ADMINISTRATIVE LAW Expand Definition of Universal Service: S641 Ch. 2002-14 This bill authorizes the North Carolina Utilities Commission to adopt rules to expand the defi- nition of universal service to include Statewide Internet access and other technological telecommuni- cations advances. This act became effective July 11, 2002. To view full bill text, click here. License by Credentials/Dentistry: S861 Ch. 2002-37 To increase the number of qualified dental practitioners in North Carolina, the Board of Dental Examiners is authorized to license by credentials applicants who are licensed to practice dentistry or dental hygiene in other states. This bill requires that an out-of-state applicant provide satisfactory evidence that the applicant has the required education, training and qualifications, in addition to meet- ing other listed conditions. The Board of Dental Examiners is also authorized to issue a “Limited Volunteer Dental Li- cense” which will allow qualifying applicants to practice dentistry without compensation in nonprofit health care facilities serving low-income populations in the State. In addition, the Board may issue an “instructor’s license,” under certain circumstances, to a person who is not otherwise licensed to prac- tice dentistry in North Carolina for the person to teach and practice in or on behalf of a dental school, academic medical center or teaching hospital. This act becomes effective January 1, 2003. To view full bill text, click here. Locksmith Licensure Effective Date: H1552 Ch. 2002-63 The effective date of the Locksmith Licensing Act is delayed until January 1, 2003. This act generally became effective retroactively to August 16, 2001. To view full bill text, click here. Amend CAMA Variance Process: H1544 Ch. 2002-68 Please see summary under “Real Property.” Conforming APA Amendments: S1224 Ch. 2002-97 The Office of Administrative Hearings is authorized to use the Internet to make available at no charge certain agency publications, including the North Carolina Register and the North Carolina Ad- ministrative Code. This bill also conforms the Administrative Procedure Act to provisions of Chapter 12 of the General Statutes relating to rules which establish or increase fees. This act became effective August 29, 2002. To view full bill text, click here. Domestic Violence Commission Rulemaking: H1534 Ch. 2002-105 The Domestic Violence Commission is authorized to adopt rules for the approval of abuser treatment programs. This act became effective September 6, 2002. To view full bill text, click here. Sanitation Rules/Effective Date and Field Test: H1777 Ch. 2002-160 Please see summary under “Health Law.” Certain Occupational Licensing Board Changes: S1281 Ch. 2002-168 Among other things, this act adds a new section, N.C.G.S. 93B-16, to Chapter 93B of the General Statutes to provide that an “occupational licensing board may purchase commercial insurance of any kind to cover all risks or potential liability . . . .” In addition, occupational licensing boards are deemed State agencies and board members and board employees are considered State employees for certain purposes. Further, the purchase of insurance by an occupational licensing board is not to be construed to waive sovereign immunity or any other available defenses. This legislation also authorizes the Board of Landscape Architects to retain private counsel as a part of its powers and duties and makes various changes to the statutes governing the Real Estate Commission. Further, Article 89, “North Carolina Professional Employer Organization Act,” is added to Chapter 58 to require professional employer organizations to register with the Department of Insur- ance. This act generally became effective October 1, 2002. To view full text of bill, click here. Interpreter/Transliterator Licensure: H1313 Ch. 2002-182 The Interpreter and Transliterator Licensure Act is added to the General Statutes in order to ensure minimum standards of competency and to provide the public with safe and accurate manual or oral interpreting or transliterating services. To that end, this bill states that no person shall practice, or offer to practice, as an interpreter or transliterator for a fee or other consideration, represent himself or herself as a licensed interpreter or transliterator, or use certain titles unless that person is currently licensed. In addition, the North Carolina Interpreter and Transliterator Licensing Board is created and authorized to adopt, amend or repeal rules as necessary to carry out the Act. This legislation also outlines the requirements for licensure, applicable expenses and fees and license renewal. This act generally becomes effective July 1, 2003. To view full text of bill, click here. BUSINESS LAW Conform Mobile Telecommunications Sourcing: H1521 Ch. 2002-16 This act conforms the sourcing of mobile telecommunications services to the federal Mobile Telecommunications Sourcing Act and codifies the sourcing principles for other telecommunications services. Specifically, N.C.G.S. 105-164.3 is amended to define the “place of primary use” as the “street address representative of where the use of a customer’s telecommunications service primarily occurs.” Further, this bill clarifies that prepaid telephone calling services are taxable at the point of sale instead of at the point of use and are not subject to tax as a telecommunications service. N.C.G.S. 105-164.4C(b)(1) is also amended to provide that gross receipts derived from telecommunications service include receipts from flat rate service, service provided on a call-by-call basis, mobile telecom- munications service, and private telecommunications service. This act generally became effective August 1, 2002. To view full bill text, click here. Repeal Obsolete Attestation Requirement: H1504 Ch. 2002-26 This bill repeals an obsolete attestation requirement in N.C.G.S. 47-42 that only a bank’s secre- tary or cashier may execute conveyances by the bank and provides that all deeds and conveyances executed by a banking corporation on or after October 1, 1999, in compliance with N.C.G.S. 47-18.3 are validated. This act became effective July 22, 2002. To view full bill text, click here. Member Approval of Bylaw Amendment: H1505 Ch. 2002-27 N.C.G.S. 55A-10-21(a) is amended to conform the voting requirement for member approval of amendments to bylaws to the voting requirement for member approval of amendments to articles of incorporation. This act became effective July 22, 2002. To view full bill text, click here. Repeal Obsolete Banking Law: H1539 Ch. 2002-29 This act repeals an obsolete provision in N.C.G.S. 53-62(dl) that prohibited the establishment of automated teller machines (ATMs) by out-of-state financial institutions. This act became effective July 22, 2002. To view full bill text, click here. Misc. Business Changes: H1503 Ch. 2002-58 This legislation amends N.C.G.S. 55-7-02(a) to state that any corporation, public or nonpublic, can confer any rights it wishes to call a special meeting of shareholders. In addition, the 10% holders of voting shares in a nonpublic corporation have an absolute statutory right to require a special meeting to be held within 30 days after demand. Finally, subsection (a) is amended to place a time limit on the effective life of a written demand by a shareholder for a special meeting by requiring that demands representing the necessary percentage of votes be received within a 60-day period. This portion be- came effective August 1, 2002. Sections 2 and 3 amend N.C.G.S. 55-13-20(b) and 55-13-22(a) to effect a minor modification to the procedure for delivering dissenters’ notice to shareholders, where actions are approved by written consent of the shareholders, by requiring the corporation to inform the shareholders of the event that triggered dissenters’ rights. Section 4 amends N.C.G.S. 59-35.1(b) to clarify that any document sub- mitted on behalf of a general partnership for filing by the Secretary of State under any of the business entity acts must be signed by a general partner. These portions are effective retroactively to January 1, 2002. This legislation also adds a new subsection to N.C.G.S. 59-84.2 which states that: “If a regis- tered limited liability partnership is dissolved but its business is continued by some of its partners with or without others in a new partnership under the same name, then (i) the new partnership shall auto- matically succeed to the registration of the dissolved original partnership as a registered limited liabil- ity partnership and (ii) the dissolved original partnership shall be deemed to be registered as a regis- tered limited liability partnership until the winding up of its affairs is completed.” This portion became effective retroactively to October 1, 1993, the effective date of the act originally authorizing LLPs. To view full text of bill, click here. Financial Institutions Asset Securitization: H1099 Ch. 2002-88 This act permits the waiver of the right of equity of redemption by certain financial institutions in certain securitized financial assets. To that end, a new Article, “Asset-Backed Securities Facilita- tion,” is added to Chapter 25 of the General Statutes. The General Statutes Commission is directed to study and report on the question of whether the waiver of the equity of redemption should be extended to apply to other business entities in other commercial transactions. This act became effective August 22, 2002. To view full text of bill, click here. Extend Qualified Business Venture Tax Credit: H1520 Ch. 2002-99 Please see summary under “Tax Law.” Subsidiary Dividend Changes: H1670 Ch. 2002-136 This legislation clarifies the expense attribution law as it applies to deductible dividends and provides limits on the potential tax liability. Specifically, a new section, N.C.G.S. 105-130.6A, is added to Article 4 of Chapter 105 of the General Statutes to establish the adjustment for expenses related to dividends received that are not taxed by providing a cap on the amount of tax payable. The applicable caps are as follows: 15% of non-tax dividends for most corporations; 20% of non-tax divi- dends for bank holding companies; and 15% of total interest expenses for electric power holding com- panies. A credit is also provided for bank holding companies and electric power holding companies. This bill also directs the Revenue Laws Study Committee to study and report to the 2003 General Assembly on “the treatment of expenses related to dividends received and other income not taxed and the taxation of affiliated corporations, or holding companies, and of financial institutions under current law.” This act became effective for taxable years beginning on or after January 1, 2001. To view full text of bill, click here. Interstate Air Couriers – Bill Lee: H1665 Ch. 2002-146 Please see summary under “Tax Law.” 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” NC Economic Stimulus and Job Creation Act: H1734 Ch. 2002-172 Among other things, this bill enacts the Job Development Investment Grant Program in Chap- ter 143B of the General Statutes. This program is intended to stimulate economic activity and create new jobs within the State and enables the Economic Investment Committee to enter into negotiated agreements with businesses to provide grants if certain conditions are met. This legislation also out- lines which types of projects are eligible for a grant, the application process, required fees and reports, the calculation of minimum and maximum grants, the terms of each community economic develop- ment agreement, the consequences for failure to comply with the agreement, and disbursement of the grant. This act generally became effective October 31, 2002. To view full text of bill, click here. Small Business Contractor Initiative/Funds: S832 Ch. 2002-181 A new Part is added to Article 10 of Chapter 143B of the General Statutes to provide for con- tract financing and surety bonds for financially-responsible small businesses that contract with govern- mental agencies and are unable to obtain adequate financing and bonding assistance in connection with those contracts. N.C.G.S. 143B-472.77 creates the North Carolina Small Business Contractor Author- ity within the Department of Commerce and outlines the Authority’s powers and duties. N.C.G.S. 143B-472.78 states requirements that a small business applicant must meet to qualify for financing assistance, and N.C.G.S. 143B-472.83 provides conditions to obtain bonding assistance. This act be- comes effective January 1, 2003, and expires June 30, 2006. To view full text of bill, click here. Strengthen Securities Fraud Enforcement Laws: S1455 Ch. 2002-189 The General Statutes Commission is directed to study the provisions of Senate Bill 1455, 4th edition, in consultation with the Department of the Secretary of State, the Securities Industry Associa- tion and the North Carolina Bar Association and to make recommendations to the 2003 Regular Ses- sion of the 2003 General Assembly. In addition, N.C.G.S. 78C-17(b) and (b1) are amended to increase certain filing and renewal fees with the Secretary of State. N.C.G.S. 143-59.2 is added to prohibit the State from contracting with businesses that have any officers or directors who have been convicted of securities fraud. N.C.G.S. 143-59.1 is also amended to prohibit the State from contracting with ven- dors that are incorporated in a tax haven country after December 31, 2001, but the United States is the principal market for the public trading of the corporation’s stock. The term “tax haven country” in- cludes Barbados, Bermuda, British Virgin Islands, Cayman Islands, Commonwealth of the Bahamas, Cyprus, Gibraltar, Isle of Man, the Principality of Liechtenstein, the Principality of Monaco, and the Republic of the Seychelles. This act has varying effective dates but generally became effective Novem- ber 1, 2002. To view full text of bill, click here. CONSTITUTIONAL RIGHTS & RESPONSIBILITIES Firearm Regulation Amendments: H622 Ch. 2002-77 Please see summary under “Litigation & the Courts.” Secure Local Revenues: H1490 Ch. 2002-120 Please see summary under “Tax Law.” NCDL/Selective Service Registration: H1245 Ch. 2002-162 This act provides that all male United States citizens or immigrants who are at least 18 but less than 26 years of age must comply with the Selective Service System’s registration requirements when applying for the issuance, renewal or duplication of a drivers license, commercial drivers license or identification card. The Division of Motor Vehicles is required to notify the applicant that his applica- tion for a drivers license or identification card serves as his consent to be registered with the Selective Service System. This act became effective October 17, 2002. To view full text of bill, click here. Persons with Disabilities Changes: S866 Ch. 2002-163 Please see summary under “Labor & Employment Law.” Public Health Bioterrorism Preparedness: H1508 Ch. 2002-179 Please see summary under “Health Law.” CONSTRUCTION LAW Toll Road and Bridge Authority Created: H644 Ch. 2002-133 This act adds a new Article, “Public Toll Roads and Bridges,” to Chapter 136 of the General Statutes to address the critical transportation needs in the State and speed implementation of needed transportation improvements by increasing the funding available for some projects. To that end, Ar- ticle 6H authorizes public toll roads and bridges in North Carolina as well as the creation of the North Carolina Turnpike Authority. This act became effective October 3, 2002. To view full text of bill, click here. DOT Contracts: H1518 Ch. 2002-151 This bill increases the informal bid limit in N.C.G.S. 136-28.1 for Department of Transporta- tion projects and modifies the current authorization of the Department of Transportation in N.C.G.S. 136-28.11 to award design-build contracts. This act became effective October 9, 2002. To view full text of bill, click here. Public Construction Law Changes: H623 Ch. 2002-161 Chapter 143 of the General Statutes is amended to promote energy efficiency in State-owned buildings. The term “governmental unit” is defined as either a local governmental unit or a State governmental unit, and “State governmental unit” is defined “as the State or a department, an agency, a board, or a commission of the State, including the Board of Governors of The University of North Carolina and its constituent institutions.” A new section, N.C.G.S. 143-64.17F, is added to provide that State governmental units may use guaranteed energy savings contracts to reduce energy costs when feasible and practical. N.C.G.S. 143- 64.17H requires a State governmental unit that enters into a guaranteed energy savings contract to report the contract and its terms to the State Energy Office of the Department of Administration within 30 days of entering into the contract. Article 8, “State Energy Conservation Finance Act,” is added to Chapter 142 and authorizes a State governmental unit that has solicited a guaranteed energy conservation measure to execute and deliver, for and on behalf of North Carolina, a financing contract to finance the costs of the energy conservation measure. The aggregate principal amount payable by the State under such contracts may not exceed $50,000,000 at any one time. Other sections outline the procedure for incurrence or issu- ance of these financing contracts and address tax exemption and investment eligibility. This act be- comes effective January 1, 2003. To view full text of bill, click here. DOT Planning: H1516 Ch. 2002-170 This act amends several sections in Chapter 136 of the General Statutes to clarify the law governing planning by the Department of Transportation. This act became effective October 23, 2002. To view full text of bill, click here. UNC Nonappropriated Capital: H1726 Ch. 2002-173 This bill authorizes the construction and financing, without appropriations from the General Fund, of certain capital improvements projects by certain constituent institutions of The University of North Carolina. This act became effective October 31, 2002. To view full text of bill, click here. Small Business Contractor Initiative/Funds: S832 Ch. 2002-181 Please see summary under “Business Law.” CRIMINAL JUSTICE Open Container Sunset Repeal: H1488 Ch. 2002-25 This act extends the sunset on the law governing transportation of open containers of alcoholic beverages to September 30, 2006. This act became effective July 22, 2002. To view full text of bill, click here. Electronic Criminal Process: H1583 Ch. 2002-64 This bill establishes the legal effect of the use of electronic technology in criminal process and procedure, as recommended by the North Carolina Courts Commission. A new section, N.C.G.S. 15A- 101.1, is added to Chapter 15A of the General Statutes to define certain terms such as “electronic signature,” “original” and “signature.” Another new section, N.C.G.S. 15A-301.1, authorizes the Administrative Office of the Courts to create and maintain an automated electronic repository for criminal process. The “Electronic Re- pository” must comprise a secure system of electronic data entry, storage and retrieval that provides for creating, signing, issuing, entering, filing, and retaining criminal process in electronic form. This act becomes effective January 1, 2003. To view full text of bill, click here. Level 2 GDL Restriction – Child Fatality Task Force: H1546 Ch. 2002-73 This act provides occupancy limitations for vehicles driven by Level 2 drivers with limited provisional licenses in order to reduce the likelihood of a young driver having an accident. When the limited provisional license holder is driving a vehicle and is not accompanied by a supervising driver, there may be no more than one passenger under 21 years of age in the vehicle. This limit does not apply to passengers who are members of the license holder’s immediate family or whose primary residence is the same household as the license holder. However, if a family member or member of the same house- hold as the license holder who is younger than 21 years of age is a passenger in the vehicle, no other passengers under 21 years of age, who are not members of the license holder’s immediate family or members of the license holder’s household, may be in the vehicle. Failure to comply with these provisions does not constitute negligence per se or contributory negligence by the driver or passenger in any action for the recovery of damages arising out of the operation, ownership or maintenance of a motor vehicle. Any evidence of failure to comply with these provisions is not admissible in any criminal or civil trial, action or proceeding except in an action based on a violation of this section. No drivers license points or insurance surcharge will be assessed for failure to comply with the seating and occupancy limitations of this act. This act becomes effective December 1, 2002, and applies to limited provisional licenses issued on or after that date. To view full text of bill, click here. Revenue Laws Enforcement Enhancements: S1218 Ch. 2002-106 The goal of this act is to improve the enforcement of tax laws by criminalizing or increasing the penalty for certain forms of tax fraud. To that end, “Income Tax Return Preparer” is defined in N.C.G.S. 105-228.90(b) as any person who prepares for compensation, or who employs one of more persons to prepare for compensation, any return of tax or any claim for refund of tax under Article 4 of Chapter 105. Furthermore, if the person who commits an offense under N.C.G.S. 105-236(9a) is an income tax return preparer and the amount of all taxes fraudulently evaded on returns filed in one taxable year is $100,000 or more, the person is guilty of a Class C felony. If the amount fraudulently evaded by an income tax return preparer is less than $100,000, the person is guilty of a Class F felony. If the tax fraud is committed by a person other than an income tax return preparer, the person is guilty of a Class H felony. Additionally, if a person receives money from a taxpayer that is to be remitted to the Secre- tary for application to the taxpayer’s tax liability and willfully fails to remit the money, that person is guilty of a Class F felony. This act also authorizes the Department of Revenue to disclose certain information concerning a taxpayer to law enforcement agencies. This act generally becomes effective December 1, 2002. To view full text of bill, click here. Close Incest Loophole to Protect Minors: H1276 Ch. 2002-119 As a result of incest laws that date to 1879, a loophole has existed in the General Statutes that allowed far lesser penalties for perpetrators convicted of sexually assaulting their own children than for those who rape or molest other children. This act closes the loophole in N.C.G.S. 14-178 by equal- izing the punishments for crimes committed against children, without regard to familial status. It also provides that no child under the age of 16 is liable under this section if the other person is at least four years older when the incest occurred. This act becomes effective December 1, 2002. To view full text of bill, click here. Modify Appropriations Act of 2001: S1115 Ch. 2002-126 Please see summary under “Litigation & the Courts.” Criminal History Check/Conform Sex Offender Requirements: H1638 Ch. 2002-147 The Department of Justice is authorized to provide criminal record checks to the following: the ALE Division when investigating ABC permit applications, local law-enforcement agencies issuing precious metal dealer permits, the Private Protective Services Board, the Alarm Systems Licensing Board, the Board of Law Examiners, the Medical Board, the State Board of Dental Examiners, the Board of Pharmacy, the Board of Mortuary Science, the Real Estate Commission, the Commissioner of Labor when investigating private personnel service license applicants, the Structural Pest Control Com- mittee, and cities when investigating taxi license applicants. The Department of Justice is also autho- rized to charge a fee for conducting the criminal record checks. This act also conforms sex offender laws to federal requirements. Definitions of “employed,” “institution of higher education” and “student” are added to N.C.G.S. 14-208.6. Further, N.C.G.S. 14- 208.7(b) states two additional requirements for the sex offender registration form: 1) a statement indicating whether the person is a student or expects to enroll as a student within a year of registering and, if so, the name and address of the educational institution; and 2) a statement indicating whether the person is employed or expects to be employed at an institution of higher education within a year of registering and, if so, the name and address of the educational institution. N.C.G.S. 14-208.9 is also amended to require written notice of a change in such academic or employment status not later than the tenth day after the change. This act became effective October 9, 2002. To view full text of bill, click here. Felonious Access to Government Computers: H1501 Ch. 2002-157 This act makes it unlawful under N.C.G.S. 14-454.1 to willfully, directly or indirectly, access or cause to be accessed any government computer for the purpose of devising or executing any scheme or artifice to defraud or obtaining property or services by means of false or fraudulent pretenses, represen- tations or promises. A violation of this provision constitutes a Class F felony. If a person willfully and without authorization accesses or causes to be accessed any govern- ment computer for any purpose other than those addressed above, that person is guilty of a Class H felony. If a person willfully and without authorization accesses or causes to be accessed any educa- tional testing material, scores or grades that are in a government computer, that person is guilty of a Class 1 misdemeanor. If a person willfully and without authorization alters, damages or destroys a government computer, that person is guilty of a Class F felony. Provision is also made for any person who denies government computer services to an authorized user. This act becomes effective December 1, 2002. To view full text of bill, click here. Offender Supervision Compact/Transfer: H1641 Ch. 2002-166 This legislation amends Chapter 148 of the General Statutes to adopt the provisions of the revised Interstate Compact for the Supervision of Adult Offenders. The purpose of the Compact is to control and regulate the interstate movement of offenders in the community, to provide for the effective tracking, supervision and rehabilitation of these offenders, and to equitably distribute the costs, ben- efits and obligation of the Compact among the compacting states. Included in the Compact are provi- sions outlining applicable definitions, the creation of the Compact Commission and the State Council, the powers and duties of the Commission, the organization and operation of the Commission, the activities and rule-making functions of the Commission, oversight, enforcement and dispute resolution by the Commission, and the financing of the Commission. In addition, this act authorizes North Caro- lina to participate in the International Prisoner Transfer Program administered by the United States Department of Justice. This act generally became effective October 23, 2002. To view full text of bill, click here. Address Confidentiality Program: H1402 Ch. 2002-171 Please see summary under “Family Law.” Counterfeiting/Negotiable Instruments: H1100 Ch. 2002-175 This act is intended to provide consumers and financial institutions greater protection from fraudulent financial transactions. To that end, N.C.G.S. 14-119 makes it a Class I felony for any person to forge or counterfeit any instrument, or possess any counterfeit instrument, with the intent to injure or defraud any person, financial institution or governmental unit. In addition, it is a Class G felony to transport or possess five or more counterfeit instruments with the intent to injure or defraud. Defini- tions are provided for “counterfeit,” “financial institution,” “governmental unit,” “instrument,” and “scanning device.” Further, a person is guilty of financial transaction card theft if, with the intent to defraud any person, the person uses a scanning device to access information encoded on another person’s card or receives the encoded information from another person’s financial transaction card. A new section, N.C.G.S. 14-113.20A, makes it a Class E felony for a person to sell, transfer or purchase the identifying information of another person with the intent to commit financial identity fraud. Another new section, N.C.G.S. 1-539.2C, states that any person who is injured because of financial identity fraud may sue for civil damages in an amount of up to $5,000 for each incident or three times the amount of actual damages, whichever is greater. This act becomes effective December 1, 2002. To view full text of bill, click here. Crime to Defraud Drug Test: S910 Ch. 2002-183 This bill makes it a Class 1 misdemeanor to sell or distribute urine or sell or possess adulterants for the purpose of altering drug or alcohol screening test results. This act becomes effective December 1, 2002. To view full text of bill, click here. EDUCATION LAW Defining “Needy North Carolina Students”: S1231 Ch. 2002-69 This act amends N.C.G.S. 116-19(a) by defining “needy North Carolina students” as “those eligible students who have financial need as determined by the institution under the institutional meth- odology or the federal methodology as defined by the State Education Assistance Authority.” The term “institutional methodology” is also defined. This act became effective August 12, 2002. To view full text of bill, click here. Care for School Children with Diabetes Act: S911 Ch. 2002-103 The State Board of Education is required to adopt and disseminate guidelines for the develop- ment and implementation of individual diabetes care plans. The guidelines must include procedures for regular review of an individual care plan, information to be included in a diabetes care plan, and staff development for the support of students with diabetes. Local boards of education are required to implement the guidelines. This act became effective September 5, 2002. To view full text of bill, click here. Retirement/Tenure/Teacher Exchange Programs: H1724 Ch. 2002-110 This bill clarifies the status of teachers participating in foreign exchange programs for purposes of retirement and tenure. “Exchange teacher” is defined in Chapter 115C as a nonimmigrant alien teacher participating in an exchange visitor program designated by the United States Department of State. Exchange teachers are not eligible to obtain career status but are considered permanent teachers for purposes of determining eligibility to receive employment benefits if employed with the expecta- tion of at least six full consecutive monthly pay periods of employment and if employed at least 20 hours per week. This act became effective July 1, 2002. To view full text of bill, click here. LEAs and Group Homes: S163 Ch. 2002-164 Please see summary under “Juvenile Justice & Children’s Rights.” Facilitate Job Sharing By Teachers: S1443 Ch. 2002-174 A new section is added to Chapter 115C of the General Statutes to facilitate job-sharing by public school teachers. The goal of job-sharing is to make teaching an attractive option for well- qualified classroom teachers who do not wish to work full-time. N.C.G.S. 115C-302.2 defines a “class- room teacher in a job-sharing position” and requires the State Board of Education to adopt rules to facilitate job-sharing. These rules must provide that a classroom teacher in a job-sharing position will receive paid legal holidays, annual vacation leave, sick leave, and personal leave on a pro rata basis. Such a teacher will also receive service credit under the Teachers’ and State Employees’ Retirement System. This act generally becomes effective January 1, 2003. To view full text of bill, click here. Dropout Reduction/LEA Accountability: S1275 Ch. 2002-178 This act directs the State Board of Education to develop a plan to improve the State’s tracking of dropout data. It also encourages local boards of education to “adopt policies that require superinten- dents to assign to the core academic courses, in seventh through ninth grades, teachers who have at least four years’ teaching experience and who have received within the last three years an overall rating on a formal evaluation that is at least above standard.” In addition, N.C.G.S. 115C-105.38 directs the State Board of Education to assume all powers and duties related to a school when that school and its local board of education fail to implement recommendations of an assistance team assigned to that school. This act became effective October 31, 2002. To view full text of bill, click here. ELDER LAW Modify Appropriations Act of 2001: S1115 Ch. 2002-126 Please see summary under “Litigation & the Courts.” 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” Sanitation Rules/Effective Date and Field Test: H1777 Ch. 2002-160 Please see summary under “Health Law.” ENVIRONMENTAL LAW Improve Air Quality/Electric Utilities: S1078 Ch. 2002-4 The purpose of this act is to improve air quality in the State by imposing limits on the emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) from large-scale (having an individual genera- tion capacity of 25 or more megawatts of electricity), coal-fired generating units owned or operated by investor-owned public utilities in the State. Specifically, Section 1 establishes annual limits on the collective emissions that will be allowed by Duke Energy and Process Energy. It also authorizes the Governor to enter into an agreement with an investor-owned public utility to transfer to the State any acquired emissions allowances. Sections 2 and 3 make technical and conforming changes. Sections 4, 5, 6, 7, and 8 set forth enforcement provisions and penalties for both negligent and knowing violations of the emissions limi- tations. Section 9 provides for cost recovery of expenditures incurred by the investor-owned public utilities in complying with the established limits. This act generally became effective June 20, 2002. To view full text of bill, click here. Remove Scrap Tire Sunset: H1578 Ch. 2002-10 This bill removes the June 30, 2002 sunset on the scrap tire disposal tax. This act became effective June 27, 2002. To view full text of bill, click here. Extend Core Sound Moratorium/Marine Fish Studies: H1557 Ch. 2002-15 The moratorium on issuing new shellfish cultivation leases in Core Sound is extended to July 1, 2003. Also, the Joint Legislative Commission on Seafood and Aquaculture is directed to study and report on the moratorium on issuing new shellfish cultivation leases in Core Sound and the process by which the Department of Health and Human Services develops and issues fish consumption advisories. This act became effective July 11, 2002. To view full text of bill, click here. Extend Certain Compliance Deadlines: H1584 Ch. 2002-24 The State deadline for approval of hazard mitigation plans is extended to November 1, 2003. In addition, certain small municipal waste combustion units must achieve final compliance with certain requirements related to the emission of air pollutants on and after December 1, 2004. This act became effective July 18, 2002. To view full text of bill, click here. Merge Radiation Protection into Div. Env. Health: S1251 Ch. 2002-70 This act merges the Division of Radiation Protection of the Department of Environment and Natural Resources into the Division of Environmental Health of the Department of Environment and Natural Resources. All functions, powers, duties, and obligations of the Division of Radiation Protec- tion of the Department of Environment and Natural Resources are transferred in their entirety to the Division of Environmental Health of the Department of Environment and Natural Resources. This act became effective July 1, 2002. To view full text of bill, click here. Low-Sulfur Gasoline Requirements: H1308 Ch. 2002-75 This bill confirms January 1, 2004, as the date on which State requirements governing the concentration of sulfur in gasoline become effective. It also provides that gasoline meeting federal requirements governing the concentration of sulfur in gasoline shall be deemed to comply with State requirements governing the concentration of sulfur in gasoline during the two-year period allowed for the transition to low-sulfur gasoline by federal regulations. This act became effective August 15, 2002. To view full text of bill, click here. Clarify LUST Land-Use Restrictions/Deed Record: H1575 Ch. 2002-90 Please see summary under “Real Property.” Amend Pollution Abatement Tax Exclusion: S1253 Ch. 2002-104 A new provision is added to N.C.G.S. 105-275(8) that disqualifies certain animal waste man- agement systems from special property classification and exclusion from the tax base. The act also directs the Revenue Laws Study Committee to study issues related to the tax exclusion. This act became effective September 6, 2002. To view full text of bill, click here. Disapprove CAMA Rule: H1540 Ch. 2002-116 This act disapproves an amendment to the Administrative Rule entitled “Use Standards for Ocean Hazard Areas: Exceptions,” as adopted by the Coastal Resources Commission, and authorizes counties and cities to order the removal of a swimming pool upon a finding that the swimming pool is dangerous or prejudicial to public health or safety. This act became effective September 17, 2002. To view full text of bill, click here. Environmental Reports Amendments: H1572 Ch. 2002-148 Various environmental reporting requirements are amended or repealed. Among other things, N.C.G.S. 113-145.6A is amended to require the Chair of the Board of Trustees of the Clean Water Management Trust Fund to report each year by December 1 on the implementation of this Article. N.C.G.S. 130A-294(i) is also rewritten to require the Department’s report on the implementation of the comprehensive hazardous waste management plan to include an evaluation of how well the State and private parties are managing and cleaning up hazardous waste. In addition, several sections in Chapter 143 are rewritten to require annual reports instead of quarterly or semiannual ones. This act became effective October 9, 2002. To view full text of bill, click here. Inactive Hazardous Sites Amendments: H1564 Ch. 2002-154 This act provides the Department of Environment and Natural Resources with explicit author- ity to assess a civil penalty for a violation involving a voluntary remedial action under the Inactive Hazardous Sites Program conducted by a private environmental consulting or engineering firm. N.C.G.S. 130A-22(a) provides that the penalty assessed shall not exceed $25,000 per day for such a violation. This act also expands the environmental permit waiver authority under the Program. This act gener- ally became effective October 9, 2002. To view full text of bill, click here. Land Conservation Statutes Amendments: S1252 Ch. 2002-155 As recommended by the Environmental Review Commission, N.C.G.S. 113A-231 is amended to provide that the Department of Environment and Natural Resources shall exercise its powers to protect real property and interests in real property which have been donated for certain tax credits, conserved with the use of other financial incentives, or conserved through nonregulatory programs. N.C.G.S. 113A-232 is also rewritten to provide that State conservation land management agencies, local government conservation land management agencies and private nonprofit land trust organiza- tions are eligible to receive grants from the Conservation Grant Fund. This act became effective Octo- ber 9, 2002. To view full text of bill, click here. Environmental Technical Corrections: H1007 Ch. 2002-165 This act makes clarifying, conforming and technical amendments to various laws related to the environment, public health and natural resources, as recommended by the Environmental Review Com- mission. This act became effective October 23, 2002. To view full text of bill, click here. Conserve Water/Promote Green Energy: H1215 Ch. 2002-167 Units of local government are directed to evaluate their efforts to conserve water, including developing plans for current and future water conservation and water reuse programs. The Environ- mental Management Commission is also required to adopt rules governing water conservation and water reuse, and a goal to reduce water consumption by State agencies by at least 10% is established. In addition, the Utilities Commission is directed to study methods to fund and promote the develop- ment of green power in North Carolina. This act became effective October 23, 2002. To view full text of bill, click here. Amend Environmental Laws: H1537 Ch. 2002-176 The pilot program for inspection of animal waste management systems is extended and will not terminate until September 1, 2003, and the reporting requirement for the program is amended. In addition, N.C.G.S. 143B-295 is amended to provide that members of the Soil and Water Conservation Commission may hold concurrent offices consistent with the provisions of the North Carolina Consti- tution. N.C.G.S. 139-54 is also amended to authorize the Soil and Water Conservation Commission to approve grants for small watershed projects related to dam rehabilitation and improvement. Further, N.C.G.S. 120-70.42 is rewritten to provide that members of the Environmental Review Commission who are not reelected to the General Assembly may complete their term of service on the Commission until a new General Assembly convenes. N.C.G.S. 159G-6(c) is amended to authorize the Department of Environment and Natural Resources to transfer funds from the General Water Supply Revolving Loan and Grant Account to the Emergency Water Supply Revolving Loan Account in order to assist water supply systems that are experiencing a drought emergency. This act became effective October 31, 2002. To view full text of bill, click here. ESTATE PLANNING & FIDUCIARY LAW Distribution to Unlocated Devisees: H1538 Ch. 2002-62 This act amends the law relating to distribution to known but unlocated devisees or heirs to conform to the North Carolina Unclaimed Property Act. Specifically, it provides that, if no claim to the share has been presented within one year after the filing of the final account, the clerk shall deliver the share to the State Treasurer as abandoned property. This act became effective October 1, 2002. To view full text of bill, click here. Housing Tax Credit Changes/Estate Tax Changes: S1416 Ch. 2002-87 Please see summary under “Tax Law.” 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” FAMILY LAW 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” Address Confidentiality Program: H1402 Ch. 2002-171 This legislation establishes an Address Confidentiality Program for victims of domestic vio- lence, sexual offense and stalking. Chapter 15C of the General Statutes enables the State and the agencies of North Carolina to respond to requests for public records without disclosing the location of such victims. Under this program, the Attorney General designates a substitute address for a program participant and acts as the agent of the program participant for purposes of service of process and receiving and forwarding first-class mail or certified or registered mail. Other provisions in this legis- lation cover the filing and certification of applications for participation in the program, the issuance of a program authorization card, certification cancellation, address use by State or local agencies, the prohibition from disclosing a program participant’s actual address or telephone number, and additional time afforded a program participant to act in certain legal situations. Further, N.C.G.S. 132-1.1 is amended to specifically state that the actual address and telephone number of a program participant is not a public record and may not be disclosed except under certain circumstances. This act becomes effective January 1, 2003. To view full text of bill, click here. GOVERNMENT & PUBLIC SECTOR ATTORNEYS Retirement System Conforming Changes: S1429 Ch. 2002-71 This bill makes changes in the Teachers’ and State Employees’ Retirement System, the Local Governmental Employees’ Retirement System, the Legislative Retirement System, and the Consoli- dated Judicial Retirement System. The changes conform these retirement systems to the Economic Growth and Tax Relief Reconciliation Act of 2001. Specifically, Chapters 120, 128 and 135 of the General Statutes are amended to allow eligible members of the respective retirement systems to purchase service credits through rollover contribu- tions to the Annuity Savings Fund from certain other plans. Eligible members may also purchase service credits through a direct transfer to the Annuity Savings Fund from certain other plans. In addition, this legislation increases the maximum annual compensation used for determining all ben- efits for certain persons for plan years after December 31, 2001, to $200,000. This act generally becomes effective January 1, 2003. To view full text of bill, click here. Withdrawn Retirement Service: S1238 Ch. 2002-153 This act allows the purchase of withdrawn service in the Local Governmental Employees’ Retirement System and corrects the calculation of benefits for members of the Teachers’ and State Employees’ Retirement System who purchase withdrawn service. It also increases the appropriation to the Retirement Systems Division by $247,713 to fund eight two-year time-limited positions to imple- ment the provisions of this act. This act becomes effective January 1, 2003. To view full text of bill, click here. HEALTH LAW License by Credentials/Dentistry: S861 Ch. 2002-37 Please see summary under “Administrative Law.” MH/DD/SA Commission Changes: H1515 Ch. 2002-61 The Commission for Mental Health, Developmental Disabilities, and Substance Abuse Ser- vices shall consist of 30 members. The General Assembly shall appoint 6 members, and the Governor shall appoint 24 members to the Commission. Persons recommended for appointment must meet certain criteria listed in N.C.G.S. 143B-148. This act became effective August 1, 2002. To view full text of bill, click here. 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” Sanitation Rules/Effective Date and Field Test: H1777 Ch. 2002-160 This act delays the effective date of certain administrative rules governing sanitation of hospi- tals, nursing homes, rest homes, and other institutions to March 1, 2003, and provides for a field test of those rules. In addition, the Commission for Health Services is authorized to adopt temporary and permanent rules to amend those rules, and the Medical Care Commission is authorized to adopt tempo- rary and permanent rules governing the licensing of family care homes and homes for the aged and infirm. This act also requires the Secretary of Health and Human Services and the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services to develop a process for expediting review of requests for waivers from rules pertaining to mental health, developmental dis- abilities and substance abuse services. This act became effective October 17, 2002. To view full text of bill, click here. LEAs and Group Homes: S163 Ch. 2002-164 Please see summary under “Juvenile Justice & Children’s Rights.” Public Health Bioterrorism Preparedness: H1508 Ch. 2002-179 The purpose of this act is to promote readiness for, and improve management of, a public health threat that may result from a terrorist incident using nuclear, biological or chemical agents. N.C.G.S. 130A-475 provides that, if the State Health Director suspects such a threat to exist, the State Health Director is authorized to order any of the following: (i) require any person or animal to submit to examinations to determine possible exposure; (ii) test any real or personal property; (iii) evacuate or close any real property for up to 10 days to investigate suspected contamination; (iv) limit the freedom of movement or action of a person or animal that is or may be contaminated; and (v) limit access by any person or animal to an area that is housing persons or animals that may have been contaminated. Other provisions address access to health information, abatement of a public health threat, tort liability, quar- antine and isolation authority, confidentiality of certain information, and detention to protect public health. This act also amends the North Carolina Medical Care Commission’s rule-making authority regarding standards and criteria for the education and credentialing of persons trained to administer treatment for anaphylaxis. Further, this act provides that medical review confidentiality applies to ambulatory surgical facilities and amends the North Carolina Hazardous Materials Emergency Act to provide for regional responses to terrorist incidents. This act became effective October 1, 2002. To view full text of bill, click here. Insurance Amendments: H760 Ch. 2002-187 Please see summary under “Insurance.” INSURANCE Beach and FAIR Plan Amendments: H1120 Ch. 2002-185 To address the inadequate availability of homeowners’ insurance policies in beach and coastal counties, this act requires the Beach Plan to issue homeowners’ insurance policies to residents in such areas who are unable to obtain homeowners’ insurance policies from certain insurers. Further, Chapter 58 is amended to provide immediate temporary binding authority of agents accepting applications to the Beach Plan and to require the Beach and FAIR Plans to maintain unearned premium reserves and reserves for losses. This act also clarifies that the Beach and FAIR Plans are subject to the Open Meetings Act and amends the insurance law pertaining to special deposits to permit hardship payments under workers’ compensation policies. This act generally became effective October 31, 2002. To view full text of bill, click here. Insurance Amendments: H760 Ch. 2002-187 Part I of this act clarifies certain definitions in the Motor Vehicle Reinsurance Facility and FAIR and Beach Plan laws and makes other technical and substantive corrections. Part II amends various provisions in Chapter 58 regarding Department of Insurance oversight of insurance company solvency. Part III amends the managed care external review law to provide clarity in mailing notices, the same immunity to medical professionals advising the Commissioner as provided to external re- viewers, and confidentiality of credentialing information in the possession of the Commissioner. Part IV extends the rate filing timetables for homeowners’ and workers’ compensation insur- ance to 210 days. Part V clarifies the North Carolina Health Insurance Portability and Accountability Act, and Part VI extends the time for premium finance company premium refunds for audited policies to 90 days. Part VII amends the title insurance reserve laws to enhance insolvency protection. Part VIII reduces the nonforfeiture interest rate for individual annuities to one and one-half percent per annum. This act became effective October 31, 2002. To view full text of bill, click here. JUDICIAL SELECTION Judicial Campaign Reform Act: S1054 Ch. 2002-158 Please see summary under “Litigation & the Courts.” JUVENILE JUSTICE & CHILDREN’S RIGHTS Level 2 GDL Restriction – Child Fatality Task Force: H1546 Ch. 2002-73 Please see summary under “Criminal Justice.” Close Incest Loophole to Protect Minors: H1276 Ch. 2002-119 Please see summary under “Criminal Justice.” 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” LEAs and Group Homes: S163 Ch. 2002-164 This act addresses licensure issues and the needs of local school administrative units in which group homes for children are located. N.C.G.S. 115C-140.1(a) provides that, if a child with special needs is placed in a group home or foster home, the cost of a free appropriate public education for that child must be borne by the local board of education in which the group home or foster home is located. However, this statute is amended to state that “the local school administrative unit in which a child is domiciled shall transfer to the local school administrative unit in which the institution is located an amount equal to the actual local cost in excess of State and federal funding required to educate that child in the local school administrative unit for the fiscal year.” In addition, N.C.G.S. 122C-23 and 131D-10.3 are amended to provide that the Department of Health and Human Services shall not enroll any new provider for Medicaid Home or Community Based services or other Medicaid services or issue a license for a new facility or a new service if the applicant meets any of the listed criteria. N.C.G.S. 143B-139.1 is rewritten to authorize the Secretary to adopt and enforce rules governing certain specific areas applicable to local health and human ser- vices agencies. Further, N.C.G.S. 7B-505, 7B-903(a)(2)c., 7B-2502(a), and 7B-2503 are amended to provide that, in placing a juvenile in nonsecure custody or out-of-home care, the court must also consider whether it is in the juvenile’s best interest to remain in the juvenile’s community of residence. This act generally became effective October 23, 2002. To view full text of bill, click here. LABOR & EMPLOYMENT LAW Retirement System Conforming Changes: S1429 Ch. 2002-71 Please see summary under “Government & Public Sector Attorneys.” Temporary Extended Unemployment Benefits: H1040 Ch. 2002-143 This bill addresses the temporary extended unemployment benefits second tier benefit qualifi- cation for the State. Specifically, N.C.G.S. 96-12.01(a1)(4) is amended to provide, among other things, that the “total extended benefit amount payable to any eligible individual with respect to the applicable benefit year shall be the least of the following amounts: I. Fifty percent (50%) of the total amount of regular benefits which were payable to the individual under this Chapter in the individual’s applicable benefit year; or II. Thirteen times the individual’s weekly benefit amount that was payable to the individual under this Chapter for a week of total unemployment in the applicable benefit year.” This act became effective October 4, 2002. To view full text of bill, click here. Persons with Disabilities Changes: S866 Ch. 2002-163 The definition of “reasonable accommodations” in the Persons with Disabilities Protection Act is amended to state that an employer is not required to make any changes that would impose on the employer an “undue hardship,” which is defined as a “significant difficulty or expense.” Several factors must be considered in determining whether an accommodation would impose an undue hard- ship. N.C.G.S. 168A-10.1 directs the North Carolina Office on the Americans with Disabilities Act to adopt rules to provide a “consistent and comprehensive mechanism for accommodating requests regarding accessibility to public services” and to adopt dispute resolution procedures to govern re- sponsiveness to those requests. This act becomes effective January 1, 2003. To view full text of bill, click here. LITIGATION & THE COURTS Firearm Regulation Amendments: H622 Ch. 2002-77 In this bill, the General Assembly declares that the lawful design, marketing, manufacture, distribution, sale, or transfer of firearms or ammunition to the public is not an unreasonably dangerous activity and does not constitute a nuisance per se. Furthermore, the General Assembly recognizes that it is the unlawful use of firearms and ammunition, rather than their lawful design, marketing, manufac- ture, distribution, sale, or transfer, that is the proximate cause of injuries arising from their unlawful use. A new subsection is also added to Chapter 14, N.C.G.S. 14-409.40(g), to authorize the State exclusively to bring suit against any firearms or ammunition marketer, manufacturer, distributor, dealer, seller, or trade association by or on behalf of certain governmental units for any remedies related to the lawful design, marketing, manufacture, distribution, sale, or transfer of firearms or ammunition to the public. Any such action will be brought by the Attorney General on behalf of the State. This act became effective August 15, 2002, and applies to any action pending or filed on or after that date. To view full text of bill, click here. Rail Transportation Liability: S759 Ch. 2002-78 This act establishes limitations on rail transportation liability. Specifically, N.C.G.S. 160A- 626, 153A-279 and 160A-326 are amended to add definitions of “claim,” “passenger rail services,” “railroad,” and “operating rights railroad.” In addition, the Authority, county or city may contract with any railroad to allocate financial responsibility for passenger rail services claims. This legislation also states insurance requirements for the entity entering into such a contract and sets specific limits on the aggregate liability of the entity. This act became effective August 15, 2002. To view full text of bill, click here. Modify Appropriations Act of 2001: S1115 Ch. 2002-126 The budget bill contains all State appropriations and many special provisions and must be read along with the Joint Conference Committee Report in order to gain a full understanding of its contents. Brief highlights from the Judicial provisions in the budget bill include the following: • The Judicial Branch is authorized to use up to $45,000 to pilot a program of audio-visual court reporting in District #13. • Travel and per diem expenses are reduced to reflect less frequent conferences for court personnel. • Five magistrate positions are eliminated as of January 1, 2003, with the reductions taken in the lowest workload counties. In addition, positions that are currently vacant or become vacant prior to December 31 will remain vacant until new appointments are made effective January 1, 2003. • Funding for the appellate courts is reduced to reflect, among other things, the elimination of the use of emergency judges at the Court of Appeals and a reduction in library expenses. • Budgeted funds for emergency judge pay at the trial court level are reduced to reflect greater management of the use of emergency judges. • Funding for the dispute settlement centers is reduced 16%. In addition, a process for collec- tion of a $60 fee in court-referred cases that are successfully resolved by the program is to be estab- lished. • Non-personnel expenses for the Family Court Program are reduced $100,000 to reflect in- creased efficiencies. • One Victim Witness Legal Assistant position is eliminated in District #2 and two positions are eliminated in District #24. These are the only districts with more VWLAs than assistant district attorney positions. • Expenditures for arbitration fees through the District Court Mandatory Arbitration Program are reduced to reflect the exclusion of collections cases from mandatory arbitration. • Funding from the General Fund for the Drug Treatment Court Program is reduced to reflect changes in the allocation of federal funds, the greater use of outside resources for case management, and increased efficiencies in the administration of the program. In addition, the Drug Treatment Court Administrator position is eliminated with those duties being absorbed by other AOC staff. • The Sentencing Services Program is transferred to the Office of Indigent Defense Services as of July 1, 2002. • Funds are provided for telephone and data lines for a new courthouse in Dare County. • The Appellate Courts Printing and Computer Operations Fund is established to hold all funds collected through charges to litigants for the reproduction of appellate records and briefs. Funds will be used to support the print shop operations of the appellate courts. Brief highlights from the Judicial - Indigent Defense provisions in the budget bill include the following: • One Assistant Public Defender position is eliminated in District #12. • Funding for the Sentencing Services Program is reduced to reflect a narrower focus for the program and more efficient administration. • The Mecklenburg County Public Defender Program is expanded, but the expansion is pro- jected to result in a cost saving for 2002-2003. • The budget for assigned counsel for indigent defendants is increased by a one-time General Fund appropriation of $4,950,000. These funds are to be used to pay some of the $6,700,000 in unpaid attorney fees carried over from 2001-2002. • A new appointment fee is instituted effective December 1, 2002, with the receipts budgeted to the Office of Indigent Defense Services. • The Office of Indigent Defense Services is authorized to use up to $1,225,000 in existing funding to create a public defender office in Forsyth County. The creation of this office is projected to result in a cost saving for 2002-2003. Except as otherwise provided, this act became effective July 1, 2002. To view full text of bill, click here. Clarification of Court Fees: H1187 Ch. 2002-135 This act clarifies the court fees for legal services and makes various other court fees uniform. Specifically, the State Treasurer is directed to remit $1.05 of each $30.00 General Court of Justice fee collected pursuant to certain statutes to the North Carolina State Bar for the provision of legal services. This act became effective October 1, 2002. To view full text of bill, click here. Judicial Campaign Reform Act: S1054 Ch. 2002-158 This legislation provides for what is intended to be, beginning in 2004, full public financing in the general election for appellate judicial candidates who accept strict fundraising and spending limits. To that end, the North Carolina Public Campaign Financing Fund is established as an alternative source of campaign financing for candidates who demonstrate adequate public support and agree to the re- strictions. The chief funding mechanisms for the Fund are a voluntary $50 contribution requested from lawyers at the time they pay their privilege license tax beginning July 1, 2003, and a positive $3 check- off on the North Carolina individual income tax form. Agreeing to the $3 check-off on an individual’s State income tax form does not increase or decrease the individual’s tax liability. This bill also lowers the contribution limits for appellate judicial campaigns to $1,000 ($2,000 from immediate family members) and establishes a nonpartisan method of electing Supreme Court Justices and Court of Appeals Judges beginning in 2004. Under this system, the nonpartisan primary will be used to narrow the field of candidates to two candidates for each position to be filled. Appellate judicial candidates can qualify for public funding of their campaigns if they volun- tarily meet certain conditions, including filing a declaration of intent to participate in the program, receiving qualifying contributions during a set period from at least 350 North Carolina registered vot- ers in amounts between $10 and $500 each, spending only up to a set qualifying contribution cap during the primary, and agreeing to spend only public funds and remaining qualifying donations in the general election. Incumbents are not exempted from meeting these conditions for participation. If the State Board of Elections certifies a candidate under the program, that candidate may receive “rescue funds” in a contested primary to match opposition spending by a non-certified candi- date that exceeds a certain level. In the general election, the candidate will receive an initial funding amount and rescue funds as necessary to match opposition spending by a non-certified candidate in excess of the initial amount, up to twice that amount. Further, a certified candidate may receive rescue funds when hit with spending by an opposing non-certified candidate and/or by independent-expendi- ture activity that exceeds the spending limit accepted by the certified candidate. The bill also estab- lishes a fundraising embargo in the 21 days before the general election so that it is more difficult for a non-certified candidate to make a last minute “surprise attack” on a certified candidate who has not received the maximum amount of rescue money. The non-certified candidate can still add more money from personal funds. This legislation also provides for the distribution of a Judicial Voter Guide with information on all appellate judicial candidates before both the primary and the general election and sets a civil penalty for violations of this act. This act generally became effective October 10, 2002. To view full text of bill, click here. LOCAL GOVERNMENT Billboard Just Compensation Sunset Extended: H1487 Ch. 2002-11 Please see summary under “Real Property.” Rail Transportation Liability: S759 Ch. 2002-78 Please see summary under “Litigation & the Courts.” Local Government Reverse Auctions: S1170 Ch. 2002-107 A new section, N.C.G.S. 143-129.9, is added to Article 8 of Chapter 143 of the General Statutes to authorize additional methods for bidding on public procurement contracts. Specifically, a political subdivision of the State may use reverse auctions or electronic bidding to obtain competitive bids for the purchase of apparatus, supplies, materials, or equipment. A “reverse auction” is defined as a “real- time purchasing process in which bidders compete to provide goods at the lowest selling price in an open and interactive environment” in which the bidders’ prices may be revealed. “Electronic bidding” allows a political subdivision to receive bids electronically in addition to, or instead of, paper bids. This act became effective September 6, 2002. To view full text of bill, click here. Secure Local Revenues: H1490 Ch. 2002-120 Please see summary under “Tax Law.” REAL PROPERTY Billboard Just Compensation Sunset Extended: H1487 Ch. 2002-11 This act extends expiration of the requirement that just compensation be paid for the removal by local authorities of billboards on interstates and federal-aid primary highways, as required by fed- eral law. This requirement will remain effective until 23 U.S.C. § 131(g) is amended or repealed. This act became effective June 27, 2002. To view full text of bill, click here. Judicial and Execution Sales Clarification: H1513 Ch. 2002-28 As recommended by the General Statutes Commission, this act clarifies that the recent estab- lishment of a rolling upset bid procedure for judicial and execution sales did not affect the requirement that such sales be confirmed by the appropriate judicial official. This act became effective July 22, 2002. To view full text of bill, click here. Certain Counties Delinquent Taxes: H1533 Ch. 2002-51 This act authorizes certain counties (Bertie, Clay, Durham, Henderson, Hertford, Macon, Northampton, Polk, Rutherford, and Transylvania), in addition to those counties already authorized, to require the payment of delinquent property taxes before recording deeds conveying property. This act became effective July 30, 2002. To view full text of bill, click here. Amend CAMA Variance Process: H1544 Ch. 2002-68 This bill amends the process by which a variance may be granted by the Coastal Resources Commission under the Coastal Area Management Act. To qualify for a variance, a petitioner must show the following: 1) unnecessary hardships would result from strict application of the rules, stan- dards or orders; 2) the hardships result from conditions that are peculiar to the property, such as the location, size or topography of the property; 3) the hardships did not result from actions taken by the petitioner; and 4) the requested variance is consistent with the spirit, purpose and intent of the rules, standards or orders, will secure public safety and welfare, and will preserve substantial justice. The Coastal Resources Commission may impose reasonable and appropriate conditions and safeguards upon any variance it grants. This act became effective August 8, 2002. To view full text of bill, click here. Secondary Road Paving: H1492 Ch. 2002-86 This legislation requires the Department of Transportation to condemn land for secondary road paving or maintenance projects when the owners of the majority of the road frontage adjacent to the project agree to provide the necessary right-of-way for the project. This act became effective August 22, 2002. To view full text of bill, click here. Clarify LUST Land-Use Restrictions/Deed Record: H1575 Ch. 2002-90 This act clarifies certain statutes related to land-use restrictions and recordation of those re- strictions in connection with the cleanup of releases from petroleum underground storage tanks, as recommended by the Environmental Review Commission. This act became effective retroactively to September 1, 2001. To view full text of bill, click here. Amend Condominium and Planned Community Acts: S1154 Ch. 2002-112 As recommended by the General Statutes Commission, this act expands the list of sections of the North Carolina Condominium Act that apply to condominiums created on or before October 1, 1986, and codifies an applicability provision relating to the North Carolina Planned Community Act. This act became effective September 6, 2002. To view full text of bill, click here. Electronic Register of Deed Filings: H1581 Ch. 2002-115 This legislation affects electronic signatures and electronic records filed with the Cabarrus County and Mecklenburg County Registers of Deeds. Specifically, N.C.G.S. 66-58.4(b), which used to prohibit electronic signatures when attestation by a notary public was required, is amended to allow an electronic signature in such circumstances if the electronic signature, together with all other informa- tion required to be included by other applicable law, is attached to, or logically associated with, the signature or record. In addition, N.C.G.S. 161-14 is amended to provide that the register of deeds may accept elec- tronic records for filing and that the fees for recording an electronic record shall be based on the number of pages and formatting of the electronic record if it were printed by the register of deeds following recording. This act became effective September 16, 2002. To view full text of bill, click here. 2002 Technical Corrections: S1217 Ch. 2002-159 Please see summary under “Other.” Amend Mortgage Lending Act: H1307 Ch. 2002-169 The Mortgage Lending Act is amended to authorize the licensure of exclusive mortgage bro- kers if the individual applicant complies with the stated requirements. This bill also requires criminal history record checks on applicants and licensees and provides for the approval of educational courses under the Mortgage Lending Act. This act became effective October 23, 2002. To view full text of bill, click here. Public Health Bioterrorism Preparedness: H1508 Ch. 2002-179 Please see summary under “Health Law.” Amend Use Value Statutes and Other Tax Laws: S1161 Ch. 2002-184 Please see summary under “Tax Law.” TAX LAW Revenue Laws Technical Changes: S1160 Ch. 2002-72 This act makes various technical and clarifying changes to the revenue laws and related statutes and provides a one-time extension to the time period in which a taxpayer may sign a letter of commit- ment with the Department of Commerce to qualify for a lower tier designation. Specifically, if during January or February 2002 a taxpayer signed a letter of commitment with the Department of Commerce under N.C.G.S. 105-129.8 to create new jobs at a location or under N.C.G.S. 105-129.9 to place spe- cific machinery and equipment in service at a location, then the taxpayer may calculate the credit for which the taxpayer qualifies based on the location’s enterprise tier designation and development zone designation for 2001. This act generally became effective August 12, 2002. To view full text of bill, click here. Housing Tax Credit Changes/Estate Tax Changes: S1416 Ch. 2002-87 The primary purpose of this act is to improve the low-income housing tax credit by making it simpler and less costly, while providing the same level of incentives for the construction of low-in- come housing. To that end, a new Article, “Low-Income Housing Tax Credits,” is added to Chapter 105 of the General Statutes. N.C.G.S. 105-129.42 addresses credits for low-income housing awarded a federal credit allocation on or after January 1, 2003. It establishes that a taxpayer who is allocated a federal low-income housing tax credit under section 42 of the Code to construct or substantially reha- bilitate a qualified North Carolina low-income housing development is allowed a credit equal to a percentage of the development’s eligible basis. N.C.G.S. 105-129.42(c) sets out the housing develop- ments that are qualified North Carolina low-income housing developments and are allowed a credit, as well as the percentage of the development’s eligible basis for which a credit is allowed. N.C.G.S. 105-129.41 addresses credits for low-income housing awarded a federal credit alloca- tion before January 1, 2003. The credit allowed may not exceed 50% of the tax against which it is claimed for the taxable year, reduced by the sum of all other credits made by or on behalf of the taxpayer. A provision is also added to cover the process of tax election. These housing tax credit changes generally became effective August 22, 2002. This bill also modifies the formula for calculating North Carolina estate tax on estates with property in more than one state. In such a case, the amount of tax payable depends on whether the decedent was a resident of this State at death. If so, the tax due is “reduced by the lesser of the amount of the death tax paid the other state or an amount computed by multiplying the credit by a fraction, the numerator of which is the gross value of the estate that has a tax situs in another state and the denomi- nator of which is the value of the decedent’s gross estate.” If the decedent was not a resident of this State at death, the tax due is computed by “multiplying the credit by a fraction, the numerator of which is the gross value of real property that is located in North Carolina plus the gross value of any personal property that has a tax situs in North Carolina and the denominator of which is the value of the decedent’s gross estate.” This portion became effective retroactively to January 1, 2002, and applies to the estates of decedents dying on or after that date. To view full text of bill, click here. Extend Qualified Business Venture Tax Credit: H1520 Ch. 2002-99 This legislation extends the sunset on tax credits for qualified business investments and amends the definition of “qualified grantee business” in N.C.G.S. 105-163.010. It also extends the sunset on the State Ports tax credit and clarifies the North Carolina State Ports Authority’s fee-setting authority. This act generally became effective August 29, 2002. To view full text of bill, click here. Amend Pollution Abatement Tax Exclusion: S1253 Ch. 2002-104 Please see summary under “Environmental Law.” Revenue Laws Enforcement Enhancements: S1218 Ch. 2002-106 Please see summary under “Criminal Justice.” Contracts to Reimburse Fuel Tax/Fuel Tax Changes: S1407 Ch. 2002-108 This act establishes a contract right regarding the timing of payments under contracts requiring reimbursement of federal fuel excise taxes. Article 6 is added to Chapter 119 of the General Statutes to provide that, when a contract calls for one party to reimburse a second party for the federal manufacturer’s excise taxes levied on petroleum products, the party making the reimbursement has the right to choose to tender payment for the taxes no more than one business day before the day the second party is required to remit the taxes to the federal Internal Revenue Service. The party making the reimburse- ment has the option of exercising this right. Exercise of this right does not relieve the party of the obligation to make the reimbursement as provided for in the contract, but affects only the timing of when that reimbursement must be tendered. This act also provides the procedure for exercising this contractual right. In addition, this bill makes various motor fuel excise tax changes. Among other things, N.C.G.S. 105-449.87 imposes an excise tax at the motor fuel rate on motor fuel that, based on its shipping document, is destined for delivery to another state and is then diverted and delivered in this State. N.C.G.S. 105-449.115A is a new section which provides that a person may not transport motor fuel by tank wagon unless that person has an invoice, bill of sale or shipping document containing certain information. This act generally becomes effective January 1, 2003. To view full text of bill, click here. Secure Local Revenues: H1490 Ch. 2002-120 The primary purpose of this legislation is to provide that local revenues may not be withheld or impounded by the Governor. To that end, Chapters 105, 136 and 159B of the General Statutes are amended in various places to state that the revenue at issue is local revenue and not a State expenditure under the North Carolina Constitution so the Governor is not authorized to reduce or withhold the distribution. In addition, N.C.G.S. 143-25(b) states that, in order to satisfy certain statutory requirements and provide adequate services to their citizens, units of local government must be able to rely on the funds and local revenue sources the General Assembly has provided. Therefore, the Governor “shall not withhold from distribution funds that have been collected by the State on behalf of local govern- ments or funds that the General Assembly has appropriated or otherwise committed to local govern- ments unless, after making adequate provision for the prompt payment of principal of and interest on bonds and notes of the State according to their terms, the Governor has exhausted all other sources of revenue of the State including surplus remaining in the treasury at the beginning of the fiscal period.” However, the act does not authorize the Governor to withhold revenues from taxes levied by units of local governments and collected by the State because the State is prohibited from taking local tax revenue. Finally, the act clarifies the franchise tax on electric power companies. Specifically, a new subsection is added to N.C.G.S. 105-116 to provide that “[a]n electric power company engaged in the business of furnishing electricity, electric lights, current, or power that collects the annual franchise or privilege tax . . . and remits the tax collected to the Secretary shall not be subject to any additional franchise or privilege tax imposed upon it by any city or county.” This act became effective September 24, 2002. To view full text of bill, click here. Local Sales Tax Acceleration: S1292 Ch. 2002-123 An additional one-half cent local option sales and use tax may be levied on or after December 1, 2002. This act became effective September 26, 2002. To view full text of bill, click here. Interstate Air Couriers – Bill Lee: H1665 Ch. 2002-146 This act amends tax laws related to interstate air couriers and amends the wage standard under the William S. Lee Quality Jobs and Business Expansion Act in Chapter 105 of the General Statutes to account for the value of health insurance to part-time jobs. This act generally became effective for taxable years that begin on or after January 1, 2002. To view full text of bill, click here. Amend Property Tax Laws: H1523 Ch. 2002-156 N.C.G.S. 105-358 is rewritten to provide that a “tax collector may, upon making a record of the reasons therefor, reduce or waive the ten percent (10%) penalty imposed on giving a worthless check under G.S. 105-357(b)(2).” A new subsection is also added to N.C.G.S. 105-317.1 to provide a process for a taxpayer who owns taxable personal property to appeal the value, situs or taxability of the prop- erty. In addition, N.C.G.S. 105A-13 is amended to authorize the imposition of a local collection assis- tance fee on each local agency debt. This act has varying effective dates, but generally became effec- tive October 9, 2002. To view full text of bill, click here. Amend Use Value Statutes and Other Tax Laws: S1161 Ch. 2002-184 This act primarily amends the present-use value statutes to more accurately determine the real- istic present-use value of agricultural land, horticultural land and forestland for property tax purposes. This act also creates a Property Tax Subcommittee of the Revenue Laws Study Committee to study the property tax system and clarifies the sales and use tax exemption regarding certain agricultural sub- stances. Finally, this act makes various administrative changes in the tax laws. This act has varying effective dates but generally becomes effective for taxes imposed for taxable years beginning on or after July 1, 2003. To view full text of bill, click here. WORKERS’ COMPENSATION Insurance Amendments: H760 Ch. 2002-187 Please see summary under “Insurance.” OTHER Tobacco Escrow Compliance: H348 Ch. 2002-145 The purpose of this bill is to improve compliance with the tobacco escrow statute. To accom- plish this purpose, Article 37 of Chapter 66 of the General Statutes is amended to add a new Part which addresses a prohibition on the sale of certain cigarettes, the duties of participating and nonparticipating manufacturers, applications by nonparticipating manufacturers, and the duties of the Attorney General in the preparation of certain lists. This act generally became effective October 4, 2002. To view full text of bill, click here. Motor Carrier Safety Amendments: H1519 Ch. 2002-152 The Division of Motor Vehicles must refuse to issue a certificate of title for, and refuse or cancel the registration of, a motor vehicle owned by a motor carrier that is determined to pose an “imminent hazard.” This bill also clarifies the definitions of interstate and intrastate motor carrier. Further, the Division of Motor Vehicles is authorized to determine the safety fitness of, and assign safety ratings to, intrastate motor carriers. This act becomes effective December 1, 2002. To view full text of bill, click here. 2002 Technical Corrections: S1217 Ch. 2002-159 The General Assembly passes a bill every session that is prepared in part by the General Stat- utes Commission, in part by the Bill Drafting and Research attorneys on staff at the General Assembly, and in part by legislators at the request of constituents and other interests. This bill is supposed to be limited to correcting citation references and other mechanical errors in an effort to resolve conflicts in various statutes and session laws, but, over the years, it has also included more substantive changes. This year’s version provides, among other things, for changes to N.C.G.S. 28A-13-3(c) and N.C.G.S. 28A-15-1(c) to correct a drafting error and an amendment to N.C.G.S. 48-2-601 to state explicitly that transfers from the clerk of court in adoption matters go to a district court judge. In addition, N.C.G.S. 7B-3000(g) is rewritten to authorize the Administrative Office of the Courts, rather than the Department of Juvenile Justice and Delinquency Prevention, to adopt rules governing the destruction of juvenile court records. Further, N.C.G.S. 50-20(b)(4) is amended to clarify that, in an equitable distribution action, “divisible property” includes decreases in martial debt as well as in- creases. This bill also includes several technical corrections to N.C.G.S. 59-73.12(a) and 59-1052 as enacted last year in Senate Bill 842, Business Entity Changes. These changes clarify who submits and signs articles of conversion to a general partnership and who submits and signs articles of conversion to a limited partnership, respectively. In addition, a subsection is added to N.C.G.S. 143-730 to provide for the confidentiality of an individual’s health information in the possession of the Managed Care Patient Assistance Program. This legislation also exempts the national standard Uniform Commercial Code forms from the requirements set out in N.C.G.S. 161-14(b) for instruments presented to registers of deeds for registration. Further, this act amends a 2001 budget provision to provide that the Medicaid transfer of assets policy applies to non-institutionalized individuals as well as institutionalized individuals, but that the application of this provision will become effective no less than 30 days after all Medicaid recipients have been notified and will not apply to any transfers occurring prior to the implementation of the policy to non-institutionalized individuals. Another provision in this bill specifies that the Department of Health and Human Services must continue to “exclude the equity value of life estate and tenancy-in- common property when determining resource eligibility for Medicaid, even if the property is also income producing.” This act generally became effective October 11, 2002. To view full text of bill, click here. Studies Act of 2002: S98 Ch. 2002-180 This bill authorizes various studies for the time between the end of the 2002 session and the commencement of the 2003 session in January. Legislative Research Commission issues include the following: revival of the Notice of Settlement Act, alcoholic beverage laws, Internet spam, employer benefits, earlier organization of the General Assembly to expedite the session, criminal history record checks of employees of long-term care providers, State personnel system statutes, and the inclusion of charter schools in the Tort Claims Act for school bus accidents. The LRC may report its findings on any of these topics to the 2003 General Assembly. This legislation also directs the Department of Health and Human Services to study ways the State can facilitate public access to public and private free and discount prescription drug programs for senior citizens. In addition, the Joint Legislative Education Oversight Committee is authorized to study ways to improve the recruitment and retention of public school teachers and the need for addi- tional fiscal and administrative flexibility for local boards of education. Further, the Revenue Laws Study Committee is authorized to study issues relating to the collection of county property taxes on mobile homes. The Legislative Study Commission on Securities Fraud Enforcement Laws is also created to study the State securities fraud enforcement laws and the provisions of Senate Bill 1455. This act also establishes the Legislative Study Commission on the Teachers’ and State Employ- ees’ Retirement System. Finally, the General Statutes Commission is directed to study a personal representative’s authority to take possession of, and dispose of, real property of an estate without an order of the court and whether North Carolina should allow a method for the distribution of property coming to an estate after the estate is closed without the necessity of reopening the estate. This act became effective October 31, 2002. To view full text of bill, click here. Amend Definition of Convention Center: S70 Ch. 2002-188 The definition of a convention center is amended in North Carolina’s ABC law in N.C.G.S. 18B-1000(1a). This act became effective October 31, 2002. To view full text of bill, click here. Transfer DMV Enforcement to CCPS: H314 Ch. 2002-190 All statutory authority, powers, duties, and functions allocated to the Department of Transpor- tation, Division of Motor Vehicles Enforcement Section, for the regulation and enforcement of com- mercial motor vehicles, oversize and overweight vehicles, motor carrier safety, and mobile and manu- factured housing are transferred to, and vested in, the Department of Crime Control and Public Safety. This act becomes effective December 1, 2002. To view full text of bill, click here.