Legislative Update for the Week of May 19

The short session is moving along at a brisk pace. The Senate took up some big issues this week - legislation on fracking and regulatory reform were both approved, and a package on tort reform was discussed but not approved.  We expect to see the Senate version of the budget in Appropriations next week.

Activity on Legislation

HB 725, Young Offenders Rehabilitation Act (Avila, Moffitt, Mobley, Hall).  HB 725 seeks to raise the age of juvenile jurisdiction from 16 to 18-years-old for misdemeanors. The bill passed the full House this week with a vote of 77-39!

SB 734, Regulatory Reform Act of 2014 (Wade, Jackson, Brock). SB 734 proposes a number of regulatory changes.  Most are unrelated to the work of Disability Rights.  However, there are three proposals related to people with disabilities. Section 1.15 proposes a new section of the Administrative Procedure Act that would place the burden of proof in contested cases on the petitioner (language in SB 774 summarized last week).  Section 3.5 relates to accessibility requirements for swimming pools, providing that swimming pools shall be required to be accessible only to the extent required by the ADA. Section 3.24 proposes an increase in the penalties for violating state law regarding “handicapped” parking spaces to $300-500. The bill passed second reading in the full Senate and is scheduled for its final vote in the Senate next week.

New Legislation

HB 1153, OAH Electronic Filing (Moffitt, Glazier, Murry, Jordan Sponsors). HB 1153 seeks to authorize the Office of Adminisrative Hearings to allow documents in contested case hearings to be filed electronically, as recommended by the  Joint Legislative Administrative Procedure Oversight Committee. It has been referred to the House Committee on Regulatory Reform.

HB 1179, Status Reports Filed by Guardians (Jones, Dollar, Earle Sponsors)/SB 803 (Hise, Barringer, Randleman). HB 1179 seeks to amend the requirements for status reports filed by public and corporate guardians. All status reports would be filed with the clerk with a number of mandatory pieces of information, including a report on the ward's residence, education, employment, rehabilitation or habilitation; and a report of the guardian's efforts to restore competency, among other items.  It has been referred to House Health and Human Services and Judiciary C committees.

HB 1181, Partnership for a Healthy North Carolina (Dollar, Burr, Avila, Lambeth). HB 1181 seeks to begin implementation of Medicaid Reform. It would add a chapter to the General Statutes on Medicaid Accountable Care Organizations. The proposal would give broad authority to the Secretary to develop the ACO network, including the authority to apply fpr State Plan Amendments to implement the ACO model.  It appropriates $1 mil to make any necessary changes to NCTracks; benchmark setting and individual actuarial validation; and to otherwise implemnt the act.  With respect to long term supports and services, it only calls for a report to the Joint Legislative Oversight Committee on Health and Human Services by February 16, 2015, on the findings and recommendations of the Department's strategic planning for long-term services and supports for Medicaid beneficiaries. It has been referred to the House Health and Human Services and Appropriations committees.

SB 842, Governor's Budget (Brown, H., Harrington, Hunt Sponsors). SB 842 provides a greater level of detail on the Governor's proposals. Among other items, it proposes the following:

• Transferring Medicaid Appeals out of the Office of Administrative Hearings and back to Health and Human Services; 
• Allows DHHS to redirect $250k  from the amount given to the Housing Finance Agency to help increase targeted housing placements by establishing and supporting positions to assist in managing outreach, referral, and service linkage oversight activities for the Targeted Housing Program and the Section 811 Project Rental Assistance program; 
• Directs DHHS to develop a plan to serve an additional 1,000 Medicaid-eligible adults on the CAP-I/DD waiver with an annual service cap of $20k per year for those slots;  
• Directs the net proceeds of the lease or sale of the Dix land to the Mental Health Trust Fund for programs and services for transitioning from institutional settings to community settings; community crisis services, including responses to emergent behavioral health or developmental disability conditions; the use of technology in the provision of consumer services and supports; supported employment services; or repairs, renovations, and capital expenditures.
• Clarifies the Special Care Unit moratorium to allow additional beds in areas where existing nursing home (90%) and Adult Care Home (85%) special care units are near capacity.
• Increased funds to the Mental Health Services  and Substance Abuse Services and Treatment block grants allocated to crisis services.
• $2 mil (NR) to the Housing Finance Agency for the purpose of making loans for qualified North Carolina low-income housing development in tier one and tier two areas.

The NC legislature is back in session

Welcome back to our weekly updates on the Disability Rights policy blog. The "short" session started on Wednesday, May 14. While the initial predictions of a 4 week session, seem unlikely, the session should not drag on too long due to the upcoming elections. The biggest news this week was the release of the Governor's proposed changes to the budget, which we summarize below. Below the budget summary are the highlights of new bills and progress on bills filed last session.

Summary of Governor’s Proposed Budget for FY2015

You can find a complete copy of the Governor’s proposal here.

 Net change by budget area:

 Health and Human Services – Decrease of $122,592,860

K-12 Public Schools – Increase of $46,358,028

Community Colleges – Increase of $16,866,780

UNC System – Decrease of $49,398,097

Justice and Public Safety – Increase of $28,433,112

Health and Human Services

Division of Medical Assistance

•  Require Preferred Drug List for Mental Health Drugs ($6M reduction)
• LME/MCO Assessment:  3.5% assessment on the LME/MCOs resulting in a $60M decrease in the state portion of Medicaid spending through LME/MCOs.
• Medicaid Reform: $1 mil in one-time start-up costs to begin Medicaid Reform.
• Shared Savings Plan: Due to the difficulty of achieving the estimated savings from last year's shared savings plan, a portion of the funding ($6 mil) is being restored.
• Private Duty Nursing Rates: Establishes differentiated payment rates for RNs and LPNss.
• Hospital Provider Assessment-- Increases the amount of the state's retention of hospital medicaid payments from 25.9% to 28.85%, effective July 1, 2014. 

Division of Mental Health, Developmental Disabilities and Substance Abuse Services

• Re-Direct Administrative Dollars to Better Finance Facility Based In-Patient Care and Fund Crisis Services via Block Grants:  $10.7 million in administrative savings would be re-directed to the Division's facilities to make more financially sound, facility provided in-patient care. 
• $6.1 mil expansion of community crisis services (from federal block grant funds): Emergency Department diversion services (group home training and paramedic mobile crisis), alternate treatment settings (walk-in crisis and peer run centers); and transition care.

Division of Vocational Rehabilitation

•  Eliminates 9.5 positions from the Independent Living program, of which 8.5 FTEs are long term vacancies. 
• Eliminates Benefits Specialists (5.5 FTEs) that were funded by an expiring grant and a corresponding state match. Benefits counselling will be provided by Rehabilitation Counselors, supported by a statewide specialist. 

Division of Child Development and Early Education

• Expand NC Pre-K – The Governor proposes a $3.6M NC Pre-K expansion funded by Lottery proceeds, which would provide about 700 additional slots. Would serve more than 26,000 children total.

Division of Social Services

•  Oversight of County Child Welfare – $3.2M for 30 additional positions to oversee the operation of child welfare services across the counties.
• Foster Care Assistance Payments – $5M in additional funding for foster care due to increased caseload. 
• Fund State and County Special Assistance at Full Service Level: The SA Program has served fewer clients over the past three years and the average monthly payment has decreased, which has reduced the need for state appropriation.
• Adjust Budget Due to Implementation of New Personal Care Service Program: Under the PCS service program effective January 1, 2013, idependent assessors determine eligibility for PCS and not Adult Care Home Case Management through local DSS.  
• Achieve Savings through Increased Federal Receipts: With the implementation of NC FAST, counties will now be able to claim a 75% Federal Financial Participation (FFP) rate (was 50%) when performing case management activities in the new system.  As a result, the state is eliminating $1.68 mil in state funds that were allocated for this purpose.

Public Health 

• Fully Fund the AIDS Drug Assistance Program: An increased collection of drug rebates in 2014-15 and additional funding from the federal government, allow a reduction in state appropriation on a one-time basis. The program will continue to serve all eligible individuals up to 300% of the FPL . 
• Eliminates two positions in Public Health that were tasked with supporting schools as part of Child and Family Support Teams, unnecessary now that support teams are operational across the state.

Education

K-12 Public Schools

• Teacher Pay – The starting salary for teachers would increase by 7.1% to $33,000. Teachers in steps 8-12 of the salary schedule would receive an increase ranging from 2.8% to 4.3% and teachers in steps 13-26 would receive and average 2% increase. $102M recurring increase.
• School Psychologist Increase – a one-time bonus of $1,000 for school psychologists in years 0-4 of the step schedule. $266K non-recurring increase.
• Increase for Principals and Asst. Principals – All principals would receive a 2% increase and all assistant principals in steps 10-36 would receive a 2% increase. Assistant principals who are not eligible for the 2% increase would receive a one-time $1000 bonus. $5.8M recurring increase; $133,410 non-recurring increase.
• Salary Increase for All Other School-Based Personnel – All other personnel will receive a $1,000 recurring increase in pay. $52.9M recurring increase.
• Master’s Degree Salary Supplements – The budget restores $18.7M in salary supplements for Masters recipients.
• Textbooks – The budget increases funding for textbooks by $23M, but uses non-recurring lottery funds.
• Increase Months of Employment for Teachers of Visually and Hearing Impaired Preschool Children: IDEA Part C requires that teachers providing family support and early intervention services to preschool children who are vision and hearing impaired, provide year-round services. Additional funds will allow teachers currently not funded year-round to be funded for a full 12 months.

General Government

• Increase Operating Budget for Veterans Nursing Homes by $18 mil: The expenditure increase, supported by receipts, is needed to accommodate additional operating expenses associated with the recent opening of two new facilities in Black Mountain and Kinston. 
• Transfer State Personnel Appeals Function to the Office of State Human Resources: This proposal transfers the state personnel appeals function from the Office of Administrative Hearings to the State Human Resources Commission within the Office of State Human Resources (OSHR).  

Transportation

• Motor Vehicle Services - Medical Review Unit--A dedicated source of funding is required for the NC Division of Motor Vehicles' Medical Review Unit to contract physicians for the purposes of case reviews and Medical Review Board Hearings for individuals with physical or mental disabilities. 

Activity on Legislation this Week

Bill Updates

HB 725, Young Offenders Rehabilitation Act (Avila, Moffitt, Mobley, Hall).  HB 725 seeks to raise the age of juvenile jurisdiction from 16 to 18-years-old for misdemeanors. The bill received a favorable vote on second reading on the last day of long session in 2013. It still needs to be approved on 3d reading before it can be heard in the Senate in order to become law. It is scheduled for this vote for next Tuesday, May 20, 2014.

HB 498, Mandate Autism Health Insurance Coverage(McGrady, Murry, Cotham, Shepard).  The bill requires health benefit plans, including the State Health Plan, to provide coverage for the treatment of Autism Spectrum disorders. The bill was approved by the full House last session but has not been heard in the Senate. The policy received a lot of attention this week when the Joint Study Committee on the Affordable Care Act and Implementation Issues sought to approve draft legislation that would prohibit any additional Health Care coverage mandates for two years, which would have prohibited the autism health insurance coverage for that time as well. The proposed legislation was not approved.

New Legislation Filed This Week

HB 1042, Clarify Charter School Application Process (Howard)/SB 752 (Hartsell).  The bill clarifies the process for review of charter applications by the North Carolina Charter Schools Advisory Board, requires the adoption of rules for the charter application process, and clarifies the appeals process for denials of charter applications, as Recommended by the Joint Legislative Program Evaluation Oversight Committee. It has been referred to the House Education committee.

HB 1046, State Plan Amendments/Submission and Notice (Burr and Hollo)/SB 782 (Hise). HB 1046 seeks to require additional public posting and notice of state plan amendments and to require submission of a state plan amendment to the federal government prior to the effective date of the state plan amendment, as Recommended by the Joint Legislative Oversight Committee on Health and Human Services.  It has been referred to the House HHS committee.

HB 1061, Replace Common Core to Meet NC’s Needs (Holloway, Pittman, Speciale).  HB 1061 seeks to replace the Common Core standards, as Recommended by the Legislative Research Commission Study Committee on the Common Core State Standards. It has been referred to the House Education committee and Appropriations.

HB 1069, Unemployment Insurance Law Changes (Howard, Warren, Arp)/ SB759 (Rucho, Clark).  HB 1069 seeks to amend the Unemployment Insurance laws, as Recommended by the Joint Legislative Oversight Committee on Unemployment Insurance.  The proposals include requiring photo ID for benefits;  sets benefit duration according to the unemployment rate; modifies the work search requirement by increasing the number of job contacts to 5 per week and eliminating the requirement to search on 2 different days.  It has been referred to the House Finance and Rules committees.

HB 1078, Business Ct Judges/End Special Superior Court Judges (Burr and Davis). HB 1078 proposed to phase out Special Superior Court Judges, to Provide for the Appointment of Business Court Judges by the Governor in Consultation with the Chief Justice, and to Provide for the Renewed Use of Emergency Superior Court Judges, as Recommended by the Legislative Research Commission's Committee on Judicial Efficiency and Effective Administration of Justice. 

HB 1091, Study Supervision of Magistrates (Davis and Burr).  HB 1091 directs the Administrative Office of the Courts to study the appointment and supervision of Magistrates, as Recommended by the Legislative Research Commission's Committee on Judicial Efficiency and Effective Administration of Justice .

HB 1098, DMV DL Medical Review Program Changes (Torbett). HB 1098 proposes changes to the DMV Drivers License Medical Review Program, as Recommended by the Joint Legislative Transportation Oversight Committee.

HB 1110, Improve Oversight of Public Guardianship (Jones, Dollar, Earle).  HB 1110 directs the Division of Aging and Adult Services (DAAS), to collaborate with the Administrative Office of the Courts to develop a plan regarding the  evaluation of complaints pertaining to wards under the care of publicly funded guardians in order to ensure that, in addition to current requirements, the complaint process also incorporates a face‑to‑face observation of the ward, an interview with the ward, or both. It also directs the Division of Social Services to study the issue of conflicts of interest in child welfare cases as related to public guardianship. It also directs DAAS to consult with the clerks of superior court,LME/MCOs, the North Carolina Bar Association Section on Elder Law, and any other interested groups to develop a model plan for transitioning a ward to an alternative guardianship arrangement when an individual guardian of the person becomes unable or unwilling to serve. The model plan shall focus on ways to prevent the appointment of a public guardian.

SB 774, Burden of Proof in Certain Contested Cases (Hartsell).  SB 774 seeks to add a new section to the Administrative Procedure Act, § 150B‑25.1, Burden of proof. It would provide for the petitioner in all contested case hearing to bear the burden of proving the facts alleged in the petition by a preponderance of the evidence.  There are only two exceptions:  In a contested case involving the imposition of civil fines or penalties by a State agency for violation of the law, the burden of showing that the person who was fined actually committed the act for which the fine or penalty was imposed rests with the State agency; and The burden of showing that a career State employee subject to Chapter 126 of the General Statutes was discharged, suspended, or demoted for just cause rests with the agency employer.  The bill also directs the Joint Legislative Administrative Procedure Oversight Committee to study whether there are other categories of contested cases in which the burden of proof should be placed with the agency.