Conference report makes the following changes to the 3rd edition.

Part I.

Amends GS 108D-8(h) by amending the information that the Office of Administrative Hearings must include in its notice of hearing, to include the circumstances in which a medial assessment may be obtained at the LME/MCO's expense (was, at the Department of Health and Human Service's expense).

Part II.

Enacts new Article 1B, Transitions to Community Living, in GS Chapter 122C.

Includes definitions for terms as they apply in this Article. Directs the Department of Health and Human Services (DHHS), in consultation with the NC Housing Finance Agency (HFA), to establish and administer the NC Supportive Housing Program (SHP), a tenant-based rental assistance program. Provides that the purpose of the SHP is to transition individuals who are diagnosed with serious mental illness and serious and persistent mental illness from institutional settings to more integrated community-based settings appropriate to meet their needs. Directs DHHS, in consultation with the HFA and LME/MCOs, to arrange for program participants to be placed in available housing slots through the program with all of the rights and obligations created by a landlord-tenant relationship.

Provides guidelines for the administration of housing subsidies for supportive housing and directs the Division of Aging and Adult Services to establish eligibility requirements the Supportive Housing Program. Designates DHHS as having ongoing responsibilities for developing and distributing a list of potentially eligible program participants for each LME/MCO by catchment area. Shifts responsibility for prioritizing this information upon receipt to each LME/MCO. Directs DHHS to annually determine the number of housing slots to be allocated to each LME/MCO as specified in this act. Directs the LME/MCO to develop a written transition plan that identifies certain needs of the individual and the available housing slots that meet the individual's needs.

Provides guidelines regarding transition services and tenancy support services. Directs DHHS to develop an application process for owners of housing units to participate in the program as landlords.

Requires DHHS to report annually on October 1 to the Joint Legislative Oversight Committee on Health and Human Services on the number of individuals within the catchment area who transitioned into housing slots available through SHP during the preceding calendar year. Specifies that the report is to contain a breakdown of all the funds used by the LME/MCO to transition these individuals into the housing slots. Provides that DHHS is not required to provide housing slots to individuals beyond the number that can be supported by funds appropriated for this purpose.

Requires that each LME/MCO transition at minimum 15 eligible individuals to community-based supported housing slots available through SHP no later than October 1, 2013.

Requires funds appropriated to DHHS for the 2013-15 biennium to develop and implement housing, support, and other services for people with mental illness under the Department of Justice settlement agreement be used in specified ways. Effective October 1, 2013.

Enacts new GS 122E-3A creating the Community Living Housing Fund (Fund) in the Housing Finance Agency (Agency) to pay for the transition of individuals diagnosed with severe mental illness or severe and persistent mental illness from institutional settings to community-based supported hosing and to increase the percentage of targeted housing units available to individuals with disabilities for use in the NC Supportive Housing Program. Make the Agency, in consultation with DHHS, responsible for administering the Fund. Fund monies are available only upon an act of appropriation by the General Assembly and may only be used for the specified purposes. Terminates the Transitions to Community Living Fund on June 30, 2020, and reverts any remaining balance to the General Fund.

Part III.

Amends GS 108A-123(d), if Senate Bill 402 becomes law, to provide that the first $43 million of the state's annual Medicaid payment must be allocated between the equity assessment and the UPL assessment with the remaining portion of the payment allocated to the UPL assessment. Effective July 1, 2013.