Defines state-operated facility as any facility that was at any time under the jurisdiction of the Secretary of Health and Human Services (Secretary) pursuant to GS 122C-181 (listing facilities operated by the Secretary). Defines department as Department of Health and Human Services.

Repeals GS 122C-181(a)(3)d, which directs that the Secretary operate the R.J. Blackley Alcohol and Drug Treatment Center (Center).

Exempts any not-for-profit health care system owned by the State from certificate of need review for (1) the conversion of a former State-operated facility into a psychiatric hospital for children and adolescents; (2) the establishment or redevelopment of inpatient psychiatric beds at that  psychiatric hospital; and (3) the establishment of inpatient psychiatric services for children and adolescents at that psychiatric hospital, so long as all of the following conditions are met:

• The former State-operated facility is located in a county that (1) has a total population between 60,000 and 65,000; (2) has a total land area under 540 square miles, according to the most recent federal decennial census; and (3) is located  along the State's border with Virginia; and
• The State-owned entity must first enter into a written agreement with the Department to establish and operate a new psychiatric hospital at the former State-operated facility with inpatient psychiatric beds exclusively for children  and adolescents.

Provides that the conversion of any  unused  State-operated facility into a psychiatric hospital for children and adolescents authorized under the act is subject to existing licensure laws and licensing requirements.

Directs the Secretary to enter into an agreement with a State entity meeting the description in GS 116-37 (University of North Carolina Health Care System) for the operation of a psychiatric hospital for children and adolescents on the campus of the facility known as the Center by no later than April 1, 2023.