NORTH CAROLINA
REGISTER
Volume 18, Issue 20
Pages 1760 - 1841
April 15, 2004
This issue contains documents officially filed
through March 24, 2004.
Office of Administrative Hearings
Rules Division
424 North Blount Street (27601)
6714 Mail Serv ice Center
Raleigh, NC 27699-6714
(919) 733-2678
FAX (919) 733-3462
Julian Mann III, Director
Camille Winston, Deputy Director
Molly Masich, Director of APA Services
Ruby Creech, Publications Coordinator
Linda Dupree, Editorial Assistant
Dana Sholes, Editorial Assistant
Julie Brincefield, Editorial Assistant
IN THIS ISSUE
I. IN ADDITION
ENR - Public Notice - Hazardous Waste...................1760
Summary of Notice of Intent to Redevelop A
Brownsfield Property - St Ives 220 Commercial....1761
II. PROPOSED RULES
Agriculture
Board of Agriculture ..................................................1762 - 1767
Commerce
State Banking Commission.......................................1768 - 1774
Environment and Natural Resources
Environmental Health................................................1792 - 1793
Health and Human Services
Medical Care Commission........................................1774 - 1776
Insurance ........................................................................1776 - 1791
Licensing Boards
Pharmacy, Board of....................................................1793 - 1794
III. TEMPORARY RULES
Expired Temporary Rules
Administration ............................................................1795
DENR/Marine Fisheries Commission ....................1795
IV. CONTESTED CASE DECISIONS
Index to ALJ Decisions.................................................1796 - 1803
Text of Selected Decisions
03 DHR 0903 ..............................................................1804 - 1829
04 DHR 0051 ..............................................................1830 - 1837
03 OSP 1554................................................................1838 - 1841
For the CUMULATIVE INDEX to the NC Register go to:
http://oahnt.oah.state.nc.us/register/CI.pdf
North Carolina Register is published semi-monthly for $195 per year by the Office of Administrative Hearings, 424 North Blount Street, Raleigh, NC
27601. North Carolina Register (ISSN 15200604) to mail at Periodicals Rates is paid at Raleigh, NC. POSTMASTER: Send Address changes to
the North Carolina Register, 6714 Mail Service Center, Raleigh, NC 27699-6714.
NORTH CAROLINA ADMINISTRATIVE CODE CLASSIFICATION SYSTEM
The North Carolina Administrative Code (NCAC) has four major classifications of rules. Three of these, titles, chapters, and sections are
mandatory. The major classification of the NCAC is the title. Each major department in the North Carolina executive branch of
government has been assigned a title number. Titles are further broken down into chapters which shall be numerical in order.
Subchapters are optional classifications to be used by agencies when appropriate.
NCAC TITLES TITLE 21
LICENSING BOARDS
TITLE 24
INDEPENDENT AGENCIES
1 ADMINISTRATION
2 AGRICULTURE & CONSUMER SERVICES
3 AUDITOR
4 COMMERCE
5 CORRECTION
6 COUNCIL OF STATE
7 CULTURAL RESOURCES
8 ELECTIONS
9 GOVERNOR
10A HEALTH AND HUMAN SERVICES
11 INSURANCE
12 JUSTICE
13 LABOR
14A CRIME CONTROL & PUBLIC SAFETY
15A ENVIRONMENT &NATURAL RESOURCES
16 PUBLIC EDUCATION
17 REVENUE
18 SECRETARY OF STATE
19A TRANSPORTATION
20 TREASURER
21* OCCUPATIONAL LICENSING BOARDS
22 ADMINISTRATIVE PROCEDURES
(REPEALED)
23 COMMUNITY COLLEGES
24* INDEPENDENT AGENCIES
25 STATE PERSONNEL
26 ADMINISTRATIVE HEARINGS
27 NC STATE BAR
28 JUVENILE JUSTICE AND DELINQUENCY
PREVENTION
1 Acupuncture
2 Architecture
3 Athletic Trainer Examiners
4 Auctioneers
6 Barber Examiners
8 Certified Public Accountant Examiners
10 Chiropractic Examiners
11 Employee Assistance Professionals
12 General Contractors
14 Cosmetic Art Examiners
16 Dental Examiners
17 Dietetics/Nutrition
18 Electrical Contractors
19 Electrolysis
20 Foresters
21 Geologists
22 Hearing Aid Dealers and Fitters
25 Interpreter/Transliterator (Reserved)
26 Landscape Architects
28 Landscape Contractors
29 Locksmith Licensing
30 Massage & Bodywork Therapy
31 Marital and Family Therapy
32 Medical Examiners
33 Midwifery Joint Committee
34 Funeral Service
36 Nursing
37 Nursing Home Administrators
38 Occupational Therapists
40 Opticians
42 Optometry
44 Osteopathic Examination (Repealed)
45 Pastoral Counselors, Fee-Based Practicing
46 Pharmacy
48 Physical Therapy Examiners
50 Plumbing, Heating & Fire Sprinkler
Contractors
52 Podiatry Examiners
53 Professional Counselors
54 Psychology
56 Professional Engineers & Land Surveyors
57 Real Estate Appraisal
58 Real Estate Commission
60 Refrigeration Examiners
61 Respiratory Care
62 Sanitarian Examiners
63 Social Work Certification
64 Speech & Language Pathologists &
Audiologists
65 Therapeutic Recreation Certification
66 Veterinary Medical
68 Substance Abuse Professionals
69 Soil Scientists
1 Housing Finance
2 Agricultural Finance Authority
3 Safety & Health Review
Board
4 Reserved
5 State Health Plan Purchasing
Alliance Board
Note: Title 21 contains the chapters of the various occupational licensing boards and Title 24 contains the chapters of independent agencies.
NORTH CAROLINA REGISTER
Publication Schedule for January 2004 – December 2004
FILING DEADLINES NOTICE OF TEXT PERMANENT RULE TEMPORARY
RULES
Volume &
issue
number
Issue date Last day
for filing
Earliest date for
public hearing
End of required
comment
period
Deadline to submit
to RRC
for review at
next meeting
Earliest Eff.
Date of
Permanent Rule
Delayed Eff. Date of
Permanent Rule
(first legislative
day of the next
regular session)
270th day from publication
in the Register
18:13 01/02/04 12/08/03 01/17/04 03/02/04 03/22/04 05/01/04 05/10/04 09/28/04
18:14 01/15/04 12/19/03 01/30/04 03/15/04 03/22/04 05/01/04 05/10/04 10/11/04
18:15 02/02/04 01/09/04 02/17/04 04/02/04 04/20/04 06/01/04 01/26/05 10/29/04
18:16 02/16/04 01/26/04 03/02/04 04/16/04 04/20/04 06/01/04 01/26/05 11/12/04
18:17 03/01/04 02/09/04 03/16/04 04/30/04 05/20/04 07/01/04 01/26/05 11/26/04
18:18 03/15/04 02/23/04 03/30/04 05/14/04 05/20/04 07/01/04 01/26/05 12/10/04
18:19 04/01/04 03/11/04 04/16/04 06/01/04 06/21/04 08/01/04 01/26/05 12/27/04
18:20 04/15/04 03/24/04 04/30/04 06/14/04 06/21/04 08/01/04 01/26/05 01/10/05
18:21 05/03/04 04/12/04 05/18/04 07/02/04 07/20/04 09/01/04 01/26/05 01/28/05
18:22 05/17/04 04/26/04 06/01/04 07/16/04 07/20/04 09/01/04 01/26/05 02/11/05
18:23 06/01/04 05/10/04 06/16/04 08/02/04 08/20/04 10/01/04 01/26/05 02/26/05
18:24 06/15/04 05/24/04 06/30/04 08/16/04 08/20/04 10/01/04 01/26/05 03/12/05
19:01 07/01/04 06/10/04 07/16/04 08/30/04 09/20/04 11/01/04 01/26/05 03/28/05
19:02 07/15/04 06/23/04 07/30/04 09/13/04 09/20/04 11/01/04 01/26/05 04/11/05
19:03 08/02/04 07/12/04 08/17/04 10/01/04 10/20/04 12/01/04 01/26/05 04/29/05
19:04 08/16/04 07/26/04 08/31/04 10/15/04 10/20/04 12/01/04 01/26/05 05/13/05
19:05 09/01/04 08/11/04 09/16/04 11/01/04 11/22/04 01/01/05 01/26/05 05/29/05
19:06 09/15/04 08/24/04 09/30/04 11/15/04 11/22/04 01/01/05 01/26/05 06/12/05
19:07 10/01/04 09/10/24 10/16/04 11/30/04 12/20/04 02/01/05 05/00/06 06/28/05
19:08 10/15/04 09/24/04 10/30/04 12/14/04 12/20/04 02/01/05 05/00/06 07/12/05
19:09 11/01/04 10/11/04 11/16/04 12/31/04 01/20/05 03/01/05 05/00/06 07/29/05
19:10 11/15/04 10/22//04 11/30/04 01/14/05 01/20/05 03/01/05 05/00/06 08/12/05
19:11 12/01/04 11/05/04 12/16/04 01/31/05 02/21/05 04/01/05 05/00/06 08/28/05
19:12 12/15/04 11/22/04 12/30/04 02/14/05 02/21/05 04/01/05 05/00/06 09/11/05
EXPLANATION OF THE PUBLICATION SCHEDULE
This Publication Schedule is prepared by the Office of Adminis trative Hearings as a public service and the computation of time periods are not to be deemed binding or controlling.
Time is computed according to 26 NCAC 2C .0302 and the Rules of Civil Procedure, Rule 6.
GENERAL
The North Carolina Register shall be published twice
a month and contains the following information
submitted for publication by a state agency:
(1) temporary rules;
(2) notices of rule-making proceedings;
(3) text of proposed rules;
(4) text of permanent rules approved by the Rules
Review Commission;
(5) notices of receipt of a petition for municipal
incorporation, as required by G.S. 120-165;
(6) Executive Orders of the Governor;
(7) final decision letters from the U.S. Attorney
General concerning changes in laws affecting
voting in a juris diction subject of Section 5 of
the Voting Rights Act of 1965, as required by
G.S. 120-30.9H;
(8) orders of the Tax Review Board issued under
G.S. 105-241.2; and
(9) other information the Codifier of Rules
determines to be helpful to the public.
COMPUTING TIME: In computing time in the
schedule, the day of publication of the North Carolina
Register is not included. The last day of the period so
computed is included, unless it is a Saturday, Sunday,
or State holiday, in which event the period runs until
the preceding day which is not a Saturday, Sunday, or
State holiday.
FILING DEADLINES
ISSUE DATE: The Register is published on the first
and fifteen of each month if the first or fifteenth of
the month is not a Saturday, Sunday, or State holiday
for emp loyees mandated by the State Personnel
Commission. If the first or fifteenth of any month is
a Saturday, Sunday, or a holiday for State employees,
the North Carolina Register issue for that day will be
published on the day of that month after the first or
fifteenth that is not a Saturday, Sunday, or holiday for
State employees.
LAST DAY FOR FILING: The last day for filing for any
issue is 15 days before the issue date excluding
Saturdays, Sundays, and holidays for State
employees.
NOTICE OF TEXT
EARLIEST DATE FOR PUBLIC HEARING: The hearing
date shall be at least 15 days after the date a notice of
the hearing is published.
END OF REQUIRED COMMENT PERIOD
An agency shall accept comments on the text of a
proposed rule for at least 60 days after the text is
published or until the date of any public hearings held
on the proposed rule, whichever is longer.
DEADLINE TO SUBMIT TO THE RULES REVIEW
COMMISSION: The Commission shall review a rule
submitted to it on or before the twentieth of a month
by the last day of the next month.
FIRST LEGISLATIVE DAY OF THE NEXT REGULAR
SESSION OF THE GENERAL ASSEMBLY: This date is
the first legislative day of the next regular session of
the General Assembly following approval of the rule
by the Rules Review Commission. See G.S. 150B-
21.3, Effective date of rules.
IN ADDITION
18:20 NORTH CAROLINA REGISTER April 15, 2004
1760
Note from the Codifier: This Section contains public notices that are required to be published in the Register or have been
approved by the Codifier of Rules for publication.
PUBLIC NOTICE NORTH CAROLINA DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES
HAZARDOUS WASTE SECTION 1646 MAIL SERVICE
CENTER RALEIGH, NORTH CAROLINA 27699-1646
(919) 733-2178
Notice of proposed issuance of and public comment period for delisting petition under the Federal Resource Conservation and
Recovery Act as amended by the Hazardous and Solid Waste Amendments of 1984 (PL-98-616) and the North Carolina Hazardous
Waste Management Rules (15A NCAC 13A) for GlaxoSmithKline (GSK), Research Triangle Park, Durham County, North Carolina.
The public comment period will begin on the date of this notice and extend for thirty (30) days thereafter. Comments regarding the
delisting petition should be sent to the following address:
Elizabeth W. Cannon
North Carolina Hazardous Waste Section
1646 Mail Service Center
Raleigh, North Carolina 27699-1646
All data submitted by the applicant is available as part of the administrative record. NC DENR will provide auxiliary aids and
services for disabled persons who wish to review the GSK’s delisting petition to comply with the Americans with Disabilities Act. To
receive special services, please contact Rita Umozurike at the address and phone number below as early as possible, so arrangements
can be made. A copy is available for review from 9 a.m. to 4 p.m., Monday through Friday at the:
Hazardous Waste Section
401 Oberlin Road, Room 150
Raleigh, North Carolina 27605
Call (919) 733-2178 ext. 311 for an appointment.
Here is a summary of the delisting petition.
The Hazardous Waste Section is preparing to approve GSK’s delisting petition for ash from the incinerator’s air
pollution control equipment. The ash is currently considered hazardous, but analysis has shown that the ash
generated at this specific facility does not contain constituents at a level that causes it to be considered hazardous
waste. Data was collected over several weeks, under conditions that indicate worst-case levels of the chemical
constituents. If the delisting is approved, GSK may be allowed to send this waste to a North Carolina lined
municipal landfill for disposal.
All comments received during the public comment will be considered in the decision-making process regarding the delisting petition.
IN ADDITION
18:20 NORTH CAROLINA REGISTER April 15, 2004
1761
SUMMARY OF NOTICE OF
INTENT TO REDEVELOP A BROWNFIELDS PROPERTY
St. Ives 220 Commercial, LLC
Pursuant to N.C.G.S. § 130A-310.34, St. Ives 220 Commercial, LLC has filed with the North Carolina Department of Environment
and Natural Resources (“DENR”) a Notice of Intent to Redevelop a Brownfields Property (“Property”) in Wake Forest, Wake County,
North Carolina. The Property consists of approximately 33 acres and is located at 12415 Capitol Boulevard. Environmental
contamination exists on the Property in soil and groundwater. St. Ives 220 Commercial, LLC has committed itself to redevelop the
Property for mixed commercial, retail, conference/convention/events center/flex space/warehousing and office space uses. The Notice
of Intent to Redevelop a Brownfields Property includes: (1) a proposed Brownfields Agreement between DENR and St. Ives 220
Commercial, LLC, which in turn includes (a) a map showing the location of the Property, (b) a description of the contaminants
involved and their concentrations in the media of the Property, (c) the above-stated description of the intended future use of the
Property, and (d) proposed investigation and remediation; and (2) a proposed Notice of Brownfields Property prepared in accordance
with G.S. 130A-310.35. The full Notice of Intent to Redevelop a Brownfields Property may be reviewed at the Wake Forest Town
Manager’s Office, 401 Elm Street, Wake Forest, NC 27587 by contacting Joyce Wilson, Town Clerk at 919.554.6190; or at 401
Oberlin Rd., Raleigh, NC 27605 by contacting Shirley Liggins at that address, at shirley.liggins@ncmail.net, or at (919) 733-2801,
ext. 336, where DENR will provide auxiliary aids and services for persons with disabilities who wish to review the documents.
Written public comments may be submitted to DENR within 60 days after the date this Notice is published in a newspaper of general
circulation serving the area in which the brownfields property is located, or in the North Carolina Register, whichever is later.
Written requests for a public meeting may be submitted to DENR within 30 days after the period for written public comments begins.
All such comments and requests should be addressed as follows:
Mr. Bruce Nicholson
Brownfields Program Manager
Division of Waste Management
NC Department of Environment and Natural Resources
401 Oberlin Road, Suite 150
Raleigh, North Carolina 27605
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1762
This Section contains the text of proposed rules. At least 60 days prior to the publication of text, the agency published a Notice of
Rule-making Proceedings. The agency must accept comments on the proposed rule for at least 30 days from the publication date,
or until the public hearing, or a later date if specified in the notice by the agency. The required comment period is 60 days for a
rule that has a substantial economic impact of at least five million dollars ($5,000,000). Statutory reference: G.S. 150B-21.2.
TITLE 2 – DEPARTMENT OF AGRICULTURE &
CONSUMER SERVICES
Notice is hereby given in accordance with G.S. 150B-21.2 that
the NC Board of Agriculture intends to amend the rule cited as
02 NCAC 52B .0406.
Proposed Effective Date: August 1, 2004
Instructions on How to Demand a Public Hearing: (must be
requested in writing within 15 days of notice): Any person may
request a public hearing on the proposed rule by submitting a
request in writing no later than April 30, 2004, to David S.
McLeod, Secretary, NC Board of Agriculture, 1001 Mail Service
Center, Raleigh, NC 27699-1001.
Reason for Proposed Action: This rule establishes
requirements for testing horses and other equine for equine
infectious anemia (EIA). Proposed changes would clarify
responsibilities for checking EIA test papers of equine in public
places such as horse shows, and make technical changes.
Procedure by which a person can object to the agency on a
proposed rule: Any person may object to the proposed rule by
submitting a written statement of objection(s) to David S.
McLeod, Secretary, NC Board of Agriculture, 1001 Mail Service
Center, Raleigh, NC 27699-1001.
Written comments may be submitted to: David S. McLeod,
Secretary, NC Board of Agriculture, 1001 Mail Service Center,
Raleigh, NC 27699-1001, Phone (919)733-7125 ext. 249, Fax
(919) 716-0105, email david.mcleod@ncmail.net.
Comment period ends: June 14, 2004
Procedure for Subjecting a Proposed Rule to Legislative
Review: Any person who objects to the adoption of a permanent
rule may submit written comments to the agency. A person may
also submit written objections to the Rules Review Commission.
If the Rules Review Commission receives written and signed
objections in accordance with G.S. 150B-21.3(b2) from 10 or
more persons clearly requesting review by the legislature and the
Rules Review Commission approves the rule, the rule will
become effective as provided in G.S. 150B-21.3(b1). The
Commission will receive written objections until 5:00 p.m. on
the 6th business day preceding the end of the month in which a
rule is approved. The Commission will receive those objections
by mail, delivery service, hand delivery, or facsimile
transmission. If you have any further questions concerning the
submission of objections to the Commission, please call a
Commission staff attorney at 919-733-2721.
Fiscal Impact
State
Local
Substantive (>$3,000,000)
None
SECTION .0400 - EQUINE INFECTIOUS ANEMIA (EIA)
02 NCAC 52B .0406 EIA TEST REQUIRED
(a) All equine more than six months of age entering North
Carolina for any purpose other than for immediate slaughter
shall be accompanied by a copy of the certificate of test from a
laboratory approved by the USDA showing the animal to be
negative to an approved test for equine infectious anemia (EIA)
within the past 12 months, except as provided in 02 NCAC 52B
.0410. (See 02 NCAC 52B .0206 for other importation
requirements.)
(b) No equine more than six months of age shall be sold, offered
for sale, traded, given away, or moved for the purpose of change
of ownership unless accompanied by the original official
negative test for EIA administered within 12 months prior to sale
or movement, except that equine which are offered for sale at
auction markets or sales may have a blood sample drawn at the
market by the market's veterinarian at the seller's expense. In
such cases, the equine may be sold and transferred contingent
upon receipt of an official negative EIA test. Until receipt of an
official negative EIA test, the equine must be isolated in
accordance with standards for isolation of positive reactors,
pursuant to 02 NCAC 52B .0408(c)(2).
(c) All equine brought to or kept at any public stables or other
public place for exhibition, recreation or assembly shall be
accompanied by either the original or a copy of an official
negative test for EIA administered within the previous 12
months. The owner, operator or person in charge of any public
stables or other public place where equine are brought or kept
for exhibition, recreation or assembly shall not permit an equine
to remain on the premises without the test required by this Rule.
(d) A person in possession or control of an equine in a public
place shall, upon the request of an authorized person, present the
original or a copy of the test required by this Rule and shall
assist in identifying the equine. A person in possession or
control of an equine who does not have an original or a copy of
the test required by this Rule shall remove the equine from the
premises within two hours of receiving written notification to
leave from an authorized person. As used in this Rule,
"authorized person" means the person in charge of the premises,
or the State Veterinarian or his representative.
Authority G.S. 106-405.17; S.L. 1999-237, s. 13.6.
* * * * * * * * * * * * * * * * * * * *
Notice is hereby given in accordance with G.S. 150B-21.2 that
the NC Board of Agriculture intends to adopt the rule cited as 02
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1763
NCAC 52J .0104 and amend the rules cited as 02 NCAC 52J
.0101-0103, .0201-.0207, .0209-.0210, .0302.
Proposed Effective Date: January 1, 2005
Instructions on How to Demand a Public Hearing: (must be
requested in writing within 15 days of notice): Any person may
request a public hearing on the proposed rule by submitting a
request in writing no later than April 30, 2004, to David S.
McLeod, Secretary, NC Board of Agriculture, 1001 Mail Service
Center, Raleigh, NC 27699-1001.
Reason for Proposed Action: Proposed changes would clarify
existing rules by making requirements more specific, add
requirements for drainage of facilities, acceptable impervious
surfaces for sanitation, fencing of outdoors areas, and other
changes to improve quality of facilities and care provided by
licensees.
Procedure by which a person can object to the agency on a
proposed rule: Any person may object to the proposed rule by
submitting a written statement of objection(s) to David S.
McLeod, Secretary, NC Board of Agriculture, 1001 Mail Service
Center, Raleigh, NC 27699-1001.
Written comments may be submitted to: David S. McLeod,
Secretary, NC Board of Agriculture, 1001 Mail Service Center,
Raleigh, NC 27699-1001, Phone (919)733-7125 ext. 249, Fax
(919) 716-0105, email david.mcleod@ncmail.net.
Comment period ends: June 14, 2004
Procedure for Subjecting a Proposed Rule to Legislative
Review: Any person who objects to the adoption of a permanent
rule may submit written comments to the agency. A person may
also submit written objections to the Rules Review Commission.
If the Rules Review Commission receives written and signed
objections in accordance with G.S. 150B-21.3(b2) from 10 or
more persons clearly requesting review by the legislature and the
Rules Review Commission approves the rule, the rule will
become effective as provided in G.S. 150B-21.3(b1). The
Commission will receive written objections until 5:00 p.m. on
the 6th business day preceding the end of the month in which a
rule is approved. The Commission will receive those objections
by mail, delivery service, hand delivery, or facsimile
transmission. If you have any further questions concerning the
submission of objections to the Commission, please call a
Commission staff attorney at 919-733-2721.
Fiscal Impact
State
Local
Substantive (>$3,000,000)
None
CHAPTER 52 - VETERINARY DIVISION
SUBCHAPTER 52J - ANIMAL WELFARE SECTION
SECTION .0100 - RECORD KEEPING AND LICENSING
02 NCAC 52J .0101 RECORDS; ANIMAL
SHELTERS, ETC.
Operators of all animal shelters, pet shops, public auctions, and
dealers shall maintain records on all dogs and cats showing the
following:
(1) origin of animals (including names and
addresses of consignors) and date animals
were received;
(2) description of animals including species, age,
sex, breed, and color markings;
(3) location of animal if not kept at the licensed or
registered facility;
(3)(4) disposition of animals including name and
address of person to whom animal is sold,
traded or adopted; adopted and the date of
such transaction; in the event of death, the
record shall show the date, signs of illness, or
cause of death if identified; if euthanized, the
record will shall show date and type of
euthanasia; and
(4)(5) record of veterinary care including treatments
treatments, immunization and immunization;
date, time, description of medication
(including name and dosage), and initials of
person administering any product or
procedure.
(5) maintain records on file for a period of one
calendar year.
Authority G.S. 19A-24.
02 NCAC 52J .0102 RECORDS; BOARDING KENNELS
Operators of boarding kennels shall maintain records of all dogs
and cats showing the following:
(1) name and address of owner or person
responsible for animal, the date of entry and
signature and address of individual to whom
animal is released; released and the date of
release;
(2) description of animal including breed, sex, age
and color marking; and
(3) record of veterinary care including treatment
provided while boarded, which shall include
date, times, description of medication
(including name and dosage) and
immunization; initials of person administering
product or procedure.
(4) records on file must be maintained for a period
of one calendar year.
Authority G.S. 19A-24.
02 NCAC 52J .0103 INSPECTION OF RECORDS
All operators of animal shelters, pet shops, boarding kennels,
public auctions, and persons operating as dealers will shall make
all required records available to the director or his authorized
representative on request. request, during the business and
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1764
cleaning hours listed on the license application. The operator
must be able to match each animal to its record upon request.
Records shall be maintained for a period of one year after the
animal is released.
Authority G.S. 19A-24; 19A-25.
02 NCAC 52J .0104 DEFINITIONS
As used in this Subchapter:
(1) "Accessories" means any objects used in
cleaning and sanitizing primary enclosures,
exercise areas, or objects to which an animal
may have access, including, but not limited to
toys, blankets, food and water utensils, and
bedding.
(2) "Adequate" means a condition which, when
met, does not jeopardize an animal's comfort,
safety or health.
(3) "Cage" means a primary enclosure which is
enclosed on all sides and also on the top and
bottom.
(4) "Husbandry" means the practice of daily care
administered to animals.
(5) "Isolation" means the setting apart of an
animal from all other animals, food, and
equipment in the facility for the sole purpose
of preventing the spread of disease.
(6) "License period" means July 1 through June
30.
(7) "Long term care" means the housing of an
animal for a period of more than 30
consecutive days.
(8) "Properly cleaned" means the removal of
carcasses, debris, food waste, excrement, or
other organic material with adequate
frequency.
(9) "Social interaction" means friendly physical
contact or play between animals of the same
species or with a person.
(10) "Suitable method of drainage" means drainage
that allows for the elimination of water and
waste products, prevents contamination of
animals, allows animals to remain dry, and
complies with applicable building codes and
local ordinances.
(11) "Supervision of animals" means one person (at
least 16 years of age) present, at all times, able
to directly view each enclosure or common
area.
Authority G.S. 19A-24.
SECTION .0200 - FACILITIES AND OPERATING
STANDARDS
02 NCAC 52J .0201 GENERAL
(a) Housing facilities for dogs and cats shall be structurally
sound and maintained in good repair to protect the animals from
injury, contain the animals and restrict the entrance of other
animals and people.
(b) All light fixtures and electrical outlets in animal areas shall
be in compliance with the State Building Code.
(b) (c) Reliable and adequate safe electric power, if required,
power is required to comply with other provisions of the Animal
Welfare Act and adequate potable water shall be available. Act.
(c) (d) Supplies of food and bedding shall be stored in facilities
which adequately protect such supplies against infestation or
contamination by vermin. vermin and insects. All open bags of
food shall be stored in airtight containers with lids.
Refrigeration shall be provided for supplies of perishable food.
(d) (e) Provisions shall be made for the daily removal and
disposal of animal and food waste, bedding and debris, debris
from the housing facility in accordance with local ordinances, to
assure facility will be maintained in a clean and sanitary manner.
(e) (f) Hot and cold running, potable water must be available.
Facilities such as washroom, basin or sink shall be provided to
maintain cleanliness among animal caretakers caretakers,
animals, and animal food and water receptacles.
(f) (g) Ambient temperature shall be measured and read outside
the primary enclosure at a distance not to exceed three feet from
any one of the external walls and on a level parallel to the
bottom of the primary enclosure at a point approximately half
the distance between the top and bottom of such enclosure.
Facility shall have ability to confirm ambient temperature.
(h) A separate five-foot perimeter fence is required if any
animals have access to an outdoor enclosure, including
unsupervised exercise areas.
(i) An adequate drainage system must be provided for the
housing facility.
(j) All areas of a facility are subject to review or inspection by
North Carolina Department of Agriculture and Consumer
Services employees during normal business hours (8:00 a.m.
through 5:30 p.m. Monday through Friday).
(k) All animals in a facility are subject to these standards,
regardless of ownership.
(l) A licensee or registrant shall comply with all federal, state
and local laws, rules and ordinances relating to or affecting the
welfare of dogs and cats in its facility.
(m) No dog or cat shall be in a window display except during
business hours and then only in compliance with standards set
forth in this Section.
Authority G.S. 19A-24.
02 NCAC 52J .0202 INDOOR FACILITIES
(a) Indoor housing facilities for dogs and cats shall be
sufficiently adequately heated and cooled when necessary to
protect the dogs and cats from cold and excessive heat and
provide for their health and comfort. The ambient temperature
shall not be allowed to fall below 50 degrees F. for dogs and cats
not acclimated to lower temperatures. or exceed 85 degrees F.
(b) Indoor housing facilities for dogs and cats shall be
adequately ventilated to provide for the health and comfort of
the animals at all times. Such The facilities shall be provided
with fresh air either by means of windows, doors, vents or air
conditioning and shall be ventilated so as to minimize drafts,
drafts. Air flow shall be adequate to minimize odors and
moisture condensation. Ventilation shall be provided when
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18:20 NORTH CAROLINA REGISTER April 15, 2004
1765
ambient temperature is 85 degrees F. or higher.
(c) Indoor housing facilities for dogs and cats shall have ample
light by natural or artificial means or both, of good quality and
well distributed. Such light shall provide uniformly distributed
illumination of sufficient light intensity to permit routine
inspection and cleaning during the entire working period.
Primary enclosures shall be so placed as to protect the dogs and
cats from excessive illumination. adequate illumination to permit
routine inspections, maintenance, cleaning and housekeeping of
the facility and observation of the animals. Illumination shall
provide regular diurnal lighting cycles of either natural or
artificial light, uniformly diffused throughout the animal
facilities.
(d) Interior building surfaces of indoor facilities with which
animals come in contact shall be constructed and maintained so
that they are substantially impervious to moisture, so that it may
and can be readily sanitized.
(e) A suitable method of drainage shall be provided to rapidly
eliminate excess water from an indoor housing facility. If closed
drain systems are used, they shall be equipped with traps and
installed to prevent odors and backup of sewage. The drainage
system shall be constructed to prevent cross-contamination
among animals.
Authority G.S. 19A-24.
02 NCAC 52J .0203 OUTDOOR FACILITIES
(a) When sunlight is likely to cause overheating and discomfort,
sufficient shade shall be provided to allow all dogs and cats kept
outdoors to protect themselves from the direct rays of the sun.
Primary enclosures and walkways with which an animal comes
in contact shall be constructed of sealed concrete or other
surfaces impervious to moisture. Gravel may be used if
maintained at a minimum depth of six inches and kept in a
sanitary manner.
(b) Dogs and cats kept outdoors shall be provided with access to
shelter housing to allow them to remain dry and comfortable
during inclement weather. Housing shall be constructed of
material which is impervious to moisture, and which can be
disinfected. One house shall be available for each animal within
each enclosure.
(c) In addition to housing, the enclosure shall provide protection
from excessive sun and inclement weather.
(d) Animal owners shall be advised at the time of reservation
and admission if the animal will be kept in outside facilities.
(c) (e) A suitable method of drainage shall be provided to
rapidly eliminate excess water. The drainage system shall be
constructed to prevent cross-contamination among animals.
Authority G.S. 19A-24.
02 NCAC 52J .0204 PRIMARY ENCLOSURES
(a) Primary enclosures shall be constructed so as to prevent
contamination from waste and wastewater from animals in other
enclosures. All surfaces with which an animal comes in contact
shall be impervious to moisture. For primary enclosures placed
into service on or after January 1, 2005, no wood can be within
the animal's reach. For primary enclosures in use in a licensed
or registered facility prior to January 1, 2005, any damaged
wood must be replaced in a manner that does not permit contact
with wood by the animal.
(a) (b) Primary enclosures for dogs and cats shall be structurally
sound and maintained in good repair and in a manner to prevent
injury to animals and keep other animals out. Primary
enclosures shall be constructed so as to provide sufficient space
to allow each dog or cat to walk, turn about freely freely, and to
easily stand, sit, or lie in a comfortable, normal natural position.
The height of a primary enclosure other than a cage shall be no
less than five feet. All enclosures shall be constructed to prevent
the escape of animals.
(c) Each primary enclosure shall be provided with a solid
resting surface or surfaces adequate to comfortably hold all
occupants of the primary enclosure at the same time. All resting
surfaces must be of a non-porous or easily sanitized material,
such as a towel, or a disposable material such as newspaper.
The resting surface or surfaces shall be elevated in primary
enclosures housing two or more cats.
(b) (d) In addition to Paragraph (a) (b) of this Regulation, Rule,
each dog shall be provided a minimum square footage of floor
space equal to the mathematical square of the sum of the length
of the dog in inches, as measured from the tip of its nose to the
base of its tail, plus six inches. inches, then divide the product by
144. The calculation is: (length of dog in inches + 6) x (length
of dog in inches + 6) = required floor space in square inches.
Required floor space in square inches ÷ 144 = required floor
space in square feet. The calculation shall be expressed in
square feet. Not more than 12 four adult dogs shall be housed in
the same primary enclosure. enclosure without supervision.
(length of dog in inches + 6") (length of dog in inches + 6")
required area inches =required square feet144
(e) If more than four dogs are housed in a common area or
enclosure, then there must be at least one supervisor for each 12
dogs housed within each enclosure or common area. No more
than 36 dogs may be housed in any enclosure or common area at
any time.
(c) (f) In addition to Paragraph (a) (b) of this Regulation, Rule,
each adult cat housed in any primary enclosure shall be provided
a minimum of two and one-half four square feet of floor space.
space which may include elevated resting surfaces. Each kitten
shall be provided 1.5 square feet. Not more than 12 adult cats
shall be housed in the same primary enclosure.
(d) In all enclosures having a solid floor, a receptacle containing
sufficient clean litter shall be provided for excreta. Each
primary enclosure shall be provided with a solid resting surface
or surfaces adequate to comfortably hold all occupants of the
primary enclosures at the same time. Such resting surface or
surfaces shall be elevated in primary enclosures housing two or
more cats.
(g) In all cat enclosures, a receptacle containing sufficient clean
litter shall be provided for waste. A minimum of one receptacle
per three cats is required.
Authority G.S. 19A-24.
02 NCAC 52J .0205 FEEDING
(a) Dogs and cats shall be fed at least once each day 24-hour
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1766
period except as otherwise might be required to provide
adequate veterinary care. Food shall be commercially prepared
food which complies with laws applicable to animal feed or the
food shall be provided by the owner. The food shall be free
from contamination, wholesome, palatable, and of sufficient
adequate quality and quantity appropriate for the given size, age,
and nutritive value condition of an animal to meet the normal
daily requirements for the condition and size of the dog or cat.
nutritional value. Puppies and kittens less than six months of
age shall be fed at least twice in each 24 hour 24-hour period.
An eight hour eight-hour interval between feedings is required if
only two feedings are offered in a 24 hour 24-hour period.
(b) Food receptacles shall be accessible to all dogs or cats and
shall be located so as to minimize contamination by excreta.
Feeding pans waste. For every adult animal, there must be at
least one food receptacle offered. Food receptacles shall be
durable and shall be kept clean and sanitized. Damaged
receptacles shall be replaced. Disposable food receptacles may
be used but must be discarded after each feeding. Self feeders
may be used for the feeding of dry food, and they shall be
sanitized regularly to prevent molding, deterioration or caking of
feed.
(c) Food and water receptacles in outdoor facilities shall be
protected from the elements.
Authority G.S. 19A-24.
02 NCAC 52J .0206 WATERING
If potable water is not accessible to the dogs and cats at all
times, potable water shall be offered to such animals at least
twice daily for periods of not less than one hour, Animals shall
have continuous access to fresh water, except as might otherwise
be required to provide adequate veterinary care. Watering
receptacles shall be durable and kept clean and sanitized.
Damaged receptacles shall be replaced.
Authority G.S. 19A-24.
02 NCAC 52J .0207 SANITATION
(a) Excreta Waste shall be removed from primary enclosures as
often as necessary and exercise areas to prevent contamination
of the dogs or cats contained therein and to reduce disease
hazards and odors. Enclosures and exercise areas for dogs and
cats must be properly cleaned a minimum of two times per day.
The animal must be able to walk or lie down without coming in
contact with any waste or debris. When a hosing or flushing
method is used for cleaning a primary enclosure commonly
known as a cage, any dog an enclosure, dogs or cat cats
contained therein shall be removed from such enclosure during
the cleaning process, and adequate measures shall be taken to
protect the animals in other such enclosures from being
contaminated with water and other wastes.
(b) Sanitization of primary enclosures Sanitation shall be as
follows:
(1) Prior to the introduction of dogs or cats into
empty primary enclosures previously
occupied, such enclosures and accessories
shall be sanitized in the manner provided in
Subparagraph (3) of this Paragraph.
(2) Primary In addition to primary enclosures for
dogs or cats shall be sanitized often enough to
prevent an accumulation being properly
cleaned a minimum of debris or excreta, or a
disease hazard, provided, however, that such
two times per day, enclosures and accessories
shall be sanitized at least a minimum of once
every two weeks seven days in the manner
provided in Subparagraph (3) of this
Paragraph. Paragraph if the same animal is
housed in the same enclosure more than seven
days.
(3) Cages, rooms and hard-surfaced pens or runs
shall be sanitized by:
(A) washing them with hot water (180
degrees F.) and soap or detergent as
in a mechanical cage washer; or
(B) washing all soiled surfaces with a
detergent solution to remove all
organic matter followed by or in
conjunction with application of a safe
and effective disinfectant approved
by the director; disinfectant; or
(C) cleaning all soiled surfaces with live
steam.
(4) Food and water receptacles shall be sanitized
daily with hot water, detergent, and approved
disinfectant.
(5) Soiled linens and cloth products shall be
mechanically washed with detergent and
sanitized.
(6) Any area accessible to multiple animals shall
be kept clean and sanitary.
(c) Premises (buildings and grounds) shall be kept clean and in
good repair in order to protect the animals from injury and to
facilitate the prescribed husbandry practices set forth in this
Rule. Premises shall remain free of accumulations of trash.
trash, junk, waste products, and discarded matter. Weeds,
grasses, and bushes must be controlled so as to facilitate
cleaning of the premises and to improve pest control, and to
protect the health and well-being of the animals.
(d) An effective program for the control of insects,
ectoparasites, and avian and mammalian pests shall be
established and maintained.
(e) No dog or cat shall be in a window display except during
business hours and then only in compliance with standards set
forth in 2 NCAC 52J .0200.
Authority G.S. 19A-24.
02 NCAC 52J .0209 CLASSIFICATION AND
SEPARATION
Animals housed in the same primary enclosure shall be
maintained in compatible groups, with the following additional
restrictions:
(1) Females in season (estrus) shall not be housed
in the same primary enclosure with males,
except for planned breeding purposes.
Breeding shall not be allowed in animal
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18:20 NORTH CAROLINA REGISTER April 15, 2004
1767
shelters.
(2) In boarding kennels, animals of different
owners shall not have contact with other
animals, unless written permission is obtained
from the animal's owner. Any dog or cat
exhibiting a vicious an aggressive disposition
shall be housed individually in a primary
enclosure.
(3) Puppies or kittens less than six four months of
age shall not be housed in the same primary
enclosure with adult dogs or cats other than
their dams, except when permanently
maintained in breeding colonies. colonies, or if
requested in writing, by the animals' owner, as
in a boarding kennel. Puppies or kittens
between 4 and 16 weeks of age shall have
daily access to human social interaction,
excluding animals which pose a danger to
humans or other animals.
(4) Dogs shall not be housed in the same primary
enclosure with cats, nor shall dogs or cats be
housed in the same primary enclosure with any
other species of animals. Exceptions will be
allowed at boarding kennels, if requested in
writing by the animals' owner.
(5) All facilities shall designate an isolation area
for animals being treated or observed for
communicable diseases. Dogs or cats under
quarantine or treatment in isolation that are
being treated for a communicable disease shall
be separated from other dogs or cats and other
suspectable susceptible species of animals in
such a manner as to minimize dissemination of
such disease. A sign shall be posted at the
cage or isolation area when in use, giving
notice of a communicable disease.
(6) Animals in long term care which are intended
for adoption or sale must be provided the
following:
(a) Daily access to both human and same
species social interaction.
(b) Daily access to space other than the
primary enclosure.
(c) A species and size-appropriate toy,
unless it poses a health threat.
(7) All animals shall be confined in primary
enclosures or exercise areas.
Authority G.S. 19A-24.
02 NCAC 52J .0210 VETERINARY CARE
(a) Programs A written program of veterinary care to include
disease control and prevention, vaccination, euthanasia, and
adequate veterinary care shall be established and maintained
under with the supervision and assistance of a licensed
veterinarian.
(b) If there is a severe or persistent disease problem at the
facility, the facility operator shall obtain a veterinarian's written
recommendations for correcting the problem.
(b) (c) Each dog and cat shall be observed daily by the animal
caretaker in charge, or by someone under his direct supervision.
Sick or diseased, injured, lame, or blind dogs or cats shall be
provided with veterinary care or be humanely disposed of unless
such action is inconsistent with the research purposes for which
such animal was obtained and is being held, provided, however,
euthanized, provided that the provision this shall not effect affect
compliance with any state or local law requiring the holding, for
a specified period, of animals suspected of being diseased.
Obviously sick, diseased, or deformed animals will not be
offered for sale or adoption. If euthanasia is performed at a
facility, a list of personnel approved to perform euthanasia shall
be maintained on a Letter of Euthanasia Certification form and
kept on file at the facility. Diseased or deformed animals shall
be sold or adopted only under the policy set forth in the
"Program of Veterinary Care." Full written disclosure of the
medical condition of the animal shall be provided to the new
owner.
(d) All animals in a licensed or registered facility shall be in
compliance with the North Carolina rabies law, G.S. 130A,
Article 6, Part 6.
Authority G.S. 19A-24.
02 NCAC 52J .0302 PRIMARY ENCLOSURES USED
IN TRANSPORTING DOGS AND CATS
(a) Primary enclosures such as compartments or transport cages,
cartons, or crates used to transport cats and dogs shall be well
constructed, well ventilated and designed to protect the health
and insure the safety of the animals. Such enclosures shall be
constructed or positioned in the vehicle in such a manner that:
(1) Each animal in the vehicle has sufficient fresh
air for normal breathing.
(2) The openings of such enclosures are easily
accessible for emergency removals at all
times.
(3) The animals are adequately protected from the
elements.
The ambient temperature shall not be allowed to exceed 95
maintained between 50 degrees F. F at any time nor to exceed 85
degrees F. for a period of more than four hours. The ambient
temperature will not be allowed to fall below 50 and 85 degrees
F. unless animals are acclimated to lower temperatures.
(b) Animals transported in the same primary enclosure shall be
of the same species. Puppies or kittens less than six four months
of age shall not be transported in the same primary enclosure
with adult dogs and cats other than their dams.
(c) Primary enclosures used to transport dogs and cats shall be
large enough for each animal to stand erect, turn about freely
freely, and to easily stand, sit, or lie down in a normal natural
position.
(d) Animals shall not be placed in primary enclosures over other
animals in transit unless such enclosure is constructed so as to
prevent animal excreta from entering lower enclosures.
(e) All primary enclosures used to transport dogs and cats shall
be sanitized between use for shipments.
Authority G.S. 19A-24.
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18:20 NORTH CAROLINA REGISTER April 15, 2004
1768
TITLE 04 – DEPARTMENT OF COMMERCE
Notice is hereby given in accordance with G.S. 150B-21.2 that
the State Banking Commission, Commissioner of Banks intends
to adopt the rules cited as 04 NCAC 03B .0219-.0228, .0301-
.0304; amend the rules citied as 04 NCAC 03B .0101-.0103,
.0105 and repeal the rules cited as 04 NCAC 03B .0201-.0206,
.0209-.0218.
Proposed Effective Date: August 1, 2004
Public Hearing:
Date: April 30, 2004
Time: 9:00 a.m.
Location: 316 W. Edenton Street, Raleigh, NC
Reason for Proposed Action: To update the agency's address
in several rules; to incorporate statutory revisions into and
otherwise update the agency's rules governing administrative
hearings and appeals to the full Banking Commission in
contested cases.
Procedure by which a person can object to the agency on a
proposed rule: Objections may be submitted in writing to
William H. Finlay, Agency Legal Specialist, 4309 Mail Service
Center, Raleigh, NC 27699-4309, or by email,
wfinlay@nccob.org. Objections may also be made in person at
the public hearing.
Written comments may be submitted to: William H. Finlay,
Agency Legal Specialist, 4309 Mail Service Center, Raleigh, NC
27699-4309, phone (919)715-0082, Fax (919)733-6918, and
email wfinlay@nccob.org.
Comment period ends: June 14, 2004
Procedure for Subjecting a Proposed Rule to Legislative
Review: Any person who objects to the adoption of a permanent
rule may submit written comments to the agency. A person may
also submit written objections to the Rules Review Commission.
If the Rules Review Commis sion receives written and signed
objections in accordance with G.S. 150B-21.3(b2) from 10 or
more persons clearly requesting review by the legislature and the
Rules Review Commission approves the rule, the rule will
become effective as provided in G.S. 150B-21.3(b1). The
Commission will receive written objections until 5:00 p.m. on
the 6th business day preceding the end of the month in which a
rule is approved. The Commission will receive those objections
by mail, delivery service, hand delivery, or facsimile
transmission. If you have any further questions concerning the
submission of objections to the Commission, please call a
Commission staff attorney at 919-733-2721.
Fiscal Impact
State
Local
Substantive (>$3,000,000)
None
SUBCHAPTER 3B - RULE-MAKING AND
CONTESTED CASES
SECTION .0100 - RULE-MAKING
04 NCAC 03B .0101 PETITIONS
(a) Any person wishing to submit a petition requesting the
adoption, amendment, or repeal of a rule by the Banking
Commission shall address a petition to:
Office of The Commissioner of Banks
P.O. Box 10709 4309 Mail Service Center
Raleigh, North Carolina 27605-0709. 27699-4309.
Attention: Rule-making Coordinator
(b) The Commissioner of Banks will determine, based on a
study of the facts stated in the petition, whether the public
interest will be served by granting it. He will consider all the
contents of the submitted petition, plus any additional
information he deems relevant.
Authority G.S. 53-92; 150B-20.
04 NCAC 03B .0102 NOTICE
(a) Any person or agency desiring to be placed on the mailing
list for Banking Commission rule-making notices may file a
request in writing, furnishing their name and mailing address to:
Office of The Commissioner of Banks
P.O. Box 10709 4309 Mail Service Center
Raleigh, North Carolina 27605-0709. 27699-4309.
Attention: Rule-making Coordinator
The request must state the subject areas within the authority of
the Banking Commission for which notice is requested.
(b) Persons desiring information in addition to that provided in a
particular rule -making notice may contact:
Office of The Commissioner of Banks
P.O. Box 10709 4309 Mail Service Center
Raleigh, North Carolina 27605-0709. 27699-4309.
Attention: Rule-making Coordinator
Authority G.S. 53-92; 150B-20.
04 NCAC 03B .0103 HEARINGS
(a) Unless otherwise stated in a particular rule-making notice,
hearings before the Banking Commission shall be held in
Raleigh, North Carolina, at regular scheduled or special called
meetings of the Banking Commission.
(b) Any person desiring to present oral data, views, or
arguments on the proposed rule must, before the hearing, file a
notice with:
Office of The Commissioner of Banks
P.O. Box 10709 4309 Mail Service Center
Raleigh, North Carolina 27605-0709. 27699-4309.
Attention: Rule-making Coordinator
Any person permitted to make an oral presentation shall submit
a written copy of the presentation to the above-named person
prior to or at the hearing.
(c) A request to make an oral presentation must contain a brief
summary of the individual's views with respect thereto, and a
statement of the length of time the individual wants to speak.
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18:20 NORTH CAROLINA REGISTER April 15, 2004
1769
Presentations may not exceed 15 minutes unless, upon request,
either before or at the hearing, the Commissioner of Banks or the
presiding officer should determine that fundamental fairness and
procedural due process require an extension of time.
(d) Upon receipt of a request to make an oral presentation the
Commissioner of Banks shall acknowledge receipt of the
request, and inform the person requesting of the imposition of
any limitations deemed necessary to the end of a full and
effective public hearing on the proposed rule.
(e) Upon receipt of such written comments prompt
acknowledgment shall be made including a statement that the
comments therein shall be considered fully by the Banking
Commission.
(f) The presiding officer at the hearing shall have complete
control of the proceedings, including: extensions of any time
requirements, recognition of speakers, time allotments for
presentations, direction of the flow of the discussion, and the
management of the hearing. The presiding officer, at all times,
shall take care that each person participating in the hearing is
given a fair opportunity to present views, data, and comments.
Authority G.S. 53-92; 150B-21.2.
04 NCAC 03B .0105 DECLARATORY RULINGS
(a) Any person substantially affected by a statute administered
or rule promulgated by the Commissioner of Banks or the
Banking Commission may request a declaratory ruling as to:
(1) whether, and if so how, the statute or rule
applies to a given factual situation; or
(2) whether a particular agency rule is valid.
All decisions of the Commissioner of Banks relative to
declaratory rulings shall be subject to review by the Banking
Commission upon written application of any aggrieved party.
(b) The Commissioner of Banks will have the sole power to
make such declaratory rulings. All requests for declaratory
rulings shall be written and mailed to:
Office of The Commissioner of Banks
P.O. Box 10709 4309 Mail Service Center
Raleigh, North Carolina 27605-0709. 27699-4309.
Attention: Legal Division
(c) All requests for a declaratory ruling must include the
following information:
(1) name and address of petitioner;
(2) statute or rule to which petition relates;
(3) concise statement of the manner in which
petitioner is aggrieved by the rule or statute or
its potential application to him;
(4) a statement of whether an oral hearing is
desired, and if so the reasons for such an oral
hearing.
(d) Whenever the Commissioner of Banks believes for good
cause that the issuance of a declaratory ruling is undesirable, he
may refuse to do so. When good cause for refusing to issue a
declaratory ruling is deemed to exist, the Commissioner of
Banks will notify the petitioner of his decision in writing, stating
reasons for the denial of a declaratory ruling.
(e) Where a declaratory ruling is deemed appropriate, the
Commissioner of Banks will issue the ruling within 60 days of
receipt of the petition.
(f) A declaratory ruling procedure may consist of written
submissions, oral hearings, or such other procedures as may be
appropriate in a particular case.
Authority G.S. 53-92; 150B-17.
SECTION .0200 - CONTESTED CASES
04 NCAC 03B .0201 BANKING COMMISSION
HEARINGS
The regular or called meetings of the Banking Commission shall
be the forum for all contested cases involving the Banking
Commission. In addition to those contested cases automatically
subject to hearing by the Banking Commission, the agenda for
meetings of the Banking Commission shall provide for the
hearing of any appeal by an interested party of any decision or
action of the Commissioner of Banks, as well as any specific
dispute which any party may have with the Commissioner of
Banks or with the Banking Commission.
Authority G.S. 53-92; 150B-2(2).
04 NCAC 03B .0202 HEARINGS BEFORE THE
COMMISSIONER OF BANKS
Whenever, pursuant to statute, the Commissioner of Banks is
authorized or required to hold a hearing, the Commissioner of
Banks shall be the hearing officer and such hearing shall be
conducted in compliance with and subject to the provisions of
Section .0200 of Subchapter 3B of these rules.
Authority G.S. 53-92; 150B-2(2).
04 NCAC 03B .0203 REQUEST FOR HEARING
(a) Whenever a person believes his rights, duties, or privileges
have been affected by action of the Commissioner of Banks and
he has not been notified of a right to a hearing, he may request
an administrative hearing.
(b) Before a hearing request can be made, a person must first
make reasonable efforts to resolve the problem with the
Commissioner of Banks informally. This requirement will be
satisfied by contacting:
The Commissioner of Banks
P.O. Box 951
Raleigh, North Carolina 27602.
(c) Following such informal contact with the Commissioner of
Banks, if still dissatisfied, the person may file a written request
with:
The Commissioner of Banks
P.O. Box 951
Raleigh, North Carolina 27602.
Such request must contain the following information:
(1) name and address of petitioner,
(2) a concise statement of the agency action being
challenged,
(3) a concise statement of the way in which the
petitioner has been aggrieved,
(4) a clear and specific demand for a hearing.
(d) Such request will be acknowledged within 30 days after
submission of the request and a hearing scheduled promptly.
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1770
Authority G.S. 53-92; 150B-38.
04 NCAC 03B .0204 NOTICE
(a) Notice of a hearing shall be given reasonably in advance of
the hearing so as to allow the party affected reasonable time to
prepare for the hearing, and will not be less than 15 days, except
as authorized for emergencies.
(b) Notice of a hearing shall include:
(1) a statement of the date, hour, place, and nature
of the hearing;
(2) a reference to the particular sections of the
statutes and rules involved;
(3) a short and plain statement of the factual
allegations.
Authority G.S. 53-92; 150B-38(b).
04 NCAC 03B .0205 WRITTEN ANSWERS TO
NOTICE
Any person receiving notice of a contested case hearing may file
a written answer. Such answer must be filed at least 30 days
prior to commencement of the hearing by delivering or mailing
it to person indicated in the notice.
Authority G.S. 53-92; 150B-38.
04 NCAC 03B .0206 REPRESENTATION BY AN
ATTORNEY
The administrative hearing is especially designed to give any
person the opportunity to effectively represent himself to protect
his rights, duties, and privileges. However, if a party desires, he
may employ an attorney to represent him at the administrative
hearing.
Authority G.S. 53-92; 150B-38.
04 NCAC 03B .0209 DISCOVERY
Any aggrieved party may discover any information from the
Banking Commission or the Commissioner of Banks which may
be available, except records related solely to the internal
procedures of the agency or those which have been properly
classified as confidential under statutory authority.
Authority G.S. 53-92; 53-99; 53-125; 150B-39.
04 NCAC 03B .0210 RULES OF EVIDENCE
The rules of evidence as applied in the Superior and District
Court Divisions of the Genera l Court of Justice shall be followed
in any proceeding before the Banking Commission or the
Commissioner of Banks involving a contested case. Irrelevant,
immaterial, and unduly repetitious evidence shall be excluded.
Authority G.S. 53-92; 150B-41.
04 NCAC 03B .0211 PRE-HEARING CONFERENCE
(a) In any contested cases, the hearing officer, the
Commissioner of Banks, or such other person or persons as the
Banking Commission may designate may hold a conference in
advance of holding the hearing and require attendance of all
parties.
(b) This conference will be informal in nature.
(c) This conference will be noted in the notice of hearing or in a
subsequent notice if a conference is later determined to be
necessary by the hearing officer.
(d) The purposes of this conference will be to discuss:
(1) the possibility of simplification of issues,
(2) stipulation of facts or findings,
(3) identification of areas where evidence will be
needed,
(4) indications of depositions or subpoenas
needed,
(5) the need for consolidation of cases or joint
hearings,
(6) any other matters which will reduce costs or
save time or otherwise aid expeditious
disposition of the contested cases.
Authority G.S. 53-92; 150B-40.
04 NCAC 03B .0212 PLACE AND FORUM FOR
CONTESTED CASES
All administrative hearings conducted by the Commissioner of
Banks or by the Banking Commission shall be held at the
location stipulated in the notice.
Authority G.S. 53-92; 150B-24.
04 NCAC 03B .0213 FAILURE TO APPEAR FOR A
CONTESTED CASE
If a party served with notice fails to appear without having
notified the hearing officer and no continuance, adjournment, or
like disposition is ordered, the hearing officer may proceed with
the hearing in the party's absence.
Authority G.S. 53-92; 150B-40.
04 NCAC 03B .0214 CONSOLIDATION OF
CONTESTED CASES
(a) In appropriate cases, i.e., when there is a common question
of law or fact, when the same or related parties are involved, or
to avoid unnecessary cost and delay, the hearing officer may
order the cases consolidated into one hearing.
(b) When such an order is made, the Commissioner of Banks
shall give notice to the parties involved of the consolidation.
Authority G.S. 53-92; 150B-38.
04 NCAC 03B .0215 INTERVENTION OF A NEW
PARTY INTO A CONTESTED CASE
(a) A petition to intervene as of right or permissively as
provided in North Carolina Rules of Civil Procedure, Rule 24,
will be granted if the petitioner meets the criteria of Rule 24 and
is timely. It will be deemed untimely if a grant would cause
substantial prejudice to the rights of the parties, substantial
added expense, or compellingly serious inconvenience to the
parties or the Banking Commission.
PROPOSED RULES
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(b) A person desiring to intervene in a contested case must file a
written petition with:
The Commissioner of Banks
P.O. Box 951
Raleigh, North Carolina 27602.
(c) The petition must be made on Form 22 which can be
obtained from the Commissioner, which form includes the
following information:
(1) a citation to any statutory or nonstatutory
grounds for intervention (if any; if not, so
state);
(2) a statement of the claim or defense in respect
of which intervention is sought;
(3) name and address;
(4) business or occupation;
(5) full identification of the hearing in which
petitioner is seeking to intervene;
(6) summary of the arguments or evidence
petitioner seeks to present.
(d) In the event the Commissioner of Banks determines to allow
intervention, notification of that decision will be issued promptly
to all parties and to the petitioner. In cases of discretionary
intervention, such notification will include a statement of the
limitations, if any, of time, subject matter, evidence, or whatever
else is deemed necessary, which are imposed on the intervenor.
(e) In the event the Commissioner's decision is to deny
intervention, the petitioner will be notified promptly. Such
notice will be in writing, will state all reasons for the decision,
and will be issued to the petitioner and to all parties.
Authority G.S. 53-92; 150B-38(f).
04 NCAC 03B .0216 DISQUALIFICATION OF
HEARING OFFICER
(a) If for any reason the hearing officer determines that personal
bias or other factors would keep him from being able to conduct
the hearing and perform all duties in an impartial manner, he
shall submit in writing to the Commissioner of Banks his
disqualification and the reasons therefor.
(b) If for any reason any party in a contested case believes that
the hearing officer is personally biased or otherwise unable to
conduct the hearing and perform all duties in an impartial
manner, the party may file a sworn, notarized, affidavit with the
Commissioner of Banks.
(c) The affidavit must state all facts the party deems relevant to
the disqualification of the hearing officer.
(d) An affidavit of disqualification will be considered timely if
filed before commencement of the hearing. Any other affidavit
may be found timely provided it is filed at the first opportunity
after the party becomes aware of facts which give rise to a
reasonable belief the officer may be disqualified under this rule.
(e) Procedure. The Banking Commission shall decide whether
to disqualify the person in the following manner:
(1) The allegations of the affidavit shall be
investigated by the Commissioner of Banks.
(2) The person whose disqualification is to be
determined will not participate in the decision
but may be called on to furnish information to
the Commissioner of Banks.
(3) The Commissioner of Banks will report his
findings and his recommendations to the
Banking Commission who will then decide
whether to disqualify the challenged
individual.
(4) A record of proceedings and the reasons for
decisions reached will be maintained as part of
the contested case record.
(f) Resumption of Hearing. When a hearing officer is
disqualified or otherwise is unable to continue the hearing,
another hearing officer will replace him and that hearing will be
resumed except as follows:
(1) When oral testimony has already been given,
and it is determined by the successor hearing
officer that the viewing of the witness is an
important element of the case, that portion of
the testimony and evidence will be repeated.
(2) When continuation of the hearing would result
in substantial prejudice, for whatever reasons,
to the rights of the parties, either a new hearing
will be initiated or the case will be dismissed
without prejudice.
(g) The determination of whether resuming and continuing the
case will result in substantial prejudice is to be made by the new
hearing officer.
(h) Determinations of decisions of disqualification, continuation
of the hearing, rehearing of a portion or all of a contested case,
or dismissal of a case without prejudice, together with a
statement of reasons, will be part of the record of the case and
communicated to all parties promptly.
Authority G.S. 53-92; 150B-40.
04 NCAC 03B .0217 SUBPOENAS
(a) The hearing officer is empowered to issue subpoenas in the
Banking Commissioner's name.
(b) Subpoenas requiring the attendance of witnesses, or those to
produce documents, evidence, or things, will be issued promptly
by the hearing officer after receipt of a request from a party to
the case for such subpoena, except as stated herein.
(c) The hearing officer will have the discretion to refuse a
request for the issuance of a subpoena if, clearly, on its face, the
request is objectionable or unreasonable.
(d) Except as may be otherwise stated in a particular subpoena,
any person receiving a subpoena from the Banking Commission
may object thereto by filing a written objection to the subpoena
with:
The Commissioner of Banks
P.O. Box 951
Raleigh, North Carolina 27602.
Such request must include a concise but complete statement of
reasons why the subpoena should be revoked or modified.
These reasons may include lack of relevancy of the evidence
requested, lack of particularity in the description of the evidence
sought, or any other reason sufficient in law for holding the
subpoena invalid, such as that the evidence is privileged, that
appearance or production would be so disruptive as to be
unreasonable in light of the significance of the evidence sought,
or other undue hardships.
PROPOSED RULES
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1772
(e) The person subpoenaed must simultaneously with filing his
objection with the agency serve his objection on the party who
requested the subpoena.
(f) The party requesting the subpoena, in such time as may be
granted by the hearing officer, may file a written response to the
objection. The response shall be served in like manner as the
objection.
(g) After receipt of the objection and a response thereto, if any,
the hearing officer shall issue a notice to the party who requested
the subpoena and the party challenging the subpoena and may
notify all other parties of an open hearing, to be scheduled as
soon as practicable, at which time evidence and testimony may
be presented limited to the questions raised by the objection and
response, if any.
(h) Promptly after the close of such hearing, the officer will rule
on the challenge and issue a written decision. A copy of his
decision will be issued to all parties and made a part of the
record.
(i) The request for subpoena must include the following
information:
(1) name of agency and contested case,
(2) name of party requesting the subpoena,
(3) name of person subpoenaed and person on
whose behalf he is to testify,
(4) specification of the materials requested.
(j) The subpoena must include:
(1) name of agency and contested case,
(2) name of person subpoenaed and person on
whose behalf he is to testify,
(3) specification of the materials requested,
(4) notice that the agency can apply to the courts
for an order of contempt if the subpoenaed
person does not comply.
Authority G.S. 53-92; 150B-39.
04 NCAC 03B .0218 PUBLIC INSPECTION OF FILES
Files containing the material listed herein shall be maintained
and shall be available for public inspection during normal
business hours at the office of:
The Commissioner of Banks
P.O. Box 951
Raleigh, North Carolina 27602.
(1) all rules and all other written statements of
policy or interpretations formulated, adopted,
or used by the Commissioner of Banks and the
Banking Commission in the discharge of its
functions;
(2) all final orders, decisions, and opinions made
after February 1, 1976, together with all
materials that were before the deciding officers
at the time the final order, decision, or opinion
was made, except materials properly for good
cause held confidential.
Authority G.S. 53-92; 53-99.
04 NCAC 03B .0219 DEFINITIONS
As used in this Subchapter:
(1) "Appellate Panel" means an appellate review
panel appointed pursuant to G.S. 53-92(d).
(2) "Commission" means the North Carolina State
Banking Commission.
(3) "Commissioner" means the North Carolina
Commissioner of Banks.
(4) "Court" means a North Carolina District or
Superior Court.
(5) "Day" means a calendar day, other than a
Saturday, Sunday or North Carolina state
holiday.
(6) "Hearing officer" means the Commissioner or
an individual appointed by the Commissioner
pursuant to G.S. 53-93.
(7) "Rules of Civil Procedure " means the North
Carolina Rules of Civil Procedure, G.S. 1A-1,
et seq., as the same may be amended from
time to time.
(8) Terms used herein which are defined by G.S.
150B shall be defined as in G.S. 150B.
Authority G.S. 53-92; 53-93; 150B-38(h).
04 NCAC 03B .0220 HEARINGS
Whenever the Commissioner is authorized or required by law to
hold a hearing, the hearing officer shall conduct the hearing in
accordance with the applicable provisions of law, the Rules of
Civil Procedure, the Rules of Evidence and the procedures set
forth in this Subchapter.
Authority G.S. 53-92; 53-93; 53-186; 53-208.10; 53-208.23;
53-224.25; 53-228; 53-233.16; 53-243.12; 53-251; 53-271(c);
53-284; 53 321; 53-327; 53-369; 53-370; 53-412; 150B-38(h).
04 NCAC 03B .0221 APPLICATION OF THE RULES
OF CIVIL PROCEDURE
Except as otherwise provided in this Subchapter or in G.S. 150B,
the Rules of Civil Procedure shall apply in hearings and
prehearing proceedings governed by this Subchapter to the same
extent as though the hearing or prehearing proceeding was
pending in a Court.
Authority G.S. 53-93; 150B-38(h).
04 NCAC 03B .0222 FILING OF DOCUMENTS
(a) All requests for hearing, written answers, motions, responses
to motions or other papers required or permitted to be filed in
any contested case shall be signed by the party or the party's
attorney and the original thereof filed with the Commissioner
addressed as follows:
If filed via the United States Postal Service:
Office of the Commissioner of Banks
4309 Mail Service Center
Raleigh, NC 27699-4309
Attn: Legal Division
If filed via a private overnight mail service or via hand
delivery:
Office of the Commissioner of Banks
316 W. Edenton Street
PROPOSED RULES
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1773
Raleigh, NC 27603-1716
Attn: Legal Division
(b) A copy of any papers filed with the Commissioner, together
with any attachments, shall be served upon all parties in any
manner permitted by the Rules of Civil Procedure.
(c) Any paper required or permitted to be filed pursuant to this
Rule shall be considered filed on the date it is actually received
at the address above.
Authority G.S. 53-93; 150B-38(h).
04 NCAC 03B .0223 REQUEST FOR A HEARING
(a) A person aggrieved may request a hearing, which shall be
conducted by a hearing officer. The request shall be made in
writing, state all statutory or other legal bases for the request,
describe the events or circumstances giving rise to the request
and shall include a copy of any supporting documents or other
papers supporting the request. If applicable, the request may (but
need not) include a statement of pertinent legal issues or
questions.
(b) If the Commissioner determines that it is appropriate to do
so, he may direct his staff to schedule a hearing, notwithstanding
the fact that no request for a hearing has been received. In such
cases, the Commissioner's direction shall be treated as a request
for a hearing.
Authority G.S. 53-93; 53-208.10(c); 53-208.23; 53-243.12(b);
150B-38(h).
04 NCAC 03B .0224 DATE, TIME AND LOCATION
OF HEARING; MOTIONS TO CONTINUE
(a) The date, time and location of any hearing under this
Subchapter shall be set forth in the notice of hearing or other
paper which commences the hearing process.
(b) Any party may move to continue the hearing.
(c) The hearing officer shall rule on any motion to continue.
Unless oral argument is requested by the hearing officer,
motions to continue shall be decided based upon the written
submissions of the parties.
Authority G.S. 53-93; 150B-38(h).
04 NCAC 03B .0225 MOTIONS
(a) Any party may file any motion which would be permitted
under the Rules of Civil Procedure if the contested case was
pending in a Court.
(b) The opposing party may file such response as is permitted
by the Rules of Civil Procedure to any such motion within five
days of the date that it is filed with the Commissioner.
(c) The hearing officer shall promptly rule on any such motion.
The hearing officer may rule on any motion with or without oral
argument. If the hearing officer determines that oral argument is
appropriate, he shall notify the parties of the date for such
argument. The notice shall indicate whether the argument is to
be conducted in person or by conference call.
Authority G.S. 53-93; 150B-38(h).
04 NCAC 03B .0226 PRE-HEARING CONFERENCE
(a) If the hearing officer determines that to do so would aid in
the prompt and efficient resolution of any contested case, the
hearing officer may order that the parties attend a pre-hearing
conference. The notice of the conference shall either be included
in the document referred to in Rule .0224(a) of this Subchapter
or in a separate written order. The purpose of a pre-hearing
conference is to:
(1) explore any grounds upon which a contested
case may be resolved without the need for a
hearing;
(2) determine the scope of discovery each party
wishes to pursue;
(3) exchange exhibits and other evidence;
(4) reach stipulations or other agreements; and
(5) pursue any other matters which will reduce the
cost, save time, simplify the issues to be heard,
or otherwise aid in the expeditious disposition
of the matters to be addressed by the hearing.
(b) The pre-hearing conference may be conducted informally
between the parties. At the request of either party, the pre-hearing
conference may be conducted by a member of the
Commissioner's legal staff.
Authority G.S. 53-93; 150B-38(h); 150B-41(c).
04 NCAC 03B .0227 HEARINGS
(a) Prior to the commencement of a hearing, the hearing officer
shall rule on any outstanding motions.
(b) Once a hearing has begun the hearing officer, may adjourn
the hearing and reconvene the same at a later time or date.
(c) Hearings are open to the public, except as to any testimony
or other evidence regarding matters made confidential by law.
(d) Hearings shall be conducted in a manner which conforms to
the extent reasonably possible to the Rules of Civil Procedure
and the Rules of Evidence. The order of evidence shall be
determined by the hearing officer.
(e) Persons permitted to intervene pursuant to the Rules of Civil
Procedure shall be permitted to participate in the hearing only to
the extent the hearing officer determines is necessary for a full
and fair adjudication of the case.
Authority G.S. 53-92(d); 53-93; 150B-38(h).
04 NCAC 03B .0228 STIPULATIONS
Parties may by written stipulation agree upon the facts or any
portion thereof and their stipulation may be regarded and used as
evidence at the hearing. However, the hearing officer shall not
be precluded from requiring or allowing the introduction of
additional evidence concerning the issues to which the parties
have stipulated.
Authority G.S. 53-93; 150B-38(h).
SECTION .0300 - APPEALS TO THE STATE
BANKING COMMISSION
04 NCAC 03B .0301 APPOINTMENT OF
APPELLATE PANEL
PROPOSED RULES
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1774
In the event the Chairman of the Commission, pursuant to G.S.
53-92(d), appoints an Appellate Panel to consider an appeal and
make a recommended decision to the State Banking
Commission, the Commissioner's staff shall send all parties
written notice of that appointment.
Authority G.S. 53-92(c); 53-92(d); 53-95; 53-107.2(a); 53-115;
53-215; 53-224.30; 53-231; 53-232.17; 53-243.02; 53-252;
53-272; 53-289; 53-350; 53-410; 53-412; 150B-38(h).
04 NCAC 03B .0302 RECORD ON APPEAL;
HEARING DATE; MEMORANDA OF LAW
(a) The record on appeal shall consist of the official agency
record as set forth in G.S. 150B-42.
(b) The Commissioner's counsel, after consulting with the chair
of the Commission or Appellate Panel, shall provide each party
with written instructions setting forth the deadlines by which
memoranda of law shall be filed by the parties, when the appeal
will be considered by the Commission or Appellate Panel, and
whether oral argument will be heard.
Authority G.S. 53-92(c); 53-92(d); 150B-38(h).
04 NCAC 03B .0303 ORAL ARGUMENT
(a) The decision to hear oral argument in an appeal to the
Commission shall be in the discretion of the Commission or
Appellate Panel. If oral argument is permitted, the chair of the
Commission or Appellate Panel shall notify the Commissioner,
who shall notify all parties and set a date and time for same.
(b) If oral argument is permitted, each party shall be allowed a
maximum of 30 minutes for oral argument, including rebuttal
arguments.
Authority G.S. 53-92; 53-95; 150B-38(h).
04 NCAC 03B .0304 COMMISSION REVEW OF
APPELLATE PANEL'S RECOMMENDED DECISION
(a) If an appeal is heard by an Appellate Panel, that Appellate
Panel, after reviewing the record on appeal, memoranda of law
and hearing oral arguments, if any, shall make a recommended
decision to the Commission. The Commission shall, by a vote
of the majority of its members present and voting at any regular
or special meeting, either affirm, affirm with modifications or
reject the recommended decision of the Appellate Panel.
(b) If the Commission rejects the Appellate Panel's
recommended decision, it shall specify the actions the Appellate
Panel or the Commissioner shall take with regard to the appeal.
(c) A decision to affirm or to affirm with modifications shall be
considered a "final agency decision" for purposes of G.S. 150B-
42.
Authority G.S. 53-92; 53-95; 150B-38(h).
TITLE 10A – DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Notice is hereby given in accordance with G.S. 150B-21.2 that
the NC Medical Care Commission intends to amend the rules
cited as 10A NCAC 13B .3401-.3402, .3405, .6204 and repeal
the rules cited as 10A NCAC 13B .3403-.3404.
Proposed Effective Date: October 1, 2004
Public Hearing:
Date: June 3, 2004
Time: 10:00 a.m.
Location: Council Building, Room 201, Dorothea Dix Campus,
701 Barbour Dr., Raleigh, NC
Reason for Proposed Action: The NC Medical Care
Commission has approved to initiate permanent rulemaking for
these Rules. The "Notice of Text" is the first step in the
permanent rule-making process. These rules pertain to the
licensure of hospitals. The changes include, but are not limited
to, an omission of amending a rule regarding neonatal services
organization with rule amendments effective April 1, 2003,
technical changes rules to reflect the current Federal
Government name designation for the Small Rural Hospital
Flexibility Program and repealing rules that no longer apply to
hospitals participating in the Small Rural Health Flexibility
Program in accordance with 42 CFR 485 Subpart F.
Procedure by which a person can object to the agency on a
proposed rule: A person may object to the agency on the
proposed rules by submitting written comments on the proposed
rules. They may also object by attending the public hearing and
personally voice their objections during that time.
Written comments may be submitted to: Nadine Pfeiffer,
NCDFS, 2711 Mail Service Center, Raleigh, NC 27699-2711,
phone (919) 733-7461, fax (919) 733-8274, and email
nadine.pfeiffer@ncmail.net.
Comment period ends: June 14, 2004
Procedure for Subjecting a Proposed Rule to Legislative
Review: Any person who objects to the adoption of a permanent
rule may submit written comments to the agency. A person may
also submit written objections to the Rules Review Commission.
If the Rules Review Commission receives written and signed
objections in accordance with G.S. 150B-21.3(b2) from 10 or
more persons clearly requesting review by the legislature and the
Rules Review Commission approves the rule, the rule will
become effective as provided in G.S. 150B-21.3(b1). The
Commission will receive written objections until 5:00 p.m. on
the 6th business day preceding the end of the month in which a
rule is approved. The Commission will receive those objections
by mail, delivery service, hand delivery, or facsimile
transmission. If you have any further questions concerning the
submission of objections to the Commission, please call a
Commission staff attorney at 919-733-2721.
Fiscal Impact
State
Local
Substantive (>$3,000,000)
None
PROPOSED RULES
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1775
CHAPTER 13 – NC MEDICAL CARE COMMISSION
SUBCHAPTER 13B –LICENSING OF HOSPITALS
SECTION .3400 - SUPPLEMENTAL RULES FOR THE
LICENSURE OF CRITICAL ACCESS HOSPITALS
10A NCAC 13B .3401 SUPPLEMENTAL RULES
The rules of this Section pertain only to designated Primary Care
Hospitals or Federally Certified Primary Care Hospitals.Critical
Access Hospitals in accordance with 42 CFR 485 Subpart F.
The general requirements of this Subchapter shall apply to such
facilities except where they are specifically waived or modified
by the rules of this Section.
Authority G.S. 131E-79.
10A NCAC 13B .3402 DEFINITIONS
The following definitions shall apply throughout this Section,
unless context otherwise clearly indicates to the contrary:
(1) "Available" means provided directly by the
facility or by written agreement with a
qualified provider of the service within one
hour. hour driving time .
(2) "Designated Primary Care Hospital" "Critical
Access Hospital" means a facility designated
by the North Carolina Office of Research,
Demonstrations and Rural Health
Development in accordance with G.S. 131E-
76(6).42 CFR 485 Subpart F.
(3) "Federally Certified Primary Care Hospital"
means a hospital which has been designated
and certified as a Federally Certified Rural
Primary Care Hospital under the Essential
Access Community Hospital Program
administered through the North Carolina
Office of Research, Demonstrations and Rural
Health Development in accordance with P.L.
101-239 and P.L. 101-508.
(4) "Primary Care Inpatient Services" means that
the hospital provides acute care inpatient
services appropriate to the level of service at
the facility up to a maximum annual average
daily census of 15 patients per day. In
addition, the facility may also provide long
term care in "swing bed" or distinct part status
and psychiatric distinct part beds.
Authority G.S. 131E-79.
10A NCAC 13B .3403 LICENSURE APPLICATION
An application from a facility seeking to be licensed under the
rules of this Section must be accompanied by written
certification from the North Carolina Office of Research,
Demonstrations and Rural Health Development that the facility
is a Designated Primary Care Hospital or a Federally Certified
Primary Care Hospital.
Authority G.S. 131E-79.
10A NCAC 13B .3404 FEDERALLY CERTIFIED
PRIMARY CARE HOSPITAL
(a) The requirements of 10A NCAC 13B .3500 through .5206
shall be waived for a facility which the North Carolina Office of
Research, Demonstrations and Rural Health Development
certified as a designated Federally Certified Primary Care
Hospital, and Rule .6227 (f) and (g) of that Subchapter shall not
apply to such facilities which do not provide emergency room
service or maintain any life support systems.
(b) The Division may conduct any validation survey or
investigation of a specific complaint in facilities which choose to
be licensed as a Federally Certified Primary Care Hospital.
Authority G.S. 131E-79.
10A NCAC 13B .3405 DESIGNATED CRITICAL
ACCESS HOSPITALS
The requirements of 10A NCAC 13B shall apply to Designated
Primary Care Hospitals Critical Access Hospitals with the
following modifications:
(1) Autopsy facilities required in Rule .4907 of
this Subchapter are not required for a
Designated Primary Care Hospital, provided
that the facility has in effect a written
agreement with another facility meeting Rule
.4907 of this Subchapter for providing autopsy
services.
(2) Radiological services required in Section
.4800 of this Subchapter are not required for
Designated Primary Care Hospitals provided
that the facility has radiological equipment on
site and a written agreement with another
licensed facility meeting the requirements of
Section .4800 of this Subchapter which makes
radiological service available.
(3) Emergency services required in Rules .4102 -
.4110Section .4100 of this Subchapter are not
required.required for Designated Primary Care
Hospitals. Emergency response capability set
forth in Rule .4101 of this Subchapter shall be
provided. Medical staff of a Designated
Primary Care Hospital shall participate in
training facility personnel in require that
facility personnel are capable of initiating life-saving
measures at a first-aid level of response
for any patient or person in need of such
services. This shall include:
(a) Establishing protocols or agreements
with any facility providing
emergency services;
(b) Initiating basic cardio-respiratory
cardio-pulmonary resuscitation
according to the American Red Cross
or American Heart Association
standards;
PROPOSED RULES
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(c) Availability of intravenous fluids and
supplies required to establish
intravenous access; and
(d) Availability of first-line emergency
drugs as specified by the medical
staff.
(4) Anesthesia services required in Section .4600
of this Subchapter are not required in
Designated Primary Care Hospitals hospitals
not offering outpatient surgery services.
(5) Food services required in Section .4700 of this
Subchapter shall be provided for inpatients of
Designated Primary Care Hospitals either
directly or made available through contractual
arrangements.
Authority G.S. 131E-79.
SECTION .6200 - CONSTRUCTION REQUIREMENTS
10A NCAC 13B .6204 NEONATAL LEVEL III AND
LEVEL IV NURSERY
(a) Units shall be accessible to post-partum nursing and delivery
units.
(b) The nursery shall be located and arranged to preclude
unrelated traffic through the nursery.
(c) Each nursery shall contain the following:
(1) Lavatory located within 20 feet travel distance
of each bassinet;
(2) Emergency calling system; and
(3) Charting facilities.
(d) There shall be six feet between bassinets for Neonatal Level
III IV units and five feet between bassinets for Neonatal Level II
III units. Neonatal Level III IV nurseries shall have 80 square
feet per bassinet not including corridors and cabinets. Neonatal
Level II III nurseries shall have 50 square feet per bassinet not
including cabinets and corridors. Corridors or aisles shall have
at least eight feet of clear width for access to bassinets.
(e) Each nursery shall be served by a connecting workroom. It
shall contain gowning facilities at the entrance for staff and
housekeeping personnel, lavatory, and storage. One workroom
may serve more than one nursery. The workroom may be
omitted if equivalent work area and facilities are provided within
the nursery. Gowning and hand washing facilities shall be
provided at the entrance to each nursery.
(f) Space for examination and treatment shall be provided and
shall contain a counter, storage, and lavatory. It may serve more
than one nursery room and may be located in a workroom.
(g) If commercially prepared formula is not used, space and
equipment to accommodate the handling, storage, and
preparation of formula shall be provided.
(h) A janitor's closet for the exclusive use of the housekeeping
staff in maintaining the nursery suite shall be provided. It shall
contain a floor receptor or service sink and storage space for
housekeeping equipment and supplies.
(i) Doors to nurseries shall be no less than three feet wide. If
doors are provided directly from nurseries to public corridors or
public spaces, they shall be equipped with "one-way" hardware
for exit only to prevent unauthorized entry.
(j) Smoke detection shall be provided in each nursery bed space.
Authority G.S. 131E-79.
TITLE 11 – DEPARTMENT OF INSURANCE
Notice is hereby given in accordance with G.S. 150B-21.2 that
the NC Department of Insurance intends to amend the rules
cited as 11 NCAC 01 .0403 .0416, .0418, .0425, .0427, .0429.
Proposed Effective Date: August 1, 2004
Public Hearing:
Date: May 4, 2004
Time: 10:00 a.m.
Location: Dobbs Building, 3rd Floor Hearing Room, 430 N.
Salisbury St., Raleigh, NC
Reason for Proposed Action: The amendments are technical in
nature and are just being updated.
Procedure by which a person can object to the agency on a
proposed rule: The Department of Insurance will accept
written objections to these Rules until the expiration of the
comment period (June 14, 2004). Objections need to be specific
and sent to the attention of the APA Coordinator.
Written comments may be submitted to: Ellen K. Sprenkel,
1201 Mail Service Center, Raleigh, NC 27699-1201, phone
(919) 733-4529, fax (919) 733-6495, and email
esprenke@ncdoi.net.
Comment period ends: June 14, 2004
Procedure for Subjecting a Proposed Rule to Legislative
Review: Any person who objects to the adoption of a permanent
rule may submit written comments to the agency. A person may
also submit written objections to the Rules Review Commission.
If the Rules Review Commission receives written and signed
objections in accordance with G.S. 150B-21.3(b2) from 10 or
more persons clearly requesting review by the legislature and the
Rules Review Commission approves the rule, the rule will
become effective as provided in G.S. 150B-21.3(b1). The
Commission will receive written objections until 5:00 p.m. on
the 6th business day preceding the end of the month in which a
rule is approved. The Commission will receive those objections
by mail, delivery service, hand delivery, or facsimile
transmission. If you have any further questions concerning the
submission of objections to the Commission, please call a
Commission staff attorney at 919-733-2721.
Fiscal Impact
State
Local
Substantive (>$3,000,000)
None
CHAPTER 1 - DEPARTMENTAL RULES
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1777
SECTION .0400 - ADMINISTRATIVE HEARINGS
11 NCAC 01 .0403 REQUEST FOR HEARING
(a) A request for an administrative hearing under 11 NCAC 1
.0401 must be in writing and shall contain the following
information:
(1) name and address of the person requesting the
hearing,
(2) a concise statement of the departmental action
being challenged,
(3) a concise statement of the manner in which the
petitioner is aggrieved, and
(4) a clear and specific demand for a public
hearing.
(b) The request for hearing shall be filed with: Commissioner
of Insurance, ATTENTION: Deputy Commissioner, Hearings
Office, N.C. Department of Insurance, Post Office Box 26387,
Raleigh, North Carolina 27611. General Counsel, N.C.
Department of Insurance, 1201 Mail Service Center, Raleigh,
NC 27699-1201.
Authority G.S. 58-2-40; 150B-38.
11 NCAC 01 .0416 DUTIES OF THE HEARING
OFFICER
In conjunction with the powers in this Section, in General
Statute Chapter 58, and in Article 3A of General Statute Chapter
150B, the hearing officer shall perform the following duties,
consistent with law:
(1) Hear and rule on motions;
(2) Grant or deny continuances;
(3) Issue orders regarding prehearing matters,
including directing the appearance of the
parties at a prehearing conference;
(4) Examine witnesses when deemed to be
necessary to make a complete record and to
aid in the full development of material facts in
the case;
(5) Make preliminary, interlocutory, or other
orders as deemed to be appropriate;
(6) Recommend Order a summary disposition of
the case or any part thereof when there is no
genuine issue as to any material fact or
recommend dismissal when the case or any
part thereof has become moot or for other
reasons; and
(7) Apply sanctions in accordance with 11 NCAC
1 .0423.
Authority G.S. 58-2-40(1); 58-2-50; 58-2-55; 58-2-70;
150B-38(h).
11 NCAC 01 .0418 SETTLEMENT CONFERENCE
(a) A settlement conference is for the primary purpose of
assisting the parties in resolving disputes and for the secondary
purpose of narrowing the issues and preparing for hearing.
(b) Upon the request of any party, the hearing officer shall
assign the case to another hearing officer appointed by the
Commissioner under G.S. 58-2-55 for the purpose of conducting
a settlement conference. Unless the parties and the other hearing
officer agree, a unilateral request for a settlement conference
does not constitute good cause for a continuance. The
conference shall be conducted at a time and place agreeable to
all parties and the hearing officer. It shall be conducted by
telephone if any party would be required to travel more than 50
miles to attend, unless that party agrees to travel to the location
set for the conference. It If a telephone conference is scheduled,
the parties must be available by telephone at the time of the
conference.
(c) All parties shall attend or be represented at a settlement
conference. Parties or their representatives shall be prepared to
participate in settlement discussions.
(d) The parties shall discuss the possibility of settlement before
a settlement conference if they believe that a reasonable basis for
settlement exists.
(e) At the settlement conference, the parties shall be prepared to
provide information and to discuss all matters required in 11
NCAC 1 .0415.
(f) If, following a settlement conference, a settlement has not
been reached but the parties have reached an agreement on any
facts or other issues, the hearing officer presiding over the
settlement conference shall issue an order confirming and
approving, if necessary, those matters agreed upon. The order is
binding on the hearing officer who is assigned to hear the case.
Authority G.S. 58-2-40(1); 58-2-50; 58-2-55; 58-2-70;
150B-38(h).
11 NCAC 01 .0425 INTERVENTION
(a) Any person not named in the notice of hearing who desires
to intervene in a contested case as a party shall file a timely
motion to intervene and shall serve the motion upon all existing
parties. Timeliness will be determined by the hearing officer in
each case based on circumstances at the time of filing. The
motion shall show how the movant's rights, duties, or privileges
may be determined or affected by the contested case; shall show
how the movant may be directly affected by the outcome or
show that the movant's participation is authorized by statute,
rule, or court decision; shall set forth the grounds and purposes
for which intervention is sought; and shall indicate movant's
statutory right to intervene if one exists.
(b) Any party may object to the motion for intervention by
filing a written notice of objections with the hearing officer
within five days after service of the motion if there is sufficient
time before the hearing. The notice of objection shall state the
party's reasons for objection and shall be served upon all parties.
If there is insufficient time before the hearing for a written
objection, the objection may be made at the hearing.
(c) When the hearing officer deems it to be necessary to develop
a full record on the question of intervention, he may conduct a
hearing on the motion to determine specific standards that will
apply to each intervenor and to define the extent of allowed
intervention.
(d) The hearing officer shall may allow intervention upon a
proper showing under this Rule, unless he finds that the movant's
interest is adequately represented by one or more parties
participating in the case or unless intervention is mandated by
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1778
statute, rule, or court decision. An order allowing intervention
shall specify the extent of participation permitted the intervenor
and shall state the hearing officer's reason. An intervenor may
be allowed to:
(1) File a written brief without acquiring the status
of a party;
(2) Intervene as a party with all the rights of a
party; or
(3) Intervene as a party with all the rights of a
party but limited to specific issues and to the
means necessary to present and develop those
issues.
Authority G.S. 58-2-40(1); 58-2-50; 58-2-55; 58-2-70;
150B-38(h).
11 NCAC 01 .0427 RIGHTS AND
RESPONSIBILITIES OF PARTIES
(a) A party has the right to present evidence, rebuttal testimony,
and argument with respect to the issues of law and policy, and to
cross-examine witnesses, including the author of a document
prepared by, on behalf of, or for use of the Department and
offered in evidence.
(b) A party shall have all evidence to be presented, both oral
and written, available on the date for hearing. Requests for
subpoenas, depositions, or continuances shall be made within a
reasonable time after their needs become evident to the
requesting party. In cases when the hearing time is expected to
exceed one day, the parties shall be prepared to present their
evidence at the date and time ordered by the hearing officer or
agreed upon at a prehearing conference.
(c) The hearing officer shall send copies of all orders or
decisions to all parties simultaneously. Any party sending a
letter, exhibit, brief, memorandum, or other document to the
hearing officer shall simultaneously send a copy to all other
parties.
(d) All parties have the continuing responsibility to notify the
hearing officer of their current addresses and telephone numbers.
(e) A party need not be represented by an attorney. attorney
unless the party is a corporate entity. A corporate entity shall
not be represented by its President or other officers. If a party
has notified other parties of that party's representation by an
attorney, all communications shall be directed to that attorney.
(f) With the approval of the hearing officer, any person may
offer testimony or other evidence relevant to the case. Any
nonparty offering testimony or other evidence may be
questioned by parties to the case and by the hearing officer.
(g) Before issuing a recommended decision, the hearing officer
may order any party to submit proposed findings of fact and
written arguments. Before issuing a final decision, the
Commissioner may order any party to submit proposed findings
of fact and written arguments.
Authority G.S. 58-2-40(1); 58-2-50; 58-2-55; 58-2-70;
150B-38(h).
11 NCAC 01 .0429 EVIDENCE
(a) The North Carolina Rules of Evidence as found in Chapter
8C of the General Statutes govern in all contested case
proceedings, except as provided otherwise in this Section and
G.S. 150B-41.
(b) The hearing officer may admit all evidence that has
probative value. Irrelevant, incompetent, immaterial, or unduly
repetitious evidence shall be excluded. The hearing officer may,
in his discretion, exclude any evidence if its probative value is
substantially outweighed by the risk that its admission will
require undue consumption of time or create substantial danger
of undue prejudice or confusion.
(c) Contemporaneous objections by a party or a party's attorney
are not required in the course of a hearing to preserve the right to
object to the consideration of evidence by the hearing officer in
reaching a decision or by the court upon judicial review.
(d) All evidence to be considered in the case, including all
records and documents or true and accurate photocopies thereof,
shall be offered and made a part of the record in the case.
Except as provided in Paragraph (f) of this Rule, factual
information or evidence that is not offered shall not be
considered in the determination of the case. Documentary
evidence incorporated by reference may be admitted only if the
materials so incorporated are available for examination by the
parties.
(e) Documentary evidence in the form of copies or excerpts may
be received in the discretion of the hearing officer or upon
agreement of the parties. Copies of a document shall be
received to the same extent as the original document unless a
genuine question is raised about the accuracy or authenticity of
the copy or, under the circumstances, it would be unfair to admit
the copy instead of the original.
(f) The hearing officer may take notice of judicially cognizable
facts by entering a statement of the noticed fact and its source
into the record. Upon a timely request, any party shall be given
the opportunity to contest the facts so noticed through
submission of evidence and argument.
(g) A party may call an adverse party; or an officer, director,
managing agent, or employee of the State or any local
government, of a public or private corporation, or of a
partnership or association or body politic that is an adverse
party; and may interrogate that party by leading questions and
may contradict and impeach that party on material matters in all
respects as if that party had been called by the adverse party.
The adverse party may be examined by that party's counsel upon
the subject matter of that party's examination in chief under the
rules applicable to direct examination, and may be
cross-examined, contradicted, and impeached by any other party
adversely affected by the testimony.
Authority G.S. 58-2-40(1); 58-2-50; 58-2-55; 58-2-70;
150B-38(h).
* * * * * * * * * * * * * * * * * * * *
Notice is hereby given in accordance with G.S. 150B-21.2 that
the North Carolina Department of Insurance intends to amend
the rules cited as 11 NCAC 11F .0301-.0303, .0306-.0307 and
repeal the rules cited as 11 NCAC 11F .0304-.0305, .0308.
Proposed Effective Date: August 1, 2004
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1779
Public Hearing:
Date: May 4, 2004
Time: 10:00 a.m.
Location: Dobbs Building, 3rd Floor Hearing Room, 430 N.
Salisbury St., Raleigh, NC
Reason for Proposed Action: To comply with changes made in
the NAIC Model Laws
Procedure by which a person can object to the agency on a
proposed rule: The Department of Insurance will accept
written objections to the changes in these Rules until the
expiration of the comment period on June 14, 2004.
Written comments may be submitted to: Ellen K. Sprenkel,
1201 Mail Service Center, Raleigh, NC 27699-1201, phone
(919) 733-4529, fax (919) 733-6495, and email
esprenke@ncdoi.net.
Comment period ends: June 14, 2004
Procedure for Subjecting a Proposed Rule to Legislative
Review: Any person who objects to the adoption of a permanent
rule may submit written comments to the agency. A person may
also submit written objections to the Rules Review Commission.
If the Rules Review Commission receives written and signed
objections in accordance with G.S. 150B-21.3(b2) from 10 or
more persons clearly requesting review by the legislature and the
Rules Review Commission approves the rule, the rule will
become effective as provided in G.S. 150B-21.3(b1). The
Commission will receive written objections until 5:00 p.m. on
the 6th business day preceding the end of the month in which a
rule is approved. The Commission will receive those objections
by mail, delivery service, hand delivery, or facsimile
transmission. If you have any further questions concerning the
submission of objections to the Commission, please call a
Commission staff attorney at 919-733-2721.
Fiscal Impact
State
Local
Substantive (>$3,000,000)
None
CHAPTER 11 - FINANCIAL EVALUATION DIVISION
SUBCHAPTER 11F – ACTUARIAL
SECTION .0300 - ACTUARIAL OPINION AND
MEMORANDUM
11 NCAC 11F .0301 APPLICABILITY AND SCOPE
(a) This Section applies to all life insurance companies and
fraternal benefit societies doing business in this State and to all
life insurance companies and fraternal benefit societies that are
authorized to reinsure life insurance, annuities, or accident and
health insurance business in this State. This Section shall be
applied in a manner that allows the appointed actuary to utilize
his or her professional judgment in performing the asset analysis
and developing the actuarial opinion and supporting memoranda,
consistent with relevant Actuarial Standards of Practice.
However, the Commissioner shall have the authority to specify
specific methods of actuarial analysis and actuarial assumptions
when these specifications are necessary for an acceptable
opinion to be rendered relative to the adequacy of reserves and
related items. All cross references to rule numbers are to rules
within this Section.
(b) This Section applies to all annual statements filed with the
Commissioner after December 31, 2004.December 31, 1994.
Except for companies that are exempt under Rule .0304 of this
Section, a A statement of opinion on the adequacy of the
reserves and related actuarial items based on an asset adequacy
analysis in accordance with Rule .0306 of this Section and a
supporting memorandum in accordance with Rule .0307 of this
Section are required each year. Any company so exempted must
file an opinion under Rule .0305 of this Section.
(c) The Commissioner may require any company otherwise
exempt under this Section to submit an opinion and to prepare a
supporting memorandum in accordance with Rules .0306 and
.0307 of this Section if an asset adequacy analysis for the
company is necessary because of the financial condition of the
company.
Authority G.S. 58-2-40; 58-24-120; 58-58-50(i); 58-58-50(j).
11 NCAC 11F .0302 DEFINITIONS
(a) "Annual statement" means that statement required to be filed
each year under G.S. 58-2-165.
(b) "Appointed actuary" means any individual who is appointed
or retained in accordance with Rule .0303(c) of this Section to
provide the actuarial opinion and supporting memorandum as
required by G.S. 58-58-50(i) and this Section.
(c) "Asset adequacy analysis" means an analysis that meets the
standards and other requirements referred to in Rule .0303(d) of
this Section. Section; and includes cash flow testing, sensitivity
testing, or applications of risk theory.
(d) "Board" means the Actuarial Standards Board established by
the American Academy of Actuaries to develop and promulgate
standards of actuarial practice, and its successors.
(e) "Company" means a life insurance company, fraternal
benefit society, or reinsurer subject to this Section.
(f) "Non-investment grade bonds" are those designated as
medium to lower quality by the NAIC Securities Valuation
Office.
(g)(f) "Opinion" means: means the statement of actuarial
opinion of an appointed actuary regarding the adequacy of the
reserves and related actuarial items based on an asset adequacy
analysis in accordance with Rule .0306 of this Section and with
applicable actuarial standards of practice.
(1) For Rules .0306, .0307, or .0308 of this
Section, the statement of actuarial opinion of
an appointed actuary regarding the adequacy
of the reserves and related actuarial items
based on an asset adequacy test in accordance
with Rule .0306 of this Section and with
presently accepted actuarial standards;
(2) For Rule .0305 of this Section, the statement
of actuarial opinion of an appointed actuary
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1780
regarding the calculation of reserves and
related items, in accordance with Rule .0305
of this Section and with those presently
accepted actuarial standards that specifically
relate to this opinion.
(h)(g) "Qualified actuary" means any individual who meets the
requirements set forth in Rule .0303(b) of this Section.
Authority G.S. 58-2-40; 58-24-120; 58-58-50(i); 58-58-50(j).
11 NCAC 11F .0303 GENERAL REQUIREMENTS
(a) Submission of Opinion:
(1) There shall be included on or attached to page
1 of the annual statement for each year
beginning with calendar year 1994, 2004, the
statement of an appointed actuary, entitled
"Statement of Actuarial Opinion," setting forth
an opinion relating to reserves and related
actuarial items held in support of policies and
contracts, in accordance with Rule .0306 of
this Section.Section; provided, however, that
any company exempted under Rule .0304 of
this Section from submitting an opinion in
accordance with Rule .0306 of this Section
shall include on or attach to page 1 of the
annual statement an opinion rendered by an
appointed actuary in accordance with Rule
.0305 of this Section.
(2) If in the previous year a company provided an
opinion in accordance with Rule .0305 of this
Section, and in the current year fails the
exemption criteria of Rules .0304(c)(1),
.0304(c)(2), or .0305(c)(5) of this Section to
again provide an opinion in accordance with
Rule .0305 of this Section, the opinion in
accordance with Rule .0306 of this Section
shall not be required until August 1 following
the date of the annual statement. In this
instance, the company shall provide an opinion
in accordance with Rule .0305 of this Section
with appropriate qualification noting the intent
to subsequently provide an opinion in
accordance with Rule .0306 of this Section.
(3)(2) Upon written request by the company the
Commissioner may shall grant a 45-day
extension of the date for submission of the
opinion. In the written request, the company
shall state the reason that such extension is
needed.
(b) A "qualified actuary" is an individual who:
(1) Is a member in good standing of the American
Academy of Actuaries;
(2) Is qualified to sign opinions for life and health
insurance company annual statements in
accordance with the American Academy of
Actuaries qualification standards for actuaries
signing such opinions;
(3) Is familiar with the valuation requirements
applicable to life and health insurance
companies;
(4) Has not been found by the Commissioner (or if
so found has subsequently been reinstated as a
qualified actuary), to have:
(A) Violated any provision of, or any
obligation imposed by, any law or
rule in the course of his or her
dealings as a qualified actuary;
(B) Been found by a court of competent
jurisdiction to be guilty of a
fraudulent or dishonest practice;
(C) Demonstrated his or her
incompetency, lack of cooperation, or
untrustworthiness to act as a qualified
actuary; Failed to comply with the
Code of Professional Conduct as
published by the Board;
(D) Submitted to the Commissioner
during the past five years, under this
Section, an opinion or memorandum
that the Commissioner rejected
because it did not meet the provisions
of this Section, including standards
set by the Board; or
(E) Resigned or been removed as an
actuary within the past five years as a
result of acts or omissions indicated
in any adverse report on an
examination or as a result of failure to
adhere to generally acceptable
actuarial standards; and
(5) Has not failed to notify the Commissioner of
any action taken by any insurance regulator of
any other state similar to that under
Subparagraph (b)(4) of this Rule.
(c) An "appointed actuary" is a qualified actuary who is
appointed or retained to prepare the opinion required by this
Section, either directly by or by the authority of the board of
directors through an exe cutive officer of the company. The
company shall, within 45 days after the date of the appointment,
give the Commissioner written notice of the name, title (and, in
the case of a consulting actuary, the name of the firm), and
manner of appointment or retention of each person appointed or
retained by the company as an appointed actuary and shall state
in such notice that the person meets the requirements of
Paragraph (b) of this Rule. Once notice is furnished, no further
notice is required for the actuary, provided that the company
gives the Commissioner written notice if the actuary ceases to be
appointed or retained as an appointed actuary or no longer meets
the requirements of Paragraph (b) of this Rule. If any person
appointed or retained as an appointed actuary replaces a
previously appointed actuary, the notice shall so state and give
the reasons for replacement.
(d) The asset adequacy analysis required by this Section:
(1) Shall conform to the standards of practice as
promulgated from time to time by the Board
and on any additional standards under this
PROPOSED RULES
18:20 NORTH CAROLINA REGISTER April 15, 2004
1781
Section, which standards are to form the basis
of the opinion in accordance with Rule .0306
of this Section; and
(2) Shall be based on methods of analysis that are
deemed to be consistent with Actuarial
Standards of Practice adopted appropriate for
such purposes by the Board.
(e) Liabilities to be Covered:
(1) The opinion shall apply to all in force business
on the annual statement date regardless of
when or where issued, e.g., aggregate reserves
for life insurance and annuity policies and
contracts, aggregate reserves for accident and
health contracts, aggregate reserves for
deposit-type contracts, and policy and contract
claims liabilities for life and accident and
health policies and contracts, reserves of
Exhibits 8, 9 and 10, and claim liabilities in
Exhibit 11, Part 1 and equivalent items in the
separate account statement or statements..
(2) If the appointed actuary determines as the
result of asset adequacy analysis that a reserve
should be held in addition to the aggregate
reserve held by the company and calculated in
accordance with methods set forth in G.S.
58-58-50(d), 58-58-50(d-1), 58-58-50(g),
58-58-50(h), and 58-58-50(k), the company
shall establish such additional reserve.
(3) For years ending before December 31, 1996,
the company may, in lieu of establishing the
full amount of the additional reserve in the
annual statement for that year, set up an
additional reserve in an amount not less than
the following:
(A) December 31, 1994, the additional
reserve divided by three.
(B) December 31, 1995, two times the
additional reserve divided by three.
(4)(3) Additional reserves established under
Subparagraph (e)(2) or (e)(3) of this Rule and
deemed to be unnecessary in later years may
be released. Any amounts released must be
disclosed in the opinion for the applicable
year. The release of such reserves areis not
deemed to be an adoption of a lower standard
of valuation.
Authority G.S. 58-2-40; 58-58-50(i); 58-58-50(j).
11 NCAC 11F .0304 REQUIRED OPINIONS
(a) The opinion submitted under G.S. 58-58-50(i) shall be in
accordance with the applicable provisions in this Rule.
(b) For purposes of this Rule, companies are classified as
follows, based on the admitted assets as of the end of the
calendar year for which the actuarial opinion is applicable:
(1) Category A comprises companies whose
admitted assets do not exceed twenty million
dollars ($20,000,000).
(2) Category B comprises companies whose
admitted assets exceed twenty million dollars
($20,000,000) but do not exceed one hundred
million dollars ($100,000,000).
(3) Category C comprises companies whose
admitted assets exceed one hundred million
dollars ($100,000,000) but do not exceed five
hundred million dollars ($500,000,000).
(4) Category D comprises companies whose
admitted assets exceed five hundred million
dollars ($500,000,000).
(c) Exemption Eligibility Tests:
(1) Any Category A company that, for any year
beginning with calendar year 1994, meets all
of the following criteria is eligible for
exemption from submission of an opinion in
accordance with Rule .0306 of this Section for
the year in which these criteria are met. The
ratios in Parts (c)(1)(A), (c)(1)(B), and
(c)(1)(C) of this Rule shall be calculated based
on amounts as of the end of the calendar year
for which the opinion is applicable.
(A) The ratio of the sum of capital and
surplus to the sum of cash and
invested assets is at least equal to .10.
(B) The ratio of the sum of the reserves
and liabilities for annuities and
deposits to the total admitted assets is
less than .30.
(C) The ratio of the book value of the
non-investment grade bonds to the
sum of capital and surplus is less than
.50.
(D) The Examiner Team for the NAIC
has not designated the company as a
first priority company in any of the
two calendar years preceding the
calendar year for which the opinion is
applicable, or a second priority
company in each of the two calendar
years preceding the calendar year for
which the opinion is applicable; or
the company has resolved the first or
second priority status to the
satisfaction of the insurance regulator
of the company's state of domicile
and that regulator has so notified the
chair of the NAIC Life and Health
Actuarial Task Force and the NAIC
Staff and Support Office.
(2) Any Category B company that, for any year
beginning with calendar year 1994, meets all
of the following criteria shall be eligible for
exemption from submission of an opinion in
accordance with Rule .0306 of this Section for
the year in which the criteria are met. The
ratios in Parts (c)(2)(A), (c)(2)(B), and
(c)(2)(C) of this Rule shall be calculated based
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1782
on amounts as of the end of the calendar year
for which the opinion is applicable.
(A) The ratio of the sum of capital and
surplus to the sum of cash and
invested assets is at least equal to .07.
(B) The ratio of the sum of the reserves
and liabilities for annuities and
deposits to the total admitted assets is
less than .40.
(C) The ratio of the book value of the
non-investment grade bonds to the
sum of capital and surplus is less than
.50.
(D) The Examiner Team for the NAIC
has not designated the company as a
first priority company in any of the
two calendar years preceding the
calendar year for which the opinion is
applicable, or a second priority
company in each of the two calendar
years preceding the calendar year for
which the opinion is applicable; or
the company has resolved the first or
second priority status to the
satisfaction of the insurance regulator
of the company's state of domicile
and that regulator has so notified the
chair of the NAIC Life and Health
Actuarial Task Force and the NAIC
Staff and Support Office.
(3) Any Category A or Category B company that
meets all of the criteria set forth in
Subparagraphs (c)(1) and (c)(2) of this Rule,
whichever is applicable, is exempt from
having to submit an opinion under Rule .0306
of this Section unless the Commissioner
specifically indicates to the company that the
exemption is not to be taken.
(4) Any Category A or Category B company that,
for any year beginning with calendar year
1994, is not exempt under Subparagraph (c)(3)
of this Rule shall submit an opinion in
accordance with Rule .0306 of this Section for
the year for which it is not exempt.
(5) Any Category C company that, after
submitting an opinion in accordance with Rule
.0306 of this Section, meets all of the
following criteria, shall not be required, unless
required in accordance with Subparagraph
(c)(6) of this Rule, to submit an opinion in
accordance with Rule .0306 of this Section
more frequently than every third year. Any
Category C company that fails to meet all of
the following criteria for any year shall submit
an opinion in accordance with Rule .0306 of
this Section for that year. The ratios in Parts
(c)(5)(A), (c)(5)(B), and (c)(5)(C) of this Rule
shall be calculated based on amounts as of the
end of the calendar year for which the opinion
is applicable.
(A) The ratio of the sum of capital and
surplus to the sum of cash and
invested assets is at least equal to .05.
(B) The ratio of the sum of the reserves
and liabilities for annuities and
deposits to the total admitted assets is
less than .50.
(C) The ratio of the book value of the
non-investment grade bonds to the
sum of the capital and surplus is less
than .50.
(D) The Examiner Team for the NAIC
has not designated the company as a
first priority company in either of the
two calendar years preceding the
calendar year for which the opinion is
applicable, or a second priority
company in each of the two calendar
years preceding the calendar year for
which the opinion is applicable, or
the company has resolved the first or
second priority status to the
satisfaction of the insurance regulator
of the company's state of domicile
and that regulator has so notified the
chair of the NAIC Life and Health
Actuarial Task Force and the NAIC
Staff and Support Office.
(6) Any company that is not required by this Rule
to submit an opinion in accordance with Rule
.0306 of this Section for any year shall submit
an opinion in accordance with Rule .0305 of
this Section for that year unless, as provided
for by Rule .0301 of this Section, the
Commissioner requires an opinion in
accordance with Rule .0306 of this Section.
(d) Every Category D company shall submit an opinion in
accordance with Rule .0306 of this Section for each year,
beginning with calendar year 1994.
Authority G.S. 58-2-40; 58-58-50(i); 58-58-50(j).
11 NCAC 11F .0305 OPINION WITHOUT ASSET
ADEQUACY ANALYSIS
(a) The opinion required by G.S. 58-58-50(i) shall comprise:
(1) a paragraph identifying the appointed actuary
and his or her qualifications.
(2) a regulatory authority paragraph stating that
the company is exempt under this Section
from submitting an opinion based on an asset
adequacy analysis and that the opinion, which
is not bas ed on an asset adequacy analysis, is
rendered in accordance with this Rule.
(3) a scope paragraph identifying the subjects on
which the opinion is to be expressed and
describing the scope of the appointed actuary's
work.
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18:20 NORTH CAROLINA REGISTER April 15, 2004
1783
(4) an opinion paragraph expressing the appointed
actuary's opinion as required by G.S.
58-58-50(i).
(b) The following language provided is that which in typical
circumstances would be included in an opinion in accordance
with this Section. The language may be modified as needed to
meet the circumstances of a particular case, but the appointed
actuary shall use language that clearly expresses his or her
professional judgment. However, in any event the opinion shall
retain all pertinent aspects of the language provided in this Rule.
(1) The opening paragraph shall indicate the
appointed actuary's relationship to the
company.
(A) For a company actuary, the opening
paragraph of the actuarial opinion
shall read as follows:
"I, [name of actuary], am [title] of [name of company] and a
member of the American Academy of Actuaries. I was
appointed by, or by the authority of, the Board of Directors of
the insurer to render this opinion as stated in the letter to the
Commissioner dated [insert date]. I meet the Academy
qualification standards for rendering the opinion and am familiar
with the valuation requirements applicable to life and health
companies."
(B) For a consulting actuary, the opening
paragraph of the actuarial opinion
shall contain a sentence such as:
"I, [name and title of actuary], a member of the American
Academy of Actuaries, am associated with the firm of [insert
name of consulting firm]. I have been appointed by, or by the
authority of, the Board of Directors of [name of company] to
render this opinion as stated in the letter to the Commissioner
dated [insert date]. I meet the Academy qualification standards
for rendering the opinion and am familiar with the valuation
requirements applicable to life and health insurance companies."
(2) The regulatory authority para