The Senate committee substitute to the 4th edition deletes all provisions of the previous edition and replaces it with the following.

Part I. Administrative Reforms

Eliminate, As Obsolete, the Small Business Contractor Authority, the Committee on Dropout Prevention, the State Education Committee, the State Education Commission, the National Heritage Area Designation Commission, the Governor’s Management Council, the Board of Directors of the North Carolina Center for Nursing, and the Board of Corrections

Repeals GS Chapter 143B, Part 20, Article 10, Small Business Contractor Act, thus eliminating the Small Business Contractor Authority.

Repeals Article 6B, Dropout Prevention Grants, of GS Chapter 115C.

Repeals Article 26 of GS 143, thus eliminating the State Education Commission. Repeals GS 116C-2, eliminating the State Education Commission, and amends GS 116C-1, making conforming changes.

Amends Section 18.10 of SL 2001-491 to provide that the National Heritage Area Designation Commission will terminate August 1, 2014 (previously, Commission did not have a termination date).

Repeals GS Chapter 143B, Article 9, Part 24, thus eliminating the Governor’s Management Committee.

Repeals GS 90-171.71, eliminating the Board of Directors of the NC Center for Nursing.

Repeals GS 143B-715, eliminating the Board of Corrections. Amends GS 143B-711, making conforming changes.

Clarify Process for Readoption of Existing Rules

Amends GS 150B-21.3A to require that the Rules Review Commission (RRC) report to the Joint Legislative Administrative Procedure Oversight Committee any agency that fails to conduct the existing rule review. Provides that for the readoption of rules, once the final determination report becomes effective, the RRC must establish a date by which the agency must readopt the rules. Requires the RRC to consult with the agency and consider the agent’s rulemaking priorities in setting the date. Allows the agency to amend a rule as part of the readoption process. Provides that if a rule is readopted without substantive change, the agency is not required to prepare a fiscal note. Makes clarifying and conforming changes. 

Authorize Licensing Boards to Adopt Rules for Professional Corporations

Adds new subsection (b) to GS 55B-12, application of regulations of licensing boards, to provide that subject to the requirements of Article 2A of GS Chapter 150B, any licensing board subject to GS Chapter 55B (Professional Corporation Act) may adopt rules to implement the provisions of this Chapter, including any rules needed to set fees within the limits set by this Chapter.

 Occupational Licensing Board Reporting Amendments

Amends GS 93B-2, concerning required annual reports of occupational licensing boards (OLB), adding reporting requirements that (1) each OLB must file electronically (previously, did not provide for electronic filing) their required annual reports, (2) required reports must also be filed with the Joint Legislative Administrative Procedure Oversight Committee (was, the Joint Regulatory Reform Committee), and (3) the annual reports must also now include the total number of licensees supervised by the board as well as the number who failed the licensing examination. Makes similar changes to the requirements for financial reports. Adds language that requires the Joint Legislative Administrative Procedure Oversight Committee to notify any board that fails to file the reports as required.

OAH Electronic Filing

Enacts new GS 150B-23.3 providing that the Office of Administrative Hearings is authorized to electronically file and serve documents in a contested case by using an Electronic Filing Service Provider (EFSP). Sets out and defines the following terms for use in this new subsection: electronic filing, EFSP, and electronic service. Section is effective when it becomes law and applies to contested cases filed on or after that date.

Streamline Rule-Making Process

Repeals GS 150B-19.1(h), which required agencies to obtain a certification of adherence to rulemaking principles before submitting the proposed text of a rule for publication. Amends GS 150B-21.4(a) to require an agency, before it publishes in the North Carolina Register the proposed text of a permanent rule change (was, before adopting a permanent rule change) that requires the expenditure or distribution of funds subject to the State Budget Act to submit the text of the proposed change, an analysis of the change, and a fiscal note on the change to the Office of State Budget and management and obtain certification that the funds that would be needed are available. Makes conforming changes. Amends GS 150B-21.4(b1) adding language to provide that when an agency's proposed rule change would have a substantial impact, it must also obtain a certification from the Office of State Budget and Management that it adhered to regulatory principles as set out in GS 150B-19.1(a)(2), (5), and (6). This section is effective when it becomes law, and applies to proposed rules published on or after that date.

State Board of Education Rule-Making Clarification

Amends GS 115C-12 to provide that the State Board of Education (State Board) is subject to Article 2A of GS Chapter 150B and may not implement or enforce a policy that meets the definition of a rule if the policy has not been adopted as a rule according to Article 2A. Amends GS 150B-23 to provide that if an agency fails to take any required action within the specified time period, any person whose rights are substantially prejudiced by the failure to act may commence a contested case seeking an order that the agency act. If the judge finds that the agency failed to act as required, the agency may be ordered to take the required action within a specified time period. Makes conforming changes to GS 150B-44.

Hardison Amendment Clarification

Amends GS 150B-19.3, concerning limitations of environmental rules, providing that rules required by a subdivision of GS 150B-19.3(a) will be treated as if they had received 10 written objections under GS 150B-21.3(b2), thus requiring a delayed effective date pursuant to GS 150B-21.3(b1), the earlier of the 31st legislative day or the day of adjournment of the next regular session of the General Assembly that begins at least 25 days after the date the rule was approved.  Effective September 1, 2014. 

Amends GS 150B-21.3A(a)(3), concerning periodic review of existing rules, providing that a rule will also be classified as necessary with substantive public interest if the rule imposes a more restrictive standard, limitation, or requirement than any imposed by federal law or rule.

Makes technical and conforming changes. Effective August 23, 2013.

Representation of Small Business Entities in Administrative Appeals

Amends GS 150B-23(a) to add that a business entity may represent itself in an administrative appeal using a nonattorney representative who is one or more of the following of the entity: (1) officer; (2) manager or member-manager, if the entity is a limited liability company; (3) employee whose income is reported on a W-2, if the entity authorizes the representation in writing and if the owner’s interest in the entity is at least 25 percent.  Makes the same additions to GS 105-290 (appeals to the Property Tax Commission).

 Legislative Appointments

Amends GS 120-121 by adding two new subsections, (e) and (f), regarding legislative appointments. Under subsection (e), when the Speaker of the House of Representatives (Speaker) or the President Pro Tempore of the Senate (President Pro Tem) is directed by law to make a recommendation for an appointment by the General Assembly and the legislator is also directed to make the recommendation in consultation or upon the recommendation of a third party, the following applies: (1) the recommendation or consultation is discretionary and not binding upon the legislator, (2) the third party must make the recommendation or consultation at least 60 days before the expiration of the term or within 10 business days from the occurrence of a vacancy, and (3) failure by the third party to submit the recommendation or consultation to the legislature within the required time periods are to be viewed as a waiver by the third party of the opportunity. Provides that subsection (f) applies when the Speaker or the President Pro Tem is directed by law to make a recommendation for an appointment by the General Assembly and the legislator is also directed to make the recommendation from nominees provided by a third party. Under subsection (f), the third party must submit the nominees at least 60 days before the expiration of the term or within 10 business days from when the vacancy occurs; if the third party fails to submit the nomination to the legislator within the time periods required under this subsection, the failure to submit the nomination is deemed a waiver on the part of the third party.

Enacts new GS 120-124, Appointments made by legislators, to provide that in any case where a legislator is called upon by law to appoint a member to a board or commission on the recommendation or in consultation with a third party, the recommendation or consultation is discretionary and is not binding on the legislator. Requires the third party to submit the recommendation or consultation at least 60 days before the expiration of the term or within 10 business days from the occurrence of a vacancy. Provides that in any case where a legislator is called upon by law to appoint a member to a board or commission from nominees provided by a third party, the third party must submit the recommendation or consultation at least 60 days before the expiration of the term or within 10 business days from the occurrence of a vacancy. Provides that this subsection does not apply to nominations that are made under GS 120-99(a) (creation and composition of the Legislative Ethics Committee) nor under GS 120-100(b) (filling a vacancy on the Legislative Ethics Committee). Failure to submit the recommendation, consultation, or nomination within the time periods required under this section shall be deemed a waiver of the opportunity by the third party.

Makes this section effective when it becomes law and applies to recommendations, consultations, and nominations made on or after that date.

Part II. Business Regulation

Prohibit Certain Headlights

Amends GS 20-131 (Requirements as to headlamps and auxiliary driving lamps) by creating a new subsection, GS 20-131(b1), that provides that no person will operate a vehicle with headlamps that change the original design or performance of the headlamps and do not comply with Federal Motor Vehicle Safety Standard No. 108. A violation of this subsection will result in a $100 infraction. Effective December 1, 2014, applying to offenses on or after that date. 

Bail Bond Shield Amendment

Amends GS 58-71-40 to allow the design of the shield carried by licensed bailbondsmen and runners to be altered by enameling or other specified processes to accommodate the license number. Requires the size of the shield to be 1.88 inches wide and 2.36 inches high. 

Amends GS 15A-540, concerning the surrender of a defendant by a surety, providing that a surety may use the services and assistance of any surety bondsman, professional bondsman, or runner licensed under GS 58-71-40 to effect the arrest or surrender of a defendant under (a) or (b) of the statute.

Repeal Outdated Public Utilities Statutes or Reports

Repeals GS 62-36.1 and GS 62-36A (both concerning natural gas planning). Amends GS 62-158(d) and GS 62-159(d), making conforming changes and deleting the specified reporting requirements. 

Repeals GS 62-133.2(g), which required the Utilities Commission to report, on July 1 of every odd-numbered year, to the Joint Legislative Commission on Governmental Operations on specified proceedings. 

Repeals SL 2002-4, Section 14; SL 2007-397, Section 14; and SL 1995-27, Section 6.1, all of which contained various public utilities reports.

Merchant Exemption from Locksmith Licensing

Amends GS 74F-16 to clarify the exemption for merchants from locksmith licensing requirements, providing that merchants are specified as exempt if they are (1) lawfully duplicating keys or maintaining locks in the normal course of business, (2) maintaining a physical location in North Carolina, (3) maintaining a sales and use tax permit pursuant to GS 105-164.16, and (4) not representing themselves as locksmiths.

Clarify Professional Engineer Exemption

Amends GS 89C-25 to provide that GS Chapter 89C (engineering and land surveying) does not prevent (in addition to those items listed in the statute): (1) the practice of architecture, as defined in GS Chapter 83A; landscape architecture as defined in GS Chapter 89A; or contracting as defined in Articles 1, 2, 4, and 5 of GS Chapter 87; (2) engaging in engineering or land surveying as an employee or assistant under the responsible charge of a professional (deletes employees or assistants of a nonresident professional provided that the work may not include responsible charge of design or supervision); and (3) the engineering or surveying activities of a person as defined in GS 89C-3(5) who is engaged in manufacturing, processing, producing, or transmitting and delivering a product, and which activities are reasonably necessary and connected with the primary services performed by individuals regularly employed in the ordinary course of business by the person, provided that the activity is not a holding out or an offer of engineering or surveying services (deletes current language concerning the internal engineering or surveying activities of a person, firm, or corporation engaged in manufacturing, processing, or producing a product, including activities of public service corporations, public utility companies, authorities, state agencies, railroads, or membership cooperatives, or the installation and servicing of the product in the field, and so forth). Specifies what is included in activities reasonably necessary and connected with the primary service and requires activities performed under this third category to be under the responsible charge of a licensed professional engineer or licensed professional surveyor when the safety of the public is directly involved.

Amends GS 89C-19 to prohibit the state or its political subdivisions from engaging in engineering or land surveying involving public or private property where the safety of the public is directly involved without the project being under the direct supervision of a professional engineer or land surveyor.

Clarify Effective Date of Definition of Discharge Waste

Amends Section 17 of SL 2012-187 to provide that Section 11 of the act (which amended the term "discharge" to provide that it does not include an emission which is a release into the outdoor atmosphere of air contaminants) is effective when the act became law and applies to contested cases filed or pending on or after the date that the act became law. Effective July 16, 2012.

ADA Requirements for Private Pools

Requires swimming pools to be accessible only to the extent required by the Americans with Disabilities Act. Requires the Building Code Council to adopt a rule to be consistent with this requirement.

Unclaimed Life Insurance Benefits

Enacts new Part 7 in Article 58 of GS Chapter 58, establishing the Unclaimed Life Insurance Benefits Act.  Requires an insurer to perform a comparison of in-force policies, annuities, and account owners that are available electronically against a death master file (DMF) on a semiannual basis. If the records are not available electronically, the insurer must perform a comparison of the policies, annuities, and account owners against a DMF on a semiannual basis using the records most easily accessible by the insurer. The Commissioner of Insurance is allowed to exempt an insurer from the DMF comparisons if the insurer demonstrates that compliance would result in hardship. These requirements do not apply to policies or annuities for which the insurer has received premiums from outside the policy value or by check, bank draft, payroll deduction, or any other similar method of active payment within the 18 months immediately preceding the death master file comparison. Specifies four actions that must be taken when the insurer learns of the possible death of a person, including determining whether benefits may be due and providing the beneficiary with the appropriate forms or instructions to make a claim and notifying the beneficiary of the actions needed to submit a valid claim. The actions must be taken within 90 days and documented. If an insurer is unable to confirm the death following a DMF match, the insurer may determine that no further good faith efforts are required. Prohibits charging any beneficiary, or others entitled to benefits, any fees or costs associated with a DMF search or verification. Requires that benefits, accrued interest, and interest payable under GS 58-58-110 be first paid to the beneficiaries or account owners; if those individuals cannot be found, the benefits and associated interest escheat to the state as unclaimed property. Enacts new GS 58-58-400 to provide that a pattern of failures to meet the Part requirements may constitute an unfair claims settlement practice. 

Exempt Small Business Entities Buying or Selling Entity-Owned Property

Amends GS 93A-2(c)(1), concerning license requirements of real estate brokers, providing that owners of an exempt closely held business as well as officers, managers, and employees of a closely held business entity owned by a person meeting the specified qualifications are not subject to licensure or other requirements found in GS 93A-1 or 93A-2. Makes organizational and clarifying changes to the statute. Adds that when a person conducts a real estate transaction under an exemption in the statute, the person must disclose specified information about the person and the exemption in writing.

Add Limited Liability Companies to the Types of Corporations That May Lease or Purchase Hospital Facilities.

Amends GS 131E-6(3) to provide that limited liability companies formed under GS Chapter 57D and a foreign limited liability company which has procured a certificate of authority to transact business in North Carolina are considered to be corporations authorized to do business in North Carolina. Effective October 1, 2014.

Clarify Membership under Insurance Guaranty Association Act

Amends GS 58-48-20 to add that the term "covered claim" includes all claims incurred against a workers’ compensation group self-insured, licensed and regulated under Part 1 of Article 47 of GS Chapter 58 that merged with a member insurer on or after January 1, 1997.

Amends GS 97-131 to add that the membership in the NC Self-Insurance Security Association of an individual self-insurer or group ends for the purposes of another member’s insolvency or any other purpose upon the merger of the individual or group to a mutual insurance company or a stock insurance company on or after January 1, 1997.

Broker-in-Charge

Amends GS 93A-4(a1) to require the Real Estate Commission to determine trust accounts to be a subject within the 90 hours of classroom instruction for real estate brokers. Amends GS 93A-4.2 to provide that a real estate broker operating as a sole proprietor is not required to be designated as a broker-in-charge if the real estate broker has completed the trust accounts subject course portion of the classroom instruction.  Effective December 1, 2014.

Requires the Real Estate Commission to allow any real estate broker operation as a sole proprietor who has completed the 90 hours of classroom instruction on or before July 1, 2014, but has not completed the trust accounts subject course to complete just the trust accounts subject course in order to qualify for the exemption in GS 93A-4(b). Effective December 1, 2014, and expires December 31, 2016.

Requires the Real Estate Commission to adopt temporary rules to implement the section by December 1, 2014.

Part III. State and Local Government Regulation

Notify Property Owners of Right-of-Way Transfers

Amends GS 136-66.10 (dedication of right-of-way under local ordinances) to require local governments that require or accept right-of-way dedications in exchange for transferred density credits to notify the applicant and the property owner when the local government begins review of or negotiations for a right-of-way dedication and associated density credit transfer, whichever occurs first. Provides details for sending the notification and providing notification when the property owner is not the applicant. Applies to dedications occurring on or after October 1, 2014. 

Corridor Map Changes

Amends GS 136-44.51 to prohibit an application for a building permit issuance or subdivision plat approval for a tract subject to a valid transportation corridor official map from being delayed for more than two years (was, three years) from the date of its original submittal. Effective October 1, 2014.

Notice to Chronic Violators

Repeals GS 160A-200 (city annual notice to chronic violators of overgrown vegetation ordinance).

Amends GS 160A-200.1 (annual notice to chronic violators of public nuisance ordinance) to add that cities may also give notice to a chronic violator of the municipality's overgrown vegetation ordinance in accordance with this statute.

Repeal Obsolete Department of Insurance Statutes

Repeals GS 58-2-170 (Annual statements by professional liability insurers; medical malpractice claim reports); GS 58-3-191(a) (which required each health benefit plan to annually file in the office of the Commissioner the specified information for the previous calendar year) and (b1) (which provided that effective March 1, 1998, insurers shall make the reports that are required under subsection (a) of this section and that have been filed with the Commissioner available on their business premises and shall provide any insured access to them upon request); GS 58-67-140(a)(7) (allowing HMO license suspension or revocation for knowingly publishing or making any false statement or report, including any report or any data that serves as the basis for any report, required to be submitted under GS 58-3-191); GS 58-36-3(c) (requiring the Department of Insurance to report annually to the President Pro Tempore of the Senate and the Speaker of the House of Representatives on the effectiveness of SL 2001-389 in assuring the provision of insurance coverage to motorcyclists at fair and economical rates); GS 58-40-130(e) (concerning a report that was to be made by July 1, 1988); and GS 58-50-95 (the Commissioner shall report annually to the Joint Legislative Oversight Committee on Health and Human Services regarding the nature and appropriateness of reviews conducted under this Part). Makes conforming changes.

Study Post-Arrest Photographic Images Not Public

Requires the Administrative Office of the Courts and the Department of Public Safety to study whether photos of individuals charged with a crime should be a public record. Requires a report to the Joint Legislative Oversight Committee on Justice and Public Safety by December 31, 2014.

Compliance with Building Code Inspection Requirements

Amends GS 153A-360 (county inspections of work in progress) to provide that the statute's provisions are subject to GS 153A-235(a) (which provides that a county may not adopt a local ordinance or resolution or any other policy that requires regular, routine inspections of buildings or structures constructed in compliance with the North Carolina Residential Code for One- and Two-Family Dwellings in addition to the specific inspections required by the North Carolina Building Code without first obtaining approval from the North Carolina Building Code Council).

Amends GS 160A-420 (city inspections of work in progress) to provide that the statute's provisions are subject to GS 160A-412(b) (a city may not adopt a local ordinance or resolution or any other policy that requires regular, routine inspections of buildings or structures constructed in compliance with the North Carolina Residential Code for One- and Two-Family Dwellings in addition to the specific inspections required by the North Carolina Building Code without first obtaining approval from the North Carolina Building Code Council). 

Building Code Study

Requires the NC Building Code Council to study the authority given to local building inspectors in those counties and cities where building plans are reviewed and approved before the issuance of a building permit pursuant to specified statutes. Requires a report to the 2015 General Assembly on or before January 15, 2015.

Extend Deadline for Adoption of Division of Employment Security Rules

Amends Section 1.10(c) of SL 2011-401 by extending the deadline by which the Division of Employment Security (Division) must adopt all existing rules and regulations under GS Chapter 150B, Article 2A, from December 31, 2012, to December 31, 2015. Effective December 31, 2012.

Requires the Division to report to the Joint Legislative Oversight Committee on Unemployment Insurance on its progress by September 3, 2014. Amends GS 120-70.156 to add to the powers of the Joint Legislative Oversight Committee on Unemployment Insurance the ability to review rules adopted by the Division and recommending policies and procedures to ensure the Division is operating in conformity with GS Chapter 96 and federal laws and regulations.

Building Code Alternate Approval Methods Study

Requires the NC Building Code Council to study the policies and procedures for the approval of alternative materials, designs, or methods. Specifies three elements that must be included in the study. Requires a report to the 2015 General Assembly on or before January 20, 2015.

Clarify Official Misconduct for Code Officials

Amends GS 143-151.8 to provide that for purposes of the Article (North Carolina Code Officials Qualification Board), willful misconduct, gross negligence, or gross incompetence also includes four additional items, including the enforcement of a code requirement applicable to a certain area or set of circumstances in other areas or circumstances not specified in the requirement, and the enforcement of a requirement that is more stringent than or otherwise exceeds the code requirement. Requires the NC Code Officials Qualification Board to, by October 1, 2014, notify all Code enforcement officials in the state of the clarification to the grounds for disciplinary action enacted by this section.

Enforce Municipal Floodplain Ordinance in ETJ

Amends GS 160A-360(k) to add that for complying with 44 CFR Part 60, Subpart A, property that is exempt from the exercise of extraterritorial jurisdiction under subsection (k) is subject to the county’s floodplain ordinance or all floodplain regulation provisions of the county’s unified development ordinance.

Statewide Venus Flytrap Penalties

Enacts new GS 14-129.3 making it a Class H felony to dig up, pull up, take, or carry away or aid in such, any Venus flytrap plant or seed that is growing on another’s land, or in the public domain, with the intent to steal. Exempts anyone with a permit to perform the act, signed by the land owner, and requires the permit to be in the person’s possession at the time of the act.

Amends GS 14-129 to increase the minimum fine from $10 to $75 and the maximum fine from $50 to $175 for digging up, pulling up, or taking any of the plants listed in the statute from another's land or any public domain. Ads that each plant taken constitutes a separate offense. Requires the clerk of court for the jurisdiction in which a conviction occurs  involving any species listed in the statute that also appears on the NC Protected Plants list to report the conviction to the Plant Conservation Board so that the Board may consider a civil penalty. Makes the statute statewide, removing the exemption for 22 listed counties.

Provides that if Senate Bill 38 (Amend Environmental Laws 2014), 5th edition, becomes law, then Section 10 of the act, amending GS 14-129, is repealed.

Applies to offenses committed on or after December 1, 2014.

Community College Brewing Waiver

Enacts new GS 18B-1114.6 to allow the holder of a brewing, distillation, and fermentation course authorization to (1) manufacture malt beverages on the school’s campus or the school’s contracted or leased property for providing instruction and education on making malt beverages; (2) possess malt beverages manufactured during the brewing, distillation, and fermentation program for the purpose of conducting malt beverage tasting seminars and classes; (3) sell malt beverages produced during the course to wholesalers or retailers upon obtaining a malt beverages wholesaler permit; and (4) sell malt beverages produced during the course, upon obtaining a permit. Limits the authorization for the course to community colleges or colleges offering a brewing, distillation, and fermentation program as a part of its curriculum. Allows the holder of the course authorization who obtains a malt beverage wholesaler permit to obtain a malt beverage special event permit and where the permit is valid, allows participation in approved events and selling at retail at those events any malt beverages produced incident to the operation of the program. Sets limitations on the events. Makes conforming changes to GS 18B-1114.5, GS 18B-1101, and GS 66-58.

Good Samaritan Law

Amends GS 90-21.14 to clarify that, in order to be exempt from liability, a person must voluntarily and without expectation of compensation (was, receives no compensation for services as an emergency medical care provider) provide first aid or emergency health care.

Notice Publication-Certain Local Governments

Enacts new GS 153A-52.2, Electronic notice, allowing governing boards of local government to adopt an ordinance that will allow them to electronically publish any notice they are otherwise required to publish by law. The ordinance may cover all notices required to be published or certain selected classes of notices. Any notice published under the above ordinance must comply with the following conditions:

(1) The notice is published on the website of the governing board no later than the time required for publication under applicable law or act.

(2) The website contains, on its main page or index, links to all notices or a link to another page with links to all notices.

(3) Notices and links must be maintained on the website for at least one year after publication.

(4) A copy of the notice must be filed in a notice book, separately maintained and apart from the ordinance book or minutes of the governing board. The notice books must also be indexed and maintained for public inspection.

(5) A copy of the notice must be mailed or emailed to a person that has filed a written request for notice with the clerk or secretary of the governing board.

Such ordinances that allow electronic publication cannot supersede any general law or local act that requires notice by mail to certain persons or classes of persons or the posting of signs on certain property. The ordinance may control notice requirements for any board appointed by the governing board of the county, including the board of social services and the board of health.

Amends GS 160A-1(7), 153A-1(6), and 159-1(b)(5) to include the following: (1) electronic notice, as provided in GS 153A-52.2, if an ordinance has been adopted by the governing board and (2) insertion in a news publication circulated in the county, published at least once per week, and with an audited readership of at least 25,000 persons in each section's description and definition of publish. 

Amends GS 163-33, Powers and duties of county boards of elections, stating the county board can adopt a policy to provide for notices, advertisements, and publications to be given electronically.

Applies only to Guilford and Mecklenburg counties and to any city located wholly or partly within those counties.

Effective October 1, 2014, applying to notices given on or after that date.

ABC Permits/Schools and Colleges

Amends GS 18B-1006(a) to prohibit a permit for the sale of alcoholic beverages (was, sale of malt beverages, unfortified wine, or fortified wine) from being issued to a business on the campus or property of a public school, college, or university (was, just of a public school or college). Adds to and amends the exemptions.

Distillery Tastings Clarification

Amends GS 18B-101(19) to add to the conditions under which distillery permit holders may conduct a consumer tasting event at the distillery to include if the tasting is held either in the distillery itself or any other building or structure on property that is contiguous to the property where the distillery is located that the permit holder has control of through a lease, deed, or other legal process.

Part IV. Health and Safety Regulation

Limited Food Services at Lodging Facilities

Amends GS 130A-247 to add that limited food service establishments includes lodging facilities serving only reheated food that has been pre-cooked. Amends GS 130A-148 to add lodging facilities that serve only reheated food that has been pre-cooked to those establishments that may be issued a limited food service establishment permit. Requires the Commission for Public Health to adopt rules to conform to these provisions.

Nursing Home Administrator Act Revision

Amends GS 90-280 to remove the requirement that the exam for applicants for an administrator in training program and reciprocity endorsement be conducted by the State Board of Examiners for Nursing Home Administrators.

Report on SEEK

Requires the Division of Child Development and Early Education to report to the Joint Legislative Oversight Committee on Health and Human Services and the 2015 General Assembly before the state implementation of the Subsidized Early Education for Kids System by March 15, 2015. Specifies items to be included in the report.

Report on Multiplicative Auditing and Monitoring of Certain Service Providers

Requires the Deputy Secretary of Behavioral Health and Developmental Disabilities Services of the Department of Health and Human Services to report, by December 1, 2014, to the Joint Legislative Oversight Committee on Health and Human Services on the status of multiplicative auditing and monitoring of all provider agencies under the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services who have been nationally accredited. Specifies items to be included in the report.

End Sunset for Facilities That Use Alternative Electronic Monitoring Systems

Amends Section 4 of SL 2009-490, as the title indicates.

State Medicaid Recredentialing Period

Codifies Section 12H.7 of SL 2013-360 as GS 108C-9(e). Amends the provision to require that the fee be charged to all providers at recredentialing every five (was, three) years, effective July 1, 2017, and applying to all recredentialings due on or after that date.

Use of Natural Spring Water at Co-Located Restaurants

Provides that notwithstanding 15A NCAC 18A .1723, a spring that tranverses a restaurant's property may be used for water service to restaurant customers, and to employees, for consumption without requiring that it be equipped with a continuous disinfection device. Also provides that the owner will not be required to submit a certification to the Department of Public Health concerning the spring, or be subject to other requirements with respect to water service from the spring, except as required by the federal Safe Drinking Water Act. Requires the Commission for Public Health to adopt rules to amend 15A NCAC 18A .1723 consistent with these provisions, at which time the provisions expire. 

Enacts new GS 130A-330 to allow a spring transversing restaurant property to be used for the purpose of water service to restaurant customers, and for employees, and makes it exempt from any requirements for disinfection of the spring water and other requirements that apply to a public water system. The provision applies only to the extent it is not preempted by the federal

Safe Drinking Water Act.

Interstate Connectivity of the Controlled Substances Reporting System

Directs the Department of Health and Human Services to execute a memorandum of understanding with the National Association of Boards of Pharmacy to participate in PMP Interconnect.

Amend Hotel Carbon Monoxide Alarm Requirement

Repeals Section 19(c) of SL 2013-413, which was to become effective October 1, 2014, and was to require that carbon monoxide detectors receive primary power from the building's wiring where the wiring is served from a commercial source and receive power from a battery when the primary power source is interrupted. Makes conforming changes to defunct effective dates in SL 2013-413.

Amends GS 143-138(b2), concerning carbon monoxide alarms (CMAs), providing updates to the requirements for CMAs in hotels, allowing, in lieu of requiring a CMA in a lodging establishment a carbon monoxide detection system, with detectors and audible notification appliances installed and properly maintained. Requires CMAs in every dwelling unit having a combustion (was, fossil fuel) heater. Makes the rules for lodging establishments also applicable to tourist homes providing accommodations for seven or more days, bed and breakfast inns, and homes. Defines combustion heater, appliance, or fireplace for use in this section.

Directs the Building Code Council (BCC) to modify the NC State Building Code (Code) to reflect and regulate the provisions of GS 143-138(b2) in new and existing lodging establishments. Provides that the BCC can establish more stringent rules regulating CMAs and detectors if so desired. Directs the BCC to modify the Code to include an annual inspection for the purpose of verifying compliance with GS 143-138(b2).

Outlines procedure for when a violation that poses an imminent hazard is discovered and is not corrected upon inspection.  Procedures include the code official immediately contacting the local health director/designee for the county where the violation was discovered by verbal contact and also submitting a written report documenting the violation to said director. The local health director is then obligated to investigate and take appropriate action regarding the permit of the lodging establishment within one working day of the reciept of the written report.

Violations that are discovered but do not pose imminent hazard but are not corrected during an inspection are subject to a correction period of three working days during which the owner or operator can submit a notice, verbal or written, that the violation has been corrected. If the code official receives such notice, a re-inspection can be performed. If no such notice is received, the code official will submit a report to the local health director within three working days. The local health director is then obligated to investigate and take appropriate action regarding the permit of the lodging establishment.

Exempts property subject to GS 42-42 (Landlord to provide fit premises) or GS 42A-31 ( Landlord to provide fit premises) from the requirements of GS 143-138(b2)(2) through (d).

Makes technical and conforming changes, updating language of GS 143-138(b2).

Amends GS 130A-248(g), deleting language that required all hotels, motels, tourist homes, and other establishments that provide lodging for pay to install either a battery-operated or electric carbon monoxide detector in every enclosed space meeting specified conditions. Provides new language that requires those establishments to comply with requirements of GS 143-138(b2)(2).  Provides that after receiving notification of a violation of GS 143-138(b2)(2) by a specified code official, the local health department can suspend permits issued pursuant to GS 130A-248.

Requires the Building Code Council, by March 31, 2015, to adopt a rule to amend the NC State Building Code (Fire Prevention) as it applies to structures required to comply with GS 143-138(b2)(2), as amended, to adopt the standards for carbon monoxide alarms in the 2015 International Fire Code. The effective date of the rule must be no later than June 1, 2015.

Pharmacy Benefits Management Regulation

Enacts new Article 56A, Pharmacy Benefits Management in GS Chapter 58. Provides that in order for a prescription drug to be placed on the maximum allowable cost price list, the drug must be available for purchase by pharmacies in the state from national or regional wholesalers, must not be obsolete and either (1) be listed as “A” or “B” rated in the most recent version of the US Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations or (2) have an “NR” or “NA” rating, or similar rating, by a nationally recognized reference. Requires a pharmacy benefits manager to remove a maximum allowable cost price for a prescription drug, or modify a maximum allowable cost price, as necessary for a cost of a prescription drug to remain consistent with changes in the national marketplace. Requires a review of the maximum allowable cost prices for removal or modification to be completed by the pharmacy benefits manager at least once every seven business days and any removal or modification to occur within seven business days. Requires a pharmacy benefits manager to provide a way for the contracted pharmacies to promptly review current prices within one business day of the change or removal. Effective January 1, 2015, and applies to contracts entered into, renewed, or amended on or after that date.

Requires the Department of Insurance, in collaboration with the Department of Commerce and the NC Board of Pharmacy to study pharmacy benefits management company regulation. Specifies issues to be studied. Requires a report to the General Assembly by January 20, 2015.

CBD Oil Amendment

Amends GS 90-113.102 to require the Department of Health and Human Services to create an online Intractable Epilepsy Alternative Treatment database registry (was, Pilot Study database registry) for the registration of research studies (was, pilot studies), neurologists, caregivers, and patients. Requires that the registry be accessible to law enforcement for the limited purpose of verifying registered caregivers' names, provided that no patient identifying information or patient information protected under HIPAA is disclosed. Removes the requirement that the Department contact the county department of health where the patient lives and provide the name and address of the registered caregiver and identifying information contained on the caregiver registration card. Makes conforming changes to GS 90-113.101, GS 90-113.103, GS 90-113.104, and GS 90-113.105 replacing references to the "pilot study" with "research study."

Amends GS 90-113.104 to add to the criteria that must be met in order to receive a caregiver registration card that the individual be a resident of North Carolina.

Amends GS 90-113.105 to make the immunity provisions available to neurologists conducting registered research studies and their associated institutions and expands the provision to include immunity for possession of hemp extract. Effective upon adoption of rules under Section 4 of SL 2014-53, makes conforming changes to GS 90-94.1.

Animal Euthanasia Requirements

Amends GS 19A-24 to require the Board of Agriculture to adopt rules to ensure the correct calculations of chemicals used in the euthanasia of animals include dosage based on the species age, weight, and condition of the animal and that the information recorded during the process include specified information, including dosages for drugs administered and the amounts for drugs wasted. Specifies how an animal is to be weighed when any chemical agent has instructions that direct the amount of the dosage to be determined based on weight; also requires documentation when the amount administered varies from the recommendation. Effective September 1, 2014.

Part V. Environmental Regulation

Contested Cases For Air Quality Permits

Amends GS 143-215.108(e) to no longer apply to a third party who is dissatisfied with a decision of the Commission to commence a contested case by filing a petition under GS 150B-23. Provides that the filing of a petition under this subsection will stay the Commission’s decision until the contested case is resolved. Adds subsection (e1) to provide that a person, other than a permit applicant or permittee, who is aggrieved by the Commission’s decision on a permit application may begin a contested case by filing a petition under GS 150B-239 within 30 days after the Commission provides notice after its decision on a permit application, as provided in GS 150B-23(f), or by posting the decision on a publicly available website. Provides that in a contested case filed under this subsection, “substantial prejudice” to the petitioner in a contested case filed under this subsection means the exceedance of a national ambient air quality standard. Provides that the filing of a petition under this subsection does not stay the Commission’s decision except as ordered by the administrative law judge under GS 150B-33(b).

Closure of Certain Animal Waste Containment Basins

Amends Part 1A of Article 21 of GS Chapter 143 by adding new GS 143-215.10J, which directs DENR to consider any waste containment basin to be a fresh water storage facility meeting all the requirements for closure under 15A NCAC 02T. 1306 if the owner of the basin can demonstrate to DENR that the basin meets all of the five specified requirements. Directs the Department to provide written notification to the owner of a basin that it is no longer considered an animal waste management system.

Contested Cases for CAMA Permits

Amends GS 113A-121.1(c) to provide that when an applicant seeks administrative review of a decision concerning a minor or major development permit under subsection (a) of this section, the permit is suspended from the time that a person seeks administrative review of the decision until the Commission makes a final decision in the contested case and no action may be taken during that time that would be unlawful in the absence of a permit. Adds subsection (d) to provide that a permit challenged under subsection (b) remains in effect unless a stay is issued by the administrative law judge or by a reviewing court.

Permit Choice

Enacts new GS Chapter 143, Article 80, titled Permit Choice, providing that if a permit applicant submits a permit for any type of development but a rule or ordinance changes between the time the permit application was submitted and the permit was granted, then the permit applicant can chose which version of the rule or ordinance will apply to the permit.  Applies to all development permits issued by the State and local governments; does not apply to any zoning permits. Effective when it becomes law and applies to permits for which a permit decision has not been made by that date.

Environmental Self Audit Privilege and Limited Immunity

Enacts new Part 7D in GS Chapter 8, Environmental Audit Privilege and Limited Immunity, to create an environmental audit privilege to protect the confidentiality of communications relating to voluntary internal environmental audits. Defines environmental audit. Applies to activities regulated under environmental laws including (1) Article 7 of GS Chapter 74; (2) GS Chapter 104E; (3) Article 25 of GS Chapter 113; (4) Articles 1, 4, and 7 of GS Chapter 113A; (5) Article 9 of GS Chapter 130A; (6) Articles 21, 21A, and 21B of GS Chapter 143; and (7) Part 1 of Article 7 of GS Chapter 143B. Makes an environmental audit report privileged and immune from discovery and provides that it is not admissible as evidence in civil or administrative proceedings instituted by an enforcement agency. Lists seven documents that are exempt from the privilege. Provides that the privilege does not apply to criminal investigations or proceedings.

Provides that the privilege does not apply to the extent that it is expressly waived in writing. Specifies persons to whom the audit report and information generated from the audit may be disclosed without waiving privilege. Specifies instances in which disclosure of the audit does not constitute a waiver.

Requires an owner or operator, in order to assert the privilege, to notify the enforcement agency of the existence of the audit, no later than 10 working days after an agency completes an inspection.

Allows an enforcement agency to seek by motion a declaratory ruling on the issue of whether an environmental audit report is privileged in a civil or administrative proceeding. Sets forth the circumstances under which the privilege can be revoked.

Provides that a party asserting the privilege has the burden of providing that (1) the materials claimed as privileged constitute an environmental audit report and (2) compliance has been achieved or will be within a reasonable period of time. A party seeking disclosure has the burden of providing the condition for disclosure.

Provides that the owner or operator of a facility is immune from imposition of civil and administrative penalties and fines for a violation of environmental laws voluntarily disclosed. The waiver of penalties and fines is not granted until the agency has certified that the violation was corrected within a reasonable period of time. Specifies conditions that must be met in order for a disclosure to be considered voluntary. Specifies factors that make a disclosure nonvoluntary. A voluntary disclosure is subject to disclosure under the Public Records Act.

Prohibits local laws, rules, ordinances, or permit conditions that circumvent or limit the privilege or the exercise of the privileges or the presumption and immunity established.

Provides that an owner or operator of a facility who makes a voluntary disclosure of a violation of environmental laws discovered through performance of an environmental audit is only entitled to exercise the privilege or immunity once in a two-year period, no more than twice in a five-year period, and no more than three times in a ten-year period.

Effective October 1, 2014, and applies to environmental audits conducted on or after that date.

Ambient Air Monitoring

Requires DENR to review its ambient air monitoring network and, in the next annual monitoring network plan, request the removal of any ambient air monitors not required by federal law and regulations. Requires DENR, by October 1, 2014, to stop using all ambient air monitors not required by federal law if approval is not needed from the EPA for the discontinuance. Requires the Division of Air Quality to report to the ERC by November 1, 2014, on the status of the ambient air monitoring network and implementation of these requirements.

Coastal Stormwater Grandfather

Provides that the provision and requirements applicable to any grandfathered development activity subject to (a)(2) of 15A NCAC 02H .1005 is also applicable to an expansion of the development activity. Defines grandfathered development activity. Requires the adoption of a rule to amend 15A NCAC 02H .1005 consistent with the bill requirements.

Amend Isolated Wetlands Regulation

Requires the Environmental Management Commission to adopt a rule to amend 15A NCAC 02H .1305 (Review of Applications) so that when implementing the rule (1) the amount of impacts of isolated wetlands is less than or equal to 1 acre of isolated wetlands for the entire project; (2) the mitigation ratio for impacts greater than 1 acre for the entire project under 15A NCAC 02H .1305(g)(6) is 1:1 and may be on the same parcel; (3) impacts to isolated wetlands are not combined with the project impacts to jurisdictional wetlands or streams for determining when impact thresholds triggering a mitigation are met; and (4) for purposes of Section 5.9(b) of the act, isolated wetlands means a Basin Wetland or Bog, as described in the specified manual, that is greater than 1 acre in size. Identical provisions are in effect when the act becomes law and expire on the date that the required rule is adopted.

Requires the Department of Environment and Natural Resources to study the surface area thresholds for the regulation of mountain bog isolated wetlands and report to the Environmental Review Commission on or before November 1, 2014.

Clarify Isolated Wetlands Regulation

Provides that if Senate Bill 38 (Amend Environmental Laws 2014) becomes law, Section 8 (amend isolated wetlands regulation) is repealed.

Interstate Mining Compact Clarification

Amends GS 74-37 to provide that in any instance where a governor is unable to attend a meeting of the Interstate Mining Commission or perform any functions in connection with the Commission’s business, the governor must designate an alternate from among the members of the advisory body required in the statute or the division director in the state environmental protection agency with responsibility for protecting and restoring lands affected by mining.

Change Name of Ecosystem Enhancement Program to Division of Mitigation Services

Replaces all occurrences of the title Ecosystem Enhancement Program with Division of Mitigation Services in the following statutes:  GS 143-214.8, 143-214.9, 143-214.10, 143-214.11, 143-214.12, 143-214.13, and 143-214.14.

Additionally, amends GS 143-214.9 to provide that it is not the policy of this state to destroy upland habitats unless it furthers the purposes of the Division of Mitigation Services to do so (was, Wetlands Restoration Program).

Also amends GS 143-214.12(a1) to delete provision that requires a recipient of funds distributed from the Ecosystem Restoration Fund (ERF) by the Department of Environment and Natural Resources (DENR) to grant a conservation easement or interest in real property acquired with the funds to DENR. Instead, permits a recipient of funds from the ERF who acquires a conservation interest or an interest in real property connected to a restoration project delivered to the Division of Mitigation Services and secures approval from DENR to directly transfer the conservation easement or real property interest to a third-party nonprofit conservation organization or other governmental agency.

Amend Pre-Drilling Testing of Water Supplies

Amends GS 113-423(f), as amended by Section 13(b) of SL 2014-4, to clarify specifications regarding pre-drilling testing of water supplies. Makes an exception to identifying analytical results from testing conducted under this section as a public record under GS Chapter 132, requiring that the testing results be posted on DENR’s website as a public record except when the surface owner specifies in writing at the time the results are provided to DENR that the results are not to be made a public record.

Local Air Pollution Control Programs

Amends GS 143-215.112 to prohibit local air pollution control programs from limiting or regulating any combustion heater, appliance, or fireplace in private dwellings. Amends GS 143-215.108 to provide that the statute does not give the Environmental Management Commission or DENR the power to regulate the emissions from any combustion heater, appliance, or fireplace in private dwellings.

Amends GS 160A-193 to provide that the statute does not authorize the application of a city ordinance banning or limiting outdoor burning to persons living within one mile of the city unless the city provides those persons with either (1) trash and yard waste collection services or (2) access to solid waste drop-off sites on the same basis as city residents.

Part VI. Severability Clause and Effective Date

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

Effective when the act becomes law, unless otherwise indicated.