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/CFM/-7H3^I .^ ^/y^b / The ^ORTH CAROLINA REGISTER IN THIS ISSUE GENERAL STATUTES EXECUTIVE ORDERS FINAL DECISION LETTER PROPOSED RULES Crime Control and Public Safety Environment, Health, and Natural Resources Human Resources FINAL RULES f?ECE»VED Revenue List of Rules Codified ARRC OBJECTIONS OCT CAW 15 1991 LIBRARY RULES INVALIDATED BY JUDICIAL DECISION ISSUE DATE: SEPTEMBER 30, 1991 Volume 6 • Issue 13 • Pages 784-923 INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE NORTH CAROLINA REGISTER The North Carolina Register is published bi-monthly and contains information relating to agenc>', executi\e, legislati\e and judicial actions required b>' or affecting Chapter 150B of the General Statutes. All proposed, ad-ministrative rules and amendments filed under Chapter 150B must be published in the Register. The Register will t>pically comprise approximately fifty pages per issue of legal text. State law requires that a copy of each issue be pro- \ided free of charge to each county in the state and to various state officials and institutions. The North CaroHna Register is a\ailable by yearly subscription at a cost of one hundred and five dollars ($105.00) for 24 issues. Requests for subscriptions to the North Carolina Register should be directed to the Office of Ad-ministrative Hearings, P. O. Drawer 27447, Raleigh, N. C. 27611-7447, Attn: Subscriptions. ADOPTION, AMENDMENT, AND REPEAL OF RULES An agency intending to adopt, amend, or repeal a rule must first publish notice of the proposed action in the North Carolina Register. The notice must include the time and place of the public hearing; a statement of how-public comments may be submitted to the agency either at the hearing or otherwise; the text of the proposed rule or amendment; a reference to the Statutory Authority for the action and the proposed effective date. The Director of the Office of Administrati\e Hearings has authority to publish a summary, rather than the full text, of any amendment which is considered to be too lengthy. In such case, the full text of the rule con-taining the proposed amendment will be available for public inspection at the Rules Division of the Office of Administrati\e Hearings and at the office of the pro-mulgating agency. Unless a specific statute pro\'ides otherwise, at least 30 days must elapse following publication of the pro-posal in the North Carolina Register before the agencv may conduct the required public hearing and take ac-tion on the proposed adoption, amendment or repeal. When final action is taken, the promulgating agency must file any adopted or amended rule for approval by the Administrati\'e Rules Re\iew Commission. Upon ap-proval of ARRC, the adopted or amended rule must be filed with the Office of Administrative Hearings. If it differs substantially from the proposed form published as part of the public notice, upon request b>- the agen-cy, the adopted \ersion will again be published in the North Carolina Register. A rule, or amended rule cannot become effective earlier than the first day of the second calendar month after the adoption is filed with the Office of Ad-ministrative Hearings for publication in the NCAC. Proposed action on rules may be withdrawn by the promulgating agency at any time before final action is taken by the agency. TEMPOIL4RY RULES Under certain conditions of an emergency' nature, some agencies may issue temporary rules. A temporary-rule becomes effective when adopted and remains in effect for the period specified in the rule or 180 days, whichever is less. An agency adopting a temporary rule must begin normal rule-making procedures on the per-manent rule at the same time the temporary rule is adopted. NORTH CAROLINA ADMINISTRATIVE CODE The North Carolina Administrati\-e Code (NCAC) is a compilation and index of the administrative rules of 25 state agencies and 38 occupational licensing boards. The NCAC comprises approximately 15,000 letter size, single spaced pages of material of which approximate-ly 35% is changed annually. Compilation and publica-tion of the NCAC is mandated by G.S. 150B-63(b). The Code is di\-ided into Titles and Chapters. Each state agency is assigned a separate title which is fur-ther broken down by chapters. Title 21 is designated for occupational licensing boards. The NCAC is available in two formats. (1) Single pages may be obtained at a minimum cost of two dollars and 50 cents ($2.50) for 10 pages or less, plus fifteen cents ($0.15) per each additional page. (2) The full publication consists of 53 volumes, totaling in excess of 15,000 pages. It is sup-plemented monthly with replacement pages. A one year subscription to the full publication in-cluding supplements can be purchased for seven hundred and fifty dollars ($750.00). In-di\- idual \-olumes may also be purchased with supplement service. Renewal subscriptions for supplements to the initial publication a\-ailable Requests for pages of rules or \-olumes of the NCAC should be directed to the Office of Administrativ* Hearings. NOTE The foregoing is a generalized statement of the pro cedures to be folloN^ed. For specific statutory- language it is suggested that Articles 2 and 5 of Chapter I50B o the General Statutes be examined carefully. CITATION TO THE NORTH CAROLINA REGISTER The North Carolina Register is cited bv \-olume, issue page number and date. 1:1 NCR 101-201, April 1, 198 refers to Volume 1, Issue 1, pages 101 through 201 o the North Carolina Register issued on April 1, 1986. North Carolina Register. Published bi-monthly by the Office of Administrative Hearings, P.O. Drawer 27447, Raleigh, North Carolina 27611-7447, pursuant to Chapter 150B of the General Statutes. Subscriptions one hundred and fi\-e dollars (S105.00) per year. North Carolina Administrative Code. Published in looseleaf notebooks with supplement service by the Office of Administrati\e Hearings, P.O. Drawer 27447, Raleigh, North Carolina 27611-7447, pursuant to Chapter 150B of the General Satutes. Subscriptions se\-en hundred and fifty dollars ($750.00). Individual Nolumes a\ailable. NORTH CAROLINA REGISTER ISSLE CONTENTS OJJlce of Administrative Hearings P. O. Drawer 27447 Raleigh, \C 27611-7447 (919) 733-2678 I. GENERAL STA IT TES Chapter I SOB 784 II. EXECl TFV E ORDERS Executive Orders 149-150 804 III. EINAL DECISION LEITER Voting Rights Act 806 IV. PROPOSED Rl EES Crime Control and Public Safety State Highway Patrol 809 Environment, Health, and Natural Resources Health Scnices 815 Land Resources 810 Human Resources Medical Assistance 807 Julian Mann III, Director James R. Scarcella Sr., Deputy Director Molly NIasich, Director APA Services Staff: Ruby Creech, Publicalions Coordinator Teresa Kilpatrick, Editorial Assistant Jean Shirley, Editorial Assistant V. EESAL RULES Revenue Corporate Income ;md Franchise Tax Division 816 Sales and Use Tax 817 List of Rules Codified 907 VI. ARRC OBJECTIONS 916 VII. RULES INV AI IDATED BV JUDICIAL DECISION 919 VIII. CUMULATIVE INDEX 921 NORTH CAROLINA REGISTER Publication Schedule (October 1991 - December 1992) Issue Last Day Last Day Earliest Date for for Date for Filing Electronic Public Filing Hearing Earliest Date for Adoption by Agency Last Day * to Earliest Submit Effective to Date RRC ++*++++++++++*+++++++*++++++*+++++*+**++++++++*++++++++*++++++++++ 10/01/91 10/15/91 11,01/91 11/15/91 12/02/91 12/16'91 01/02/92 01/15/92 02/03/92 02/14/92 03/02/92 03/16/92 04 01,92 04/15/92 05/01/92 05/15/92 06/01/92 06/15/92 07/01/92 07/15/92 08/03/92 08/14/92 09/01 92 09/15 92 10/01/92 10/15/92 11/02/92 11/16/92 12 01/92 12/15/92 09/10/91 09/24/91 10/11/91 10/24/91 11/07/91 11/21/91 12/09/91 12/20/91 01/10/92 01/24/92 02/10/92 02/24/92 03/11/92 03/25/92 04/10/92 04/24/92 05/11/92 05/25/92 06/10/92 06/24/92 07/13/92 07/24/92 08/11/92 08/25/92 09/10/92 09/24/92 10/12/92 10/23/92 11/06/92 11/24/92 09/17/91 10/01/91 10/18/91 10/31/91 11/14/91 12/02/91 12/16/91 12/31/91 01/17/92 01/31/92 02/17/92 03/02/92 03 '18/ 92 04/01/92 04/17/92 05/01/92 05/18/92 06/01/92 06-17,92 07/01 .'92 07/20,92 07/31/92 08/18^92 09/01/92 09,-17/92 10/01/92 10/19/92 10/30/92 11/13/92 12^01/92 10/31/91 10/30/91 11/16/91 11/30/91 12/17/91 12/31/91 01/17/92 01/30/92 02/18/92 02/29/92 03/17/92 03/31/92 04/16/92 04/30/92 05/16/92 05/30/92 06/16/92 06/30/92 07/16/92 07/30/92 08/18/92 08/29/92 09/16/92 09/30/92 10/16/92 10/30/92 11/17/92 12/01/92 12/16/92 12/30/92 10/31/91 11/14/91 12/01/91 12/15/91 01/01/92 01/15/92 01/31/92 02/14,92 03/04/92 03/15/92 04/01/92 04/15/92 05/01/92 05/15/92 05/31/92 06/14/92 07/01/92 07/15/92 07/31/92 08/14/92 09/02/92 09/13/92 10/01/92 10/15/92 10/31/92 11/14/92 12/02/92 12/16/92 12/31/92 01/14/93 11/20/91 11/20/91 12/20/91 12/20/91 01/20/92 01/20/92 02/20/92 02/20/92 03/20/92 03/20/92 04,'20/92 04/20/92 05.'20/92 05/20/92 06/20/92 06/20/92 07/20/92 07/20/92 08/20/92 08/20/92 09/20/92 09/20/92 10/20/92 10/20/92 11/20 92 11/20/92 12/20/92 12/20/92 01/20/93 01/20/93 02/01/92 01/01/92 02/01/92 02/01/92 03/01/92 03/01/92 04/01/92 04/01/92 05/01/92 05/01/92 06/01/92 06/01/92 07/01/92 07,01/92 08/01/92 08/01/92 09/01/92 09/01/92 10/01/92 10/01/92 11/01/92 11/01/92 12 01/92 12/01/92 01/01/93 01/01/93 02/01/93 02/01/93 03/01/93 03,01/93 * The "Earliest Effective Date" is computed assuming that the agency follows the publication schedule above, that the Rules Review Commission approves the rule at the next calendar month meeting after submission, and that RRC delivers the rule to the Codifier of Rules five (5) business days before the 1st of the next calendar month. GENERAL STA TUTES OF NOR TH CAROLINA CHAPTER 150B THE ADMINISTRATIVE PROCEDURE ACT [The following excerpt contains the statutory- provisions of the Administrative Procedure Act as amended by the 1991 Regular Session of the General Assembly effective October 1, 1991, except 150B-l(d)(5) and 150B-l(eX10), effective July 16, 1991.) Article 1. General Provisions. § 150B-1. Policy and scope. (a) Purpose. -- This Chapter establishes a uni-form system of administrative rule making and adjudicatory procedures for agencies. Ihe pro-cedures ensure that the functions of rule making, investigation, advocacy, and adjudication are not all performed by the same person in the admin-istrative process. (b) Rights. -- rhis Chapter confers procedural rights. (c) Full Exemptions. — This Chapter appUes to every agency except: (1) The North Carolina National Guard in exercising its court-martial jurisdiction. The Department of Human Resources in exercising its authority over the Camp Butner reservation granted in Article 6 of Chapter 122C of the General Statutes. The Ltihties Commission. The Industrial Commission. The Employment Security Commission. Exemptions From Rule Making. -- Article 2A of this Chapter does not apply to the follow-ing: The Commission. The North Carolina Low- Level Radioac-tive Waste Management Authority in ad-ministering the provisions of G.S. 104G-10andG.S. 104G-11. The North Carolina Hazardous Waste Management Commission in administer-ing the provisions of G.S. BOB- 13 and G.S. 130B-14. The Department of Revenue, except that Parts 3 and 4 of /Vrticle 2A apply to the Department. The North Carolina Air Cargo /Virport Authority with respect to the acquisition, construction, operation, or use, including fees or charges, of any portion of a cargo airport complex. Exemptions From Contested Case Pro-visions. -- The contested case provisions of this Chapter apply to all agencies and all proceedings (2) (3) (4) (5) (d) (1) (2) (3) (4) (5) (e) not expressly exempted from the Chapter. The contested case provisions of this Chapter do not apply to the following: (1) The Department of Human Resources and the Department of Environment, Health, and Natural Resources in com-plying with the procedural safeguards mandated by Section 680 of Part H of Public Law 99-457 as amended (Educa-tion of the Handicapped Act Amend-ments of 1986). (2) The Governor's Waste Management Board in administering the provisions of G.S. 104E-6.2 and G.S. 130A-293. (3) The North Carolina Low-Level Radio-active Waste Management Authority in administering the provisions of G.S. 104G-9, 104G-10, and 104G-11. (4) The North Carolina Hazardous Waste Management Conunission in administer-ing the provisions of G.S. 130B-11, 130B-13, and 130B-14. (5) Hearings required pursuant to the Reha-bilitation Act of 1973, (Public Law 93-122), as amended and federal regu-lations promulgated thereunder. G.S. 150B-51(a) is considered a contested case hearing provision that does not apply to these hearings. (6) The Department of Revenue. (7) The Department of Correction. (8) The Department of Transportation, ex-cept as provided in G.S. 136-29. (9) The Occupational Safety and Health Re-view Board in all actions that do not in-volve agricultural employers. (10) The North Carolina Air Cargo Airport Authority with respect to the acquisition, construction, operation, or use, including fees or charges, of any portion of a cargo airport complex, (f) Exemption From All But Judicial Review. — No Article in this Chapter except Article 4 applies to the University of North CaroUna. § 150B-2. Definitions. - As used in this Chapter, 6:13 NORTH CAROLINA REGISTER September 30, 1991 784 GENERAL STA TUTES OF NORTH CAROLINA (01 ) "/\dininistrative law judge" means a per-son appointed under G.S. 7A-752, 7A-753, or 7A-757. (1) "Agency" means an agency or an otTicer in the executi\-e branch of the government of this State and includes the Council of State, the Governor's OtTice, a board, a commission, a department, a division, a council, and any other unit of government in the executive branch. A local unit of government is not an agency. (la) "Adopt" means to take fmal action to create, amend, or repeal a rule. (lb) "Coditler of Rules" means the Chief Administrative Law Judge of the OlTice of Administrative Hearings or a desig-nated representati\e of the Chief Admin-istrative Law Judge. (Ic) "Commission" means the Rules Review Commission. (2) "Contested case" means an administrative proceeding pursuant to this Chapter to resolve a dispute between an agency and another person that invohes the person's nglits, duties, or privileges, including li-censing or the lew of a monetar>' penalty. "Contested case" does not include rulemaking, declaratorv' rulings, or the award or denial of a scholarship or grant. Repealed. "Hearing officer" means a person or group of persons designated by an agency that is subject to /Vrticle 3A of this Chap-ter to preside in a contested case hearing conducted under that /Vrticle. "License" means any certificate, permit or other evidence, by whatever name called, of a right or privilege to engage in any activity, except licenses issued under Chapter 20 and Subchapter I of Chapter 105 of the General Statutes and occupa-tional licenses. (4) "Licensing" means an\' administrative action issuing, failing to issue, suspending, or re\oking a license or occupational li-cense. "Licensing" docs not include con-tro\ ersies over whether an examination was fair or whether the applicant passed the examination. (4a) "Occupational license" means any certif-icate, permit, or other e\idence, by what-ever name caUed, of a right or pnvilege to engage in a profession, occupation, or field of endeavor that is issued by an oc-cupational licensing agency. (4b) "Occupational licensing agency" means any board, commission, committee or other aaencv of the State of North (Ja) (2b) (3) Carolina which is established for the pri-mar,' purpose of regulating the entr\' of persons into, and or the conduct of per-sons within a particular profession, occu-pation or field of endeavor, and which is authorized to issue and re\'oke licenses. "Occupational hcenstng agency" does not include State agencies or departments which may as only a part of their regular function issue permits or hcenses. (5) "Party" means any person or agency named or admitted as a party or properly seeking as of right to be admitted as a party and includes the agency as appro-priate. This subdivision does not permit an agency that makes a fmal decision, or an officer or employee of the agency, to petition for initial judicial re\iew of that decision. (6) "Person aggrieved" means any person or group of persons of common interest di-rectly or indirectly affected substantially in his or its person, property, or employment by an administrative decision. (7) "Person" means any natural person, part-nership, corporation, body politic and any unincorporated association, organization, or society which may sue or he sued under a common name. (8) "Residence" means domicile or principal place of business. (8a) "Rule" means any agency regulation, standard, or statement of general apphca-bility that implements or interprets an enactment of the General Assembly or Congress or a regulation adopted by a federal agency or that describes the pro-cedure or practice requirements of an agency. The term includes the establish-ment of a fee and the amendment or re-peal of a pnor rule. The term does not include the following: a. Statements concerning only the internal management of an agency or group of agencies within the same principal office or department enumerated m G.S. 143-11 or 143B-6, including policies and proce-dures manuals, if the statement does not directly or substantially affect the proce-dural or substantive rights or duties of a person not employed by the agency or group of agencies. b. Budgets and budget pohcies and proce-dures issued by the Director of the Budget, bv the head of a department, as defmed by G.S. 143A-2 or G.S. 143B-3, by an occupational licensing board, as 785 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NOR TH CAROLINA defined by G.S. 93B-1, or by the State Board of Elections. c. Nonbinding interpretive statements within the delegated authority of an agency that merely defme, interpret, or explain the meaning of a statute or rule. d. A form, the contents or substantive re-quirements of which are prescribed by rule or statute. e. Statements of agency pohcy made in the context of another proceeding, including: 1. Declaratory rulings under G.S. 150B-4; 2. Orders estabhshing or fixing rates or tariffs. f Requirements, communicated to the public by the use of signs or symbols, concerning the use of pubhc roads, bridges, ferries, buUdings, or facilities, g. Statements that set forth criteria or guidelines to be used by the staff of an agency in performing audits, investi-gations, or inspections; in setthng financial disputes or negotiating fmancial arrange-ments; or in the defense, prosecution, or settlement of cases, h. Scientific, architectural, or engineering standards, forms, or procedures, including design criteria and construction standards used to construct or maintain highways, bridges, or ferries. i. Job classification standards, job quali-fications, and salaries estabUshed for posi-tions under the jurisdiction of the State Personnel Commission, j. Establishment of the interest rate that applies to tax assessments under G.S. 105-241.1 and the variable component of the excise tax on motor fuel under G.S. 105-434. (8b) ''Substantial evidence" means relevant evidence a reasonable mind might accept as adequate to support a conclusion. (9) Repealed, § 150B-3. Special provisions on licensing. (a) When an apphcant or a licensee makes a timely and sufficient apphcation for issuance or renewal of a license or occupational license, in-cluding the payment of any required license fee, the existing license or occupational license does not expire until a decision on the application is fmally made by the agency, and if the application is denied or the terms of the new license or oc-cupational license are limited, until the last day for applying for judicial review of the agency or-der. This subsection does not affect agency action summarily suspending a license or occu-pational hcense under subsections (b) and (c) of this section. (b) Before the commencement of proceedings for the suspension, revocation, annulment, with-drawal, recall, cancellation, or amendment of any License other than an occupational license, the agency shall give notice to the hcensee, pursuant to the provisions of G.S. 150B-23. Before the commencement of such proceedings involving an occupational license, the agency shall give notice pursuant to the provisions of G.S. 150B-38. In either case, the licensee shall be given an oppor-tunity to show compliance with all lawful re-quirements for retention of the license or occupational hcense. (c) If the agency fmds that the pubhc health, safety, or welfare requires emergency action and incorporates this fmding in its order, summary suspension of a license or occupational hcense may be ordered effective on the date specified in the order or on service of the certified copy of the order at the last known address of the hcensee, whichever is later, and effective during the pro-ceedings. The proceedings shall be promptly commenced and determined. Nothing in this subsection shall be construed as amending or repealing any special statutes, in effect prior to Eebruary 1, 1976, which provide for the summary' suspension of a hcense. § 150B-4. Declaratory rulings. (a) On request of a person aggrieved, an agency shall issue a declaratory ruling as to the validity of a rule or as to the apphcability to a given state of facts of a statute administered by the agency or of a rule or order of the agency, except when the agency for good cause finds issuance of a ruling undesirable. The agency shall prescribe in its rules the circumstances in which rulings shall or shall not be issued. A declaratory ruling is binding on the agency and the person requesting it unless it is altered or set aside by the court. An agency may not retroactively change a declaratory ruling, but nothing in this section prevents an agency from prospectively changing a declaratory ruling. A declarator)' ruling is subject to judicial review in the same manner as an order in a contested case. Failure of the agency to issue a declaratory ruhng on the merits within 60 days of the request for such ruling shall constitute a denial of the request as well as a de-nial of the merits of the request and shall be subject to judicial re\iew. (b) This section does not apply to the Depart-ment of Correction. /Vrticle 2. Rule Making. Repealed. 6:13 NORTH CAROLINA REGISTER September 30, 1991 786 GENERAL STA TUTES OF NORTH CAROLINA /\rlicle 2A. Rules. Part 1. General Provisions. § I50B-18. Scope and effect. This /Vrticle applies to an agency's exercise of its authority to adopt a rule. A rule is not valid unless it is adopted in substantial compliance with this .Article. § 150Ei-19. Restrictions on what can be adopted as a rule. An agency may not adopt a rule that does one or more of the following: (1) Implements or interprets a law unless that law or another law specifically authorizes the agency to do so. (2) Enlarges the scope of a profession, occu-pation, or field of endeavor for which an occupational license is required. (3) Imposes criminal liability or a ci\'il penalty for an act or omission, including the vio-lation of a rule, unless a law specifically authorizes the agency to do so or a law declares that violation of the rule is a criminal offense or is grounds for a civU penalty. (4) Repeats the content of a law, a rule, or a federal regulation. (5) Establishes a reasonable fee or other rea-sonable charge for providing a ser\'ice in fulfillment of a duty unless a law specif-ically authorizes the agency to do so or the fee or other charge is for one of the foUowing: a. A ser\'ice to a State, federal, or local governmental unit. b. A copy of part or all of a State publica-tion or other document, the cost of mail-ing a document, or both. c. A transcript of a public hearing. d. A conference, workshop, or course. e. Data processing services. (6) .Allows the agency to waive or modify a requirement set in a rule unless a rule es-tablishes specific guidelines the agency must follow in determining whether to waive or modify the requirement. § I50B-20. Petitioning an agency to adopt a rule. (a) Petition. - A person may petition an agency to adopt a rule by submitting to the agency a written rule-making petition requesting the adoption. A person may submit written comments with a rule-making petition. If a rule-makmg petition requests the agency to create or amend a rule, the person must submit the proposed text of the requested rule change and a statement of the effect of the requested rule change. Each asencv must establish bv rule the procedure for submitting a rule-making petition to it and the procedure the agency follows in considering a rule-making petition. (b) Time. — An agency must grant or deny a rule-making petition submitted to it within 30 days after the date the rule-making petition is submitted, unless the agency is a board or com-mission. If the agency is a board or commission, it must grant or deny a rule-making petition within 120 days after the date the rule-making petition is submitted. (c) Action. -- If an agency denies a rule-making petition, it must send the person who submitted the petition a written statement of the reasons for denying the petition. If the agency grants a rule-making petition, it must inform the person who submitted the rule-making petition of its decision and must initiate rule-making pro-ceedings. When an agency grants a rule-making petition requesting the creation or amiendment of a rule, the notice of rule making it pubhshes in the North Carolina Register may state that the agency is initiating rule-making proceedings as the result of a rule-making petition, state the name of the person who submitted the rule-making petition, set out the text of the requested rule change submitted with the rule-making peti-tion, and state whether the agency endorses the proposed nile change. (d) Review. — Denial of a rule-making petition is a final agency decision and is subject to judicial review under /Vrticle 4 of this Chapter. Failure of an agency to grant or deny a rule-making pe-tition within the tmie limits set in subsection (b) is a denial of the rule-making petition. (e) Exception. -- This section does not apply to the Department of Correction. § 150B-21. .Agency must designate rule-making coordinator. Each agency must designate one or more rule-making coordinators to oversee the agency's rule-making functions. The coordinator must prepare notices of public hearings, coordinate access to the agency's rules, and serve as the liai-son between the agency, other agencies, and the public in the rule-making process. Part 2. .-\doption of Rules. § 150B-2I.I. Procedure for adopting a tem-porary rule. (a) .Adoption. -- .An agency may adopt a tem-porary rule without prior notice or hearing or upon any abbreviated notice or hearing the agency fmds practical when it fmds that adher-ence to the notice and hearing requirements of this Part would be contrary to the public interest and that the immediate adoption of the rule is required by one or more of the following: 787 6:li NORTH CAROLINA REGISTER September iO, 1991 GENERAL STA TUTES OF NORTH CAROLINA (1) A serious and unforeseen threat to the public heahh, safety, or welfare. (2) The effective date of a recent act of the General Assembly or the United States Congress. (3) A recent change in federal or State budg-etary policy. (4) A federal regulation. (5) A court order. An agency must prepare a written statement of its findings of need for a temporary rule. The statement must be signed by the head of the agency adopting the rule. An agency must begin rule-making proceedings for a permanent rule by the day it adopts a tem-porary rule. An agency begins rule-making pro-ceedings for a permanent rule by submitting to the codifier written notice of its intent to adopt a permanent rule. (b) Review. — When an agency adopts a tem-porary rule it must submit the rule, the agency's written statement of its fmdings of need for the rule, and the notice of intent to adopt a perma-nent rule to the Codifier of Rules. Withm one business day after an agency submits a temporary rule, the Codifier of Rules must review the agen-cy's written statement of fmdings of need for the rule to determine whether the statement of need meets the criteria listed in subsection (a). In re-viewing the statement, the Codifier of Rules may consider any information submitted by the agency or another person. If the Codifier of Rules finds that the statement meets the criteria, the Codifier of Rules must notify the head of the agency and enter the rule in the North Carolina Administrative Code. If the Codifier of Rules fmds that the statement does not meet the criteria, the Codifier of Rules must immediately notify the head of the agency. The agency may supplement its statement of need with additional fmdings or submit a new statement. If the agency provides additional findings or subiiuts a new statement, the Codifier of Rules must review the additional fmdings or new statement within one business day after the agency submits the additional findings or new statement. If the Codifier of Rules again fmds that the statement does not meet the criteria listed in subsection (a), the Codifier of Rules must immediately notify the head of the agency. If an agency decides not to provide additional fmdings or submit a new statement when notified by the Codifier of Rules that the agency's fmdings of need for a rule do not meet the re-quired criteria, the agency must notify the Codifier of Rules of its decision. The Codifier of Rules must then enter the rule in the North Carolina Administrative Code on the sixth busi-ness day after receiving notice of the agency's decision. (c) Standing. — A person aggrieved by a tem-porary rule adopted by an agency may fde an action for declaratory judgment in Wake County Superior Court pursuant to Article 26 of Chapter 1 of the General Statutes. In the action, the court shall determine whether the agency's writ-ten statement of findings of need for the rule meets the criteria listed in subsection (a) and whether the rule meets the standards in G.S. 150B-21.9 that apply to review of a permanent rule. The court may not grant an ex parte tem-porary restraining order. Filing a petition for rule making or a request for a declaratory ruling with the agency that adopted the rule is not a prerequisite to filing an action under this subsection. A person who files an action for declaratory judgment under this sub-section must serve a copy of the complaint on the agency that adopted the rule being contested, the Codifier of Rules, and the Commission. (d) Effective Date and Expiration. -- A tem-porary rule becomes effective on the date speci-fied in G.S. 150B-21.3. A temporary rule expires on the date specified in the rule or 1 80 days from the date the rule becomes effective, whichever comes first. § I50B-21.2. Procedure for adopting a per-manent rule. (a) Notice. — Before an agency adopts a per-manent rule, it must publish notice of its intent to adopt a permanent rule in the North Carolina Register and as required by any other law. The notice published in the North Carolina Register must include all of the following: (1) Either the text of the proposed rule or a statement of the subject matter of the proposed rule making. (2) A short explanation of the reason for the proposed action. (3) A citation to the law that gives the agency the authority to adopt the proposed rule, if the notice includes the text of the pro-posed rule, or a citation to the law that gives the agency the authority to adopt a rule on the subject matter of the proposed rule making, if the notice includes only a statement of the subject matter of the proposed rule making. (4) The proposed effective date of the pro-posed rule, if the notice includes the text of the proposed rule, or the proposed ef-fective date of a rule adopted on the sub-ject matter of the proposed rule making, if the notice includes only a statement of the subject matter of the proposed rule making. 6:li NORTH CAROLINA REGISTER September 30, 1 99 1 788 GENERAL STA TUTES OF NORTH CAROLINA (5) The date, time, and place of any public hearing scheduled on the proposed rule or subject matter of the proposed rule making. (6) Instructions on how a person may demand a public hearing on a proposed rule if the notice does not schedule a pubhc hearing on the proposed rule and subsection (c) requires the agency to hold a pubhc hear-ing on the proposed rule when requested to do so. (7) The period of time during vshich and the person to whom written comments may be submitted on the proposed rule or subject matter of the proposed rule mak-ing. (8) If a fiscal note has been prepared for the proposed rule or will be prepared when a rule is proposed on the subject matter of the proposed rule making, a statement that a copy of the fiscal note can be ob-tained from the agency. (b) Mailing List. -- .\n agency must maintain a mailing hst of persons who have requested no-tice of rule making. WTien an agency pubUshes a rule-making notice in the North Carolina Reg-ister, it must mail a copy of the notice to each person on the maihng hst who has requested notice of rule-making proceedings on the rule or the subject matter for rule making described in the notice. /Vn agency may charge an annual fee to each person on the agency's mailing hst to cover copying and mailing costs. (c) Heciring. -- .\n agency must hold a pubhc hearing on a rule it proposes to adopt in two circumstances and may hold a pubhc hearing in other circumstances. WTien an agency is required to hold a public hearing on a proposed rule or decides to hold a pubhc hearing on a proposed rule when it is not required to do so, the agency must pubhsh in the North Carolina Register a notice of the date, time, and place of the pubhc hearing. The hearing date of a public hearing held after the agency pubhshes notice of the hearing in the North Carolina Register must be at least 15 days after the date the notice is pub-hshed. An agency must hold a pubhc hearing on a rule it proposes to adopt in the following two cir-cumstances: ( 1) The agency pubhshes a statement of the subject matter of the proposed rule mak-ing in the notice in the North Carolina Register. (2) The agency pubhshes the text of the pro-posed rule in the notice in the North Carohna Register and all the following apply: a. TTie notice does not schedule a pubhc hearing on the proposed rule. b. Within 15 days after the notice is pub-hshed, the agency receives a written re-quest for a pubhc hearing on the proposed rule. c. The proposed rule is not part of a rule-making proceeding the agency initiated by pubhshing a statement of the subject matter of proposed rule making. d. The proposed text is not a changed \'er-sion of proposed te.xt the agency previ-ously pubhshed in the course of rule-making proceedings but did not adopt. (d) Text After Subject-Matter Notice. -- When an agency pubhshes notice of the subject matter of proposed rule making in the North Carolina Register, it must subsequently pubhsh in the North Carohna Register the text of the rule it proposes to adopt as a result of the pubhc hear-ing and of any comments received on the subject matter. An agency may not pubhsh the pro-posed text of a rule for which it pubhshed a subject-matter notice before the pubhc hearing on the subject matter. (e) Comments. — .An agency must accept comments on the te.xt of a proposed rule pub-hshed in the North Carohna Register for at least 30 days after the text is pubhshed or until the date of any pubhc hearing held on the proposed rule, whichever is longer. An agency must accept comments on a statement of the subject matter of proposed rule making until the pubhc hearing on the subject matter. An agency must consider fuUy aU v/ritten and oral comments received. (f) Adoption. -- An agency may not adopt a rule until the time for commenting on the pro-fKised text of the rule has elapsed and may not adopt a rule if more than 12 months have elapsed since the end of the time for commenting on the proposed text of the rule. An agency may not adopt a rule that differs substantiaUy from the text of a proposed rule pubhshed m the North Carolina Register unless the agency pubhshes the text of the proposed different rule in the North Carolina Register and accepts comments on the proposed different rule for the time set in sub-section (e). An adopted rule differs substantiaUy from a proposed rule if it does one or more of the fol-lowing: (1) .Affects the interests of persons who, based on the notice pubhshed in the North Carolina Register or the proposed text of the rule, could not reasonably have deter-mined that the rule would affect their in-terests. 789 6:13 NORTH CAROLINA REGLSTER September 30, 1 991 GENERAL STA TUTES OF NOR TH CAROLINA (2) Addresses a subject matter or an issue that is not addressed in the proposed text of the rule. (3) Produces an effect that could not reason-ably have been expected based on the proposed text of the rule. When an agency adopts a rule, it may not take subsequent action on the rule without following the procedures in this Part. (g) Explanation. -- An agency must issue a concise written statement explaining why the agency adopted a rule if, within 30 days after the agency adopts the rule, a person asks the agency to do so. The explanation must state the prin-cipal reasons for and against adopting the rule and must discuss why the agency rejected any arguments made or considerations urged against the adoption of the rule. (h) Record. — An agency must keep a record of a rule-making proceeding. 1 he record must include all written comments received, a tran-script or recording of any public hearing held on the rule, and any written explanation made by the agency for adopting the rule. § 150B-21.3. Kffcctive date of rules. (a) Temporary Rule. — A temporary rule be-comes effective on the date the Codifier of Rules enters the rule in the North Carolina Adminis-trative Code. (b) Permanent Rule. — A permanent rule ap-proved by the Commission becomes ctTccti\e five business days after the Commission delivers the rule to the Codifier of Rules, unless the agency adopting the rule specifies a later effective date. If the agency specifies a later effective date, the rule becomes efTective on that date. A permanent rule that is not approved by the Commission becomes effective five business days after the agency adopting the rule delivers the rule to the Crodifier of Rules, unless the agency adopting the rule specifies a later effective date. If the agency specifies a later effective date, the rule becomes effective on that date. (c) OSHy\ Standard. -- A permanent rule con-cerning an occupational safety and health stand-ard that is adopted by the Occupational Safety and Health Division of the Department of Labor and is identical to a federal regulation promulgated by the Secretary of the United States Department of Labor becomes effective on the date the Division delivers the rule to the Codifier of Rules, unless the Division specifies a later effective date. If the Division specifies a later effective date, the rule becomes effective on that date. § 150B-21.4. Fiscal notes on rules. (a) State Funds. — Before an agency publishes in the North Carolina Register the proposed text of a permanent rule change that would require the expenditure or distribution of funds subject to the Executive Budget Act, Article 1 of Chapter 143, it must submit the text of the proposed rule change and a fiscal note on the proposed rule change to the Director of the Budget and obtain certification from the Director that the funds that would be required by the proposed rule change are available. The fiscal note must state the amount of funds that would be expended or dis-tributed as a result of the proposed rule change and explain how the amount was computed. The Director of the Budget must certify a pro-posed rule change if funds are available to cover the expenditure or distribution required by the proposed rule change. (b) Local Funds. -- Before an agency publishes in the North Carolina Register the proposed text of a permanent rule change that would affect the expenditures or revenues of a unit of local gov-ernment, it must submit the text of the proposed rule change and a fiscal note on the proposed rule change to the Fiscal Research Division of the General Assembly, the Office of State Budget and Management, the North Carolina Associ-ation of County Commissioners, and the North Carolina League of MunicipaUties. The fiscal note must state the amount by which the pro-posed rule change would increase or decrease ex-penditures or revenues of a unit of local government and must explain how the amount was computed. (c) Errors. — An erroneous fiscal note prepared in good faith does not affect the validity of a rule. § I50B-2L5. Circumstances when notice and rule-making hearing not required. (a) Amendment. -- An agency is not required to pubhsh a notice of rule making in the North Carolina Register or hold a public hearing when it proposes to amend a rule, without changing the substance of the rule, to do one of the fol-lowing: (1) Reletter or renumber the rule or subparts of the rule. (2) Substitute one name for another when an organization or position is renamed. (3) Correct a citation in the rule to another rule or law when the citation has become inaccurate since the rule was adopted be-cause of the repeal or renumbering of the cited rule or law. (4) Change information that is readily avail-able to the public, such as an address or a telephone number. (5) Correct a typographical error made in en-tering the rule in the North Carolina Ad-ministrative Code. 6:13 NORTH CAROLINA REGISTER September 30, I99I 790 GENERAL STA TUTES OF NORTH CAROLINA (6) Change a rule in response to a request or an objection by the Commission. (b) Repeal. — An agency is not required to publish a notice of rule making in the North Carolina Register or hold a pubKc hearing when it proposes to repeal a rule as a result of any of the following: (Ij The law under which the rule was adopted is repealed. (2) The law under which the rule was adopted or the rule itself is declared unconstitu-tional. (3) The rule is declared to be in excess of the agency's statutory authority. (c) OSHA Standard. -- The Occupational Safety and Health Division of the Department of Labor is not required to publish a notice of rule making in the North Carolina Register or hold a public hearing when it proposes to adopt a rule that concerns an occupational safety and health standard and is identical to a federal regu-lation promulgated by the Secretary of the United States Department of Labor. The Occu-pational Safety and Health Division is not re-quired to submit to the Commission for review a rule for which notice and hearing is not re-quired under this subsection. § 150B-21.6. Incorjx)rating material in a rule by reference. An agency may incorporate the following ma-terial by reference in a rule without repeating the te.\t of the referenced material: (1) .Another rule or part of a rule adopted by the agency. (2) .AH or part of a code, standard, or regu-lation adopted by another agency, the federal government, or a generally recog-nized organization or association. (3) Material adopted to meet a requirement of the federal go\emment. In incorporating material by reference, the agency must designate in the rule whether or not the incorporation includes subsequent amend-ments and editions of the referenced material. The agency can change this designation only by a subsequent rule-makmg proceeding. The agency must have copies of the incorporated material available for inspection and must specify in the rule both where copies of the material can be obtained and the cost on the date the rule is adopted of a copy of the material. .A statement in a rule that a rule incorporates matenal by reference in accordance with former G.S. 1 SOB- 14(b) is a statement that the rule does not include subsequent amendments and editions of the referenced material. A statement in a rule that a rule incorporates material by reference in accordance with former G.S. 1503- 14(c) is a statement that the rule includes subsequent amendments and editions of the referenced ma-terial. § 150B-21.7. Effect of transfer of duties or termination of agency on rules. WTien a law that authorizes an agency to adopt a rule is repealed and another law gives the same or another agency substantially the same author-ity to adopt a rule, the rule remains in effect until the agency amends or repeals the rule. \\Tien a law that authorizes an agency to adopt a rule is repealed and another law does not gi\e the same or another agency substantially the same author-ity to adopt a rule, a rule adopted under the re-pealed law is repealed as of the date the law is repealed. WTien an executive order abolishes part or all of an agency and transfers a function of that agency to another agency, a rule concerning the transferred function remains in effect until the agency to which the function is transferred amends or repeals the rule. When an executive order abolishes part or aU of an agency and does not transfer a function of that agency to another agency, a rule concerning a function abolished by the executive order is repealed as of the effec-tive date of the executive order. ITie Director of Fiscal Research of the General Assembly must notify the Codifier of Rules when a rule is repealed under this section. WTien no-tified of a rule repealed under this section, the Codifier of Rules must enter the repeal of the rule in the North Carolina Administrative Code. Part 3. Re\iew by Commission. § 150B-21.8. Review of rule by Commission. (a) TemporaPv' Rule. -- The Commission does not review a temporary rule. (b) Permanent Rule. -- An agency must submit a permanent rule adopted by it to the Commis-sion before the rule can be included m the North Carolina Administrative Code. TTie Commission reviews a permanent rule in accordance \\ ith the standards in G.S. 150B-21.9 and follows the procedure in this Part in its review of a perma-nent rule. (c) Scope. -- WTien the Commission reviews an amendment to a rule, it may review the entire rule that is being amended. The procedure in G.S. 150B-21.12 applies when the Commission objects to a part of a rule that is within its scope of review but is not changed by a rule amend-ment. § 150B-21.9. Standards and timetable for re-view by Commission. (a) Standards. -- The Commission must deter-mine whether a rule meets all of the following criteria: 791 6: 13 NOR TH CAROLINA REGIS TER September 30, 1 991 GENERAL STATUTES OF NORTH CAROLINA (1) It is within the authority delegated to the agency by the General Assembly. (2) It is clear and unambiguous. (3) It is reasonably necessary to fulfill a duty delegated to the agency by the General Assembly. The Commission may determine if a rule sub-mitted to it was adopted in accordance with Part 2 of this /Vrticle. The Commission must notify the agency that adopted the rule if it determines that a rule was not adopted in accordance with Part 2 of this Article and must retum the rule to the agency. Entry of a rule in the North Carolina Administrative Code after review by the Com-mission is conclusive evidence that the rule was adopted in accordance with Part 2 of this Article. (b) Timetable. — The Commission must review a rule submitted to it on or before the twentieth of a month by the last day of the next month. The Commission must review a rule submitted to it after the twentieth of a month by the last day of the second subsequent month. § I50B-21.10. Commission action on perma-nent rule. At the first meeting at which a permanent rule is before the Commission for review, the Com-mission must take one of the following actions: (1) Approve the rule, if the Commission de-termines that the rule meets the standards for review. (2) Object to the rule, if the Commission de-termines that the rule does not meet the standards for re\iew. (3) Extend the period for reviewing the rule, if the Commission determines it needs additional information on the rule to be able to decide whether the rule meets the standards for review. In reviewing a new rule or an amendment to an existing rule, the Commission may request an agency to make technical changes to the rule and may condition its approval of the rule on the agency's making the requested technical changes. § 150B-21.il. Procedure when Commission approves permanent rule. When the Commission approves a permanent rule, it must notify the agency that adopted the rule of the Commission's approval and must de-liver the approved rule to the Codifier of Rules. The Commission must deliver an approved rule by the end of the month in which the Commis-sion approved the rule, unless the agency asks the Commission to delay the delivery of the rule. § 150B-21.12. Procedure >vhen Commission objects to a permanent rule. (a) Action. -- When the Commission objects to a permanent rule, it must send the agency that adopted the rule a written statement of the ob-jection and the reason for the objection. The agency that adopted the rule must take one of the following actions: (1) Change the rule to satisfy the Commis-sion's objection and submit the revised rule to the Commission. (2) Submit a written response to the Com-mission indicating that the agency has de-cided not to change the rule. An agency that is not a board or commission must take one of these actions within 30 days after receiving the Commission's statement of objection. A board or commission must take one of these actions within 30 days after receiving the Commission's statement of objection or within 10 days after the board or commission's next regularly scheduled meeting whichever comes later. When an agency changes a rule in response to an objection by the Commission, the Commis-sion must determine whether the change satisfies the Commission's objection. If it does, the Commission must approve the rule. If it does not, the Commission must send the agency a written statement of the Commission's continued objection and the reason for the continued ob-jection. A rule to which the Commission has objected remains under review by the Commission until the agency that adopted the rule decides not to satisfy the Commission's objection and makes a written request to the Commission to retum the rule to the agency. When the Commission re-turns a rule to which it has objected, it may send to the President of the Senate and each member of the General Assembly a report of its objection to the rule. (b) Entry in Code. -- When the Commission returns a rule to which it has objected to the agency that adopted the rule, the Commission must notify the Codifier of Rules of its action and of the basis of the Commission's objection. An agency whose rule is returned may file the rule with the Codifier of Rules. When the Codifier of Rules enters in the North Carolina Administrative Code a rule to which the Com-mission objected, the entry must reflect the Commission's objection and must state the standard on which the Commission based its objection. § I50B-21.I3. Procedure when Commission extends period for review of permanent rule. When the Commission extends the period for review of a permanent rule, it must notify the agency that adopted the rule of the extension and the reason for the extension. After the Com-mission extends the period for review of a rule, it may call a public hearing on the rule. Within 6:U NORTH CAROLINA REGISTER September 30, 1991 792 GENERAL STATUTES OF NORTH CAROLINA 70 days after extending the period for review of a rule, the Commission must decide whether to approve the rule, object to the rule, or call a public hearing on the rule. § 150B-2I.I4. Public hearing on a rule. The Commission may call a public hearing on a rule when it extends the period for review of the rule. At the request of an agency, the Commis-sion may call a public hearing on a rule that is not before it for review. Calling a public hearing on a rule not already before the Commission for re\iew places the rule before the Commission for review. When the Commission decides to call a public hearing on a rule, it must publish notice of the public hearing in the North Carolina Register. After a pubUc hearing on a rule, the Commis-sion must approve the rule or object to the rule in accordance with the standards and procedures in this Part. The Commission must make its decision of whether to approve or object to the rule within 70 days after the public hearing. § 150B-21.15. Declaratory judgment action authorized when Commission objects to a f)erma-ncnt rule. (a) Standing. -- A person aggrieved by a per-manent rule entered in the North Carolina Ad-ministrati\ e Code with an objection by the Commission based on a lack of statutory" au-thority may fde an action for declaratory judg-ment in Wake County Superior Court pursuant to Article 26 of Chapter 1 of the General Stat-utes. In the action, the court shall determine whether the agency exceeded it authority ia adopting the rule. A declaratory judgment action under this sec-tion must be fded within 90 days after the rule that is the subject of the action is entered in the Code. Filing a petition for rule making or a re-quest for a declarator)' ruling with the agency that adopted the rule is not a prerequisite to fding an action under this section. A person who fdes an action for declaratory judgment under this sec-tion must ser\'e a copy of the complaint on the agency that adopted the rule being contested, the Codifier of Rules, and the Commission. (b) Record. - Within 10 days after a declaratory judgment action is filed under this section, the agency that adopted the rule that is the subject of the action must send to the court the original or a certified copy of the record in the Commission's re\iew of the rule. The record consists of the rule, the Commission's letter of objection to the rule, the agency's written re-sponse to the Commission's letter, and any other relevant documents before the Commission when it decided to object to the rule. (c) Effect. — A rule remains in effect during the pendency of an action for declaratory judgment under this section unless the court suspends the rule after fmding that the agency that adopted the rule has no substantial likelihood of prevailing in the action. (d) Changes. -- While a rule is the subject of a declaratory judgment action under this section, the agency that adopted the rule may submit to the Commission changes in the rule to satisfy the Commission's objection. If the Commission determines that changes submitted to it satisfy its objection, the Commission must accept the changes and file the revised rule with the Codifier of Rules. The Codifier must then enter the rule in the North Carolina Administrative Code. WTien the Commission determines that changes submitted to it satisfy its objection, the agency that submitted the changes must notify the court of the changes and of the Commission's action. Part 4. Publication of Code and Register. § 150B-21.17. North Carolina Register. (a) Content. -- The Codifier of Rules must publish the North Carolina Register. The North Carolina Register must be published at least two times a month and must contain the following: (1) Notices of proposed adoptions of rules. (2) Notices of receipt of a petition for munic-ipal incorporation, as required bv G.S. 120-165. (3) Executive orders of the Governor. (4) l-'inal decision letters from the United States Attorney General concerning changes in laws that affect voting in a ju-risdiction subject to § 5 of the Voting Rights Act of 1965, as required by G.S. 120-30.911. (5) Orders of the Tax Review Board issued under G.S. 105-241.2. (6) Other information the Codifier determines helpful to the pubhc. (b) Eorm. -- When an agency publishes notice in the North Carolina Register of the proposed text of a new rule, the Codifier of Rules must pubhsh the complete text of the proposed new rule. In publishing the text of a proposed new rule, the Codifier must indicate the rule is new by underlining the proposed text of the rule. When an agency publishes notice in the North Carolina Register of the proposed text of an amendment to an existing rule, the Codifier must publish the complete text of the rule that is being amended unless the Codifier determines that publication of the complete text of the rule being amended is not necessary to enable the reader to understand the proposed amendment. In pub-lishing the text of a proposed amendment to a 793 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NORTH CAROLINA rule, the Codifier must indicate deleted text with overstrikes and added text with underlines. When an agency publishes notice in the North Carolina Register of the proposed repeal of an existing rule, the Codifier must publish the com-plete text of the rule the agency proposes to re-peal unless the Codifier determines that publication of the complete text is impractical. In publishing the text of a rule the agency pro-poses to repeal, the Codifier must indicate the rule is to be repealed. § 150B-21.18. North Carolina Administrative Code. The Codifier of Rules must compile all rules into a Code known as the North Carolina Ad-ministrative Code. The format and indexing of the Code must conform as nearly as practical to the format and indexing of the North Carolina General Statutes. The Codifier must publish printed copies of the Code and may pubhsh the Code in other forms. The Codifier must keep the Code current by publishing the Code in a loose-leaf format and periodically providing new pages to be substituted for outdated pages, by publishing the Code in volumes and periodically pubhshing cumulative supplements, or by an-other means. The Codifier must keep superseded rules. § 150B-21.19. Requirements for Including rule in Code. To be acceptable for inclusion in the North Carolina Administrative Code, a rule must: (1) Cite the law under which the rule is adopted. (2) Be signed by the head of the agency or the rule-making coordinator for the agency that adopted the rule. (3) Be in the physical form specified by the Codifier of Rules. (4) flave been reviewed by the Commission, if the rule is a permanent rule. § 150B-21.20. Codifier's authority to revise form of rules. (a) Authority. -- After consultmg with the agency that adopted the rule, the Codifier of Rules may revise the form of a rule submitted for inclusion in the North Carolina Administrative Code within 10 business days after the rule is submitted to do one or more of the foUowing: (1) Rearrange the order of the rule in the Code or the order of the subsections, su-bdivisions, or other subparts of the rule. (2) Provide a catch line or heading for the rule or revise the catch line or heading of the rule. (3) Reletter or renumber the rule or the sub-parts of the rule in accordance with a uniform svstem. (4) Rearrange definitions and lists. (5) Make other changes in arrangement or in form that do not change the substance of the rule and are necessary or desirable for a clear and orderly arrangement of the rule. (b) Effect. -- Revision of a rule by the Codifier of Rules under this section does not affect the effective date of the rule or require the agency to readopt or resubmit the rule. When the Codifier of Rules revises the foim of a rule the Codifier of Rules must send the agency that adopted the rule a copy of the revised rule. The revised rule is the official rule. § 150B-2I.21. Publication of rules of North Carolina State Bar and exempt agencies. (a) State Bar. — The North Carolina State Bar must submit a rule adopted or approved by it and entered in the minutes of the North Carolina Supreme Court to the Codifier of Rules for inclusion in the North Carolina Administrative Code. The State Bar must submit a rule within 15 days after it is entered in the minutes of the Supreme Court. The Codifier of Rules must compile, make available for pubhc inspection, and publish a rule included in the North Carolina Administrative Code under this subsection in the same manner as other rules in the Code. (b) Exempt Agencies. -- Notwithstanding G.S. 150B-1, the North Carolina L'tifities Commis-sion must submit to the Codifier of Rules those rules of the Utilities Commission that are pub-lished from time to time in the pubhcation titled "North Carolina Utilities Laws and Regulations." The Utihties Commission must submit a rule required to be included in the Code within 15 days after it is adopted. The Codifier of Rules must pubhsh the rules submitted by the Utilities Commission in the North Carolina Ad-ministrative Code in the same format as they are submitted. Notwithstanding G.S. 150B-1, an agency other than the Utihties Commission that is exempted from this .Article by that statute must submit a temporary or permanent rule adopted by it to the Codilier of Rules for inclusion in the North Carohna Administrative Code. One of these ex-empt agencies must submit a rule to the Codifier of Rules within 15 days after it adopts the rule. The Codifier of Rules must compile, make available for pubhc inspection, and pubhsh a rule of one of these agencies in the North Carolina Administrative Code in the same manner as other rules in the Code. § 1508-21.22. Effect of inclusion in Code. Official or judicial notice can be taken of a rule in the North Carolina Administrative Code and shall be taken when appropriate. Codification 6:li NORTH CAROLINA REGISTER September 30, 1 991 794 GENERAL STA TUTES OF NORTH CAROLINA of a rule in the North Carolina Administrative Code 15 prima facie evidence of compliance with this .Article. § 150B-21.23. Rule publication manual. Ihe Codifier of Rules must publish a manual that sets out the form and method for publishing a notice of rule making in the North Carolina Register and for filing a rule in the North Carolina Administrative Code. § I50B-21.24. Free copies of Register and Code. (a) Register. -- The Codifier of Rules must distribute copies of the North Carolina Register as soon after publication as practical, without charge, to the following: ( 1 ) A person who receives a free copy of the North Carolina Administrative Code, (2) Upon request, one copy to each member of the General Assembly, (b) Code. -- The Codifier of Rules must dis-tribute copies of the North Carolina Administra-tive Code as soon after pubhcation as practical, without charge, to the following: (1) One copy to the board of commissioners of each county, to be placed at the county clerk of court's office or at another place selected by the board of commissioners, (2j One copy to the Commission. (3) One copy to the Clerk of the Supreme Court and to the Clerk of the Court of Appeals of North Carolina, (4) One copy to the Supreme Court Library^ and one copy to the library of the Court of Appeals. (5) One copy to the Admimstrative Office of the Courts. (6) One copy to the Govemor. (7) Five copies to the Legislati\'e Services Commission for the use of the General Assembly. (8) Upon request, one copy to each State of-ficial or department to whom or to w hich copies of the appellate division reports are furnished under G.S. 7A-343,1, (9) Fi\'e copies to the Division of State Li-brary,' of the Department of Cultural Re-sources pursuant to G.S. 125-11.7. § 150B-21.25. Paid copies of Register and Code. A person who is not entitled to a free copy of the North Carolina Administrative Code or North Carolina Register may obtain a copy by paying a fee set by the Codifier of Rules. The Coditier must set separate fees for the North Carolina Register and the North Carolina Ad-ministrative Code in amounts that cover publi-cation, copying, and mailing costs, .AH monies received under this section must be credited to the General Fund, Article 3. .Administrative Hearings. § 1508-22. Settlement; contested case. It is the policy of this State that any dispute between an agency and another person that in-volves the person's rights, duties, or privileges, including licensing or the le\'y of a monetarv' penalty, should be settled through informal pro-cedures. In trying to reach a settlement through informal procedures, the agency may not conduct a proceeding at which sworn testimony is taken and witnesses may be cross-examined. If the agency and the other person do not agree to a resolution of the dispute through informal pro-cedures, either the agency or the person may commence an administrative proceeding to de-termine the persons rights, duties, or privileges, at which time the dispute becomes a "contested case," § 150B-23. Commencement; assignment of administrative law judge; hearing required; notice; intenention. (a) A contested case shall be commenced by filing a petition with the Office of .Administrative Heanngs and, except as provided in .Article 3A of this Chapter, shall be conducted by that Of-fice, The party who files the petition shall ser%'e a copy of the petition on all other parties and, if the dispute concerns a license, the person who holds the license, A party who files a petition shall file a certificate of service together with the petition, A petition shall be signed by a party or a representative of the party and, if filed by a party other than an agency, shall state facts tending to establish that the agency named as the respondent has deprived the petitioner of prop-erty, has ordered the petitioner to pay a fine or ci\il penalty, or has otherwise substantially prej-udiced the petitioner's nghts and that the agency: (1) Exceeded its authority or jurisdiction; (2) .Acted erroneously; (3) Failed to use proper procedure: (4) .Acted arbitrarily or capriciously: or (5j Failed to act as required by law"^or rule. The parties in a contested case shall be gi\en an opportunity for a hearing without undue delay, .Any person aggrie\ed may commence a con-tested case hereunder, A local goverimient employee, applicant for employment, or former employee to whom Chapter 126 of the General Statutes appHes may commence a contested case under this .Article in the same manner as any other petitioner. The case shall be conducted in the Office of Admin-istrative Hearings in the same manner as other contested cases under this .Article, except that the 795 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NORTH CAROLINA decision of the State Personnel Commission shall be advisor\' only and not binding on the local appointing authority, unless (1) the employee, apphcant, or former employee has been subjected to discrimination prohibited by Article 6 of Chapter 126 of the General Statutes or (2) ap-plicable federal standards require a binding deci-sion. In these two cases, the State Personnel Commission's decision shall be binding. (al) Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1022, s. 1(9), effective July 15, 1986. (a2) An administrative law judge assigned to a contested case may require a party to the case to file a prehearing statement. A party's prehearing statement must be ser\'ed on all other parties to the contested case. (b) The parties to a contested case shall be given a notice of hearing not less than 15 days before the hearing by the Office of Administrative Hearings. If prehearing statements have been filed in the case, the notice shall state the date, hour, and place of the hearing. If prehearing statements have not been filed in the case, the notice shall state the date, hour, place, and nature of the hearing, shall list the particular sections of the statutes and rules involved, and shall give a short and plain statement of the factual allegations. (c) Notice shall be given personally or by cer-tified mail. If given by certified mail, it shall be deemed to have been given on the dchvery date appearing on the return receipt. If giving of no-tice cannot be accomplished cither personally or by certified mail, notice shall then be given in the manner provided in G.S. lA-1, Rule 4(jl). (d) Any person may petition to become a party by filing a motion to intervene in the manner provided in G.S. lA-1, Rule 24. In addition, any person interested in a contested case may inter-vene and participate in that proceeding to the extent deemed appropriate by the administrative law judge. (e) /Ml hearings under this Chapter shall be open to the public. Hearings shall be conducted in an impartial manner. Hearings shall be con-ducted according to the procedures set out in this Article, except to the extent and in the particulars that specific hearing procedures and time stand-ards are governed by another statute. (f) Unless another statute or a federal statute or regulation sets a time limitation for the filing of a petition in contested cases against a specified agency, the general Umitation for the filing of a petition in a contested case is 60 days. The time limitation, whether estabhshed by another stat-ute, federal statute, or federal regulation, or this section, shall commence when notice is given of the agency decision to all persons aggrieved who are known to the agency by personal delivery or by the placing of the notice in an official deposi-tory of the United States Postal Service wrapped in a wrapper addressed to the person at the latest address given by the person to the agency. The notice shall be in writing, and shall set forth the agency action, and shall inform the persons of the right, the procedure, and the time limit to file a contested case petition. When no informal settlement request has been received by the agency prior to issuance of the notice, any sub-sequent informal settlement request shall not suspend the time limitation for the fUing of a pe-tition for a contested case hearing. § 150B-24. Venue of hearing. (a) The hearing of a contested case shall be conducted: (1) In the county in this State in which any person whose property or rights are the subject matter of the hearing maintains his residence; (2) In the county where the agency maintains its principal office if the property or rights that are the subject matter of the hearing do not affect any person or if the subject matter of the hearing is the property or rights of residents of more than one county; or (3) In any county determined by the admin-istrative law judge in his discretion to promote the ends of justice or better serve the convenience of witnesses. (b) Any person whose property or rights are the subject matter of the hearing waives his ob-jection to venue by proceeding in the hearing. § 150B-25. Conduct of hearing; answer. (a) If a party fails to appear in a contested case after proper service of notice, and if no adjournment or continuance is granted, the ad-ministrative law judge may proceed with the hearing in the absence of the party. (b) Repealed. (c) The parties shall be given an opportunity to present arguments on issues of law and poUcy and an opportunity to present evidence on issues of fact . (d) A party may cross-examine any witness, including the author of a document prepared by, on behalf of or for use of the agency and offered in evidence. Any party may submit rebuttal ev-idence. § 150B-26. Consolidation. When contested cases involving a common question of law or fact or multiple proceedings involving the same or related parties are pending, the Director of the Office of Administrative Hearings may order a joint hearing of any mat- 6:li NORTH CAROLINA REGISTER September 30, 1991 796 GENERAL STA TUTES OF NORTH CAROLINA ters at issue in the cases, order the cases consol-idated, or make other orders to reduce costs or delay in the proceedings. § 1508-27. Subpoena. After the commencement of a contested case, subpoenas may be issued and served in accord-ance with G.S. lA-1, Rule 45. In addition to the methods of sen'ice in G.S. IA-1, Rule 45, a State law enforcement officer may serve a subpoena on behalf of an agency that is a party to the contested case by any method by which a sheriff may ser\e a subpoena under that Rule. Upon a motion, the administrative law judge may quash a subpoena if upon a hearing, the administrative law judge fmds that the evidence the production of which is required does not relate to a matter in issue, the subpoena does not describe with sufficient particularity the evidence the pro-duction of which is required, or for any other reason sufficient in law the subpoena may be quashed. Witness fees shall be paid by the party requesting the subpoena to subpoenaed witnesses in accordance with G.S. 7A-314. However, State officials or employees who are subpoenaed shall not be entitled to witness fees, but they shall re-ceive their normal salary and they shall not be required to take any annual leave for the witness days. Travel expenses of State officials or em-ployees who are subpoenaed shall be reimbursed as provided m G.S. 138-6. § 1 SOB- 28. Depositions and discoven'. (a) A deposition may be used in lieu of other evidence when taken in comphance with the Rules of Civil Procedure, G.S. lA-1. Parties in contested cases may engage in discovery pursuant to the provisions of the Rules of Civil Procedure, G.S. lA-1. (b) On a request for identifiable agency records, with respect to material facts involved in a con-tested case, except records related solely to the mtemal procedures of the agency or which are exempt from disclosure by law, an agency shall promptly make the records available to a party. § 150B-29. Rules of evidence. (a) In all contested cases, irrelevant, immaterial and unduly repetitious evidence shall be ex-cluded. Except as otherwise provided, the rules of evidence as applied in the trial division of the General Court of Justice shall be followed; but, when evidence is not reasonably available under the rules to show relevant facts, then the most reliable and substantial evidence available shall be admitted. On the judge's own motion, an administrative law judge may exclude evidence that is inadmissible under this section. It shall not be necessary for a party or his attorney to object at the hearing to evidence in order to pre-ser\' e the right to object to its consideration by the administrative law judge in making a recom-mended decision, by the agency in making a fmal decision, or by the court on judicial review. (b) Evidence in a contested case, including re-cords and documents, shall be offered and made a part of the record. Factual information or ev-idence not made a part of the record shall not be considered in the determination of the case, ex-cept as permitted under G.S. 1508-30. Docu-mentary evidence may be received in the form of a copy or excerpt or may be incorporated by reference, if the materials so incorporated are available for examination by the parties. Upon timely request, a party shall be given an oppor-tunity to compare the copy with the original if available. § 1508-30. Omcial notice. Official notice may be taken of all facts of which judicial notice may be taken and of other facts within the specialized knowledge of the agency. The noticed fact and its source shall be stated and made known to affected parties at the earliest practicable time, and any party shall on timely request be afforded an opportunity to dispute the noticed fact through submission of evidence and argument. § 1508-31. Stipulations. (a) The parties in a contested case may, by a stipulation in writing filed with the administrative law judge, agree upon any fact involved in the controversy, which stipulation shall be used as evidence at the hearing and be binding on the parties thereto. Parties should agree upon facts when practicable. (b) Except as otherwise provided by law, dis-position may be made of a contested case by stipulation, agreed settlement, consent order, waiver, default, or other method agreed upon by the parties. § 1508-32. Designation of administrative law judge. (a) The Director of the Office of Administrative Hearings shall assign himself or another admin-istrative law judge to preside over a contested case. (b) On the filing in good faith by a party of a timely and sufficient affidavit of personal bias or disqualification of an administrative law judge, the administrative law judge shall determine the matter as a part of the record in the case, and this determination shall be subject to judicial review at the conclusion of the proceeding. (c) WTien an administrative law judge is dis-qualified or it is impracticable for him to con-tinue the hearing, the Director shall assign another administrative law judge to continue with the case unless it is shown that substantial prejudice to any party will result, in which event 797 6:13 NORTH CAROLINA REGISTER September 30, I99I GENERAL STA TUTES OF NORTH CAROLINA a new hearing shall be held or the case dismissed without prejudice. § I50B-33. Powers of administrative law judge. (a) An administrative law judge shall stay any contested case under this Article on motion of an agency which is a party to the contested case, if the agency shows by supporting cdTidavits that it is engaged in other litigation or administrative proceedings, by whatever name called, with or before a federal agency, and this other litigation or administrative proceedings will determine the position, in whole or in part, of the agency in the contested case. At the conclusion of the other litigation or administrative proceedings, the con-tested case shall proceed and be determined as expeditiously as possible. (b) An administrative law judge may: (1) Administer oaths and affumations; (2) Sign, issue, and rule on subpoenas in ac-cordance with G.S. 150B-27 and G.S. lA-1, Rule 45; (3) Provide for the taking of testimony by deposition and rule on all objections to discovery in accordance with G.S. lA-1, the Rules of Civil Procedure; (3a) Rule on all prehearing motions that are authorized by G.S. lA-1, the Rules of Civd Procedure; (4) Regulate the course of the hearings, in-cluding discovery, set the time and place for continued hearings, and fix the time for filing of briefs and other documents; (5) Direct the parties to appear and confer to consider simplification of the issues by consent of the parties; (6) Stay the contested action by the agency pending the outcome of the case, upon such terms as he deems proper, and sub-ject to the provisions of G.S. lA-1, Rule 65; (7) Determine whether the hearing shaU be recorded by a stenographer or by an elec-tronic device; and (8) Enter an order returnable in the General Court of Justice, Superior Court Division, to show cause why the person should not be held in contempt. The Court shall have the power to impose punishment as for contempt for any act which would constitute direct or indirect contempt if the act occurred in an action pending in Superior Court. (9) Determine that a rule as apphed in a particular case is void because (1) it is not within the statutory authority of the agency, (2) is not clear and unambiguous to persons it is intended to direct, guide. or assist, or (3) is not reasonably necessary to enable the agency to fulfill a duty de-legated to it by the General Assembly. (10) Impose the sanctions provided for in G.S. 1A- 1 or Chapter 3 of Title 26 of the North Carolina Administrative Code for non-comphance with applicable procedural rules. § 150B-34. Recommended decision or order of administrative law judge. (a) Except as provided in G.S. 150B-36(c), in each contested case the administrative law judge shall make a recommended decision or order that contains fmdings of fact and conclusions of law. (b) Repealed. § 1 SOB- 35. No ex parte communication; ex-ceptions. Unless required for disposition of an ex parte matter authorized by law, neither the adminis-trative law judge assigned to a contested case nor a member or employee of the agency making a fmal decision in the case may communicate, di-rectly or indirectly, in cormection with any issue of fact, or question of law, with any person or party or his representative, except on notice and opportunity for all parties to participate. § 1 SOB- 36. Final decision. (a) Before the agency makes a fmal decision, it shall give each party an opportunity to fde ex-ceptions to the decision recommended by the administrative law judge, and to present written arguments to those in the agency who will make the final decision or order. If a party files in good faith a timely and sufficient affidavit of personal bias or other reason for disqualification of a member of the agency making the fmal decision, the agency shall determine the matter as a part of the record in the case, and the determination is subject to judicial review at the conclusion of the case. (b) A fmal decision or order in a contested case shall be made by the agency in writing after re-view of the official record as defmed in G.S. 150B-37(a) and shall include fmdings of fact and conclusions of law. If the agency does not adopt the administrative law judge's recommended de-cision as its fmal decision, the agency shall state in its decision or order the specific reasons why it did not adopt the administrative law judge's recorTm:iended decision. The agency may con-sider only the official record prepared pursuant to G.S. 150B-37 in making a fmal decision or order, and the final decision or order shall be supported by substantial evidence admissible un-der G.S. 150B-29(a), 150B-30, or 150B-31. A copy of the decision or order shall be served upon each party personally or by certified mail addressed to the party at the latest address given 6:13 NORTH CAROLINA REGISTER September 30, 1991 798 GENERAL STA TUTES OF NORTH CAROLINA by the party to the agency, and a copy shall be furnished to his attorney of record and the Office of Administrative Hearings. (c) 1 he following decisions made by adminis-trative law judges in contested cases are fmal de-cisions: (1) A determination that the Office of Ad-ministrative Hearings lacks junsdiction. (2) An order entered pursuant to the authority in G.S. 7A-759(e). (3) An order entered pursuant to a written prehearing motion that either dismisses the contested case for failure of the petitioner to prosecute or grants the rehef requested when a party does not comply with procedural requirements. (4) An order entered pursuant to a prehearing motion to dismiss the contested case in accordance with G.S. lA-1, Rule 12(b) v\hen the order disposes of all issues in the contested case. § 15(»B-37. Omcial record. (a) In a contested case, the Office of Adminis-trative Hearings shall prepare an official record of the case that includes: (1) Notices, pleadings, motions, and interme-diate rulings; (2) Questions and offers of proof, objections, and rulings thereon; (3) Evidence presented; (4) Matters officially noticed, except matters so obvious that a statement of them would serve no useful purpose; and (5) The administrative law judge's recom-mended decision or order. (b) Proceedings at which oral evidence is pre-sented shall be recorded, but need not be tran-scribed unless requested by a party. Each party shall bear the cost of the transcript or part thereof or copy of said transcript or part thereof which said party requests, and said transcript or part thereof shall be added to the official record as an exhibit. (c) The Office of Administrative Hearings shall forward a copy of the official record to the agency making the final decision and shall forward a copy of the recommended decision to each party. Article 3A. Other Administrative Hearings. § I50B-38. Scope; required; notice; venue. (a) The provisions of this Article shall apply to the following agencies: (1) Occupational licensing agencies; (2) The State B;mking Commission, the Commissioner of Banks, the Savings In-stitutions Division of the Department of Economic and Community Development, and the Credit Union Division of the De-partment of Economic and Community Development; and (3) The Department of Insurance and the Commissioner of Insurance. (b) Prior to any agency action in a contested case, the agency shall give the parties in the case an opportunity for a hearing without undue delay and notice not less than 15 days before the hear-ing. Notice to the parties 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; and (3) A short and plain statement of the facts alleged. (c) Notice shall be given personally or by cer-tified mail. If given by certified mail, notice shall be deemed to have been given on the delivery date appearing on the return receipt. If notice cannot be given personally or by certified mail, then notice shall be given in the manner provided in G.S. lA-1, Rule4(jr). (d) A party who has been served with a notice of hearing may file a written response with the agency. If a written response is filed, a copy of the response must be mailed to all other parties not less than 10 days before the date set for the hearing. (e) /Ml hearings conducted under this /Vrticle shall be open to the public. A hearing conducted by the agency shall be held in the county where the agency maintains its principal office. A hearing conducted for the agency by an adminis-trative law judge requested under G.S. 150B-40 shall be held in a county in this State where any person whose property or rights are the subject matter of the hearing resides. If a different venue would promote the ends of justice or better serve the convenience of witnesses, the agency or the administrative law judge may designate another county. A person whose property or rights are the subject matter of the hearing waives his ob-jection to venue if he proceeds in the hearing. (f) Any person may petition to become a party by filing with the agency or hearing officer a motion to intervene in the manner provided by G.S. lA-1, Rule 24. In addition, any person in-terested in a contested case under this Article may intervene and participate to the extent deemed appropriate by the agency hearing offi-cer. (g) When contested cases involving a common question of law or fact or multiple proceedings involving the saine or related parties are pending before an agency, the agency may order a joint hearing of any matters at issue in the cases, order the cases consolidated, or m;ike other orders to reduce costs or delay in the proceedings. 799 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NORTH CAROLINA (h) Every agency shall adopt rules governing the conduct of hearings that are consistent with the provisions of this Article. § 1 SOB- 39. Depositions; discovery; subpoenas. (a) A deposition may be used in lieu of other evidence when taken in compliance with the Rules of Civil Procedure, G.S. lA-1. Parties in a contested case may engage in discovery pursu-ant to the provisions of the Rules of Civil Pro-cedure, G.S. lA-1. (b) Upon a request for an identifiable agency record involving a material fact in a contested case, the agency shall promptly provide the re-cord to a party, unless the record relates solely to the agency's internal procedures or is exempt from disclosure by law. (c) In preparation for, or in the conduct of, a contested case subpoenas may be issued and served in accordance with G.S. lA-1, Rule 45. Upon a motion, the agency may quash a subpoena if, upon a hearing, the agency finds that the evidence, the production of which is re-quired, does not relate to a matter in issue, the subpoena does not describe with sufficient particularity the evidence the production of which is required, or for any other reason suffi-cient in law the subpoena may be quashed. Witness fees shall be paid by the party requesting the subpoena to subpoenaed witnesses in ac-cordance with G.S. 7A-314. However, State of-ficials or employees who are subpoenaed shall not be entitled to any witness fees, but they shall receive their normal salary' and they shall not be required to take any annual leave for the witness days. Travel expenses of State officials or em-ployees who are subpoenaed shall be reimbursed as provided in G.S. 138-6. § 150B-40. Conduct of hearing; presiding of-ficer; ex parte communication. (a) Hearings shall be conducted in a fair and impartial manner. At the hearing, the agency and the parties shall be given an opportunity to present evidence on issues of fact, examine and cross-examine witnesses, including the author of a document prepared by, on behalf of or for the use of the agency and offered into evidence, sub-mit rebuttal evidence, and present arguments on issues of law or pohcy. If a party fails to appear in a contested case after he has been given proper notice, the agency may continue the hearing or proceed with the hearing and make its decision in the absence of the party. (b) Except as provided under subsection (e) of this section, hearings under this Article shall be conducted by a majority of the agency. An agency shall designate one or more of its mem-bers to preside at the hearing. If a party files in good faith a timely and sufficient affidavit of the personal bias or other reason for disqualification of any member of the agency, the agency shall determine the matter as a part of the record in the case, and its determination shall be subject to judicial review at the conclusion of the proceed-ing. If a presiding officer is disqualified or it is impracticable for him to continue the hearing, another presiding officer shall be assigned to continue with the case, except that if assignment of a new presiding officer will cause substantial prejudice to any party, a new hearing shall be held or the case dismissed without prejudice. (c) The presiding officer may: (1) Administer oaths and affirmations; (2) Sign and issue subpoenas in the name of the agency, requiring attendance and giv-ing of testimony by witnesses and the production of books, papers, and other documentary evidence; (3) Provide for the taking of testimony by deposition; (4) Regulate the course of the hearings, set the time and place for continued hearings, and fix the time for filing of briefs and other documents; (5) Direct the parties to appear and confer to consider simplification of the issues by consent of the parties; and (6) Apply to any judge of the superior court resident in the district or presiding at a term of court in the county where a hear-ing is pending for an order to show cause why any person should not be held in contempt of the agency and its processes, and the court shall have the power to im-pose punishment as for contempt for acts which would constitute direct or indirect contempt if the acts occurred in an action pending in superior court. (d) Unless required for disposition of an ex parte matter authorized by law, a member of an agency assigned to make a decision or to make fmdings of fact and conclusions of law in a con-tested case under this Article shall not commu-nicate, directly or indirectly, in connection with any issue of fact or question of law, with any person or party or his representative, except on notice and opportunity for all parties to partic-ipate. Ihis prohibition begins at the time of the notice of hearing. An agency member may communicate with other members of the agency and may have the aid and advice of the agency staff other than the staff which has been or is engaged in investigating or prosecuting functions in connection with the case under consideration or a factually-related case. This section does not apply to an agency employee or party represen-tative with professional training in accounting. 6:13 NORTH CAROLINA REGISTER September 30. 1 99 1 800 GENERAL STA TUTES OF NORTH CAROLINA actuarial science, economics or financial analysis insofar as the case involves financial practices or conditions. (e) WTien a majority of an agency is unable or elects not to hear a contested case, the agency shall apply to the Director of the Office of Ad-ministrative Hearings for the designation of an administrative law judge to preside at the hearing of a contested case under this ^Vrticle. Upon re-ceipt of the application, the Director shall, with-out undue delay, assign an administrative law-judge to hear the case. The provisions of this Article, rather than the provisions of Article 3, shall govern a contested case in which the agency requests an administra-tive law judge from the Office of Administrative Hearings. The administrative law judge assigned to hear a contested case under this .Article shall sit in place of the agency and shall have the authority of the presiding officer in a contested case under this .Article. The administrative law judge shall make a proposal for decision, which shall contain pro-posed fmdings of fact and proposed conclusions of law. An administrative law judge shall stay any con-tested case under this Article on motion of an agency which is a party to the contested case, if the agency shows by supporting affidavits that it is engaged in other htigation or administrati\e proceedings, by whatever name called, with or before a federal agency, and this other litigation or administrative proceedings will determine the position, in whole or in part, of the agency in the contested case. At the conclusion of the other litigation or administrative proceedings, the con-tested case shall proceed and be determined as expeditiously as possible. The agency may make its fmal decision only after the administrative law judge's proposal for decision is sened on the parties, and an oppor-tunity is given to each party to file exceptions and proposed fmdings of fact and to present oral and written arguments to the agency. § 150B-41. Evidence; stipulations; official no-tice. (a) In all contested cases, irrelevant, immaterial, and unduly repetitious e\'idence shall be ex-cluded. Except as otherwise provided, the rules of evidence as applied in the trial division of the General Court of Justice shall be followed; but, when evidence is not reasonably available under such rules to show rele\ant facts, they may be shown by the most reliable and substantial evi-dence available. It shall not be necessary for a party or his attorney to object to evidence at the hearing in order to preser\'e the right to object to its consideration by the agency in reaching its decision, or by the court of judicial review. (b) Evidence in a contested case, including re-cords and documents shall be offered and made a part of the record. Other factual information or e\idence shall not be considered in determi-nation of the case, except as permitted under G.S. 150B-30. Documentary evidence may be received in the form of a copy or excerpt or may be incorporated by reference, if the materials so incorporated are available for examination by the parties. Upon timely request, a party shall be given an opportunity to compare the copy with the original if available. (c) The parties in a contested case under this Article by a stipulation in writing fded with the agency may agree upon any fact involved in the controversy, which stipulation shall be used as evidence at the hearing and be binding on the parties thereto. Parties should agree upon facts when practicable. Except as otherwise provided by law, disposition may be made of a contested case by stipulation, agreed settlement, consent order, waiver, default, or other method agreed upon by the parties. (d) Official notice may be taken of all facts of which judicial notice may be taken and of other facts within the specialized knowledge of the agency. The noticed fact and its source shall be stated and made known to affected parties at the earliest practicable time, and any party shall on timely request be afforded an opportunity to dis-pute the noticed fact through submission of evi-dence and argument. An agency may use its experience, technical competence, and specialized knowledge in the evaluation of evidence pre-sented to it. § I50B-42. Final agency decision; official re-cord. (a) After compliance with the provisions of G.S. 150B-40(e), if applicable, and review of the official record, as defmed in subsection (b) of this section, an agency shall make a written fmal de-cision or order in a contested case. The decision or order shall include fmdings of fact and con-clusions of law. Findings of fact shall be based exclusively on the evidence and on matters offi-cially noticed. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting them. A decision or order shall not be made except upon consideration of the record as a whole or such portion thereof as may be cited by any party to the proceeding and shall be supported by substantial e\ idence admissible under G.S. I50B-41. A copy of the decision or order shall be sened upon each party personally or by certified mail addressed to the party at the SOI 6:13 NORTH CAROLINA REGISTER September 30, I99I GENERAL STA TUTES OF NORTH CAROLINA latest address given by the party to the agency and a copy shall be furnished to his attorney of record. (b) An agency shall prepare an official record of a hearing that shall include: (1) Notices, pleadings, motions, and interme-diate rulings; (2) Questions and offers of proof, objections, and rulings thereon; (3) Evidence presented; (4) Matters officially noticed, except matters so obvious that a statement of them would serve no useful purpose; (5) Proposed fmdings and exceptions; and (6) Any decision, opinion, order, or report by the officer presiding at the hearing and by the agency. (c) Proceedings at which oral evidence is pre-sented shall be recorded, but need not be tran-scribed unless requested by a party. Each party shall bear the cost of the transcript or part thereof or copy of said transcript or part thereof which said party requests. Article 4. Judicial Review. § 150B-43. Right to judicial review. Any person who is aggrieved by the fmal deci-sion in a contested case, and who has exhausted all administrative remedies made available to him by statute or agency rule, is entitled to judicial review of the decision under this /Vrticle, unless adequate procedure for judicial review is pro-vided by another statute, in which case the review shall be under such other statute. Nothing in this Chapter shall prevent any person from invoking any judicial remedy available to him under the law to test the vahdity of any administrative action not made reviewable under this Article. § 150B-44. Right to judicialintervention when decision unreasonably delayed. Unreasonable delay on the part of any agency or administrative law judge in taking any required action shall be justification for any person whose rights, duties, or privileges are adversely affected by such delay to seek a court order compelling action by the agency or administrative law judge. An agency that is subject to .Article 3 of this Chapter and is not a board or commission has 90 days from the day it receives the official record in a contested case from the Office of Adminis-trative Hearings to make a fmal decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 days. An agency that is subject to Article 3 of this Chapter and is a board or commission has 90 days from the day it receives the official record in a con-tested case from the Office of Administrative Hearings or 90 days after its next regularly scheduled meeting, whichever is longer, to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 days. If an agency subject to Article 3 of this Chapter has not made a fmal decision within these time limits, the agency is considered to have adopted the administrative law judge's recommended decision as the agency's fmal deci-sion. Failure of an agency subject to Article 3A of this Chapter to make a fmal decision within 180 days of the close of the contested case hear-ing is justification for a person whose rights, du-ties, or privileges are adversely affected by the delay to seek a court order compelling action by the agency or, if the case was heard by an ad-ministrative law judge, by the administrative law judge. § 150B-45. Procetlure for seeking review; waiver. To obtain judicial review of a fmal decision un-der this Article, the party seeking review must fde a petition in the Superior Court of Wake County or in the superior court of the county where the person resides. The person seeking review must file the petition within 30 days after the person is served with a written copy of the decision. A person who fails to fde a petition within the required time waives the right to judicial review under this /Vrticle. For good cause shown, however, the superior court may accept an untimely petition. § 150B-46. Contents of petition; copies ser\ed on all parties; intervention. The petition shall exphcitly state what ex-ceptions are taken to the decision or procedure and what relief the petitioner seeks. Within 10 days after the petition is filed with the court, the party seeking the review shall serve copies of the petition by personal service or by certified mail upon all who were parties of record to the ad-ministrative proceedings. Names and addresses of such parties shall be furnished to the petitioner by the agency upon request. Any party to the administrative proceeding is a party to the review proceedings unless the party withdraws by noti-fying the court of the withdrawal and serving the other parties with notice of the withdrawal. Other parties to the proceeding may file a re-sponse to the petition within 30 days of service. Parties, including agencies, may state exceptions to the decision or procedure and what rehef is sought in the response. Any person aggrieved may petition to become a party by filing a motion to inter\'ene as pro-vided m G.S. lA-1, Rule 24. 6:13 NORTH CAROLINA REGISTER September 30, I99I S02 GESERAL STATUTES OE NORTH CAROLINA § 150B-47. Records filed with clerk of superior court; contents of records; costs. Within 30 days after receipt of the copy of the petition for review, or within such additional time as the court may allow, the agency that made the fmal decision in the contested case shall transmit to the reviewing court the original or a certified copy of the official record m the con-tested case under review together with: (ij any exceptions, proposed fmdings of fact, or written arguments submitted to the agency in accordance with G.S. 150B-36(aj; and (ii) the agency's fmal decision or order. With the permission of the court, the record may be shortened by stipulation of all parties to the re\iew proceedings. Any party unreasonably refusing to stipulate to limit the record may be taxed by the court for such additional costs as may be occasioned by the re-fusal. The court may require or permit subse-quent corrections or additions to the record when deemed desirable. § 150B-48. Stay of decision. At any time before or during the review pro-ceeding, the person aggrieved may apply to the reviewing court for an order staying the operation of the administrative decision pending the out-come of the review. The court may grant or deny the stay in its discretion upon such terms as it deems proper and subject to the provisions of G.S. lA-1, Rule 65. § 150B-49. New evidence. .-Vn aggrieved person who files a petition in the superior court may apply to the court to present additional evidence. If the court is satisfied that the evidence is material to the issues, is not merely cumulative, and could not reasonably have been presented at the administrative hear-ing, the court may remand the case so that addi-tional evidence can be taken. If an administrative law judge did not make a recommended decision in the case, the court shall remand the case to the agency that conducted the admimstrative hearing. After hearing the evidence, the agency may affirm or modify its previous fmdings of fact and fmal decision. If an administrative law judge made a recommended decision in the case, the court shall remand the case to the administrative law judge. .\fter hearing the evidence, the administrative law judge may affirm or modify his pre\ious fmdings of fact and recommended decision. The admin-istrative law judge shall forward a copy of his decision to the agency that made the fmal deci-sion, which in turn may affum or modify its previous findings of fact and fmal decision. The additional evidence and any affirmation or mod-ification of a recommended decision or fmal de-cision shall be made part of the official record. § 1508-50. Review by superior court without The review by a superior court of agency deci-sions under this Chapter shall be conducted by the court without a jury. § 1508-51. Scope of review. (aj Imtial Determination in Certain Cases. In reviewing a fmal decision in a contested case in which an administrative law judge made a re-commended decision, the court shall make two initial determinations. First, the court shall de-termine whether the agency heard new evidence after receiving the recommended decision. If the court determines that the agency heard new evi-dence, the court shall reverse the decision or re-mand the case to the agency to enter a decision in accordance with the evidence in the official record. Second, if the agency did not adopt the recommended decision, the court shall determine whether the agency's decision states the specific reasons why the agency did not adopt the re-commended decision. If the court determines that the agency did not state specific reasons why it did not adopt a recommended decision, the court shall reverse the decision or remand the case to the agency to enter the specific reasons. (b) Standard of Review. After making the de-termmations, if any, required by subsection (a), the court re\iewing a final decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency's decision if the substantial rights of the petitioners may have been preju-diced because the agency's findings, inferences, conclusions, or decisions are: (1) In violation of constitutional provisions; (2) In excess of the statutory authority or ju-nsdiction of the agency: (3) Made upon unlawful procedure: (4) .'VtTected by other error of law; (5) Unsupported bv substantial evidence ad-missible under G.S. 150B-29(a), 1508-30, or 150B-31 in view of the entire record as submitted: or (6) .\rbitrar\" or capricious. § 1508-52. .Appeal; stay of court's decision. A party to a review proceeding in a superior court may appeal to the appellate di\'ision from the final judgment of the superior court as pro-vided in G.S. 7A-27. Pendmg the outcome of an appeal, an appealing party may apply to the court that issued the judgment under appeal for a stay of that judgment or a stay of the adminis-trative decision that is the subject of the appeal, as appropriate. rVrticle 5. Publication of Administrative Rules. Repealed. 803 6:B NORTH CAROLINA REGISTER September 30, 1991 EXECUTIVE ORDERS EXECUTIVE ORDER NUMBER 149 RESCISSION OF EXECUTIVE ORDER NUMBER 79 WHICH ESTABLISHED THE NORTH CAROLINA SMALL BUSINESS COUNCIL By the authority vested in me as Governor by the Constitution and laws of North Carolina, IT IS ORDERED: Executive Order Number 79 establishing the North Carolina Small Business Council is hereby rescinded. Done this the 15th day of August, 1991. EXECUTIVE ORDER NUMBER 150 NORTH CAROLINA HUM.\N SERVICE TRANS-PORTATION COUNCIL WHEREAS, the North Carolina Departments of Transportation, Human Resources, and Eco-nomic and Community Development administer State and Eederal funding programs which may be used by local human service agencies to pro-vide necessary client transportation services; and WHEREAS, the administrative pohcies and procedures of these departments greatly affect vehicle usage and the provision of transportation services at the local level; and WHEREAS, the Interagency Transportation Review Committee was established in 1978 to review the transportation components of all ap-plications or plans requesting transportation funding when the funds are administered by a State department or agency; and WHEREAS, the Interagency Transportation Review Committee process has led to a much more coordinated and cost effective use of trans-portation resources, both capital and operating, by local human service transportation providers; and WHEREAS, the General Assembly has appro-priated funds for the Elderly and Handicapped Transportation Assistance Program based on the assurance of cost-effectiveness provided by im-plementation of the local Transportation Devel-opment Plan; and WHEREAS, Title XIX Medicaid transporta-tion funds are to be expended in a manner con-sistent with the local Transportation Development Plan; and WHEREAS, there is a need for a statement of policy on coordination of transportation re-sources and these State departments and agencies are in a position to facilitate the more efficient use of these resources. THEREFORE, pursuant to the authority vested in me as Governor by the Constitution and laws of this State IT IS ORDERED: Section 1. POLICY That, wherever practical, existing transportation resources, public and private, should be utUized before any new resources wiU be made available through public funds; That the locally prepared and adopted Trans-portation Development Plan shall continue to be the means by which to determine the most cost effective and efficient use of transportation resources; and That the Department of Transportation shall provide, to the extent that funds are available and equipment is used consistent with the local Transportation Development Plan, capital equipment for the provision of local human ser-vice transportation while the transportation funds from other departments are used primarily for operating assistance. Section 2. ESTABLISHMENT (1) There is hereby created the North Carolina Human Service Transportation Council. The Council wiU be composed of represen-tatives from the North Carolina Depart-ments of Transportation, Human Resources, and Economic and Community Development. The Secretaries of the re-spective departments shall determine those divisions to be represented on the Council. Representation should include all divisions which administer federal and state funds used to provide human service transporta-tion at the local level. Division directors will be responsible for selecting a staff per-son as the division's council representative. Council appointees should be in policy making positions and have authority over subrecipient budget review and approval. (2) Departments, agencies or programs which are outside the jurisdiction of the Executive Order are encouraged to join the Council and agree to adopt the policies, procedures and decisions of the Council. (3) The State departments shall cooperate in the formation, follow the policies, proce-dures and decisions of, and support the Hu-man Service Transportation Council as described herein. Council representatives 6: 13 NOR TH CA ROLINA REGIS TER September 30, 1 991 S04 EXECUTIVE ORDERS shall assist the Department of Transporta-tion in encouraging local agencies to partic-ipate in transportation development planning efforts and in subsequent plan im-plementation, and to operate vehicles in a manner consistent with the local plan. (4) The Director of the Public Transportation and Rail Division shall chair the Council. Section 1 DUTIES OF COUNCIL The Council shall have the following duties: (1) to implement poUcy and apply criteria as developed by the Council; (2) to provide written notice of recommen-dations based upon review of applications or plans to the appropriate State agency; (3) to review the transportation components of all applications or plaits requesting trans-portation funding when funds are adminis-tered by a member agency; (4) to provide approval for the purchase of all human ser\'ice transportation vehicles fi-nanced by State administered programs; and (5) to advise and make recommendations to the Department of Transportation concerning human service transportation policy. Section 4, ADMINISTRATION The Department of Transportation - Public Transportation & Rail Di\ision shall provide the administrative support for the Council. Section 5, TRANSPORTATION FUNDING DECISIONS In case of disputes, the local and/or State agency shall ha\-e the opportunity to address the Coun-cil. When the Council decision is appealed or when the Council caimot reach consensus, the Secretary of the Department of Transportation, after conferring with the appropriate Department Secretary, shall have authority on all transporta-tion funding decisions under the jurisdiction of the Council. Section 6, AGENCY RESPONSIBILITIES (1) To further the objectives of the Executive Order, ajj departments and agencies under the Executive Order shall immediately draft directives and procedures necessary to im-plement these policies. Such drafts shall be submitted to the Secretary of Transportation for review and approval within 60 days of the signing of this Executive Order. PubUc Transportation & Rail Division staff assist-ance shall be made available as necessary. (2) There shall he a signed statement of policy for each agency under the jurisdiction of this Executive Order. The statement should be signed by the respective Department Secre-tary and each of the division directors within the department that come under the juris-diction of this Executive Order. The state-ment wiU address the agency's commitment to the objectives of this Executive Order and the policies and procedures of the Council. Section r EFFECTIVE DATE This order shall be effective immediately and shall remain in effect until July 1, 1993. Done in the Capital City of Raleigh, North Carolina this the 21st day of August, 1991. 805 6:13 NORTH CAROLINA REGISTER September 30, 1991 VOTING RIGHTS ACT FINAL DECISION LETTER [G.S. 120-30.9H, effective July 16, 1986, requires that all letters and other documents issued by the Attorney General of the United States in which a final decision is made concerning a "change af-fecting voting" under Section 5 of the Voting Rights Act of 1965 be published in the North Carolina Register. J U.S. Department of Justice Civil Rights Division JRD:MAP:SAL:lrj DJ 166-012-3 Voting Section 91-2474 P.O. Box 66128 Washington, D.C. 20035-6128 September 12, 1991 Michael CroweU, Esq. Thanington, Smith & Hargrove P. O. Box 1151 Raleigh, North Carolina 27602 Dear Mr. CroweU: This refers to the adoption of a limited voting system with seven commissioners elected to four year, staggered terms, with a plurality-win requirement in the primary, and the implementation schedule for the board of commissioners in Beaufort County, North Carolina, submitted to the Attorney Gen-eral pursuant to Section 5 of the Voting Rights Act of 1965, as amended, 42 U.S.C. 1973c. We received your submission on July 15, 1991. The Attorney General does not interpose any objection to the specified changes. However, we note that Section 5 expressly provides that the failure of the Attorney General to object does not bar subsequent litigation to enjoin the enforcement of the changes. See the Procedures for the Adminis-tration of Section 5 (28 C.F.R. 51.41). Sincerely, John R. Durme Assistant Attorney General Civil Rights Division By: Gerald W. Jones Chief, Voting Section 6.13 NORTH CAROLINA REGISTER September 30. I99I 806 PROPOSED RULES TITLE 10 - DEPARTMENT OF HL^SIAN RESOURCES A^.otice is hereby given in accordance with G.S. ISOB- 12 that the Department of Human Resources Division of Medical Assistance intends to amend rule(s) cited as 10 SCAC 26D .0016; 26H .0107, ,0508: and adopt rule(s) cited as 10 NCAC 26H .0209. J he proposed effective date of this action is February 1, 1992. 1 he public hearing will be conducted at 1:30 p.m. on October 31, 1991 at the Sorth Carolina Division of Medical Assistance, 1985 Lmstead Drive, Room 201. Raleigh, .V.C. 27603. c-omment Procedures: Written comments con-cerning these rules must be submitted by October 31, 1991, to: Division of .Medical .Assistance, 1985 Umstead Drive, Raleigh, .\.C. 27603, ATTN.: Bill Hottel, APA Coordinator. Oral comments may be presented at the hearing. In addition, a fiscal impact statement is available upon written request from the same address. Editor's Sote: 10 SCAC 26H .0107, .0209 and .0508 have been filed as temporary rules effective August 1, 1991 for a period of 180 days to expire on January 31, 1992. 10 SCAC 26D .0016 has been filed as a tempo-rary rule effective August 15, 1991 for a period of 180 days to expire on February 15, 1992. CHAPTER 26 - MEDICAL ASSISTANCE SUBCHAPTER 26D - LIMITATIONS ON AMOUNT: DLRATION: AND SCOPE .0016 CO-PAVMENT (a) Co-payment Requirements. The following requirements are imposed on all Medicaid recip-ients for the following ser\-ices: (1) Outpatient Hospital Services. Co-payment will be charged at the rate of one dollar ($1.00) per outpatient visit. (2) Chiropractic Services. Co-payment will be charged at the rate of fifty cents ($.50) per chiropractic visit. (3) Pediatric Services. Co-payment wlU be charged at the rate of one dollar ($1.00) per podiatric visit. (4) Optometric Services. Co-payment will be charged at the rate of one doUar ($1.00) per optometric visit. (5) Optical Supplies and Ser\'ices. Co-payment will be charged at the rate of two dollars ($2.00) per item. Co-payment for repair of eyeglasses and other optical sup-plies will be charged at the rate of two dollars ($2.00) per repair exceeding five doUars ($5.00). (6) Prescribed Drugs. Co paym^ant Vr^ii fee chargod at tfee Fate &f Effective August 15, 1991, the recipient co-pavment amount for prescription drugs will increase from fifty cents ($.50) per prescription to one doUar (SI. 00) per prescription including refdls. (7) Dental Services. Co-payment wiU be charged at the rate of two dollars ($2.00) per visit, except when more than one visit is required. If more than one visit is re-quired but the service is billed under one procedure code with one date of service, then only one co-payment shall be col-lected. FuU and partial dentures are ex-amples. (8) Physicians. Co payment wiH- fee chargod at- tfee Fate »f Effective .August 15. 1991. the recipient co-pavment amount for a phvsician visit will increase from frfty cents ($.50) per visit to two dollars ($2.00) per visit. (9) Hospital Inpatient Services. No co-payment win be charged for hospital in-patient services. (10) Rural Health Clinics. No co-payment win be charged for rural health clinic ser-vices. (11) Clinics (Other than Rural Health). Co-payment will be charged at the rate of fifty cents ($.50) per visit. (12) Non- Hospital Dialysis Pacihty Services. No co-payment wiU be charged for non-hospital dialysis facility services. (13) Home Health Services. No co-payment will be charged for home health services. (14) Hearing .Aid Dispensers. No co-payment win be charged for services rendered by hearing aid dispensers. (15) Artibulance. No co-payment wiU be charged for ambulance services. (b) Co-payment Exemptions. No co-payment will be charged for the following services: (1) E PS DT related services; (2) Family Planning Services; (3) Services in state owned mental hospitals; (4) Services covered by both Medicare and .Medicaid; (5) Services to children under age 18; (6) Services related to pregnancy; 807 6:13 NORTH CAROLINA REGISTER September 30, 1991 PROPOSED RULES (7) Sen'ices provided to residents of ICF, ICF-MR, SNF, Mental Hospitals; and (8) Hospital emergency room services. Authority G.S. IOSA-25(b); S.L. 1985, c. 479, s. 86; 42 C.F.R. 440.230(d); Tax Equity and Fiscal Responsibility Act of 1982, Subtitle B; Section 95 of Chapter 689, 1991 Session Laws. SUBCHAPTER 2611 - RKIMBLRSEMENT PLANS SECTION .0100 - REIMBURSEMENT FOR NURSING FACILITY SERVICES .0107 PAYMENT ASSURANCE (a) The state will pay each provider of nursing care services, who furnishes the services in ac-cordance with the requirements of the State Plan and the participation agreement, the amount de-termined under the plan. In addition. Skilled Nursing Facilities must be enrolled in the Title XVI 11 Program. (b) In no case shall the payment rate for ser-vices provided under the plan exceed the facihty's customary charges to the general public for such services. (c) The payment methods and standards set forth herein are designed to enlist the partic-ipation of any provider who operates a facility both economically and efficiently. Participation in the program shall be Limited to providers of service who accept, as payment in full, the amounts paid in accordance with the State Plan. This reimbursement plan is effective consistent with and on approval of the State Plan for Med-ical Assistance. (d) In all circumstances involving third party payment, Medicaid is the payor of last resort. No payment will be made for a Medicaid recipi-ent who is also ehgible for Medicare, Part A, for the first 20 days of care rendered to skilled nurs-ing patients. Medicaid payments for co-insurance for such patients will be made for the subsequent 21st through the 100th day of care. The Division of Medical Assistance will pay an amount for Medicare Part A deductibles and co-insurance, the total of which will equal the facil-ity's Medicaid per diem rate less any Medicare Part A payment, effective August 1, 1991. In the case of ancillary services providers are obligated to: (1) maintain detailed records or charges for all patients; (2) bill the appropriate Medicare Part B car-rier for aJl services provided to Medicaid patients that may be covered under that program; and (3) allocate an appropriate amount of ancil-lary costs, based on these charge records adjusted to reflect Medicare denials of coverage, to Medicare Part B in the an-nual cost report, (e) The state may withhold payments to pro-viders under the following circumstances; (1) If the state has a reasonable expection that the provider wiU not expend its direct rate for reasonable and allowable direct patient care costs, the state may, at its discretion, withhold a portion of each payment so as to avoid a large amount due back to the state upon reimbursement settlement pursuant to the provision of Paragraph .0104(e) of this Section. (2) Upon provider termination the state may withhold a sum of money from provider payments that it reasonably expects will be due when fmal reimbursement settle-ments for all previous periods, including the period in which the termination oc-curred, are completed. (3) Upon determination of any sum due the Medicaid Program or upon instruction from a legally authori^;ed agent of the State or Federal Government the state may withhold sums to meet the obli-gations identified. (4) The state may arrange repayment sched-ules within the limits set forth in federal regulations in lieu of withholding funds. (5) The state m.ay charge reasonable interest or overpayments from the date that the overpayment occurred. Authority G.S. I08A-25(b); I08A-54; I08A-55; S.L. 1985, c. 479. s. 86; Section 95 of Chapter 689, 1991 Session Law.':; 42 C.F.R. 447, Subpart C. SECTION .0200 - HOSPITAL INPATIENT REIMBURSEMENT PLAN .0209 PAYMENT OF MEDICARE PART A DEDUCTIBLES In regard to payment of Medicare Part A deductibles, the Division of Medical Assistance wilJ pay the Medicaid median per diem inpatient rate for one day in lieu of the Medicare Part A inpatient deductible, effective August 1, 1991. The median rate will be determined as of July 1 each year. Authority G.S. l08A-25(b); 108A-54; lOSA-55; Section '95 of Chapter 689. 1991 Session Laws; 42 C.F.R. 447, Subpart C. SECTION .0500 - REIMBURSEMENT FOR SERVICES 6:13 NORTH CAROLINA REGISTER September iO, 1991 808 PROPOSED RULES .0508 ni RABLE MKDICAL EQLII'MENT AND REEA lED SLPI'EIES (a) l"tTecti\c August _L 1991, payment for each claim tor durable medical equipment and associ-ated supplies will be equal to the lower of the supplier's usual and customary billed charges or the maximum fee established for each item of durable medical equipment or related supply. The maximum fees are set at +tW percent e4 Ae Medicare -Part 8- foes as &f Januur>' 4- trf each year. the Medicaid fee schedule in effect on July j_^ l'J91. 1 ees tor added equipment \siU be set at .Medicare I'art B fees. If a Medicare fee camiot be obtained, fof a particular equipment item, the fee will be b
Object Description
Description
Title | North Carolina register |
Date | 1991-09-30 |
Description | Vol. 6, issue 13 (September 30, 1991) |
Publisher | Raleigh, N.C. : Office of Administrative Hearings |
Digital Characteristics-A | 148 p.; 10.7 MB |
Digital Format | application/pdf |
Pres File Name-M | pubs_serial_ncregister19910930.pdf |
Pres Local File Path-M | \Preservation_content\StatePubs\pubs_serial_ncregister\images_master |
Full Text | /CFM/-7H3^I .^ ^/y^b / The ^ORTH CAROLINA REGISTER IN THIS ISSUE GENERAL STATUTES EXECUTIVE ORDERS FINAL DECISION LETTER PROPOSED RULES Crime Control and Public Safety Environment, Health, and Natural Resources Human Resources FINAL RULES f?ECE»VED Revenue List of Rules Codified ARRC OBJECTIONS OCT CAW 15 1991 LIBRARY RULES INVALIDATED BY JUDICIAL DECISION ISSUE DATE: SEPTEMBER 30, 1991 Volume 6 • Issue 13 • Pages 784-923 INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE NORTH CAROLINA REGISTER The North Carolina Register is published bi-monthly and contains information relating to agenc>', executi\e, legislati\e and judicial actions required b>' or affecting Chapter 150B of the General Statutes. All proposed, ad-ministrative rules and amendments filed under Chapter 150B must be published in the Register. The Register will t>pically comprise approximately fifty pages per issue of legal text. State law requires that a copy of each issue be pro- \ided free of charge to each county in the state and to various state officials and institutions. The North CaroHna Register is a\ailable by yearly subscription at a cost of one hundred and five dollars ($105.00) for 24 issues. Requests for subscriptions to the North Carolina Register should be directed to the Office of Ad-ministrative Hearings, P. O. Drawer 27447, Raleigh, N. C. 27611-7447, Attn: Subscriptions. ADOPTION, AMENDMENT, AND REPEAL OF RULES An agency intending to adopt, amend, or repeal a rule must first publish notice of the proposed action in the North Carolina Register. The notice must include the time and place of the public hearing; a statement of how-public comments may be submitted to the agency either at the hearing or otherwise; the text of the proposed rule or amendment; a reference to the Statutory Authority for the action and the proposed effective date. The Director of the Office of Administrati\e Hearings has authority to publish a summary, rather than the full text, of any amendment which is considered to be too lengthy. In such case, the full text of the rule con-taining the proposed amendment will be available for public inspection at the Rules Division of the Office of Administrati\e Hearings and at the office of the pro-mulgating agency. Unless a specific statute pro\'ides otherwise, at least 30 days must elapse following publication of the pro-posal in the North Carolina Register before the agencv may conduct the required public hearing and take ac-tion on the proposed adoption, amendment or repeal. When final action is taken, the promulgating agency must file any adopted or amended rule for approval by the Administrati\'e Rules Re\iew Commission. Upon ap-proval of ARRC, the adopted or amended rule must be filed with the Office of Administrative Hearings. If it differs substantially from the proposed form published as part of the public notice, upon request b>- the agen-cy, the adopted \ersion will again be published in the North Carolina Register. A rule, or amended rule cannot become effective earlier than the first day of the second calendar month after the adoption is filed with the Office of Ad-ministrative Hearings for publication in the NCAC. Proposed action on rules may be withdrawn by the promulgating agency at any time before final action is taken by the agency. TEMPOIL4RY RULES Under certain conditions of an emergency' nature, some agencies may issue temporary rules. A temporary-rule becomes effective when adopted and remains in effect for the period specified in the rule or 180 days, whichever is less. An agency adopting a temporary rule must begin normal rule-making procedures on the per-manent rule at the same time the temporary rule is adopted. NORTH CAROLINA ADMINISTRATIVE CODE The North Carolina Administrati\-e Code (NCAC) is a compilation and index of the administrative rules of 25 state agencies and 38 occupational licensing boards. The NCAC comprises approximately 15,000 letter size, single spaced pages of material of which approximate-ly 35% is changed annually. Compilation and publica-tion of the NCAC is mandated by G.S. 150B-63(b). The Code is di\-ided into Titles and Chapters. Each state agency is assigned a separate title which is fur-ther broken down by chapters. Title 21 is designated for occupational licensing boards. The NCAC is available in two formats. (1) Single pages may be obtained at a minimum cost of two dollars and 50 cents ($2.50) for 10 pages or less, plus fifteen cents ($0.15) per each additional page. (2) The full publication consists of 53 volumes, totaling in excess of 15,000 pages. It is sup-plemented monthly with replacement pages. A one year subscription to the full publication in-cluding supplements can be purchased for seven hundred and fifty dollars ($750.00). In-di\- idual \-olumes may also be purchased with supplement service. Renewal subscriptions for supplements to the initial publication a\-ailable Requests for pages of rules or \-olumes of the NCAC should be directed to the Office of Administrativ* Hearings. NOTE The foregoing is a generalized statement of the pro cedures to be folloN^ed. For specific statutory- language it is suggested that Articles 2 and 5 of Chapter I50B o the General Statutes be examined carefully. CITATION TO THE NORTH CAROLINA REGISTER The North Carolina Register is cited bv \-olume, issue page number and date. 1:1 NCR 101-201, April 1, 198 refers to Volume 1, Issue 1, pages 101 through 201 o the North Carolina Register issued on April 1, 1986. North Carolina Register. Published bi-monthly by the Office of Administrative Hearings, P.O. Drawer 27447, Raleigh, North Carolina 27611-7447, pursuant to Chapter 150B of the General Statutes. Subscriptions one hundred and fi\-e dollars (S105.00) per year. North Carolina Administrative Code. Published in looseleaf notebooks with supplement service by the Office of Administrati\e Hearings, P.O. Drawer 27447, Raleigh, North Carolina 27611-7447, pursuant to Chapter 150B of the General Satutes. Subscriptions se\-en hundred and fifty dollars ($750.00). Individual Nolumes a\ailable. NORTH CAROLINA REGISTER ISSLE CONTENTS OJJlce of Administrative Hearings P. O. Drawer 27447 Raleigh, \C 27611-7447 (919) 733-2678 I. GENERAL STA IT TES Chapter I SOB 784 II. EXECl TFV E ORDERS Executive Orders 149-150 804 III. EINAL DECISION LEITER Voting Rights Act 806 IV. PROPOSED Rl EES Crime Control and Public Safety State Highway Patrol 809 Environment, Health, and Natural Resources Health Scnices 815 Land Resources 810 Human Resources Medical Assistance 807 Julian Mann III, Director James R. Scarcella Sr., Deputy Director Molly NIasich, Director APA Services Staff: Ruby Creech, Publicalions Coordinator Teresa Kilpatrick, Editorial Assistant Jean Shirley, Editorial Assistant V. EESAL RULES Revenue Corporate Income ;md Franchise Tax Division 816 Sales and Use Tax 817 List of Rules Codified 907 VI. ARRC OBJECTIONS 916 VII. RULES INV AI IDATED BV JUDICIAL DECISION 919 VIII. CUMULATIVE INDEX 921 NORTH CAROLINA REGISTER Publication Schedule (October 1991 - December 1992) Issue Last Day Last Day Earliest Date for for Date for Filing Electronic Public Filing Hearing Earliest Date for Adoption by Agency Last Day * to Earliest Submit Effective to Date RRC ++*++++++++++*+++++++*++++++*+++++*+**++++++++*++++++++*++++++++++ 10/01/91 10/15/91 11,01/91 11/15/91 12/02/91 12/16'91 01/02/92 01/15/92 02/03/92 02/14/92 03/02/92 03/16/92 04 01,92 04/15/92 05/01/92 05/15/92 06/01/92 06/15/92 07/01/92 07/15/92 08/03/92 08/14/92 09/01 92 09/15 92 10/01/92 10/15/92 11/02/92 11/16/92 12 01/92 12/15/92 09/10/91 09/24/91 10/11/91 10/24/91 11/07/91 11/21/91 12/09/91 12/20/91 01/10/92 01/24/92 02/10/92 02/24/92 03/11/92 03/25/92 04/10/92 04/24/92 05/11/92 05/25/92 06/10/92 06/24/92 07/13/92 07/24/92 08/11/92 08/25/92 09/10/92 09/24/92 10/12/92 10/23/92 11/06/92 11/24/92 09/17/91 10/01/91 10/18/91 10/31/91 11/14/91 12/02/91 12/16/91 12/31/91 01/17/92 01/31/92 02/17/92 03/02/92 03 '18/ 92 04/01/92 04/17/92 05/01/92 05/18/92 06/01/92 06-17,92 07/01 .'92 07/20,92 07/31/92 08/18^92 09/01/92 09,-17/92 10/01/92 10/19/92 10/30/92 11/13/92 12^01/92 10/31/91 10/30/91 11/16/91 11/30/91 12/17/91 12/31/91 01/17/92 01/30/92 02/18/92 02/29/92 03/17/92 03/31/92 04/16/92 04/30/92 05/16/92 05/30/92 06/16/92 06/30/92 07/16/92 07/30/92 08/18/92 08/29/92 09/16/92 09/30/92 10/16/92 10/30/92 11/17/92 12/01/92 12/16/92 12/30/92 10/31/91 11/14/91 12/01/91 12/15/91 01/01/92 01/15/92 01/31/92 02/14,92 03/04/92 03/15/92 04/01/92 04/15/92 05/01/92 05/15/92 05/31/92 06/14/92 07/01/92 07/15/92 07/31/92 08/14/92 09/02/92 09/13/92 10/01/92 10/15/92 10/31/92 11/14/92 12/02/92 12/16/92 12/31/92 01/14/93 11/20/91 11/20/91 12/20/91 12/20/91 01/20/92 01/20/92 02/20/92 02/20/92 03/20/92 03/20/92 04,'20/92 04/20/92 05.'20/92 05/20/92 06/20/92 06/20/92 07/20/92 07/20/92 08/20/92 08/20/92 09/20/92 09/20/92 10/20/92 10/20/92 11/20 92 11/20/92 12/20/92 12/20/92 01/20/93 01/20/93 02/01/92 01/01/92 02/01/92 02/01/92 03/01/92 03/01/92 04/01/92 04/01/92 05/01/92 05/01/92 06/01/92 06/01/92 07/01/92 07,01/92 08/01/92 08/01/92 09/01/92 09/01/92 10/01/92 10/01/92 11/01/92 11/01/92 12 01/92 12/01/92 01/01/93 01/01/93 02/01/93 02/01/93 03/01/93 03,01/93 * The "Earliest Effective Date" is computed assuming that the agency follows the publication schedule above, that the Rules Review Commission approves the rule at the next calendar month meeting after submission, and that RRC delivers the rule to the Codifier of Rules five (5) business days before the 1st of the next calendar month. GENERAL STA TUTES OF NOR TH CAROLINA CHAPTER 150B THE ADMINISTRATIVE PROCEDURE ACT [The following excerpt contains the statutory- provisions of the Administrative Procedure Act as amended by the 1991 Regular Session of the General Assembly effective October 1, 1991, except 150B-l(d)(5) and 150B-l(eX10), effective July 16, 1991.) Article 1. General Provisions. § 150B-1. Policy and scope. (a) Purpose. -- This Chapter establishes a uni-form system of administrative rule making and adjudicatory procedures for agencies. Ihe pro-cedures ensure that the functions of rule making, investigation, advocacy, and adjudication are not all performed by the same person in the admin-istrative process. (b) Rights. -- rhis Chapter confers procedural rights. (c) Full Exemptions. — This Chapter appUes to every agency except: (1) The North Carolina National Guard in exercising its court-martial jurisdiction. The Department of Human Resources in exercising its authority over the Camp Butner reservation granted in Article 6 of Chapter 122C of the General Statutes. The Ltihties Commission. The Industrial Commission. The Employment Security Commission. Exemptions From Rule Making. -- Article 2A of this Chapter does not apply to the follow-ing: The Commission. The North Carolina Low- Level Radioac-tive Waste Management Authority in ad-ministering the provisions of G.S. 104G-10andG.S. 104G-11. The North Carolina Hazardous Waste Management Commission in administer-ing the provisions of G.S. BOB- 13 and G.S. 130B-14. The Department of Revenue, except that Parts 3 and 4 of /Vrticle 2A apply to the Department. The North Carolina Air Cargo /Virport Authority with respect to the acquisition, construction, operation, or use, including fees or charges, of any portion of a cargo airport complex. Exemptions From Contested Case Pro-visions. -- The contested case provisions of this Chapter apply to all agencies and all proceedings (2) (3) (4) (5) (d) (1) (2) (3) (4) (5) (e) not expressly exempted from the Chapter. The contested case provisions of this Chapter do not apply to the following: (1) The Department of Human Resources and the Department of Environment, Health, and Natural Resources in com-plying with the procedural safeguards mandated by Section 680 of Part H of Public Law 99-457 as amended (Educa-tion of the Handicapped Act Amend-ments of 1986). (2) The Governor's Waste Management Board in administering the provisions of G.S. 104E-6.2 and G.S. 130A-293. (3) The North Carolina Low-Level Radio-active Waste Management Authority in administering the provisions of G.S. 104G-9, 104G-10, and 104G-11. (4) The North Carolina Hazardous Waste Management Conunission in administer-ing the provisions of G.S. 130B-11, 130B-13, and 130B-14. (5) Hearings required pursuant to the Reha-bilitation Act of 1973, (Public Law 93-122), as amended and federal regu-lations promulgated thereunder. G.S. 150B-51(a) is considered a contested case hearing provision that does not apply to these hearings. (6) The Department of Revenue. (7) The Department of Correction. (8) The Department of Transportation, ex-cept as provided in G.S. 136-29. (9) The Occupational Safety and Health Re-view Board in all actions that do not in-volve agricultural employers. (10) The North Carolina Air Cargo Airport Authority with respect to the acquisition, construction, operation, or use, including fees or charges, of any portion of a cargo airport complex, (f) Exemption From All But Judicial Review. — No Article in this Chapter except Article 4 applies to the University of North CaroUna. § 150B-2. Definitions. - As used in this Chapter, 6:13 NORTH CAROLINA REGISTER September 30, 1991 784 GENERAL STA TUTES OF NORTH CAROLINA (01 ) "/\dininistrative law judge" means a per-son appointed under G.S. 7A-752, 7A-753, or 7A-757. (1) "Agency" means an agency or an otTicer in the executi\-e branch of the government of this State and includes the Council of State, the Governor's OtTice, a board, a commission, a department, a division, a council, and any other unit of government in the executive branch. A local unit of government is not an agency. (la) "Adopt" means to take fmal action to create, amend, or repeal a rule. (lb) "Coditler of Rules" means the Chief Administrative Law Judge of the OlTice of Administrative Hearings or a desig-nated representati\e of the Chief Admin-istrative Law Judge. (Ic) "Commission" means the Rules Review Commission. (2) "Contested case" means an administrative proceeding pursuant to this Chapter to resolve a dispute between an agency and another person that invohes the person's nglits, duties, or privileges, including li-censing or the lew of a monetar>' penalty. "Contested case" does not include rulemaking, declaratorv' rulings, or the award or denial of a scholarship or grant. Repealed. "Hearing officer" means a person or group of persons designated by an agency that is subject to /Vrticle 3A of this Chap-ter to preside in a contested case hearing conducted under that /Vrticle. "License" means any certificate, permit or other evidence, by whatever name called, of a right or privilege to engage in any activity, except licenses issued under Chapter 20 and Subchapter I of Chapter 105 of the General Statutes and occupa-tional licenses. (4) "Licensing" means an\' administrative action issuing, failing to issue, suspending, or re\oking a license or occupational li-cense. "Licensing" docs not include con-tro\ ersies over whether an examination was fair or whether the applicant passed the examination. (4a) "Occupational license" means any certif-icate, permit, or other e\idence, by what-ever name caUed, of a right or pnvilege to engage in a profession, occupation, or field of endeavor that is issued by an oc-cupational licensing agency. (4b) "Occupational licensing agency" means any board, commission, committee or other aaencv of the State of North (Ja) (2b) (3) Carolina which is established for the pri-mar,' purpose of regulating the entr\' of persons into, and or the conduct of per-sons within a particular profession, occu-pation or field of endeavor, and which is authorized to issue and re\'oke licenses. "Occupational hcenstng agency" does not include State agencies or departments which may as only a part of their regular function issue permits or hcenses. (5) "Party" means any person or agency named or admitted as a party or properly seeking as of right to be admitted as a party and includes the agency as appro-priate. This subdivision does not permit an agency that makes a fmal decision, or an officer or employee of the agency, to petition for initial judicial re\iew of that decision. (6) "Person aggrieved" means any person or group of persons of common interest di-rectly or indirectly affected substantially in his or its person, property, or employment by an administrative decision. (7) "Person" means any natural person, part-nership, corporation, body politic and any unincorporated association, organization, or society which may sue or he sued under a common name. (8) "Residence" means domicile or principal place of business. (8a) "Rule" means any agency regulation, standard, or statement of general apphca-bility that implements or interprets an enactment of the General Assembly or Congress or a regulation adopted by a federal agency or that describes the pro-cedure or practice requirements of an agency. The term includes the establish-ment of a fee and the amendment or re-peal of a pnor rule. The term does not include the following: a. Statements concerning only the internal management of an agency or group of agencies within the same principal office or department enumerated m G.S. 143-11 or 143B-6, including policies and proce-dures manuals, if the statement does not directly or substantially affect the proce-dural or substantive rights or duties of a person not employed by the agency or group of agencies. b. Budgets and budget pohcies and proce-dures issued by the Director of the Budget, bv the head of a department, as defmed by G.S. 143A-2 or G.S. 143B-3, by an occupational licensing board, as 785 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NOR TH CAROLINA defined by G.S. 93B-1, or by the State Board of Elections. c. Nonbinding interpretive statements within the delegated authority of an agency that merely defme, interpret, or explain the meaning of a statute or rule. d. A form, the contents or substantive re-quirements of which are prescribed by rule or statute. e. Statements of agency pohcy made in the context of another proceeding, including: 1. Declaratory rulings under G.S. 150B-4; 2. Orders estabhshing or fixing rates or tariffs. f Requirements, communicated to the public by the use of signs or symbols, concerning the use of pubhc roads, bridges, ferries, buUdings, or facilities, g. Statements that set forth criteria or guidelines to be used by the staff of an agency in performing audits, investi-gations, or inspections; in setthng financial disputes or negotiating fmancial arrange-ments; or in the defense, prosecution, or settlement of cases, h. Scientific, architectural, or engineering standards, forms, or procedures, including design criteria and construction standards used to construct or maintain highways, bridges, or ferries. i. Job classification standards, job quali-fications, and salaries estabUshed for posi-tions under the jurisdiction of the State Personnel Commission, j. Establishment of the interest rate that applies to tax assessments under G.S. 105-241.1 and the variable component of the excise tax on motor fuel under G.S. 105-434. (8b) ''Substantial evidence" means relevant evidence a reasonable mind might accept as adequate to support a conclusion. (9) Repealed, § 150B-3. Special provisions on licensing. (a) When an apphcant or a licensee makes a timely and sufficient apphcation for issuance or renewal of a license or occupational license, in-cluding the payment of any required license fee, the existing license or occupational license does not expire until a decision on the application is fmally made by the agency, and if the application is denied or the terms of the new license or oc-cupational license are limited, until the last day for applying for judicial review of the agency or-der. This subsection does not affect agency action summarily suspending a license or occu-pational hcense under subsections (b) and (c) of this section. (b) Before the commencement of proceedings for the suspension, revocation, annulment, with-drawal, recall, cancellation, or amendment of any License other than an occupational license, the agency shall give notice to the hcensee, pursuant to the provisions of G.S. 150B-23. Before the commencement of such proceedings involving an occupational license, the agency shall give notice pursuant to the provisions of G.S. 150B-38. In either case, the licensee shall be given an oppor-tunity to show compliance with all lawful re-quirements for retention of the license or occupational hcense. (c) If the agency fmds that the pubhc health, safety, or welfare requires emergency action and incorporates this fmding in its order, summary suspension of a license or occupational hcense may be ordered effective on the date specified in the order or on service of the certified copy of the order at the last known address of the hcensee, whichever is later, and effective during the pro-ceedings. The proceedings shall be promptly commenced and determined. Nothing in this subsection shall be construed as amending or repealing any special statutes, in effect prior to Eebruary 1, 1976, which provide for the summary' suspension of a hcense. § 150B-4. Declaratory rulings. (a) On request of a person aggrieved, an agency shall issue a declaratory ruling as to the validity of a rule or as to the apphcability to a given state of facts of a statute administered by the agency or of a rule or order of the agency, except when the agency for good cause finds issuance of a ruling undesirable. The agency shall prescribe in its rules the circumstances in which rulings shall or shall not be issued. A declaratory ruling is binding on the agency and the person requesting it unless it is altered or set aside by the court. An agency may not retroactively change a declaratory ruling, but nothing in this section prevents an agency from prospectively changing a declaratory ruling. A declarator)' ruling is subject to judicial review in the same manner as an order in a contested case. Failure of the agency to issue a declaratory ruhng on the merits within 60 days of the request for such ruling shall constitute a denial of the request as well as a de-nial of the merits of the request and shall be subject to judicial re\iew. (b) This section does not apply to the Depart-ment of Correction. /Vrticle 2. Rule Making. Repealed. 6:13 NORTH CAROLINA REGISTER September 30, 1991 786 GENERAL STA TUTES OF NORTH CAROLINA /\rlicle 2A. Rules. Part 1. General Provisions. § I50B-18. Scope and effect. This /Vrticle applies to an agency's exercise of its authority to adopt a rule. A rule is not valid unless it is adopted in substantial compliance with this .Article. § 150Ei-19. Restrictions on what can be adopted as a rule. An agency may not adopt a rule that does one or more of the following: (1) Implements or interprets a law unless that law or another law specifically authorizes the agency to do so. (2) Enlarges the scope of a profession, occu-pation, or field of endeavor for which an occupational license is required. (3) Imposes criminal liability or a ci\'il penalty for an act or omission, including the vio-lation of a rule, unless a law specifically authorizes the agency to do so or a law declares that violation of the rule is a criminal offense or is grounds for a civU penalty. (4) Repeats the content of a law, a rule, or a federal regulation. (5) Establishes a reasonable fee or other rea-sonable charge for providing a ser\'ice in fulfillment of a duty unless a law specif-ically authorizes the agency to do so or the fee or other charge is for one of the foUowing: a. A ser\'ice to a State, federal, or local governmental unit. b. A copy of part or all of a State publica-tion or other document, the cost of mail-ing a document, or both. c. A transcript of a public hearing. d. A conference, workshop, or course. e. Data processing services. (6) .Allows the agency to waive or modify a requirement set in a rule unless a rule es-tablishes specific guidelines the agency must follow in determining whether to waive or modify the requirement. § I50B-20. Petitioning an agency to adopt a rule. (a) Petition. - A person may petition an agency to adopt a rule by submitting to the agency a written rule-making petition requesting the adoption. A person may submit written comments with a rule-making petition. If a rule-makmg petition requests the agency to create or amend a rule, the person must submit the proposed text of the requested rule change and a statement of the effect of the requested rule change. Each asencv must establish bv rule the procedure for submitting a rule-making petition to it and the procedure the agency follows in considering a rule-making petition. (b) Time. — An agency must grant or deny a rule-making petition submitted to it within 30 days after the date the rule-making petition is submitted, unless the agency is a board or com-mission. If the agency is a board or commission, it must grant or deny a rule-making petition within 120 days after the date the rule-making petition is submitted. (c) Action. -- If an agency denies a rule-making petition, it must send the person who submitted the petition a written statement of the reasons for denying the petition. If the agency grants a rule-making petition, it must inform the person who submitted the rule-making petition of its decision and must initiate rule-making pro-ceedings. When an agency grants a rule-making petition requesting the creation or amiendment of a rule, the notice of rule making it pubhshes in the North Carolina Register may state that the agency is initiating rule-making proceedings as the result of a rule-making petition, state the name of the person who submitted the rule-making petition, set out the text of the requested rule change submitted with the rule-making peti-tion, and state whether the agency endorses the proposed nile change. (d) Review. — Denial of a rule-making petition is a final agency decision and is subject to judicial review under /Vrticle 4 of this Chapter. Failure of an agency to grant or deny a rule-making pe-tition within the tmie limits set in subsection (b) is a denial of the rule-making petition. (e) Exception. -- This section does not apply to the Department of Correction. § 150B-21. .Agency must designate rule-making coordinator. Each agency must designate one or more rule-making coordinators to oversee the agency's rule-making functions. The coordinator must prepare notices of public hearings, coordinate access to the agency's rules, and serve as the liai-son between the agency, other agencies, and the public in the rule-making process. Part 2. .-\doption of Rules. § 150B-2I.I. Procedure for adopting a tem-porary rule. (a) .Adoption. -- .An agency may adopt a tem-porary rule without prior notice or hearing or upon any abbreviated notice or hearing the agency fmds practical when it fmds that adher-ence to the notice and hearing requirements of this Part would be contrary to the public interest and that the immediate adoption of the rule is required by one or more of the following: 787 6:li NORTH CAROLINA REGISTER September iO, 1991 GENERAL STA TUTES OF NORTH CAROLINA (1) A serious and unforeseen threat to the public heahh, safety, or welfare. (2) The effective date of a recent act of the General Assembly or the United States Congress. (3) A recent change in federal or State budg-etary policy. (4) A federal regulation. (5) A court order. An agency must prepare a written statement of its findings of need for a temporary rule. The statement must be signed by the head of the agency adopting the rule. An agency must begin rule-making proceedings for a permanent rule by the day it adopts a tem-porary rule. An agency begins rule-making pro-ceedings for a permanent rule by submitting to the codifier written notice of its intent to adopt a permanent rule. (b) Review. — When an agency adopts a tem-porary rule it must submit the rule, the agency's written statement of its fmdings of need for the rule, and the notice of intent to adopt a perma-nent rule to the Codifier of Rules. Withm one business day after an agency submits a temporary rule, the Codifier of Rules must review the agen-cy's written statement of fmdings of need for the rule to determine whether the statement of need meets the criteria listed in subsection (a). In re-viewing the statement, the Codifier of Rules may consider any information submitted by the agency or another person. If the Codifier of Rules finds that the statement meets the criteria, the Codifier of Rules must notify the head of the agency and enter the rule in the North Carolina Administrative Code. If the Codifier of Rules fmds that the statement does not meet the criteria, the Codifier of Rules must immediately notify the head of the agency. The agency may supplement its statement of need with additional fmdings or submit a new statement. If the agency provides additional findings or subiiuts a new statement, the Codifier of Rules must review the additional fmdings or new statement within one business day after the agency submits the additional findings or new statement. If the Codifier of Rules again fmds that the statement does not meet the criteria listed in subsection (a), the Codifier of Rules must immediately notify the head of the agency. If an agency decides not to provide additional fmdings or submit a new statement when notified by the Codifier of Rules that the agency's fmdings of need for a rule do not meet the re-quired criteria, the agency must notify the Codifier of Rules of its decision. The Codifier of Rules must then enter the rule in the North Carolina Administrative Code on the sixth busi-ness day after receiving notice of the agency's decision. (c) Standing. — A person aggrieved by a tem-porary rule adopted by an agency may fde an action for declaratory judgment in Wake County Superior Court pursuant to Article 26 of Chapter 1 of the General Statutes. In the action, the court shall determine whether the agency's writ-ten statement of findings of need for the rule meets the criteria listed in subsection (a) and whether the rule meets the standards in G.S. 150B-21.9 that apply to review of a permanent rule. The court may not grant an ex parte tem-porary restraining order. Filing a petition for rule making or a request for a declaratory ruling with the agency that adopted the rule is not a prerequisite to filing an action under this subsection. A person who files an action for declaratory judgment under this sub-section must serve a copy of the complaint on the agency that adopted the rule being contested, the Codifier of Rules, and the Commission. (d) Effective Date and Expiration. -- A tem-porary rule becomes effective on the date speci-fied in G.S. 150B-21.3. A temporary rule expires on the date specified in the rule or 1 80 days from the date the rule becomes effective, whichever comes first. § I50B-21.2. Procedure for adopting a per-manent rule. (a) Notice. — Before an agency adopts a per-manent rule, it must publish notice of its intent to adopt a permanent rule in the North Carolina Register and as required by any other law. The notice published in the North Carolina Register must include all of the following: (1) Either the text of the proposed rule or a statement of the subject matter of the proposed rule making. (2) A short explanation of the reason for the proposed action. (3) A citation to the law that gives the agency the authority to adopt the proposed rule, if the notice includes the text of the pro-posed rule, or a citation to the law that gives the agency the authority to adopt a rule on the subject matter of the proposed rule making, if the notice includes only a statement of the subject matter of the proposed rule making. (4) The proposed effective date of the pro-posed rule, if the notice includes the text of the proposed rule, or the proposed ef-fective date of a rule adopted on the sub-ject matter of the proposed rule making, if the notice includes only a statement of the subject matter of the proposed rule making. 6:li NORTH CAROLINA REGISTER September 30, 1 99 1 788 GENERAL STA TUTES OF NORTH CAROLINA (5) The date, time, and place of any public hearing scheduled on the proposed rule or subject matter of the proposed rule making. (6) Instructions on how a person may demand a public hearing on a proposed rule if the notice does not schedule a pubhc hearing on the proposed rule and subsection (c) requires the agency to hold a pubhc hear-ing on the proposed rule when requested to do so. (7) The period of time during vshich and the person to whom written comments may be submitted on the proposed rule or subject matter of the proposed rule mak-ing. (8) If a fiscal note has been prepared for the proposed rule or will be prepared when a rule is proposed on the subject matter of the proposed rule making, a statement that a copy of the fiscal note can be ob-tained from the agency. (b) Mailing List. -- .\n agency must maintain a mailing hst of persons who have requested no-tice of rule making. WTien an agency pubUshes a rule-making notice in the North Carolina Reg-ister, it must mail a copy of the notice to each person on the maihng hst who has requested notice of rule-making proceedings on the rule or the subject matter for rule making described in the notice. /Vn agency may charge an annual fee to each person on the agency's mailing hst to cover copying and mailing costs. (c) Heciring. -- .\n agency must hold a pubhc hearing on a rule it proposes to adopt in two circumstances and may hold a pubhc hearing in other circumstances. WTien an agency is required to hold a public hearing on a proposed rule or decides to hold a pubhc hearing on a proposed rule when it is not required to do so, the agency must pubhsh in the North Carolina Register a notice of the date, time, and place of the pubhc hearing. The hearing date of a public hearing held after the agency pubhshes notice of the hearing in the North Carolina Register must be at least 15 days after the date the notice is pub-hshed. An agency must hold a pubhc hearing on a rule it proposes to adopt in the following two cir-cumstances: ( 1) The agency pubhshes a statement of the subject matter of the proposed rule mak-ing in the notice in the North Carolina Register. (2) The agency pubhshes the text of the pro-posed rule in the notice in the North Carohna Register and all the following apply: a. TTie notice does not schedule a pubhc hearing on the proposed rule. b. Within 15 days after the notice is pub-hshed, the agency receives a written re-quest for a pubhc hearing on the proposed rule. c. The proposed rule is not part of a rule-making proceeding the agency initiated by pubhshing a statement of the subject matter of proposed rule making. d. The proposed text is not a changed \'er-sion of proposed te.xt the agency previ-ously pubhshed in the course of rule-making proceedings but did not adopt. (d) Text After Subject-Matter Notice. -- When an agency pubhshes notice of the subject matter of proposed rule making in the North Carolina Register, it must subsequently pubhsh in the North Carohna Register the text of the rule it proposes to adopt as a result of the pubhc hear-ing and of any comments received on the subject matter. An agency may not pubhsh the pro-posed text of a rule for which it pubhshed a subject-matter notice before the pubhc hearing on the subject matter. (e) Comments. — .An agency must accept comments on the te.xt of a proposed rule pub-hshed in the North Carohna Register for at least 30 days after the text is pubhshed or until the date of any pubhc hearing held on the proposed rule, whichever is longer. An agency must accept comments on a statement of the subject matter of proposed rule making until the pubhc hearing on the subject matter. An agency must consider fuUy aU v/ritten and oral comments received. (f) Adoption. -- An agency may not adopt a rule until the time for commenting on the pro-fKised text of the rule has elapsed and may not adopt a rule if more than 12 months have elapsed since the end of the time for commenting on the proposed text of the rule. An agency may not adopt a rule that differs substantiaUy from the text of a proposed rule pubhshed m the North Carolina Register unless the agency pubhshes the text of the proposed different rule in the North Carolina Register and accepts comments on the proposed different rule for the time set in sub-section (e). An adopted rule differs substantiaUy from a proposed rule if it does one or more of the fol-lowing: (1) .Affects the interests of persons who, based on the notice pubhshed in the North Carolina Register or the proposed text of the rule, could not reasonably have deter-mined that the rule would affect their in-terests. 789 6:13 NORTH CAROLINA REGLSTER September 30, 1 991 GENERAL STA TUTES OF NOR TH CAROLINA (2) Addresses a subject matter or an issue that is not addressed in the proposed text of the rule. (3) Produces an effect that could not reason-ably have been expected based on the proposed text of the rule. When an agency adopts a rule, it may not take subsequent action on the rule without following the procedures in this Part. (g) Explanation. -- An agency must issue a concise written statement explaining why the agency adopted a rule if, within 30 days after the agency adopts the rule, a person asks the agency to do so. The explanation must state the prin-cipal reasons for and against adopting the rule and must discuss why the agency rejected any arguments made or considerations urged against the adoption of the rule. (h) Record. — An agency must keep a record of a rule-making proceeding. 1 he record must include all written comments received, a tran-script or recording of any public hearing held on the rule, and any written explanation made by the agency for adopting the rule. § 150B-21.3. Kffcctive date of rules. (a) Temporary Rule. — A temporary rule be-comes effective on the date the Codifier of Rules enters the rule in the North Carolina Adminis-trative Code. (b) Permanent Rule. — A permanent rule ap-proved by the Commission becomes ctTccti\e five business days after the Commission delivers the rule to the Codifier of Rules, unless the agency adopting the rule specifies a later effective date. If the agency specifies a later effective date, the rule becomes efTective on that date. A permanent rule that is not approved by the Commission becomes effective five business days after the agency adopting the rule delivers the rule to the Crodifier of Rules, unless the agency adopting the rule specifies a later effective date. If the agency specifies a later effective date, the rule becomes effective on that date. (c) OSHy\ Standard. -- A permanent rule con-cerning an occupational safety and health stand-ard that is adopted by the Occupational Safety and Health Division of the Department of Labor and is identical to a federal regulation promulgated by the Secretary of the United States Department of Labor becomes effective on the date the Division delivers the rule to the Codifier of Rules, unless the Division specifies a later effective date. If the Division specifies a later effective date, the rule becomes effective on that date. § 150B-21.4. Fiscal notes on rules. (a) State Funds. — Before an agency publishes in the North Carolina Register the proposed text of a permanent rule change that would require the expenditure or distribution of funds subject to the Executive Budget Act, Article 1 of Chapter 143, it must submit the text of the proposed rule change and a fiscal note on the proposed rule change to the Director of the Budget and obtain certification from the Director that the funds that would be required by the proposed rule change are available. The fiscal note must state the amount of funds that would be expended or dis-tributed as a result of the proposed rule change and explain how the amount was computed. The Director of the Budget must certify a pro-posed rule change if funds are available to cover the expenditure or distribution required by the proposed rule change. (b) Local Funds. -- Before an agency publishes in the North Carolina Register the proposed text of a permanent rule change that would affect the expenditures or revenues of a unit of local gov-ernment, it must submit the text of the proposed rule change and a fiscal note on the proposed rule change to the Fiscal Research Division of the General Assembly, the Office of State Budget and Management, the North Carolina Associ-ation of County Commissioners, and the North Carolina League of MunicipaUties. The fiscal note must state the amount by which the pro-posed rule change would increase or decrease ex-penditures or revenues of a unit of local government and must explain how the amount was computed. (c) Errors. — An erroneous fiscal note prepared in good faith does not affect the validity of a rule. § I50B-2L5. Circumstances when notice and rule-making hearing not required. (a) Amendment. -- An agency is not required to pubhsh a notice of rule making in the North Carolina Register or hold a public hearing when it proposes to amend a rule, without changing the substance of the rule, to do one of the fol-lowing: (1) Reletter or renumber the rule or subparts of the rule. (2) Substitute one name for another when an organization or position is renamed. (3) Correct a citation in the rule to another rule or law when the citation has become inaccurate since the rule was adopted be-cause of the repeal or renumbering of the cited rule or law. (4) Change information that is readily avail-able to the public, such as an address or a telephone number. (5) Correct a typographical error made in en-tering the rule in the North Carolina Ad-ministrative Code. 6:13 NORTH CAROLINA REGISTER September 30, I99I 790 GENERAL STA TUTES OF NORTH CAROLINA (6) Change a rule in response to a request or an objection by the Commission. (b) Repeal. — An agency is not required to publish a notice of rule making in the North Carolina Register or hold a pubKc hearing when it proposes to repeal a rule as a result of any of the following: (Ij The law under which the rule was adopted is repealed. (2) The law under which the rule was adopted or the rule itself is declared unconstitu-tional. (3) The rule is declared to be in excess of the agency's statutory authority. (c) OSHA Standard. -- The Occupational Safety and Health Division of the Department of Labor is not required to publish a notice of rule making in the North Carolina Register or hold a public hearing when it proposes to adopt a rule that concerns an occupational safety and health standard and is identical to a federal regu-lation promulgated by the Secretary of the United States Department of Labor. The Occu-pational Safety and Health Division is not re-quired to submit to the Commission for review a rule for which notice and hearing is not re-quired under this subsection. § 150B-21.6. Incorjx)rating material in a rule by reference. An agency may incorporate the following ma-terial by reference in a rule without repeating the te.\t of the referenced material: (1) .Another rule or part of a rule adopted by the agency. (2) .AH or part of a code, standard, or regu-lation adopted by another agency, the federal government, or a generally recog-nized organization or association. (3) Material adopted to meet a requirement of the federal go\emment. In incorporating material by reference, the agency must designate in the rule whether or not the incorporation includes subsequent amend-ments and editions of the referenced material. The agency can change this designation only by a subsequent rule-makmg proceeding. The agency must have copies of the incorporated material available for inspection and must specify in the rule both where copies of the material can be obtained and the cost on the date the rule is adopted of a copy of the material. .A statement in a rule that a rule incorporates matenal by reference in accordance with former G.S. 1 SOB- 14(b) is a statement that the rule does not include subsequent amendments and editions of the referenced material. A statement in a rule that a rule incorporates material by reference in accordance with former G.S. 1503- 14(c) is a statement that the rule includes subsequent amendments and editions of the referenced ma-terial. § 150B-21.7. Effect of transfer of duties or termination of agency on rules. WTien a law that authorizes an agency to adopt a rule is repealed and another law gives the same or another agency substantially the same author-ity to adopt a rule, the rule remains in effect until the agency amends or repeals the rule. \\Tien a law that authorizes an agency to adopt a rule is repealed and another law does not gi\e the same or another agency substantially the same author-ity to adopt a rule, a rule adopted under the re-pealed law is repealed as of the date the law is repealed. WTien an executive order abolishes part or all of an agency and transfers a function of that agency to another agency, a rule concerning the transferred function remains in effect until the agency to which the function is transferred amends or repeals the rule. When an executive order abolishes part or aU of an agency and does not transfer a function of that agency to another agency, a rule concerning a function abolished by the executive order is repealed as of the effec-tive date of the executive order. ITie Director of Fiscal Research of the General Assembly must notify the Codifier of Rules when a rule is repealed under this section. WTien no-tified of a rule repealed under this section, the Codifier of Rules must enter the repeal of the rule in the North Carolina Administrative Code. Part 3. Re\iew by Commission. § 150B-21.8. Review of rule by Commission. (a) TemporaPv' Rule. -- The Commission does not review a temporary rule. (b) Permanent Rule. -- An agency must submit a permanent rule adopted by it to the Commis-sion before the rule can be included m the North Carolina Administrative Code. TTie Commission reviews a permanent rule in accordance \\ ith the standards in G.S. 150B-21.9 and follows the procedure in this Part in its review of a perma-nent rule. (c) Scope. -- WTien the Commission reviews an amendment to a rule, it may review the entire rule that is being amended. The procedure in G.S. 150B-21.12 applies when the Commission objects to a part of a rule that is within its scope of review but is not changed by a rule amend-ment. § 150B-21.9. Standards and timetable for re-view by Commission. (a) Standards. -- The Commission must deter-mine whether a rule meets all of the following criteria: 791 6: 13 NOR TH CAROLINA REGIS TER September 30, 1 991 GENERAL STATUTES OF NORTH CAROLINA (1) It is within the authority delegated to the agency by the General Assembly. (2) It is clear and unambiguous. (3) It is reasonably necessary to fulfill a duty delegated to the agency by the General Assembly. The Commission may determine if a rule sub-mitted to it was adopted in accordance with Part 2 of this /Vrticle. The Commission must notify the agency that adopted the rule if it determines that a rule was not adopted in accordance with Part 2 of this Article and must retum the rule to the agency. Entry of a rule in the North Carolina Administrative Code after review by the Com-mission is conclusive evidence that the rule was adopted in accordance with Part 2 of this Article. (b) Timetable. — The Commission must review a rule submitted to it on or before the twentieth of a month by the last day of the next month. The Commission must review a rule submitted to it after the twentieth of a month by the last day of the second subsequent month. § I50B-21.10. Commission action on perma-nent rule. At the first meeting at which a permanent rule is before the Commission for review, the Com-mission must take one of the following actions: (1) Approve the rule, if the Commission de-termines that the rule meets the standards for review. (2) Object to the rule, if the Commission de-termines that the rule does not meet the standards for re\iew. (3) Extend the period for reviewing the rule, if the Commission determines it needs additional information on the rule to be able to decide whether the rule meets the standards for review. In reviewing a new rule or an amendment to an existing rule, the Commission may request an agency to make technical changes to the rule and may condition its approval of the rule on the agency's making the requested technical changes. § 150B-21.il. Procedure when Commission approves permanent rule. When the Commission approves a permanent rule, it must notify the agency that adopted the rule of the Commission's approval and must de-liver the approved rule to the Codifier of Rules. The Commission must deliver an approved rule by the end of the month in which the Commis-sion approved the rule, unless the agency asks the Commission to delay the delivery of the rule. § 150B-21.12. Procedure >vhen Commission objects to a permanent rule. (a) Action. -- When the Commission objects to a permanent rule, it must send the agency that adopted the rule a written statement of the ob-jection and the reason for the objection. The agency that adopted the rule must take one of the following actions: (1) Change the rule to satisfy the Commis-sion's objection and submit the revised rule to the Commission. (2) Submit a written response to the Com-mission indicating that the agency has de-cided not to change the rule. An agency that is not a board or commission must take one of these actions within 30 days after receiving the Commission's statement of objection. A board or commission must take one of these actions within 30 days after receiving the Commission's statement of objection or within 10 days after the board or commission's next regularly scheduled meeting whichever comes later. When an agency changes a rule in response to an objection by the Commission, the Commis-sion must determine whether the change satisfies the Commission's objection. If it does, the Commission must approve the rule. If it does not, the Commission must send the agency a written statement of the Commission's continued objection and the reason for the continued ob-jection. A rule to which the Commission has objected remains under review by the Commission until the agency that adopted the rule decides not to satisfy the Commission's objection and makes a written request to the Commission to retum the rule to the agency. When the Commission re-turns a rule to which it has objected, it may send to the President of the Senate and each member of the General Assembly a report of its objection to the rule. (b) Entry in Code. -- When the Commission returns a rule to which it has objected to the agency that adopted the rule, the Commission must notify the Codifier of Rules of its action and of the basis of the Commission's objection. An agency whose rule is returned may file the rule with the Codifier of Rules. When the Codifier of Rules enters in the North Carolina Administrative Code a rule to which the Com-mission objected, the entry must reflect the Commission's objection and must state the standard on which the Commission based its objection. § I50B-21.I3. Procedure when Commission extends period for review of permanent rule. When the Commission extends the period for review of a permanent rule, it must notify the agency that adopted the rule of the extension and the reason for the extension. After the Com-mission extends the period for review of a rule, it may call a public hearing on the rule. Within 6:U NORTH CAROLINA REGISTER September 30, 1991 792 GENERAL STATUTES OF NORTH CAROLINA 70 days after extending the period for review of a rule, the Commission must decide whether to approve the rule, object to the rule, or call a public hearing on the rule. § 150B-2I.I4. Public hearing on a rule. The Commission may call a public hearing on a rule when it extends the period for review of the rule. At the request of an agency, the Commis-sion may call a public hearing on a rule that is not before it for review. Calling a public hearing on a rule not already before the Commission for re\iew places the rule before the Commission for review. When the Commission decides to call a public hearing on a rule, it must publish notice of the public hearing in the North Carolina Register. After a pubUc hearing on a rule, the Commis-sion must approve the rule or object to the rule in accordance with the standards and procedures in this Part. The Commission must make its decision of whether to approve or object to the rule within 70 days after the public hearing. § 150B-21.15. Declaratory judgment action authorized when Commission objects to a f)erma-ncnt rule. (a) Standing. -- A person aggrieved by a per-manent rule entered in the North Carolina Ad-ministrati\ e Code with an objection by the Commission based on a lack of statutory" au-thority may fde an action for declaratory judg-ment in Wake County Superior Court pursuant to Article 26 of Chapter 1 of the General Stat-utes. In the action, the court shall determine whether the agency exceeded it authority ia adopting the rule. A declaratory judgment action under this sec-tion must be fded within 90 days after the rule that is the subject of the action is entered in the Code. Filing a petition for rule making or a re-quest for a declarator)' ruling with the agency that adopted the rule is not a prerequisite to fding an action under this section. A person who fdes an action for declaratory judgment under this sec-tion must ser\'e a copy of the complaint on the agency that adopted the rule being contested, the Codifier of Rules, and the Commission. (b) Record. - Within 10 days after a declaratory judgment action is filed under this section, the agency that adopted the rule that is the subject of the action must send to the court the original or a certified copy of the record in the Commission's re\iew of the rule. The record consists of the rule, the Commission's letter of objection to the rule, the agency's written re-sponse to the Commission's letter, and any other relevant documents before the Commission when it decided to object to the rule. (c) Effect. — A rule remains in effect during the pendency of an action for declaratory judgment under this section unless the court suspends the rule after fmding that the agency that adopted the rule has no substantial likelihood of prevailing in the action. (d) Changes. -- While a rule is the subject of a declaratory judgment action under this section, the agency that adopted the rule may submit to the Commission changes in the rule to satisfy the Commission's objection. If the Commission determines that changes submitted to it satisfy its objection, the Commission must accept the changes and file the revised rule with the Codifier of Rules. The Codifier must then enter the rule in the North Carolina Administrative Code. WTien the Commission determines that changes submitted to it satisfy its objection, the agency that submitted the changes must notify the court of the changes and of the Commission's action. Part 4. Publication of Code and Register. § 150B-21.17. North Carolina Register. (a) Content. -- The Codifier of Rules must publish the North Carolina Register. The North Carolina Register must be published at least two times a month and must contain the following: (1) Notices of proposed adoptions of rules. (2) Notices of receipt of a petition for munic-ipal incorporation, as required bv G.S. 120-165. (3) Executive orders of the Governor. (4) l-'inal decision letters from the United States Attorney General concerning changes in laws that affect voting in a ju-risdiction subject to § 5 of the Voting Rights Act of 1965, as required by G.S. 120-30.911. (5) Orders of the Tax Review Board issued under G.S. 105-241.2. (6) Other information the Codifier determines helpful to the pubhc. (b) Eorm. -- When an agency publishes notice in the North Carolina Register of the proposed text of a new rule, the Codifier of Rules must pubhsh the complete text of the proposed new rule. In publishing the text of a proposed new rule, the Codifier must indicate the rule is new by underlining the proposed text of the rule. When an agency publishes notice in the North Carolina Register of the proposed text of an amendment to an existing rule, the Codifier must publish the complete text of the rule that is being amended unless the Codifier determines that publication of the complete text of the rule being amended is not necessary to enable the reader to understand the proposed amendment. In pub-lishing the text of a proposed amendment to a 793 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NORTH CAROLINA rule, the Codifier must indicate deleted text with overstrikes and added text with underlines. When an agency publishes notice in the North Carolina Register of the proposed repeal of an existing rule, the Codifier must publish the com-plete text of the rule the agency proposes to re-peal unless the Codifier determines that publication of the complete text is impractical. In publishing the text of a rule the agency pro-poses to repeal, the Codifier must indicate the rule is to be repealed. § 150B-21.18. North Carolina Administrative Code. The Codifier of Rules must compile all rules into a Code known as the North Carolina Ad-ministrative Code. The format and indexing of the Code must conform as nearly as practical to the format and indexing of the North Carolina General Statutes. The Codifier must publish printed copies of the Code and may pubhsh the Code in other forms. The Codifier must keep the Code current by publishing the Code in a loose-leaf format and periodically providing new pages to be substituted for outdated pages, by publishing the Code in volumes and periodically pubhshing cumulative supplements, or by an-other means. The Codifier must keep superseded rules. § 150B-21.19. Requirements for Including rule in Code. To be acceptable for inclusion in the North Carolina Administrative Code, a rule must: (1) Cite the law under which the rule is adopted. (2) Be signed by the head of the agency or the rule-making coordinator for the agency that adopted the rule. (3) Be in the physical form specified by the Codifier of Rules. (4) flave been reviewed by the Commission, if the rule is a permanent rule. § 150B-21.20. Codifier's authority to revise form of rules. (a) Authority. -- After consultmg with the agency that adopted the rule, the Codifier of Rules may revise the form of a rule submitted for inclusion in the North Carolina Administrative Code within 10 business days after the rule is submitted to do one or more of the foUowing: (1) Rearrange the order of the rule in the Code or the order of the subsections, su-bdivisions, or other subparts of the rule. (2) Provide a catch line or heading for the rule or revise the catch line or heading of the rule. (3) Reletter or renumber the rule or the sub-parts of the rule in accordance with a uniform svstem. (4) Rearrange definitions and lists. (5) Make other changes in arrangement or in form that do not change the substance of the rule and are necessary or desirable for a clear and orderly arrangement of the rule. (b) Effect. -- Revision of a rule by the Codifier of Rules under this section does not affect the effective date of the rule or require the agency to readopt or resubmit the rule. When the Codifier of Rules revises the foim of a rule the Codifier of Rules must send the agency that adopted the rule a copy of the revised rule. The revised rule is the official rule. § 150B-2I.21. Publication of rules of North Carolina State Bar and exempt agencies. (a) State Bar. — The North Carolina State Bar must submit a rule adopted or approved by it and entered in the minutes of the North Carolina Supreme Court to the Codifier of Rules for inclusion in the North Carolina Administrative Code. The State Bar must submit a rule within 15 days after it is entered in the minutes of the Supreme Court. The Codifier of Rules must compile, make available for pubhc inspection, and publish a rule included in the North Carolina Administrative Code under this subsection in the same manner as other rules in the Code. (b) Exempt Agencies. -- Notwithstanding G.S. 150B-1, the North Carolina L'tifities Commis-sion must submit to the Codifier of Rules those rules of the Utilities Commission that are pub-lished from time to time in the pubhcation titled "North Carolina Utilities Laws and Regulations." The Utihties Commission must submit a rule required to be included in the Code within 15 days after it is adopted. The Codifier of Rules must pubhsh the rules submitted by the Utilities Commission in the North Carolina Ad-ministrative Code in the same format as they are submitted. Notwithstanding G.S. 150B-1, an agency other than the Utihties Commission that is exempted from this .Article by that statute must submit a temporary or permanent rule adopted by it to the Codilier of Rules for inclusion in the North Carohna Administrative Code. One of these ex-empt agencies must submit a rule to the Codifier of Rules within 15 days after it adopts the rule. The Codifier of Rules must compile, make available for pubhc inspection, and pubhsh a rule of one of these agencies in the North Carolina Administrative Code in the same manner as other rules in the Code. § 1508-21.22. Effect of inclusion in Code. Official or judicial notice can be taken of a rule in the North Carolina Administrative Code and shall be taken when appropriate. Codification 6:li NORTH CAROLINA REGISTER September 30, 1 991 794 GENERAL STA TUTES OF NORTH CAROLINA of a rule in the North Carolina Administrative Code 15 prima facie evidence of compliance with this .Article. § 150B-21.23. Rule publication manual. Ihe Codifier of Rules must publish a manual that sets out the form and method for publishing a notice of rule making in the North Carolina Register and for filing a rule in the North Carolina Administrative Code. § I50B-21.24. Free copies of Register and Code. (a) Register. -- The Codifier of Rules must distribute copies of the North Carolina Register as soon after publication as practical, without charge, to the following: ( 1 ) A person who receives a free copy of the North Carolina Administrative Code, (2) Upon request, one copy to each member of the General Assembly, (b) Code. -- The Codifier of Rules must dis-tribute copies of the North Carolina Administra-tive Code as soon after pubhcation as practical, without charge, to the following: (1) One copy to the board of commissioners of each county, to be placed at the county clerk of court's office or at another place selected by the board of commissioners, (2j One copy to the Commission. (3) One copy to the Clerk of the Supreme Court and to the Clerk of the Court of Appeals of North Carolina, (4) One copy to the Supreme Court Library^ and one copy to the library of the Court of Appeals. (5) One copy to the Admimstrative Office of the Courts. (6) One copy to the Govemor. (7) Five copies to the Legislati\'e Services Commission for the use of the General Assembly. (8) Upon request, one copy to each State of-ficial or department to whom or to w hich copies of the appellate division reports are furnished under G.S. 7A-343,1, (9) Fi\'e copies to the Division of State Li-brary,' of the Department of Cultural Re-sources pursuant to G.S. 125-11.7. § 150B-21.25. Paid copies of Register and Code. A person who is not entitled to a free copy of the North Carolina Administrative Code or North Carolina Register may obtain a copy by paying a fee set by the Codifier of Rules. The Coditier must set separate fees for the North Carolina Register and the North Carolina Ad-ministrative Code in amounts that cover publi-cation, copying, and mailing costs, .AH monies received under this section must be credited to the General Fund, Article 3. .Administrative Hearings. § 1508-22. Settlement; contested case. It is the policy of this State that any dispute between an agency and another person that in-volves the person's rights, duties, or privileges, including licensing or the le\'y of a monetarv' penalty, should be settled through informal pro-cedures. In trying to reach a settlement through informal procedures, the agency may not conduct a proceeding at which sworn testimony is taken and witnesses may be cross-examined. If the agency and the other person do not agree to a resolution of the dispute through informal pro-cedures, either the agency or the person may commence an administrative proceeding to de-termine the persons rights, duties, or privileges, at which time the dispute becomes a "contested case," § 150B-23. Commencement; assignment of administrative law judge; hearing required; notice; intenention. (a) A contested case shall be commenced by filing a petition with the Office of .Administrative Heanngs and, except as provided in .Article 3A of this Chapter, shall be conducted by that Of-fice, The party who files the petition shall ser%'e a copy of the petition on all other parties and, if the dispute concerns a license, the person who holds the license, A party who files a petition shall file a certificate of service together with the petition, A petition shall be signed by a party or a representative of the party and, if filed by a party other than an agency, shall state facts tending to establish that the agency named as the respondent has deprived the petitioner of prop-erty, has ordered the petitioner to pay a fine or ci\il penalty, or has otherwise substantially prej-udiced the petitioner's nghts and that the agency: (1) Exceeded its authority or jurisdiction; (2) .Acted erroneously; (3) Failed to use proper procedure: (4) .Acted arbitrarily or capriciously: or (5j Failed to act as required by law"^or rule. The parties in a contested case shall be gi\en an opportunity for a hearing without undue delay, .Any person aggrie\ed may commence a con-tested case hereunder, A local goverimient employee, applicant for employment, or former employee to whom Chapter 126 of the General Statutes appHes may commence a contested case under this .Article in the same manner as any other petitioner. The case shall be conducted in the Office of Admin-istrative Hearings in the same manner as other contested cases under this .Article, except that the 795 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NORTH CAROLINA decision of the State Personnel Commission shall be advisor\' only and not binding on the local appointing authority, unless (1) the employee, apphcant, or former employee has been subjected to discrimination prohibited by Article 6 of Chapter 126 of the General Statutes or (2) ap-plicable federal standards require a binding deci-sion. In these two cases, the State Personnel Commission's decision shall be binding. (al) Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1022, s. 1(9), effective July 15, 1986. (a2) An administrative law judge assigned to a contested case may require a party to the case to file a prehearing statement. A party's prehearing statement must be ser\'ed on all other parties to the contested case. (b) The parties to a contested case shall be given a notice of hearing not less than 15 days before the hearing by the Office of Administrative Hearings. If prehearing statements have been filed in the case, the notice shall state the date, hour, and place of the hearing. If prehearing statements have not been filed in the case, the notice shall state the date, hour, place, and nature of the hearing, shall list the particular sections of the statutes and rules involved, and shall give a short and plain statement of the factual allegations. (c) Notice shall be given personally or by cer-tified mail. If given by certified mail, it shall be deemed to have been given on the dchvery date appearing on the return receipt. If giving of no-tice cannot be accomplished cither personally or by certified mail, notice shall then be given in the manner provided in G.S. lA-1, Rule 4(jl). (d) Any person may petition to become a party by filing a motion to intervene in the manner provided in G.S. lA-1, Rule 24. In addition, any person interested in a contested case may inter-vene and participate in that proceeding to the extent deemed appropriate by the administrative law judge. (e) /Ml hearings under this Chapter shall be open to the public. Hearings shall be conducted in an impartial manner. Hearings shall be con-ducted according to the procedures set out in this Article, except to the extent and in the particulars that specific hearing procedures and time stand-ards are governed by another statute. (f) Unless another statute or a federal statute or regulation sets a time limitation for the filing of a petition in contested cases against a specified agency, the general Umitation for the filing of a petition in a contested case is 60 days. The time limitation, whether estabhshed by another stat-ute, federal statute, or federal regulation, or this section, shall commence when notice is given of the agency decision to all persons aggrieved who are known to the agency by personal delivery or by the placing of the notice in an official deposi-tory of the United States Postal Service wrapped in a wrapper addressed to the person at the latest address given by the person to the agency. The notice shall be in writing, and shall set forth the agency action, and shall inform the persons of the right, the procedure, and the time limit to file a contested case petition. When no informal settlement request has been received by the agency prior to issuance of the notice, any sub-sequent informal settlement request shall not suspend the time limitation for the fUing of a pe-tition for a contested case hearing. § 150B-24. Venue of hearing. (a) The hearing of a contested case shall be conducted: (1) In the county in this State in which any person whose property or rights are the subject matter of the hearing maintains his residence; (2) In the county where the agency maintains its principal office if the property or rights that are the subject matter of the hearing do not affect any person or if the subject matter of the hearing is the property or rights of residents of more than one county; or (3) In any county determined by the admin-istrative law judge in his discretion to promote the ends of justice or better serve the convenience of witnesses. (b) Any person whose property or rights are the subject matter of the hearing waives his ob-jection to venue by proceeding in the hearing. § 150B-25. Conduct of hearing; answer. (a) If a party fails to appear in a contested case after proper service of notice, and if no adjournment or continuance is granted, the ad-ministrative law judge may proceed with the hearing in the absence of the party. (b) Repealed. (c) The parties shall be given an opportunity to present arguments on issues of law and poUcy and an opportunity to present evidence on issues of fact . (d) A party may cross-examine any witness, including the author of a document prepared by, on behalf of or for use of the agency and offered in evidence. Any party may submit rebuttal ev-idence. § 150B-26. Consolidation. When contested cases involving a common question of law or fact or multiple proceedings involving the same or related parties are pending, the Director of the Office of Administrative Hearings may order a joint hearing of any mat- 6:li NORTH CAROLINA REGISTER September 30, 1991 796 GENERAL STA TUTES OF NORTH CAROLINA ters at issue in the cases, order the cases consol-idated, or make other orders to reduce costs or delay in the proceedings. § 1508-27. Subpoena. After the commencement of a contested case, subpoenas may be issued and served in accord-ance with G.S. lA-1, Rule 45. In addition to the methods of sen'ice in G.S. IA-1, Rule 45, a State law enforcement officer may serve a subpoena on behalf of an agency that is a party to the contested case by any method by which a sheriff may ser\e a subpoena under that Rule. Upon a motion, the administrative law judge may quash a subpoena if upon a hearing, the administrative law judge fmds that the evidence the production of which is required does not relate to a matter in issue, the subpoena does not describe with sufficient particularity the evidence the pro-duction of which is required, or for any other reason sufficient in law the subpoena may be quashed. Witness fees shall be paid by the party requesting the subpoena to subpoenaed witnesses in accordance with G.S. 7A-314. However, State officials or employees who are subpoenaed shall not be entitled to witness fees, but they shall re-ceive their normal salary and they shall not be required to take any annual leave for the witness days. Travel expenses of State officials or em-ployees who are subpoenaed shall be reimbursed as provided m G.S. 138-6. § 1 SOB- 28. Depositions and discoven'. (a) A deposition may be used in lieu of other evidence when taken in comphance with the Rules of Civil Procedure, G.S. lA-1. Parties in contested cases may engage in discovery pursuant to the provisions of the Rules of Civil Procedure, G.S. lA-1. (b) On a request for identifiable agency records, with respect to material facts involved in a con-tested case, except records related solely to the mtemal procedures of the agency or which are exempt from disclosure by law, an agency shall promptly make the records available to a party. § 150B-29. Rules of evidence. (a) In all contested cases, irrelevant, immaterial and unduly repetitious evidence shall be ex-cluded. Except as otherwise provided, the rules of evidence as applied in the trial division of the General Court of Justice shall be followed; but, when evidence is not reasonably available under the rules to show relevant facts, then the most reliable and substantial evidence available shall be admitted. On the judge's own motion, an administrative law judge may exclude evidence that is inadmissible under this section. It shall not be necessary for a party or his attorney to object at the hearing to evidence in order to pre-ser\' e the right to object to its consideration by the administrative law judge in making a recom-mended decision, by the agency in making a fmal decision, or by the court on judicial review. (b) Evidence in a contested case, including re-cords and documents, shall be offered and made a part of the record. Factual information or ev-idence not made a part of the record shall not be considered in the determination of the case, ex-cept as permitted under G.S. 1508-30. Docu-mentary evidence may be received in the form of a copy or excerpt or may be incorporated by reference, if the materials so incorporated are available for examination by the parties. Upon timely request, a party shall be given an oppor-tunity to compare the copy with the original if available. § 1508-30. Omcial notice. Official notice may be taken of all facts of which judicial notice may be taken and of other facts within the specialized knowledge of the agency. The noticed fact and its source shall be stated and made known to affected parties at the earliest practicable time, and any party shall on timely request be afforded an opportunity to dispute the noticed fact through submission of evidence and argument. § 1508-31. Stipulations. (a) The parties in a contested case may, by a stipulation in writing filed with the administrative law judge, agree upon any fact involved in the controversy, which stipulation shall be used as evidence at the hearing and be binding on the parties thereto. Parties should agree upon facts when practicable. (b) Except as otherwise provided by law, dis-position may be made of a contested case by stipulation, agreed settlement, consent order, waiver, default, or other method agreed upon by the parties. § 1508-32. Designation of administrative law judge. (a) The Director of the Office of Administrative Hearings shall assign himself or another admin-istrative law judge to preside over a contested case. (b) On the filing in good faith by a party of a timely and sufficient affidavit of personal bias or disqualification of an administrative law judge, the administrative law judge shall determine the matter as a part of the record in the case, and this determination shall be subject to judicial review at the conclusion of the proceeding. (c) WTien an administrative law judge is dis-qualified or it is impracticable for him to con-tinue the hearing, the Director shall assign another administrative law judge to continue with the case unless it is shown that substantial prejudice to any party will result, in which event 797 6:13 NORTH CAROLINA REGISTER September 30, I99I GENERAL STA TUTES OF NORTH CAROLINA a new hearing shall be held or the case dismissed without prejudice. § I50B-33. Powers of administrative law judge. (a) An administrative law judge shall stay any contested case under this Article on motion of an agency which is a party to the contested case, if the agency shows by supporting cdTidavits that it is engaged in other litigation or administrative proceedings, by whatever name called, with or before a federal agency, and this other litigation or administrative proceedings will determine the position, in whole or in part, of the agency in the contested case. At the conclusion of the other litigation or administrative proceedings, the con-tested case shall proceed and be determined as expeditiously as possible. (b) An administrative law judge may: (1) Administer oaths and affumations; (2) Sign, issue, and rule on subpoenas in ac-cordance with G.S. 150B-27 and G.S. lA-1, Rule 45; (3) Provide for the taking of testimony by deposition and rule on all objections to discovery in accordance with G.S. lA-1, the Rules of Civil Procedure; (3a) Rule on all prehearing motions that are authorized by G.S. lA-1, the Rules of Civd Procedure; (4) Regulate the course of the hearings, in-cluding discovery, set the time and place for continued hearings, and fix the time for filing of briefs and other documents; (5) Direct the parties to appear and confer to consider simplification of the issues by consent of the parties; (6) Stay the contested action by the agency pending the outcome of the case, upon such terms as he deems proper, and sub-ject to the provisions of G.S. lA-1, Rule 65; (7) Determine whether the hearing shaU be recorded by a stenographer or by an elec-tronic device; and (8) Enter an order returnable in the General Court of Justice, Superior Court Division, to show cause why the person should not be held in contempt. The Court shall have the power to impose punishment as for contempt for any act which would constitute direct or indirect contempt if the act occurred in an action pending in Superior Court. (9) Determine that a rule as apphed in a particular case is void because (1) it is not within the statutory authority of the agency, (2) is not clear and unambiguous to persons it is intended to direct, guide. or assist, or (3) is not reasonably necessary to enable the agency to fulfill a duty de-legated to it by the General Assembly. (10) Impose the sanctions provided for in G.S. 1A- 1 or Chapter 3 of Title 26 of the North Carolina Administrative Code for non-comphance with applicable procedural rules. § 150B-34. Recommended decision or order of administrative law judge. (a) Except as provided in G.S. 150B-36(c), in each contested case the administrative law judge shall make a recommended decision or order that contains fmdings of fact and conclusions of law. (b) Repealed. § 1 SOB- 35. No ex parte communication; ex-ceptions. Unless required for disposition of an ex parte matter authorized by law, neither the adminis-trative law judge assigned to a contested case nor a member or employee of the agency making a fmal decision in the case may communicate, di-rectly or indirectly, in cormection with any issue of fact, or question of law, with any person or party or his representative, except on notice and opportunity for all parties to participate. § 1 SOB- 36. Final decision. (a) Before the agency makes a fmal decision, it shall give each party an opportunity to fde ex-ceptions to the decision recommended by the administrative law judge, and to present written arguments to those in the agency who will make the final decision or order. If a party files in good faith a timely and sufficient affidavit of personal bias or other reason for disqualification of a member of the agency making the fmal decision, the agency shall determine the matter as a part of the record in the case, and the determination is subject to judicial review at the conclusion of the case. (b) A fmal decision or order in a contested case shall be made by the agency in writing after re-view of the official record as defmed in G.S. 150B-37(a) and shall include fmdings of fact and conclusions of law. If the agency does not adopt the administrative law judge's recommended de-cision as its fmal decision, the agency shall state in its decision or order the specific reasons why it did not adopt the administrative law judge's recorTm:iended decision. The agency may con-sider only the official record prepared pursuant to G.S. 150B-37 in making a fmal decision or order, and the final decision or order shall be supported by substantial evidence admissible un-der G.S. 150B-29(a), 150B-30, or 150B-31. A copy of the decision or order shall be served upon each party personally or by certified mail addressed to the party at the latest address given 6:13 NORTH CAROLINA REGISTER September 30, 1991 798 GENERAL STA TUTES OF NORTH CAROLINA by the party to the agency, and a copy shall be furnished to his attorney of record and the Office of Administrative Hearings. (c) 1 he following decisions made by adminis-trative law judges in contested cases are fmal de-cisions: (1) A determination that the Office of Ad-ministrative Hearings lacks junsdiction. (2) An order entered pursuant to the authority in G.S. 7A-759(e). (3) An order entered pursuant to a written prehearing motion that either dismisses the contested case for failure of the petitioner to prosecute or grants the rehef requested when a party does not comply with procedural requirements. (4) An order entered pursuant to a prehearing motion to dismiss the contested case in accordance with G.S. lA-1, Rule 12(b) v\hen the order disposes of all issues in the contested case. § 15(»B-37. Omcial record. (a) In a contested case, the Office of Adminis-trative Hearings shall prepare an official record of the case that includes: (1) Notices, pleadings, motions, and interme-diate rulings; (2) Questions and offers of proof, objections, and rulings thereon; (3) Evidence presented; (4) Matters officially noticed, except matters so obvious that a statement of them would serve no useful purpose; and (5) The administrative law judge's recom-mended decision or order. (b) Proceedings at which oral evidence is pre-sented shall be recorded, but need not be tran-scribed unless requested by a party. Each party shall bear the cost of the transcript or part thereof or copy of said transcript or part thereof which said party requests, and said transcript or part thereof shall be added to the official record as an exhibit. (c) The Office of Administrative Hearings shall forward a copy of the official record to the agency making the final decision and shall forward a copy of the recommended decision to each party. Article 3A. Other Administrative Hearings. § I50B-38. Scope; required; notice; venue. (a) The provisions of this Article shall apply to the following agencies: (1) Occupational licensing agencies; (2) The State B;mking Commission, the Commissioner of Banks, the Savings In-stitutions Division of the Department of Economic and Community Development, and the Credit Union Division of the De-partment of Economic and Community Development; and (3) The Department of Insurance and the Commissioner of Insurance. (b) Prior to any agency action in a contested case, the agency shall give the parties in the case an opportunity for a hearing without undue delay and notice not less than 15 days before the hear-ing. Notice to the parties 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; and (3) A short and plain statement of the facts alleged. (c) Notice shall be given personally or by cer-tified mail. If given by certified mail, notice shall be deemed to have been given on the delivery date appearing on the return receipt. If notice cannot be given personally or by certified mail, then notice shall be given in the manner provided in G.S. lA-1, Rule4(jr). (d) A party who has been served with a notice of hearing may file a written response with the agency. If a written response is filed, a copy of the response must be mailed to all other parties not less than 10 days before the date set for the hearing. (e) /Ml hearings conducted under this /Vrticle shall be open to the public. A hearing conducted by the agency shall be held in the county where the agency maintains its principal office. A hearing conducted for the agency by an adminis-trative law judge requested under G.S. 150B-40 shall be held in a county in this State where any person whose property or rights are the subject matter of the hearing resides. If a different venue would promote the ends of justice or better serve the convenience of witnesses, the agency or the administrative law judge may designate another county. A person whose property or rights are the subject matter of the hearing waives his ob-jection to venue if he proceeds in the hearing. (f) Any person may petition to become a party by filing with the agency or hearing officer a motion to intervene in the manner provided by G.S. lA-1, Rule 24. In addition, any person in-terested in a contested case under this Article may intervene and participate to the extent deemed appropriate by the agency hearing offi-cer. (g) When contested cases involving a common question of law or fact or multiple proceedings involving the saine or related parties are pending before an agency, the agency may order a joint hearing of any matters at issue in the cases, order the cases consolidated, or m;ike other orders to reduce costs or delay in the proceedings. 799 6:13 NORTH CAROLINA REGISTER September 30, 1991 GENERAL STA TUTES OF NORTH CAROLINA (h) Every agency shall adopt rules governing the conduct of hearings that are consistent with the provisions of this Article. § 1 SOB- 39. Depositions; discovery; subpoenas. (a) A deposition may be used in lieu of other evidence when taken in compliance with the Rules of Civil Procedure, G.S. lA-1. Parties in a contested case may engage in discovery pursu-ant to the provisions of the Rules of Civil Pro-cedure, G.S. lA-1. (b) Upon a request for an identifiable agency record involving a material fact in a contested case, the agency shall promptly provide the re-cord to a party, unless the record relates solely to the agency's internal procedures or is exempt from disclosure by law. (c) In preparation for, or in the conduct of, a contested case subpoenas may be issued and served in accordance with G.S. lA-1, Rule 45. Upon a motion, the agency may quash a subpoena if, upon a hearing, the agency finds that the evidence, the production of which is re-quired, does not relate to a matter in issue, the subpoena does not describe with sufficient particularity the evidence the production of which is required, or for any other reason suffi-cient in law the subpoena may be quashed. Witness fees shall be paid by the party requesting the subpoena to subpoenaed witnesses in ac-cordance with G.S. 7A-314. However, State of-ficials or employees who are subpoenaed shall not be entitled to any witness fees, but they shall receive their normal salary' and they shall not be required to take any annual leave for the witness days. Travel expenses of State officials or em-ployees who are subpoenaed shall be reimbursed as provided in G.S. 138-6. § 150B-40. Conduct of hearing; presiding of-ficer; ex parte communication. (a) Hearings shall be conducted in a fair and impartial manner. At the hearing, the agency and the parties shall be given an opportunity to present evidence on issues of fact, examine and cross-examine witnesses, including the author of a document prepared by, on behalf of or for the use of the agency and offered into evidence, sub-mit rebuttal evidence, and present arguments on issues of law or pohcy. If a party fails to appear in a contested case after he has been given proper notice, the agency may continue the hearing or proceed with the hearing and make its decision in the absence of the party. (b) Except as provided under subsection (e) of this section, hearings under this Article shall be conducted by a majority of the agency. An agency shall designate one or more of its mem-bers to preside at the hearing. If a party files in good faith a timely and sufficient affidavit of the personal bias or other reason for disqualification of any member of the agency, the agency shall determine the matter as a part of the record in the case, and its determination shall be subject to judicial review at the conclusion of the proceed-ing. If a presiding officer is disqualified or it is impracticable for him to continue the hearing, another presiding officer shall be assigned to continue with the case, except that if assignment of a new presiding officer will cause substantial prejudice to any party, a new hearing shall be held or the case dismissed without prejudice. (c) The presiding officer may: (1) Administer oaths and affirmations; (2) Sign and issue subpoenas in the name of the agency, requiring attendance and giv-ing of testimony by witnesses and the production of books, papers, and other documentary evidence; (3) Provide for the taking of testimony by deposition; (4) Regulate the course of the hearings, set the time and place for continued hearings, and fix the time for filing of briefs and other documents; (5) Direct the parties to appear and confer to consider simplification of the issues by consent of the parties; and (6) Apply to any judge of the superior court resident in the district or presiding at a term of court in the county where a hear-ing is pending for an order to show cause why any person should not be held in contempt of the agency and its processes, and the court shall have the power to im-pose punishment as for contempt for acts which would constitute direct or indirect contempt if the acts occurred in an action pending in superior court. (d) Unless required for disposition of an ex parte matter authorized by law, a member of an agency assigned to make a decision or to make fmdings of fact and conclusions of law in a con-tested case under this Article shall not commu-nicate, directly or indirectly, in connection with any issue of fact or question of law, with any person or party or his representative, except on notice and opportunity for all parties to partic-ipate. Ihis prohibition begins at the time of the notice of hearing. An agency member may communicate with other members of the agency and may have the aid and advice of the agency staff other than the staff which has been or is engaged in investigating or prosecuting functions in connection with the case under consideration or a factually-related case. This section does not apply to an agency employee or party represen-tative with professional training in accounting. 6:13 NORTH CAROLINA REGISTER September 30. 1 99 1 800 GENERAL STA TUTES OF NORTH CAROLINA actuarial science, economics or financial analysis insofar as the case involves financial practices or conditions. (e) WTien a majority of an agency is unable or elects not to hear a contested case, the agency shall apply to the Director of the Office of Ad-ministrative Hearings for the designation of an administrative law judge to preside at the hearing of a contested case under this ^Vrticle. Upon re-ceipt of the application, the Director shall, with-out undue delay, assign an administrative law-judge to hear the case. The provisions of this Article, rather than the provisions of Article 3, shall govern a contested case in which the agency requests an administra-tive law judge from the Office of Administrative Hearings. The administrative law judge assigned to hear a contested case under this .Article shall sit in place of the agency and shall have the authority of the presiding officer in a contested case under this .Article. The administrative law judge shall make a proposal for decision, which shall contain pro-posed fmdings of fact and proposed conclusions of law. An administrative law judge shall stay any con-tested case under this Article on motion of an agency which is a party to the contested case, if the agency shows by supporting affidavits that it is engaged in other htigation or administrati\e proceedings, by whatever name called, with or before a federal agency, and this other litigation or administrative proceedings will determine the position, in whole or in part, of the agency in the contested case. At the conclusion of the other litigation or administrative proceedings, the con-tested case shall proceed and be determined as expeditiously as possible. The agency may make its fmal decision only after the administrative law judge's proposal for decision is sened on the parties, and an oppor-tunity is given to each party to file exceptions and proposed fmdings of fact and to present oral and written arguments to the agency. § 150B-41. Evidence; stipulations; official no-tice. (a) In all contested cases, irrelevant, immaterial, and unduly repetitious e\'idence shall be ex-cluded. Except as otherwise provided, the rules of evidence as applied in the trial division of the General Court of Justice shall be followed; but, when evidence is not reasonably available under such rules to show rele\ant facts, they may be shown by the most reliable and substantial evi-dence available. It shall not be necessary for a party or his attorney to object to evidence at the hearing in order to preser\'e the right to object to its consideration by the agency in reaching its decision, or by the court of judicial review. (b) Evidence in a contested case, including re-cords and documents shall be offered and made a part of the record. Other factual information or e\idence shall not be considered in determi-nation of the case, except as permitted under G.S. 150B-30. Documentary evidence may be received in the form of a copy or excerpt or may be incorporated by reference, if the materials so incorporated are available for examination by the parties. Upon timely request, a party shall be given an opportunity to compare the copy with the original if available. (c) The parties in a contested case under this Article by a stipulation in writing fded with the agency may agree upon any fact involved in the controversy, which stipulation shall be used as evidence at the hearing and be binding on the parties thereto. Parties should agree upon facts when practicable. Except as otherwise provided by law, disposition may be made of a contested case by stipulation, agreed settlement, consent order, waiver, default, or other method agreed upon by the parties. (d) Official notice may be taken of all facts of which judicial notice may be taken and of other facts within the specialized knowledge of the agency. The noticed fact and its source shall be stated and made known to affected parties at the earliest practicable time, and any party shall on timely request be afforded an opportunity to dis-pute the noticed fact through submission of evi-dence and argument. An agency may use its experience, technical competence, and specialized knowledge in the evaluation of evidence pre-sented to it. § I50B-42. Final agency decision; official re-cord. (a) After compliance with the provisions of G.S. 150B-40(e), if applicable, and review of the official record, as defmed in subsection (b) of this section, an agency shall make a written fmal de-cision or order in a contested case. The decision or order shall include fmdings of fact and con-clusions of law. Findings of fact shall be based exclusively on the evidence and on matters offi-cially noticed. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting them. A decision or order shall not be made except upon consideration of the record as a whole or such portion thereof as may be cited by any party to the proceeding and shall be supported by substantial e\ idence admissible under G.S. I50B-41. A copy of the decision or order shall be sened upon each party personally or by certified mail addressed to the party at the SOI 6:13 NORTH CAROLINA REGISTER September 30, I99I GENERAL STA TUTES OF NORTH CAROLINA latest address given by the party to the agency and a copy shall be furnished to his attorney of record. (b) An agency shall prepare an official record of a hearing that shall include: (1) Notices, pleadings, motions, and interme-diate rulings; (2) Questions and offers of proof, objections, and rulings thereon; (3) Evidence presented; (4) Matters officially noticed, except matters so obvious that a statement of them would serve no useful purpose; (5) Proposed fmdings and exceptions; and (6) Any decision, opinion, order, or report by the officer presiding at the hearing and by the agency. (c) Proceedings at which oral evidence is pre-sented shall be recorded, but need not be tran-scribed unless requested by a party. Each party shall bear the cost of the transcript or part thereof or copy of said transcript or part thereof which said party requests. Article 4. Judicial Review. § 150B-43. Right to judicial review. Any person who is aggrieved by the fmal deci-sion in a contested case, and who has exhausted all administrative remedies made available to him by statute or agency rule, is entitled to judicial review of the decision under this /Vrticle, unless adequate procedure for judicial review is pro-vided by another statute, in which case the review shall be under such other statute. Nothing in this Chapter shall prevent any person from invoking any judicial remedy available to him under the law to test the vahdity of any administrative action not made reviewable under this Article. § 150B-44. Right to judicialintervention when decision unreasonably delayed. Unreasonable delay on the part of any agency or administrative law judge in taking any required action shall be justification for any person whose rights, duties, or privileges are adversely affected by such delay to seek a court order compelling action by the agency or administrative law judge. An agency that is subject to .Article 3 of this Chapter and is not a board or commission has 90 days from the day it receives the official record in a contested case from the Office of Adminis-trative Hearings to make a fmal decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 days. An agency that is subject to Article 3 of this Chapter and is a board or commission has 90 days from the day it receives the official record in a con-tested case from the Office of Administrative Hearings or 90 days after its next regularly scheduled meeting, whichever is longer, to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 days. If an agency subject to Article 3 of this Chapter has not made a fmal decision within these time limits, the agency is considered to have adopted the administrative law judge's recommended decision as the agency's fmal deci-sion. Failure of an agency subject to Article 3A of this Chapter to make a fmal decision within 180 days of the close of the contested case hear-ing is justification for a person whose rights, du-ties, or privileges are adversely affected by the delay to seek a court order compelling action by the agency or, if the case was heard by an ad-ministrative law judge, by the administrative law judge. § 150B-45. Procetlure for seeking review; waiver. To obtain judicial review of a fmal decision un-der this Article, the party seeking review must fde a petition in the Superior Court of Wake County or in the superior court of the county where the person resides. The person seeking review must file the petition within 30 days after the person is served with a written copy of the decision. A person who fails to fde a petition within the required time waives the right to judicial review under this /Vrticle. For good cause shown, however, the superior court may accept an untimely petition. § 150B-46. Contents of petition; copies ser\ed on all parties; intervention. The petition shall exphcitly state what ex-ceptions are taken to the decision or procedure and what relief the petitioner seeks. Within 10 days after the petition is filed with the court, the party seeking the review shall serve copies of the petition by personal service or by certified mail upon all who were parties of record to the ad-ministrative proceedings. Names and addresses of such parties shall be furnished to the petitioner by the agency upon request. Any party to the administrative proceeding is a party to the review proceedings unless the party withdraws by noti-fying the court of the withdrawal and serving the other parties with notice of the withdrawal. Other parties to the proceeding may file a re-sponse to the petition within 30 days of service. Parties, including agencies, may state exceptions to the decision or procedure and what rehef is sought in the response. Any person aggrieved may petition to become a party by filing a motion to inter\'ene as pro-vided m G.S. lA-1, Rule 24. 6:13 NORTH CAROLINA REGISTER September 30, I99I S02 GESERAL STATUTES OE NORTH CAROLINA § 150B-47. Records filed with clerk of superior court; contents of records; costs. Within 30 days after receipt of the copy of the petition for review, or within such additional time as the court may allow, the agency that made the fmal decision in the contested case shall transmit to the reviewing court the original or a certified copy of the official record m the con-tested case under review together with: (ij any exceptions, proposed fmdings of fact, or written arguments submitted to the agency in accordance with G.S. 150B-36(aj; and (ii) the agency's fmal decision or order. With the permission of the court, the record may be shortened by stipulation of all parties to the re\iew proceedings. Any party unreasonably refusing to stipulate to limit the record may be taxed by the court for such additional costs as may be occasioned by the re-fusal. The court may require or permit subse-quent corrections or additions to the record when deemed desirable. § 150B-48. Stay of decision. At any time before or during the review pro-ceeding, the person aggrieved may apply to the reviewing court for an order staying the operation of the administrative decision pending the out-come of the review. The court may grant or deny the stay in its discretion upon such terms as it deems proper and subject to the provisions of G.S. lA-1, Rule 65. § 150B-49. New evidence. .-Vn aggrieved person who files a petition in the superior court may apply to the court to present additional evidence. If the court is satisfied that the evidence is material to the issues, is not merely cumulative, and could not reasonably have been presented at the administrative hear-ing, the court may remand the case so that addi-tional evidence can be taken. If an administrative law judge did not make a recommended decision in the case, the court shall remand the case to the agency that conducted the admimstrative hearing. After hearing the evidence, the agency may affirm or modify its previous fmdings of fact and fmal decision. If an administrative law judge made a recommended decision in the case, the court shall remand the case to the administrative law judge. .\fter hearing the evidence, the administrative law judge may affirm or modify his pre\ious fmdings of fact and recommended decision. The admin-istrative law judge shall forward a copy of his decision to the agency that made the fmal deci-sion, which in turn may affum or modify its previous findings of fact and fmal decision. The additional evidence and any affirmation or mod-ification of a recommended decision or fmal de-cision shall be made part of the official record. § 1508-50. Review by superior court without The review by a superior court of agency deci-sions under this Chapter shall be conducted by the court without a jury. § 1508-51. Scope of review. (aj Imtial Determination in Certain Cases. In reviewing a fmal decision in a contested case in which an administrative law judge made a re-commended decision, the court shall make two initial determinations. First, the court shall de-termine whether the agency heard new evidence after receiving the recommended decision. If the court determines that the agency heard new evi-dence, the court shall reverse the decision or re-mand the case to the agency to enter a decision in accordance with the evidence in the official record. Second, if the agency did not adopt the recommended decision, the court shall determine whether the agency's decision states the specific reasons why the agency did not adopt the re-commended decision. If the court determines that the agency did not state specific reasons why it did not adopt a recommended decision, the court shall reverse the decision or remand the case to the agency to enter the specific reasons. (b) Standard of Review. After making the de-termmations, if any, required by subsection (a), the court re\iewing a final decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency's decision if the substantial rights of the petitioners may have been preju-diced because the agency's findings, inferences, conclusions, or decisions are: (1) In violation of constitutional provisions; (2) In excess of the statutory authority or ju-nsdiction of the agency: (3) Made upon unlawful procedure: (4) .'VtTected by other error of law; (5) Unsupported bv substantial evidence ad-missible under G.S. 150B-29(a), 1508-30, or 150B-31 in view of the entire record as submitted: or (6) .\rbitrar\" or capricious. § 1508-52. .Appeal; stay of court's decision. A party to a review proceeding in a superior court may appeal to the appellate di\'ision from the final judgment of the superior court as pro-vided in G.S. 7A-27. Pendmg the outcome of an appeal, an appealing party may apply to the court that issued the judgment under appeal for a stay of that judgment or a stay of the adminis-trative decision that is the subject of the appeal, as appropriate. rVrticle 5. Publication of Administrative Rules. Repealed. 803 6:B NORTH CAROLINA REGISTER September 30, 1991 EXECUTIVE ORDERS EXECUTIVE ORDER NUMBER 149 RESCISSION OF EXECUTIVE ORDER NUMBER 79 WHICH ESTABLISHED THE NORTH CAROLINA SMALL BUSINESS COUNCIL By the authority vested in me as Governor by the Constitution and laws of North Carolina, IT IS ORDERED: Executive Order Number 79 establishing the North Carolina Small Business Council is hereby rescinded. Done this the 15th day of August, 1991. EXECUTIVE ORDER NUMBER 150 NORTH CAROLINA HUM.\N SERVICE TRANS-PORTATION COUNCIL WHEREAS, the North Carolina Departments of Transportation, Human Resources, and Eco-nomic and Community Development administer State and Eederal funding programs which may be used by local human service agencies to pro-vide necessary client transportation services; and WHEREAS, the administrative pohcies and procedures of these departments greatly affect vehicle usage and the provision of transportation services at the local level; and WHEREAS, the Interagency Transportation Review Committee was established in 1978 to review the transportation components of all ap-plications or plans requesting transportation funding when the funds are administered by a State department or agency; and WHEREAS, the Interagency Transportation Review Committee process has led to a much more coordinated and cost effective use of trans-portation resources, both capital and operating, by local human service transportation providers; and WHEREAS, the General Assembly has appro-priated funds for the Elderly and Handicapped Transportation Assistance Program based on the assurance of cost-effectiveness provided by im-plementation of the local Transportation Devel-opment Plan; and WHEREAS, Title XIX Medicaid transporta-tion funds are to be expended in a manner con-sistent with the local Transportation Development Plan; and WHEREAS, there is a need for a statement of policy on coordination of transportation re-sources and these State departments and agencies are in a position to facilitate the more efficient use of these resources. THEREFORE, pursuant to the authority vested in me as Governor by the Constitution and laws of this State IT IS ORDERED: Section 1. POLICY That, wherever practical, existing transportation resources, public and private, should be utUized before any new resources wiU be made available through public funds; That the locally prepared and adopted Trans-portation Development Plan shall continue to be the means by which to determine the most cost effective and efficient use of transportation resources; and That the Department of Transportation shall provide, to the extent that funds are available and equipment is used consistent with the local Transportation Development Plan, capital equipment for the provision of local human ser-vice transportation while the transportation funds from other departments are used primarily for operating assistance. Section 2. ESTABLISHMENT (1) There is hereby created the North Carolina Human Service Transportation Council. The Council wiU be composed of represen-tatives from the North Carolina Depart-ments of Transportation, Human Resources, and Economic and Community Development. The Secretaries of the re-spective departments shall determine those divisions to be represented on the Council. Representation should include all divisions which administer federal and state funds used to provide human service transporta-tion at the local level. Division directors will be responsible for selecting a staff per-son as the division's council representative. Council appointees should be in policy making positions and have authority over subrecipient budget review and approval. (2) Departments, agencies or programs which are outside the jurisdiction of the Executive Order are encouraged to join the Council and agree to adopt the policies, procedures and decisions of the Council. (3) The State departments shall cooperate in the formation, follow the policies, proce-dures and decisions of, and support the Hu-man Service Transportation Council as described herein. Council representatives 6: 13 NOR TH CA ROLINA REGIS TER September 30, 1 991 S04 EXECUTIVE ORDERS shall assist the Department of Transporta-tion in encouraging local agencies to partic-ipate in transportation development planning efforts and in subsequent plan im-plementation, and to operate vehicles in a manner consistent with the local plan. (4) The Director of the Public Transportation and Rail Division shall chair the Council. Section 1 DUTIES OF COUNCIL The Council shall have the following duties: (1) to implement poUcy and apply criteria as developed by the Council; (2) to provide written notice of recommen-dations based upon review of applications or plans to the appropriate State agency; (3) to review the transportation components of all applications or plaits requesting trans-portation funding when funds are adminis-tered by a member agency; (4) to provide approval for the purchase of all human ser\'ice transportation vehicles fi-nanced by State administered programs; and (5) to advise and make recommendations to the Department of Transportation concerning human service transportation policy. Section 4, ADMINISTRATION The Department of Transportation - Public Transportation & Rail Di\ision shall provide the administrative support for the Council. Section 5, TRANSPORTATION FUNDING DECISIONS In case of disputes, the local and/or State agency shall ha\-e the opportunity to address the Coun-cil. When the Council decision is appealed or when the Council caimot reach consensus, the Secretary of the Department of Transportation, after conferring with the appropriate Department Secretary, shall have authority on all transporta-tion funding decisions under the jurisdiction of the Council. Section 6, AGENCY RESPONSIBILITIES (1) To further the objectives of the Executive Order, ajj departments and agencies under the Executive Order shall immediately draft directives and procedures necessary to im-plement these policies. Such drafts shall be submitted to the Secretary of Transportation for review and approval within 60 days of the signing of this Executive Order. PubUc Transportation & Rail Division staff assist-ance shall be made available as necessary. (2) There shall he a signed statement of policy for each agency under the jurisdiction of this Executive Order. The statement should be signed by the respective Department Secre-tary and each of the division directors within the department that come under the juris-diction of this Executive Order. The state-ment wiU address the agency's commitment to the objectives of this Executive Order and the policies and procedures of the Council. Section r EFFECTIVE DATE This order shall be effective immediately and shall remain in effect until July 1, 1993. Done in the Capital City of Raleigh, North Carolina this the 21st day of August, 1991. 805 6:13 NORTH CAROLINA REGISTER September 30, 1991 VOTING RIGHTS ACT FINAL DECISION LETTER [G.S. 120-30.9H, effective July 16, 1986, requires that all letters and other documents issued by the Attorney General of the United States in which a final decision is made concerning a "change af-fecting voting" under Section 5 of the Voting Rights Act of 1965 be published in the North Carolina Register. J U.S. Department of Justice Civil Rights Division JRD:MAP:SAL:lrj DJ 166-012-3 Voting Section 91-2474 P.O. Box 66128 Washington, D.C. 20035-6128 September 12, 1991 Michael CroweU, Esq. Thanington, Smith & Hargrove P. O. Box 1151 Raleigh, North Carolina 27602 Dear Mr. CroweU: This refers to the adoption of a limited voting system with seven commissioners elected to four year, staggered terms, with a plurality-win requirement in the primary, and the implementation schedule for the board of commissioners in Beaufort County, North Carolina, submitted to the Attorney Gen-eral pursuant to Section 5 of the Voting Rights Act of 1965, as amended, 42 U.S.C. 1973c. We received your submission on July 15, 1991. The Attorney General does not interpose any objection to the specified changes. However, we note that Section 5 expressly provides that the failure of the Attorney General to object does not bar subsequent litigation to enjoin the enforcement of the changes. See the Procedures for the Adminis-tration of Section 5 (28 C.F.R. 51.41). Sincerely, John R. Durme Assistant Attorney General Civil Rights Division By: Gerald W. Jones Chief, Voting Section 6.13 NORTH CAROLINA REGISTER September 30. I99I 806 PROPOSED RULES TITLE 10 - DEPARTMENT OF HL^SIAN RESOURCES A^.otice is hereby given in accordance with G.S. ISOB- 12 that the Department of Human Resources Division of Medical Assistance intends to amend rule(s) cited as 10 SCAC 26D .0016; 26H .0107, ,0508: and adopt rule(s) cited as 10 NCAC 26H .0209. J he proposed effective date of this action is February 1, 1992. 1 he public hearing will be conducted at 1:30 p.m. on October 31, 1991 at the Sorth Carolina Division of Medical Assistance, 1985 Lmstead Drive, Room 201. Raleigh, .V.C. 27603. c-omment Procedures: Written comments con-cerning these rules must be submitted by October 31, 1991, to: Division of .Medical .Assistance, 1985 Umstead Drive, Raleigh, .\.C. 27603, ATTN.: Bill Hottel, APA Coordinator. Oral comments may be presented at the hearing. In addition, a fiscal impact statement is available upon written request from the same address. Editor's Sote: 10 SCAC 26H .0107, .0209 and .0508 have been filed as temporary rules effective August 1, 1991 for a period of 180 days to expire on January 31, 1992. 10 SCAC 26D .0016 has been filed as a tempo-rary rule effective August 15, 1991 for a period of 180 days to expire on February 15, 1992. CHAPTER 26 - MEDICAL ASSISTANCE SUBCHAPTER 26D - LIMITATIONS ON AMOUNT: DLRATION: AND SCOPE .0016 CO-PAVMENT (a) Co-payment Requirements. The following requirements are imposed on all Medicaid recip-ients for the following ser\-ices: (1) Outpatient Hospital Services. Co-payment will be charged at the rate of one dollar ($1.00) per outpatient visit. (2) Chiropractic Services. Co-payment will be charged at the rate of fifty cents ($.50) per chiropractic visit. (3) Pediatric Services. Co-payment wlU be charged at the rate of one dollar ($1.00) per podiatric visit. (4) Optometric Services. Co-payment will be charged at the rate of one doUar ($1.00) per optometric visit. (5) Optical Supplies and Ser\'ices. Co-payment will be charged at the rate of two dollars ($2.00) per item. Co-payment for repair of eyeglasses and other optical sup-plies will be charged at the rate of two dollars ($2.00) per repair exceeding five doUars ($5.00). (6) Prescribed Drugs. Co paym^ant Vr^ii fee chargod at tfee Fate &f Effective August 15, 1991, the recipient co-pavment amount for prescription drugs will increase from fifty cents ($.50) per prescription to one doUar (SI. 00) per prescription including refdls. (7) Dental Services. Co-payment wiU be charged at the rate of two dollars ($2.00) per visit, except when more than one visit is required. If more than one visit is re-quired but the service is billed under one procedure code with one date of service, then only one co-payment shall be col-lected. FuU and partial dentures are ex-amples. (8) Physicians. Co payment wiH- fee chargod at- tfee Fate »f Effective .August 15. 1991. the recipient co-pavment amount for a phvsician visit will increase from frfty cents ($.50) per visit to two dollars ($2.00) per visit. (9) Hospital Inpatient Services. No co-payment win be charged for hospital in-patient services. (10) Rural Health Clinics. No co-payment win be charged for rural health clinic ser-vices. (11) Clinics (Other than Rural Health). Co-payment will be charged at the rate of fifty cents ($.50) per visit. (12) Non- Hospital Dialysis Pacihty Services. No co-payment wiU be charged for non-hospital dialysis facility services. (13) Home Health Services. No co-payment will be charged for home health services. (14) Hearing .Aid Dispensers. No co-payment win be charged for services rendered by hearing aid dispensers. (15) Artibulance. No co-payment wiU be charged for ambulance services. (b) Co-payment Exemptions. No co-payment will be charged for the following services: (1) E PS DT related services; (2) Family Planning Services; (3) Services in state owned mental hospitals; (4) Services covered by both Medicare and .Medicaid; (5) Services to children under age 18; (6) Services related to pregnancy; 807 6:13 NORTH CAROLINA REGISTER September 30, 1991 PROPOSED RULES (7) Sen'ices provided to residents of ICF, ICF-MR, SNF, Mental Hospitals; and (8) Hospital emergency room services. Authority G.S. IOSA-25(b); S.L. 1985, c. 479, s. 86; 42 C.F.R. 440.230(d); Tax Equity and Fiscal Responsibility Act of 1982, Subtitle B; Section 95 of Chapter 689, 1991 Session Laws. SUBCHAPTER 2611 - RKIMBLRSEMENT PLANS SECTION .0100 - REIMBURSEMENT FOR NURSING FACILITY SERVICES .0107 PAYMENT ASSURANCE (a) The state will pay each provider of nursing care services, who furnishes the services in ac-cordance with the requirements of the State Plan and the participation agreement, the amount de-termined under the plan. In addition. Skilled Nursing Facilities must be enrolled in the Title XVI 11 Program. (b) In no case shall the payment rate for ser-vices provided under the plan exceed the facihty's customary charges to the general public for such services. (c) The payment methods and standards set forth herein are designed to enlist the partic-ipation of any provider who operates a facility both economically and efficiently. Participation in the program shall be Limited to providers of service who accept, as payment in full, the amounts paid in accordance with the State Plan. This reimbursement plan is effective consistent with and on approval of the State Plan for Med-ical Assistance. (d) In all circumstances involving third party payment, Medicaid is the payor of last resort. No payment will be made for a Medicaid recipi-ent who is also ehgible for Medicare, Part A, for the first 20 days of care rendered to skilled nurs-ing patients. Medicaid payments for co-insurance for such patients will be made for the subsequent 21st through the 100th day of care. The Division of Medical Assistance will pay an amount for Medicare Part A deductibles and co-insurance, the total of which will equal the facil-ity's Medicaid per diem rate less any Medicare Part A payment, effective August 1, 1991. In the case of ancillary services providers are obligated to: (1) maintain detailed records or charges for all patients; (2) bill the appropriate Medicare Part B car-rier for aJl services provided to Medicaid patients that may be covered under that program; and (3) allocate an appropriate amount of ancil-lary costs, based on these charge records adjusted to reflect Medicare denials of coverage, to Medicare Part B in the an-nual cost report, (e) The state may withhold payments to pro-viders under the following circumstances; (1) If the state has a reasonable expection that the provider wiU not expend its direct rate for reasonable and allowable direct patient care costs, the state may, at its discretion, withhold a portion of each payment so as to avoid a large amount due back to the state upon reimbursement settlement pursuant to the provision of Paragraph .0104(e) of this Section. (2) Upon provider termination the state may withhold a sum of money from provider payments that it reasonably expects will be due when fmal reimbursement settle-ments for all previous periods, including the period in which the termination oc-curred, are completed. (3) Upon determination of any sum due the Medicaid Program or upon instruction from a legally authori^;ed agent of the State or Federal Government the state may withhold sums to meet the obli-gations identified. (4) The state may arrange repayment sched-ules within the limits set forth in federal regulations in lieu of withholding funds. (5) The state m.ay charge reasonable interest or overpayments from the date that the overpayment occurred. Authority G.S. I08A-25(b); I08A-54; I08A-55; S.L. 1985, c. 479. s. 86; Section 95 of Chapter 689, 1991 Session Law.':; 42 C.F.R. 447, Subpart C. SECTION .0200 - HOSPITAL INPATIENT REIMBURSEMENT PLAN .0209 PAYMENT OF MEDICARE PART A DEDUCTIBLES In regard to payment of Medicare Part A deductibles, the Division of Medical Assistance wilJ pay the Medicaid median per diem inpatient rate for one day in lieu of the Medicare Part A inpatient deductible, effective August 1, 1991. The median rate will be determined as of July 1 each year. Authority G.S. l08A-25(b); 108A-54; lOSA-55; Section '95 of Chapter 689. 1991 Session Laws; 42 C.F.R. 447, Subpart C. SECTION .0500 - REIMBURSEMENT FOR SERVICES 6:13 NORTH CAROLINA REGISTER September iO, 1991 808 PROPOSED RULES .0508 ni RABLE MKDICAL EQLII'MENT AND REEA lED SLPI'EIES (a) l"tTecti\c August _L 1991, payment for each claim tor durable medical equipment and associ-ated supplies will be equal to the lower of the supplier's usual and customary billed charges or the maximum fee established for each item of durable medical equipment or related supply. The maximum fees are set at +tW percent e4 Ae Medicare -Part 8- foes as &f Januur>' 4- trf each year. the Medicaid fee schedule in effect on July j_^ l'J91. 1 ees tor added equipment \siU be set at .Medicare I'art B fees. If a Medicare fee camiot be obtained, fof a particular equipment item, the fee will be b |