Senate committee substitute to the 1st edition makes the following changes.

Requires that the Department of Transportation's report on their study of the impact that reforms to the State Environmental Policy Act have had on transportation projects also be given to the Joint Legislative Transportation Oversight Committee. 

Enacts new GS 116-143.9, which requires the UNC Board of Governors to establish a fixed tuition plan (plan) for the University of North Carolina System (UNC System). Provides that the plan is to be available to any undergraduate student seeking a baccalaureate degree admitted to any constituent institution in the UNC System who also qualifies as a state resident for tuition purposes. Requires the plan to include four components as follows. Requires a guaranty that the cost of tuition will continue to be the same amount during the tuition period. Requires the tuition period to be according to the following four classifications, except as provided in subsection (b) of the statute. (1) For a student who is classified as a freshman based on credit hours at the time of the student's enrollment, the tuition period must be eight consecutive academic semesters for a student seeking a baccalaureate degree in a four-year program or 10 consecutive academic semesters for a student seeking a baccalaureate degree in a program officially designated by the UNC Board of Governors as a five-year program, including any summer sessions. (2) For a student who is classified as a sophomore based on credit hours at the time of the student's enrollment, the tuition period must be six consecutive academic semesters for a student seeking a baccalaureate degree in a four-year program or eight consecutive academic semesters for a student seeking a baccalaureate degree in a program officially designated by the Board of Governors as a five-year program, including any summer sessions. (3) For a student who is classified as a junior based on credit hours, the tuition period must be four consecutive academic semesters for a student seeking a baccalaureate degree in a four-year program or six consecutive academic semesters for a student seeking a baccalaureate degree in a program officially designated by the UNC Board of Governors as a five-year program, including any summer sessions. (4) For a student who is classified as a senior based on credit hours at the time of enrollment, the tuition period must be two consecutive academic semesters for a student seeking a baccalaureate degree in a four-year program or four consecutive academic semesters for a student seeking a baccalaureate degree in a program officially designated by the UNC Board of Governors as a five-year program, including any summer sessions. Requires the student to remain enrolled continuously at the same constituent institution during the entire tuition period, except as provided in subsection (b) of the statute. Requires that, at the end of the tuition period, the cost of tuition reverts to the current tuition for that constituent institution and a tuition surcharge is imposed under GS 116-143.7 if applicable.

Provides in subsection (b) that upon application by a student, the fixed tuition plan may be tolled if the student is able to demonstrate that the student's pursuit of a degree has been substantially disrupted or interrupted by a military service obligation, serious medical debilitation, a short-term or long-term disability, or other extraordinary hardship. Directs the UNC Board of Governors to establish the appropriate procedures to implement subsection (b) of the statute.

Establishes that, if a student who is already enrolled in a baccalaureate degree program at a constituent institution on the date this act becomes effective and wants to participate in the fixed tuition plan, the student's fixed tuition rate is to be the amount of the tuition rate on the effective date of the statute and the student's tuition period is to be determined according to the classifications set out in GS 116-143.9(2) (intends GS 116-143.9(a)(2)), as enacted.

Applies to any student who enrolls or is enrolled in a baccalaureate degree program at a constituent institution of the UNC System beginning with the 2017-18 fall academic semester.

Amends GS 143C-5-4, previously titled Enactment deadline, now renamed Enactment deadline; procedures to be followed when the Current Operations Appropriations Act does not become law prior to the end of certain fiscal years. Makes organizational changes and adds new subsection (b) - If Appropriations Act Does Not Become law Prior to End of Certain Fiscal Years - establishing and setting out nine specified procedures and limitations that must apply when a fiscal year begins and a current operations appropriations act is not law, including that the Director of the Budget can continue with allocations as long as they don't exceed the level of recurring expenditures from the prior fiscal year, and vacant positions in the General Assembly are not filled. Further restricts any public school employee that is paid on the teacher salary schedule or school based administrator schedule from moving up salary schedules or automatic step increases. Also includes provisions governing State employee salaries, State employer contribution rate, statutory transfers to reserves, and expenditure of Federal Block Grants and other grant funds. 

Amends GS 163-82.19, to require that, in addition to requiring the Division of Motor Vehicles (DMV) to modify its forms so that any eligible person who applies for original issuance, renewal, or correction of a driver's license or special identification card issued under GS 20-37.7, the person must (was, the person may) complete an application to register to vote, or to update the voter's registration if the voter has changed his or her address or moved from one precinct to another or from one county to another, on part of the form.  Also provides that, in addition to providing the information requested in subsection (a) of the statute and listed under GS 163-82.4, an applicant must provide a notation on the form attesting that the applicant meets all the voter eligibility requirements, including United States citizenship, and whether the applicant affirmatively declined to become a registered voter while conducting business at the drivers license office.

Provides that all applications are to be forwarded by the Department of Transportation (Department) to the appropriate board of elections no later than five business days after the date of acceptance according to rules which are to be promulgated by the State Board of Elections, unless an applicant affirmatively declines to become a registered voter or update the applicant's voter registration while at the driver's license office (currently, there is no unless clause). Establishes that nothing in GS 163-82.19(a), as amended, is to be construed as requiring the Department to determine eligibility for voter registration and voting.

Effective January 1, 2017, and applies to elections held on or after that date.

Appropriates $250,000 from the General Fund to the State Board of Elections for the 2016-17 fiscal year for the purpose of implementing the requirements for automatic voter registration under the act. Effective July 1, 2016.

Current GS 19A-63(a) conditions a county or city's eligibility for reimbursement from the Spay/Neuter Account (established under GS 19A-62) on whether the county or city offers one or more of the specified programs to low-income persons on a year-round basis for the purpose of reducing the cost of spaying and neutering procedures for dogs and cats.

Amends the second allowed program which allowed a spay/neuter clinic to be operated by a non-profit organization under contract or other arrangement with the county or city (no longer requires that the non- profit organization contract with a local veterinarian to perform the spay-neuter procedures). Amends the fourth allowed program which provides for a subvention of the spaying and neutering costs incurred by low-income pet owners through the use of vouchers or other procedures that provides a discount of the cost of the spaying or neutering procedure fixed by a participating veterinarian or other provider (currently, only allows cost fixed by a participating veterinarian).  

Amends the definition of low-income person as it applies in Article 5 (Spay/Neuter Program) of GS Chapter 19A. Low-income person now means an individual who qualifies for one or more of the programs of public assistance administered by the Department of Health and Human Services under GS Chapter 108A (Social Services) or whose annual household income is lower than 300% of the federal poverty level guidelines published by the US Department of Health and Human Services. Makes conforming changes.

Amends GS 19A-63(d) to require each county to provide notice of the opportunity (currently, reads to provide the opportunity) to participate in the program created by the statute, by electronic or other means (currently, no provision for the required means of the notice) to all local veterinarians providing services for small animals to the public (currently, does not specify veterinarians' services). Requires proof of the notice (currently, the provision) of this opportunity to be included in the first reimbursement request of each calendar year.

Amends GS 19A-64 by modifying two of the four requirements for distributing funds when the total requests for reimbursement exceed the amounts available for distribution from the Spay/Neuter Account as follows: (1) provides that among the eligible counties and cities in development tier one areas, reimbursement must be made to each eligible county or city in the proportion that the total number of eligible spay and neuter procedures in that city or county compares to the total number of eligible reimbursement requests submitted from all cities and counties (was, in the proportion that the rate of spays and neuters per one thousand persons in that city or county compares to the total rate of spays and neuters per one thousand persons) within the total tier one area and (2) provides that among the eligible counties and cities in development tier two and three areas, reimbursement must be made to each eligible county or city in the proportion that the total number of eligible spay and neuter procedures in that city or county compares to the number of eligible reimbursement requests submitted from all cities and counties (was, in the proportion that the rate of spays and neuters per one thousand persons in that city or county compares to the number of eligible reimbursement requests submitted from all cites and counties) within the total tier two and three areas.

Effective July 1, 2016.

Amends 15A-1341(a1) regarding deferred prosecution for convictions of Class H and I felonies and misdemeanors, adding language that gives the District Attorney discretion to waive prior convictions that did not involve moral turpitude and place a defendant on deferred prosecution. Enacts new subsection (a7) titled Misdemeanor Deferred Prosecutions for Defendant 18 years old or Younger, providing that defendants 18 years old or younger at the time of an offense that otherwise qualifies for deferred prosecution as described in GS 15A-1341(a1) are entitled to automatic placement on deferred prosecution. Provides that automatic deferral does not apply to misdemeanors committed between individuals with a personal relationship, as defined in GS 50B-1(b). Such defendants are also entitled to automatic expunction at the conclusion of a successful deferred prosecution, as well as dismissal of the charges.

Also amends GS 15A-146, concerning the expunction of records when charges are dropped, providing that for any misdemeanors dismissed pursuant to GS 15A-1341(a1) above, a petition must be filed on the defendant's behalf by the clerk of superior court automatically after dismissal of charges and payment of of $175.

Appropriates $1,000 from the General Fund to the Administrative Office of the Courts in nonrecurring funds for the 2016-17 fiscal year to implement the act.

Effective December 1, 2016, applying to all offenses committed on or after that date.

Provides as follows, depending on the passing of H 973 or S 726, which are identical bills concerning updating the reference to the Internal Revenue Code and decoupling from certain provisions of the federal Protecting Americans from Tax Hike Act of 2015.

If either H 973 or S 726 of the 2016 Regular Session of the 2015 General Assembly passes, then amends GS 105-153.5(c2) to provide that in calculating North Carolina taxable income, a taxpayer must add to the taxpayer's adjusted gross income, for taxable year 2014 (was, for taxable years 2014, 2015, and 2016), the amount excluded from the taxpayer's gross income for the discharge of qualified principal residence indebtedness under section 108 of the Internal Revenue Code (Code).

If either H 973 or S 726 of the 2016 Regular Session of the 2015 General Assembly does not pass, then amends GS 105-153.5(b), which provides that in calculating North Carolina taxable income, a taxpayer may deduct from the taxpayer's adjusted gross income specified items that are included in the taxpayer's adjusted gross income by adding the amount excluded from the taxpayer's gross income for a discharge of qualified principal residence indebtedness under section 108 of the Code to the allowable deductions.

Effective for taxable years beginning on or after January 1, 2016.

Includes whereas clauses discussing the NC Medicaid program.

Repeals Section 3 of SL 2013-5, provisions prohibiting Medicaid Expansion. 

Directs the Department of Health and Human Services, Division of Medical Assistance (DHHS), effective January 1, 2017, to provide Medicaid coverage to all people under age 65 that have incomes equal to or less than 133% of the federal poverty guidelines. Coverage provided will consist of the coverage described in 42 USC 1396(k)(1). Provides that persons in the expansion group with access to employer-sponsored insurance are eligible for assistance with the cost of insurance through the NC Health Insurance Premium Payment (NCHIPP) program. 

Appropriates from the General Fund to DHHS $7,008,705 in recurring funds for the 2016-17 fiscal year for administrative costs associated with the expansion. Provides that these funds are a state match for the estimated $21,026,116 for the 2016-17 fiscal year in federal funds that will be received for the expansion, which will also be used for associated administrative costs. Provides that if the amount of federal funds available for this purpose exceeds the amounts set forth in the statute, then the expenditure of state funds for this purpose must be reduced by an amount equal to the amount of excess federal funds that are available, and appropriates these excess federal funds for the purposes described in the statute.

Appropriates from the General Fund to DHHS $47,632,240 in recurring funds for the 2016-17 fiscal year as part of the Medicaid rebase. Provides that these state funds are a state match to an estimated $1,222,560,822 in federal funds that will be received to pay for Medicaid services. 

Sets out specified reductions to other state programs that serve the population that will be included in the Medicaid expansion, reflecting the savings generated by the expansion. 

Reorganizes the statutory sections of GS Chapter 108A, Article 7, which comprise the Hospital Provider Assessment Act, setting out the changes.

Enacts new GS 108A-131, Additional assessment amount for Medicaid expansion, establishing an additional assessment for hospital providers that are not fully exempt from both the equity assessment and UPL assessment under GS 108A-122(c). Sets out how the assessment is to be calculated each year by the Secretary of DHHS. Requires the Secretary to notify each hospital that is assessed of the following: (1) total state share of service and administrative costs of Medicaid expansion for the applicable time period, (2) the hospital's share of all Medicaid services billed, and (3) the amount assessed to the hospital. Includes provisions concerning the priority of an assessment collection as well as appeal provisions whereby the assessment amount determination can be reconsidered. Defines Medicaid expansion for the purposes of the statute.

Enacts new subsection GS 108A-124(e) setting out provisions concerning the payment of reduced payments of the assessment amounts in the case that any or all of the payment amount cannot be made. Effective July 1, 2017.

Unless otherwise provided, act becomes effective July 1, 2016. 

Amends GS 135-48.32 that requires benefits under the State Health Plan for Teachers and State Employees (Plan) to be provided under contracts between the Plan and the claims processors selected by the Plan. Requires claims processor contractors to provide all claims processing data elements to the Plan including the identification of providers and the allowed amounts paid. Eliminates provisions that allow the State Treasurer to contract with a pharmacy benefits manager to administer pharmacy benefits under the Plan, and eliminates provisions concerning the required content and administration of those contracts.

Amends GS 135-48.34 by changing the title to Contract exemptions. Establishes that contracts to provide benefits, contracts with providers or provider networks, and contracts for the design, adoption, and implementation of health benefit plans and programs available under health benefits plans, as authorized under GS 135-48.2, as amended, are not subject to the requirements of Article 3 of GS Chapter 143 (purchases and contracts by State departments, institutions or commissions), or to the requirements of Part 3 or 4 of Article 15 of GS Chapter 143B (information technology projects, management, and procurement). Provides that the contracts are subject to the requirements of GS 135-48.33. Makes conforming changes.

Amends GS 135-47(c) (recodified as GS 135-48.47(c) by SL 2011-85 Section 2.7) to allow local governments to elect to participate in the State Health Plan until the number of employees and dependents of employees of local governments enrolled in the Plan reaches 20,000 (currently, 10,000) after which time no additional local governments may join the Plan.

Amends GS 135-48.47(b)(3) to change one of the six provisions governing participation by a local government unit in the State Health Plan to require the local government unit to determine the eligibility of its employees and employees' dependents. Further, provides new language to establish that the portion of the employee and employees' dependents premiums paid to the local government unit may be determined be the local government unit but cannot exceed the premiums in the structure set by the Plan. Makes technical changes.  Effective January 1, 2017 and applies to premiums paid on or after that date.

Enacts new subsection GS 135-48.47(d) to allow local governments participating in the Plan as of April 1, 2016, to elect to withdraw from participating in the Plan effective January 1, 2017.  Requires the local government unit to give notice of withdrawal to the Plan no later than October 1, 2016.

Enacts new GS 135-48.49 to establish that the Plan is responsible for reporting coverage for retirees and coverage for direct bill members, except for individuals participating in Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, as required by section 6055 of the Internal Revenue Code. Also requires the Plan to provide employing units with access to Plan data necessary for employing units to meet filing requirements under sections 6055 and 6056 of the Internal Revenue Code. Provides that the Plan may facilitate the availability of a reporting solution, however, the employing unit is responsible for paying all costs associated with the use of any reporting solution made available by the Plan.

Applies to contracts entered into, renewed, or amended on or after the date that the act becomes law.

 

Amends GS 115C-296, concerning the State Board of Education (SBE) having entire control of licensing of all applicants for teaching positions in North Carolina public schools, adding new language to subsection (a) that provides that the SBE now will require all applicants that have not been previously licensed in North Carolina to undergo a criminal history check, as provided for in GS 115C-297.1. Further provides that the SBE may charge a fee for performing a criminal history check.

Enacts new GS 115C-297.1, School personnel criminal history checks, defining "criminal history" for use in this section and setting out numerous crimes and offenses that if committed, indicates the employee either poses a threat to the physical safety to students or personnel, or has demonstrated they don't have the integrity and honesty to fulfill duties as public school personnel. Specifies that all those applicants not previously licensed in NC must have a criminal history check before receiving a license and that the SBE will charge a fee for the check. Further requires the Department of Public Safety to provide the SBE the criminal history from state and national repositories, while the SBE must also submit fingerprints and paperwork to the Department of Public Safety for processing. After all background information is received SBE will use all information in order to make licensure decisions, with written findings to show how it used information in such decisions. Information received by the SBE in checking the criminal history is privileged. Includes immunity for SBE and others for acts or omission in carrying out the statute. Establishes that the willful issuance of wrong or misleading information, etc. for purposes of the background check is a Class A1 misdemeanor. 

Enacts new GS 143B-931.1, authorizing the Department of Public Safety to provide such background information as sought by the SBE in regards to criminal history checks. Requires the SBE to submit fingerprints, signed consent forms and other identifying information to the Department of Public Safety.  

Provides that the SBE will require applicants for licensure renewal that have not been previously checked for criminal history to undergo such a background check at the applicant's next license renewal. 

Effective July 1, 2016, applying to applications for licensure received on or after that date. 

Establishes that market based sourcing will be used for multistate income tax apportionment.

Amends GS 105-130.4, Allocation and apportionment of income for corporations, by eliminating subsubsections (l)(2) and (l)(3), leaving only the sales factor (was, (l)(1)) under subsection (l).  Establishes that recipients are in this state if the taxpayer’s market for the receipts is in this state, and if the market for a receipt cannot be determined, the state or states of assignment are to be reasonably approximated. Provides that when a taxpayer cannot ascertain the state to which the receipts are to be assigned using reasonable approximation, then the receipts must be excluded from the denominator of the sales factor. Provides six criteria, GS 105-130.4(l)(1) through (6), to determine a taxpayer’s market for receipts in this state. Adds and defines broadcasters and banks. 

Enacts new GS 105-130.4A, Market based sourcing for broadcasters. Sets out and defines terms for use in the statute. Provides that if the audience factor for a receipt cannot be determined, the state or states of assignment are to be reasonably approximated. Audience factor is defined in the act as the factor determined by the ratio specified in the statute for television stations, radio stations, and cable or satellite program and channel broadcasts. Provides that when a taxpayer is delivering advertising or licensed content directly or indirectly to a known list of subscribers, the taxpayer must reasonably approximate the receipts attributable to this state's market using a percentage that reflects the ratio of North Carolina subscribers to the total number of subscribers; if the taxpayer is delivering that content through an intermediary and does not have access to the list of subscribers, the taxpayer must reasonably approximate the receipts attributable to this state's market using a percentage that reflects the ratio of the North Carolina population to the total population in the specific geographic area where the advertisement or licensed content is materially used. Sets out provisions concerning when material is used in a foreign country. Allows the Department of Revenue to authorize an alternate approach that reflects an attempt to obtain the most accurate assignment of receipts when the specified rules of reasonable approximation fail to reasonably approximate the percentage of receipts attributable to this state's market. Specifies that the a broadcaster's receipts factor is a fraction, the numerator of which is the sum of the broadcaster's gross receipts from sources within the state and the denominator of which is the sum of the broadcaster's gross receipts from transactions and activity in the regular course of its trade or business everywhere. Specifies how advertising gross receipts and license fees for audio or video programming in release, and gross receipts from subscriber fees, rents, sales, or similar charges from audio or video programming in release, are to be attributed. 

Enacts new GS 105-130.4B, Market based sourcing for banks.  Establishes GS 105-130.4A(a) that provides definitions that apply to the new statute. Creates a general rule that states the receipts factor of a bank is a fraction, with the numerator being the total receipts of the taxpayer in this state during the income year and the denominator being the total receipts of the taxpayer everywhere during the income year, and lists five receipts that are excluded from both the numerator and denominator of the receipts factor. Sets out provisions for calculations concerning: (1) receipts from the sale, lease, or rental of real property; (2) receipts from the sale, lease, or rental of tangible personal property; (3) interest, fees, and penalties from loans secured by real property; (4) interest, fees, and penalties from loans not secured by real property; (5) net gains from the sale of loans; (6) receipts from interest, fees, and penalties from card holders; (7) net gains from the sale of credit card receivables; and (8) miscellaneous receipts.

The above provisions are effective for taxable years beginning on or after January 1, 2018.

Enacts new GS 105-262.2, Rules to implement market based sourcing.  Establishes that it is the policy of the state to provide necessary guidance on a timely basis to corporate taxpayers subject to allocation and apportionment of income under GS 105-130.4, and that the expedited procedure for the adoption of rules under GS 105-262.1, which sets out rules to exercise authority under GS 105-130.5A (which discusses Secretary’s authority to adjust net income or require a combined return) apply to the adoption of rules needed to administer market based sourcing of receipts.  Directs that the Office of State Budget and Management is not required to prepare a fiscal note for a proposed rule under this new statute, and that the Secretary of Revenue is not subject to the fiscal note requirement under GS 105-262(c) or GS 105-262.1(c).

Requires the Utilities Commission (Commission) to adjust the rates for public utilities, excluding water public utilities with less than $200,000 in annual operating revenues, for the tax changes in Section 1 of this act (which amends GS 105-130.4). Requires each utility to calculate the cumulative net effect of the tax changes and file the calculations with proposed rate changes to reflect the net prospective tax changes in utility customer rates within 60 days of the enactment of this act. Requires any adjustments that are required to existing tax assets or liabilities to be reflected in the utility's books and records by the tax changes are to be deferred and reflected in customer rates in either the utility's next rate case or earlier if deemed appropriate by the Commission.

Amends GS 106-758 to expand the definition of aquaculture so that it also includes the propagation and rearing of aquatic species in marine hatcheries and other deepwater fish farming operations in the state's coastal and ocean waters. Makes technical changes.

Amends GS 106-761 as follows. Requires the Department of Agriculture and Consumer Services (DACS) to regulate the production and sale of saltwater fish and crustacean species in addition to freshwater fish and crustacean species. Makes conforming changes. Provides that DACS and Board of Agriculture authority is limited to commercially reared fish and does not include authority over the wild fishery resources managed under the authority of the North Carolina Wildlife Resources Commission or the Marine Fisheries Commission (was, authority of the North Carolina Wildlife Resources Commission). Requires the Board of Agriculture (Board) to, by rule, designate the species of fish, crustaceans, and shellfish that may be produced and sold under a Marine Aquaculture Propagation and Production Facility License. Sets out factors that the Board must consider in making the designations. Allows the Board to, by rule, authorize and license the operation of fish hatcheries and production facilities for the species of fish designated as described above. Requires the Board to (1) consult with the Marine Fisheries Commission and the National Marine Fisheries Service regarding appropriate measures to protect wild stocks from disease or genetic contamination and (2) enter into memoranda of agreement with the US Army Corps of Engineers and any other appropriate state or federal regulatory agencies regarding appropriate standards and markings for marine aquaculture structures to avoid impairment of navigation. Specifies that marine aquaculture facilities that require the use of public bottom lands underlying waters of the state or the superjacent water column will also require a lease from the Department of Environment and Natural Resources pursuant to Article 16A of GS Chapter 113. Allows the Board to prescribe standards of operation, qualifications of operators, and the conditions under which fish may be commercially reared, transported, possessed, bought, and sold. Provides that Marine Aquaculture Propagation and Production Licenses issued by DACS are valid for five years. Requires a person to have a Marine Aquaculture Propagation and Production Facility License and associated lease under Article 16A of GS Chapter 113 before taking or attempting to take marine species being produced under the license and associated lease from any privately leased, franchised, or deeded marine aquaculture operation without written authorization of the holder and with actual knowledge it is a marine aquaculture leased area. Specifies circumstances under which actual knowledge is presumed. Violations are a Class A1 misdemeanor, which may include a fine of no more than $5,000. Specified what is to be included in the written authorization from the holder. 

Enacts new Article 16A, Leasing of Bottom Land and Waters of the State for Marine Aquaculture, in GS Chapter 113. States General Assembly findings and declares that it is the policy of the state to encourage the development of private, commercial marine aquaculture in ways that are compatible with other public uses of marine and estuarine resources.

New GS 113-216 allows the Secretary of Environmental Quality (Secretary) to grant marine aquaculture leases for the public bottom to state residents who have obtained a Marine Aquaculture Propagation and Production Facility License when the Secretary determines that the public interest will benefit from issuance of the lease. Sets out five minimum standards that must be met for an area to be suitable for marine aquaculture, including that the leased area not contain a natural shellfish bed and that the operation of a marine aquaculture operation in the leased area will not impinge upon the rights of riparian owners. Allows the Secretary to delete any part of an area proposed for a lease or condition a lease to protect the public interest; also prohibits the Secretary from granting a new lease in an area heavily used for recreational purposes. Sets out requirements to be met when applying for a lease, including that the application include a map or diagram, that must meet specified conditions, of the area proposed to be leased. Applicants must also pay a $200 filing fee. Sets out requirements to be met by the area of bottom applied for. Requires the Secretary to conduct a public hearing when the Secretary intends to approve an application; sets out notification requirements. After consideration of the public comment received and any additional investigations the Secretary orders to evaluate the comments, the Secretary is required to notify the applicant in person or by certified or registered mail of the decision on the lease application; the Secretary must also notify persons who submitted comments at the public hearing and requested notice of the decision. Allows an applicant who is dissatisfied with the Secretary's decision or another person aggrieved by the decision to commence a contested case by filing a petition under GS 150B‑23 within 20 days after receiving notice of the Secretary's decision. Specifies that initial leases begin upon the issuance of the lease by the Secretary and expire at noon on the first day of July following the 10th anniversary of the granting of the lease and renewal leases are issued for 10 years from the time of expiration of the previous lease. Applicants for a renewal of a lease must pay a $100 filing fee. Sets the price of the rental for initial leases at $10 per acre, per year. Rental must be paid annually in advance prior to the first day of April each year. Provides that leaseholds granted under this statute are to be treated as if they were real property and are subject to all laws relating to taxation, sale, devise, inheritance, gift, seizure and sale under execution or other legal process, and the like. Leases properly acknowledged and probated are eligible for recordation in the same manner as instruments conveying an estate in real property. Provides the procedure for when ownership is transferred, with the lease terminated when it is transferred to a nonresident. Specifies seven occurrences upon which the Secretary must commence action to terminate the leasehold. Allows the Secretary to discontinue termination procedures when the leaseholder takes steps within 30 days to remedy the situation. Allows the leaseholder to initiate a contested case when the termination is not discontinued. Sets out additional requirements to be met when terminating a lease. Requires the Secretary to mail to all leaseholders a notice of the annual rental due and include forms for determining the amount of harvest gathered and gathering other pertinent information related to the utilization of the leasehold in the best interests of the aquaculture industry of the state. The form must be completed and returned by the leaseholder with the payment of the leaseholder's rental; it is a Class 1 misdemeanor for any leaseholder or the leaseholder's agent executing such forms to knowingly make a false statement.

New GS 113-217 allows the Secretary to include in marine aquaculture leases issued under G.S. 113‑216 provisions to allow the use of the water column superjacent to the leased bottom when the Secretary determines the public interest will benefit from inclusion of water column provisions. Sets out six standards that must be met by areas where water column use is allowed, including that aquaculture use of the leased area does not significantly impair navigation, and that the leased area is not within an area traditionally used and available for fishing or hunting activities incompatible with the activities proposed by the leaseholder. 

Amends GS 113-134.1 to provide that while the Marine Fisheries Commission is directed to exercise all regulatory authority over the conservation of marine fisheries resources in the Atlantic Ocean to the seaward extent of the State jurisdiction over the resources as defined, DACS must exercise concurrent authority to the extent necessary to effectuate the purposes of Article 63 of GS Chapter 106. Provides that if there is a conflict between actions taken or regulations promulgated by either agency, the Marine Fisheries Commission and DACS are allowed to make agreements concerning the settlement of such conflict in the best interests of promoting marine aquacultural resources, when not inconsistent with the conservation of the marine and estuarine resources of the state.

The above provisions are effective October 1, 2016.

Appropriates $500,000 from the General Fund to DACS to implement the Marine Aquaculture Propagation and Production Facility licensing program.

Requires DACS and the Division of Marine Fisheries of the Department of Environmental Quality to jointly: (1) request that the Mid‑Atlantic and South Atlantic Fishery Management Councils develop a Fishery Management Plan for regulating offshore aquaculture in federal waters offshore from the North Carolina coast and (2) petition the National Oceanic and Atmospheric Administration to initiate rule‑making proceedings to implement a comprehensive regulatory program for managing the development of an environmentally sound and economically sustainable aquaculture fishery in federal waters offshore from the North Carolina coast. Requires an interim report to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources no later than January 15, 2017, and a final report on or before June 1, 2017, that includes the request and petition.

Requires the Division of Marine Fisheries to review its Fishery Management Plan for river herring and report by December 15, 2016, to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources regarding the continuing validity and scientific basis for the continued status of both species as "overfished." Provides that if the Division does not have an adequate scientific basis to review the status of both species, then the report should include cost estimates for the restoration of spawning and nursery area surveys and age composition work for all coastal streams within the state that historically contained significant river herring fisheries.