House committee substitute to the 3rd edition deletes the provisions of the 3rd edition and replaces it with the following.

Part I. Improve Rule-Making Process

Amends GS 150B-2 to define policy as any nonbinding interpretive statement within the delegated authority of an agency that merely defines, interprets, or explains the meaning of a statute or rule.

Amends GS 150B-21.4 to require an agency to obtain certification that funds required by a proposed rule change are available from the Office of State Budget and Management before adopting a permanent rule change that would require the expenditure or distribution of funds subject to the State Budget Act. Requires the agency to submit the text of the proposed rule change, analysis of the change, and a fiscal note on the change at the time the agency submits the notice of text for publication. Also requires that the analysis made to determine if the rule will result in increased DOT costs that must be done when an agency adopts a rule affecting environmental permitting of Department of Transportation (DOT) projects be conducted and submitted to the Board of Transportation when the agency submits the notice of texts for publication (was, before the agency publishes the proposed text). Makes conforming changes triggering other text and fiscal note submissions before an agency adopts a permanent rule change (was, before an agency publishes the proposed text). Changes the definition of substantial economic impact to mean an aggregate financial impact on all persons affected of at least $3 million (was, at least $500,000) in a 12-month period.

Amends GS 150B-21.2(c) to require the notice of the proposed text of a rule to include the text of the proposed rule, unless the rule is a readoption without substantive change to the existing rule proposed in accordance with GS 150B-21.3A (was, required the text of the proposed rule).

Enacts new GS 150B-21.3A to provide that any rule for which the agency that adopted the rule has not conducted a review in accordance with the statute will expire on the date set in the schedule established by the Rules Review Commission (Commission) pursuant to the statute. Requires each agency subject to Article 2A to conduct a review of the agency's existing rule at least once every ten years in accordance with the following specified process. Requires the agency to analyze each existing rule and decide whether the rule is necessary with substantive public interest, necessary without substantive public interest, or unnecessary. The determination is to be posted and open to public comment. After reviewing and assessing the merits of the public comments, the agency must report to the Commission. The Commission must review the reports and if there is a comment on a rule the agency has determined to be necessary and without substantive public interest or unnecessary, the Commission must decide whether the comment has merit; if the comment does have merit, the rules must be designated as necessary with substantive public interest. Requires the Commission to report final determinations to the Joint Legislative Administrative Procedure Oversight Committee (Committee) for consultation. Provides that the final determination report does not become effective until that agency has consulted with the Committee. Provides for when the Committee does not hold the consultation meeting within 60 days and for the role of the General Assembly when the Committee disagrees with a determination.

Requires the Commission to establish a schedule for the review of existing rules according to the statute on a decennial basis by assigning each title of the Administrative Code a date by which the review must be completed. Provides that if the agency does not conduct the review by the set date, the rules in that title will expire.

Allows an agency to subject a rule that it determines to be unnecessary to review under the statute at any time by notifying the Commission that it wants to be placed on the schedule for the current year.

Provides that if proposed GS 150B-21.3A becomes law, the Rules Review Commission (RRC) must subject rules adopted by the Environmental Management Commission related to surface water quality and wetlands to review in the first year that that the RRC establishes for the review of existing rules.

Repeals GS 150B-19.2 (review of existing rules).

Requires the Joint Legislative Administrative Procedure Oversight Committee to undertake a study of the exemptions from rule-making in GS 150B-1(d) and elsewhere in the statutes. Requires each exemption to be evaluated for the continued need and potential consequences of repeal of the exemption. Requires a report to the 2014 Session of the 2013 General Assembly.

Part II. State and Local Government Regulations

Amends GS 153A-348 and GS 160A-364.1 to add that when a use constituting a violation of a zoning or unified development ordinance is in existence prior to adoption of the zoning or unified development ordinances creating the violation and that use is grandfathered and then terminated, a county or city must bring an enforcement action within 10 years of the date of the termination of the grandfathered status, unless the violation poses an imminent hazard to health or public safety.

Amends GS 153A-449 and GS 160A-20.1 (both concerning contracts with private entities) to add that a county or city may not require a private contractor under the statute to abide by any restriction that the city our county could not impose on all of its employers as a condition of bidding on a contract.

Above provisions in Part II are effective when the act becomes law and apply to zoning and unified development ordinances adopted before, on, or after the effective date of this act and to contracts entered on or after that date.

Amends GS 153A-340 and GS 160A-381 to add that a zoning or unified development ordinance may not differentiate in terms of the regulations applicable to fraternities or sororities between those that are approved or recognized by a college or university and those that are not.

Enacts new GS 116-40.11 providing that any student enrolled at a constituent institution who is accused of a violation of the disciplinary or conduct rules of the constituent institution has the right to be represented by a licensed attorney or nonattorney advocate who may fully participate during any disciplinary procedure or other procedure adopted and used by the constituent institution regarding the alleged violation. Provides that a student does not have the right to be represented by a licensed attorney or nonattorney advocate if the institution has implemented a Student Honor Court that is fully staffed by students to address such violations for any allegation of academic dishonesty. Also gives student organizations recognized by a constituent institution that are accused of a violation of the disciplinary or conduct rules of the institution the right to be represented by a licensed attorney or nonattorney, except when the institution has implemented a Student Honor Court fully staffed by students to address such violations. Effective when the act becomes law and applies to all allegations of violations beginning on or after August 1, 2013.

Amends GS 130A-247 to amend the definition of private club to include an organization that meets the definition of a private club in GS 18B-1000(5).

Amends GS 136-133.1 to allow the Department of Transportation, at the request of the selective vegetation removal permittee, to approve plans for the cutting, thinning, pruning, or removal of vegetation outside of the cut or removal zone along acceleration or deceleration ramps if the view to the ad will be improved and the total aggregate area of cutting or removal does not exceed the maximum allowed in the statute. Allows tree branches within a highway right of way that encroach into the zone created by points A, B, D. and E (was, points A, C, and D).

Enacts new GS 136-131.2 to prohibit a city, county, local or regional zoning authority, or other political subdivision from, without paying just compensation, regulating or prohibiting the repair or reconstruction of any outdoor advertising for which there is in effect a valid DOT permit as long as the square footage of the advertising surface area is not increased.

Requires the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to amend its Records Retention and Disposition Schedule Manual to provide that if a Medicaid service has been eliminated by the state, the provider must retain records for two years after the last date of the service, unless a longer period is required under federal law. Allows records to be destroyed or transferred, at the termination of that time period, to a state agency or contactor identified by the Department of Health and Human Services.

Requires the Joint Legislative Program Evaluation Oversight Committee to include in the 2013-14 Work Plan for the Program Evaluation Division a study to evaluate the structure, organization, and operation of the various independent occupation licensing boards. Specifies issues to be included in the study. Requires the Program Evaluation Division to report to the Joint Legislative Program Evaluation Oversight Committee and the Joint Legislative Administrative Procedure Oversight Committee at a time to be determined. Effective when the act becomes law.

Amends GS 97-78 to allow the Industrial Commission to appoint an administrator whose duties are prescribed by the Commission and makes them no longer subject to the State Personnel System. Also no longer requires the executive secretary to be subject to the State Personnel System. Amends GS 97-79(b) to provide that deputies appointed by the Industrial Commission are not considered hearing officers.

Enacts new GS 160A-203 and GS 153A-145.1, both titled Certain ordinances prohibited, providing that no city or county can enact or enforce an ordinance, rule, or regulation that requires an employer to assume financial, legal, or other responsibility for the mitigation of the impact of their employees' commute or transportation to or from the workplace that may result in the employer being subject to a fine, fee, or other monetary, legal, or negative consequences.

Amends GS 160A-174(b), adding that an ordinance is also not consistent with state or federal law when it (1) regulates a field that is also regulated by state or federal statutes enforced by, or a regulation promulgated by, an environmental agency and (2) is more stringent than the state or federal statute or regulation. Also amends GS 153A-121(a1) to include the above new limitation regarding consistency of ordinances as well as incorporate the other six existing limitations as found in GS 160A-174(b). Provides that cities or counties, except for the restriction prohibiting more stringent regulations enforced by environmental agencies, are not precluded from requiring a higher standard of conduct or condition for stand-alone state or federal laws.

Enacts new GS 160A-174(c) and GS 153A-121(a2), providing that the limitation set out above does not apply to ordinances of cities, towns, or counties if they are or continue to be required by one of the following: (1) a serious and unforeseen threat to the public health, safety, or welfare; (2) an act of the General Assembly or U.S. Congress that expressly requires the city or county to adopt an ordinance; (3) a provision in federal or state budget policy; (4) a federal regulation required to be adopted or administered by the state; or (5) a court order.

Enacts new GS 160A-174(d) and GS 153A-121(a3), specifying which entities are considered environmental agencies for the purposes of promulgating state and federal regulations as they apply to ordinances that are not consistent with regulations.

Repeals GS 160A-385(a), regulations concerning qualified protests against zoning map changes.

Part III. Business and Labor Regulations

Amends GS 130A-247, concerning bed and breakfast establishments, adding and defining a bed and breakfast home, a new category, as a business in a private home of not more than eight guest rooms that offers bed and breakfast accommodations for a period of less than one week.  Also sets out four criteria that must also be met for a business to be considered a bed and breakfast home, including not serving food or drink to the general public for pay and serving breakfast, lunch, and dinner, or a combination, only to overnight guests in the home. Amends GS 130A-248(a2), making conforming changes and directing the Commission for Public Health to adopt rules to govern the sanitation of bed and breakfast homes as well as bed and breakfast inns, ensuring that they do not unreasonably interfere with the business operations thereof. Effective October 1, 2013.

Amends various provisions of Article 89A of GS Chapter 58 governing the licensure requirements for Professional Employer Organizations (PEOs) as follows:

Repeals GS 58-89A-5(8) defining hazardous financial condition.

Amends GS 58-89A-50 to change the surety bond requirement under subsection (a) from the existing formula based on the applicant's prior year compensation to a flat amount of $100,000. Provides that an applicant whose current assets do not exceed current liabilities pursuant to GS 58-89A-60(b) must file an additional surety bond or other items as set forth in subsection GS 58-89A-5(f), equal to or in excess of current liabilities, less current assets. Deletes subsection (d) (which prohibits a licensee from requiring a client to contribute to the licensee's surety bond payment).

Amends GS 58-89A-60(b), providing that every applicant must file with the Commissioner of Insurance (Commissioner) an audited GAAP financial statement, prepared as of a date not more than 90 days before the application, that demonstrates that the applicant or licensee's current assets exceed current liabilities. Sets out the requirements for the GAAP financial statement, including that it must be audited by an independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located and that the accountant cannot have qualification as to the going concern status of the PEO. Provides that a PEO group can submit combined or consolidated audited financial statements to meet the above requirements, except for PEOs that do not have sufficient operating history.

Amends GS 58-89A-85, concerning the supervision, rehabilitation, and liquidation of a licensee, requiring the Commissioner to proceed in two specified manners if it is determined that a licensee is bankrupt (previously, specified manners to proceed if it was determined the licensee was bankrupt or in a hazardous financial condition).

Amends GS 58-89A-95, concerning agreements of PEOs,  deleting subsection (c), which established certain notice requirements that the licensee must give to employees, and deletes language in subsection (b), which set out timeliness requirements for the written notice required in the same subsection.

Amends GS 58-89A-100, regarding contract requirements, providing that, unless otherwise expressly agreed to by a professional employer organization and a client company in a PEO agreement, the client company retains the exclusive right of direction and control over the assigned employees as is necessary to conduct the client company's business. Also provides that the licensee will have the right to hire, discipline, and terminate an assigned employee in accordance with the licensee's responsibilities under GS Chapter 58 and a PEO agreement. Establishes that the client company has the right to hire, discipline, and terminate an assigned employee.

Amends GS 58-89A-145, concerning examinations of licensees, providing that the reasonable cost of an examination, including fees related to attorneys, appraisers, and so forth can only be recovered pursuant to GS 58-89A-65(d).

Repeals GS 58-89A-155(a)(4), concerning notice requirements under GS 58-50-40.

These sections, concerning PEO Act amendments, become effective October 1, 2013.

Amends GS 110-90.2(a), concerning mandatory child care providers' criminal history checks, adding  a new term and definition for the section provisional provider, which is defined to mean an employee that has started the preservice criminal records check process to be hired and is waiting for a determination letter from DHHS. Such a provider can be hired and begin orientation and training, as well as counted in the staff-to-child ratio, as long as the provisional provider is accompanied by a qualified child care provider during supervision of children and is clearly identifiable as a provisional provider. Existing employees subject to a records check every three years are treated as provisional providers during the pendency of the criminal record check process. Adds news subsection GS 110-90.2(h), requiring the check of the State and National Repositories for criminal history of a person and directed to the SBI must be completed within 15 calendar days of the receipt of the request from DHHS and the criminal history check of a person to be conducted by the DHHS must be completed within 15 calendar days of the receipt of the application from the child care provider.

Amends GS 20-4.01, definitions for statutes regarding motor vehicles, providing that the Class C Motor Vehicle classification also includes a vehicle originally manufactured as a school bus that is in operation for agricultural purposes with a gross vehicle weight less than 26,501 pounds. Amends GS 20-7(a), concerning drivers' licenses, providing that a Class C license is required to operate the above mentioned repurposed Class C school bus.

Enacts GS 95-28.4, concerning veterans' preference for employment in North Carolina, providing that a private, nonpublic employer in North Carolina can provide a preference to a veteran for employment. Also allows spouses of honorably discharged veterans that have service-connected permanent and total disability to also receive the preference for employment. Provides that this preference does not violate any state or local law.

Amends GS 95-79, concerning certain illegal agreements between employers and labor unions/organizations, making organizational changes and enacting a new subsection (b), which provides that provisions that directly or indirectly condition the purchase of agricultural products or the terms of the agreement on an agricultural producer's status as a union or nonunion employer or willingness to enter into an agreement with a labor union/organization is invalid and unenforceable as against public policy. Defines agricultural producer as any producer engaged in any service or activity included within specified federal provisions.

Amends GS 20-118(c), concerning weight limits for transportation of certain agricultural material, expanding certain exemptions allowed to the weight limitations of GS 20-118 (b) and (e) to also require the vehicles to be transporting feed ingredients being transported to a livestock or poultry feed manufacturing or compounding facility as well as livestock and poultry by-products that are being transported from a livestock or poultry slaughter or processing plant.

Amends GS 153A-340(b) to add the production and activities relating to or incidental to the production of grains to the list of bona fide farm purposes. Provides that for the purposes of subdivision (2) of this section, the clause "when performed on the farm," as used in GS 106-581.1(6), includes the farm within the jurisdiction of the county and any other farm that is owned or leased to, or from others, by the bona fide farm operator, no matter where the farm is located.

Amends GS 106-581.1 to expand the definition of the terms agriculture, agricultural, and farming to also refer to a public or private grain warehouse or warehouse operation where grain is held 10 days or longer, including, but not limited to, all buildings, elevators equipment, and warehouses consisting of one or more warehouse sections and considered a single delivery point with the capability to receive, load out, weigh, dry, and store grain.

Enacts new GS 97-5.1 to create a rebuttable presumption that any person who operates and has an ownership or leasehold interest in a passenger motor vehicle that is operated as a taxicab is an independent contractor for purposes of GS Chapter 97 and not an employee as defined in GS 97-2. Provides that the presumption that taxicab drivers are independent contractors is not rebutted solely (1) because the operator is required to comply with rules and regulations imposed on taxicabs by the local governmental unit that licenses companies, taxicabs, or operators or (2) because a taxicab accepts a trip request to be at a specific place at a specific time. However, declares that the presumption can be rebutted by application of the common law test for determining employment status. Defines passenger motor vehicle that is operated as a taxicab according to passenger capacity and services provided and also defines the terms lease and leasehold as they are used in this section. Effective when the act becomes law and applies to persons affected on or after that date.

Part IV. Environmental and Public Health Regulations

Amends GS 130A-309.57 to prohibit permitted scrap tire collectors from contracting with a scrap tire processing facility unless the processing facility can document that it has access to a facility permitted to receive the scrap tires (was, required the Commission to adopt a rule to implement this prohibition).

Current law provides that the North Carolina State Building Code (Code) may contain provisions requiring the installation of carbon monoxide detectors in every dwelling unit with a fossil-fuel burning heater, appliance, or fireplace, and any dwelling unit with an attached garage. Amends GS 143-138 to require that the Code also contain requirements for installing electrical carbon monoxide detectors at lodging establishments. Provides that violations under this subsection are punishable in accordance with subsection (h) of this section and GS 143-139. Adds to the specified criteria for carbon monoxide detectors installed in dwelling units and in lodging establishments.

Provides that the definitions in GS 143-212, 15A NCAC 02T .0103 and 15A NCAC 02T .1302 apply to Section 27 of this act, regarding the lagoon closure rule. Directs the Environmental Management Commission (EMC) and the Department of Environment and Natural Resources (DENR) to implement the closure requirements of 15 NCAC 02T .1306 as provided in Section 27(c) of this act until the effective date of the revised permanent rule that the EMC is required to adopt under Section 27(d) of this act. Provides criteria regarding permit rescission in Section 27(c) of this act. Provides for additional rule-making authority for the EMC in Section 27(d) of this act, directing the EMC to adopt a rule to amend 15 NCAC 02T .1306 (closure requirements) consistent with Section 27(c) of this act. Provides that Section 27(c) of this act expires on the date that the rules pursuant to Section 27(d) of this act become effective. Directs the EMC and DENR to implement 15A NCAC 02T .1302 (definitions) as provided in Section 28(b) of this act until the effective date of the revised permanent rule that the EMC is required to adopt under Section 28(c) of this act. Directs the EMC to adopt a rule to amend 15A NCAC 02T .1302 that is consistent with Section 28(b) of this act. Provides that Section 28(b) of this act expires on the date that rules adopted under Section 28(c) of this act become effective.

Provides that the definitions set out in GS 143-212 and 15A NCAC 02U .0103 apply in Section 29 of this act. Requires the EMC and DENR to implement 15A NCAC 02U .0701 (setbacks) as provided in Section 29(c) of this act, until the effective date of the revised permanent rule that Section 29(d) requires the Commission to adopt. Provides additional criteria regarding implementation and conferring additional rule-making authority on the EMC. Provides that Section 29(c) of this act expires on the date that rules adopted under Section 29(d) of this act become effective.

Directs the Commission for Public Health (CPH) to amend and clarify its rules for the implementation of a smoking ban in restaurants and bars no later than January 1, 2014. Requires that the rules ensure consistent interpretation and enforcement and declares that the rules must specifically clarify the definition of enclosed areas for purposes of implementation. Exempts rules adopted under this section from the requirements of GS 150B-21.4, provides that they are not subject to Part 3 of Article 2A of GS Chapter 150B, and makes them effective as provided in GS 150B-21.3(b1). Requires the EMC to report on its progress in clarifying and amending the rules to the Joint Legislative Oversight Committee on Health and Human Services no later than November 1, 2013.

Includes a severability clause to provide that if any provisions of the proposed act or its application are held to be invalid, the invalidity does not affect other provisions or applications that can be given effect without the invalid provisions or applications.

Except as otherwise provided, makes this act effective when it becomes law.

 

The House committee substitute to the 4th edition is to be summarized.

Senate amendment makes the following change to the 2nd edition:

Revises GS 130A-309.09A(h) to clarify that the limitation on local government authority to regulate the height of recycled materials stockpiles does not apply when stockpile facilities are located on lots within 200 yards of residential districts.