF and ICF/MR facilities who are regularly engaged in work activities as part of their developmental plan and for whom retention of additional income contributes to their achievement of independence. The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department. The incentive allowances may be as follows:

Monthly Net Wages Monthly Incentive Allowance

$1.00 to $100.99 Up to $50.00

$101.00 - $200.99 $80.00

$201.00 to $300.99 $130.00

$301.00 and greater $212.00.

Section 11.12.(g) Dental Coverage Limits. Dental services shall be provided on a restricted basis in accordance with rules adopted by the Department to implement this subsection.

Section 11.12.(h) Dispensing of Generic Drugs. Notwithstanding G.S. 90-85.27 through G.S. 90-85.31, under the Medical Assistance Program (Title XIX of the Social Security Act) a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber personally indicates, either orally or in the prescriber's own handwriting on the prescription order, 'dispense as written' or words of similar meaning. Generic drugs, when available in the pharmacy, shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand name drugs, subject to the prescriber's 'dispense as written' order as noted above.

As used in this subsection 'brand name' means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and 'established name' has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act as amended, 21 U.S.C. § 352(e)(3).

Section 11.12.(i) Exceptions to Service Limitations, Eligibility Requirements, and Payments. Service limitations, eligibility requirements, and payments bases in this section may be waived by the Department of Health and Human Services, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, managed care plans, or community-based services programs in accordance with plans approved by the United States Department of Health and Human Services, or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient. The Department of Health and Human Services may proceed with planning and development work on the Program of All-Inclusive Care for the Elderly and will issue a progress report to the chairs of the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources on or before January 30, 2001.

Section 11.12.(j) Volume Purchase Plans and Single Source Procurement. The Department of Health and Human Services, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other similar processes in order to improve cost containment.

Section 11.12.(k) Cost Containment Programs. The Department of Health and Human Services, Division of Medical Assistance, may undertake cost containment programs including preadmissions to hospitals and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.

Section 11.12.(l) For all Medicaid eligibility classifications for which the federal poverty level is used as an income limit for eligibility determination, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines.

Section 11.12.(m) The Department of Health and Human Services shall provide Medicaid to 19-, 20-, and 21-year olds in accordance with federal rules and regulations.

Section 11.12.(n) The Department of Health and Human Services shall provide coverage to pregnant women and to children according to the following schedule:

(1) Pregnant women with incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(2) Infants under the age of 1 with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(3) Children aged 1 through 5 with family incomes equal to or less than one hundred thirty-three percent (133%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(4) Children aged 6 through 18 with family incomes equal to or less than the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(5) The Department of Health and Human Services shall provide Medicaid coverage for adoptive children with special or rehabilitative needs regardless of the adoptive family's income.

Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy. In order to reduce county administrative costs and to expedite the provision of medical services to pregnant women, to infants, and to children described in subdivisions (3) and (4) of this subsection, no resources test shall be applied.

Section 11.12.(o) Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.

Section 11.12.(p) The Department of Health and Human Services shall submit a ~~monthly~~ quarterly status report on expenditures for acute care and long-term care services to the Fiscal Research Division and to the Office of State Budget and Management. This report shall include an analysis of budgeted versus actual expenditures for eligibles by category and for long-term care beds. In addition, the Department shall revise the program's projected spending for the current fiscal year and the estimated spending for the subsequent fiscal year on a quarterly basis. ~~Reports for the preceding month~~ The quarterly expenditure report and the revised forecast shall be forwarded to the Fiscal Research Division and to the Office of State Budget and Management no later than the third Thursday of the ~~month.~~ month following the end of each quarter.

Section 11.12.(q) The Division of Medical Assistance, Department of Health and Human Services, may provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.

Section 11.12.(r) If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Health and Human Services, may use funds that are identified to support the cost of development and acquisition of equipment and software through contractual means to improve and enhance information systems that provide management information and claims processing.

Section 11.12.(s) The Division of Medical Assistance, Department of Health and Human Services, may administer Medicaid estate recovery mandated by the Omnibus Budget Reconciliation Act of 1993, (OBRA 1993), 42 U.S.C. § 1396p(b), and G.S. 108-70.5 using temporary rules pending approval of final rules promulgated pursuant to Chapter 150B of the General Statutes.

Section 11.12.(t) The Department of Health and Human Services may adopt temporary rules according to the procedures established in G.S. 150B-21.1 when it finds that these rules are necessary to maximize receipt of federal funds, to reduce Medicaid expenditures, and to reduce fraud and abuse. Prior to the filing of these temporary rules with the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary rule and its effect on State appropriations and local governments.

Section 11.12.(u) The Department shall report to the Fiscal Research Division of the Legislative Services Office and to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources or the Joint Legislative Health Care Oversight Committee on any change it anticipates making in the Medicaid program that impacts the type or level of service, reimbursement methods, or waivers, any of which require a change in the State Plan or other approval by the Health Care Financing Administration. The reports shall be provided at the same time they are submitted to HCFA for approval.

Section 11.12.(v) If the Department of Health and Human Services obtains a Medicaid waiver to implement two long-term care pilot projects, then the Department shall report the particulars of the waiver, the pilot projects, and the status of implementation to members of the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Study Commission on Aging within 30 days of receiving the waiver. The Department shall not expand the pilot project beyond the two initial pilots without first reporting the proposed expansion to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources.

Section 11.12.(w) The Department of Health and Human Services shall study the effect of subsection (o) of this section on both the Medicaid program and the Health Insurance Program for Children. The Department shall make an interim report on the results of this study to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources by October 1, 1999, and shall make a final report by January 1, 2000.

Section 11.12.(x) Effective no earlier than October 1, 2000, the Department of Health and Human Services shall amend the Medicaid State Plan to adopt simplified methodologies for the treatment of assets in determining Medicaid eligibility for aged, blind, and disabled persons. The simplified methodologies are limited to excluding the value of burial plots and the cash value of life insurance when the total face value of cash value bearing life insurance policies does not exceed ten thousand dollars ($10,000).

Section 11.12.(y) The Division of Fiscal Research, through the Legislative Services Office, with the cooperation of the Department of Health and Human Services, shall issue a Request for Proposal (RFP) for an independent consultant to study and review the amount, sufficiency, duration, and scope of each service provided under the North Carolina Medicaid Program. The independent consultant shall make an interim progress report on January 1, 2001, to the cochairs of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources. The final report of the independent consultant shall be presented to the North Carolina General Assembly not later than May 1, 2001. The Department shall transfer funding from the Medicaid Program for the cost of the study.

Section 11.12.(z) The Department of Health and Human Services shall study the feasibility of authorizing Medicaid reimbursement for children eligible for EPSDT services by providers who are eligible for reimbursement for these services under the Teachers' and State Employees' Comprehensive Major Medical Plan pursuant to G.S. 135-40.7B, and under the Health Insurance Program for Children pursuant to G.S. 108A-70.21. The Department shall report its findings and recommendations to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division not later than October 1, 2000.

Section 11.12.(aa) Upon approval of a demonstration waiver by the Health Care Financing Administration, the Department of Health and Human Services may provide Medicaid coverage for family planning services to men and women of child-bearing age with family incomes equal to or less than 185% of the federal poverty level. Coverage shall be contingent upon federal approval of the waiver and shall begin no earlier than January 1, 2001."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

COUNTY MEDICAID COST-SHARE

Section 11.6.(a) Section 11.39 of S.L. 1999-237 reads as rewritten:

"Section 11.39.(a) Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for the 1999-2000 fiscal year, the Department shall transfer to the Mental Health Restricted Reserve not more than the amount of actual expenditures for Medicaid payments for the 1998-99 fiscal year for services provided by area mental health authorities. The Department shall transfer from the Division of Medical Assistance the estimated amount needed to match Medicaid payments for the former Carolina Alternatives Programs. The Department shall not transfer from area program allocations funds to cover Medicaid payment expenditures that exceed the amount of funds in the Reserve for the 1999-2000 fiscal year.

Section 11.39.(b) Any nonfederal increases in the cost of Medicaid services provided by area mental health authorities will be borne in equal parts by the State and county funding entity until the county share reaches fifteen percent (15%) of the nonfederal share. Effective July 1, 2000, the county share of the cost of Medicaid services currently and previously provided by area mental health authorities shall be increased incrementally each fiscal year until the county share reaches fifteen percent (15%) of the nonfederal share by State fiscal year 2009-2010."

Section 11.6.(b) Section 11.22(g) is repealed.

Section 11.6.(c) Section 11.22(h) of S.L. 1999-237 reads as rewritten:

"Section 11.22.(h) Effective January 1, 2000, the State shall pay fifty percent (50%) and the county shall pay fifty percent (50%) of the nonfederal share of new levels of Medicaid Personal Care Services paid to adult care homes. Effective July 1, 2001, the State shall pay fifty-seven percent (57%) and each county shall pay forty-three percent (43%) of the nonfederal share of new levels of Medicaid Personal Care Services paid to adult care homes. Each year thereafter, the State share of the nonfederal cost will increase by seven percent (7%) until the county share equals fifteen percent (15%) of the nonfederal share of new levels of Medicaid Personal Care Services. Effective July 1, 2000, the county share of the cost of Medicaid Personal Care Services paid to adult care homes shall be decreased incrementally each fiscal year until the county share reaches fifteen percent (15%) of the nonfederal share by State fiscal year 2009-2010."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MEDICAID RESERVE FUND TRANSFER

Section 11.7. Section 11.10(a) of S.L. 1999-237 reads as rewritten:

"Section 11.10.(a) Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143-23.2, the sum of eighty-four million dollars ($84,000,000) for the 1999-2000 fiscal year and the sum of ~~twenty-nine~~ ninety-nine million dollars ~~($29,000,000)~~ ($99,000,000) for the 2000-2001 fiscal year shall be allocated as prescribed by G.S. 143-23.2(b) for Medicaid programs. Notwithstanding the prescription in G.S. 143-23.2(b) that these funds not reduce State general revenue funding, these funds shall replace the reduction in general revenue funding effected in this act."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Baddour, Nesbitt, Senators Martin of Guilford, Rand, Plyler, Perdue, Odom, Cooper

WAIVE NC HEALTH CHOICE WAITING PERIOD FOR SPECIAL NEEDS CHILDREN

Section 11.8.(a) G.S. 108A-70.18(8) reads as rewritten:

"§ 108A-70.18. Definitions.

~~Unless~~ As used in this Part, unless the context clearly requires otherwise, the term:

…

(8) 'Uninsured' means the applicant for Program benefits was not covered under any private or employer-sponsored comprehensive health insurance plan for the six-month period immediately preceding the date of application for Program benefits. Effective April 1, 1999, 'uninsured' means the applicant is and was not covered under any private or employer-sponsored comprehensive health insurance plan for 60 days immediately preceding the date of application. The waiting periods required under this subdivision shall be waived if if:

a. ~~the~~ The child has been enrolled in Medicaid and has lost Medicaid ~~eligibility,~~ eligibility;

b. The child has lost health care benefits due to cessation of a nonprofit organization program that provides health care benefits to low-income ~~children, or~~ children;

c. The child has lost employer-sponsored comprehensive health care coverage due to termination of employment, cessation by the employer of employer-sponsored health coverage, or cessation of the employer's ~~business.~~ business; or

d. Health insurance benefits available to the family of a special needs child have been terminated due to a long-term disability or a substantial reduction in or limitation of lifetime medical benefits or benefit category. As used in this paragraph, 'special needs child' has the definition applied in G.S. 108A-70.23(a)."

Section 11.8.(b) The total amount of State funds expended for the Health Insurance Program for Children (NC Health Choice) in the 2000-2001 fiscal year shall not exceed the amount of State funds appropriated to match federal funds for the Program for the 2000-2001 fiscal year.

SUBPART 3. FACILITY SERVICES

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

EXTEND ADULT CARE HOME MORATORIUM/STUDY

Section 11.9.(a) Section 11.69(b) of S.L. 1997-443, as amended by Section 12.16C(a) of S.L. 1998-212, and as further amended by Section 1 of S.L. 1999-135, reads as rewritten:

"(b) Effective until ~~September 30, 2000,~~ September 30, 2001, the Department of Health and Human Services shall not approve the addition of any adult care home beds for any type home or facility in the State, except as follows:

(1) Plans submitted for approval prior to May 18, 1997, may continue to be processed for approval;

(2) Plans submitted for approval subsequent to May 18, 1997, may be processed for approval if the individual or organization submitting the plan demonstrates to the Department that on or before August 25, 1997, the individual or organization purchased real property, entered into a contract to purchase or obtain an option to purchase real property, entered into a binding real property lease arrangement, or has otherwise made a binding financial commitment for the purpose of establishing or expanding an adult care home facility. An owner of real property who entered into a contract prior to August 25, 1997, for the sale of an existing building together with land zoned for the development of not more than 50 adult care home beds with a proposed purchaser who failed to consummate the transaction may, after August 25, 1997, sell the property to another purchaser and the Department may process and approve plans submitted by the purchaser for the development of not more than 50 adult care home beds. It shall be the responsibility of the applicant to establish, to the satisfaction of the Department, that any of these conditions have been met;

(3) Adult care home beds in facilities for the developmentally disabled with six beds or less which are or would be licensed under G.S. 131D or G.S. 122C may continue to be approved;

(4) If the Department determines that the vacancy rate of available adult care home beds in a county is fifteen percent (15%) or less of the total number of available beds in the county as of August 26, 1997, and no new beds have been approved or licensed in the county or plans submitted for approval in accordance with subdivision (1) or (2) of this section which would raise the vacancy rate above fifteen percent (15%) in the county, then the Department may accept and approve the addition of beds in that county; or

(5) If a county board of commissioners determines that a substantial need exists for the addition of adult care home beds in that county, the board of commissioners may request that a specified number of additional beds be licensed for development in their county. In making their determination, the board of commissioners shall give consideration to meeting the needs of Special Assistance clients. The Department may approve licensure of the additional beds from the first facility that files for licensure and subsequently meets the licensure requirements."

Section 11.9.(b) The Department of Health and Human Services shall study the various types of adult care homes covered by the moratorium enacted under Section 11.69(b) of S.L. 1997-443 and amended by Section 12.16C(a) of S.L. 1998-212 and S.L. 1999-135. The study shall identify adult care homes by predominant types of residents currently being served and shall recommend licensure categories appropriate to the population served. As part of this study, the Department shall identify current public funding available to residents of the identified adult care homes as well as additional funding sources appropriate to the population being served. Not later than March 1, 2001, the Department shall report the results of its study to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

USE OF FIRE PROTECTION FUND FOR EMERGENCY GENERATORS

Section 11.10. G.S. 122A-5.13 reads as rewritten:

"§ 122A-5.13. Adult Care Home, Group Home, and Nursing Home Fire Protection Fund authorized; authority.

(a) The North Carolina Housing Finance Agency shall establish an Adult Care Home, Group Home, and Nursing Home Fire Protection Fund (hereinafter 'Fire Protection Fund') to assist owners of adult care homes, group homes for developmentally disabled adults, and nursing homes with the purchase and installation of fire protection systems and emergency generators in existing and new adult care homes, group homes for developmentally disabled adults, and nursing homes. The Fire Protection Fund shall be a revolving fund.

(b) The Agency, in consultation with the Department of Health and Human Services, shall adopt rules for the management and use of the Fire Protection Fund. These rules at a minimum shall provide for the following:

(1) Financial incentives for owners of facilities who utilize Fire Protection Fund monies to install sprinkler systems instead of smoke detection equipment.

(2) Maximum loan amounts of one dollar and seventy-five cents ($1.75) per square foot for advanced smoke detectors and digital communication equipment, three dollars and seventy-five cents ($3.75) per square foot for residential sprinkler systems, and six dollars ($6.00) per square foot for institutional sprinkler systems.

(3) Interest rates from three percent (3%) to six percent (6%) for a period not to exceed 20 years for sprinkler systems and 10 years for smoke detection systems.

(4) Documentary verification that owners of facilities obtain fire protection systems and emergency generators at a reasonable cost.

(5) Acceleration of a loan when statutory fire protection requirements are not met by the facility for which the loan was made.

(6) Loan approval priority criteria that considers the frailty level of residents at a facility.

(7) Loan origination and servicing fees.

(c) Proceeds from the Fire Protection Fund, not to exceed ten thousand dollars ($10,000) annually, may be used to provide staff support to the North Carolina Housing Finance Agency for loan processing under this section and to the Department of Health and Human Services for review and approval of fire protection plans and inspection of fire protection systems."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

STUDY MULTIUNIT ASSISTED HOUSING WITH SERVICES FACILITIES

Section 11.11. The North Carolina Study Commission on Aging shall study Multiunit Assisted Housing with Services (MAHS) facilities. The study shall include the following:

(1) What strategies may be employed at the State and local level to ensure registration of MAHS facilities with the Department of Health and Human Services, as required under G.S. 131D-2(a)(7a).

(2) Whether persons requesting access to MAHS facilities should be included in the assessment process that is part of the uniform portal of entry system.

(3) Whether an advocacy and oversight system for MAHS facilities should be developed that is comparable to the advocacy and oversight system in place for adult care homes.

Not later than February 1, 2001, the Commission shall report its findings and recommendations to the 2001 General Assembly and to the cochairs of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Purcell, Plyler, Perdue, Odom

FUNDS FOR TRAINING PROGRAMS FOR RECRUITMENT OF CERTIFIED NURSING ASSISTANTS IN NURSING FACILITIES

Section 11.11A.(a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of five hundred thousand dollars ($500,000) for the 2000-2001 fiscal year shall be used for the development and implementation of on-site Internet training or other innovative training programs designed to improve recruitment and reduce turnover of certified nursing assistants in nursing facilities.

Section 11.11A.(b) The Community Colleges System Office shall work with nursing home providers to develop and implement the training program. The program shall be tested in at least five nursing facilities in the State.

Section 11.11A.(c) The Community Colleges System Office shall ensure that the program is evaluated by a committee composed of individuals representing the community colleges, the North Carolina Health Care Facilities Association, and the Division of Facility Services in the Department of Health and Human Services. Not later than June 30, 2001, the Community Colleges System Office shall report to the North Carolina Study Commission on Aging on the use of these funds and implementation of the program.

SUBPART 4. SOCIAL SERVICES

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ADULT CARE HOMES REIMBURSEMENT RATE INCREASE/STATE AUDITOR STUDY

Section 11.12.(a) Section 11.22(e) of S.L. 1999-237 reads as rewritten:

"Section 11.22.(e) Effective October 1, 2000, the maximum monthly rate for residents in adult care home facilities shall be one thousand ~~sixteen~~ sixty-two dollars ~~($1,016)~~ ($1,062) per month per resident."

Section 11.12.(b) The Office of the State Auditor shall study the cost reimbursement system used to reimburse adult care homes for residents in those homes who receive public assistance. The study shall include an analysis of the financial information collected on the adult care homes by the Department of Health and Human Services controller's office. The study shall also analyze the impact of occupancy rates on the cost reimbursement system. The Office of the State Auditor shall report the results of the study to the members of the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources not later than March 1, 2001.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

EXTEND SPECIAL ASSISTANCE DEMONSTRATION PROJECT

Section 11.13. Section 11.21 of S.L. 1999-237 reads as rewritten:

"Section 11.21. The Department of Health and Human Services may use funds from the existing State/County Special Assistance for Adults budget to provide Special Assistance payments to eligible individuals in in-home living arrangements. These payments may be made for up to 400 individuals. These payments may be made for up to a two-year period beginning July 1, ~~1999,~~ 2000, and ending June 30, ~~2001.~~ 2002. To the maximum extent possible, the Department shall consider geographic balance in the dispersion of payments to individuals across the State. The Department shall make an interim report to the cochairs of the House of Representatives Appropriations Committee, the cochairs of the House of Representatives Appropriations Subcommittee on Health and Human Services and the cochairs of the Senate Appropriations Committee, the Chair of the Senate Appropriations Committee on Human Resources by June 30, ~~2000,~~ 2001, and a final report by October 1, ~~2001.~~ 2002. This report shall include the following information:

(1) A description of cost savings that could occur by allowing individuals eligible for State/County Special Assistance the option of remaining in the home.

(2) Which activities of daily living or other need criteria are reliable indicators for identifying individuals with the greatest need for income supplements for in-home living arrangements.

(3) How much case management is needed and which types of individuals are most in need of case management.

(4) The geographic location of individuals receiving payments under this section.

(5) A description of the services purchased with these payments.

(6) A description of the income levels of individuals who receive payments under this section and the impact on the Medicaid program.

(7) Findings and recommendations as to the feasibility of continuing or expanding the demonstration program."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD WELFARE SYSTEM IMPROVEMENTS

Section 11.14.(a) Subsection (a) of Section 11.28 of S.L. 1999-237 reads as rewritten:

"Section 11.28.(a) The Division of Social Services, Department of Health and Human Services, shall report ~~semiannually~~ to the members of the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on the activities of the State Child Fatality Review Team and shall provide a final report to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Health and Human Services no later than April 1, 2000, including recommendations for changes in the statewide child protection ~~system.~~ system no later than October 1 of each year."

Section 11.14.(b) Subsection (d) of Section 11.57 of S.L. 1997-443, as amended by Section 12.22 of S.L. 1998-212 and as amended by Section 11.28 of S.L. 1999-237, is repealed.

Section 11.14.(c) G.S. 131D-10.6A reads as rewritten:

"§ 131D-10.6A. Training by the Division of Social Services required.

(a) The Division of Social Services, Department of Health and Human Services, shall ~~continue the in-house training component that provides a mandated~~ require a minimum of 30 hours of preservice training for foster care parents either prior to licensure or within six months from the date a provisional license is issued pursuant to G.S. ~~131D-10.3, and 84 hours for foster care workers and adoption social workers~~ 131D-10.3 and a mandated minimum of 10 hours of continuing education for all foster care parents ~~and 18 hours for foster care workers and adoption social workers.~~ annually after the year in which a license is obtained.

(b) The Division of Social Services shall establish minimum training requirements for child welfare services staff. The minimum training requirements established by the Division are as follows:

(1) Child welfare services workers shall complete a minimum of 72 hours of preservice training before assuming direct client contact responsibilities.

(2) Child protective services workers shall complete a minimum of 18 hours of additional training that the Division of Social Services determines is necessary to adequately meet training needs.

(3) Foster care and adoption workers shall complete a minimum of 39 hours of additional training that the Division of Social Services determines is necessary to adequately meet training needs.

(4) Child welfare services supervisors shall complete a minimum of 72 hours of preservice training before assuming supervisory responsibilities and a minimum of 54 hours of additional training that the Division of Social Services determines is necessary to adequately meet training needs.

(5) Child welfare services staff shall complete 24 hours of continuing education annually.

The Division of Social Services may grant an exception in whole or in part to the requirement under subdivision (1) of this subsection to child welfare workers who satisfactorily complete or are enrolled in a masters or bachelors program after July 1, 1999, from a North Carolina social work program accredited pursuant to the Council on Social Work Education. The program's curricula must cover the specific preservice training requirements as established by the Division of Social Services.

The Division of Social Services shall ensure that training opportunities are available for county departments of social services and consolidated human service agencies to meet the training requirements of this subsection."

Section 11.14.(d) G.S. 131D-10.6A(b), as enacted by subsection (b) of this section, applies to child welfare services staff initially hired on or after January 1, 1998.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SPECIAL CHILDREN ADOPTION FUND

Section 11.15.(a) Of the funds appropriated to the Department of Health and Human Services in this act, the sum of one million one hundred thousand dollars ($1,100,000) shall be used to support the Special Children Adoption Fund for the 2000-2001 fiscal year. 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. No local match shall be required as a condition for receipt of these funds. In accordance with State rules for allowable costs, the Special Children Adoption Fund may be used for post-adoption services for families whose incomes exceed two hundred percent (200%) of the federal poverty level.

Section 11.15.(b) Of the total funds appropriated for the Special Children Adoption Fund, four hundred thousand dollars ($400,000) shall be reserved for payment to participating private adoption agencies.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SPECIAL NEEDS ADOPTIONS INCENTIVE FUND

Section 11.16. There is created a Special Needs Adoptions Incentive Fund to provide financial assistance to facilitate the adoption of certain children residing in licensed foster care homes, effective January 1, 2001. These funds shall be used to remove financial barriers to the adoption of these children and shall be available to foster care families who adopt children with special needs as defined by the Social Services Commission. These funds shall be matched by county funds.

This program shall not constitute an entitlement and is subject to the availability of funds.

The Social Services Commission shall adopt rules to implement the provisions of this section.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD WELFARE SERVICES DATA COLLECTION

Section 11.16A. The Department of Health and Human Services, Division of Social Services, shall report to the House of Representative Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division no later than April 1, 2001, on the following information for this State and for comparable states:

(1) Demographics on the population under the age of 18, including significant trends over a 5-year period.

(2) The number of child welfare cases, including significant trends over a 5-year period. Information regarding cases shall include separate data on reports, investigations, and substantiated cases. This report shall contain information on the definition of these terms.

(3) The total number of Child Welfare Services workers, including significant trends over a 5-year period.

(4) The total budget, from all available sources, for Child Welfare Services, including significant trends over a 5-year period.

The Department shall establish a mechanism for reporting this information on an annual basis and shall develop an estimate of the cost of complying with this Section.

The purpose of this reporting requirement is for the General Assembly to utilize this information as part of a rational decision-making process of identifying and meeting the needs of the Child Welfare Services system.

SUBPART 5. MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

NONMEDICAID REIMBURSEMENT CHANGES

Section 11.17. Section 11.7 of S.L. 1999-237 reads as rewritten:

"Section 11.7. Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program. Hospitals that provide psychiatric inpatient care for multiply diagnosed adults who were identified as members of the Thomas S. class at the time of dissolution of the class, and other multiply diagnosed adults may be paid an additional incentive payment not to exceed fifteen percent (15%) of their regular daily per diem reimbursement.

The Department of Health and Human Services may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days. When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non-Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.

Notwithstanding the provisions of paragraph one, the Department of Health and Human Services may negotiate with providers of medical services under the various Department of Health and Human Services programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes: contracts or agreements for medical services and purchases of medical equipment and other medical supplies. These negotiated rates are allowable only to meet the medical needs of its non-Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.

Maximum net family annual income eligibility standards for services in these programs shall be as follows:

Medical Eye All

Family Size Care Adults Rehabilitation Other

1 $ 4,860 $ 8,364 $ 4,200

2 5,940 10,944 5,300

3 6,204 13,500 6,400

4 7,284 16,092 7,500

5 7,821 18,648 7,900

6 8,220 21,228 8,300

7 8,772 21,708 8,800

8 9,312 22,220 9,300

The eligibility level for children in the Medical Eye Care Program in the Division of Services for the Blind shall be one hundred percent (100%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. The eligibility level for adults in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall be one hundred ~~twenty-five~~ fifty percent ~~(125%)~~ (150%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. Additionally, those adults enrolled in the Atypical Antipsychotic Medication Program who become gainfully employed may continue to be eligible to receive State support, in decreasing amounts, for the purchase of atypical antipsychotic medication and related services up to three hundred percent (300%) of the poverty level.

State financial participation in the Atypical Antipsychotic Medication Program for those enrollees who become gainfully employed is as follows:

Income State Participation Client

Participation

(% of poverty)

~~0-125%~~ ~~100%~~ 0%

~~126-140%~~ ~~90%~~ ~~10%~~

~~141-160%~~ ~~80%~~ ~~20%~~

~~161-180%~~ ~~70%~~ ~~30%~~

~~181-200%~~ ~~60%~~ ~~40%~~

~~201-220%~~ ~~50%~~ ~~50%~~

~~221-240%~~ ~~40%~~ ~~60%~~

~~241-260%~~ ~~30%~~ ~~70%~~

~~261-280%~~ ~~20%~~ ~~80%~~

~~281-300%~~ ~~10%~~ ~~90%~~

~~301%-over~~ 0% ~~100%.~~

0-150% 100% 0%

151-200% 75% 25%

201-250% 50% 50%

251-300% 25% 75%

301% and over 0% 100%."

The Department of Health and Human Services shall contract at, or as close as possible to, Medicaid rates for medical services provided to residents of State facilities of the Department."

Requested by: Representative Culpepper, Senators Martin of Guilford, Plyler, Perdue, Odom

AREA BOARD MEMBER PER DIEM

Section 11.18. G.S. 122C-120 reads as rewritten:

"§ 122C-120. Compensation of area board members.

(a) Area board members may receive as compensation for their services per diem and a subsistence allowance for each day during which they are engaged in the official business of the area board. The amount of the per diem and subsistence allowances shall be established by the area ~~board and the amounts shall not exceed those authorized by G.S. 138-5 for State boards.~~ board. The amount of per diem allowance shall not exceed fifty dollars ($50.00). Reimbursement of subsistence expenses shall be at the rates allowed to State officers and employees under G.S. 138-6(a)(3).

(b) Area board members may be reimbursed for all necessary travel expenses and registration fees in amounts fixed by the board."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD RESIDENTIAL TREATMENT SERVICES PROGRAM

Section 11.19.(a) The Department of Health and Human Services shall establish the Child Residential Treatment Services Program. The Program shall be implemented by the Department in consultation with the Office of Juvenile Justice and other affected State agencies. The purpose of the Program is to provide appropriate and medically necessary residential treatment alternatives for children at risk of institutionalization or other out-of-home placement. Program funds shall be targeted for non-Medicaid eligible children and may also be used for Medicaid-eligible children. Program funds may also be used to expand the Child Mental Health Systems of Care Project. The Program shall include the following:

(1) Behavioral health screenings for all children at risk of institutionalization or other out-of-home placement.

(2) Appropriate and medically necessary residential treatment placements, including placements for youths needing substance abuse treatment services and for specialized populations such as deaf children, children with serious emotional disturbances, and sexually aggressive youth.

(3) Multidisciplinary case management services, as needed.

(4) A system of utilization review specific to the nature and design of the Program.

(5) Mechanisms to ensure that children are not placed in department of social services custody for the purpose of obtaining mental health residential treatment services.

(6) Mechanisms to maximize current State and local funds and to expand use of Medicaid funds to accomplish the intent of this Program.

(7) Other appropriate components to accomplish the Program's purpose.

(8) The Secretary of the Department of Health and Human Services may enter into contracts with residential service providers.

Section 11.19.(b) The Department shall not allocate funds appropriated for Program services until a Memorandum of Agreement has been executed between the Department and other affected State agencies. The Memorandum of Agreement shall address specifically the roles and responsibilities of the various departmental divisions and affected State agencies involved in the administration, financing, care, and placement of children at risk of institutionalization or other out-of-home placement. The Department shall not allocate funds appropriated in this act for the Program until Memoranda of Agreement between local departments of social services and area mental health programs, and the Administrative Office of the Courts, and the Office of Juvenile Justice, as appropriate, are executed to effectuate the purpose of the Program. The Memoranda of Agreement shall address issues pertinent to local implementation of the Program.

Section 11.19.(c) Notwithstanding any other provision of law to the contrary, services under the Child Residential Treatment Services Program are not an entitlement for non-Medicaid eligible children served by the Program.

Section 11.19.(d) The Department of Health and Human Services, in conjunction with the Office of Juvenile Justice and other affected agencies, shall report on the following:

(1) The number and other demographic information of children served.

(2) The amount and source of funds expended to implement the Program.

(3) Information regarding the number of children screened, specific placement of children, and treatment needs of children served.

(4) The average length of stay in residential treatment, transition, and return to home.

(5) The number of children diverted from institutions or other out-of-home placements such as training schools and State psychiatric hospitals.

(6) Recommendations on other areas of the Program that need to be improved.

(7) Other information relevant to successful implementation of the Program.

The Department shall submit a progress report on implementation of the Program not later than February 1, 2001, and a final report not later than May 1, 2002, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom, Lucas, Gulley

FUNDS FOR CHILD AND ADOLESCENT RESIDENTIAL UNIT AT MURDOCH CENTER

Section 11.20.(a) Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of one million two hundred thousand dollars ($1,200,000) for the 2000-2001 fiscal year shall be used as follows:

(1) To develop and operate a six-bed short-term residential unit to meet the needs of autistic children statewide whose behaviors place them at serious risk of institutionalization. The unit shall be developed within the Murdoch Mental Retardation Center and supported by specialized staff within the Murdoch Mental Retardation Center; and

(2) To develop and operate a four-bed residential program for autistic children statewide whose behaviors place them at serious risk of institutionalization. The program may offer short-term diagnostic/prescriptive services or comprehensive interventions in order to transition children back to their homes and communities. The program shall be developed and supported by staff from the Murdoch Mental Retardation Center.

Section 11.20.(b) Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of three hundred twenty-six thousand dollars ($326,000) for the 2000-2001 fiscal year shall be used to provide residential services for children with autism.

Section 11.20.(c) The Department shall submit progress reports on December 1, 2000, and on April 1, 2001, on its compliance with this section. The Department shall submit a final report on January 1, 2002. The reports shall be submitted to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SERVICES TO CHILDREN AT RISK FOR INSTITUTIONALIZATION OR OTHER OUT-OF-HOME PLACEMENT

Section 11.21.(a) In order to ensure that children at risk for institutionalization or other out-of-home placement are appropriately served by the mental health, developmental disabilities, and substance abuse services system, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall do the following with respect to services provided to these children:

(1) Provide only those treatment services that are medically necessary.

(2) Implement utilization review of services provided.

(3) Effective immediately:

a. Eliminate formerly court-mandated Willie M. or Eligible Violent and Assaultive Children Program administration, infrastructure, categorical funding designation, and eligibility determination process at the State and local level;

b. Identify savings realized from elimination of Program administration and infrastructure at the State and local level;

c. Adopt the following guiding principles for the provision of services:

1. Service delivery system must be outcome-oriented and evaluation-based.

2. Services should be delivered as close as possible to the consumer's home.

3. Services selected should be those that are most efficient in terms of cost and effectiveness.

4. Services should not be provided solely for the convenience of the provider or the client.

5. Families and consumers should be involved in decision making throughout treatment planning and delivery.

d. Implement all of the following cost reduction strategies:

1. Preauthorization for all services except emergency services.

2. Levels of care to assist in the development of treatment plans.

3. Clinically appropriate services.

4. State review of individualized service plans for all children served to ensure that service plans focus on delivery of appropriate services rather than optimal treatment and habilitation plans.

(4) Collaborate with other affected State agencies such as the Office of Juvenile Justice and the Administrative Office of the Courts, and with local departments of social services and area mental health programs to eliminate cost-shifting and facilitate cost-sharing among these governmental agencies with respect to the treatment and placement services.

Section 11.21.(b) The Department shall submit a progress report on implementation of this section not later than February 1, 2001, and a final report not later than May 1, 2002, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division.

Section 11.21.(c) G.S. 122C-3(13a) is repealed.

Section 11.21.(d) G.S. 122C-112(14) is repealed.

Section 11.21.(e) Part 7 of Article 4 of Chapter 122C of the General Statutes is repealed. This subsection applies to petitions for contested case review filed on and after the effective date of this act.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SERVICES TO MULTIPLY-DIAGNOSED ADULTS

Section 11.22.(a) In order to ensure that multiply-diagnosed adults are appropriately served by the mental health, developmental disabilities, and substance abuse services system, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall do the following with respect to services provided to these adults:

(1) Provide only those treatment services that are medically necessary.

(2) Implement utilization review of services provided.

(3) Effective immediately:

a. Eliminate formerly court-mandated Thomas S. Program administration, infrastructure, and categorical funding designation at the local level, while continuing to provide services to former Thomas S. clients and other multiply-diagnosed adults;

b. Identify savings realized from elimination of Program administration and infrastructure;

c. Adopt the following guiding principles for the provision of services:

1. Service delivery system must be outcome oriented and evaluation based.

2. Services should be delivered as close as possible to the consumer's home.

3. Services selected should be those that are most efficient in terms of cost and effectiveness.

4. Services should not be provided solely for the convenience of the provider or the client.

5. Families and consumers should be involved in decision-making throughout treatment planning and delivery; and

d. Implement all of the following cost reduction strategies:

1. Preauthorization for all services except emergency services.

2. Criteria for determining medical necessity.

3. Clinically appropriate services.

4. State review of (i) individualized service plans for all adults served to ensure that service plans focus on delivery of appropriate services rather than optimal treatment and habilitation plans, and (ii) staffing patterns of residential services.

Section 11.22.(b) No State funds shall be used for the purchase of single-family or other residential dwellings to house multiply-diagnosed adults.

Section 11.22.(c) The Department shall submit a progress report on implementation of this section not later than February 1, 2001, and a final report not later than May 1, 2002, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Phillips, Plyler, Perdue, Odom

FUNDS FOR MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES OVERSIGHT COMMITTEE

Section 11.23.(a) Of the funds appropriated in this act to the Department of Health and Human Services, the Department shall transfer the sum of three hundred fifty thousand dollars ($350,000) to the General Assembly, Legislative Services Office, for the 2000-2001 fiscal year. These funds shall be used for the mental health, developmental disabilities, and substance abuse services system reform initiative proposed in Senate Bill 1217 and House Bill 1519, 1999 General Assembly, Regular Session 2000. The funds shall be used specifically for a comprehensive study of developmental disabilities services and administration and to hire professional staff to assist the Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services. These funds may be transferred for these purposes if and only if Senate Bill 1217 or House Bill 1519, 1999 General Assembly, becomes law.

Section 11.23.(b) The Department shall study whether a new division of developmental disabilities should be established in the Department. Not later than January 1, 2001, the Department shall report its findings and recommendations to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources.

Section 11.23.(c) The Department of Health and Human Services shall proceed with plans for the construction of a new State psychiatric hospital to replace Dorothea Dix hospital. Not later than October 1, 2000, the Department shall report the status of the plans including identification of potential sites for the new facility. The report shall be made to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, to the Senate Appropriations Committee on Human Resources, and the House of Representatives Appropriations Subcommittee on Health and Human Services.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES RESERVE FOR SYSTEM REFORM AND OLMSTEAD DECISION

Section 11.24.(a) There is created in the Office of State Budget and Management the Mental Health, Developmental Disabilities, and Substance Abuse Services Reserve for System Reform and Olmstead. The purposes of the Reserve are to:

(1) Provide start-up funds for programs and services that provide community alternatives for individuals currently residing in the State's mental health, developmental disabilities, and substance abuse services institutions.

(2) Facilitate the State's compliance with the United States Supreme Court decision in Olmstead v. L.C. and E.W.

(3) Facilitate reform of the mental health, developmental disabilities, and substance abuse services system.

Section 11.24.(b) Funds appropriated to the Reserve created in subsection (a) of this section shall be used to:

(1) Pay onetime expenditures that will not impose additional financial obligations on the State, and

(2) Establish or expand community-based services if sufficient recurring funds can be identified within the Department from funds currently budgeted for mental health, developmental disabilities, and substance abuse services, area mental health programs, or local government.

Section 11.24.(c) Before allocating funds from the Reserve, the Director of the Budget shall certify that the planned uses of the funds are in compliance with this section and do not constitute or will not create an ongoing financial obligation to the State.

Section 11.24.(d) Funds in the Mental Health, Developmental Disabilities, and Substance Abuse Services Reserve for System Reform and Olmstead shall not revert to the General Fund but shall remain in the Reserve to be used as authorized in this section.

Section 11.24.(e) The Department of Health and Human Services shall report periodically to the Legislative Study Commission on Mental Health, Developmental Disabilities, and Substance Abuse Services and to the Joint Legislative Commission on Governmental Operations on any actions taken under this section.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

EARLY INTERVENTION SERVICES

Section 11.25. Section 11.42 of S.L. 1999-237 reads as rewritten:

"Section 11.42.(a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of two hundred three thousand dollars ($203,000) for the 1999-2000 fiscal year and the sum of ~~six hundred ten~~ eight hundred sixty thousand dollars ~~($610,000)~~ ($860,000) for the 2000-2001 fiscal year shall be used to implement two recommendations from the Interagency Coordinating Council's "Study on Early Intervention Services for Children Ages Birth to Five Years," dated March 1999. The Department of Health and Human Services, the Department of Public Instruction, and The University of North Carolina's Division TEACCH (Treatment and Education of Autistic and other Communications Handicapped Children and Adults), shall participate jointly, in collaboration with the Interagency Coordinating Council, in the planning, design, and implementation of the following provisions:

(1) Of the funds allocated by this subsection, the sum of seventy-eight thousand dollars ($78,000) in the 1999-2000 fiscal year and the sum of ~~one hundred ten~~ three hundred thousand dollars ~~($110,000)~~ ($300,000) in the 2000-2001 fiscal year shall be used to plan, design, and implement an integrated, interagency database for children with or at risk for disabilities who receive early intervention services. The purpose of the database is to:

a. Assist in identifying gaps in services;

b. Project and plan for future service needs;

c. Improve the quality and accessibility of services; and

d. Document outcomes of early intervention services.

This database shall be compatible with the State Board of Education's new Student Information Management System. These agencies shall initiate use of the database in a pilot program in at least one community by July 1, 2000, and shall evaluate this pilot for statewide implementation by July 1, 2001. Any local education agency participating in the pilot program shall provide the same data for children in the preschool program for children with disabilities as is provided by the Department of Health and Human Services for children served in the infant-toddler program. The agencies shall submit a progress report by April 1, 2000, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

(2) Of the funds allocated by this subsection, the sum of one hundred twenty-five thousand dollars ($125,000) in fiscal year 1999-2000 and the sum of five hundred sixty thousand dollars ~~($500,000)~~ ($560,000) in fiscal year 2000-2001 shall be used to plan for and implement regional transdisciplinary teams to provide training, technical assistance, and other support services to existing early intervention agencies and providers. The teams will maintain expertise on low incidence populations, such as children with visual and hearing impairments, autism, and child mental health needs. These agencies shall implement a pilot program establishing a regional transdisciplinary team no later than March 2000. These agencies shall submit an interim report by March 15, 2000, and a final plan for statewide implementation of the transdisciplinary teams by March 15, 2001, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 11.42.(b) The North Carolina Schools for the Deaf and other agencies providing early intervention services to children from birth through five years of age shall implement procedures to ensure that:

(1) Parents of children newly identified with hearing loss and determined to be eligible for services are informed of the services available to them through Beginnings for Parents of ~~Hearing Impaired Children, Inc.;~~ Children Who Are Deaf or Hard of Hearing, Inc.; and

(2) Beginnings for Parents of ~~Hearing Impaired Children, Inc.,~~ Children Who Are Deaf or Hard of Hearing, Inc., with the consent of parents, is notified of these children in a timely and appropriate manner."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

LICENSURE EXCEPTION FOR CERTAIN NONPROFIT SUBSTANCE ABUSE FACILITIES

Section 11.25A. G.S. 122C-22(a) reads as rewritten:

"(a) The following are excluded from the provisions of this Article and are not required to obtain licensure under this Article:

(1) Physicians and psychologists engaged in private office practice;

(2) General hospitals licensed under Article 5 of Chapter 131E of the General Statutes, that operate special units for the mentally ill, developmentally disabled, or substance abusers;

(3) State and federally operated facilities;

(4) Adult care homes licensed under Chapter 131D of the General Statutes;

(5) Developmental child care centers licensed under Article 7 of Chapter 110 of the General Statutes;

(6) Persons subject to licensure under rules of the Social Services Commission;

(7) Persons subject to rules and regulations of the Division of Vocational Rehabilitation Services; and

(8) Facilities that provide occasional respite care for not more than two individuals at a time; provided that the primary purpose of the facility is other than as defined in G.S. 122C-3(14).

(9) Twenty-four-hour nonprofit facilities established for the purposes of shelter care and recovery from alcohol or other drug addiction through a 12-step, self-help, peer role modeling, and self-governance approach."

SUBPART 6. CHILD DEVELOPMENT

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

TRANSFER FUNDS FOR CLIENT SERVICES

Section 11.26. The sum of three million dollars ($3,000,000) appropriated to the Division of Child Development in this act shall be transferred to the Division of Social Services to fund client services provided by the county departments of social services.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARE SUBSIDY RATES

Section 11.27.(a) Section 11.47 of S.L. 1999-237 reads as rewritten:

"Section 11.47.(a) The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be seventy-five percent (75%) of the State median income, adjusted for family size.

Section 11.47.(b) Fees for families who are required to share in the cost of care shall be established based on a percent of gross family income and adjusted for family size. Fees shall be determined as follows:

FAMILY SIZE PERCENT OF GROSS FAMILY INCOME

1-3 9%

4-5 8%

6 or more 7%

Section 11.47.(c) Payments for the purchase of child care services for low-income children shall be in accordance with the following requirements:

(1) Effective October 1, 1999, religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the ~~county market~~ subsidy rate or the rate they charge privately paying parents, whichever is lower.

(2) Effective October 1, 1999, religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that are receiving a higher rate than the ~~market~~ subsidy rates that will be implemented with this provision shall continue to receive that higher rate for a period of three years from the effective date of this section.

(3) Effective October 1, 1999, licensed child care centers with two or more stars may receive a higher payment rate per child per month as follows: two stars - $14.00, three stars - $17.00, four stars - $20.00, and five stars - $23.00. Effective January 1, 2000, licensed child care homes with two or more stars may receive a higher payment rate per child per month as follows: two stars - $14.00, three stars - $17.00, four stars - $20.00, and five stars - $23.00. This subdivision expires September 1, 2000.

(3a) Effective September 1, 2000, licensed child care centers and homes with two or more stars shall receive the subsidy rate for that rated quality level for that age group or the rate they charge privately paying parents, whichever is lower.

(4) Nonlicensed homes shall receive fifty percent (50%) of the ~~county market~~ subsidy rate or the rate they charge privately paying parents, whichever is lower.

(5) Maximum payment rates shall also be calculated periodically by the Division of Child Development for transportation to and from child care provided by the child care provider, individual transporter, or transportation agency, and for fees charged by providers to parents. These payment rates shall be based upon information collected by market rate surveys.

~~Section 11.47.(d) Provision of payment rates for child care providers in counties who do not have at least 75 children in each age group for center-based and home-based care are as follows:~~

~~(1)~~ ~~Payment rates shall be set at the statewide market rate for licensed child care centers and homes.~~

~~(2)~~ If it can be demonstrated that the application of the statewide market rate to a county with fewer than 75 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low-income children, then the county market rate may be applied.

Section 11.47.(e) A market rate shall be calculated for child care centers and homes ~~that meet minimum licensing standards~~ at each rated quality level for each county and for each age group or age category of enrollees and shall be representative of fees charged to unsubsidized privately paying parents for each age group of enrollees within the county. The Division of Child Development shall also calculate a statewide market rate at each rated quality level for each age category. The Division of Child Development may also calculate regional market rates at each rated quality level for each age group and age category.

Section 11.47.(f) Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes and facilities operated pursuant to G.S. 110-106 may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families. No separate licensing requirements shall be used to select facilities to participate. In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations. Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.

County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.

Section 11.47.(g) Payment for subsidized child care services provided with Work First Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program."

Section 11.27.(b) Article 7 of Chapter 110 of the General Statutes is amended by adding a new section to read:

"110-109. Child care subsidy rates.

(a) The Department shall conduct a statewide market rate study of child care facilities at least once every two years. The study shall include a survey of all licensed facilities. Based on the results of this study, the Department shall establish a market rate for child care centers and homes at each rated quality level for each county and for each age group. The Department shall also calculate a statewide market rate at each rated quality level for each age group. The market rate shall be set at the seventy-fifth percentile of fees charged to unsubsidized, privately paying parents at each rated quality level for each age group.

(b) Within six months of completing a statewide market rate study, the Department shall publish the results of that study and implement market rates based on the results of that study.

(c) When a county has at least 75 children in an age group at a particular rated quality level, the subsidy rate is the county market rate for that age group at that rated quality level. When a county has fewer than 75 children in an age group at a particular rated quality level, the subsidy rate is the statewide market rate for that age group at that rated quality level.

(d) Notwithstanding the provisions of subsection (c) of this section, when it can be demonstrated that the statewide market rate is lower than the county market rate and that setting the subsidy rate at the statewide market rate would inhibit the ability of a county to purchase child care for low-income children, the subsidy rate shall be the county market rate."

Section 11.27.(c) The first market rate study required by G.S. 110-109, as enacted by subsection (b) of this section, shall be completed no later than April 1, 2001.

Section 11.27.(d) The Department of Health and Human Services shall conduct a one-time interim market rate study that shall be completed no later than April 1, 2002. This interim market rate study shall incorporate the results of the April 2001 study and shall contain a survey of rates charged at child care facilities that have changed their rate quality level since the survey conducted for the April 2001 study. The Department shall implement the results of this study within six months of its completion.

Section 11.27.(e) Noncitizen families who reside in this State legally shall be eligible for child care subsidies if all other conditions of eligibility are met. If all other conditions of eligibility are met, noncitizen families who reside in this State illegally shall be eligible for child care subsidies only if at least one of the following conditions is met:

(1) The child for whom a child care subsidy is sought is receiving child protective services or foster care services.

(2) The child for whom a child care subsidy is sought is developmentally delayed or at risk of being developmentally delayed.

(3) The child for whom a child care subsidy is sought is a citizen of the United States.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Baddour, Senators Martin of Guilford, Plyler, Perdue, Odom, Cooper

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES

Section 11.28.(a) G.S. 143B-168.12(a) reads as rewritten:

"(a) In order to receive State funds, the following conditions shall be met:

(1) The North Carolina Partnership shall have a Board of Directors consisting of the following 25 members:

a. The Secretary of Health and Human Services, ex officio, or the Secretary's designee;

b. Repealed by Session Laws 1997, c. 443, s. 11A.105.

c. The Superintendent of Public Instruction, ex officio, or the Superintendent's designee;

d. The President of the Community Colleges System, ex officio, or the President's designee;

e. Three members of the public, including one child care provider, one other who is a parent, and one other who is a board chair of a local partnership serving on the North Carolina Partnership local partnership advisory committee, appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate;

f. Three members of the public, including one who is a parent, one other who is a representative of the faith community, and one other who is a board chair of a local partnership serving on the North Carolina Partnership local partnership advisory committee, appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives;

g. Twelve members, appointed by the Governor. Three of these 12 members shall be members of the party other than the Governor's party, appointed by the Governor. Seven of these 12 members shall be appointed as follows: one who is a child care provider, one other who is a pediatrician, one other who is a health care provider, one other who is a parent, one other who is a member of the business community, one other who is a member representing a philanthropic agency, and one other who is an early childhood educator;

h. Repealed by Session Laws 1998-212, s. 12.37B(a).

h1. The Chair of the North Carolina Partnership Board shall be appointed by the Governor;

i. Repealed by Session Laws 1998-212, s. 12.37B(a).

j. One member of the public appointed by the General Assembly upon recommendation of the Majority Leader of the Senate;

k. One member of the public appointed by the General Assembly upon recommendation of the Majority Leader of the House of Representatives;

l. One member of the public appointed by the General Assembly upon recommendation of the Minority Leader of the Senate; and

m. One member of the public appointed by the General Assembly upon recommendation of the Minority Leader of the House of Representatives.

All members appointed to succeed the initial members and members appointed thereafter shall be appointed for three-year terms. Members may succeed themselves.

All appointed board members shall avoid conflicts of interests and the appearance of impropriety. Should instances arise when a conflict may be perceived, any individual who may benefit directly or indirectly from the North Carolina Partnership's disbursement of funds shall abstain from participating in any decision or deliberations by the North Carolina Partnership regarding the disbursement of funds.

All ex officio members are voting members. Each ex officio member may be represented by a designee. These designees shall be voting members. No members of the General Assembly shall serve as members.

The North Carolina Partnership may establish a nominating committee and, in making their recommendations of members to be appointed by the General Assembly or by the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Majority Leader of the Senate, the Majority Leader of the House of Representatives, the Minority Leader of the Senate, the Minority Leader of the House of Representatives, and the Governor shall consult with and consider the recommendations of this nominating committee.

The North Carolina Partnership may establish a policy on members' attendance, which policy shall include provisions for reporting absences of at least three meetings immediately to the appropriate appointing authority.

Members who miss more than three consecutive meetings without excuse or members who vacate their membership shall be replaced by the appropriate appointing authority, and the replacing member shall serve either until the General Assembly and the Governor can appoint a successor or until the replaced member's term expires, whichever is earlier.

The North Carolina Partnership shall establish a policy on membership of the local board, which policy shall include the requirement that all local board members, other than any member appointed because of a position held by that individual, be residents of the county or the partnership region they are representing. No member of the General Assembly shall serve as a member of a local board. Within these requirements for local board membership, the North Carolina Partnership shall allow local partnerships that are regional to have flexibility in the composition of their boards so that all counties in the region have adequate representation.

All appointed local board members shall avoid conflicts of interests and the appearance of impropriety. Should instances arise when a conflict may be perceived, any individual who may benefit directly or indirectly from the partnership's disbursement of funds shall abstain from participating in any decision or deliberations by the partnership regarding the disbursement of funds.

(2) The North Carolina Partnership and the local partnerships shall agree to adopt procedures for its operations that are comparable to those of Article 33C of Chapter 143 of the General Statutes, the Open Meetings Law, and Chapter 132 of the General Statutes, the Public Records Law, and provide for enforcement by the Department.

(3) The North Carolina Partnership shall oversee the development and implementation of the local demonstration projects as they are selected and shall approve the ongoing plans, programs, and services developed and implemented by the local partnerships and hold the local partnerships accountable for the financial and programmatic integrity of the programs and services. The North Carolina Partnership may contract at the State level to obtain services or resources when the North Carolina Partnership determines it would be more efficient to do so.

In the event that the North Carolina Partnership determines that a local partnership is not fulfilling its mandate to provide programs and services designed to meet the developmental needs of children in order to prepare them to begin school healthy and ready to succeed and is not being accountable for the programmatic and fiscal integrity of its programs and services, the North Carolina Partnership may suspend all funds to the partnership until the partnership demonstrates that these defects are corrected. Further, at its discretion, the North Carolina Partnership may assume the managerial responsibilities for the partnership's programs and services until the North Carolina Partnership determines that it is appropriate to return the programs and services to the local partnership.

(4) The North Carolina Partnership shall develop and implement a comprehensive standard fiscal accountability plan to ensure the fiscal integrity and accountability of State funds appropriated to it and to the local partnerships. The standard fiscal accountability plan shall, at a minimum, include a uniform, standardized system of accounting, internal controls, payroll, fidelity bonding, chart of accounts, and contract management and monitoring. The North Carolina Partnership may contract with outside firms to develop and implement the standard fiscal accountability plan. All local partnerships shall be required to participate in the standard fiscal accountability plan developed and adopted by the North Carolina Partnership pursuant to this subdivision.

(5) The North Carolina Partnership shall develop a ~~centralized~~ regional accounting and contract management system which incorporates features of the required standard fiscal accountability plan described in subdivision (4) of subsection (a) of this section. All local partnerships shall participate in the regional accounting and contract management system. ~~The following local partnerships shall be required to participate in the centralized accountability system developed by the North Carolina Partnership pursuant to this subdivision:~~

a. Local partnerships which have significant deficiencies in their accounting systems, internal controls, and contract management systems, as determined by the North Carolina Partnership based on the annual financial audits of the local partnerships conducted by the Office of the State Auditor; and

b. Local partnerships which are in the first two years of operation following their selection. At the end of this two-year period, local partnerships shall continue to participate in the centralized accounting and contract management system. With the approval of the North Carolina Partnership, local partnerships may perform accounting and contract management functions at the local level using the standardized and uniform accounting system, internal controls, and contract management systems developed by the North Carolina Partnership.

Local partnerships which otherwise would not be required to participate in the centralized accounting and contract management system pursuant to this subdivision may voluntarily choose to participate in the system. Participation or nonparticipation shall be for a minimum of two years, unless, in the event of nonparticipation, the North Carolina Partnership determines that any partnership's annual financial audit reveals serious deficiencies in accounting or contract management.

(6) The North Carolina Partnership shall develop a formula for allocating direct services funds appropriated for this purpose to local partnerships.

(7) The North Carolina Partnership may adjust its allocations by up to ten percent (10%) on the basis of local partnerships' performance assessments. In determining whether to adjust its allocations to local partnerships, the North Carolina Partnership shall consider whether the local partnerships are meeting the outcome goals and objectives of the North Carolina Partnership and the goals and objectives set forth by the local partnerships in their approved annual program plans.

The North Carolina Partnership may use additional factors to determine whether to adjust the local partnerships' allocations. These additional factors shall be developed with input from the local partnerships and shall be communicated to the local partnerships when the additional factors are selected. These additional factors may include board involvement, family and community outreach, collaboration among public and private service agencies, and family involvement.

On the basis of performance assessments, local partnerships annually shall be rated "superior", "satisfactory", or "needs improvement". Local partnerships rated "superior" shall receive, to the extent that funds are available, a ten percent (10%) increase in their annual funding allocation. Local partnerships rated "satisfactory" shall receive their annual funding allocation. Local partnerships rated "needs improvement" shall receive up to ninety percent (90%) of their annual funding allocation.

The North Carolina Partnership may contract with outside firms to conduct the performance assessments of local partnerships.

(8) The North Carolina Partnership shall establish a local partnership advisory committee comprised of 15 members. Eight of the members shall be chairs of local partnerships' board of directors, and seven shall be staff of local partnerships. Members shall be chosen by the Chair of the North Carolina Partnership from a pool of candidates nominated by their respective boards of directors. The local partnership advisory committee shall serve in an advisory capacity to the North Carolina Partnership and shall establish a schedule of regular meetings. Members shall be chosen from local partnerships on a rotating basis. The advisory committee shall annually elect a chair from among its members.

(9) The North Carolina Partnership shall report (i) quarterly to the Joint Legislative Commission on Governmental Operations and (ii) to the General Assembly and the Governor on the ongoing progress of all the local partnerships' work, including all details of the use to which the allocations were put, and on the continuing plans of the North Carolina Partnership and of the Department, together with legislative proposals, including proposals to implement the program statewide."

Section 11.28.(b) G.S. 143B-168.13(6) reads as rewritten:

"(6) Annually update its funding ~~formula~~ formula, in collaboration with the North Carolina Partnership for Children, Inc., using the most recent data available. These amounts shall serve as the basis for determining 'full funding' amounts for each local partnership."

Section 11.28.(c) G.S. 143B-168.15(b) reads as rewritten:

"(b) Depending on local, regional, or statewide needs, funds may be used to support activities and services that shall be made available and accessible to providers, children, and families on a voluntary basis. Of the funds allocated to local partnerships ~~that are designated by the Secretary~~ for direct services, ~~seventy-five~~ seventy percent ~~(75%)~~ (70%) of the funds spent in each year shall be used ~~for any one or more of the following activities and services:~~

~~(1)~~ ~~Child care services, including:~~

a. ~~Child care subsidies to reduce waiting lists;~~

b. ~~Raising the county child care subsidy rate to the State market rate, if applicable, in return for improvements in the quality of child care services;~~

c. ~~Raising the income eligibility for child care subsidies to seventy-five percent (75%) of the State median family income;~~

d. ~~Start-up funding for child care providers;~~

e. ~~Assistance to enable child care providers to conform to licensing and building code requirements;~~

f. ~~Child care resources and referral services;~~

g. ~~Enhancement of the quality of child care provided;~~

h. ~~Technical assistance for child care providers;~~

i. ~~Quality grants for child care centers or family child care homes;~~

j. ~~Expanded services or enhanced rates for children with special needs;~~

k. ~~Head Start services;~~

l. ~~Development of comprehensive child care services that include child health and family support;~~

m. ~~Activities to reduce staff turnover;~~

n. ~~Activities to serve children with special needs;~~

o. ~~Transportation services related to providing child care services;~~

p. ~~Evaluation of plan implementation of child care services; and~~

q. ~~Needs and resources assessments for child care services.~~

~~(2)~~ ~~Family- and child-centered services, including early childhood education and child development services, including:~~

a. ~~Enhancement of the quality of family- and child-centered services provided;~~

b. ~~Technical assistance for family- and child-centered services;~~

c. ~~Needs and resource assessments for family- and child-centered services;~~

d. ~~Home-centered services; and~~

e. ~~Evaluation of plan implementation of family- and child-centered services.~~

~~(3)~~ ~~Other appropriate activities and services for child care providers and for family- and child-centered services, including:~~

a. ~~Staff and organizational development, leadership and administrative development, technology assisted education, and long-range planning; and~~

b. ~~Procedures to ensure that infants and young children receive needed health, immunization, and related services.~~

in child care related activities and early childhood education programs that improve access to child care and early childhood education services, develop new child care and early childhood education services, and improve the quality of child care and early childhood education services in all settings."

Section 11.28.(d) Effective September 1, 2000, G.S. 143B-168.15(g) reads as rewritten:

"(g) Not less than thirty percent (30%) of the funds spent in each year of each local partnership's direct services allocation shall be used to expand child care subsidies. To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child care services as described in this section. The local partnerships shall give priority for the use of these funds to augmenting the State's supplemental subsidy payment rate per child per month for licensed child care centers and homes earning a rated license that exceeds the minimum licensing standards. The North Carolina Partnership may increase this percentage requirement up to a maximum of fifty percent (50%) when, based upon a significant local waiting list for subsidized child care, the North Carolina Partnership determines a higher percentage is justified."

Section 11.28.(e) Subsection (c) of Section 11.48 of S.L. 1999-237 is repealed.

Section 11.28.(f) Subsection (h) of Section 11.48 of S.L. 1999-237 is repealed.

Section 11.28.(g) Subsection (i) of Section 11.48 of S.L. 1999-237 reads as rewritten:

"Section 11.48.(i) The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than fifty percent (50%) of the total amount budgeted for the Program in each fiscal year of the biennium as follows: contributions of cash equal to at least ~~ten~~ fifteen percent ~~(10%)~~ (15%) and in-kind donated resources equal to no more than ~~ten~~ five percent ~~(10%)~~ (5%) for a total match requirement of twenty percent (20%) for each fiscal year. The North Carolina Partnership for Children, Inc., may carryforward any amount in excess of the required match for a fiscal year in order to meet the match requirement of the succeeding fiscal year. ~~Any program funding expended for child care subsidies during the previous 12 months is excluded from the match requirement of this subsection.~~ Only in-kind contributions that are ~~quantifiable, as determined in the Smart Start Performance Audit,~~ quantifiable shall be applied to the in-kind match requirement. Volunteer services may be treated as an in-kind contribution for the purpose of the match requirement of this subsection. Volunteer services that qualify as professional services shall be valued at the fair market value of those services. All other volunteer service hours shall be valued at the statewide average wage rate as calculated from data compiled by the Employment Security Commission in the Employment and Wages in North Carolina Annual Report for the most recent period for which data are available. Expenses, including both those paid by cash and in-kind contributions, incurred by other participating non-State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships, also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:

(1) Be verifiable from the contractor's records;

(2) If in-kind, other than volunteer services, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations;

(3) Not include expenses funded by State funds;

(4) Be supplemental to and not supplant preexisting resources for related program activities;

(5) Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives;

(6) Be otherwise allowable under federal or State law;

(7) Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership; and

(8) Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.

The North Carolina Partnership for Children, Inc., shall establish uniform guidelines and reporting format for local partnerships to document the qualifying expenses occurring at the contractor level. Local partnerships shall monitor qualifying expenses to ensure they have occurred and meet the requirements prescribed in this subsection.

Failure to obtain a twenty percent (20%) match by ~~May 1~~ June 30 of each fiscal year shall result in a dollar-for-dollar reduction in the appropriation for the Program for ~~the next~~ a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in-kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly."

Section 11.28.(h) Subsection (m) of Section 11.48 of S.L. 1999-237 reads as rewritten:

"Section 11.48.(m) There is allocated from the funds appropriated to the Department of Health and Human Services, Division of Child Development, in this act, the sum of fifty-nine million five hundred thousand dollars ($59,500,000) for the 1999-2000 fiscal year and the sum of ~~seventy-eight million nine hundred twenty-eight thousand eight hundred twenty-six dollars ($78,928,826)~~ one hundred twenty-two million eight hundred seventy-eight thousand seventy-six dollars ($122,878,076) for the 2000-2001 fiscal year to be used as follows:

(1) The sum of fifty-eight million dollars ($58,000,000) in the 1999-2000 fiscal year and the sum of ~~seventy-eight million nine hundred twenty-eight thousand eight hundred twenty-six dollars ($78,928,826)~~ one hundred twenty-one million four hundred thirteen thousand seven hundred twenty-five dollars ($121,413,725) in the 2000-2001 fiscal year shall be used to administer and deliver services in all 100 counties. These funds may be used as financial incentives to encourage regionalization at the local level and to complete development of contracting and accounting systems at the local level. Any funds used to encourage regionalization or to complete development of contracting and accounting systems at the local level shall not be included in computations affecting the administrative cost limitations under subsection (e) of this section.

(2) The North Carolina Partnership for Children, Inc., may use the sum of one million five hundred thousand dollars ($1,500,000) in the 1999-2000 fiscal year and the sum of five hundred thousand dollars ($500,000) in the 2000-2001 fiscal year to assist local partnerships in their efforts to develop local collaboration. It is the intent of the General Assembly that these funds be nonrecurring.

(3) The North Carolina Partnership for Children, Inc., shall receive the sum of nine hundred sixty-four thousand three hundred fifty-one dollars ($964,351) in the 2000-2001 fiscal year for State-level administration of the Program.

The General Assembly requests that the Governor fully fund the Program in the continuation budget for the 2001-2003 fiscal biennium at the level recommended by the Governor in the 1999-2001 fiscal biennium."

Section 11.28.(i) Subsection (n) of Section 11.48 of S.L. 1999-237 reads as rewritten:

"Section 11.48.(n) Of the funds appropriated to the Department of Health and Human Services for the Program for the 1999-2001 biennium, the Frank Porter Graham Child Development Center shall receive the sum of one million fifteen thousand dollars ($1,015,000) in the 1999-2000 fiscal year and the sum of one million ~~fifteen thousand dollars ($1,015,000)~~ sixty-five thousand seven hundred fifty dollars ($1,065,750) in the 2000-2001 fiscal year."

SUBPART 7. DEAF AND HARD OF HEARING SERVICES

Requested by: Representatives Earle, Nye, Easterling, Redwine, Alexander, Senators Martin of Guilford, Plyler, Perdue, Odom

FAMILY SUPPORT/DIVISION OF SERVICES FOR THE DEAF AND THE HARD OF HEARING SERVICES CONTRACT

Section 11.29. Section 11.50 of S.L. 1999-237 reads as rewritten:

"Section 11.50. Of the funds appropriated in this act to the Division of Services for the Deaf and the Hard of Hearing, Department of Health and Human Services, for family support services, the sum of five hundred three thousand two hundred thirty-eight dollars ($503,238) for the 1999-2000 fiscal year and the sum of ~~five hundred three~~ seven hundred twenty-three thousand two hundred thirty-eight dollars ~~($503,238)~~ ($723,238) for the 2000-2001 fiscal year shall be used to contract with a private, nonprofit corporation licensed to do business in North Carolina to perform those services, including family support and advocacy services as well as technical assistance to professionals who work with families of hearing-impaired children aged birth to 21 years."

SUBPART 8. PUBLIC HEALTH

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MAINTAIN FUNDING FOR DEVELOPMENTAL EVALUATION CENTERS

Section 11.30. The Department of Health and Human Services shall replace any reductions in appropriations for the Developmental Evaluation Centers with Medicaid receipts. The total amount of the Developmental Evaluation Centers program budget shall not be reduced below the amount certified in the 1999-2000 fiscal year program budget.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

USE OF NEWBORN SCREENING FEES

Section 11.31.(a) G.S. 130A-125 reads as rewritten:

"§ 130A-125. Screening of newborns for metabolic and other hereditary and congenital disorders.

(a) The Department shall establish and administer a Newborn Screening Program. The program shall include, but shall not be limited to:

(1) Development and distribution of educational materials regarding the availability and benefits of newborn screening.

(2) Provision of laboratory testing.

(3) Development of follow-up protocols to assure early treatment for identified children, and the provision of genetic counseling and support services for the families of identified children.

(4) Provision of necessary dietary treatment products or medications for identified children as medically indicated and when not otherwise available.

(5) For each newborn, provision of physiological screening in each ear for the presence of permanent hearing loss.

(b) The Commission shall adopt rules necessary to implement the Newborn Screening Program. The rules shall include, but shall not be limited to, the conditions for which screening shall be required, provided that screening shall not be required when the parents or the guardian of the infant object to such screening. If the parents or guardian object to the screening, the objection shall be presented in writing to the physician or other person responsible for administering the test, who shall place the written objection in the infant's medical record.

(b1) The Commission for Health Services shall adopt temporary and permanent rules to include newborn hearing screening in the Newborn Screening Program established under this section.

(c) The Department may impose a fee for a laboratory test performed pursuant to this section by the State Public Health Laboratory. A fee for a test must be based on the actual cost of performing the test. Fees collected shall remain in the Department to be used to offset the cost of the Newborn Screening Program. ~~The fees for laboratory tests shall be used to supplement and not supplant funds appropriated for the Newborn Screening Program.~~

The Newborn Screening Fee Account is established as a nonreverting account within the Department. Fees collected pursuant to this section shall be credited to this Account and shall be applied to the Newborn Screening Program."

Section 11.31.(b) Not later than March 1, 2001, the Department of Health and Human Services shall submit a progress report on the implementation of the newborn hearing screening program to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources, and to the Fiscal Research Division. The report shall include findings and recommendations relating to:

(1) Availability and adequacy of screening and diagnostic equipment;

(2) Staff training;

(3) Data on the number of infants screened, the number who failed the hearing screening, and the number fitted for amplification;

(4) The follow-up process for audiological management;

(5) Referral procedures for child service coordination and other early intervention services; and

(6) Outreach efforts to increase public awareness.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Warren, Plyler, Perdue, Odom

HEART DISEASE AND STROKE PREVENTION TASK FORCE REPORT

Section 11.32. Subsection (l) of Section 26.9 of Chapter 507 of the 1995 Session Laws, as amended by Section 15.25 of S.L. 1997-443, and as further amended by Section 11.57 of S.L. 1999-237, reads as rewritten:

"(l) The Task Force shall submit to the Governor and to the General Assembly a preliminary report by January 1, 1996; an interim report within the first week of the convening of the 1997 General Assembly; a second interim report within the first week of the convening of the 1997 General Assembly, Regular Session 1998; a third interim report within the first week of the convening of the 1999 General Assembly, a fourth interim report within the first week of the convening of the 2000 General Assembly; a fifth interim report within the first week of the convening of the 2001 General Assembly, and a final report by June 30, 2001. The reports shall address the Plan, actions and resources needed to fully implement the Plan, and progress in achieving implementation of the Plan to reduce the occurrence of and burden from heart disease and stroke in North Carolina. The reports shall include an accounting of funds expended and anticipated funding needs for full implementation of recommended plans and programs. Not later than October 1, 2000, the Task Force shall submit an additional report on its actual budget and activities for the 1999-2000 fiscal year. The report shall also describe the impact and effectiveness of Task Force activities in the State. The report shall be submitted to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Boyd-McIntyre, Senators Martin of Guilford, Plyler, Perdue, Odom

EXTEND OSTEOPOROSIS TASK FORCE

Section 11.33.(a) Subsection (b) of Section 11.58 of S.L. 1999-237 reads as rewritten:

"Section 11.58.(b) The Task Force shall submit a progress report to members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources, the Governor, and the Fiscal Research Division not later than April 1, 2000. The progress report shall address:

(1) Progress being made in fulfilling the duties of the Task Force and in developing the Osteoporosis Prevention Plan,

(2) The anticipated time frame for completion of the Prevention Plan, and

(3) Recommended strategies or actions to reduce the occurrence of and burdens suffered from osteoporosis by citizens of this State.

The Task Force shall submit its final report to the ~~1999~~ 2001 General Assembly, the Governor, and the Fiscal Research Division not later than October 1, ~~2000.~~ 2001."

Section 11.33.(b) Subsection (m) of Section 1532 of S.L. 1997-443, as amended by subsection (c) of Section 11.58 of S.L. 1999-237, reads as rewritten:

"(m) Upon submission of its final report to the Governor and the ~~1999~~ 2001 General Assembly, ~~Regular Session 2000,~~ the Task Force shall expire."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

LIMITATIONS ON EXPANSION OF INTENSIVE HOME VISITATION PROGRAM

Section 11.34.(a) The Department of Health and Human Services shall not amend the State Medicaid Plan to provide Medicaid reimbursement for intensive home visiting services.

Section 11.34.(b) The Department of Health and Human Services shall arrange for an independent evaluation of Intensive Home Visitation Program first-year pilot programs that began operation in February, 1998. The evaluation shall review outcomes of the three models that were used in the pilot programs, compare the outcome for Intensive Home Visitation projects operating in North Carolina to those that have been the subject of national research, and identify elements that contribute to successful projects.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Wright, Senators Martin of Guilford, Plyler, Perdue, Odom

AIDS DRUG ASSISTANCE PROGRAM (ADAP)

Section 11.35.(a) Subsections (d) and (e) of Section 11.55 of S.L. 1999-237 read as rewritten:

"Section 11.55.(d) The Department shall also develop a comprehensive information management system on AIDS/HIV clients receiving services from the State. The Department may use up to fifty thousand dollars ($50,000) of the funds appropriated under this act to implement this information management system. This information management system shall be patterned after the information management system used by the Elderly Drug Assistance Program, shall provide instantaneous internal access to information, and ~~This system~~ shall include information on the following:

(1) ~~program~~ Program usage patterns of ADAP participants, including, but not limited to, frequency of prescription purchases, ~~and~~ types of medications ~~prescribed.~~ prescribed, and the cost of prescribed medications on a monthly basis.

(2) Demographics of participants in the program, including the age, gender, race, ethnicity, and county of residence of participants.

The Department shall also develop a plan for promoting patient adherence to physician treatment recommendations. In developing the plan, the Department shall identify ways of obtaining information without interfering with physician-patient confidentiality. The Department shall report on this plan to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division not later than May 15, 2000.

Section 11.55.(e) For the 1999-2000 fiscal ~~year,~~ year and for the 2000-2001 fiscal year, HIV-positive individuals with incomes at or below one hundred twenty-five percent (125%) of the federal poverty level are eligible for participation in ADAP. Notwithstanding any other provision of law, eligibility for participation in ADAP during the 1999-2000 fiscal year shall not be extended to individuals with incomes above one hundred twenty-five percent (125%) of the federal poverty level. Eligibility for participation in ADAP during the 2000-2001 fiscal year may be extended to individuals with incomes up to one hundred fifty percent (150%) of the federal poverty level only after the Office of State Budget and Management certifies in writing that the Department has developed an information management system pursuant to subsection (d) of this section. Until the Office of State Budget and Management makes this certification, eligibility for participation in ADAP during the 2000-2001 fiscal year shall not be extended to individuals with incomes above one hundred twenty-five percent (125%) of the federal poverty level. All individuals who are eligible for participation in ADAP shall be served by the Department of Health and Human Services. If sufficient funds are not available from funds allocated to ADAP, the Department of Health and Human Services shall transfer available funds from other programs within the Department to meet the funding needs of ADAP."

Section 11.35.(b) The Department of Health and Human Services shall make an interim report by October 1, 2000, and a final report by April 1, 2001, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on ADAP. The reports shall include the following:

(1) Monthly data on total cumulative AIDS/HIV cases reported in North Carolina.

(2) Monthly data on the estimated number of individuals eligible to participate in ADAP and the actual number of participants in ADAP.

(3) Monthly data on the number of individuals who have applied to participate in ADAP that have been determined to be ineligible.

(4) Monthly data on the income level of participants in ADAP and of individuals who have applied to participate in ADAP that have been determined to be ineligible.

(5) Monthly data on fiscal-year-to-date expenditures of ADAP. The interim report shall contain monthly data on the calendar-year-to-date expenditures of ADAP.

(6) Monthly data on the actual line-item budget of ADAP.

(7) Monthly data on funding sources of ADAP expenditures.

(8) Monthly data on ADAP funds that are applied to a Medicaid spend-down.

(9) An update on the status of the information management system.

(10) Monthly data on ADAP usage patterns and demographics of participants in ADAP.

(11) Estimated participation rates and costs if eligibility for participation in ADAP were raised to one hundred seventy-five percent (175%) of the federal poverty level or to two hundred percent (200%) of the federal poverty level.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

COMMUNICABLE DISEASE CONTROL AID TO COUNTIES/REPORT

Section 11.36. Not later than October 1, 2000, the Department of Health and Human Services shall report the impact of combining and allocating funds appropriated for the 1999-2000 fiscal year for Aid to Counties in the Acute Communicable Disease Control Fund, the Tuberculosis Control Fund, and the Sexually Transmitted Disease Control Fund into one Acute Communicable Disease Control Aid to Counties Grant. The report shall include the impact of expenditures by county on the individual communicable disease groups. The Department shall submit the report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division of the Legislative Services Office.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PUBLIC HEALTH PREVENTION ACTIVITIES REPORT

Section 11.37.(a) By October 1, 2000, and more frequently as requested, the Department of Health and Human Services, Division of Public Health, shall report on the activities of each of the following:

(1) Kenneth C. Royall, Jr. Children's Vision Screening Improvement Program;

(2) North Carolina Healthy Start Foundation; and

(3) Adolescent Pregnancy Prevention Coalition of North Carolina.

Section 11.37.(b) The report shall include the following for the 1999-2000 fiscal year:

a. A description of all program activities of the organization;

b. Provide a list of activities that were funded by contracts through the State and the amounts, including a program narrative, for fiscal year 1999-2000;

c. Output data demonstrating the effects of the organization's activities; and

d. Planned budget, objectives, and activities for the 2000-2001 fiscal year.

The Department shall submit the report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division of the Legislative Services Office.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PREVENTIVE HEALTH PROGRAM PLAN

Section 11.38. The Department of Health and Human Services shall work with the Fiscal Research Division of the Legislative Services Office to do the following:

(1) Conduct a full inventory on all prevention activities including task forces and committees that receive administrative funding;

(2) Identify linkages among program activities, such as activities involving education and awareness, and those involving services;

(3) Identify all administrative costs and funding sources and number of positions associated with various prevention activities;

(4) Develop an alternative organizational structure that could more effectively and efficiently administer preventive health activities.

Not later than February 1, 2001, the Department shall submit the report required under this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Purcell, Plyler, Perdue, Odom

PRESCRIPTION DRUG ASSISTANCE PROGRAM

Section 11.39. Section 11.1.(a) of S.L. 1999-237 reads as rewritten:

"Section 11.1.(a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of five hundred thousand dollars ($500,000) for the 1999-2000 fiscal year and the sum of ~~five hundred thousand~~ one million dollars ~~($500,000)~~ ($1,000,000) for the 2000-2001 fiscal year shall be used to pay the cost of outpatient prescription drugs for persons:

(1) Over the age of 65 years and not eligible for full Medicaid benefits;

(2) Whose income is not more than one hundred fifty percent (150%) of the federal poverty level; and

(3) Who have been diagnosed with cardiovascular disease or diabetes.

These funds shall be used to pay the cost of outpatient prescription drugs for the treatment of cardiovascular disease or diabetes. Payment shall be not more than the Medicaid cost including rebates. The Department shall develop criteria to maximize the efficient and effective distribution of these drugs."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ADOLESCENT PREGNANCY PREVENTION PROGRAM CHANGES

Section 11.40. G.S. 130A-131.15 reads as rewritten:

"§ 130A-131.15. Department to establish program.

(a) The Department shall establish and administer a program to distribute funds appropriated for adolescent pregnancy prevention projects.

~~(b)~~ ~~The Commission shall adopt rules necessary to implement the program.~~

~~(c)~~ The Department shall evaluate all of the adolescent pregnancy prevention projects funded as a result of this program at least yearly and shall report its findings to the Commission for Health Services, the Joint Legislative Commission on Governmental Operations, and the Chairmen of the House Appropriations Subcommittee on Health and Human Services, and the Senate Appropriations Committee on Health and Human Services by April 1 of each year. The evaluation shall be conducted by a firm or individual external to the Department. Any evaluation of these projects shall include a study of the effectiveness of the project in reducing the pregnancy rate within the target population.

~~(d)~~ The Commission shall be responsible for monitoring the Department's administration of the Adolescent Pregnancy Prevention Program. The Department shall manage and fund the Adolescent Pregnancy Prevention Program projects as follows:

~~(1)~~ Applications. Any local agency or organization or combination of agencies and organizations may apply to the Department for an allocation of money to operate a project aimed at preventing adolescent pregnancy. The application shall contain an analysis of the adolescent pregnancy and related problems in the locality the project would serve, and a description of how the project would attempt, over a period of at least five years, to prevent the problems. The application shall state how much money is needed to operate the project and how the money shall be spent. The Department shall conduct annually a proposal-writing session that shall be attended by a representative of any project that wishes to apply for funding; that session shall define the criteria for accountability and evaluation that the Department requires of projects. That session shall also provide information about additional funding sources to which projects might turn to satisfy the matching requirements of subdivision (5) of this subsection.

~~(2)~~ ~~Proposal Requirements. The Department shall apply the following minimum standards to projects applying for first-year funding:~~

a. ~~Each project shall have a plan of action that extends for at least five years for prevention of adolescent pregnancy.~~

b. ~~Each project shall have realistic, specific, and measurable goals and objectives for the prevention of adolescent pregnancy.~~

c. ~~Each project, before submitting its proposal, shall send a representative to the proposal-writing session held by the Department.~~

~~(3)~~ ~~Operating Standards. The Department shall apply the following minimum operating standards:~~

a. Each project shall have a Board of Advisors composed of members from outside the sponsoring agency of the project. The Board of Advisors shall include representatives from at least four of the following: media, government, charitable organizations, private business, and medical institutions. The Boards of Advisors shall meet at least quarterly and advise project staff on project policies and operations.

b. ~~Each project shall comply with reporting, contracting, and evaluation requirements of the Department.~~

c. ~~Each project shall define and maintain cooperative ties with other community institutions.~~

d. ~~Each project shall demonstrate its ability to attract financial support from sources other than the State, including sources in the local community.~~

~~(4)~~ Criteria for Project Selection. For first-year funding, the Department shall choose from among the applicants that meet the minimum standards in subdivision (2) of this subsection the best selection of projects according to the following criteria:

a. ~~Adequacy of proposed staff to meet project objectives;~~

b. ~~Appropriateness of project strategies to reduce adolescent pregnancy;~~

c. Level of community support, including endorsement from the appropriate local government entity and documentation from the appropriate local government entity and from community organizations that opportunity has been given for citizen input into the proposed program, and that there is community support for the proposal. Documentation may include letters or statements of support from citizens or community organizations, or statements that community support was expressed at public hearings. A public hearing is not required by this paragraph;

d. Degree of need of the locality, including that the county has a significant adolescent pregnancy problem as evidenced by its attributable risk score developed by the State Center for Health and Environmental Statistics; and

e. ~~Other appropriate criteria.~~

The Department shall make its recommendations for funding to the Commission. The Commission shall make the final determination of which projects are to be funded. The Commission shall consider the recommendations of the Department but shall not be bound by them. The Commission shall notify the projects that are to be funded by June 1 of each year.

~~(5)~~ Schedule of Funding. If the Commission, upon consultation with the Department, finds that a project it has chosen for first-year funding continues to meet the operating standards of subdivisions (2) and (3) of this subsection, funding for that project shall continue, to the extent of available money, for an additional four years. The level of funding provided by the Department to approved projects shall be set according to the following schedule:

a. ~~First year, eighty percent (80%) of the project's annual budget not to exceed the maximum award established by the Commission for Health Services;~~

b. ~~Second year, ninety percent (90%) of the State appropriations or federal block grant funds awarded in the first year;~~

c. ~~Third year, seventy-five percent (75%) of the State appropriations or federal block grant funds awarded in the first year;~~

d. ~~Fourth year, sixty-five percent (65%) of the State appropriations or federal block grant funds awarded in the first year; and~~

e. ~~Fifth year, fifty percent (50%) of the State appropriations or federal block grant funds awarded in the first year.~~

~~The portion of a project's budget that must come from sources other than State or federal block grant funds may be provided as in-kind contributions as well as cash.~~

~~(6)~~ Five-Year Limit on Funding. No project shall receive State funding if it has previously received State funding for five full years. Any project that has received State funding before July 1, 1990, will be eligible for consideration for an additional five years' State support, according to the schedule. The Commission may fund any such project that meets the minimum standards if it determines, after considering the experience and impact of the project and measuring its application against those of other applicants, that it should be funded.

~~(7)~~ ~~Maximum Level of Funding. The Commission for Health Services shall by rule determine the maximum annual amount that may be made to any one project.~~

~~(8)~~ As adolescent pregnancy prevention project grant funds decrease, a project shall maintain its original budget level, less the amount expended for start-up costs. The Department shall develop guidelines for determining start-up costs, which guidelines shall be uniform for all projects. Local match percentage may come from any in-kind source or newly generated funds, public or private, available to the project."

(b) The Department of Health and Human Services, Division of Public Health, in collaboration with local program administrators, the Adolescent Pregnancy Prevention Coalition of North Carolina, and other organizations, shall adopt guidelines for the administration of funds for teen pregnancy prevention and for parenting programs. The guidelines shall include the following programmatic requirements:

(4) Programs are not required to provide a cash match for these funds, however, the Department may require an in-kind match.

(c) The Department shall contract with an independent private consulting firm to evaluate the programs. The evaluation shall include standard data collection utilizing the mechanism that has been developed by the University of North Carolina at Chapel Hill, School of Social Work, and shall be conducted in a manner that objectively measures the effectiveness of each program evaluated.

(d) The Department shall report annually on March 1, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division. The report shall include information on all of the following for each teen pregnancy prevention and parenting program:

(1) The program budget delineating all administrative expenses, contracts for services, and technical assistance.

(2) A narrative describing each project funded and the amount of funds received by the project.

(3) Effectiveness of the program in reducing teen pregnancy or developing responsible parenting skills in young adults, as applicable.

(4) Status of the evaluation."

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Purcell, Plyler, Perdue, Odom

FUNDS FOR PREVENTION OF BIRTH DEFECTS AND REDUCTION IN INFANT MORTALITY

Section 11.42. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, the sum of one hundred fifty thousand dollars ($150,000) for the 2000-2001 fiscal year shall be used for public awareness activities on the prevention of birth defects and infant mortality reduction. This initiative will include informing women about the importance of folate consumption as an effective means of preventing neural tube birth defects. The campaign shall be targeted at women of child-bearing age and may include a media campaign, creation of literature for dissemination at public health departments and physicians' offices, and workshops.

Requested by: Representatives Earle, Nye, Easterling, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

FUNDS FOR MEDICAID COVERAGE OF FAMILY PLANNING SERVICES

Section 11.42A. Of the funds appropriated in this act to the Department of Health and Human Services, the sum of four hundred sixty-nine thousand dollars ($469,000) for the 2000-2001 fiscal year shall be used to provide the State match for a Medicaid waiver to provide Medicaid coverage for family planning services to men and women of child-bearing age whose family income is equal to or less than one hundred eighty-five percent (185%) of the federal poverty level. Funding may include funding for two staff positions and their related support. The expenditure of funds under this section is contingent upon approval of the waiver by the Health Care Financing Administration. Funds shall not be expended earlier than January 1, 2001.

PART XII. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Hill, Wright, McComas, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom, Jordan

EXPAND THE PERMISSIBLE USES OF A GRANT RECEIVED FOR THE 1999-2000 FISCAL YEAR FOR THE DEVELOPMENT OF A LOCAL FARMERS' MARKET IN NEW HANOVER COUNTY

Section 12.(a) The sum of one hundred thousand dollars ($100,000) was appropriated to the Department of Agriculture and Consumer Services for the 1999-2000 fiscal year to provide grants for local farmers' markets. The sum of forty thousand dollars ($40,000) that the Department allocated as a grant for the 1999-2000 fiscal year for the development of a farmers' market in New Hanover County shall not revert and may be used to produce written materials to educate the public and promote the development of a local farmers' market in New Hanover County or to solicit donations for the purchase of property or facilities for a local farmers' market in New Hanover County.

Section 12.(b) The uses of funds authorized by this section are in addition to other permissible uses of these funds under the guidelines adopted under Section 13.7 of S.L. 1998-212 and any other applicable rule or law.

Section 12.(c) This section becomes effective June 30, 2000.

Requested by: Representatives Fox, Owens, Warner, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom, Phillips

FARMLAND PRESERVATION

Section 12.1. Notwithstanding the provisions of G.S. 106-744(b), funds appropriated in this act to the Department of Agriculture and Consumer Services for the Farmland Preservation Trust Fund for the 2000-2001 fiscal year shall be used for the purchase of agricultural conservation easements that are perpetual in duration and which shall not be reconveyed under any circumstances.

PART XIII. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

GRASSROOTS SCIENCE PROGRAM FUNDS

Section 13. The schedule of allocations of appropriations to the Department of Environment and Natural Resources for the Grassroots Science Program under Section 15.2 of S.L. 1999-237 shall be the same in the 2000-2001 fiscal year as it was for the 1999-2000 fiscal year.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

ENVIRONMENTAL EDUCATION GRANTS

Section 13.1.(a) Of the two hundred thousand dollars ($200,000) appropriated in this act to the Department of Environment and Natural Resources for the 2000-2001 fiscal year for environmental education grants, up to fifteen percent (15%) may be used by the Department for the 2000-2001 fiscal year for the costs of administering the environmental education grants. The remainder of these funds shall be used to provide grants to promote environmental education throughout the State. Grants under this section may be awarded to:

(1) Schools, community organizations, and environmental education centers for the development of environmental education library collections; or

(2) School groups for field trips to environmental education centers across the State, provided the activities of the field trips are correlated with the Department of Public Instruction's curriculum objectives.

Section 13.1.(b) The Department of Environment and Natural Resources shall report to the Joint Legislative Commission on Governmental Operations, the Environmental Review Commission, and the Fiscal Research Division by January 1, 2001, and again by July 1, 2001, on the grant program under this section. The report shall include a list of amounts awarded and project descriptions for each grant recipient.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

DENR STUDY OF DENR

Section 13.2. The Department of Environment and Natural Resources shall continue to evaluate its organization to identify ways to increase efficiency and to retain staff and to identify ways to better serve the public through permit reform and organizational excellence. The Department shall report any recommendations to the Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate and to the Environmental Review Commission no later than January 15, 2001.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

DENR STUDY/RELOCATE DIVISION OF COASTAL MANAGEMENT OFFICE

Section 13.3. The Department of Environment and Natural Resources shall study the feasibility of relocating the main office of the Division of Coastal Management to one or more of the 20 coastal counties within the jurisdiction of the Coastal Area Management Act. In its study, the Department shall consider the cost of relocation, the impact on program efficiency, the availability of office space, and other factors affecting program functions. If the Department determines that relocation of the main office is feasible, then the Department shall include in its report a draft plan for the relocation.

The Department shall report its findings and recommendations to both the House of Representatives and the Senate Appropriations Subcommittees on Natural and Economic Resources and to the Fiscal Research Division no later than January 15, 2001.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

ERC STUDY RECODIFICATION OF ENVIRONMENTAL STATUTES

Section 13.4. The Environmental Review Commission shall study the recodification of the General Statutes relating to the environment and environmental agencies. This recodification shall make no substantive changes to the current statutes relating to the environment and environmental agencies.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Baker, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

REALLOCATE TOWN FORK CREEK FUNDS

Section 13.5. Section 15.11(a) of S.L. 1997-443, as amended by Section 15.3 of S.L. 1999-237, reads as rewritten:

"(a) The funds placed in a reserve account in the Department of ~~Environment, Health, and Natural Resources~~ Health and Human Services pursuant to Section 26.3(c) of Chapter 507 of the 1995 Session Laws shall not revert until June 30, 2001. Those funds are reallocated as follows:

(1) Five hundred four thousand five hundred sixty dollars ($504,560) to the Stokes County Water and Sewer Authority, Inc., for the Germanton Water Project.

(2) Nine hundred thirty thousand six hundred eighty dollars ($930,680) to the Stokes County Water and Sewer Authority, Inc., for the ~~Madison Connection Project.~~ Walnut Cove/Industrial Site Connection Project.

(3) Eighty thousand dollars ($80,000) to the Stokes County Water and Sewer Authority, Inc., for the Dan River Project.

(4) Thirty thousand dollars ($30,000) to the Department of Environment, Health, and Natural Resources for the Limestone Creek small watershed project in Duplin County.

(5) Three hundred forty thousand six hundred forty dollars ($340,640) to the Department of Environment, Health, and Natural Resources for the Deep Creek small watershed project in Yadkin County."

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom, Albertson

AGRICULTURE COST SHARE/TECHNICAL ASSISTANCE FUNDS

Section 13.6. Of the funds appropriated to the Department of Environment and Natural Resources for the Agriculture Cost Share Program for Nonpoint Source Pollution Control for financial assistance funding, the sum of two hundred forty thousand dollars ($240,000) for the 2000-2001 fiscal year shall be used to support cost-share technical assistance in soil and water conservation districts participating in the Agriculture Cost Share Program for Nonpoint Source Pollution Control.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

ONE STOP PERMIT ASSISTANCE PILOT PROJECTS

Section 13.7.(a) The Department of Environment and Natural Resources shall establish a one-stop environmental permit application assistance and tracking system pilot project for one year in at least two regional offices. It is the intent of the General Assembly that the Department expand this pilot program to more than two regional offices during the 2000-2001 fiscal year if the resources are available to do so and to expand it to a statewide program as soon as possible after the 2000-2001 fiscal year. As part of the pilot project, the Department shall provide to each person who submits an application for an environmental permit to one of the regional offices participating in the pilot project, a time frame within which that applicant may expect a final decision regarding the issuance or denial of the permit. The procedure regulating the time frame estimates and sanction for failing to honor the time frame shall be as set out in subsections (b) and (c) of this section.

Section 13.7.(b) Upon receipt of a complete application for an environmental permit, the Department of Environment and Natural Resources shall provide to the applicant a good faith estimate of the date by which the Department expects to make the final decision of whether to issue or deny the permit.

Section 13.7.(c) Unless otherwise provided by law, when an applicant has provided to the Department of Environment and Natural Resources the information and documentation required and requested by the Department and the Department fails to issue or deny the permit within 60 days of the date projected by the Department for the final decision of whether to issue or deny the permit, the permit shall be automatically granted to the applicant. This subsection does not apply when an applicant submits a substantial amendment to its application after the Department has provided the applicant the projected time frame as required by this section. This subsection does not apply when an applicant agrees to receive a final decision from the Department more than 60 days from the date projected by the Department under subsection (b) of this section.

Section 13.7.(d) The Department of Environment and Natural Resources shall track the time required to process each complete environmental permit application received on or after July 1, 2000, as part of the pilot project under this section. The Department shall compare the time in which the permit was issued or denied with the projected time frame provided to the applicant by the Department as required by this section. The Department shall identify each permit that was issued or denied more than 90 days after receipt of a complete application by the Department and shall document the reasons for the delayed action.

Section 13.7.(e) The Department of Environment and Natural Resources shall report to the Cochairs of both the House of Representatives and the Senate Appropriations Subcommittees on Natural and Economic Resources, the Fiscal Research Division, and the Environmental Review Commission the number of environmental permits in the pilot project that took more than 90 days to issue or deny, the types of permits those were, the reasons for the extended processing time of those permits, and how the time within which the permit was actually issued or denied compared with the projected time frame provided to the applicant by the Department as required by this section. Based on the data gathered in the pilot project, the Department shall include in its report recommendations regarding permit time frames for all major permits issued by the Department. The Department shall report to both the House of Representatives and the Senate Appropriations Subcommittees on Natural and Economic Resources, the Fiscal Research Division, and the Environmental Review Commission regarding the results of the pilot project by April 1, 2001.

Section 13.7.(f) The Department may adopt temporary rules to implement this section.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Smith, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

BEACH MANAGEMENT PLAN/FEDERAL FUNDS

Section 13.9.(a) The General Assembly makes the following findings:

(1) North Carolina has 320 miles of ocean beach, including some of the most pristine and attractive beaches in the country.

(2) The balance between economic development and quality of life in North Carolina has made our coast one of the most desirable along the Atlantic Seaboard.

(3) North Carolina's beaches are vital to the State's tourism industry.

(4) North Carolina's beaches belong to all the State's citizens and provide recreational and economic benefits to our residents statewide.

(5) Beach erosion can threaten the economic viability of coastal communities and can significantly affect State tax revenues.

(6) The Atlantic Seaboard is vulnerable to hurricanes and other storms, and it is prudent to take precautions such as beach nourishment that protect and conserve the State's beaches and reduce property damage and flooding.

(7) Beach renourishment as an erosion control method provides hurricane flood protection, enhances the attractiveness of beaches to tourists, restores habitat for turtles, shorebirds, and plants, and provides additional public access to beaches.

(8) Federal policy previously favored and assisted voluntary movement of structures threatened by erosion, but this assistance is no longer available.

(9) Relocation of structures threatened by erosion is sometimes the best available remedy for the property owner and is in the public interest.

(10) Public parking and public access areas are needed for use by the general public to enable their enjoyment of North Carolina's beaches.

(11) Acquisition of high erosion hazard property by local or State agencies can reduce risk to citizens and property, reduce costs to insurance policyholders, improve public access to beaches and waterways, and protect the environment.

(12) Beach nourishment projects such as those at Wrightsville Beach and Carolina Beach have been very successful and greatly reduced property damage during Hurricane Fran.

(13) Because local beach communities derive the primary benefits from the presence of adequate beaches, a program of beach management and restoration should not be accomplished without a commitment of local funds to combat the problem of beach erosion.

(14) The State of North Carolina prohibits seawalls and hardening the shoreline to prevent destroying the public's beaches.

(15) Beach nourishment is encouraged by both the Coastal Resources Commission and the U.S. Army Corps of Engineers as a method to control beach erosion.

(16) The Department of Environment and Natural Resources has statutory authority to assist local governments in financing beach nourishment projects and is the sponsor of several federal navigation projects that result in dredging beach-quality sand.

(17) It is declared to be a necessary governmental responsibility to properly manage and protect North Carolina's beaches from erosion and that good planning is needed to assure a cost-effective and equitable approach to beach management and restoration, and that as part of a comprehensive response to beach erosion, sound policies are needed to facilitate the ability of landowners to move threatened structures and to allow public acquisition of appropriate parcels of land for public beach access.

Section 13.9.(b) The Department of Environment and Natural Resources shall compile and evaluate information on the current conditions and erosion rates of beaches, on coastal geology, and on storm and erosion hazards for use in developing a State plan and strategy for beach management and restoration. The Department of Environment and Natural Resources shall make this information available to local governments for use in land-use planning.

Section 13.9.(c) The Department of Environment and Natural Resources shall develop a multiyear beach management and restoration strategy and plan that does all of the following:

(1) Utilizes the data and expertise available in the Divisions of Water Resources, Coastal Management, and Land Resources.

(2) Identifies the erosion rate at each beach community and estimates the degree of vulnerability to storm and hurricane damage.

(3) Uses the best available geological and geographical information to determine the need for and probable effectiveness of beach nourishment.

(4) Provides for coordination with the U.S. Army Corps of Engineers, the North Carolina Department of Transportation, the North Carolina Division of Emergency Management, and other State and federal agencies concerned with beach management issues.

(5) Provides a status report on all U.S. Army Corps of Engineers' beach protection projects in the planning, construction, or operational stages.

(6) Makes maximum feasible use of suitable sand dredged from navigation channels for beach nourishment to avoid the loss of this resource and to reduce equipment mobilization costs.

(7) Promotes inlet sand bypassing where needed to replicate the natural flow of sand interrupted by inlets.

(8) Provides for geological and environmental assessments to locate suitable materials for beach nourishment.

(9) Considers the regional context of beach communities to determine the most cost-effective approach to beach nourishment.

(10) Provides for and requires adequate public beach access, including handicapped access.

(11) Recommends priorities for State funding for beach nourishment projects, based on the amount of erosion occurring, the potential damage to property and to the economy, the benefits for recreation and tourism, the adequacy of public access, the availability of local government matching funds, the status of project planning, the adequacy of project engineering, the cost-effectiveness of the project, and the environmental impacts.

(12) Includes recommendations on obtaining the maximum available federal financial assistance for beach nourishment.

(13) Is subject to a public hearing to receive citizen input.

Section 13.9.(d) Each plan shall be as complete as resources and available information allow. The Department of Environment and Natural Resources shall revise the plan every two years and shall submit the revised plan to the General Assembly no later than March 1 of each odd-numbered year. The Department may issue a supplement to the plan in even-numbered years if significant new information becomes available.

Section 13.9.(e) The Department of Environment and Natural Resources shall submit the first plan required by this act, no later than May 1, 2001. With the first plan, the Department shall:

(1) Provide to the General Assembly a report on alternative State and local government sources of funding for beach nourishment.

(2) Review State, federal, and local policies on enabling and assisting property owners to move structures that are threatened by imminent erosion damage and shall recommend policies, legislative changes, and actions to make moving structures more feasible for landowners.

(3) Review existing programs for the acquisition and management of public land for beach access areas and open space, including identifying high-hazard, erosion-prone, or unbuildable parcels of land that may be used for this purpose, and shall recommend any policy and legislative changes needed to improve public beach access. The Department shall recommend priorities for land acquisition for public beach access, open space, and hazard-reduction purposes.

Section 13.9.(f) In the event that federal funds become available for planning and developing shore protection projects, the State shall match those funds in accordance with the funding guidelines set out in G.S. 143-215.71.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

STUDY WATER CAPACITY USE AREA ISSUES

Section 13.10. The Natural and Economic Resources Appropriations Subcommittees in both the House of Representatives and the Senate shall study the proposed rules that provide for the delineation of a water capacity use area encompassed by the following 15 North Carolina counties and adjoining creeks, streams, and rivers: Beaufort, Carteret, Craven, Duplin, Edgecombe, Greene, Jones, Lenoir, Martin, Onslow, Pamlico, Pitt, Washington, Wayne, and Wilson. The Appropriations Subcommittees shall consider the economic impact that the proposed rules would have on the fifteen county area and shall also consider what alternate water sources may be available to the fifteen county area.

The Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate may obtain assistance from any resources outside the General Assembly that the Subcommittees determine are needed to adequately perform their study. The Subcommittees shall report their findings and recommendations, including any legislative proposals, to the 2001 General Assembly.

PART XIV. DEPARTMENT OF COMMERCE

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Hunter, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

AUTHORIZATION TO REALLOCATE PREVIOUSLY APPROPRIATED PETROLEUM OVERCHARGE FUNDS

Section 14. Section 16.9A of S.L. 1999-237 reads as rewritten:

"Section 16.9A. Funds previously appropriated to the Department of Commerce from the case of United States v. Exxon and from the United States Department of Energy's Stripper Well Litigation for projects under the State Energy Conservation Plan, the Energy Extension Service Program, or the Institutional Conservation Program may be reallocated by the Department of Commerce to be used for projects under the State Energy Efficiency ~~Programs.~~ Programs and Residential Energy Conservation Assistance Program (RECAP)."

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

ENERGY CONSERVATION PROJECTS IN STATE-OWNED BUILDINGS

Section 14.1. Of the funds previously appropriated to the Department of Commerce from the case of United States v. Exxon and from the United States Department of Energy's Stripper Well Litigation, the Energy Division shall use up to one million dollars ($1,000,000) to implement energy conservation projects in State-owned buildings. The Division shall identify those buildings whose energy costs per square foot are the highest and shall implement energy conservation projects that substantially reduce energy use and provide an opportunity for savings by reducing energy costs.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Hunter, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

PETROLEUM OVERCHARGE FUNDS ALLOCATION

Section 14.2.(a) There is appropriated from funds and interest thereon received from the United States Department of Energy's Stripper Well Litigation (MDL378) that remain in the Special Reserve for Oil Overcharge Funds to the Department of Commerce the sum of two million six hundred thousand dollars ($2,600,000) for the 2000-2001 fiscal year to be allocated for the Residential Energy Conservation Assistance Program (RECAP).

Section 14.2.(b) There is appropriated from funds and interest thereon received from the United States Department of Energy's Stripper Well Litigation (MDL378) that remain in the Special Reserve for Oil Overcharge Funds to the North Carolina Housing Finance Agency the sum of two million dollars ($2,000,000) for the 2000-2001 fiscal year to be allocated for the Housing Trust Fund. Funds may only be used for residential energy-related uses as permitted under the Stripper Well Litigation.

Section 14.2.(c) There is appropriated from funds and interest thereon received from the United States Department of Energy's Stripper Well Litigation (MDL378) that remain in the Special Reserve for Oil Overcharge Funds to the North Carolina Community Development Initiative, Inc., the sum of one million dollars ($1,000,000) for the 2000-2001 fiscal year. Funds may only be used for residential energy-related uses as permitted under the Stripper Well Litigation.

Section 14.2.(d) Any funds remaining in the Special Reserve for Oil Overcharge Funds after the allocations made pursuant to subsections (a) through (c) of this section may be expended only as authorized by the General Assembly. All interest or income accruing from all deposits or investments of cash balances shall be credited to the Special Reserve for Oil Overcharge Funds.

Section 14.2.(e) The funds and interest thereon received from the Diamond Shamrock Settlement that remain in a reserve in the Office of State Budget and Management for the Department of Commerce to administer the petroleum overcharge funds pursuant to Section 112 of Chapter 830 of the 1987 Session Laws shall continue to be available to the Department of Commerce on an as-needed basis.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

AUTHORIZATION TO EXPEND REED ACT FUNDS

Section 14.3. Of the funds credited to and held in this State's account in the Unemployment Trust Fund by the Secretary of the Treasury of the United States pursuant to and in accordance with section 903 of the Social Security Act, the Employment Security Commission of North Carolina may expend the sum of two million seventy-eight thousand forty-nine dollars ($2,078,049) for the 2000-2001 fiscal year for automation purposes.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom, Dalton

WORKER TRAINING TRUST FUND APPROPRIATIONS

Section 14.4. Section 16.14 of S.L. 1999-237 reads as rewritten:

"Section 16.14.(a) There is appropriated from the Worker Training Trust Fund to the Employment Security Commission of North Carolina the sum of six million two hundred ninety-six thousand seven hundred forty dollars ($6,296,740) for the 1999-2000 fiscal year for the operation of local offices and the sum of six million two hundred ninety-six thousand seven hundred forty dollars ($6,296,740) for the 2000-2001 fiscal year for the operation of local offices.

Section 16.14.(b) Notwithstanding the provisions of G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the following agencies the following sums for the 1999-2000 and the 2000-2001 fiscal years for the following purposes:

(1) $2,400,000 for the 1999-2000 fiscal year and ~~$2,400,000~~ $2,300,000 for the 2000-2001 fiscal year to the Department of Commerce, Division of Employment and Training, for the Employment and Training Grant Program;

(2) $1,000,000 for the 1999-2000 fiscal year and $1,000,000 for the 2000-2001 fiscal year to the Department of Labor for customized training of the unemployed and the working poor for specific jobs needed by employers through the Department's Bureau for Training Initiatives;

(3) $2,046,000 for the 1999-2000 fiscal year and $1,746,000 for the 2000-2001 fiscal year to the ~~Department of Community Colleges~~ Community Colleges System Office to continue the Focused Industrial Training Program;

(4) $225,000 for the 1999-2000 fiscal year and $225,000 for the 2000-2001 fiscal year to the Employment Security Commission for the State Occupational Information Coordinating Committee to develop and operate an interagency system to track former participants in State education and training programs;

(5) $400,000 for the 1999-2000 fiscal year and $400,000 for the 2000-2001 fiscal year to the ~~Department of Community Colleges~~ Community Colleges System Office for a training program in entrepreneurial skills to be operated by North Carolina REAL Enterprises;

(6) $60,000 for the 1999-2000 fiscal year and $60,000 for the 2000-2001 fiscal year to the Office of State Budget and Management to maintain compliance with Chapter 96 of the General Statutes, which directs the Office of State Budget and Management to employ the Common Follow-Up Management Information System to evaluate the effectiveness of the State's job training, education, and placement programs; ~~and~~

(7) $1,000,000 for the 1999-2000 fiscal year and $1,000,000 for the 2000-2001 fiscal year to the Department of Labor to expand the Apprenticeship Program. It is intended that the appropriation of funds in this subdivision will result in the Department of Labor serving a benchmark performance level of 10,000 adult and youth apprentices by the year 2000 and maintained or improved ~~thereafter.~~ thereafter;

(8) $100,000 for the 2000-2001 fiscal year to the Community Colleges System Office for the Hosiery Technology Center; and

(9) $100,000 for the 2000-2001 fiscal year to the Community Colleges System Office for the Composites Testing and Training Center.

Section 16.14.(c) The State Treasurer's Office shall deposit the June 2000 interest earnings from the Employment Security Commission Reserve Fund to the Worker Training Trust Fund for the 2000-2001 fiscal year."

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

OREGON INLET FUNDS/NONREVERT

Section 14.5.(a) Funds appropriated to the Department of Commerce for the 1999-2000 fiscal year for the Oregon Inlet Project that are unexpended and unencumbered as of June 30, 2000, shall not revert to the General Fund on June 30, 2000, but shall remain available to the Department for legal costs associated with the Project.

Section 14.5.(b) This section becomes effective June 30, 2000.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Odom, Perdue, Cooper

INDUSTRIAL DEVELOPMENT FUNDS

Section 14.6.(a) Funds appropriated to the Department of Commerce in Section 15.1 of S.L. 1998-212 to be used to recruit a large recycling facility, as defined in G.S. 105-129.25, that are unexpended and unencumbered as of June 30, 2000, shall not revert to the General Fund on June 30, 2000, but shall remain available to the Department and shall be used to increase the Industrial Development Fund.

Section 14.6.(b) Funds appropriated to the Department of Commerce in S.L. 1999-237 for the 1999-2000 fiscal year as Job Loss Assistance funds that are unexpended and unencumbered as of June 30, 2000, shall not revert to the General Fund on June 30, 2000, but shall remain available to the Department to be used to increase the Industrial Development Fund.

Section 14.6.(c) This section becomes effective June 30, 2000.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Tolson, Baddour, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

RURAL REDEVELOPMENT AUTHORITY

Section 14.7. Of the funds appropriated in this act to the Department of Commerce for the 2000-2001 fiscal year for the North Carolina Rural Redevelopment Authority, the sum of two hundred fifty thousand dollars ($250,000) shall be placed in a reserve. The funds shall be released if House Bill 1819 or Senate Bill 1516, 1999 General Assembly, or a substantially similar bill creating the North Carolina Rural Redevelopment Authority becomes law.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS

Section 14.8.(a) Section 16.3 of S.L. 1999-237 reads as rewritten:

"Section 16.3.(a) Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc.

Section 16.3.(b) Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:

(1) First, the Department shall establish each commission's allocation by determining the sum of allocations to each county that is a member of that commission. Each county's allocation shall be determined by dividing the county's enterprise factor by the sum of the enterprise factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation. As used in this subdivision, the term "enterprise factor" means a county's enterprise factor as calculated under G.S. 105-129.3;

(2) Next, the Department shall subtract from funds allocated to the Global TransPark Development Zone the sum of two hundred forty thousand three hundred fifty dollars ($240,350) in ~~each fiscal year,~~ the 1999-2000 fiscal year and the sum of two hundred six thousand eighty-eight dollars ($206,088) in the 2000-2001 fiscal year, which sum represents the interest earnings in each fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and

(3) Next, the Department shall redistribute the sum of two hundred forty thousand three hundred fifty dollars ($240,350) in ~~each~~ the 1999-2000 fiscal year and the sum of two hundred six thousand eighty-eight dollars ($206,088) in the 2000-2001 fiscal year to the seven regional economic development commissions named in subsection (a) of this section. Each commission's share of this redistribution shall be determined according to the enterprise factor formula set out in subdivision (1) of this subsection. This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection."

Section 14.8.(b) Of the funds appropriated in this act to the Department of Commerce for allocation to regional economic development commissions, the sum of three hundred fifty thousand dollars ($350,000) for the 2000-2001 fiscal year shall be allocated in accordance with Section 16.3 of S.L. 1999-237, as amended by this section.

Section 14.8.(c) Of the funds appropriated in this act to the Department of Commerce for allocation to regional economic development commissions, the sum of three hundred fifty thousand dollars ($350,000) for the 2000-2001 fiscal year shall be allocated equally to the commissions.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

ECONOMIC DEVELOPMENT COMMISSION FUNDS SECURED

Section 14.9. Article 2 of Chapter 158 of the General Statutes is amended by adding a new section to read:

"§ 158-12.1. Commission funds secured.

The Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc., may deposit money at interest in any bank, savings and loan association, or trust company in this State in the form of savings accounts, certificates of deposit, or such other forms of time deposits as may be approved for county governments. Investment deposits and money deposited in an official depository or deposited at interest shall be secured in the manner prescribed in G.S. 159-31(b). When deposits are secured in accordance with this section, no public officer or employee may be held liable for any losses sustained by an institution because of the default or insolvency of the depository. This section applies to the regional economic development commissions listed in this section only for as long as the commissions are receiving State funds."

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Smith, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom, Hoyle

EXTEND FUNDING OF THE STUDY COMMISSION ON THE FUTURE OF ELECTRIC SERVICE IN NORTH CAROLINA

Section 14.10. Section 10.1 of S.L. 1997-483, as amended by Section 6.1 of S.L. 1999-395, reads as rewritten:

"Section 10.1. Notwithstanding G.S. 62-302(d), for ~~all expenses during the 1997-98, 1998-99, and 1999-2000 fiscal years of~~ the Study Commission on the Future of Electric Service in North Carolina, established in S.L. 1997-40, as amended by S.L. 1999-122, all expenses incurred through June 30, 2006, shall be reimbursed from funds in the Utilities Commission and Public Staff Fund. There is allocated initially one hundred thousand dollars ($100,000) from the Utilities Commission and Public Staff Fund to the General Assembly for the purpose of enabling the Study Commission on the Future of Electric Service in North Carolina to organize and begin its work. Upon the certification of the need for additional funds by the cochairs of the Study Commission on the Future of Electric Service in North Carolina for the work of the Commission, the Utilities Commission shall transfer the additional funds from the Utilities Commission and Public Staff Fund to the General Assembly for that purpose."

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

NORTH CAROLINA TECHNOLOGICAL DEVELOPMENT AUTHORITY, INC.

Section 14.11. The Technological Development Authority, Inc., shall do the following:

(1) By January 15, 2001, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 1999-2000 program activities, objectives, and accomplishments;

b. State fiscal year 1999-2000 itemized expenditures and fund sources;

c. State fiscal year 2000-2001 planned activities, objectives, and accomplishments including actual results through December 31, 2000;

d. State fiscal year 2000-2001 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2000; and

(2) Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by: Representatives Fox, Owens, Warren, Easterling, Redwine, Senators Martin of Pitt, Weinstein, Plyler, Perdue, Odom

WORLD TRADE CENTER NORTH CAROLINA REPORT

Section 14.12. World Trade Center North Carolina shall do the following:

(1) By January 15, 2001, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information: