House committee substitute makes the following changes to the 4th edition.

Section 1

Amends GS 1-117, concerning the cross-indexing of lis pendens by the clerk of superior court, to make a technical change to replace the statutory reference to GS 2-42(6) with GS 7A-109 (record-keeping procedures for clerks of superior court) to reflect the transfer of the statute. Makes language gender neutral.

Section 9.5

Amends GS 143B-394.15(c), which sets out the membership of the Domestic Violence Commission, to reduce the Commission to 38 members by removing the requirement that the Secretary of the Department of Public Safety, or the Secretary's designee, be a member of the Commission, ex officio.

Section 16

Amends GS 1A-1, Rule 22 (Interpleader), to provide that where funds are subject to competing claims by parties to the action, the court can order a party in possession of the funds to either deposit the funds in an interest-bearing account in a federally insured depository institution or a trust institution authorized to do business in the State (previously, in a bank, savings and loan, or trust company licensed to do business in the State) or to deposit the funds with the clerk. Makes conforming changes.

Amends GS 20-63.01(c), concerning bonds required for commission contractors, to provide that, with the approval of the Division of Motor Vehicles, an applicant may file with the clerk of superior court or the register of deeds or both of the county in which the commission contractor will be located, in lieu of a bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation) or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation).

Amends GS 85B-7.1(a), concerning the handling of clients' funds by auctioneers, to require the licensee to deposit funds that are not disbursed on auction day with a federally insured depository institution (previously, with an insured bank or savings and loan association) located in North Carolina. Makes conforming changes to GS 85B-8(a)(7), concerning prohibited acts that are grounds for the assessment of a civil penalty or the denial, suspension, or revocation of an auctioneer, auctioneer apprentice, or auction firm license.

Amends GS 86A-22(7)c, concerning bonds required for barber schools and colleges, to provide that an applicant, with approval of the Board of Barber Examiners, may also file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation) or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation).

Amends GS 88B-17(c), concerning bond required for private cosmetic art schools, to provide that an applicant, with the approval of the Board of Cosmetic Art Examiners, may file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation) or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation).

Amends GS 90-171.55, concerning the bond required for each nurses aid training program, to provide that an applicant, with the approval of the Board of Nursing, may also file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation) or (2) a certificate of deposit, as specified, which is executed by federally insured depository institution lawfully doing business in the State (previously, executed by a state or federal savings and loan association, state bank, or national bank that is doing business in North Carolina and whose accounts are insured by a federal depositors corporation).

Amends GS 90-210.86, concerning the deposit or investment of funds of mutual burial associations, to require investment in deposits in any federally insured depository institution or any trust institution authorized to do business in the State (previously, any bank or trust company in the State).

Amends GS 93A-3(b), concerning the compensation of the North Carolina Real Estate Commission, to provide that the Commission may deposit moneys in accounts, certificates of deposit, or time deposits as the Commission may approve, in any federally insured depository institution or any trust institution authorized to do business in the State (previously, in any bank, savings and loan association, or trust company).

Amends GS 93A-42(d) to require the independent escrow agent provided in subsection (c)(2) of the statute to deposit and maintain the purchaser's payments of a time share real property interest in an insured trust or escrow account in a federally insured depository institution lawfully doing business in the State (previously, in a bank or savings and loan association located in the State). Makes conforming changes to GS 93A-45, concerning purchaser's right to cancel, escrow, and violations of Article 4 of GS Chapter 93A (Time Shares).

Section 18

Amends GS 20-63.01(c) (bonds required for commission contractors), as amended by Section 16, to provide that an applicant, with the approval of the Division of Motor Vehicles, may file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not include a trust institution) authorized to do (previously, lawfully doing) business in the State or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not include a trust institution) authorized to do (previously, lawfully doing) business in the State.

Amends GS 42-50, concerning deposits from the tenant under the Tenant Security Deposit Act, to require that the security deposits from the tenant in residential dwelling units are deposited in a trust account with a licensed and federally insured depository institution or a trust institution (previously, did not include a trust institution) authorized to do (previously, lawfully doing) business in the State or as specified. Makes language gender neutral. 

Amends GS 42A-15, concerning trust account uses under the Vacation Rental Act, to provide that, if the tenant is required to make any advance payments, other than a security deposit, whether the payment is denominated as rent or otherwise, the landlord or real estate broker must deposit the payments in a trust account in a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State.

Amends GS 42A-17(a) (accounting and reimbursement under the Vacation Rental Act), as amended by Section 7.3, to require a vacation rental agreement to identify the name and address of the federally insured depository institution or trust institution (previously, did not provide for a trust institution) in which the tenant's security deposit and other advance payments are held in a trust account.

Amends GS 47C-4-110(a), concerning escrow of deposits under the North Carolina Condominium Act, to require that any deposit made in connection with the purchase or reservation of a unit from a person required to deliver a public offering statement pursuant to GS 47C-4-102(c) must be immediately deposited in a trust or escrow account in a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State and remain as specified.

Amends GS 85B-7.1(a) (handling of clients' funds by auctioneers), as amended by Section 16, to require the licensee to deposit funds that are not disbursed on auction day with a federally insured depository institution or a trust institution authorized to do business in the State (previously, with a federally insured depository institution located in North Carolina). Makes conforming changes to GS 85B-8(a)(7), as amended by Section 16, concerning prohibited acts that are grounds for the assessment of a civil penalty or the denial, suspension, or revocation of an auctioneer, auctioneer apprentice, or auction firm license.

Amends GS 86A-22 (bonds required for barber schools and colleges), as amended by Section 16, to provide that an applicant, with approval of the Board of Barber Examiners, may file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State.

Amends GS 88B-17 (bond required for private cosmetic art schools), as amended by Section 16, to provide that an applicant, with the approval of the Board of Cosmetic Art Examiners, may file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State.

Amends GS 90-171.55 (bond required for each nurses aid training program), as amended by Section 16, to provide that an applicant, with the approval of the Board of Nursing, may file with the clerk of superior court in the county in which the school will be located, in lieu of the bond, (1) an assignment of a savings account, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State or (2) a certificate of deposit, as specified, which is executed by a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State.

Amends GS 93A-42 (d), as amended by Section 16, to require the independent escrow agent provided in subsection (c)(2) of the statute to deposit and maintain the purchaser's payments of a time share real property interest in an insured trust or escrow account in a federally insured depository institution or a trust institution (previously, did not provide for a trust institution) authorized to do (previously, lawfully doing) business in the State. Makes conforming changes to GS 93A-45, as amended by Section 16, concerning purchaser's right to cancel, escrow, and violations of Article 4 of GS Chapter 93A (Time Shares).

Section 19.5

Amends GS 20-63(b1), which exempts certain special registration plates from being a "First in Flight" or "First in Freedom" plate, as required in subsection (b) of the statute, and instead requires the design of plates that are not "First in Flight" or "First in Freedom" plates be developed in accordance with GS 20-79.4(a3), which sets out a standardized format for special license plates. Further, for special plates authorized in GS 20-79.7 on or after July 1, 2013, subsection (b1) prohibits the Division of Motor Vehicles from issuing the plate on a background under the subsection unless it receives at least 200 applications for the plate in addition to the applications required under GS 20-79.4 (special registration plates) or GS 20-81.12 (collegiate insignia plates and other certain special plates). Adds new subdivision (54) to authorize a background for the Order of the Long Leaf Pine special registration plate, subject to the requirements set out in subsection (b1) of the statute.

Section 20

Amends GS 28A-2B-2 concerning venue for estate proceedings, providing that venue is the county where the petitioner whose will or codicil is the subject of the petition resides (was, where domiciled).

Section 21

Amends GS 31D-5-505 (requisites of release or limitation as against creditors and purchasers for value), as recodified by Section 7.2, to remove references to limitation of a power of appointment from both the title and the provisions, leaving the statute to provide for only the requisites for release of a power of appointment as against creditors and purchasers for value.

Section 22

Amends GS 36C-5-505(c), concerning a creditor's claim against a settlor under the North Carolina Uniform Trust Code, to provide that, if the settlor is a beneficiary after the death of the settlor's spouse, an irrevocable inter vivos trust, of which the settlor's spouse is a beneficiary during the spouse's lifetime but which does not qualify for the federal gift tax marital deduction, and during the lifetime of the settlor's spouse (1) the settlor's spouse is the only beneficiary or (2) the settlor's spouse and any issue of the settlor or the settlor's spouse, or both, are the only beneficiaries (previously, only provided for the settlor's spouse and the settlor's issue to be the only beneficiares), then the property is not considered to have been contributed by the settlor and a person who would otherwise be treated as a settlor or a deemed settlor of the trust cannot be treated as a settlor, and is therefore not subject to claims by creditors of the settlor spouse.

Section 23

Current GS 39-13 establishes that when a purchaser of real estate executes a purchase money mortgage on the property, the purchase money mortgage is good and effectual against the purchaser's spouse as well as the purchaser, without requiring the spouse to join in the execution of such mortgage or deed of trust. Amends GS 39-13 to instead provide that a mortgage or deed of trust given by the purchaser of real property to secure a loan, the proceeds of which were used to pay all or a portion of the purchase price of the encumbered real property, regardless of whether the secured party of the purchase money mortgage is the seller of the real property or a third party lender, is good and effectual against his or her spouse as well as the purchaser, without requiring the spouse to join in the execution of the mortgage or deed of trust.

Current GS 29-30(g) establishes that neither the household furnishings in the dwelling house nor the life estates taken by election of the surviving spouse of the surviving spouse's statutory elective share, in lieu of the surviving spouse's intestate share, are subject to the payment of debts due from the estate of the deceased spouse, except those debts, as specified, that are secured by the property. Amends the second exception to subsection (g) to delete the term "purchase money mortgage" and to instead specify that a mortgage or deed of trust given by the deceased spouse to secure a loan, the proceeds of which were used to pay all or part of the purchase price of the encumbered property, regardless of whether the secured party is the seller of the real property or a third-party lender, may subject the household furnishings in the dwelling house or life estates taken by election of the surviving spouse under the statute to payments of debt due from the estate of the deceased spouse. Makes technical changes.

This section applies to mortgages and deeds of trust entered into on or after the date the act becomes law.

Section 24

Amends GS 39-13.7, concerning tenancy by the entireties trusts in real property, by adding two new subsections. Provides that notice that the real property held in trust will receive immunity from the claims of separate creditors can be given in a statement in the conveyance of the tenancy by the entireties real property to the trust that the real property is held under the statute, and that as of the date of the conveyance, the requirements of subsection (b) are met (which provides three conditions that must be met for the immunity from the claims of separate creditors to apply to the property in trust). Allows a person entering a transaction involving real property held in trust under the statute to request confirmation from the trustee whether the requirements of the statute providing immunity from the claims of separate creditors are met at the time of the transaction.

Section 28

Adds that if a person is eligible for a historic rehabilitation tax credit under GS 105-129.105(e) with respect to qualifying rehabilitation expenditures that were incurred in 2014 and 2015 in connection with a certified historic structure for which a certificate of occupancy was issued on or after December 15, 2015, and before January 1, 2016, for purposes of Article 3L of GS Chapter 105, the certified historic structure is to be treated as having been placed in service in 2016 notwithstanding that the certified historic structure may be considered placed in service in 2015 for purposes of the tax credit under section 47 of the IRC or other federal income tax purposes.

Section 30

Amends GS 115C-12 to require the State Board of Education (SBE) to submit reports on schools identified as low-performing, school improvement plans found to significantly improve student performance, personnel actions taken in low-performing schools, and recommendations for additional legislation to improve student performance and increase local flexibility by November 15 of each year (was, October 15).

Amends GS 115C-296.13 to change the due date of the educator preparation program report cards from December 15 to March 15.

Amends GS 115C-238.55 to change the due date of the report on cooperative innovative high schools from January 15 to March 15.

Amends Section 1(b) of SL 2013-1, as amended, to change the due date of the SBE’s report on the impact of awarding the high school endorsements on high school graduation, college acceptance and remediation, and post-high school employments rates from September 15, 2016, to November 15, 2016.

Amends GS 115C-156.2 to change the due date of the SBE’s report on the number of students in career and technical education courses who earned community college credit and related industry certifications and credentials from September 15 to November 15.

Amends Section 8.29(e) to require the Department of Public Instruction to provide an interim report on the After-School Quality Improvement Grant Program by November 15, 2016 (was, September 15, 2016), and a final report by November 15, 2017 (was, September 15, 2017).

Amends GS 115C-83.10 to require the SBE report on specified accountability measures to be submitted by December 15, 2016, and annually thereafter (was, October 15 of each year, beginning with the 2015-16 school year).

Amends GS 115C-174.26 to require the SBE report on advanced courses to be due by December 15 (was, November 15).

Section 31

Provides that if H1080, Achievement School District, becomes law, then the following changes are made.

Amends GS 115C-75.6 to require the SBE to appoint a superintendent to serve as the Achievement School District executive officer, upon the recommendation of the ASD Superintendent Selection Advisory Committee (was, SBE must consider the Committee's recommendation when making the appointment).

Amends GS 115C-75.7 to require the SBE (was, the SBE is authorized to ) select, upon the recommendation of the ASD Superintendent, no more than five qualifying schools to transfer to the ASD as achievement schools. Also clarifies that the ASD Superintendent is authorized to waive the SBE rules, regulations, policies, and procedures, or the provisions of GS Chapter 115C for achievement schools.

Amends GS 115C-75.13 to provide that innovation zones must include development of a clear and specific plan for improving schools within the innovation zone approved by the SBE to govern and lead the schools in the innovation zone (previously did not require SBE approval) and establishment of an innovation zone office with a leader appointed by the local board of education (previously also required approved by the SBE).

Deletes proposed changes to GS 143B-139.6A, previously in Section 18.4, concerning the DHHS Secretary’s responsibilities regarding availability of early intervention services.

Section 32.5

Amends GS 115D-67.4 to require the Applied Textile Technology Center to submit all proposed agreements or contracts for supplies, materials, printing, equipment, and contractual services that exceed $1 million authorized by the statute to the Secretary of Administration or the Secretary’s designee (was, to the Attorney General or AG’s designee).

Section 33

Amends GS 116-11 by adding that the UNC Board of Governors may authorize the President to employ or engage the services of and fix the compensation for legal counsel that the President deems necessary to represent the University, constituent institution, or University employees and officials in any matter.

Section 34

Amends GS 126-5 to no longer exempt employees in the specified positions that are currently exempt from classification and compensation rules established by the State Human Resources Commission from incentive pay programs.

Section 35

Amends GS 126-14.3 to require the State Human Resources Commission to adopt rules or policies to assure that specified individuals receive adequate training and continuing education to carry out the State’s policy of hiring from among the pool of qualified persons (was, from among the most qualified persons).

Section 36

Amends GS 140-5.13 to require all appointments by the General Assembly to the Board of Trustees of the North Carolina Museum of Art to be for four years, with no person being appointed to more than three consecutive terms (was, all regular appointments are for the then current legislative term, and no appointee of the General Assembly may be appointed to more than two consecutive terms of two years).

No longer makes the appointments of two specified individuals to the Museum of Art Board of Directors for terms expiring on June 30, 2020, in S 898 contingent upon the passage of H 1146.

Section 37

Amends the membership of the Vocational Rehabilitation Council to include the representative of a parent training and information center among those who are allowed to serve more than two consecutive full terms.

Section 38

Amends the membership of the Public Librarian Certification Commission by removing the chairman of the NC Association of Library Trustees and gives the Governor an additional appointment, upon the nomination of the NC Library Association. Makes conforming and technical changes.

Section 39

Amends GS 143B-79 to provide that any surplus furnishings for use in the Governor's mansion and not needed by the Governor for current purposes are available for use by the cabinet agencies for decorative purposes in State-owned facilities. Requires an inventory of these items to be maintained by the Department of Administration, and the items can be recalled at any time for use in the Governor's mansion.

Section 43

Amends GS 159-32 to allow local governments and public authorities to deposit cash less often than monthly until the amount of cash on hand reaches $250, at which point deposit is required. Also provides for submission of cash to a properly licensed and recognized cash collection service. Effective October 1, 2016. 

Section 43.5

Amends GS 163-227.2(g) by adding that no plan adopted by the State Board of Elections in the exercise of its supervisory authority regarding the site plan for one-stop voting locations may be challenged in a petition for judicial review.

Section 44

If H 242, Various Charter School Law Changes, becomes law, then amends Section 6.5 of SL 2014-101 to provide that the State Board of Education must ensure that the rules for a fast-track replication process provide that decisions by the State Board of Education on whether to grant a charter through the replication process are completed in less than 120 days from the application submission date but in no event later than October 15 of the year immediately preceding the year of the proposed school opening (was, completed no later than October 15 of the year immediately preceding the year of the proposed school opening).

Section 48

Provides that if S 600 (Appraiser Compensation/Judge Perform Marriage), 2016 Regular Session, becomes law, then GS 93E-2-4(i), concerning duties of a registered real estate appraisal management company, is amended as follows. Requires an appraisal management company to compensate appraisers in compliance with section 129E(i) of the federal Truth in Lending Act for appraisal assignments of one- to four-family residential dwellings (currently, of property secured by the principal dwelling of the consumer). Effective January 1, 2017.

Section 51

Directs the Revisor of Statutes to print an explanatory comment to GS 36C-1-112 prepared by the Estate Planning and Fiduciary Law Section of the North Carolina Bar Association, as the Revisor may deem appropriate. 

Section 52

Provides that if H 630 (Drinking Water Protection/Coal Ash Cleanup Act), 2015 Regular Session, becomes law, then Section 3(a), which specified certain coal combustion residuals surface impoundments to be deemed intermediate risk and closed no later than August 1, 2028, is amended as follows. Changes the third specified coal combustion residuals surface impoundments to be classified and closed, as specified, as those located at the Weatherspoon Steam Station, owned and operated by Duke Energy Progress, and located in Robeson County (was, in New Hanover County). 

Section 52.5

Provides that if H 1030 (2016 Appropriations Act), 2015 Regular Session, becomes law, then subsection (d) of Section 8.32 is repealed, which required all teachers employed by a local board of education to have evidence of a rating of at least proficient on the most recent annual evaluation to maintain the current license status, but allowed a teacher unable to satisfy that requirement who had been placed on a mandatory improvement plan to be eligible to receive an initial degree license if that teacher satisfies all other licensure requirements. Effective July 1, 2016.

Section 53

Provides that if H 1030, Regular Session, becomes law, then Section 36.16(a1) is amended as follows. Establishes that teachers paid on the Salary Schedule in Section 9.1 are not eligible to receive the bonus awarded in subsection (a) unless they have more than 30 years of credible experience and do not receive a recurring salary increase (currently, does not provide an exception).

Section 53.5

Provides that if H 1030, 2015 Regular Session, becomes law, then Section 12I.1(a) of SL 2015-241, as amended, is amended by decreasing the local program expenditures of the County Department of Social Services  from $27,215,583 to $27,065,583 under the Social Services Block Grant Schedule of appropriations from federal block grant funds made for each year of the fiscal biennium ending June 30, 2017.

Section 54

Amends GS 116-30.3, concerning reversions of the General Fund current operations appropriations credit balance remaining at the end of each fiscal year in each of the budget codes specified, to provide that the amount carried forward in each budget code under the statute cannot exceed 5% (previously, 2.5%) of the General Fund appropriation in that budget code. Makes conforming change to subsection (f). Adds that any amount carried forward in a budget code that is in excess of 2.5% of the General Fund appropriation for that fiscal year in that budget code can be used only for (1) projects that are eligible to receive funds from the Repairs and Renovations Reserve under GS 143C-4-3(b) or (2) advanced planning of capital improvement projects. Adds new subsection (g) to require the Board of Governors of UNC to submit written reports, as specified, to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division on the allocation and use of funds accruing from the carryforward provided by subsection (a) of the statute.

Section 54.5

Current Section 8.27(c) of SL 2015-241, as amended, provides that federal Investing in Innovation grant funds must be used to pay for all costs incurred by the local school administrative units and the community college partners to implement the grant, including community college FTE and prohibits community colleges from earning budget FTE for student course enrollments under this grant, unless the student course enrollment is otherwise authorized as provided in G.S. 115D-20(4)a. Establishes that, notwithstanding Section 8.27(c) of SL 2015-241, as amended, if federal Investing in Innovation Grants funds are unavailable due to the insolvency of the North Carolina New Schools Project, any costs incurred by local school administrative units and the community college partners in implementing the program may be funded by the local school administrative unit or a third party entity. Prohibits community colleges from earning budget FTE for student course enrollments, unless the student course enrollment is otherwise authorized as provided in GS 115D-20(4)a. Applies to the 2016-17 school year.