SUMMARIES OF SUBSTANTIVE RATIFIED LEGISLATION - 2007

SUMMARIES OF SUBSTANTIVE

RATIFIED LEGISLATION

2007 GENERAL ASSEMBLY

2007 REGULAR SESSION

RESEARCH DIVISION

N. C. GENERAL ASSEMBLY

NOVEMBER 2007

350 copies of this document were published at an estimated cost of or about $ 10.75 per

copy.

November 2007

To the Members of the 2007 Session of the 2007 General Assembly:

This publication contains summaries of all substantive legislation of general applicability

and certain local legislation having general import from the 2007 Regular Session. Most local

acts are not analyzed in this publication. Significant appropriations matters related to the

subject area specified are also included. For an in- depth review of the appropriations and

revenue process, please refer to Overview: Fiscal and Budgetary Actions, prepared by the Fiscal

Research Division.

The document is organized alphabetically by subject areas. Where feasible, the subject

area is further divided into subgroups. Each subject area also includes a listing of legislative,

independent, and agency studies. This year we have included in the appendix a list of the

studies and reports authorized by the 2007 General Assembly. A bill/ session law index listing

the page number of each summary is at the end of the publication.

This document is the result of a combined effort by the following staff members of the

Research Division: Dee Atkinson, Cindy Avrette, Susan Barham, Brenda Carter, Drupti Chauhan,

Erika Churchill, Karen Cochrane- Brown, Judy Collier, Heather Fennell, Bill Gilkeson, George

Givens, Kory Goldsmith, Trina Griffin, Tim Hovis, Jeff Hudson, Denise Huntley, Shirley Iorio,

Sara Kamprath, Mariah Matheson, Theresa Matula, Kara McCraw, Jennifer McGinnis, Joe Moore,

Jennifer Mundt, Shawn Parker, Howard Alan Pell, Giles S. Perry, Ben Popkin, Wendy Graf Ray,

Walker Reagan, Barbara Riley, Steve Rose, and Susan Sitze. Dan Ettefagh, of the Bill Drafting

Division and Martha Walston, of the Fiscal Research Division also contributed to this document.

Howard Alan Pell is chief editor of this year’s publication, and Brad Krehely is co- editor. Lucy

Anders, of the Research Division also helped edit this document. The specific staff members

contributing to each subject area are listed directly below the chapter heading for that area.

Staff members' initials appear after their names and after each summary they contributed. If

you would like further information regarding any legislation in the various summaries, please

contact the Research Division Office at ( 919) 733- 2578.

This document is also available on the World Wide Web. Go to the General Assembly’s

homepage at http:// www. ncleg. net. Click on " Legislative Publications," then " Research

Division," then " Summaries of Substantive Ratified Legislation." Each summary is hyperlinked to

the final bill text, the bill history, and any applicable fiscal note.

It is hoped that this document will provide a useful source of information for the

members of the General Assembly and the public in North Carolina. We would appreciate

receiving any suggestions for this publication's improvement.

Yours truly,

Terrence D. Sullivan

Director of Research

Guide to Staff Initials

( BC) Brenda Carter

( BG) Bill Gilkeson

( BK) Brad Krehely

( BP) Ben Popkin

( BR) Barbara Riley

( CA) Cindy Avrette

( DA) Dee Atkinson

( DE) Dan Ettefagh

( DC) Drupti Chauhan

( DH) Denise Huntley

( EC) Erika Churchill

( GG) George Givens

( GSP) Giles S. Perry

( HF) Heather Fennell

( HAP) Howard Alan Pell

( JC) Judy Collier

( JH) Jeff Hudson

( JLM) Jennifer McGinnis

( JHM) Joe Moore

( JM) Jennifer Mundt

( KCB) Karen Cochrane- Brown

( KG) Kory Goldsmith

( KM) Kara McCraw

( MM) Mariah Matheson

( MW) Martha Walston

( SB) Susan Barham

( SI) Shirley Iorio

( SK) Sara Kamprath

( SP) Shawn Parker

( SR) Steve Rose

( SS) Susan Sitze

( TG) Trina Griffin

( TH) Tim Hovis

( TM) Theresa Matula

( WGR) Wendy Graf Ray

( WR) Walker Reagan

i

TABLE OF CONTENTS

CHAPTER 1: AGRICULTURE AND WILDLIFE...................................................... 1

ENACTED LEGISLATION .................................................................................................. 1

Agriculture ................................................................................................................ 1

Animals ..................................................................................................................... 3

Wildlife...................................................................................................................... 4

CHAPTER 2: ALCOHOLIC BEVERAGE CONTROL............................................. 7

ENACTED LEGISLATION .................................................................................................. 7

CHAPTER 3: BUSINESS AND COMMERCE............................................................ 9

ENACTED LEGISLATION .................................................................................................. 9

STUDIES....................................................................................................................... 22

CHAPTER 4: CHILDREN AND FAMILIES............................................................. 23

ENACTED LEGISLATION ................................................................................................ 23

CHAPTER 5: CIVIL LAW AND PROCEDURE....................................................... 29

ENACTED LEGISLATION ................................................................................................ 29

CHAPTER 6: CONSTITUTION AND ELECTIONS ............................................... 35

ENACTED LEGISLATION ................................................................................................ 35

MAJOR PENDING LEGISLATION ..................................................................................... 45

CHAPTER 7: CONSUMER PROTECTION ............................................................. 47

ENACTED LEGISLATION ................................................................................................ 47

CHAPTER 8: COURTS, JUSTICE, AND CORRECTIONS.................................... 53

ENACTED LEGISLATION ................................................................................................ 53

STUDIES....................................................................................................................... 68

Legislative Research Commission .......................................................................... 68

Referrals to Existing Commissions/ Committees ..................................................... 69

Referrals to Departments, Agencies, Etc. ............................................................... 70

CHAPTER 9: CRIMINAL LAW AND PROCEDURE............................................. 73

ENACTED LEGISLATION ................................................................................................ 73

MAJOR PENDING LEGISLATION ..................................................................................... 85

CHAPTER 10: EDUCATION ...................................................................................... 87

ENACTED LEGISLATION ................................................................................................ 87

Public Schools......................................................................................................... 87

Higher Education.................................................................................................. 101

Community Colleges ............................................................................................. 102

ii

Universities ........................................................................................................... 105

STUDIES..................................................................................................................... 110

New/ Independent Studies/ Commissions................................................................ 110

Referrals to Existing Commissions/ Committees ................................................... 112

Referrals to Departments, Agencies, Etc. ............................................................. 113

Other Studies......................................................................................................... 115

CHAPTER 11: ENVIRONMENT AND NATURAL RESOURCES...................... 117

ENACTED LEGISLATION .............................................................................................. 117

Air Quality ............................................................................................................ 117

Animal Waste Management .................................................................................. 118

Coastal Development............................................................................................ 120

Fisheries................................................................................................................ 121

Miscellaneous ....................................................................................................... 121

Parks and Public Spaces....................................................................................... 125

Renewable/ Alternative Energy and Energy Efficiency......................................... 126

Solid/ Hazardous Waste......................................................................................... 136

Water Quality/ Quantity/ Groundwater.................................................................. 143

STUDIES..................................................................................................................... 148

New/ Independent Studies/ Commissions................................................................ 148

Referrals to Existing Commissions/ Committees ................................................... 149

Referrals to Departments, Agencies, Etc. ............................................................. 149

MAJOR PENDING LEGISLATION ................................................................................... 150

CHAPTER 12: FINANCE .......................................................................................... 153

ENACTED LEGISLATION .............................................................................................. 153

2007 Appropriations Act....................................................................................... 155

STUDIES..................................................................................................................... 169

MAJOR PENDING LEGISLATION ................................................................................... 169

CHAPTER 13: HEALTH AND HUMAN SERVICES ............................................ 172

ENACTED LEGISLATION .............................................................................................. 172

STUDIES..................................................................................................................... 193

CHAPTER 14: INSURANCE..................................................................................... 196

ENACTED LEGISLATION .............................................................................................. 196

Automobile Insurance ........................................................................................... 196

Health and Life Insurance .................................................................................... 196

Property Insurance ............................................................................................... 203

Miscellaneous ....................................................................................................... 204

STUDIES..................................................................................................................... 207

MAJOR PENDING LEGISLATION ................................................................................... 207

CHAPTER 15: LABOR AND EMPLOYMENT...................................................... 210

ENACTED LEGISLATION .............................................................................................. 210

General Labor and Employment........................................................................... 210

iii

Governmental Employment................................................................................... 211

CHAPTER 16: LOCAL GOVERNMENT................................................................ 216

ENACTED LEGISLATION .............................................................................................. 216

CHAPTER 17: MILITARY, VETERANS', AND INDIAN AFFAIRS .................. 226

ENACTED LEGISLATION .............................................................................................. 226

Military and Veterans' Affairs .............................................................................. 226

CHAPTER 18: OCCUPATIONAL BOARDS AND LICENSING......................... 232

ENACTED LEGISLATION .............................................................................................. 232

STUDIES..................................................................................................................... 255

Referrals to Existing Commissions/ Committees ................................................... 255

CHAPTER 19: PROPERTY, TRUSTS, AND ESTATES ....................................... 256

ENACTED LEGISLATION .............................................................................................. 256

CHAPTER 20: RESOLUTIONS................................................................................ 262

Joint Resolutions................................................................................................... 262

CHAPTER 21: RETIREMENT ................................................................................. 268

ENACTED LEGISLATION .............................................................................................. 268

CHAPTER 22: SENIOR CITIZENS ......................................................................... 274

ENACTED LEGISLATION .............................................................................................. 274

STUDIES..................................................................................................................... 280

Referrals to Departments, Agencies, Etc. ............................................................. 280

CHAPTER 23: STATE GOVERNMENT................................................................. 282

ENACTED LEGISLATION .............................................................................................. 282

Agencies and Departments ................................................................................... 282

Boards, Commissions, and Committees................................................................ 289

Capital Facilities and State Property ................................................................... 291

Ethics..................................................................................................................... 293

Official North Carolina Designations .................................................................. 294

Miscellaneous ....................................................................................................... 294

STUDIES..................................................................................................................... 298

Referrals to Departments, Agencies, Etc. ............................................................. 298

CHAPTER 24: TECHNOLOGY................................................................................ 300

ENACTED LEGISLATION .............................................................................................. 300

CHAPTER 25: TRANSPORTATION....................................................................... 304

ENACTED LEGISLATION .............................................................................................. 304

Department of Transportation .............................................................................. 304

Drivers Licenses.................................................................................................... 306

iv

License Plates/ Vehicles Registration.................................................................... 308

Motor Vehicles Law .............................................................................................. 314

Toll Roads ............................................................................................................. 318

Public Transportation and Rail ............................................................................ 319

Trucks.................................................................................................................... 319

Miscellaneous ....................................................................................................... 321

CHAPTER 26: UTILITIES ........................................................................................ 326

ENACTED LEGISLATION .............................................................................................. 326

CHAPTER 27: VETOED LEGISLATION............................................................... 328

INDEX.......................................................................................................................... ...... i

APPENDIX.................................................................................................................... A- 1

Chapter 1 Agriculture and Wildlife

Page 1

Chapter 1

Agriculture and Wildlife

Erika Churchill ( EC), Barbara Riley ( BR)

Enacted Legislation

Agriculture

Adopt State Collard Festival

S. L. 2007- 28 ( HB 406). See State Government.

Facilitate Distribution of E- Blend Fuel

S. L. 2007- 82 ( SB 567). See Transportation.

Limit Liability at Agricultural Fairs

S. L. 2007- 171 ( HB 590) expands the definition of agritourism activity for purposes of

limited civil liability. The term includes any activity involving an animal exhibition at an

agricultural fair licensed by the Commissioner of Agriculture. The General Statutes provide a

limitation on civil liability for agritourism professionals engaged in the business of providing

agritourism activities. In addition to the expansion of the definition by the act, agritourism

activities are defined as any activity on a farm or ranch that allows the general public, for

recreational, educational, or entertainment purposes, to view or enjoy rural activities including

farming, ranching, historic attractions/ activities, pick your own activities, and others.

If a warning is posted, consistent with the requirements of the Article, an agritourism

professional will not be held liable for the injury or death of a participant resulting from the

inherent risks of participating in agritourism activities. The limitation on liability does not apply if

the agritourism professional does either of the following:

􀂾 Acts negligently or with willful or wanton disregard for the safety of the participant

and that act is the proximate cause of the injury.

􀂾 Knew, or should have known, of any of the following and did not make that danger

known to the participant:

• A dangerous condition on the land, facilities, or equipment used in the activity.

• The dangerous propensity of a particular animal.

This act became effective July 4, 2007, and applies to causes of action arising on or after

that date. ( EC)

Registration and Length Exemptions

S. L. 2007- 194 ( SB 738). See Transportation.

University of North Carolina/ Agricultural Extension

Employee Status

S. L. 2007- 195 ( HB 847). See Labor and Employment.

Chapter 1 Agriculture and Wildlife

Page 2

Streamlined Sales Tax Changes

S. L. 2007- 244, Sec. 4 ( HB 257, Sec. 4) revises the sales tax exemption for items sold for

use in commercial fishing to insert references to holders of a commercial fishing license, a

commercial shellfish license, and the operator of a for- hire boat. The reference to the operator of

a for- hire boat is an addition to the statute, but reflects the administrative practice of including

this group in the commercial fishing group.

This section became effective October 1, 2007. ( EC)

See Finance for the summary of the remaining sections of the act.

University Cancer Research Fund

S. L. 2007- 323, Sec. 6.23 ( HB 1473, Sec. 6.23). See Finance.

Study Structure/ Management Agriculture Research Stations

and Farms

S. L. 2007- 323, Sec. 11.4 ( HB 1473, Sec. 11.4). See State Government.

Study Equine Industry in North Carolina

S. L. 2007- 323, Sec. 13.14A( b) and ( c), ( HB 1473, Sec. 13.14A( b) and ( c) provides that,

of the funds appropriated to the Rural Economic Development Center, $ 500,000 shall be

transferred to the Agricultural Advancement Consortium to assess the numbers, composition, and

value of the equine industry in North Carolina. The Agricultural Advancement Consortium also is

directed to develop a plan to maximize the impact of the equine industry in the State.

The section became effective July 1, 2007. ( BR)

Poultry Products Inspection Act Penalties

S. L. 2007- 361 ( HB 589) amends G. S. 106- 549.59 by adding a new subsection providing

for a $ 5,000 civil penalty for violations of the poultry products inspection laws.

The act became effective October 1, 2007, and applies to penalties assessed on or after

that date. ( BR)

Amend Plant Protection and Conservation Act

S. L. 2007- 456 ( HB 862) allows the North Carolina Plant Conservation Board to establish

fees for the permits it is authorized to issue, including the permit to harvest ginseng. The act also

increases the penalty for violations of the Plant Protection and Conservation Act from a Class 3

misdemeanor to a Class 2 misdemeanor, and deletes the fine provisions. The act also authorizes

the agent of the Department of Agriculture and Consumer Services to the list of individuals who

may inspect pertinent papers and records related to the Plant Protection and Conservation Act.

The previous law included only the Commissioner, or any employee of the Department.

This act becomes effective December 1, 2007, and applies to offenses committed on or

after that date. ( EC)

Chapter 1 Agriculture and Wildlife

Page 3

Enact Waterfront Access Study Committee

Recommendations

S. L. 2007- 485 ( SB 646) increases certain boat numbering fees that are held in the

Wildlife Resource Commission's Boating and Waterway Account. The act increased the fee for

numbering a boat from $ 10 to $ 15 for a 1- year period, and increased the fee for a 3- year period

from $ 25 to $ 40. The act also directs the Division of Emergency Management to study ways to

facilitate construction and repair of water dependent structures in regulated flood zones.

This act became effective August 2, 2007. ( EC)

See Finance, Environment and Natural Resources, and Transportation for

additional information on this act.

Property Tax and Present Use Value Changes and Studies

S. L. 2007- 497 ( HB 1499). See Finance.

Exemption for Baler Twine from Sales Tax

S. L. 2007- 500 ( HB 487). See Finance.

Economic Development Modifications

S. L. 2007- 515 ( HB 1595). See Local Government.

Swine Farm Environmental Performance Standards

S. L. 2007- 523 ( SB 1465). See Environment and Natural Resources.

State Food Festival

S. L. 2007- 533 ( HB 433). See State Government.

Clarify/ Extend Animal Waste Management Provisions

S. L. 2007- 536 ( HB 810). See Environment and Natural Resources.

Migrant Housing Health/ Safety

S. L. 2007- 548 ( SB 1466). See Labor and Employment.

Animals

Allow Earthdog Trials

S. L. 2007- 180 ( SB 1424). See Criminal Law and Procedure.

Chapter 1 Agriculture and Wildlife

Page 4

Clarify Dog Fighting and Baiting Law

S. L. 2007- 181 ( SB 21). See Criminal Law and Procedure.

Increase Penalty/ Starvation of Animals

S. L. 2007- 211 ( HB 995). See Criminal Law and Procedure.

Spay/ Neuter Funding

S. L. 2007- 487 ( SB 684) repeals the provisions for the sale of a special edition rabies tag.

The proceeds from sales of the tag have been used to fund the Spay/ Neuter Account in the

Department of Health and Human Services. The act also amends the amount that may be

charged for a rabies tag by 20¢, in addition to the actual cost of the tag, links, and rivets. The

additional 20¢ per tag will be credited to the Spay/ Neuter Account. The 20¢ portion of the fee is

not be imposed for tags provided to persons who operate facilities devoted primarily to the

training or boarding of hunting dogs, or who own and vaccinate 10 or more dogs per year.

The act also provides that if the funds generated by the rabies tag fee are less than

$ 47,500 in any fiscal year, the difference between $ 47,500 and the amount actually generated

may be used to fund rabies education and prevention programs. A county may not receive funds

from the Spay/ Neuter Account, unless the county requires proof of rabies vaccination at the time

of the procedure or requires rabies vaccination at the time of the procedure.

This act becomes effective January 1, 2008. ( BR)

Wildlife

Reciprocity of Disabled Hunting Licenses

S. L. 2007- 2 ( SB 50) directs the Wildlife Resources Commission to investigate the

potential for agreements with other jurisdictions for reciprocal hunting and fishing licenses for the

disabled.

This act became effective March 22, 2007. ( BR)

Waiver of Enforcement/ No- Wake Zones

S. L. 2007- 46 ( SB 361) allows the Wildlife Resources Commission to temporarily and

conditionally waive the enforcement of a no- wake zone on the request of a local government that

encompasses or abuts the no- wake zone, if the Commission determines that public safety and

welfare will not be significantly compromised by the waiver.

This act became effective May 16, 2007. ( BR)

Prohibit Baiting of Bears

S. L. 2007- 96 ( SB 1246) prohibits placing processed food products as bait in any area of

the State where the Wildlife Resources Commission has established an open season for taking

black bear. Processed food products are defined as a food substance or flavoring that has been

modified from its raw components by the addition of ingredients, or by treatment to change its

chemical composition or form, or to enhance aroma or taste. Examples would include substances

modified by sugar, honey, oil, salt, or peanut butter. The term also includes sugary products such

as candies, pastries, and sugar blocks. The act does not prohibit the lawful disposal of solid

Chapter 1 Agriculture and Wildlife

Page 5

waste or the legitimate feeding of livestock, domestic animals, and birds. The prohibition also

does not apply to the release of dogs near a food source that is not a processed food product.

Violation of the act is a Class 2 misdemeanor.

This act became effective October 1, 2007. ( BR)

Brunswick Menhaden Restrictions

S. L. 2007- 320 ( HB 1017). See Environment and Natural Resources.

Amend Wildlife Resources Management Laws

S. L. 2007- 401 ( SB 1464) makes a number of changes to the State's wildlife management

laws. The changes include:

Authorizing the Wildlife Resources Commission to adopt rules governing the exercise of

emergency powers by the Executive Director of the Commission, when the Commission

determines that such powers are necessary to respond to a wildlife disease that threatens

irreparable injury to wildlife or the public. The emergency powers that may be authorized by

adopted rules include:

􀂾 Providing for an open season for taking beaver with a bow and arrow.

􀂾 Providing a number of changes in the statutes governing the taking of deer, including

a provision allowing the Executive Director to issue a landholder or landholder's

agent a special license and a number of antlerless and antlered deer tags sufficient

to accommodate the landholder's deer population management objectives, or to

correct any deer population imbalance that may occur on the property.

􀂾 Specifying that persons hunting deer during a deer firearms season must wear

hunter orange.

􀂾 Prohibiting the intentional feeding of alligators outside of captivity.

􀂾 Authorizing the Commission to allow the use of electronic calls in taking migratory

birds.

􀂾 Directing the Commission to study issues related to the retrieval of wildlife wounded

by hunters. The report is to be submitted to the 2008 General Assembly, the Chairs

of the House Wildlife Resources Committee, and the Senate Agriculture and Natural

Resources Committee no later than May 1, 2008.

The provisions of the act directing the Commission to study issues relating to the

retrieval of wounded wildlife became effective August 21, 2007. The remainder of the act became

effective October 1, 2007, and applies to acts committed on or after that date. ( BR)

Mountain Heritage Trout Waters Program

S. L. 2007- 408 ( SB 1303) creates a new Mountain Heritage Trout Waters 3- Day Fishing

License with a fee of $ 10. The holder of the three- day license is not required to hold a hook and

line license. The act also defines the term " mountain heritage trout waters," as those waters that

have been designated as public mountain trout waters by the Wildlife Resources Commission that

run through, or are adjacent to, a city and have been designated as mountain heritage trout

waters. The Commission is directed to adopt rules to implement a Mountain Heritage Trout

Waters Program to promote trout fishing as a heritage tourism activity, to develop criteria for

participation in the program by cities, and to prepare a management plan for mountain heritage

trout waters. A city that meets the program participation criteria shall be designated a Mountain

Heritage Trout City.

Section 2 of the act establishing the Mountain Heritage Trout Waters 3- Day Fishing

License became effective July 1, 2007. The remainder of the act became effective August 21,

2007. ( BR)

Chapter 1 Agriculture and Wildlife

Page 6

Allow Cyclists to Use Public Lands

S. L. 2007- 449 ( SB 1383). See Transportation.

For a complete list of the studies and reports authorized by the 2007 Session of the

2007 General Assembly, please refer to the Appendix contained in this publication.

Chapter 2 Alcoholic Beverage Control

Page 7

Chapter 2

Alcoholic Beverage Control

Brenda Carter ( BC), Denise Huntley ( DH), Howard Alan Pell ( HAP), Susan Sitze ( SS)

Enacted Legislation

Modify Hours of Sale for Permittees Authorized to Engage in

In- Stand Sales

S. L. 2007- 323, Sec. 6.25 ( HB 1473, Sec. 6.25) modifies the hours of sale for a permittee

who is authorized to sell malt beverages in the seating areas of stadiums, ballparks, and other

similar public places with a seating capacity of 60,000 or more during professional sporting

events, in municipalities with a population greater than 450,000. Sales and consumption of

alcoholic beverages on the premises of a permittee who meets these requirements may begin at

11: 00 a. m. on Sunday, which is one hour earlier than otherwise permitted by State law.

This section became effective July 1, 2007. ( BC)

Alcoholic Beverage Control Election- Cities in Two Counties

S. L. 2007- 386 ( SB 661) amends the Alcoholic Beverage Control election laws to provide

an additional ground upon which a city located in two or more counties may hold a mixed

beverages election. The act permits a city located in two or more counties to hold a mixed

beverages election without having an ABC store election, if a least one municipality in any of the

counties in which the city is located operates an ABC store.

This act became effective July 1, 2007. ( BC)

Alcoholic Beverage Control Law Changes

S. L. 2007- 402 ( HB 267) makes unincorporated municipalities subject to a statute that

allows the issuance of off- premises malt beverage and unfortified wine permits, after an election

allowing the sale of mixed beverages. The act also authorizes an unfortified winery permit holder

to allow winemaking on premises, subject to the appropriate Alcoholic Beverage Control ( ABC)

permit, whereby individual customers who are 21 years old or older may purchase ingredients

and rent the equipment, time, and space to make unfortified wine for personal use in limited

amounts.

The act amends the law concerning the requirement for certain ABC permittees to

recycle beverage containers beginning January 1, 2008. It clarifies that failure to comply with the

recycling requirements will not be grounds for revocation of an ABC permit. The act requires each

applicant and each person renewing an on- premises malt beverage permit, on- premises

unfortified wine permit, on- premises fortified wine permit, or a mixed beverages permit to

prepare and submit with the application or renewal, a plan for the collection and recycling of all

recyclable beverage containers of all beverages to be sold at retail on the premises. A permittee

who is not able to find a recycler for its beverage containers by January 1, 2008, may apply to

the Alcoholic Beverage Control Commission for a one- year stay of the requirement to implement

a recycling program.

This act became effective August 21, 2007. ( BC)

Chapter 2 Alcoholic Beverage Control

Page 8

Drivers License Revocation for Alcoholic Beverage Control

Violation

S. L. 2007- 537 ( HB 1277). See Transportation.

For a complete list of the studies and reports authorized by the 2007 Session of the

2007 General Assembly, please refer to the Appendix contained in this publication.

Chapter 3 Business and Commerce

Page 9

Chapter 3

Business and Commerce

Karen Cochrane- Brown ( KCB), Heather Fennell ( HF), Kory Goldsmith ( KG), Tim Hovis ( TH),

Denise Huntley ( DH), Wendy Graf Ray ( WGR), Walker Reagan ( WR), Steve Rose ( SR)

Enacted Legislation

Amend Bank and Trust Company Assessments

S. L. 2007- 55 ( SB 658) changes the cumulative assessments charged to State- chartered

banks and trust companies to pay for the operation of the Office of the Commissioner of Banks.

The act increases the assessments on smaller banks and decreases the assessments on larger

banks. The act also increases the base assessment rate charged to State trust companies from

$ 6,000 to $ 10,000.

This act became effective May 23, 2007, and applies to assessments made on or after

that date. ( WR)

Electronic Signatures/ Public Agencies

S. L. 2007- 119 ( SB 211). See State Government.

Alcohol Inhalers Illegal

S. L. 2007- 134 ( SB 125). See Criminal Law and Procedure.

Streamline Telecommunications Promotions

S. L. 2007- 157 ( SB 680). See Utilities.

Residential Mortgage Fraud Act

S. L. 2007- 163 ( HB 817). See Consumer Protection.

Identify Loan Originator on Deed of Trust

S. L. 2007- 176 ( HB 313). See Property, Trusts, and Estates.

Rental Car Fee Reform

S. L. 2007- 235 ( SB 1118). See Consumer Protection.

Streamlined Sales Tax Changes

S. L. 2007- 244 ( HB 257). See Finance.

Chapter 3 Business and Commerce

Page 10

Prescription Orders/ Electronic Image

S. L. 2007- 248 ( HB 1369) allows a pharmacist- manager of a pharmacy with a capable

computer system to maintain prescription orders by capturing electronic images of the orders. It

also allows health care providers to keep electronic records of consents to treatment and

authorizations to disclose medical information.

North Carolina law provides that every pharmacist- manager of a pharmacy is required to

maintain, for a minimum of three years, the original of every prescription order and refill

compounded or dispensed at the pharmacy. This act allows the use of electronic images of

prescription orders and refills to comply with those maintenance requirements, if the pharmacy's

computer system is " capable." A computer system is deemed capable if it can provide

information required by the Board within 48 hours of the request. The act also deletes the

requirement that a pharmacist write his or her signature on the face of a prescription for a

controlled substance, when it is dispensed, since an electronic record would not allow for a

handwritten signature.

Current law also allows health care providers to maintain medical records in electronic

format, without maintaining separate paper copies. However, prior to this act, if a consent to

treatment, or an authorization to disclose medical information was in a paper writing, it was

required to be preserved in that format. This act eliminates that requirement and allows those

forms to be kept in electronic format, along with other medical records.

This act became effective July 20, 2007. ( WGR)

Duty to Report Child Porn

S. L. 2007- 263 ( HB 27) provides that any film processor, or computer technician, who

views an image of a minor, or a person who reasonably appears to be a minor, engaging in

sexual activity must report the name of the person requesting the development of the film, or the

person in possession of the computer, to the National Center for Missing and Exploited Children,

or the appropriate local law enforcement officer. A processor of photographic images means any

person who, for compensation: ( 1) develops exposed photographic film into negatives, slides, or

prints; ( 2) makes prints from negatives, slides, digital images, or video; or ( 3) develops,

processes, transfers, edits, or enhances video or digital images. A computer technician means

any person who repairs, installs, or otherwise services any computer or computer network, or

system for compensation.

The requirement may be satisfied if the processor of photographic images, or the

computer technician, reports the required information to a person designated by the employer.

That person must then report the required information to the appropriate authority. The act

creates civil and criminal immunity for a person, or employer, who acts in good faith when

making a report.

This act became effective September 1, 2007. ( KG)

Correction Enterprises

S. L. 2007- 280 ( HB 648). See Courts, Justice and Corrections.

Contracts with Automatic Renewal Clauses

S. L. 2007- 288 ( SB 527). See Consumer Protection.

Chapter 3 Business and Commerce

Page 11

Motorcycle Manufacturer Plates

S. L. 2007- 291 ( HB 135). See Transportation.

Revise Life and Health Insurance Laws

S. L. 2007- 298 ( HB 731). See Insurance.

Increase Criminal Penalty/ Theft of Metals

S. L. 2007- 301 ( HB 367). See Criminal Law and Procedure.

Limit Liability of Liquid Petroleum Gas Dealer/ Certain Others

S. L. 2007- 302 ( HB 1536) provides that liquid petroleum gas ( LPG) dealers and their

employees, agents, and subcontractors will not be held liable for civil damages caused by

improper installation, repair, or use by others, if the dealer did not know of, and consent to, the

action.

Current law regulates liquefied petroleum gases, and sets forth a code of safety for the

handling of liquid petroleum gas. The Department of Agriculture and Consumer Services are

responsible for enforcing the code. The Commissioner of Agriculture may assess civil penalties, in

amounts ranging from $ 100 to $ 500, for violations. A violation of the Article carries a Class 1

misdemeanor criminal penalty. A dealer is defined as someone in the business of selling LPG or

installing, servicing, repairing, adjusting, connecting, or disconnecting containers, equipment, or

appliances that use LPG. The Article limits the liability of persons who provide assistance in an

emergency or accident.

This act provides that a liquid petroleum gas dealer, or the dealer's agent, employee, or

subcontractor, is not liable for civil damages for an injury caused by one or more of the following:

􀂾 The installation, alteration, modification, or repair of LPG equipment, or an LPG

appliance, by another person, if the LPG dealer, etc., did not know of, and consent

to, the installation, alteration, modification, or repair.

􀂾 The use of LPG equipment, or an LPG appliance, by another person in a manner or

for a purpose for which it was not intended, if the LPG dealer, etc., did not know of

and consent to its being used in the manner or for the purpose for which it was not

intended.

􀂾 The installation of LPG equipment, or an LPG appliance, by another person in a

manner not in accordance with the instructions of the manufacturer or in a manner

not in accordance with the rules of Article 5 of Chapter 119, if the LPG dealer did not

know of and consent to its being installed in that manner.

Nothing in the new statute alters an LPG dealer's duty to exercise reasonable care.

This act became effective October 1, 2007, and applies to acts or omissions occurring on

or after that date. ( SR)

North Carolina Green Business Fund

S. L. 2007- 323, Sec. 13.2 ( HB 1473, Sec. 13.2) creates the North Carolina Green Business

Fund as a special revenue fund to promote small businesses that develop and expand the biofuel

industry, the green building industry, clean technology, and renewable energy products and

businesses. The fund is to be administered by the Department of Commerce.

The Department of Commerce is to make grants to private businesses of less than 100

employees, nonprofit organizations, local governments, and State agencies to encourage the

Chapter 3 Business and Commerce

Page 12

expansion of small to medium sized businesses with less than 100 employees to grow a green

economy in the State. The funds are to be used for the following purposes:

􀂾 Maximize development, production, distribution, retail infrastructure, and consumer

purchases of biofuels in the State, including the development of biofuels workforce.

􀂾 Development of the green building industry in the State through the development

and growth of a market for environmentally conscious, and energy efficient, green

building processes, including:

• The installation, certification, or distribution of green building materials.

• Energy audits.

• Marketing and sales of green building technology in the State.

• The development of a workforce for green building processes.

􀂾 Attract and leverage private- sector investments and entrepreneurial growth in

environmentally conscious clean technology and renewable energy products and

businesses, including the development of workforces in these industries.

Guidelines for awarding grants under this act are exempt from the rulemaking

requirements of the Administrative Procedures Act.

This section became effective July 1, 2007. ( WR)

Use of State Executive Aircraft

S. L. 2007- 323, Sec. 13.3 ( HB 1473, Sec. 13.3) states that the use of an executive aircraft

by the Department of Commerce for economic development purposes must take precedence over

all other uses. If an executive aircraft is not in use for such purposes, priority of use must be

given to the Governor, the Council of State, and other State officials traveling on State business,

respectively. The Department of Commerce is directed to review annually the rates charged for

the use of executive aircraft and adjust the rates, if necessary. This section also establishes a

rate to be charged, if an executive aircraft is used to attend an event related to collegiate

athletics.

This section became effective July 1, 2007. ( DH)

Report on Business Courts

S. L. 2007- 323, Sec. 14.7 ( HB 1473, Sec. 14.7). See Courts, Justice, and Corrections.

State Health Plan Changes

S. L. 2007- 323, Sec. 28.22A ( HB 1473, Sec. 28.22A). See Insurance.

Privilege Tax on Software Publishers' Machinery and

Equipment

S. L. 2007- 323, Sec. 31.7 ( HB 1473, Sec. 31.7). See Finance.

Modify Tax Credit for Constructing Renewable Fuel Facilities

S. L. 2007- 323, Sec. 31.9 ( HB 1473, Sec. 31.9). See Finance.

Chapter 3 Business and Commerce

Page 13

Expand Sales and Use Tax Refund for Certain Aircraft

Manufacturers

S. L. 2007- 323, Sec. 31.10 ( HB 1473, Sec. 31.10). See Finance.

Local Option County Taxes

S. L. 2007- 323, Sec. 31.17 ( HB 1473, Sec. 31.17). See Finance.

Sales Tax Refund- Research Supplies

S. L. 2007- 323, Sec. 31.20 ( HB 1473, Sec. 31.20). See Finance.

Datacenter Sales Tax Exemption

S. L. 2007- 323, Sec. 31.22 ( HB 1473, Sec. 31.22). See Finance.

Tax Incentive for Railroad Intermodal Facility

S. L. 2007- 323, Sec. 31.23 ( HB 1473, Sec. 31.23). See Finance.

Amend Tax Incentive for Railroad Intermodal Facility

S. L. 2007- 345, Sec. 14.7 ( HB 714, Sec. 14.7). See Finance.

Protect Homeowners/ Reduce Foreclosure

S. L. 2007- 351 ( HB 1374) makes several changes to the law to protect borrowers in

mortgage transactions, including:

􀂾 Amends the Civil Procedure law, with regard to the statute of limitations, to recover

penalties for usury by including actions for the financing of usurious points, fees, or

other charges. The two- year period would accrue with each payment made and

accepted on the loan.

􀂾 Amends the law governing the grounds upon which a North Carolina court can

exercise personal jurisdiction over a nonresident defendant in a claim related to local

real property. The act authorizes jurisdiction if the loan was made to a North Carolina

borrower for primarily family or household purposes, and was secured by real

property located within the State on which there is, or will be located, a 1- 4 family

unit dwelling.

􀂾 Amends the Interest law to provide that any person who acquires the right to receive

payments on a loan made in the State, to a resident of the State, and secured by

property in the State, is deemed to have consented to the exercise of jurisdiction by

the courts of the State for any claim related to the loan.

􀂾 Amends the law relating to foreclosure under power of sale by adding several items

to the list of information that must be provided to the debtor with the notice of

hearing, including:

• Whether the borrower made requests to the servicer for information in the prior

two years, and whether the servicer complied with such requests.

Chapter 3 Business and Commerce

Page 14

• That the debtor need not appear at the hearing, if he or she does not intend to

contest the default, but that failure to appear does not affect the right to pay the

debt and prevent the sale.

• That the trustee is a neutral party and cannot advocate for the creditor or the

debtor.

• That the debtor can apply to the court to stop the sale, on legal or equitable

grounds, prior to the time the rights of the parties to the sale become fixed.

• That the debtor has the right to appear at the hearing and contest the

allegations in the notice, and the grounds the clerk must find to authorize the

foreclosure.

• That if the debtor fails to appear, the trustee will seek an order to sell the

property being foreclosed.

• That the debtor has the right to legal advice, and how the debtor may obtain

free legal advice.

􀂾 Creates a new Article entitled " Mortgage Debt Collection and Servicing." The new

Article applies to ( i) home loans that are secured by real property and used by the

individual borrower as a dwelling, ( ii) to servicers, defined as a person responsible

for receiving scheduled periodic payments from a borrower under the terms of a

loan, and making payments as required by the terms of the loan. The definition of

servicer does not include an attorney who accepts payments related to loan closings,

defaults, foreclosures, or settlement of disputes related to a loan.

􀂾 The act restricts the amount and conditions under which fees may be assessed by a

servicer. It also establishes the obligations of the servicer with regard to handling

escrow funds. The servicer must maintain records of written requests for information

made by the borrower regarding disputes or errors in the borrower's account, and

provide responses within 10 business days. The borrower is entitled to one statement

in a six- month period. Thereafter, a charge for additional statements, of no more

than $ 25.00, may be assessed.

􀂾 The borrower also is entitled to receive a copy of the original note and a statement

of the full payment history within 25 business days of making the request. After

receiving 1 statement in a 6- month period, the borrower may be charged $ 50.00 for

additional copies.

􀂾 In addition to any equitable or legal remedies that may be available, a borrower

injured by a violation of this Article, the Commissioner of Banks, the Attorney

General, or a party to the loan, may sue for actual damages and attorney's fees. If a

party to the loan sues, the borrower must notify the servicer in writing of the error or

dispute that forms the basis of the claim at least 30 days before commencing the

action. A servicer will not be in violation of the Article, if the servicer shows that the

violation was unintentional and the servicer corrects the error and compensates the

borrower within 30 days of discovery or notice of the error and prior to

commencement of an action.

Sections 4 and 5 of this act become effective April 1, 2008. The remainder of the act

became effective August 16, 2007. ( KCB)

Protect Consumers - Covered Loans

S. L. 2007- 352 ( HB 1817). See Consumer Protection.

North Carolina Foreclosure/ Landlord Tenant Laws

S. L. 2007- 353 ( HB 947). See Local Government and Property, Trusts, and Estates.

Chapter 3 Business and Commerce

Page 15

Use of Senate Seals and Coat of Arms

S. L. 2007- 354 ( SB 371) prohibits anyone, unless directed by the Senate or the Senate

Principal Clerk, to knowingly use, manufacture, reproduce, sell, or purchase for resale any part of

or likeness to any seal or coat of arms of the Senate, except for the manufacture or sale of the

article for the official use of the State. A violation of this act is a Class 2 misdemeanor. The

Attorney General may seek an injunction for violations of this act.

This act became effective August 17, 2007. ( DH)

Prohibit Gift Card Maintenance Fees

S. L. 2007- 363 ( SB 1517). See Consumer Protection.

Retainage Payments/ Construction Contracts

S. L. 2007- 365 ( SB 1245). See State Government.

Sales Tax Exemption for Baked Goods

S. L. 2007- 368 ( SB 1240). See Finance.

Business Entity Clarifications

S. L. 2007- 385 ( SB 576) amends the Business Corporation Act to clarify various

amendments made in 2005 regarding mergers. This act clarifies that a committee of a board of

directors is prohibited from authorizing or approving the corporation's reacquisition of shares,

except according to a formula or method prescribed by the board of directors. The act also

substitutes the term " plan of merger" for the term " articles of merger" throughout the Business

Corporation Act.

This act became effective August 19, 2007. ( HF)

Increase Hold for Items Bought by Pawnbroker

S. L. 2007- 415 ( SB 806) prohibits pawnbrokers from selling, exchanging, bartering, or

removing for the pawnshop any goods that were purchased before the earlier of 7 days after the

pawn ticket information is electronically reported to law enforcement, or 30 days after the

transaction. Currently, a pawnbroker must hold the goods for only 48 hours after the transaction

in which the property is purchased by the pawnbroker.

The act also authorizes the establishment of procedures for reporting pawn ticket records

electronically, by allowing the report to be made to the sheriff or the chief of police, by

transmission over the Internet or by a facsimile transmission, in a manner approved by the

sheriff or chief of police.

This act became effective October 1, 2007, and applies to goods taken by a pawnbroker

in pledge, pawn, or purchase on or after that date. ( KCB)

Extend Qualified Business Venture Tax Credit

S. L. 2007- 422 ( HB 1598). See Finance.

Chapter 3 Business and Commerce

Page 16

Quarterly Escrow Deposits/ Affiliated Tobacco Dealers

S. L. 2007- 435 ( HB 1460). See Finance.

Small Business Contractor Act

S. L. 2007- 441 ( HB 1181) creates the North Carolina Small Business Contractor Authority

( Authority). The purpose of the Authority is to foster economic development and the creation of

jobs by providing financial assistance to financially responsible small businesses that are unable

to obtain adequate financing and bonding assistance in connection with contracts.

The Authority is governed by a board consisting of 11 members: 8 appointed by the

General Assembly, 4 each upon the recommendation of the President Pro Tempore of the Senate

and the Speaker of the House of Representatives, and 3 appointed by the Governor. The

members shall serve four- year terms, and there is no prohibition against serving successive

terms.

The Authority has the power to accept grants and loans, employ staff, acquire and

manage property, develop applications for guaranty agreements, fix and determine fees, adopt

administrative rules, and report quarterly to the Joint Legislative Commission on Governmental

Operations. The Authority may not pledge the full faith and credit of the State.

In order to qualify for assistance from the Authority, a small business concern must meet

certain federally established standards for businesses of similar size and industry. The applicant

also must have a reputation for financial responsibility, be a resident of North Carolina, and

demonstrate to the satisfaction of the Authority that the applicant has been unable to obtain

adequate financing or bonding on reasonable terms through an authorized company.

The act also creates two funds: The Small Business Contract Financing Fund ( Financing

Fund) and the Small Business Surety Bond Fund ( Bond Fund). These are both special revenue

funds. The Financing Fund may be used by the Authority to guarantee a loan made to an

applicant, or as the actual loan to an applicant. The Bond Fund may be used to guarantee a

surety for losses incurred under a bid bond, payment bond, or performance bond on an

applicant's contract. The total amount of guarantees issued and bonds executed by the Authority

may not exceed 90% of the amount of money in the Surety Bond Fund.

It is a Class 2 misdemeanor to knowingly make or cause any false statement or report to

be made in any application or document submitted to an Authority.

This act becomes effective January 1, 2008, and applies to offenses committed or causes

of action arising on or after that date. ( KG)

Fire- Safe Cigarette Act

S. L. 2007- 451 ( HB 1785) enacts a new Article in the General Statutes, the Fire- Safety

Standard and Firefighter Protection Act, to adopt a cigarette fire- safety standard for cigarettes

sold in the State.

Definitions. – The act includes the following definitions:

􀂾 " Cigarette" means any roll for smoking, whether made wholly or in part, of tobacco

or any other substance, irrespective of size or shape, and whether or not such

tobacco or substance is flavored, adulterated, or mixed with any other ingredient, the

wrapper or cover of which is made of paper or any other substance or material,

other than leaf tobacco.

􀂾 " Manufacturer" is any of the following:

• Any entity which manufactures or otherwise produces cigarettes or causes

cigarettes to be manufactured or produced anywhere that such manufacturer

intends to be sold in this State, including cigarettes intended to be sold in the

United States through an importer.

Chapter 3 Business and Commerce

Page 17

• The first purchaser anywhere that intends to resell, in the United States,

cigarettes manufactured anywhere that the original manufacturer does not

intend to be sold in the United States.

• Any entity that becomes a successor of these entities.

Test Method and Performance Standard. – Test methods and performance

standards for cigarettes are governed by the act. No cigarette may be sold in the State, unless it

is tested in accordance with the act, meets the performance standards of the act, is accompanied

by a written certification filed with the Commissioner of Insurance by the manufacturer and

marked, as required under the act. Testing must meet the following requirements or standards:

􀂾 Testing must be done in accordance with the American Society of Testing and

Materials ( ASTM) " Standard Test Method for Measuring the Ignition Strength of

Cigarettes."

􀂾 Testing must be conducted using 10 layers of filter paper.

􀂾 No more than 25% of cigarettes may exhibit full- length burns.

􀂾 Performance standards must be applied only to a complete test trial ( consists of 40

replicate tests).

􀂾 Written certifications of testing filed by manufacturers shall be based upon testing by

laboratories accredited by the International Organization for Standardization ( ISO) or

comparable standard required by the Commissioner of Insurance ( Commissioner).

No additional testing is required if testing is completed in accordance with the act. A

manufacturer of a cigarette that cannot be tested in accordance with the act shall propose a test

method to the Commissioner for approval. No local government may pass any ordinance

changing the performance standard set forth in the act. The Commissioner must review the

effectiveness of this section and report every three years to the General Assembly, including any

recommendations to improve the act.

Certification. – The act addresses certification of a cigarette's performance standard.

Each manufacturer is required to submit to the Commissioner a written certification, attesting

that the cigarette has been tested and meets the performance standards required under the act.

A cigarette must be recertified every 3 years, and the manufacturer must pay to the

Commissioner a fee of $ 250.00 for each certification form.

If a manufacturer makes any change to a cigarette certified under the act that is likely to

affect the cigarette's compliance with ignition propensity standards required under the act, the

cigarette may not be sold until the manufacturer retests the cigarette under the act.

Cigarettes certified under the act must be marked in 8- point approved type, or larger, to

indicate compliance. Cigarettes sold or offered for sale that do not comply with the performance

standard are subject to forfeiture.

Penalties and Enforcement. – Penalties for violations of the act include:

􀂾 Manufacturers, distributors, agents, or any other persons who sell, or offer to sell,

cigarettes in violation of the testing requirements are subject to a civil penalty not to

exceed $ 100 per pack, up to a maximum penalty of $ 100,000 per 30- day period.

􀂾 Retail dealers who knowingly sell, or offer to sell, cigarettes in violation of the act

shall be subject to a civil penalty not to exceed $ 100 per pack, up to a maximum

penalty of $ 25,000 during a 30- day period.

􀂾 Businesses engaged in the manufacture of cigarettes that knowingly make a false

certification are subject to a civil penalty of $ 75,000, not to exceed $ 250,000 for

each false certification.

􀂾 Any person violating any other provision of the act is subject to a civil penalty, not to

exceed $ 1,000 for a first offense, and $ 5,000 for each subsequent violation.

The Commissioner or Attorney General may file an action for a violation of the act

including injunctive relief, recovery of costs, or damages incurred by the State.

The act does not apply to cigarettes sold out of state.

Chapter 3 Business and Commerce

Page 18

Preemption. – The act does not apply if a federal reduced cigarette ignition propensity

standard that preempts the act is enacted, but implementation of the federal standard does not

affect any liability for forfeiture or penalties accrued prior to enactment of the federal law.

Other Provisions. – In a provision unrelated to the Fire- Safety and Firefighter

Protection Act, the act clarifies stockholder requirements for a behavioral health professional

corporation.

The Fire- Safety Standard and Firefighter Protection Act becomes effective January 1,

2010. The remainder of the act became effective August 24, 2007. The act does not apply to

cigarettes sold on or after January 1, 2010, if the dealer can establish that taxes were paid on

the cigarettes prior to that date. ( TH)

Dealer Motor Vehicle Inspection/ Records/ Motor Vehicle

Registration

S. L. 2007- 481 ( SB 1147). See Transportation.

Bond License Plate Agent/ Online Vehicle Registration

S. L. 2007- 488 ( SB 1457). See Transportation.

Scrap Vehicle Purchase/ Parts- Record

S. L. 2007- 505 ( SB 1364) requires secondary metals recyclers and salvage yards to

maintain records when purchasing vehicles without a certificate of title for scrap, and amends the

junked motor vehicle law for the City of Monroe.

Scrap Vehicle Purchase. – This act allows secondary metals recyclers and salvage

yards to purchase motor vehicles without a certificate of title for scrap or parts only, if ( i) the

motor vehicle is 10 model years old or older, and ( ii) the secondary metals recyclers and salvage

yards comply with record keeping requirements. Law enforcement may inspect the required

records and all motor vehicles in the possession of the scrap metals recycler, or salvage yard,

when such operations are open for business. The penalty for violation of this provision is a Class

1 misdemeanor for a first offense, and a Class I felony for second and subsequent offenses. Any

motor vehicle, or other tools used to transport another motor vehicle, illegally sold under this

provision may be seized by law enforcement and is subject to forfeiture. Local governments are

preempted from enacting local laws or ordinances that regulate the sale of motor vehicles to

secondary metals recyclers or salvage yards.

The City of Monroe. – This act amends the law to change the definition of " junked

motor vehicles," as it applies in the City of Monroe, to include vehicles that appear to be worth

less than $ 500.

The sections of this act regarding the purchase of vehicles for scrap metal becomes

effective December 1, 2007, and applies to offenses committed and motor vehicles purchased on

or after that date. The section of this act regarding the City of Monroe became effective August

30, 2007. ( HF)

Clarify Motor Vehicle Franchise Laws/ Dealer Termination

S. L. 2007- 513 ( SB 1351) made the following changes to the motor vehicle franchise

laws:

Installment Sales. – The act requires retail installment sales to be evidenced by one or

more written instruments ( previously had to be one instrument), and requires that the written

statement delivered to the buyer that describes the details of the sale be signed by the buyer.

Chapter 3 Business and Commerce

Page 19

Notice of Objection/ Transfer of Dealership. – Current law prohibits a franchisor

from unreasonably refusing to approve a transfer of ownership of a dealership, transfer of a

franchise, change in the executive management or principal operator of a dealership, or

relocation of a dealership. When refusing to approve, the act requires the franchisor to provide

detailed factual and legal bases in the franchisor's notice of objection, and limits those bases to

those specifically listed in the act. It also provides for additional time for the franchisor to provide

notice of objection, if the franchisor requests additional information, to complete its review of a

proposed change.

Rights of Successor of Deceased Dealership Owner. – The act clarifies that a

designated successor of a deceased or incapacitated owner or operator of a dealership succeeds

to all of the rights and obligations of the owner or operator under either the existing franchise or

any other successor, renewal, or replacement franchise.

Manufacturer's Opinion on Viability of Franchise. – The act deletes language

stating that a manufacturer does not owe a duty to a purchaser of a motor vehicle franchise to

disclose its opinion that the franchise is not viable, or is not consistent with the manufacturer's

distribution or marketing forecast or plans.

Full Compensation for Warranty Work. – The act clarifies that a manufacturer must

fully compensate its dealers for warranty parts and service, and may not attempt to recover

those costs from the dealer through other charges or surcharges.

Denial of Claims for Reimbursement for Warranty Work. – The act clarifies that a

dealer's claim for reimbursement for warranty parts and services may not be denied by the

manufacturer based solely on a failure to comply with the manufacturer's claim documentation

procedures. The dealer also must have failed to comply with the same procedure within the

previous 12 months and received a written warning from the manufacturer of the failure.

Procedures for Dealer Claims. – The act clarifies that a manufacturer must have

reasonable written procedures for substantiating a dealer's claim for sales incentives, service

incentives, rebates, or other forms of incentive compensation.

Civil Actions. – The act allows only motor vehicle dealers and parties to a franchise as

parties who may bring a civil action for violation of the Manufacturers Licensing Law.

Dealer Eligibility to Purchase Program Vehicles. – The act prohibits a manufacturer

from considering the performance of its franchised dealers relating to sale of new motor vehicles

to determine the following with regard to program, certified, or other used vehicles:

􀂾 The dealer's eligibility to purchase vehicles from the manufacturer.

􀂾 The volume, type, or models the dealer is eligible to purchase from the

manufacturer.

􀂾 The price of vehicles the dealer is eligible to purchase from the manufacturer.

􀂾 Availability of discounts, credits, rebates, or sales incentives the dealer is eligible to

receive from the manufacturer for purchase of vehicles.

Access to Customer Information. – The act prohibits a manufacturer from accessing

customer or prospect information maintained by a dealer for purposes of soliciting the customer

on behalf of, or directing the customer to, another dealer. The prohibition does not apply to:

􀂾 Customers that request a reference to another dealership.

􀂾 Customers that move more than 60 miles from the dealership where the information

was accessed.

􀂾 Customer information that was originally provided to the dealership by the

manufacturer.

􀂾 Situations where the dealer has agreed to give the manufacturer access to the

information in a separate, written instrument.

Truck Dealer Cost Reimbursement. – The act requires manufacturers of vehicles

with a gross vehicle weight rating of 16,000 pounds or more to compensate dealers ( at a rate of

$ 600 per vehicle registered in the State) for the cost of special tools, equipment, and training for

which the dealers are liable, when the manufacturer sells a portion of its vehicles to converters

and other non- dealer retailers.

Chapter 3 Business and Commerce

Page 20

Compensation of Dealers/ Franchise Termination due to Industry

Reorganization. – Current law prohibits a manufacturer from terminating a franchise with a

licensed new motor vehicle dealer, unless certain requirements are met regarding notice,

determination of good cause for termination, and payment of compensation to the dealer. This

act adds the following new provisions to the law dealing with termination of a franchise that

results from a change in ownership, or control of all or part of the business of a manufacturer,

termination of all or part of the business operations of a manufacturer, or discontinuance of the

sale of the product line, or a change in distribution system by the manufacturer:

􀂾 The manufacturer has to notify the dealer of the termination not less than 180 days

prior to the effective date of the termination.

􀂾 The manufacturer is liable to the dealer for an amount at least equivalent to the fair

market value of the franchise on one of the following dates, whichever provides the

highest amount:

• The date the franchisor announces the action resulting in termination.

• The date the action resulting in termination first became general knowledge.

• The day 12 months prior to the date the notice of termination is issued.

􀂾 Payment is due within 90 days of the effective date of the termination. However, if

the termination is due to a change in distributors, the manufacturer may avoid

payment if the new distributor offers the dealer a franchise with acceptable terms.

􀂾 A franchise continues in full force and operation, notwithstanding a change in the

system of distribution of motor vehicles offered for sale under the franchise. Upon

the occurrence of the change, the Division is required to deny a manufacturer's

application for a license or license renewal, unless the applicant offers each dealer

who is a party to the franchise a new franchise agreement containing substantially

the same provisions, or assumes the obligations of the previous franchise agreement.

Applicability. – The act is applicable to all franchises and agreements existing at the

time of its ratification, and to all future franchises and agreements.

This act became effective August 30, 2007. However, nothing in the act applies to any

administrative proceeding pending before the Commissioner of Motor Vehicles, or any case

pending in a court on or before that date. ( WGR)

Wireless Telecommunications Facilities

S. L. 2007- 526 ( SB 831). See Local Government.

Industrial Machinery - Building Code

S. L. 2007- 529 ( SB 490) amends the State Building Code ( Code), to provide that the Code

does not apply to the regulation of the design, construction, location, installation, or operation of

industrial machinery. However, if, during the building code inspection process, an electrical

inspector has any concerns about the electrical safety of a piece of machinery, the inspector may

refer the concern to the Occupational Safety and Health Division of the North Carolina

Department of Labor. The inspector may not withhold a certificate of occupancy or mandate

third- party testing of the machinery based solely on this concern.

" Industrial machinery" is defined as equipment and machinery used in a system of

operations for the explicit purpose of producing, and does not include equipment permanently

attached to or a component part of a building and related to building services such as ventilation,

heating and cooling, plumbing, fire suppression or prevention, and general electrical

transmission.

This act became effective August 31, 2007. ( TH)

Chapter 3 Business and Commerce

Page 21

Amend Dry- Cleaning Solvent Cleanup Act

S. L. 2007- 530 ( SB 1362). See Environment and Natural Resources.

Amend Funeral Service Practice/ Other Related Laws

S. L. 2007- 531 ( SB 1435). See Occupational Boards and Licensing.

Deceptive Advertising of Business Location

S. L. 2007- 545 ( SB 514) makes it an unfair and deceptive trade practice for a person who

is in the business of supplying a perishable product to advertise that the business is located in a

certain geographic location, when the business is actually located elsewhere, unless the

advertisement contains the actual municipality and state of the location of the business.

This act became effective October 1, 2007, and applies to advertising printed or

published on or after that date. ( WR)

Job Maintenance and Capital Development Fund

S. L. 2007- 552 ( Extra Session) ( HB 4 ( Extra Session)) creates a fund in the Department of

Commerce ( Department) to be used to encourage businesses to maintain high- paying jobs and

make capital investments in the State.

Under the act, in order to be eligible for a grant a company must:

􀂾 Invest, or intend to invest, at least $ 200 million of private funds within a 6- year

period in improvements to real property and additions to tangible personal property

to be used in the business in the State.

􀂾 Employ, or maintain employment of, at least 2,000 full- time employees in the State.

􀂾 Be located in a Tier One county at the time the application is made.

􀂾 Meet a wage standard equal to 140% of the average weekly wage for the county.

􀂾 Provide health insurance to all full- time employees, have no serious OSHA violations

within the past three years, and have no serious environmental law violations within

the past three years.

Under the act, the Economic Investment Committee must recommend the grants to the

Department. The Department may enter into up to 5 grants, with the maximum individual grant

being up to $ 4 million per year, with a maximum of cumulative grants of no more than $ 60

million. The amount of each grant must be determined after consideration of the amount of sales

and use taxes paid on machinery and equipment, sales and use taxes paid on building materials

related to expansion, taxes paid on electricity, natural gas and other fuels, additional income or

franchise tax paid, worker training expenses incurred, and State permitting fees paid.

The Department must report quarterly to the Joint Legislative Committee on

Governmental Operations on grants awarded under this act.

The act directs the Joint Select Committee on Economic Development Incentives to

compile a report containing a comprehensive listing of all economic development incentives

provided in the State, and to report to the 2009 General Assembly.

This act became effective July 1, 2007. ( WR)

Job Maintenance and Capital Development Fund

HB 1761 – Vetoed August 30, 2007. See Vetoed Legislation.

Chapter 3 Business and Commerce

Page 22

Studies

Study Equine Industry in North Carolina

S. L. 2007- 323, Sec. 13.14A ( HB 1473, Sec. 13.14A) directs the sum of $ 500,000, of the

funds appropriated to the Rural Economic Development Center, Inc., for the 2007- 2008 fiscal

year, to be allocated to the Agricultural Advancement Consortium for:

􀂾 Assessing the numbers, composition, and value of the equine industry in North

Carolina.

􀂾 Analyzing the direct and indirect impact of the industry on the State's economy.

􀂾 Developing a comprehensive plan to maximize the economic opportunities presented

by the equine industry.

The assessment of the industry must provide data on both a statewide and countywide

basis. The Consortium may contract with other agencies of State government, constituent

institutions of the University of North Carolina, and private consultants to conduct the assessment

and plan development. It must complete its work within 12 months of the funds becoming

available. A report containing the results of the assessment of the equine industry and its plan for

maximizing the economic impact of the industry must be filed with the Chairs of the Joint

Legislative Commission on Governmental Operations, and the Chairs of the Senate and House of

Representatives Appropriations Committees.

This section became effective July 1, 2007. ( DH)

Authorize Minority Disparity Study

S. L. 2007- 345, Sec. 9.2 ( HB 714, Sec. 9.2) authorizes the Department of Administration

to conduct a study of the relevant evidence of the effects of race- based and gender- based

discrimination upon the utilization of minority- owned and women- owned business enterprises in

contracts for planning, design, preconstruction, construction, maintenance, renovation, or repairs

of State building projects, including local government units, or other public or private entities,

that receive State funding. The Director of the Budget is authorized, within funds available in any

State agency, to use up to $ 1.5 million for the study authorized under this section.

This section became effective July 1, 2007. ( HF)

For a complete list of the studies and reports authorized by the 2007 Session of the

2007 General Assembly, please refer to the Appendix contained in this publication.

Chapter 4 Children and Families

Page 23

Chapter 4

Children and Families

Drupti Chauhan ( DC), Erika Churchill ( EC), Shirley Iorio ( SI), Wendy Graf Ray ( WGR)

Enacted Legislation

Child Restraint Systems/ Federal Compliance

S. L. 2007- 6 ( HB 61). See Transportation.

Domestic Violence Victims/ Security

S. L. 2007- 15 ( HB 46) requires the North Carolina Council for Women/ Domestic Violence

Commission to consider, in cooperation with the North Carolina Coalition Against Domestic

Violence, whether State- funded agencies that operate domestic violence shelters should adopt

safety guidelines as a criterion for receipt of State funds. The Council is required to report to the

Joint Legislative Committee on Domestic Violence no later than May 1, 2008, on the review

results. The act also requires clerks of Superior Court, where practical and if requested by a

domestic violence victim, to make a secure area available to the victim to await the hearing of

the victim's case.

This act became effective April 12, 2007. ( WGR)

Schools Provide Information on Cervical Cancer

S. L. 2007- 59 ( SB 260). See Education.

Domestic Violence Victims/ Add Protections

S. L. 2007- 116 ( SB 30). See Courts, Justice, and Corrections and Criminal Law and

Procedure.

Amend Family Resource Center Grant Program Laws

S. L. 2007- 130 ( HB 696) changes the purpose of the Family Resource Center Grant

Program from providing grants to establish family resource centers to implementing family

support programs that are research- based and have been evaluated for effectiveness.

Additionally, the act extends the age range for services from birth through elementary school age

children, to children from birth through 17 years of age. The act also specifies that the grants

prevent child abuse and neglect by implementing program models that have been evaluated and

found to improve outcomes for children and families.

This act became effective June 27, 2007. ( EC)

Remove Barriers to Interstate Adoption

S. L. 2007- 151 ( HB 865) amends North Carolina statutes pertaining to termination of

parental rights and adoption to make it easier for nonresidents to adopt children in this State.

Adoption conditioned upon termination of parental rights. – In North Carolina,

the biological parents' rights are not required to be terminated before an adoption can take

Chapter 4 Children and Families

Page 24

place. It is enough that the biological parent has consented to an adoption, or relinquished the

child to an agency for adoption. The decree of adoption has the effect of terminating the

biological parents' rights. However, some other states do require that the biological parents'

rights be terminated before an adoption can take place. This act authorizes North Carolina courts

to terminate parental rights when all of the following conditions are met:

􀂾 The child has been relinquished for adoption or directly placed with a prospective

adoptive parent.

􀂾 The relinquishment or consent to adoption has become irrevocable.

􀂾 Termination of parental rights is a condition precedent to adoption in the jurisdiction

where the adoption will take place.

􀂾 The parent does not contest the termination.

Jurisdiction over adoption proceedings. – Currently, a prospective adoptive parent

is required to live in North Carolina for at least six months prior to filing an adoption petition, with

the exception that a prospective adoptive parent who has moved to North Carolina may file a

petition to adopt a child who has lived in North Carolina for six months or from birth. In addition,

a North Carolina court may not exercise jurisdiction over an adoption proceeding if another state

is exercising jurisdiction, so long as the other jurisdiction is acting in conformity with the Uniform

Child- Custody Jurisdiction and Enforcement Act at the time the petition is filed. This act deletes

the requirement that a prospective adoptive parent reside in North Carolina before filing a

petition to adopt. A North Carolina court will have jurisdiction under any of the following

circumstances:

􀂾 The child has lived in North Carolina for six months or from birth.

􀂾 The prospective adoptive parent has lived in North Carolina for at least six months.

􀂾 A North Carolina child- placing agency or department of social services has legal

custody of the child.

The act also allows a North Carolina court to exercise jurisdiction when another state was

already exercising jurisdiction at the time the adoption petition is filed if, within 60 days after the

date the petition is filed, the other court dismisses its proceeding or releases jurisdiction.

This act became effective October 1, 2007, and applies to motions in the cause, or

petitions filed on or after that date. ( WGR)

Expand Reach of Courts/ Termination of Parental Rights

S. L. 2007- 152 ( HB 866) expands the jurisdiction of North Carolina courts, by giving to

courts that have jurisdiction to make a child- custody determination the jurisdiction to terminate

the parental rights of any parent, irrespective of the parent's state of residence.

Under current law, district courts have exclusive original jurisdiction to hear and

determine any petition or motion relating to termination of parental rights to any juvenile who

resides in, is found in, or is in the legal or actual custody of a county department of social

services or licensed child- placing agency in the district. Before exercising jurisdiction, the court

must find that it has jurisdiction to make a child- custody determination under the provisions of

the law dealing with initial child- custody jurisdiction, jurisdiction to modify determination, or

temporary emergency jurisdiction. The law grants North Carolina courts temporary emergency

jurisdiction if the child is present in this State and the child has been abandoned, or it is

necessary in an emergency to protect the child because the child, or a sibling, or parent of the

child is subjected to or threatened with mistreatment or abuse. Custody determinations made by

courts establishing jurisdiction under this section are primarily intended to be temporary orders,

designed to protect the child until the State that has jurisdiction enters an order.

This act expands the jurisdiction of North Carolina district courts hearing petitions or

motions to terminate parental rights to any juvenile in the custody of a county department of

social services or licensed child- placing agency. The act gives courts having jurisdiction to make a

child- custody determination the jurisdiction to terminate the parental rights of any parent,

Chapter 4 Children and Families

Page 25

irrespective of the parent's state of residence. The act requires that, before a court may exercise

jurisdiction regarding the parental rights of a nonresident parent, the court must find:

􀂾 That it has jurisdiction to make a child- custody determination under the initial child-custody

jurisdiction provisions or the jurisdiction to modify determination provisions,

without regard to the temporary emergency jurisdiction provisions.

􀂾 That proper process was served on the nonresident parent.

This act became effective October 1, 2007, and applies to motions in the cause or

petitions filed on or after that date. ( WGR)

Every Child Ready to Learn

S. L. 2007- 173 ( HB 150). See Education.

Custody/ Visitation/ Military Orders

S. L. 2007- 175 ( HB 1634). See Military, Veterans', and Indian Affairs.

Assault Disabled Person/ Institutional Setting

S. L. 2007- 188 ( HB 554). See Criminal Law and Procedure.

Violate Order/ Possess Deadly Weapon Felony

S. L. 2007- 190 ( HB 47). See Criminal Law and Procedure.

Study Safety Restraints on School Buses

S. L. 2007- 191 ( SB 812). See Transportation.

Access to Information for Adult Adoptees

S. L. 2007- 262 ( HB 445) authorizes a child- placing agency or a county department of

social services to act as a confidential intermediary between an adult adoptee or an adult lineal

descendant of a deceased adoptee and a biological parent of the adoptee. These agencies may

share nonidentifying birth family health information. With written consent of both parties, the

agencies may facilitate contact or share identifying information between the parties. The act also

allows a child- placing agency or a county department of social services to act as a confidential

intermediary for the adoptive parents of a minor adoptee, in order to obtain nonidentifying birth

family health information. A confidential intermediary is authorized to charge a reasonable fee for

services, so long as the fee is pursuant to a written agreement signed by the individual to be

charged. The Division of Social Services is required to establish guidelines for confidential

intermediary services.

The act also defines " adult" as an individual who has attained the age of 21 years for the

purposes of the adoption records confidentiality and disclosure statutes.

This act becomes effective January 1, 2008. ( DC)

Duty to Report Child Porn

S. L. 2007- 263 ( HB 27). See Business and Commerce.

Chapter 4 Children and Families

Page 26

Amend Child Welfare Laws/ Comply with Federal Laws

S. L. 2007- 276 ( HB 698). See Health and Human Services.

" More at Four" Program and Office of School Readiness

S. L. 2007- 323, Sec. 7.24 ( HB 1473, Sec. 7.24). See Education.

Collaboration Among Departments on School- Based Child

and Family Team Initiative

S. L. 2007- 323, Sec. 10.9 ( HB 1473, Sec. 10.9) establishes the School- Based Child and

Family Team Initiative to identify and coordinate appropriate community services and supports

for children at risk of school failure or out- of- home placement, in order to address the physical,

social, legal, emotional, and developmental factors that affect academic performance. This

section also establishes the North Carolina Child and Family Leadership Council to review and

advise the Governor in the development of the Initiative, and to ensure the active participation

and collaboration in the Initiative by all State agencies and their local counterparts providing

services to children in participating counties. The Department of Health and Human Services, the

Department of Juvenile Justice and Delinquency Prevention, the Administrative Office of the

Courts, and the Department of Public Instruction are directed to ensure collaboration in the

development and implementation of the Initiative.

This section became effective July 1, 2007. ( WGR)

Comprehensive Treatment Services Program

S. L. 2007- 323, Sec. 10.10 ( a)-( h) ( HB 1473, Sec. 10.10 ( a)-( h)). See Health and

Human Services.

Changes to the Legislative Study Commission on Children

and Youth

S. L. 2007- 323, Secs. 10.10( i) and ( j) ( HB 1473, Secs. 10.10( i) and ( j)) make changes to

the duties and membership of the Legislative Study Commission on Children and Youth

( Commission) and create a new Task Force on the Coordination of Children's Services ( Task

Force).

These sections give the Commission the duty to determine the adequacy and

appropriateness of services to children and youth served by the Mental Health, Developmental

Disabilities, and Substance Abuse Services system. These sections also make changes to the

membership of the Commission.

The sections also create the Task Force. The purpose of the Task Force is to study and

recommend changes to the Commission, the Governor, and the General Assembly to improve

collaboration and coordination among agencies that provide services to children, youth, and

families with multiple service needs. The Task Force must report at least annually to the

Commission and on April 1 of each year to the House Appropriations Subcommittee on Health

and Human Services; the Senate Appropriations Committee on Health and Human Services; the

Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and

Substance Abuse Services; and the Fiscal Research Division.

These sections became effective July 1, 2007. ( WGR)

Chapter 4 Children and Families

Page 27

Child Care Subsidy Rates

S. L. 2007- 323, Sec. 10.15 ( HB 1473, Sec. 10.15) sets out eligibility requirements and

payment rates for subsidized child care services in North Carolina.

This section became effective July 1, 2007. ( WGR)

North Carolina Partnership for Children Personnel Record

Protection

S. L. 2007- 323, Sec. 10.19B ( HB 1473, Sec. 10.19B). See Labor and Employment.

Child Support Program/ Enhanced Standards

S. L. 2007- 323, Sec. 10.28 ( HB 1473, Sec. 10.28) requires the Department of Health and

Human Services to develop and implement performance standards for all State and county child

support enforcement offices in North Carolina. The standards must include all of the following:

􀂾 Cost per collection.

􀂾 Consumer satisfaction.

􀂾 Paternity establishments.

􀂾 Administrative costs.

􀂾 Orders established.

􀂾 Collections on arrearages.

􀂾 Location of absent parents.

􀂾 Other related performance measures.

This section also requires the Department to monitor the performance of each office and

implement a system of reporting that allows offices to review their performance and the

performance of other offices. The Department must publish an annual performance report,

including statewide and local office performance. The Department is required to report on its

progress to the Senate Appropriations Committee on Health and Human Services, the House

Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division by

May 1 of each even- numbered year beginning in 2008.

This section became effective July 1, 2007. ( WGR)

Intensive Family Preservation Services Funding and

Performance Enhancements

S. L. 2007- 323, Sec. 10.33 ( HB 1473, Sec. 10.33) directs the Intensive Family

Preservation Services ( IFPS) Program to provide intensive services to children and families in

cases of abuse, neglect, and dependency where a child is at imminent risk of removal from the

home, and in cases of abuse where a child is not at imminent risk of removal. The IFPS must

ensure the application of standardized assessment criteria for determining imminent risk and out-of-

home placement. The Department of Health and Human Services must require that any

program or entity that receives funding for the purpose of IFPS provide information and data that

allows for all of the following:

􀂾 An established follow- up system with at least six months of follow- up services.

􀂾 Detailed information on specific interventions applied.

􀂾 Cost- benefit data.

􀂾 Data on long- term benefits obtained by tracking families through the process.

􀂾 The number of families remaining intact and associated interventions.

Chapter 4 Children and Families

Page 28

􀂾 The number and percentage by race of children receiving services, compared to the

ratio of their distribution in the general population, involved with Child Protective

Services.

The Department is required to report on the IFPS Program each even- numbered year

beginning in 2008 to the House Appropriations Subcommittee on Health and Human Services, the

Senate Appropriations Committee on Health and Human Services, and the Fiscal Research

Division.

This section became effective July 1, 2007. ( WGR)

Annual Evaluation of Tarheel Challenge Program

S. L. 2007- 323, Sec. 16.1 ( HB 1473, Sec. 16.1). See Courts, Justice, and Corrections.

Adoption Tax Credit

S. L. 2007- 323, Sec. 31.6 ( HB 1473, Sec. 31.6). See Finance.

Homebound Instruction for Disabled Students

S. L. 2007- 425 ( HB 14). See Education.

Homebound Instruction Standards

S. L. 2007- 429 ( HB 20). See Education.

Child Support Collection Fee/ Non- Temporary Assistance for

Needy Families ( TANF)

S. L. 2007- 460 ( HB 825). See Health and Human Services.

Require Disclosure/ Sex Offenders/ Child Custody

S. L. 2007- 462 ( HB 1328). See Civil Law and Procedure.

For a complete list of the studies and reports authorized by the 2007 Session of the

2007 General Assembly, please refer to the Appendix contained in this publication.

Chapter 5 Civil Law and Procedure

Page 29

Chapter 5

Civil Law and Procedure

Brenda Carter ( BC), Karen Cochrane- Brown ( KCB), Bill Gilkeson ( BG), Kory Goldsmith ( KG),

Trina Griffin ( TG), Tim Hovis ( TH), Howard Alan Pell ( HAP), Wendy Graf Ray ( WGR),

Walker Reagan ( WR), Steve Rose ( SR), Susan Sitze ( SS)

Enacted Legislation

Residential Mortgage Fraud Act

S. L. 2007- 163 ( HB 817). See Consumer Protection.

Limit Liability at Agricultural Fairs

S. L. 2007- 171 ( HB 590). See Animals and Wildlife.

Motor Vehicle Chop Shop Act

S. L. 2007- 178 ( HB 1354). See Criminal Law and Procedure.

Violate Order/ Possess Deadly Weapon Felony

S. L. 2007- 190 ( HB 47). See Criminal Law and Procedure.

Amend Civil No- Contact Order Laws

S. L. 2007- 199 ( HB 1482) amends two definitions pertaining to civil no- contact orders. In

2004, the General Assembly enacted statutes creating civil no- contact protective orders. Courts

can issue these protective orders in situations where a person has been a victim of stalking or

nonconsensual sexual conduct committed by a person with whom the victim is not in a domestic

relationship. Under the Civil No- Contact Orders statutes, " unlawful conduct" is defined as the

commission of one or more acts of ( i) nonconsensual sexual conduct, including single incidences

of nonconsensual sexual conduct, or ( ii) stalking. The definition of unlawful conduct does not

include acts of self- defense or defense of others.

The act clarifies the definition of " stalking" by reorganizing the sentence and amending

the definition of " unlawful conduct" by stating that the acts have to be committed by a person of

16 years of age or older, in order to meet the definition of " unlawful conduct."

This act became effective July 8, 2007. ( SR)

Civil Jury Selection/ Equal Challenges

S. L. 2007- 210 ( HB 244) amends the law governing jurors in civil actions, to provide for

equity between the parties with respect to juror challenges. The act authorizes the judge in a civil

case to increase the number of challenges for plaintiffs with antagonistic interests, under the

same circumstances that a judge may now increase the number of juror challenges for

defendants with antagonistic interests. Prior to this act, the judge could apportion the eight

peremptory challenges between or among defendants with antagonistic interests, or the judge

Chapter 5 Civil Law and Procedure

Page 30

could increase the total number of challenges to allow up to six for each defendant. The act also

authorizes the judge to increase the number of challenges for the opposing side, if the judge has

increased the number of challenges for plaintiffs or defendants.

This act became effective October 1, 2007, and applies to actions called for trial on or

after that date. ( KCB)

Recovery of Costs in Civil Cases

S. L. 2007- 212 ( HB 21). See Courts, Justice, and Corrections.

Immunity/ Veterinarians Reporting Animal Cruelty

S. L. 2007- 232 ( HB 1359) amends the law regarding cruelty to animals by adding a

provision granting immunity for veterinarians reporting animal cruelty in violation of State law.

The law provides that any veterinarian who ( i) makes a report of animal cruelty, or ( ii)

participates in any investigation or testifies in a judicial proceeding that arises from a report of

animal cruelty, is immune from civil or criminal liability and liability from professional disciplinary

action or breach of any veterinarian- patient confidentiality, provided the veterinarian does not act

in bad faith or with a malicious purpose. Failure to report animal cruelty would not be grounds for

disciplinary action under the Veterinarian Practice Act.

This act became effective October 1, 2007. ( TH)

Challenge to Administrative Subpoena

S. L. 2007- 251 ( SB 1432) amends the statutes dealing with proceedings before the

Employment Security Commission ( ESC) and the Property Tax Commission ( PTC), by providing a

procedure to quash a subpoena issued by one of those commissions.

Under the law prior to this act, the chairman, or any duly authorized representative or

member of the ESC, was authorized to " issue subpoenas to compel the attendance of witnesses

and the production of books, papers, correspondence, memoranda, and other records deemed

necessary as evidence, in connection with a disputed claim or the administration of this Chapter."

However, there was no procedure available for quashing a subpoena. Similarly, the PTC, a

member of the PTC, or any employee of the Department of Revenue authorized by the PTC, had

the authority to subpoena witnesses and documents, with no procedure available for quashing

such a subpoena.

This act provides a procedure to quash a subpoena issued by the ESC or the PTC. The

act allows those commissions to quash a subpoena upon a motion if, after a hearing, the

commission finds any of the following concerning the subpoena:

􀂾 It requires production of evidence that does not relate to a matter in issue.

􀂾 It fails to describe with sufficient particularity the evidence required to be produced.

􀂾 It is subject to being quashed for any other reason sufficient in law.

A hearing on a motion to quash is required to be heard at least 10 days prior to the

hearing for which the subpoena was issued, and the denial of a motion to quash is subject to

immediate judicial review in the Superior Court in the county where the person subject to the

subpoena resides.

This act became effective July 20, 2007. ( WGR)

Mediation of Property Insurance Claims

S. L. 2007- 300 ( HB 730). See Insurance.

Chapter 5 Civil Law and Procedure

Page 31

Limit Liability of Liquefied Petroleum Gas Dealer/ Certain

Others

S. L. 2007- 302 ( HB 1536). See Business and Commerce.

Industrial Commission Strategic Plan/ Report

S. L. 2007- 323, Sec. 13.4A ( HB 1473, Sec. 13.4A) directs the Industrial Commission to

develop a strategic plan no later than April 1, 2008, for tracking compliance with the

requirements for prompt payments of workers compensation benefits and to expeditiously

resolve medical compensation disputes in workers compensation cases. The Industrial

Commission also is directed to include in its annual report information concerning compliance

with the prompt pay requirements of workers compensation benefits and the resolution of

medical compensation disputes. A copy of the report is to be submitted to the Joint Legislative

Commission on Governmental Operations by October 1 of each year.

This section became effective July 1, 2007. ( WR)

Report on Business Courts

S. L. 2007- 323, Sec. 14.7 ( HB 1473, Sec. 14.7). See Courts, Justice, and Corrections.

Protect Homeowners/ Reduce Foreclosure

S. L. 2007- 351 ( HB 1374). See Business and Commerce.

North Carolina Foreclosure/ Landlord Tenant Laws

S. L. 2007- 353 ( HB 947). See Local Government and Property, Trusts, and Estates.

Civil Trial Exhibits

S. L. 2007- 407 ( SB 1117) authorizes the trial judge in a civil case to permit the jury to

take certain exhibits into the jury room, upon the jury's request and in the judge's discretion. The

trial judge may, upon a deliberating jury's request and after giving the parties notice and an

opportunity to be heard, direct that parts of requested testimony be read to the jury, or that the

jury be permitted to reexamine requested evidence in open court. Upon a deliberating jury's

request, the court may permit the jury to take any of the following into the jury room:

􀂾 Exhibits that have been passed to the jury.

􀂾 Photographs admitted into evidence, shown to the jury, and used by any witnesses

in testimony before the jury.

􀂾 Any illustrative exhibits admitted into evidence and used by any witnesses in

testimony before the jury.

Summaries of testimony, lists, or other similar documents prepared in the courtroom by

any party may not be sent to the jury room with the jury, and depositions may be taken into the

jury room only with the consent of the parties. In sending exhibits to the jury, the court must

ensure that the evidentiary integrity of the exhibit is preserved.

This act became effective for trials commencing on or after October 1, 2007. ( BC)

Chapter 5 Civil Law and Procedure

Page 32

Tort Claims Limit Increased

S. L. 2007- 452 ( HB 22). See State Government.

Require Disclosure/ Sex Offenders/ Child Custody

S. L. 2007- 462 ( HB 1328) requires a person convicted of a sexually violent offense, who is

seeking child custody ex parte, to disclose the conviction in the pleadings. An ex parte

proceeding is one in which the respondent to the action has not been notified of the action, and

has no opportunity to be heard prior to the court taking action. A court may not enter, ex parte,

a temporary order for custody which changes the living arrangements of a child, or changes

custody, unless the court finds either of the following:

􀂾 The child is exposed to a substantial risk of bodily injury, or sexual abuse.

􀂾 There is a substantial risk that the child may be abducted or removed from the State

of North Carolina, for the purpose of evading the jurisdiction of North Carolina

courts.

A " sexually violent offense" includes rape; first or second degree sexual offense; sexual

battery; attempted rape or sexual offense; intercourse and sexual offense with certain victims;

statutory rape or sexual offense of person who is 13-, 14-, or 15- years- old where the defendant

is at least 6 years older; subjecting or maintaining a person for sexual servitude; incest;

employing or permitting minor to assist in offenses against public morality and decency; felonious

indecent exposure; first, second, or third degree sexual exploitation of a minor; promoting or

participating in the prostitution of a minor; taking indecent liberties with children; solicitation of

child by computer to commit an unlawful sex act. The term also includes a solicitation or

conspiracy to commit any of these offenses, or aiding and abetting any of these offenses.

This act became effective October 1, 2007, and applies to actions and proceedings filed

on or after that date. ( HAP)

Reform Tax Appeals

S. L. 2007- 491 ( SB 242). See Finance.

Advance Directives/ Health Care Power of Attorney

S. L. 2007- 502 ( HB 634). See Health and Human Services.

Scrap Vehicle Purchase/ Parts- Records

S. L. 2007- 505 ( SB 1364). See Business and Commerce.

Amend Civil Procedure Rule 45

S. L. 2007- 514 ( HB 316) amends Rule 45 of the Rules of Civil Procedure to require that,

when a subpoena is served directing a person to produce designated records, the party or

attorney issuing the subpoena must, within five business days of receipt of the material, provide

notice to all other parties of receipt of the material produced. The party or attorney issuing the

subpoena also must, upon request, provide all other parties reasonable opportunity to inspect

and copy the material produced at the expense of the inspecting party.

This act became effective October 1, 2007, and applies to actions filed on or after that

date. ( TG)

Chapter 5 Civil Law and Procedure

Page 33

Arbitration/ Negligent Health Care Claims

S. L. 2007- 541 ( HB 1671) creates a new Article in the General Statutes that provides for

the voluntary arbitration of personal injury or wrongful death actions, based on negligence in the

provision of health care. This act applies to any claim for personal injury or wrongful death

damages, that is based on alleged negligence in the provision of health care by a health care

provider.

Arbitration requirements. – The parties may elect, before or after the filing of an

action, to file a stipulation with the court agreeing to submit to arbitration under this Article and

must file a declaration with the court prior to the discovery scheduling conference, if an

agreement is not reached. If the parties go to arbitration before the action is filed, the statute of

limitations for filing the action is tolled.

Selection of arbitrator. – An arbitrator is selected by agreement of all the parties

within 45 days of the stipulation. If an agreement is not reached, the arbitrator is selected from

emergency superior court judges who agree to be on a list maintained by the Administrative

Office of the Courts. The parties each strike names from the list until one last name remains. The

fees and expenses of the arbitrator are paid equally by the parties.

Witnesses and discovery. – Each side is entitled to two experts on liability, two

experts on damages, and one rebuttal expert. Each side is entitled to the following discovery:

􀂾 25 interrogatories.

􀂾 10 requests for admission.

􀂾 Whatever is allowable under court rules for requests for production of documents

and for mental and physical examinations.

􀂾 Depositions of any party and any expert that the party expects to call as a witness,

and five depositions per side for other witnesses, unless exceptional circumstances

require otherwise.

An arbitrator may issue a subpoena for the attendance of a witness and the production

of records.

Time Limits. – Within 45 days of stipulation to arbitration, the parties must submit a

copy of all relevant medical records or a release for medical records. Within 120 days, the

claimant must disclose to each defendant the name and curriculum vitae of expert witnesses

( 140 days for the defendant). Within 160 days, each party must disclose the name and

curriculum vitae of rebuttal experts. Within 240 days, all discovery shall be completed, and within

270 days the arbitration hearing must begin.

Written decision. – Within 14 days after completion of the hearing, the arbitrator shall

issue and sign a decision in writing. An award under this article may not exceed $ 1 million.

Judgment by court. – After receiving notice of a hearing, the party may file a motion

with the court for a judgment, at which time the court must issue a judgment unless the decision

is modified, corrected, or vacated.

Appeal. – There is no right to a trial de novo on appeal. Appeals are limited to bases

found in current law, including cases of fraud, refusal to postpone a hearing upon sufficient

cause, or mathematical miscalculation.

This act becomes effective January 1, 2008, and applies to agreements to arbitrate

entered into on or after that date. ( BG)

For a complete list of the studies and reports authorized by the 2007 Session of the

2007 General Assembly, please refer to the Appendix contained in this publication.

Chapter 5 Civil Law and Procedure

Page 34

Chapter 6 Constitution and Elections

Page 35

Chapter 6

Constitution and Elections

Erika Churchill ( EC), Bill Gilkeson ( BG), Kara McCraw ( KM)

Note: For legislation affecting voting, the legislation cannot be implemented until it

has received approval under Section 5 of the Voting Rights Act of 1965. Approval is

most commonly obtained administratively from the United States Attorney General.

This requirement applies to legislation affecting any of the 40 North Carolina counties

covered by Section 5, including all statewide legislation. Unless otherwise indicated,

the effective date stated is the effective date as it is in the legislation. The act cannot

be implemented until Voting Rights Act approval is obtained.

Enacted Legislation

Archdale Elections

S. L. 2007- 41 ( SB 22) requires that regular municipal elections in the City of Archdale be

conducted in even- numbered years, beginning in 2008. The act extends the terms of current

elected officials to the new election schedule. The act also redefines the election wards of

Archdale, so that the city will have six City Council members -- four elected from single- member

districts and two elected by the city as a whole.

Archdale is a city of 9,014, according to the 2000 Census. It lies mostly in Randolph

County, which is not subject to Section 5 of the Voting Rights Act, 42 U. S. C. 1971, but partly in

Guilford County, which is covered by Section 5. The act is, therefore, subject to Section 5

preclearance.

The general law, enacted in 1971, is that municipal elections are held in odd- numbered

years. Of more than 500 municipalities in North Carolina, none departed from that general law

until 2006, when High Point's city elections were moved to even- numbered years. Archdale is the

second city to follow suit.

This act became effective May 14, 2007. ( BG)

Chapel Hill Campaign Finance Options

S. L. 2007- 222 ( HB 483) authorizes the Town of Chapel Hill to appropriate local funds for

a voluntary public campaign financing program for local offices under certain conditions. The

State Board of Elections must develop guidelines which meet the following criteria:

􀂾 Participating candidates must demonstrate public support and voluntarily accept

strict fund- raising and spending limits.

􀂾 Requirements must be drawn to further the public purpose of free and fair elections,

and must not discriminate for or against any candidate on the basis of race, creed,

position on issues, status of incumbency or nonincumbency, or party affiliation.

􀂾 Public funds must be restricted to use for campaign purposes, based on guidelines

drawn by the State Board of Elections.

􀂾 Unspent public funds must be returned to the local government.

At least one public hearing must be held before adoption of the program, and the

program must be approved by the State Board of Elections as meeting its guidelines. Notice of

the program must be given to the county board of elections.

Funds paid pursuant to the program are not subject to contribution limitations or the

prohibition on corporate contributions, but must be reported in all campaign reports required by

law as if they were contributions.

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A report analyzing the experience implementing the program must be prepared no later

than six months after the second election in which money is appropriated for the public campaign

financing program. The report must be presented to the Joint Legislative Commission on

Governmental Operations, the Fiscal Research Division of the Legislative Services Office, and the

committees in the House of Representatives and Senate to which election- related bills are

primarily referred.

This act became effective July 16, 2007, and expires on July 1, 2012. ( KM)

( Note: As this act affects only the Town of Chapel Hill in Orange County, it is not subject

to preclearance.)

Registration and Voting at One- Stop Sites

S. L. 2007- 253 ( HB 91) allows eligible persons who have missed the standard 25- day

registration deadline before an election, to register and vote in that election during the one- stop

(" early voting") period. The one- stop period runs from the third Thursday before an election

through the last Saturday before the election.

Generally, North Carolina voters may not vote in an election unless they have registered

to vote 25 days before election day. In prior law, exceptions were as follows:

􀂾 For those persons who have become qualified after the deadline, by naturalization or

restoration to citizenship after serving a felony sentence, they may register on

election day only.

􀂾 For those persons who may register and vote by absentee ballot, because of their

overseas or military status, they may register at any time prior to the election.

This act creates a process to allow any person who is qualified to vote to register in

person and vote at a one- stop site, after the general close of voter registration. In order to

register and vote, the person must do both of the following:

􀂾 Complete the standard voter registration form, including the attestation that the

person is a U. S. citizen and resides at the address given. That attestation is signed

under penalty of a Class I felony.

􀂾 Provide " proof of residence," which could be one of several valid documents that had

the person's name and current residence address: a North Carolina driver's license, a

photo identification ( I. D.) from a government agency, a utility bill, bank statement,

paycheck, government check, or other government document. ( This is similar to the

list of I. D. s that satisfy the Help America Vote Act ( HAVA) federal I. D. requirement

for certain first- time voters, except that the HAVA list allows any valid photo I. D.,

while the bill allows only a government- issued one.)

Once registered at the one- stop site, the person is entitled to vote then, or later at another one-stop

site. The person will vote a retrievable ballot, just as other one- stop voters.

Within two business days after the person has registered at the one- stop site, the board

of elections must proceed to verify the person's identity and address. The person's one- stop

ballot must be counted, unless the board determines that the applicant is not qualified to vote.

A person already registered may update information on that person's voter records at the

one- stop site during the one- stop voting period, except that that person cannot change party

registration before a partisan primary.

The act requires the State Board of Elections to monitor the implementation of the act,

and to report to the Joint Legislative Commission on Governmental Operations no later than

March 1, 2009, on its findings regarding expanding the process to include same- day registration

and voting on Election Day.

This act generally became effective when it was signed by the Governor on July 20,

2007. The bill contained a provision that governed its application to 2007 primaries and elections

designed to avoid administrative complications, based on the timing of preclearance under

Section 5 of the Voting Rights Act. Because the bill was precleared on August 16, 2007, it was

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made effective with respect to registration and voting for any primary or election held on or after

October 9, 2007. ( BG)

Help America Vote Act ( HAVA) Funds

S. L. 2007- 323, Sec. 25.1 ( HB 1473, Sec. 25.1) directs the State Board of Elections on

how to spend money in two accounts during the 2007- 2008 and 2008- 2009 fiscal years. Those

two accounts result from federal grants under the Help American Vote Act of 2002 ( HAVA). One

of them is the Election Fund, the repository of federal grants under HAVA. The other is the

Maintenance of Effort Reserve, consisting of funds the State must appropriate to continue to be

eligible for federal HAVA funds.

This section became effective July 1, 2007. ( BG)

Legal Expense Funds

S. L. 2007- 349 ( HB 1737) requires elected officers to create a legal expense fund, if the

elected officer, or a group of individuals on the elected officer's behalf, receives a contribution

from someone other than that elected officer's self, spouse, parents, brothers, or sisters, for

either of the following purposes:

􀂾 To fund an existing legal action taken by or against the elected officer in that elected

officer's capacity.

􀂾 To fund a potential legal action taken by or against an elected officer in that elected

officer's official capacity.

No more than one legal expense fund may be created for the same legal action. Legal

actions arising out of the same set of transactions and occurrences are treated as the same legal

action under the act.

Each legal expense fund must appoint a treasurer, who must receive training by the

State Board of Elections ( Board) within three months of appointment, and at least once every

four years thereafter. The treasurer must keep detailed accounts of contributions and

expenditures.

The treasurer must file with the Board an organizational report which includes:

􀂾 The name, address, and purpose of the legal expense fund.

􀂾 The names, addresses, and relationships of elected officers, candidates, and political

parties.

􀂾 The name and address of the custodian of books and accounts.

􀂾 A listing of all banks, safety deposit boxes, and other depositories used.

􀂾 Contact information of any assistant treasurers.

􀂾 Any other information requested by the Board.

The treasurer also must file a quarterly report with the Board. The quarterly report must

include:

􀂾 Contributions. The treasurer must report the following information on contributions

totaling more than $ 50 in the quarter:

• Name, mailing address, and principal occupation of each contributor.

• The amount of the contribution.

• The date the contribution was received.

􀂾 Expenditures. The treasurer must report all expenditures.

􀂾 Loans. The treasurer must report all proceeds from loans separately.

Contributions of more than $ 50 must be made by noncash methods ( check, draft, money

order, credit card charge, debit, or other noncash method that is subject to written verification).

Legal expense funds must not accept contributions from a corporation, labor union, insurance

company, professional association, or business entity in excess of $ 4,000 per calendar year.

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Most violations of the act are punishable as a Class 1 misdemeanor. Signing a report

knowing the information to be untrue is punishable as a Class I felony.

The act also makes conforming changes to the existing statutes to reflect the creation of

the legal expense fund.

This act becomes effective January 1, 2008. ( EC)

Candidate Felony Disclosure

S. L. 2007- 369 ( SB 1218) requires a candidate for elective office in North Carolina to file a

disclosure statement, at the same time the candidate files a notice of candidacy, verifying

whether or not the candidate has ever been convicted of a felony. The requirement applies to

individuals who become candidates due to a vacancy among party nominees occurring after

nomination and before the election, unaffiliated candidates nominated by petition, write- in

candidates for partisan elections, candidates for new political parties, candidates for municipal

elections, candidates for local school board elections, candidates for sanitary district boards, and

any other candidates for election by the people. This requirement does not apply to candidates

required to file Statements of Economic Interest, which also require disclosure of felony

convictions.

The State Board of Elections must adapt the candidacy form to include the disclosure

statement, and make clear that felony convictions dismissed as a result of reversal on appeal, a

pardon of innocence, or which have been expunged do not have to be disclosed. Candidates who

disclose a felony conviction must provide the name of the offense, date of conviction, date of

restoration of citizenship rights, and county and state of conviction. Completing the form with

knowledge the information is untrue is a Class I felony.

If a candidate fails to complete the required disclosure statement, the board of elections

accepting the filing must notify the candidate of the omission, and inform the candidate that the

statement must be completed within 48 hours. The candidate's filing is incomplete if the required

disclosure statement is not completed within 48 hours after the notice, and the individual's name

will not appear on the ballot, and votes for the individual will not be counted.

The form must be available as a public record in the office of the board of elections

where the candidate files the notice of candidacy, and must contain an explanation that a prior

felony conviction does not preclude holding elective office if the candidate's rights of citizenship

have been restored.

This act becomes effective January 1, 2008. ( KM)

Election Amendments

S. L. 2007- 391 ( HB 1743) is an omnibus bill that makes multiple changes to the election

laws.

Clarifies the Provision for False Campaign Reports. – The act addresses an issue

that arose in recent prosecutions. Previous law prohibiting a false statement on a campaign

report classified the act as perjury. The State's perjury statute requires that the false statement

has to have been made under an oath administered by an oath- administering official. The

campaign report requires certification— it is not required to be under oath. A Superior Court

judge commented that the legislature might want to address the disjuncture of statutes. The act

provides that lying on the campaign report is a Class I felony, but it does not reference the

perjury statute. Effective December 1, 2007, and applies to offenses committed on or after that

date.

Increases Civil Penalties for Deceptive Late Filing. – Under prior law, the civil

penalty for filing a campaign report late is $ 250 a day, up to a maximum of $ 10,000, for reports

affecting statewide races, and $ 50 a day, up to a maximum of $ 500, for reports affecting only

nonstatewide races. The act provides that if the board of elections determines, by clear and

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convincing evidence, that the late filing constitutes a willful attempt to conceal contributions or

expenditures, the board may assess a civil penalty up to 3 times the amount of the contributions

or expenditures willfully attempted to be concealed. Effective when bill becomes law, and applies

to offenses on or after that date.

Repeals $ 3,000 Presumption for " Political Committee." – The act deletes a part

of the definition of " political committee" that set a $ 3,000 presumption for whether an

organization had the " major purpose" of supporting or opposing candidates.

Earlier Distribution of Judicial Voter Guide. – The act allows the State Board of

Elections to send out the Judicial Voter Guide two weeks earlier than currently. Prior law said the

Guide could be distributed no earlier than 14 days, nor later than 7 days, before the beginning of

the one- stop period. The act changes the earliest date to be 28 days before the one- stop period.

The Guide contains information about candidates for Supreme Court and Court of Appeals.

Precinct Boundary Program Changes. – The act fleshes out the statute enacted in

2005 that provides that North Carolina will participate in the 2010 Census Redistricting Data

Program. The purpose of the program is to have the State's precinct lines included on the official

Census maps, so that Census data will be available by precinct. In past decades, the State has

worked with county boards of elections to report precinct lines and attempted to get the Census

Bureau to accept those lines as Census block boundaries. In the past, the Census has insisted

that its block boundaries be on visible features or certain political boundaries. After that process,

the General Assembly limited how county boards of elections could alter their precincts during

the decade. This time, the Census Bureau has said it will accept any precinct line a State reports,

regardless of the underlying feature. The act changes the past practice in two ways:

􀂾 Directs the Executive Secretary of the State Board of Elections to report precinct lines

to the Census Bureau as they exist on a date certain ( January 1, 2008). They will be

reported as " Voting Tabulation Districts," the Census Bureau's term.

􀂾 Freezes those Voting Tabulation Districts, prohibiting counties from changing them.

County boards of elections may still change their precincts, so long as they can

report election results by the unchanged Voting Tabulation Districts. Currently,

counties are required to report absentee and early votes by precinct. The bill

empowers the State Board of Elections to set standards for county boards of

elections in changing their precinct lines.

Allows Ballots to Be Combined. – The act clarifies that boards of elections may

combine any ballot items on a single ballot.

Corrects Description of Multi- County Districts in Ballot Access Statute. – The

act corrects a description of multi- county districts in the unaffiliated candidates' statute. The

statute provides that a district office " compris[ es] two or more counties," in the context of

providing for how many signatures an unaffiliated candidate must collect to qualify in a multi-county

district. The description leaves out districts that include parts of more than one county.

The correction uses a reference to a statute that describes ballot items that are " in the

jurisdiction of the State Board of Elections" for purposes of canvassing. For consistency, the

section amends the write- in statute in the same way.

Establishes Misdemeanor Penalty for Breaching Ballot Secrecy. – The act

establishes a Class 1 misdemeanor for anyone who has access to ballots revealing how an

individual voted. Under prior law, such disclosure was prohibited, but not criminalized. Effective

December 1, 2007, and applies to offenses committed on or after that date.

Clarifies No Write- In Space Unless Write- Ins Allowed. – The act clarifies that a

board of elections is not required to provide a space for voters to write in a candidate, if the law

does not allow write- in candidates in that race.

Corrects Date Reference in Certificate Statute. – The act provides that a certificate

of election shall be issued on the 10th day after the final decision of the State Board in a protest,

rather than 10 days after.

Extends Provision for Recasting Lost Votes. – In 2005, several thousand one- sto