Summaries of substantive ratified legislation ... General Assembly ...

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SUMMARIES OF SUBSTANTIVE RATIFIED LEGISLATION - 2001

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SUMMARIES OF SUBSTANTIVE

RATIFIED LEGISLATION

2001 GENERAL ASSEMBLY

2001 REGULAR SESSION

RESEARCH DIVISION

N. C. GENERAL ASSEMBLY

MARCH 2002

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500 copies of this document were published at an estimated cost of or about $ 8.95 per copy

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March 2002

To the Members of the 2001 Session of the 2001 General Assembly:

This publication contains summaries of all substantive legislation of general applicability and

certain local legislation having general import of the 2001 Regular Session. Most local bills are not

analyzed in this publication. Significant appropriations matters related to the subject area specified are

also included. For an in- depth review of the appropriations and revenue process, please refer to

Overview: Fiscal and Budgetary Actions, prepared by the Fiscal Research Division.

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

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

agency studies. A bill/ session law index listing the page number of each summary is at the end of the

publication.

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

Research Division in alphabetical order: Dee Atkinson, Cindy Avrette, Brenda Carter, Erika Churchill,

Karen Cochrane- Brown, Kristen Crosson, Amy Currie, Tim Dodge, Frank Folger, Bill Gilkeson, George

Givens, Wendy Graf- Ray, Trina Griffin, Jeff Hudson, Shirley Iorio, Dianna Jessup, Robin Johnson, Sara

Kamprath, Esther Manheimer, Theresa Matula, Giles Perry, Barbara Riley, Walker Reagan, Steve Rose,

Mary Shuping, Susan Sitze, and Richard Zechini. Also contributing are Martha Harris, Canaan Huie, and

Gann Watson of the Bill Drafting Division, and Martha Walston of the Fiscal Research Division. Barbara

Riley and Susan Sitze served as the chief editors of this year’s summaries. Amy Currie, Wilma Hall and

DeAnne Mangum of the Research Division also helped with the editing of this document. The specific

staff members contributing to each subject area are listed directly below the Chapter heading for that

area. The staff members' initials appear after their names and after each summary they contributed. If

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

Research Division Office at ( 919) 733- 2578.

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

homepage at http:// www. ncga. state. nc. us. Click on “ Legislative Publications”. It is listed under

Research. Each summary is hyperlinked to the final bill text, the bill history, and any applicable fiscal

note.

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

General Assembly and the public in North Carolina.

Yours truly,

Terrence D. Sullivan

Director of Research

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TABLE OF CONTENT

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

Enacted Legislation ........................................................................................................... 1

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

Wildlife ......................................................................................................................... 3

Studies........................................................................................................................ .... 3

Legislative Research Commission.................................................................................... 3

Alcoholic Beverage Control........................................................................................... 4

Enacted Legislation ........................................................................................................... 4

Studies........................................................................................................................ .... 6

New Independent Studies/ Commissions.......................................................................... 6

Anti- Terrorism .............................................................................................................. 8

Enacted Legislation ........................................................................................................... 8

Studies........................................................................................................................ .. 10

Legislative Research Commission.................................................................................. 10

Children And Families ................................................................................................. 11

Enacted Legislation ......................................................................................................... 11

Major Pending Legislation................................................................................................ 24

Studies........................................................................................................................ .. 24

Legislative Research Commission.................................................................................. 24

Civil Law and Procedure ............................................................................................. 26

Enacted Legislation ......................................................................................................... 26

Civil Procedure ............................................................................................................ 26

Domestic .................................................................................................................... 28

Evidence ..................................................................................................................... 28

Liability ....................................................................................................................... 29

Miscellaneous.............................................................................................................. 30

Studies........................................................................................................................ .. 33

Legislative Research Commission.................................................................................. 33

Commercial Law ......................................................................................................... 35

Enacted Legislation ......................................................................................................... 35

Major Pending Legislation................................................................................................ 50

Constitution And Elections ......................................................................................... 51

Enacted Legislation ......................................................................................................... 51

Studies........................................................................................................................ .. 57

Criminal Law and Procedure....................................................................................... 58

Enacted Legislation ......................................................................................................... 58

Studies........................................................................................................................ .. 70

Legislative Research Commission.................................................................................. 70

Referrals to Existing Commissions/ Committees.............................................................. 71

Education .................................................................................................................... 72

Enacted Legislation ......................................................................................................... 72

Public Schools ............................................................................................................. 72

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Higher Education - Community Colleges ........................................................................... 82

Higher Education - Universities ........................................................................................ 84

Major Pending Legislation................................................................................................ 89

Studies........................................................................................................................ .. 89

Legislative Research Commission.................................................................................. 89

New Independent Studies/ Commissions........................................................................ 90

Referrals to Existing Commissions/ Committees.............................................................. 90

Referrals to Departments, Agencies, Etc. ...................................................................... 91

Employment................................................................................................................ 93

Enacted Legislation ......................................................................................................... 93

General Employment ................................................................................................... 93

Governmental Employment .......................................................................................... 95

Governmental Employment – Retirement ...................................................................... 98

Major Pending Legislation............................................................................................... 102

Studies........................................................................................................................ . 102

Legislative Research Commission................................................................................. 102

Referrals to Departments, Agencies, Etc. ..................................................................... 103

Environment and Natural Resources........................................................................ 104

Enacted Legislation ........................................................................................................ 104

Air Quality.................................................................................................................. 104

Coastal Development .................................................................................................. 106

Environmental Health ................................................................................................. 108

Fisheries .................................................................................................................... 109

Parks & Public Spaces................................................................................................. 109

Solid Waste................................................................................................................ 110

Underground Storage Tanks........................................................................................ 113

Water Quality/ Quantity/ Groundwater........................................................................... 114

Miscellaneous............................................................................................................. 118

Major Pending Legislation............................................................................................... 120

Studies........................................................................................................................ . 123

Legislative Research Commission................................................................................. 123

New/ Independent Studies/ Commissions ...................................................................... 124

Referrals to Existing Commissions/ Committees............................................................. 125

Health and Human Services...................................................................................... 128

Enacted Legislation ........................................................................................................ 128

Health ....................................................................................................................... 128

Human Services ......................................................................................................... 146

Major Pending Legislation............................................................................................... 147

Studies........................................................................................................................ . 148

Legislative Research Commission................................................................................. 148

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

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

Insurance.................................................................................................................. 151

Enacted Legislation ........................................................................................................ 151

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Life and Health Insurance ........................................................................................... 151

Property and Casualty Insurance ................................................................................. 157

General Insurance and Miscellaneous .......................................................................... 162

Major Pending Legislation............................................................................................... 167

Studies........................................................................................................................ . 168

Legislative Research Commission................................................................................. 168

Local Government..................................................................................................... 169

Enacted Legislation ........................................................................................................ 169

Studies........................................................................................................................ . 174

Legislative Research Commission................................................................................. 174

Referrals to Existing Commissions/ Committees............................................................. 175

Property, Trusts, and Estates ................................................................................... 176

Enacted Legislation ........................................................................................................ 176

Property..................................................................................................................... 176

Trusts ........................................................................................................................ 177

Estates ...................................................................................................................... 178

Major Pending Legislation............................................................................................... 179

Redistricting ............................................................................................................. 180

Enacted Legislation ........................................................................................................ 180

Resolutions ............................................................................................................... 182

Joint Resolutions............................................................................................................ 182

Simple Resolutions......................................................................................................... 186

Senior Citizens .......................................................................................................... 187

Enacted Legislation ........................................................................................................ 187

Institutional Services .................................................................................................. 187

Community Services ................................................................................................... 190

Other......................................................................................................................... 191

Studies........................................................................................................................ . 193

Legislative Research Commission................................................................................. 193

Referrals to Departments, Agencies, Etc. ..................................................................... 193

State Government..................................................................................................... 195

Enacted Legislation ........................................................................................................ 195

Agencies and Departments.......................................................................................... 195

Boards and Commissions ............................................................................................ 200

Building Codes, Inspection, Construction...................................................................... 203

Correction .................................................................................................................. 207

Courts and Justice ...................................................................................................... 210

Governmental Immunity ............................................................................................. 215

Indian Affairs ............................................................................................................. 215

Licensure ................................................................................................................... 216

Military and Veterans' Affairs ....................................................................................... 220

Purchase and Contract................................................................................................ 221

Technology ................................................................................................................ 221

Utilities ...................................................................................................................... 222

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Miscellaneous............................................................................................................. 223

Studies........................................................................................................................ . 231

Legislative Research Commission................................................................................. 231

New Independent Studies/ Commissions....................................................................... 232

Referrals to Existing Commissions ............................................................................... 232

Referrals to Departments, Agencies Etc. ...................................................................... 232

Taxation .................................................................................................................... 234

Enacted Legislation ........................................................................................................ 234

Tax............................................................................................................................ 234

Major Pending Legislation............................................................................................... 249

Studies........................................................................................................................ . 250

New Independent Studies/ Commissions....................................................................... 250

Referrals to Existing Commissions/ Committees............................................................. 251

Transportation .......................................................................................................... 253

Enacted Legislation ........................................................................................................ 253

Department of Transportation ..................................................................................... 253

Drivers Licenses ......................................................................................................... 256

License Plates ............................................................................................................ 257

Motor Vehicles............................................................................................................ 257

Public Transportation .................................................................................................. 263

Railroad ..................................................................................................................... 263

Other......................................................................................................................... 264

Major Pending Legislation............................................................................................... 266

Studies........................................................................................................................ . 266

Legislative Research Commission................................................................................. 266

New/ Independent Studies/ Commissions ...................................................................... 266

Referrals to Existing Commissions/ Committees............................................................. 267

Referrals to Departments, Agencies, Etc. ..................................................................... 267

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Chapter 1

Agriculture

Erika Churchill ( EC), Barbara Riley ( BR)

and others ( See references by initials on page 269 of this publication.)

Enacted Legislation

Agriculture

Control Foot and Mouth/ Animal Disease Outbreaks

S. L. 2001- 12 ( SB 779) authorizes the State Veterinarian, in consultation with the Commissioner of

Agriculture and with the approval of the Governor, to develop and implement emergency procedures

determined necessary to prevent the outbreak of an infectious animal disease that has the potential for

very serious and rapid spread, is of serious socio- economic and public health consequence, or is of major

importance in the international trade of animals and animal products. The emergency measures that

may be implemented include restrictions on the transportation of potentially infected animals, emergency

disinfectant procedures at portals of entry into the State, the right to enter onto property to examine

animals believed to be infected or exposed to disease, inspections without warrants of individuals and

motor vehicles, quarantine of animals, and destruction of animals where necessary to control a

contagious disease.

Persons who willfully violate the provisions of the act shall be guilty of a Class 2 misdemeanor.

Further, it is prohibited to knowingly or willfully conceal animals subject to quarantine or fail to report the

occurrence of a disease for which quarantine is in effect. Persons knowingly concealing animals subject

to quarantine or failing to report the occurrence of an animal disease shall be subject to an administrative

penalty not to exceed $ 10,000 per violation.

The act became effective April 4, 2001 and expires April 1, 2003. ( BR)

Extend Swine Moratoria/ Animal Waste Amendments

S. L. 2001- 254 ( HB 1312). See Environment.

Soil and Water Conservation Commission/ Powers & Duties

S. L. 2001- 284 ( HB 1111). See Environment.

Injury to Commodities or Production Systems

S. L. 2001- 290 ( HB 218) creates a civil cause of action for double damages for the unlawful and

willful injury or destruction of agricultural commodities or production systems. The value of agricultural

commodities includes any costs for research and development of the commodities, diminution in market

value, and other incidental and consequential damages proven by the plaintiff.

The act became effective October 1, 2001. ( BR)

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Water Quality/ Livestock Markets/ Animal Ops

S. L. 2001- 326 ( SB 848). See Environment.

Tar Pamlico Agricultural Rule

S. L. 2001- 355 ( HB 570). See Environment.

Promote NC Farm Products/ Rest Areas

S. L. 2001- 424, Sec. 17.1 ( SB 1005, Sec. 17.1) provides that the North Carolina Department of

Agriculture and Consumer Services, with the permission of the Department of Transportation, may

distribute promotional literature and free samples of North Carolina farm products at rest areas and

welcome centers located on controlled access facilities.

This section became effective July 1, 2001. ( BR)

Transfer Rural Rehab Corp to Agricultural Finance Auth

S. L. 2001- 424, Sec. 17.2 ( SB 1005, Sec. 17.2) provides for a Type I transfer of the North Carolina

Rural Rehabilitation Corporation and its Board of directors, to the North Carolina Agricultural Finance

Authority.

This section became effective July 1, 2001. ( BR)

Farmland Preservation Funds

S. L. 2001- 424, Sec 17.3 ( SB 1005, Sec. 17.3) directs the North Carolina Department of

Agriculture and Consumer Services to use $ 200,000 of the funds appropriated to it to fund the North

Carolina Farmland Preservation Trust Fund.

This section became effective July 1, 2001. ( BR)

Farmers Markets/ Ag Centers Vending Facility Exemption

S. L. 2001- 424, Sec. 17.4 ( SB 1005, Sec. 17.4) amends Article 3 of Chapter 111 of the North

Carolina General Statutes requiring that State agencies give preference, at the request of the Department

of Health and Human Services, to visually handicapped persons in the operation of vending facilities on

State property. Specifically, the act amends G. S. 111- 42( c) to add farmers markets and agricultural

centers to those facilities excluded from the provisions of Article 3.

This section became effective July 1, 2001. ( BR)

Grape Growers Council Funds

S. L. 2001- 475 ( SB 970) See Alcoholic Beverage Control

Amend Use Value Statute

S. L. 2001- 499 ( HB 1427). See Taxation.

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Wildlife

Nonresident License Fees

S. L. 2001- 91 ( SB 888) increases the fees for nonresident hunting and fishing licenses and makes

other changes affecting licenses issued by the Wildlife Resources Commission.

The nonresident hunting license fees are set as follows:

! Nonresident State Hunting License:

! Season license - $ 60

! 6 day License - $ 45

! Nonresident bear/ wild boar Hunting License - $ 125. In addition, persons who have

purchased a nonresident lifetime sportsman combination license prior to May 24, 1994 shall

not have to purchase this license.

! Nonresident Hunting and Fishing Guide License - $ 100. The act also repeals the provisions of

the statute requiring reciprocity by the nonresident's home state.

! Nonresident Commercial Special Device License - $ 200.

The act allows the Wildlife Resources Commission to issue hunting and fishing guide licenses,

trapping licenses, and special device licenses on a staggered, rather than an annual, basis. The act also

provides that holders of a lifetime combination hunting and fishing license for disabled residents may fish

in public trout waters.

The act became effective July 1, 2001. ( BR)

Studies

Legislative Research Commission

The 2001 Studies Bill

S. L. 2001- 166, Sec. 2.1( 3)( a) ( HB 166, Sec. 2.1( 3)( a)) authorizes the Legislative Research

Commission to study enhancing fairness in agricultural contracts.

This section became effective December 6, 2001. ( BR)

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Chapter 2

Alcoholic Beverage Control

Brenda Carter ( BC), Susan Sitze ( SS)

and others ( See references by initials on page 269 of this publication.)

Enacted Legislation

Joint ABC Store Operations

S. L. 2001- 128 ( HB 446) adds a new subsection to the existing law regarding the merger of

local ABC systems, to authorize local ABC boards to enter into management agreements with one

another. These agreements would not result in a complete merger of the systems involved, but

would permit ABC systems to enter into operating agreements that provide for one ABC system to

operate one or more ABC stores owned by another ABC system. The agreements must be approved

by the ABC Commission and are subject to the reasonably applicable provisions of the law governing

the merger of ABC systems. This means that the agreements may be entered if the systems serve

the same general area or are in close proximity to each other, that the systems will agree upon

distribution of profits, and that the agreements may be dissolved at any time.

The act became effective May 25, 2001. ( BC)

Sports Club ABC Permits

S. L. 2001- 130 ( HB 1143) rewrites the law regarding the issuance of ABC permits to

residential private clubs and sports clubs. As defined in G. S. 18B- 1000, a residential private club is

one that is located in a privately owned, primarily residential and recreational development. A sports

club is an establishment substantially engaged in the business of providing an 18- hole golf course,

two or more tennis courts, or both.

The act amends G. S. 18B- 1006( k), which authorizes the ABC Commission to issue permits,

without approval at an election, to a residential private club or a sports club. The act allows the ABC

Commission to issue the permits on a statewide basis, except when the sale of mixed beverages is

not lawful within the jurisdiction and the locality has voted against the sale of mixed beverages in a

referendum conducted on or after September 1, 2001. If the issuance of permits is prohibited by the

exception in the previous sentence, the Commission may renew existing permits and may continue to

issue permits for a business location that previously held permits. The act provides that no ABC

permit may be issued to any residential private club or sports club that practices discrimination on the

basis of race, gender or ethnicity.

Effective August 23, 2001 ( 90 days after the effective date of the act), the following counties

are exempt from the residential private club and sports club permit provisions of the act: Lincoln,

Harnett, Davie, Graham, Swain, Yancey, and McDowell. Permits applied for before the effective date

of the exemption will remain valid. The act includes a severability and savings clause in the event

the exemption is found by a court to be unconstitutional or otherwise invalid.

The act became effective May 25, 2001. ( BC)

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Promoting Grape and Wine Industry

S. L. 2001- 262 ( SB 823) as amended by S. L. 2001- 487, Sec. 49 ( HB 338, Sec. 49), makes

changes to the laws governing the production, sale and consumption of wine.

The act authorizes the ABC Commission to issue a wine tasting permit to any food business

( grocery stores, convenience stores, and other establishments, such as variety stores or drugstores,

where food is regularly sold). The wine tasting permit will allow the offering of a sample of one or

more unfortified wine products, in amounts of no more than one ounce for each sample, without

charge, to customers of the business.

The act amends the law regarding unfortified winery permits to provide that under certain

conditions and under limited circumstances the holder of the permit may receive, in closed

containers, unfortified wine produced outside North Carolina under the winery's label from grapes,

berries, or other fruits owned by the winery, and may sell, deliver, and ship that wine to wholesalers,

exporters, and nonresident wholesalers in the same manner as its wine manufactured in North

Carolina. The holder of an unfortified winery permit may, upon obtaining the appropriate permit, sell

wine owned by the winery for on- or off- premise consumption at no more than three other locations

in the State and may be eligible to obtain a wine wholesaler permit to sell, deliver, and ship

wholesale unfortified wine manufactured at the winery.

The act rewrites the law governing winery special event permits, making the permit issuable

to a wine producer as well as to a holder of an unfortified winery or a limited winery permit.

The act authorizes the ABC Commission to issue a " wine producer" permit to farming

establishments of at least five acres committed to the production of grapes, berries, or other fruits for

the manufacture of unfortified wine. Holders of a wine producer permit may:

! Ship crops grown on land owned by it in North Carolina to a winery, inside or outside the

State, for the manufacture and bottling of unfortified wine from those crops and may

receive that wine back in closed containers.

! Sell, deliver, and ship the unfortified wine manufactured from its crops in closed

containers to wholesalers and retailers as authorized by the ABC laws.

! Sell the wine manufactured from its crops for on- or off- premise consumption upon

obtaining the appropriate permit.

The act also authorizes a unit of local government to obtain a special one- time permit to

serve wine, malt beverages, and spirituous liquor at a ticked event held to raise funds.

The act became effective July 4, 2001. ( BC)

Grape Growers Council Funds

S. L. 2001- 475 ( SB 970) increases the amount of wine tax proceeds earmarked annually for

the Grape Growers Council. The act amends G. S. 105- 113.81A to require that all of the net proceeds

of the excise tax collected on unfortified or fortified wine bottled in North Carolina be credited on a

quarterly basis to the Department of Agriculture and Consumer Services, subject to a $ 350,000 limit

per fiscal year. The funds will be allocated to the North Carolina Grape Growers Council to be used

to promote the North Carolina grape and wine industry and to contract for research and development

services to improve viticultural and enological practices in North Carolina.

The act became effective October 1, 2001, and applies to distributions made on or after that

date. ( BC)

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Redefine " Special ABC Area"

S. L. 2001- 515 ( HB 948) makes various changes in the State's alcoholic beverage control

laws.

The act amends the definition in G. S. 18B- 101 of Special ABC Areas within which qualified

persons and establishments may be issued permits under G. S. 18B- 603( f2) for the sale of malt

beverage, wine, and mixed beverages.

The act gives the ABC Commission specific authority to summarily suspend or revoke without

prior hearing the permit of an establishment that fails to adhere to record- keeping requirements

applicable to permittees located in designated Urban Redevelopment Areas. The act requires a city

to file with the ABC Commission a certified copy of information designating an Urban Redevelopment

Area, including maps that can be made available to any ABC permittee who requests it. The

summary suspension/ revocation may occur only if the city has filed required information designating

the location of the Urban Redevelopment Area, and has notified permittees located in the area of the

applicability of the sales restrictions. The permittee may make written request for a hearing on the

suspension/ revocation, and hearings will be held in compliance with applicable provisions of the

Administrative Procedure Act.

The act amends G. S. 18B- 600( f), which provides for township elections in a county where

ABC stores have been established by petition pursuant to law on the question of ABC stores, and on

the sale of malt beverages, unfortified wine, or mixed beverages. The act provides for township

elections in certain travel- oriented barrier island townships. An election on the question of mixed

beverages may be called in two qualifying townships voting together upon request of the county

board of commissioners or upon petition of 25% of the registered voters of the two townships taken

together; the votes of the two townships counted together would determine the result of the

election.

The act amends G. S. 95- 25.5 to allow a youth who is at least 14 years old to work on the

outside grounds of ABC- licensed premises so long as the youth's employment does not involve the

serving, dispensing, or sale of alcoholic beverages. ( For example, caddying at a golf club.) The act

requires the employer to obtain the written consent of the minor's parent or guardian.

The act became effective January 4, 2002. ( BC)

Possessing Fraudulent ID to Get Liquor

S. L. 2001- 461 ( SB 833). See Criminal Law and Procedure.

Studies

New Independent Studies/ Commissions

Legislative Alcoholic Beverage Control Study Commission

S. L. 2001- 491, Part IV ( SB 166, Part IV) creates the Legislative Alcoholic Beverage Control

Study Commission. The Commission is directed to study the following matters related to Alcoholic

Beverage Control:

! Benefits and costs of " control" and " license" systems.

! Aspects of organization, structure, and function of the North Carolina ABC Commission

and local alcoholic beverage control systems.

! Schedule, collection, and distribution of alcohol- related taxes and fees.

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! Possible efficiency enhancements to the ABC system.

! Other Alcoholic Beverage Control issues. - Including location and zoning of retail stores,

liquor advertising, effects of price on alcohol consumption, uniformity throughout the

State of alcoholic beverage availability and sales, and direct purchase of alcoholic

beverages from out- of- state wholesalers.

In addition to matters listed above, the Commission is authorized to study any other Alcoholic

Beverage Control- related issues approved by its cochairs or recommended by the Chairman of the

Alcoholic Beverage Control Commission and approved by the cochairs.

The Commission is required to submit an interim report to the Joint Legislative Commission

on Governmental Operations, to the cochairs of the House and Senate Appropriations Committees, to

the Cochairs of the House and Senate Appropriations Subcommittees on Natural and Economic

Resources, and to the General Assembly's Fiscal Research Division on or before April 15, 2002. The

Commission is required to submit a final report to the recipients of the interim report on or before

March 1, 2003.

The provision became effective December 19, 2001. ( BC)

Underage Drinking Study Commission

S. L. 2001- 491, Part XI ( SB 166, Part XI) creates the Underage Drinking Study Commission.

The Commission is directed to study the following matters related to alcohol consumption by persons

under the age of 21:

! Commercial availability.

! Social and public availability.

! Restricting youth possession.

! Other underage alcohol consumption issues.

The Commission is required to make an interim report to the Joint Legislative Commission on

Governmental Operations on or before May 1, 2001 and to submit a final report to the same body by

December 1, 2002.

The provision became effective December 19, 2001. ( SS)

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Chapter 3

Anti- Terrorism

Dianna Jessup ( DJ), Robin Johnson ( RJ),

Susan Sitze ( SS) and others ( See references

by initials on page 269 of this publication.)

Enacted Legislation

Terrorism Defense Funds

S. L. 2001- 457 ( HB 1471) appropriates a total of $ 31.9 million for the 2001- 2002 fiscal year to

implement terrorism defense. Of that amount, $ 1.9 million was appropriated to the Department of

Crime Control and Public Safety, Division of Emergency Management to implement terrorism defense

measures, including purchasing materials and equipment, training personnel, developing operation

plans, and equipping search and rescue teams. The Department must report to the Joint Legislative

Commission on Governmental Operations on the use of these funds no later than 30 days after using

those funds.

The act also approved the use by the Governor of up to $ 30 million from the Savings Reserve

Account to implement defense measures against all forms of terrorism. If used, the Governor is

required to take steps to repay the monies if funds become available. The Governor is also required

to report to the Joint Legislative Commission on Governmental Operations on the status and use of

funds no later than 30 days after accessing the funds.

The act became effective November 6, 2001. ( DJ)

Biological Agents Registry

S. L. 2001- 469 ( HB 1472) directs the Department of Health and Human Services ( DHHS) to

establish and administer a biological agents registry ( registry). The registry must identify the

biological agents possessed and maintained by any person in the State. The Commission for Health

Services is required to adopt rules that: ( i) determine and list the biological agents that must be

reported; ( ii) designate the persons required to report and the specific information that must be

reported, the manner and time frame, and to whom; ( iii) provide for the release of registry

information as part of a communicable disease investigation; ( iv) establish a system of safeguards

that requires persons who possess and maintain these agents to comply with the same federal

standards that apply to persons registered under federal law; and ( v) establish a process for

reporting unauthorized or attempted possession of biological agents.

Information prepared for or maintained in the registry is confidential and is not a public

record. However, DHHS may release this information for the purpose of conducting or aiding a

communicable disease investigation. Information may be released to federal and other states' law

enforcement agencies and to the U. S. Centers for Disease Control and Prevention.

DHHS may impose a maximum civil penalty of $ 1,000 for each day of a willful or knowing

violation of this act. A person may appeal this penalty under the Administrative Procedure Act.

The act became effective January 1, 2002. ( RJ)

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Certain Weapons of Mass Destruction

S. L. 2001- 470 ( HB 1468) establishes a new Article 36B in Chapter 14 of the General Statutes

relating to nuclear, biological, or chemical weapons of mass destruction. As used in these statutes, a

" nuclear, biological, or chemical weapon of mass destruction" is ( 1) any weapon, device, or method

that is designed or has the capability to cause death or serious injury through the release,

dissemination or impact of radiation, a disease organism, or toxic or poisonous chemicals or their

precursors; or ( 2) any substance that is designed or has the capability to cause death or serious

injury and contains radiation, is or contains a toxic or poisonous chemical, or is or contains any

microorganism, virus, bacterium, fungus, rickettsia, or toxin, or any genetically modified elements or

microorganisms that are listed in referenced parts of Title 42, Code of Federal Regulations. The term

also includes any combination of parts or substances either designed or intended for use in

converting any device or substance into any nuclear, biological, or chemical weapon of mass

destruction or from which a nuclear, biological, or chemical weapon of mass destruction may be

readily assembled or created.

The act makes it unlawful to knowingly manufacture, assemble, possess, store, transport,

sell, offer to sell, purchase, offer to purchase, deliver, give to another, or acquire a nuclear,

biological, or chemical weapon of mass destruction. Any person who violates this section is guilty of

a Class B1 felony. This section does not apply to certain military personnel and law enforcement

officers lawfully carrying out their duties; persons under contract with the federal or State

government lawfully acting under their contracts or working under their direction; certain persons

engaged in research and development for preventive, protective, or other peaceful purposes; and

persons engaged in agricultural, pest control and other similar practices.

The act prohibits several other forms of conduct and provides the following penalties:

! Makes it unlawful to willfully injure another by the use of a nuclear, biological, or

chemical weapon of mass destruction. Any person who violates this provision is guilty of

a Class A felony and shall be sentenced to life imprisonment without parole.

! Makes it unlawful to attempt, solicit another, or conspire to injure a person by the use of

a nuclear, biological, or chemical weapon of mass destruction. Any person who violates

this provision is guilty of a Class B1 felony.

! Makes it unlawful to use the United States Postal Service or other delivery business to

violate any of the provisions of Article 36B. Any person who violates this provision is

guilty of a Class B1 felony.

! Makes it unlawful to make a report to any person, knowing or having reason to know the

report is false, that causes a person to reasonably believe that a nuclear, biological, or

chemical weapon of mass destruction is located at any place or structure. Any person

who violates this section is guilty of a Class D felony. Also, a person convicted under this

section may be ordered to pay restitution for damages resulting from the disruption of

normal activities caused by the false report.

! Makes it unlawful to intentionally perpetrate a hoax with an object to cause a person

reasonably to believe that the object is a nuclear, biological, or chemical weapon of mass

destruction. Any person who violates this section is guilty of a Class D felony. Also, a

person convicted under this section may be ordered to pay restitution for damages

resulting from the disruption of normal activities caused by the hoax.

The act also provides that murder perpetrated by means of a nuclear, biological, or chemical

weapon of mass destruction is murder in the first degree, a Class A felony, and may be punished with

death or imprisonment in the State's prison for life without parole.

The act amends G. S. 143- 34.1( a1) to exempt the Governor from the requirement that he

report to the Joint Legislative Commission on Governmental Operations prior to the establishment of

receipt supported positions where there is an emergency or other exigent circumstances requiring

additional personnel to respond to a threat of terrorism.

The act became effective November 28, 2001 and applies to offenses committed on or after

that date. ( SS)

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Studies

Legislative Research Commission

The 2001 Studies Bill

S. L. 2001- 491, Sec. 2.1F ( HB 166, Sec. 2.1F) authorizes the Legislative Research Commission

to study the ability of the State to respond to instances of suspected bioterrorism.

This section became effective December 6, 2001. ( RJ)

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Chapter 4

Children And Families

Erika Churchill ( EC), Amy Currie ( AC), Frank Folger ( FF),

Dianna Jessup ( DJ), Wendy Graf Ray ( WGR)

and others ( See references by initials on page 269 of this publication.)

Enacted Legislation

Marriage Law Amendments

S. L. 2001- 62 ( HB 142), as amended by S. L. 2001- 487, Secs. 60 and 83 ( HB 338, Secs. 60

and 83), amends the State's marriage law. The act raises the minimum age for marriage from 12

years of age to 14 years of age. Persons between the ages of 14 and 16 may get married only if the

female applicant is pregnant or has given birth and intends to marry the father of the child, and any

party that is between the ages of 14 and 16 receives authorization from a district court. A district

court may authorize the marriage of a person between the ages of 14 and 16 only if the court finds

that the underage party is capable of assuming the responsibilities of the marriage and the marriage

will serve the best interest of the underage party. The court is directed to consider certain evidence

in determining whether the marriage will serve the best interest of the underage party, and there is a

rebuttable presumption that the marriage will not serve the best interest of the underage party when

all living parents of the underage party oppose the marriage. The fact that the female is pregnant,

or has given birth to a child, alone is not enough to establish that the best interest of the underage

party will be served by the marriage.

The act establishes the procedure by which an underage party may seek judicial

authorization. As a part of the proceeding a guardian ad litem, who must be an attorney, will be

appointed to represent the best interest of the underage party. Notice of the proceeding must be

provided to the parents of the underage party and any person, agency, or institution having legal

custody or serving as a guardian of the underage party. The Court of Appeals has the discretion

whether to hear an appeal from the proceeding, but a party to the proceeding does not have an

automatic right of appeal. If the last judicial ruling denies the underage party judicial authorization

to marry, the underage party cannot seek judicial authorization again until one year from the date of

entry of the last judicial ruling.

Persons between 16 and 18 years of age may marry only upon receiving the written consent

of a parent having full or joint legal custody of the underage party or a person, agency, or institution

having legal custody or serving as a guardian of the underage party. Persons 18 years of age or

older may marry without parental or judicial consent.

House Bill 142 also expands the list of persons that are authorized to perform marriages by

specifically providing that a marriage may be performed in accordance with any mode of

solemnization recognized by any federally or State recognized Indian Nation or Tribe. A marriage

between a man and a woman licensed and solemnized according to the law of a federally recognized

Indian Nation or Tribe is valid, but if the parties to the marriage obtain a marriage license from the

register of deeds then the marriage is valid only if the issuance of the license and solemnization of

the marriage is conducted in compliance with State law ( Chapter 51 of the General Statutes).

The act also makes several changes with respect to the issuance of marriage licenses.

Marriage licenses are now valid throughout the State, rather than just within the county in which they

are issued. The license must still be returned to the register of deeds that issued it. If an applicant

for a marriage license is over 18 years of age and is unable to appear in person before the register of

deeds, the other party to the marriage may appear in person and submit a sworn and notarized

affidavit in lieu of the absent applicant's personal appearance. In addition, the act clarifies what

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information ( age, marital status, and intention to marry) provided by the applicants for a marriage

license that the register of deeds is to use to determine whether the applicants are authorized to

marry. The act makes the designation of race on the marriage license optional and expands the

options that an applicant has to choose from to be inclusive of all races. The options listed are the

same options that were listed on the 2000 U. S. Census form. Errors on a marriage license application

or on the marriage license may be corrected by the register of deeds upon the submission of an

affidavit signed by one or both of the applicants for the marriage licensed accompanied by affidavits

of at least two other persons who know the correct information. Obtaining, or aiding and abetting

the obtaining, of a marriage license by misrepresentation or false pretenses is made a Class 1

misdemeanor. The Administrative Office of the Courts is directed to develop any and all forms

necessary for carrying out the purpose of the act and distribute them to the Office of the Clerk of

Superior Court in each county.

The act also provided that a regular resident superior court judge could perform marriage

ceremonies effective May 19, 2001, through May 28, 2001. The remainder of the act became

effective October 1, 2001, except the amendments in S. L. 2001- 487, Sec. 60 and 83, which became

effect December 6, 2001. ( RZ)

Sanitation Rules/ Family Foster Homes Exempt

S. L. 2001- 109 ( SB 541), as amended by S. L. 2001- 487, Sec. 84 ( HB 338, Sec. 84), exempts

single- family dwellings that are used for family foster homes or therapeutic homes from provisions in

the General Statutes that require rules for sanitation requirements for institutions and facilities at

which individuals are provided room or board. The act also redefines " therapeutic foster home" as a

family foster home where, in addition to the provision of foster care, foster parents who receive

appropriate training provide a child with behavioral health treatment services under the supervision

of a county department of social services, an area mental health program, or a licensed private

agency and in compliance with licensing rules adopted by the Commission.

The act became effective May 24, 2001. ( WGR)

Database on Psychotropic Meds/ Children

S. L. 2001- 124 ( SB 542). See Health and Human Services.

Juvenile Justice Under Corrections Oversight

S. L. 2001- 138 ( SB 67). See Criminal Law and Procedure.

Amend Adoption Laws

S. L. 2001- 150 ( SB 499) addresses issues that have arisen since the adoption law was

completely revised in 1995. This act makes the following changes:

! Defines " agency identified adoption" as a placement where an agency has agreed to

place the minor with an adoptive parent selected by the parent or guardian.

! Changes the number of months required for the completion or updating of a required

preplacement assessment from twelve to eighteen.

! Requires that an adoption petition have attached to it a certificate of service proving that

the birth parents received a copy of the preplacement assessment in a private adoption,

and proof of the consent to release identifying information prior to an agency adoption.

! Clarifies that in an agency adoption where the parent or possible parent is actually

known, that known parent or possible parent can be given notice of the adoption and is

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required to defend his or her parental rights, if there are any, directly in the adoption

proceeding itself.

! Requires the adopting parents to file with the court a certificate of service certifying that

they gave the birth parents a preplacement assessment.

! Requires the court to find in its adoption order that a certificate of service has been filed

in the case proving that, in a private adoption, the adopting parents gave the birth

parents a copy of the preplacement assessment.

! Allows, but does not require, the agency preparing a preplacement assessment to delete

from the assessment detailed financial information and private information concerning

extended family members.

! Requires adoption agencies to explain to birth parents and adopting parents any agency

procedures for sharing information between birth parents and adopting parents and for

giving birth parents a voice in selecting adopting parents.

! Requires agencies that have agreed to place the child with prospective adoptive parents

selected by the birth parents to place the child with those adoptive parents when a

favorable preplacement assessment has been prepared.

! Makes the period within which consent to an adoption or relinquishment to an adoption

agency may be revoked seven days in all cases.

! Allows for the release of identifying information between birth parents and adopting

parents in an agency adoption, but only if the parties agree to do so before the adoption.

! Allows a prospective adopting parent to advertise in a periodical or newspaper, or on

radio, television, cable television, or the Internet, that they desire to adopt.

! Applies only to a person with a current completed preplacement assessment finding

the person suitable to adopt.

! Advertisement must state that the person received a favorable assessment, identify

the agency that completed the assessment, and identify the date the assessment

was completed.

The act became effective November 1, 2001. Provisions regarding the certificate of service

that proves the birth parents received a copy of the preplacement assessment and provisions

regarding the sharing of information between adoptive parents and birth parents apply to adoptions

in which the petition is filed on or after that date, provisions regarding deletion of financial

information and information about extended family members in assessments apply to assessments

prepared on or after that date, provisions regarding revocation of consents and relinquishments apply

to consents and relinquishments executed on or after that date, and the provision regarding

advertising applies to advertising published on or after that date. ( WGR)

Grandparents as Supervising Drivers

S. L. 2001- 194 ( HB 78). See Transportation.

Children's Welfare

S. L. 2001- 208 ( HB 375), as amended by S. L. 2001- 487, Sec. 101 ( HB 338, Sec. 101), makes

various changes to the statutes governing child welfare. The changes include:

! Clarifying Changes – Timing Issues. The act sets forth time constraints in which a

child protective services juvenile court order must be reduced to writing, signed by the

judge, and filed with the Clerk of Clerk, in most situations granting 30 days from entry of

the order.

! Clarifying Changes – Other. The act clarifies and amends the newly codified Chapter

7B in the following manner:

! Service of Summons. Current law requires that a summons in an abuse, neglect, or

dependency action be served on the parent, guardian, custodian, or caretaker of the

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juvenile. The abuse/ neglect/ dependency statute is silent as to whether it is

appropriate to serve the parent of the juvenile if the parent is a minor. The act

clarifies that the minor parent is to be served with the summons in an

abuse/ neglect/ dependency petition.

! Title IV- E Funding. Federal law requires that in order to receive federal foster care

( Title IV- E) funds, there must be a finding that the juvenile's continuation in the

juvenile's own home would be contrary to the juvenile's best interest. The act

requires that a court must find that it is in the juvenile's best interest not to continue

in the juvenile's own home when setting forth the dispositional alternatives for

undisciplined and delinquent juveniles, thereby accessing Title IV- E funds to help

support the juvenile.

! Access to Juvenile Records. When the juvenile code was recodified, the provision

describing who may have access to a juvenile's records without a court order was left

out. The act adds a statute governing who may access a juvenile court file: the

juvenile ( even when the juvenile reaches majority), the guardian ad litem, the county

DSS, and the juvenile's parent, guardian, or custodian, or the attorney for the

juvenile or the juvenile's parent, guardian, or custodian.

! Changes To The Adoption Statutes.

! Transmittal of Adoption Records. The act allows that while original petition and final

decree documents are to be maintained in the clerk's records, adoption proceeding

documents may be sent within 10 days after the decree of adoption is entered or 10

days after the final disposition of an appeal rather immediately after being filed with

the county clerk of court.

! Adult Adoption/ Notice. Prior to S. L. 2001- 208, in the case of an adult adoption, in

addition to the persons who are required to be notified in all adoptions, notice of the

petition for adoption must be served on any adult children of the prospective

adoptive parent; any parent of the adult adoptee; the spouse of the adult adoptee;

and any adult child of the adult adoptee. The act changes that so notice would no

longer have to be served on the parent of the adult adoptee if the court finds good

cause not to do so.

! Certificate of Identification. Vital statistics law generally provides that when an

adoption is finalized, the State Registrar prepares a new birth certificate that contains

the name of the adoptee and adoptive parents. In the case of an adopted person

born in a foreign country and residing in North Carolina at the time of application for

a certificate, the State Registrar prepares a certificate of identification. The act

changes State law by requiring the State Registrar to prepare a certificate of

identification for any adopted person born in a foreign country and readopted in this

State upon the receipt of a report of the adoption from the Division of Social

Services, regardless of whether the adopted person is residing in this State at the

time of the application for the certificate.

! Affidavit of Parentage. Adoption law provides for the execution ( the parent or

guardian who placed the child) of an affidavit of parentage to assist the court in

determining whether a direct placement is valid and all necessary consents have

been obtained. The act permits a knowledgeable individual to provide the

information in the affidavit if the parent or guardian is not available. Additionally, in

the case of an agency placement, the requirement that the agency must obtain the

affidavit of parentage is eliminated if the agency has obtained legal and physical

custody of a child by a court order terminating the parental rights of a parent or

guardian. The court order on termination of the parental rights contains the

information set forth in the affidavit or parentage.

! Revocation of Relinquishment. Current law requires that a relinquishment of a minor

for adoption must state that the individual voluntarily consents to the permanent

transfer of legal and physical custody of the minor to the adoption agency for the

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purposes of adoption, and either ( a) the placement of the minor for adoption with a

prospective adoptive parent selected by the agency, or ( b) the placement of the

minor for adoption with a prospective adoptive parent selected by the agency and

agreed upon by the individual executing the relinquishment. If the relinquishor

parent stated that the relinquishment was for an adoption by a specific prospective

adoptive parent named or described in the relinquishment and such adoption is not

completed, then the relinquishor parent has the ability to revoke the relinquishment.

The act provides that the relinquishor parent's time to revoke is ten ( 10) days from

the agency's notice, inclusive of weekends and holidays, and must be in writing. The

change also provides that if the agency cannot locate the parent and/ or if the parent

does not revoke the relinquishment within the ten- day time period, then the agency

may place the child for adoption with a prospective adoptive parent selected by the

agency.

! Substantive Changes – Termination of Parental Rights ( TPR).

! Grounds for Termination. Two separate grounds for TPR are amended:

! Willful abandonment. Termination may now be granted upon a showing that the

parent has willfully left the child in foster care or other placement outside the

home for a total more than 12 months.

! Violence in the home by the parent. The act clarifies that the petitioner has the

responsibility of proving that the parent has committed murder or voluntary

manslaughter of another child of the parent or a child residing in the parent's

home; or has aided, abetted, attempted, conspired or solicited to commit murder

or voluntary manslaughter of the child, another child of the parent or a child

residing in the parent's home; or has committed a felony assault that results in

serious bodily injury to the child, another child of the parent or a child residing in

the parent's home.

! Right to Appeal. G. S. 7B- 1001 is amended to require any notice of appeal to the

Court of Appeals must be in writing, thereby conforming the TPR statutes to the

Rules of Appellate procedure, which govern appeals to the Court of Appeals.

! Appeals; Modification of order after Affirmation. The act also clarifies that the

juvenile acting through the juvenile's guardian ad litem, if one has been appointed,

may appeal the order of adjudication or the order of disposition, provided the appeal

is made in writing within 10 days after entry of the order.

! Disposition pending appeal. It is made clear that the judge has the authority, but is

not required, to place the juvenile with the parent or guardian of the juvenile

pending the disposition of an appeal.

! Issuance of Summons. The act clarifies that the juvenile, no matter what age, is

served with the summons and petition in a TPR action. Additionally, the act requires

that the papers directed to the juvenile must be served upon the juvenile's guardian

ad litem, if one has been appointed.

! Substantive Changes – Other.

! Right to Counsel. The act amends current statute by adding that a guardian ad litem

will be appointed to represent a parent if the parent is a minor or where it is alleged

that the juvenile is a dependent juvenile because the parent is incapacitated because

of substance abuse, mental retardation, mental illness, organic brain syndrome, or

any other similar cause or condition in addition to appointment when abuse or

neglect is alleged.

! Court Authority over Parents. The act expands the authority of the court over the

parents in a child protective services case to permit the court to order the parents to

attend and participate in parental responsibility classes, provide transportation to the

juvenile to keep appointments for treatments, and to take appropriate steps to

remedy conditions in the home that led to the juvenile's adjudication. Additionally,

the act provides that the parent may be found in criminal contempt for failure to

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comply ( in addition to the current civil contempt remedy) and specifically sets forth

the procedures to govern the contempt proceedings.

! Visitation Plan. The act provides that the director of the county Department of Social

Services may make a good faith determination that a court ordered visitation plan is

not in the juvenile's best interest ( because, for example, the juvenile is being abused

during the visitation), then the director can temporarily suspend all or part of the

visitation plan until further review by the court.

! Permanency Planning. Prior to this act, when a juvenile has been in DSS custody

and has been placed outside the home for 15 of the most recent 22 months, the

court had to order the director of DSS to initiate a proceeding to terminate parental

rights. The act changes that by reducing the time period from 15 to 12 months and

by requiring the director of DSS to automatically initiate TPR proceedings, unless the

court finds it is not in the juvenile's best interests.

! Voluntary Placement Agreements ( VPA). Previously, when juveniles were voluntarily

placed in foster care, the court reviewed the initial placement within 180 days after

the placement and held reviews thereafter whenever the court found it to be

appropriate. Juveniles placed voluntarily in foster care could not remain in foster

care for more than 12 months without the filing of a petition alleging abuse, neglect,

or dependency. The act changes that by shortening the time period within which the

initial review hearing is to be held to 90 days after placement and mandating that an

additional review hearing be held at least every 90 days thereafter. Further, the time

period a juvenile may remain in foster care under a voluntary placement without

filing a petition was shortened to 6 months.

! Inquiry as to Paternity. The act adds a requirement that the court inquire as to

whether paternity is at issue and if so, what efforts are being undertaken to establish

paternity when conducting the nonsecure custody hearing held within seven days of

the filing of a petition for custody due to abuse, neglect or dependency.

The act became effective January 1, 2002, and applies to actions commenced on or after

that date. ( EC)

Child Support

S. L. 2001- 237 ( HB 377) makes various changes to the statutes governing the establishment

and enforcement of child support orders by the Department of Social Services.

The changes include:

! Clarifying And Technical Changes. ( Effective when it becomes law)

! Affidavit of Parentage. The act changes the name of the forms used to

acknowledge paternity to an “ Affidavit of Parentage."

! Technical Corrections. During the 1999 Session of the General Assembly, an

incorrect citation was used in language enacting a new subsection. The act corrects

the citation, and recodifies the new subsection in the appropriate place in the

section. It also amends the new subsection to include the ability to admit into

evidence the Employee Verification during a hearing to enforce a child support order.

! Admissibility of Payment Records. The act clarifies that the payment record

maintained by the Centralized Collections Office is admissible in a child support

action, and that the IV- D agent is qualified to authenticate this record for the court.

! Substantive Changes. ( Effective when it becomes law, except as noted.)

! Require responsible parents to perform a job search. The act provides the

ability for the court to require a job search or participation in work activities when

the court is establishing an order for child support, the same as the court can now

require when enforcing a child support order.

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! Allow for periodic payments on child support judgments. An arrearage owed

for failure to pay child support may be reduced to a civil judgment, and enforced as

any other civil judgment. The act allows the court to set periodic payment provisions

on that civil judgment, and failure to comply with the periodic payment provisions as

ordered by the court can be enforced by action for civil or criminal contempt.

! Change of Service Method. A IV- D agency is required to follow Rule 4 of the

Rules of Civil Procedure when serving a notice of income wage withholding on an

employer, which addresses service of the summons in a civil action. Typically, the

IV- D agency used certified mail for this service. The act provides that the notice to

implement income wage withholding can be served in accordance with Rule 5 of the

Rules of Civil Procedure, which means service can be completed by placing the notice

to implement income wage withholding in a properly addressed wrapper in a post

office or official depository under exclusive care and custody of the United States

Postal Service.

! National Medical Support Notice. The act implements the federal requirements

under the final regulations implementing the 1988 changes to the Social Security Act

with respect to Child Support ( P. L. 105- 200). The National Medical Support Notice is

a federally required form that the IV- D agency must serve on the employer of a non-custodial

parent when the non- custodial parent is court ordered to provide health

insurance for the child or children covered under the child support order ( 42 USC

1396g- 1 and 29 CFR Part 2590). Upon receiving the Notice, the employer is required

to transfer the Notice to the health insurer or health care plan administrator unless:

! The employer does not maintain or contribute to plans providing dependent or

family health insurance.

! The employee is not eligible for a family health insurance plan maintained by the

employer or to which the employer contributes.

! The employer no longer employs the employee.

! Withholding limitations prevent the employer from withholding the amount

required to obtain insurance. ( Effective October 1, 2001.)

Once the Notice is transferred to the health insurer or health care plan administrator, the

health insurer or health care plan administrator must enroll the child or children, notify the employer

of the amount to withhold, and notify the employer of any applicable enrollment waiting periods.

( Effective July 1, 2002.) If the employer, the health insurer, or the health care plan administrator

does not comply with the provisions, they can be held liable for a civil penalty and are subject to a

civil suit for reasonable damages. ( EC)

Child Bicycle Safety Act

S. L. 2001- 268 ( HB 63) makes several legislative findings regarding injuries to children in

bicycle accidents and the effectiveness of helmets and restraining seats, and states that the act's

purpose is to reduce the incidence of disability and death resulting from injuries incurred in bicycling

accidents.

The act creates the following requirements relating to bicycle safety:

! Any person under the age of 16 must wear a helmet when operating or riding on a

bicycle.

! All bicycle passengers who weigh less than 40 pounds, or who are less than 40 inches

tall, must be seated in a separate restraining seat, and all other passengers must be

seated alone on a saddle seat.

! All bicycle passengers must be able to maintain an erect, seated position on the bicycle.

It is unlawful for any parent or legal guardian of a person below the age of 16 to knowingly

permit such a person to operate or be a passenger on a bicycle in violation of these requirements. A

violation of this act is an infraction and is punishable by a civil fine of up to $ 10.00. For a first

1 8

offense, the court may waive the fine upon receipt of satisfactory proof that the person responsible

has purchased or otherwise obtained a helmet or restraining seat and intends to use it when

required.

The act became effective October 1, 2001. ( WGR)

Infant Homicide Prevention Act

S. L. 2001- 291 ( HB 275) decriminalizes the abandonment of an infant under certain

circumstances. The act provides that a parent of an infant less than 7 days old may turn the child

over to one of the following persons:

! A health care provider who is on duty or at a hospital or local health department;

! A law enforcement officer who is on duty or at a police station or sheriff's department;

! A department of social services worker who is on duty or at a local department of social

services;

! An emergency medical technician who is on duty or at a fire station; or

! Any adult who willingly accepts the infant.

The act provides that the abandoning parent is not subject to prosecution for misdemeanor

refusal to provide child support, felony abandonment, or misdemeanor child abuse for any acts or

omissions related to the care of the abandoned infant. An abandoning parent who also commits

felony child abuse may still be prosecuted, but if the infant was abandoned according to the

provisions of this act, the abandonment may be treated as a mitigating factor in sentencing for a

conviction involving the abandoned infant.

The act requires that the individuals specifically listed above take an abandoned infant into

temporary custody, while any adult may, but is not required, to do so. Individuals taking an infant

into temporary custody under the provisions of this bill must protect the health and well being of the

infant and must immediately inform the department of social services or a local law enforcement

agency. The individual may inquire as to the parents’ identities and medical history, but the parent is

not required to provide this information. In addition, individuals taking an infant into temporary

custody under the provisions of this bill are immune from civil or criminal liability under the

temporary custody provisions of this bill so long as the individual acted in good faith. However, the

immunity does not extend to gross negligence, wanton conduct, or intentional wrongdoing that

would otherwise be actionable.

When abandonment is alleged, the act requires that the Director of the Division of Social

Services initiate an investigation immediately, take temporary custody of the juvenile, and secure an

order of nonsecure custody. The Director must also request that law enforcement investigate

through the North Carolina Center for Missing Persons and other resources as to whether or not the

juvenile is a missing child. The act also allows a court to terminate parental rights when a parent

voluntarily abandons an infant, under the provisions of this act, for at least 60 consecutive days

immediately preceding the filing of the petition.

The act became effective July 19, 2001, and applies to acts committed on or after that date.

( WGR)

Children in Voting Enclosures

S. L. 2001- 292 ( HB 980). See Constitution and Elections.

School Assignment/ Child in Pre- Adoptive Home

S. L. 2001- 303 ( SB 836). See Education.

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DSS/ Indian Affairs Collaboration

S. L. 2001- 309 ( HB 715) requires the Division of Social Services to collaborate with the

Commission on Indian Affairs and the North Carolina Directors of Social Services Association to

develop a process to establish a relationship between the Division of Social Services and the Indian

tribes to enable: these tribes to receive reasonable notice of identified Indian children who are being

placed in foster care or adoption or who otherwise enter the child protective services system;

agreement on a process by which North Carolina Indians might be identified and recruited for

purposes of becoming foster care and adoptive parents; agreement on a process by which the

cultural, social, and historical perspective and significance associated with Indian life may be taught

to appropriate child welfare workers and to foster and adoptive parents; identification or formation of

Indian child welfare advocacy, placement and training entities with which the Department of Health

and Human Services might contract or otherwise form partnerships; development of a valid and

reliable process through which Indian children within the child welfare system can be identified; and

identification of the appropriate roles for the State and Indian tribes, organizations and agencies to

ensure successful means for securing the best interests of Indian children.

The act became effective July 27, 2001. ( DJ, EC, TM)

No Drugs at Child Care Centers

S. L. 2001- 332 ( SB 751) See Criminal Law and Procedure.

Equitable Distribution Clarification

S. L. 2001- 364 ( HB 1084). See Civil Law and Procedure.

NC Health Choice

S. L. 2001- 424, Sec. 21.22 ( SB 1005, Sec. 21.22). See Health and Human Services.

Special Needs Adoptions Incentive Fund

S. L. 2001- 424, Sec. 21.42 ( SB 1005, Sec. 21.42) creates a Special Needs Adoptions Incentive

Fund to provide financial assistance to facilitate the adoption of children with special needs residing

in licensed foster care homes. These funds shall be matched by county funds. The Social Services

Commission shall adopt rules to implement the provisions of this section. The Department of Health

and Human Services is to report on the use of these funds no later than April 1, 2002, to the Senate

Appropriations Committee on Health and Human Services, the House of Representatives

Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

This section became effective January 1, 2001. ( AC)

Child Welfare System Pilots

S. L. 2001- 424, Sec. 21.46 ( SB 1005, Sec. 21.46) directs the Department of Health and

Human Services, working with local departments of social services, to develop a plan to implement

an alternative response system when responding to suspected reports of child neglect in no fewer

than two and no more than ten demonstration areas in the State. The Department may proceed to

implement this pilot program if non- State funds are identified for that purpose.

This section became effective July 1, 2001. ( AC)

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Family Resource Centers

S. L. 2001- 424, Sec. 21.48 ( SB 1005, Sec. 21.48) directs the Department of Health and

Human Services ( DHHS) to evaluate the use of all State and federal funds allocated to Family

Resource Centers that primarily serve families with minor children. The evaluation will determine the

effectiveness and efficiency of services provided by these family resource centers and will ensure that

these centers provide similar core services. DHHS is to report to the Senate Appropriations

Committee on Health and Human Services, the House of Representatives Appropriations

Subcommittee on Health and Human Services, and the Fiscal Research Division on May 1, 2002.

This section also amends G. S. 143B- 152.15( b) regulating program evaluation of the Family

Resource Center Grant Program, to require DHHS to report no later than December 1 of each year to

the Senate Appropriations Committee on Health and Human Services, the House of Representatives

Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on the

results of program evaluation.

This section became effective July 1, 2001. ( AC)

Intensive Family Preservation Services Funding and

Performance Enhancements

S. L. 2001- 424, Sec. 21.50 ( SB 1005, Sec. 21.50) directs the Department of Health and

Human Services ( DHHS) to review the Intensive Family Preservation Services Program ( IFPS) to

enhance and implement initiatives that will increase the sustainability and effectiveness of the IFPS.

This section requires any program or entity that receives State, federal, or other funding for the

purposes of Intensive Family Preservation Services to provide information and data that will assist in

the evaluation. DHHS is to establish performance- based funding protocol and will only provide

funding to those programs and entities that provide the required information. DHHS is to make an

interim report to the Senate Appropriations Committee on Health and Human Services, the House of

Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal

Research Division by April 1, 2002, and an annual report not later than December 1 of each year of

the biennium.

This section also amends the Family Preservation Act to delete the phased in language of the

program and to eliminate the Advisory Committee on Family- Centered Services within the

Department of Health and Human Services and make conforming amendments throughout the act.

It further clarifies that the number of grants awarded and the level of funding of each grant is

contingent upon funds appropriated for that purpose by the General Assembly.

This section became effective July 1, 2001. ( AC)

Child Support Pilot Program/ Enhanced Standards

S. L. 2001- 424, Sec. 21.53 ( SB 1005, Sec. 21.53) directs the Department of Health and

Human Services ( DHHS) to develop and implement performance standards for each State and county

child support enforcement office. DHHS is to monitor each office and publish an annual performance

report on the statewide and local office performance of each child support office. DHHS is to submit

a progress report to the Senate Appropriations Committee on Health and Human Services, the House

of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal

Research Division by January 15, 2001, and a final report no later than May 1, 2002.

This section became effective July 1, 2001. ( AC)

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Comprehensive Treatment Services Program

S. L. 2001- 424, Sec. 21.60 ( SB 1005, Sec. 21.60), as amended by S. L. 2001- 513, Sec. 17 ( HB

231, Sec. 17) directs the Department of Health and Human Services ( DHHS) to continue the

Comprehensive Treatment Services Program which includes a full range of services for children

requiring mental health services. The act clarifies that the Program includes both residential and

non- residential services for children and youth at risk for out- of- home placement. The act also

requires a Memorandum of Agreement between DHHS, the Department of Public Instruction and

other affected state and local agencies prior to the allocation of any funds for the Program. DHHS

must submit an interim report on December 1, 2001 and a final report by April 1, 2002 to the House

of Representatives Appropriations Subcommittee on Health and Human Services, the Senate

Appropriations Committee on Health and Human Services, and the Fiscal Research Division.

This section became effective July 1, 2001. ( AC)

Child Care Allocation Formula

S. L. 2001- 424, Sec. 21.69 ( SB 1005, Sec. 21.69) makes the following changes to Sec. 11.43

of S. L. 1999- 237 ( HB 168, Sec. 11.43), regarding the child care allocation formula:

! Authorizes the Department of Health and Human Services ( DHHS) to allocate child care

subsidy voucher funds to pay the costs of necessary child care for minor children of

needy families.

! Uses the mandatory thirty percent ( 30%) Smart Start subsidy allocation to constitute the

base amount for each county's child care subsidy allocation.

! Does not include the aggregate mandatory thirty percent ( 30%) Smart Start subsidy

allocation when applying the formula established in Sec. 11.43 of S. L. 1999- 237 to all

noncategorical federal and State child care funds.

! Allows DHHS to reallocate unused child care subsidy voucher funds in order to met the

child care needs of low- income families.

! Directs DHHS, in consultation with the North Carolina Partnership for Children, Inc., the

North Carolina Association of County Commissioners, directors of county departments of

social services, and representatives of private for- profit and not- for profit child care

providers to study the current methodology and process used to allocate all child care

subsidy voucher funds in order to assess its effectiveness in meeting the needs of low-income

working families. DHHS is to report its findings to the House of Representatives

Appropriations Subcommittee on Health and Human Services, the Senate Appropriations

Committee on Health and Human Services, and the Fiscal Research Division by April 1,

2002.

This section became effective July 1, 2001. ( AC)

Child Care Subsidy Rates

S. L. 2001- 424, Sec. 21.73 ( SB 1005, Sec. 21.73) makes the following changes to Sec. 11.27

of S. L. 2000- 67 ( HB 1840, Sec. 11.27), which amended the allocation of child care subsidy rates:

! Repeals G. S. 110- 109, which required the Department of Health and Human Services

( DHHS) to conduct a statewide market rate study of child care facilities, every two years,

and establish a market rate for each rated quality level for each age group within each

county along with a corresponding statewide market rate.

! Repeals Subsection ( d) of Sec. 11.27 of S. L. 2000- 67, which required DHHS to conduct a

one- time interim market rate study to be completed no later than April 1, 2002.

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! Increases the percent of gross family income upon which fees for families who are

required to share in the cost of care are established. Please see table below. ( Effective

October 1, 2001).

Family

Size

Previous Percent of Gross

Family Income

Enacted Percent of

Gross Family Income

1- 3 9% 10%

4- 5 8% 9%

6 or more 7% 8%

! Authorizes religious- sponsored child care facilities and licensed child care centers and

homes that are receiving a higher rate than the market rates that will be implemented in

this section, to continue receiving that higher rate until September 30, 2002. ( Effective

October 1, 2001).

! Reinserts the provision of payment rate qualifications for child care providers in counties

that do not have at least seventy- five ( 75) children in each age group for center- based

and home- based care and clarifies that such payment rates are to be set at the statewide

or regional market rate.

! Requires the Division of Child Development to calculate a statewide rate and regional

market rates for each rated license level for each age category.

The remainder of this section became effective July 1, 2001. ( AC)

Development of More at Four Pilot Program

S. L. 2001- 424, Sec. 21.76B ( SB 1005, Sec. 21.76B), as amended by S. L. 2001- 487, Sec. 112

( HB 338, Sec. 112) appropriates $ 6,456,500 in each year of the biennium to the Department of

Health and Human Services ( DHHS) to develop and implement, in consultation with the Department

of Public Instruction ( DPI), the " More at Four" voluntary prekindergarten pilot program for at- risk

four- year- olds. DHHS and DPI are to establish the " More at Four" Pre- K Task Force to oversee

development and implementation of the pilot program. The pilot shall be distributed geographically

to ensure adequate representation of the diverse areas of the State. DHHS, DPI and the Task Force

shall identify and make recommendations on the reallocation of funds from existing State and local

programs providing prekindergarten related care and services.

The Department of Health and Human Services, the Department of Public Instruction, and

the Task Force shall report by January 1, 2002 and May 1, 2002, to the Joint Legislative Commission

on Governmental Operations, Joint Legislative Education Oversight Committee, the House of

Representatives Appropriations Subcommittee on Health and Human Services, and the Senate

Appropriations Committee on Health and Human Services on the progress of complying with this

section. A final report along with recommendations for changes or expansion of the program shall be

presented to the 2003 General Assembly.

This section became effective July 1, 2001. ( AC)

Create Office of Education Services

S. L. 2001- 424, Sec. 21.80 ( SB 1005, Sec. 21.80) repeals G. S. 143B- 146.22 regulating the

authority of the Secretary of the Department of Health and Human Services ( DHHS) to create the

Division of Education Services to manage the Governor Morehead School and the three residential

schools for the deaf. This section also dissolves the Division of Early Intervention and creates an

Office of Education Services within DHHS to manage the Schools for the Deaf, the Governor

Morehead School for the Blind, and their preschool components. The Office of Education Services is

to improve student academic and postsecondary outcomes and strengthen collaborative relationships

2 3

with local education agencies and with the State Board of Education. DHHS shall make the necessary

organization changes and budget adjustments specified by this section by October 1, 2001.

This section became effective July 1, 2001. ( AC)

Closure of Central North Carolina School for the Deaf at

Greensboro

S. L. 2001- 424, Sec. 21.81 ( SB 1005, Sec. 21.81) amends various sections of Chapter 143B,

the Executive Organization Act of 1973 to reflect the closure of the Central North Carolina School for

the Deaf at Greensboro.

This section became effective July 1, 2001. ( AC)

Residential Schools for the Deaf

S. L. 2001- 424, Sec. 21.82 ( SB 1005, Sec. 21.82) directs the Department of Health and

Human Services ( DHHS) to assess the educational needs of the current students at the North

Carolina School for the Deaf in Morganton and the Eastern North Carolina School for the Deaf in

Wilson. The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the

Office of Education Services, and the Department of Public Instruction shall work together in the

development of education plans for students and shall develop and prepare plans for those children

who are seriously emotionally disturbed and place them in appropriate settings. DHHS shall report

on or before March 15, 2002, to the House of Representatives Appropriations Subcommittee on

Health and Human Services, the Senate Appropriations Committee on Health and Human Services,

and the Fiscal Research Division on complying with this section.

This section became effective July 1, 2001. ( AC)

Preschool Programs for the Deaf

S. L. 2001- 424, Sec. 21.83 ( SB 1005, Sec. 21.83) directs the Department of Health and

Human Services ( DHHS) to transition the children at the State- operated preschool programs for the

deaf to other preschool services, after which, the State- operated preschool sites will cease operation.

DHHS, the Division of Public Health, the Office of Education Services, the Division of Child

Development, and the Department of Public Instruction shall develop a transition plan for the

appropriate placement of the children located at these preschool sites.

This section became effective October 1, 2001. ( AC)

Graduated Drivers License Change

S. L. 2001- 487, Sec. 51.5 ( HB 338, Sec. 51.5). See Transportation.

Amend Stalking/ Domestic Violence Laws

S. L. 2001- 518 ( SB 346). See Criminal Law and Procedure.

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Major Pending Legislation

Abolish Alienation of Affection/ Criminal Conversation

HB 576 would abolish the common law torts of alienation of affections and criminal

conversation. The bill has passed the House and is pending in the Senate. ( WGR)

Increase Misdemeanor Child Abuse Penalty

HB 904 would increase the penalty for a parent who inflicts physical injury, allows injury to

be inflicted, or creates or allows to be created a substantial risk of physical injury on a child from a

Class 1 misdemeanor to a Class A1 misdemeanor. The bill has passed the House and is pending in

the Senate. ( WGR)

Close Incest Loophole to Protect Minors

HB 1276 would increase the penalty for incest to match the penalties for other sexual

offenses that may be committed against minors, such as first- degree rape and statutory rape. It

would also prevent any party to incest that is under the age of 16 from being prosecuted for the

crime of incest, unless the parties were less than four years apart and the act was consensual.

The bill creates four possible penalties for incest depending on the age of the parties:

! If one party is under the age of 13 and the other party is at least four years older, the

older party shall be guilty of a Class B1 felony. If this act occurred between non- family

members, it would be first- degree rape, which is punishable as a Class B1 felony.

! If one party is 13, 14, or 15 years old and the other party is at least six years older, the

older party shall be guilty of a Class B1 felony. If this act occurred between non- family

members, it would be " first- degree" statutory rape, which is punishable as a Class B1

felony.

! If one party is 13, 14, or 15 years old and the other party is more than four but less than

six years older, the older party shall be guilty of a Class C felony. If this act occurred

between non- family members, it would be " second- degree" statutory rape, which is

punishable as a Class C felony.

! If both parties are 16 years old or older or if the parties are less than four years apart in

age and the act was consensual, both parties may be prosecuted for incest and are

subject to a Class F felony.

The bill has passed the House and is pending in the Senate. ( WGR)

Studies

Legislative Research Commission

2001 Studies Bill

S. L. 2001- 491, Sec. 2.1( 9) ( SB 166, Sec. 2.1( 9)) authorizes the Legislative Research

Commission to study the following domestic violence issues:

! Child abuse and neglect in child care facilities.

! Confidentiality program for victims of domestic violence.

2 5

! Establishing a domestic violence fatality review team.

The act became effective December 19, 2001. ( SS)

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Chapter 5

Civil Law and Procedure

Brenda Carter ( BC), Karen Cochrane- Brown ( KCB), Frank Folger ( FF), Bill Gilkeson ( BG),

Trina Griffin ( TG), Robin Johnson ( RJ), Esther Manheimer ( EM), Wendy Graf Ray ( WGR),

Walker Reagan ( WR), Steve Rose ( SR), Susan Sitze ( SS). Rick Zechini ( RZ)

and others ( See references by initials on page 269 of this publication.)

Enacted Legislation

Civil Procedure

Amend Rule 9( j) of the Rules of Civil Procedure

S. L. 2001- 121 ( HB 434) amends the law that allows a judge under certain circumstances to

extend the statute of limitations in medical malpractice claims by clarifying which judges are

authorized to enter such orders. Prior law limited the authority to superior court judges of the county

where the cause of action arose. This act resolves the problem where there is not a superior court

judge of the county, or not a superior court judge of the county qualified to hear the matter. Also,

because the county where the cause of action arises is not necessarily a county in which venue is

proper, the act provides that the order be entered in a county where the lawsuit could be filed.

The act amends G. S. 1A- 1, Rule 9( j) of the Rules of Civil Procedure to provide that a resident

judge of the superior court for a judicial district in which venue is appropriate under G. S. 1- 82 for a

medical malpractice cause of action or, if no resident judge for that judicial district is physically

present in that judicial district, otherwise available, or able or willing to consider the motion, then any

presiding judge of the superior court for that judicial district, may allow a motion to extend the

statute of limitations to file a complaint in a medical malpractice action.

The act became effective October 1, 2001 and applies to actions filed on or after that date.

( WR)

Extend Limitations for Some Intentional Torts

S. L. 2001- 175 ( HB 665) extends the statute of limitations in civil actions for assault, battery,

and false imprisonment from one year to three years. This act was prompted by recent North

Carolina cases in which the Court of Appeals urged the General Assembly to examine the distinction

between the one- year statute of limitations for intentional torts and the three- year statute of

limitations for negligence. As a result of this legislation, a plaintiff who is the victim of an intentional

tort has the same amount of time to file a lawsuit as a plaintiff who is the victim of a negligent act.

However, the one- year statute of limitations for the intentional torts of libel and slander remains

unchanged.

The act became effective October 1, 2001 and applies to claims arising on or after that date.

( TG)

Amend Certain Rules of Civil Procedure

S. L. 2001- 379 ( HB 439), as amended by S. L. 2001- 487, Sec. 107.5 ( HB 338, Sec. 107.5),

amends Rules 4( c), 4( j), 4( j1), 4( j2), 5( b), 28( c), 37( a), 46, 63 and 65( b) of the Rules of Civil

Procedure.

2 7

The act amends Rule 4( c) to extend the time allowed for return of service of a summons

from 30 days to 60 days.

The act amends Rule 4( j) to permit service of process by a designated delivery service, such

as Airborne Express, DHL Worldwide Express, FedEx, and UPS, in a manner similar to service of

process by certified mail through the US Postal Service. A delivery service designated under the act

is one so designated by the US Treasury Secretary for IRS purposes.

The act amends Rule 5( b) to permit service of pleadings and papers on an attorney by fax.

Time of confirmation of receipt of the fax determines the time of delivery and delivery must be by

5: 00 p. m. to be considered delivered on that day.

The act amends Rule 28( c) to allow a videotaped deposition to be taken by an employee of

the attorney if the deposition notice discloses the name of the employee and by whom he or she is

employed, and the deposition is recorded by stenographic means by a non- disqualified person.

The act amends Rule 37( a) to provide that when an opposing party fails to respond to

discovery, the party seeking discovery must certify in its motion to compel discovery that it has in

good faith conferred or attempted to confer with the person failing to make discovery in an effort to

secure the information or material without court action.

The act clarifies Rule 46 by including pretrial rulings and interlocutory orders with other

rulings and orders by the trial court that do not have to be formally objected to in order to preserve

the objection. This provision does not apply to rulings and orders concerning the admissibility of

evidence. This section also repeals Rule 46( c) to eliminate the conflict with Rule 10( b)( 2) of the

Rules of Appellate Procedure that requires formal objection to jury instructions in order to preserve

the exception on appeal.

The act amends Rule 63 to expand circumstances for the substitution of a judge after a

verdict is returned or a trial is concluded. In addition to authorizing the substitution for a judge who

is disabled or deceased, this section authorizes substitution upon a judge's resignation, retirement,

expiration of term of office, removal from office, or for any other reason the judge is unable to

perform his or her duties. This section also clarifies that the powers of the substitute judge apply to

entries of judgment.

The act amends Rule 65( b) to require that an attorney seeking a temporary restraining order

( TRO) certify the efforts, if any, that have been made to give prior notice of the request for a TRO to

the adverse party or the adverse party's attorney, and the reasons why the notice should not be

required.

The amendment to Rule 5( b) became effective October 1, 2001 and applies to actions filed

before, on or after that date. The amendment to Rule 63 became effective August 18, 2001 and

applies to actions pending on or after that date. The remainder of the act became effective October

1, 2001 and applies to actions filed on or after that date. ( WR)

Unnecessary Filing of Briefs

S. L. 2001- 388 ( SB 951) amends Rule 5 of the Rules of Civil Procedure to prohibit the filing,

with the clerk of superior court, briefs and memorandum that are provided to the court, unless the

court orders the filing.

The act also eliminates, in a civil action, the need to file a cover sheet with papers filed

subsequent to the initial filing if the document itself contains specific information summarizing the

critical elements of the filing. In order for the exemption to apply, the document must include:

! The caption on the first page.

! The name, address, and telephone number of the attorney or party filing the document.

! A designation of the party for whom the document is filed, if filed by an attorney.

! The names and designations of each other party to the action.

! The Administrative Office of the Court code( s), set forth on the first page of the

document next to the title.

! The signature of the attorney or party filing the document.

2 8

The part of the act prohibiting filings of briefs and memoranda became effective August 6,

2001. The part of the act exempting certain cover sheet filings became effective October 1, 2001.

( FF)

Domestic

Settlement Procedures in District Court Actions

S. L. 2001- 320 ( HB 668), as amended by S. L. 2001- 487, Sec. 39 ( HB 338, Sec. 39), repeals

G. S. 7A- 38.4, a pilot program providing for mediation of certain cases in district court, and makes the

program permanent by the enactment of G. S. 7A- 38.4A. The act establishes permanent

authorization for mediation settlement procedures in any pending action in the district court involving

equitable distribution, alimony, child support, post- separation support, or claims arising out of

contracts and releases between husband and wife, separation agreements or premarital agreements.

The language in the act is identical to that which was in the legislation establishing the pilot program.

The statute envisions mediation as an informal process conducted by a mediator with the objective of

helping parties voluntarily settle their disputes.

The act became effective October 1, 2001, with the exception of the authority for the

Supreme Court to adopt rules to implement the act. That part of the act became effective July 1,

2001. ( SR)

Equitable Distribution Clarification

S. L. 2001- 364 ( HB 1084) clarifies that an action for equitable distribution of property

between parties does not abate upon the death of one of the parties. This issue had not been

specifically addressed in the General Statutes prior to the enactment of this provision. The act

provides that, when one of the parties to an equitable distribution action dies before an order is

entered, the court must consider any property that has passed to the surviving spouse as a result of

the death of a spouse as a factor in the equitable distribution action. The act amends the law that

sets out the amount of property that would pass to a surviving spouse who takes upon intestacy, or a

surviving spouse who claims an elective share, by reducing the amount by the value of any equitable

distribution of property awarded to the surviving spouse.

The act became effective August 10, 2001, and applies to actions pending or filed on or after

that date. ( WGR)

Evidence

Psychological Associates and Clinical Social Workers Testimony

S. L. 2001- 152 ( SB 739), as amended by S. L. 2001- 487, Sec. 40( b) ( HB 338, Sec. 40( b)),

amends G. S. 8- 53.6 to provide that a licensed psychological associate or licensed clinical social

worker that provides marital counseling is not competent to testify as to any information acquired

while rendering the marital counseling in a separation, divorce, or alimony action involving the parties

who obtained the marital counseling. When G. S. 8- 53.6 was originally enacted in 1983, clinical social

workers were not licensed by the State. Since that time, the State began licensing clinical social

workers, and both licensed clinical social workers and licensed psychological associates provide

counseling to persons experiencing marital problems. G. S. 8- 53.6 had previously applied only to

licensed physicians, licensed psychologists, and certified marital family therapists. The act also

changes the term " certified marital family therapists" to " licensed marriage and family therapist" to

2 9

conform to the recent licensure of marriage and family therapists. In addition, the act makes

technical changes to some of the references to the divorce and alimony statutes in G. S. 8- 53.6 that

have been repealed and replaced since G. S. 8- 53.6 was originally enacted.

The act became effective October1, 2001. Effective December 6, 2001, S. L. 2001- 487, Sec.

40( b) ( HB 338, Sec. 40( b)) makes a technical correction to G. S. 8- 53.7 to make the general social

worker testimonial privilege applicable to licensed clinical social workers. ( RZ)

Testimonial Privilege for Violence Victims

S. L. 2001- 277 ( HB 643) establishes a qualified testimonial privilege for communications made

to an agent of a rape crisis center or a domestic violence program during the provision of services.

The privilege applies to the following individuals:

! Domestic violence victims who seek advice, counseling or other services for mental,

emotional or physical injuries suffered as a result of domestic violence.

! Persons who have a significant relationship with a domestic violence victim and seek

services for themselves as a result of the domestic violence.

! Sexual assault victims who seek advice, counseling or other services as a result of

injuries suffered from the assault.

! Persons who have a significant relationship with a sexual assault victim and seek services

for themselves as a result of the sexual assault.

The privilege prevents an agent of a domestic violence program or rape crisis center, who

has provided services to a victim, from being required to disclose information acquired during the

provision of services that was necessary to enable the agent to render services. However, the victim

may waive the privilege in open court, and the privilege terminates upon the death of the victim.

The privilege established by this act is qualified. Any resident or presiding judge in the

district in which the action is pending is required to compel disclosure if the court finds, by a

preponderance of the evidence, a good faith, specific, and reasonable basis for believing that:

! The records or testimony sought contain information that is relevant and material to

factual issues to be determined in a civil proceeding, or is relevant, material and

exculpatory on the issue of guilt, degree of guilt, or sentencing in a criminal proceeding

for the offense charged or any lesser included offense;

! The evidence is not sought merely for character impeachment purposes; and

! The evidence sought is not merely cumulative of other evidence or information available

or already obtained by the party seeking disclosure.

If the court finds that a sufficient showing has been made, it is required to order that the

records be produced under seal. The court may then examine the records and allow disclosure of

portions that contain information that are subject to disclosure under this provision. After all appeals

are exhausted, the records must be returned to the center, unless otherwise ordered by the court.

The act became effective December 1, 2001, and applies to all communications made on or

after that date. ( WGR)

Liability

Limit Liability of Landowner of Watershed Properties

S. L. 2001- 272 ( HB 983) limits the liability of owners of land associated with a watershed

improvement project for injuries to individuals who enter the land for educational and recreational

purposes.

Generally, landowners owe a duty to lawful visitors to exercise reasonable care in the

maintenance of their premises, but to trespassers, they only owe a duty to refrain from wanton or

willful infliction of injury. This act provides that an owner of land associated with a watershed

3 0

improvement project only owes the lesser duty owed to trespassers to individuals entering the

property by invitation or permission, free of charge, for educational or recreational purposes. The

intent is to encourage landowners to make these areas available to the public.

This act also clarifies that the doctrine of attractive nuisance still applies and requires the

owner to inform direct invitees of artificial or unusual hazards of which the owner has actual

knowledge.

The act became effective October 1, 2001, and applies to all causes of action arising on or

after that date. ( WGR)

Application of Tort Claims Act to Bus Drivers

S. L. 2001- 424, Sec. 6.18 ( SB 1005, Sec. 6.18) amends G. S. 143- 300.1, Claims Against

County and City Boards of Education for Accidents Involving School Buses or School Transportation

Service Vehicles, to require the Attorney General to refuse to defend the employee or former

employee if the Attorney General finds one of the following:

! The act or omission was not within the scope and course of his employment as a State

employee.

! The employee or former employee acted or failed to act because of actual fraud,

corruption, or actual malice on his part.

! Defense of the action or proceeding by the State would create a conflict of interest

between the State and the employee or former employee.

! Defense of the action or proceeding would not be in the best interests of the State.

This makes the statute consistent with the statute governing defense of other state

employees, G. S. 143- 300.4.

This section became effective July 1, 2001. ( EC)

Miscellaneous

Notary Validation

S. L. 2001- 154 ( HB 700). See State Government.

Action on Construction Payment Bond

S. L. 2001- 177 ( HB 1053), as amended by S. L. 2001- 487, Sec. 100 ( HB 338, Sec. 100). See

Commercial Law.

Judicial & Execution Sales/ Revise Procedure

S. L. 2001- 271 ( SB 681) revises the resale procedures for judicial and execution sales of real

property. It provides that a sale could be upset by subsequent upset bids filed within 10 days of the

report of sale or the prior upset bid, until the price for the property is no longer raised. This

procedure would eliminate the need for most resales and the need to readvertise the sale of the

property. A court may still order a resale for good cause.

The legislation also shortens the time required for notice of a sale. The time period for

posting notice is shortened from 30 days to 20 days. The time period for publication of the

newspaper notice is shortened from four successive weeks to two successive weeks. These notice

requirements would also apply to any resales.

3 1

The act became effective January 1, 2002, and applies to judicial sales and execution sales

that were originally ordered after that date. ( JH)

Soil and Water Employee Judgments

S. L. 2001- 300 ( HB 968). See Local Government.

Amend Physicians' Liens Statutes

S. L. 2001- 377 ( SB 780), as amended by S. L. 2001- 487, Sec. 59 ( HB 338, Sec. 59), eliminates

the requirement that a medical provider file with the clerk of court notice of a lien on the proceeds of

any recovery a patient may receive as a result of a personal injury claim. Under prior law, the

medical provider must file this notice within 30 days of the filing of that personal injury lawsuit. This

act substitutes a requirement that the medical provider give notice to the patient's attorney at the

time the medical provider provides to the patient's attorney the medical records and expenses

necessary to pursue the lawsuit. Once a lien is properly perfected ( and once any dispute concerning

the amount of the medical bills is resolved), the patient's attorney is required to disburse the

proceeds of the lawsuit toward the medical lien despite instructions by the patient to the contrary.

The act became effective October 1, 2001, and applies to liens perfected on or after that

date. ( RJ)

Legal Services Funding Through State Bar

S. L. 2001- 424, Sec. 22.14 ( SB 1005, Sec. 22.14) dedicates a portion of court costs to provide

access to civil justice. One dollar and five cents ($ 1.05) of each fee collected for court costs in

criminal actions, civil actions, special proceedings, and administration of estates will be transmitted to

the North Carolina State Bar. The State Bar will then allocate the funds directly to each of five

geographically based field programs for provision of access to legal representation for indigent

persons in certain kinds of civil matters. The programs are required to keep appropriate records and

make periodic reports to the State Bar. The allocation became effective January 1, 2002, and applies

to fees assessed or paid on or after that date. ( BC)

Openness of Court Records and Proceedings and Other

Governmental Documents

S. L. 2001- 516 ( HB 1284) establishes civil procedures for asserting a right of access to a civil

judicial proceeding or judicial record when the judicial proceeding has been or is to be, held in closed

session, or the document considered by the court has been sealed. This process, different from a

right of intervention under Rule 24 of the Rules of Civil Procedure, allows a party who seeks to assert

a right of access to file a motion in an existing lawsuit to be heard on the right of access. The act

specifically allows a party to the lawsuit to submit a document or proffer testimony it is seeking to

have sealed without making the document or testimony public. Appeal of an order on a motion for

access may be immediately appealed as an interlocutory appeal, but unless a stay is granted, the

underlying lawsuit may continue. If the motion denying access is reversed on appeal, the sole

remedy available to the appellate court is to remand the case for retrial. The party that tendered the

document or testimony under seal may elect to withdraw the sealed information and not have it

considered at a rehearing, and therefore not public. The act does not grant a right of access to

documents or court records that are otherwise closed as a matter of law. There is a $ 20 filing fee for

this motion.

3 2

The act amends Chapter 132, Public Records, by adding a new section to exclude from the

definition of public records specific details of public security plans and arrangements and detailed

plans and drawings of public buildings and infrastructure facilities. Information related to the general

adoption of such plans and budgetary decisions related to the plans and public buildings shall remain

as public records. By virtue of this exception, a public body could consider this information in closed

session but votes for the general adoption of the plans or budget would be in open session.

The act amends the law governing the administration of the State Employees Health Plan to

provide that reimbursement rates or other terms of consideration of any contract between the Plan

and medical providers and pharmacy benefit managers are not public record for a period of 30

months from the expiration of the contract. The Plan is permitted to share the information with other

State agencies necessary for the administration of the Plan.

The act amends the law governing the confidentiality of competitive health care information

in contracts involving public hospitals and public hospital authorities. The act amends G. S. 131E- 97.3

by adding a process for the determination of what information constitutes competitive health care

information. A person who challenges a public hospital's decision to withhold contract information it

believes constitutes confidential health care information can ask the court to review the contract in

camera and determine what is confidential health care information.

The portions of the act concerning proceedings for open court records and proceedings

became effective January 1, 2002 and apply to records filed and proceedings commenced or pending

on or after that date. The changes regarding what is public record became effective January 4, 2002

and apply to public records in existence on or after that date. The remainder of the act became

effective January 4, 2002. ( WR)

Major Pending Legislation

Substitute Letter of Credit for Surety Bond

HB 1099 would amend a number of statutes that currently require a surety bond to allow, as

an alternative, the posting of an irrevocable letter of credit from a bank or savings institution insured

by the Federal Deposit Insurance Corporation. The bill is pending in the Senate Judiciary I

Committee. ( RJ)

Appeals from Contempt

HB 1139 would provide that the appeal from a finding of criminal contempt by a district court

judge or a superior court judge is to the Court of Appeals, and appeal from a finding by a magistrate

or a clerk of superior court is by hearing de novo before a superior court judge. The bill also would

amend the law governing appeals of criminal contempt findings in workers' compensation cases

before the Industrial Commission. Contempt can be found summarily by the Commission, or not

summarily by proceeding in district court. The bill also would provide that appeal from a finding of

criminal contempt in a workers' compensation action by either the Industrial Commission or by the

district court is to the Court of Appeals. The bill is pending in the Senate Judiciary I Committee. ( RJ)

En Banc Procedure

SB 93 would authorize the Court of Appeals, upon a majority vote of the judges of the Court,

to sit as a whole to hear a case on appeal, instead of just a three- judge panel. The bill would clarify

that an appeal of right from the Court of Appeals to the Supreme Court based on a dissent to a

decision only applies to decisions of three- judge panels and would clarify that an appeal from an en

banc hearing in the Court of Appeals is by discretionary review only. The bill also would request the

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Supreme Court to adopt rules of procedure for en banc hearings in the Court of Appeals. The bill is

pending in the House Judiciary II Committee. ( RJ)

Amend Rule 68 Offer of Judgment

SB 416 would amend Rule 68 or the Rules of Civil Procedure – Offer of Judgment, to clearly

exclude costs, interest, and statutorily authorized attorneys’ fees in determining the amount of the

judgment. The bill also proposes 1) that the cutoff period for making the offer of judgment be

moved up from 10 days before trial to 30 days before trial; 2) that if the offer is made more than 60

days before trial, the adverse party has 30 days to accept the offer; otherwise the party has 10 days

to accept; 3) that an offeree who refuses an offer and does no better at trial should not recover post-offer

interest or attorneys’ fees; and 4) that “ lump sum” offers of judgment ( those including costs,

interest, or attorney fees) not be allowed. The bill is pending in the House Judiciary II Committee.

( RJ)

Studies

Legislative Research Commission

The 2001 Studies Bill

Governmental Tort Liability Issues

S. L. 2001- 491, Sec. 2.1( 4)( h) ( SB 166, Sec. 2.1( 4)( h)) authorizes the Legislative Research

Commission to study several issues related to local government tort liability and State tort liability,

including:

! The distinction between governmental and proprietary functions.

! The feasibility of requiring all local government to pay tort claims up to a uniform

minimum level, and if determined feasible, whether that level should be the same as

under the State Tort Claims Act.

! The duty to defend government employees

! Possible methods for funding the State Excess Liability Fund.

If the LRC decides to study this issue, it may report its findings, together with recommended

legislation, to the 2002 Regular Session of the 2001 General Assembly, or the 2003 General

Assembly.

This section became effective on December 19, 2001. ( TG)

Construction Contracts Retainage Reform

S. L. 2001- 491, Sec. 2.1( 4)( j) ( SB 166, Sec. 2.1( 4)( j)) authorizes the Legislative Research

Commission ( LRC) to study construction contract retainage reform.

This section became effective December 19, 2001. ( RZ)

Wrongful Death Proceeds Distribution

S. L. 2001- 491, Sec. 2.1( 11)( a) ( SB 166, Sec. 2.1( 11)( a)) authorizes the Legislative Research

Commission to study several issues related to the State law pertaining to the distribution of wrongful

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death proceeds in certain cases involving minor children where the children's parents are living

separate and apart or are divorced at the time of the death of the minor child, including:

! Whether the wrongful death statute needs revision to modify the distribution of wrongful

death proceeds where the parents have provided unequal support for the child not rising

to the level of willful abandonment.

! Whether circumstances other than willful abandonment should bar a parent from

receiving all or part of his or her share of wrongful death proceeds resulting from the

death of the minor child.

! Whether in situations involving the death of a minor child the courts should be authorized

to make findings regarding the relationship of each beneficiary to the deceased to

determine each beneficiary's equitable share of wrongful death proceeds.

! Whether the definition of " abandonment" under G. S. 31A- 2, should be modified, or

whether the distribution of a minor's estate under intestate succession should be based

on equitable considerations.

If the LRC decides to study this issue, it may report its findings, together with recommended

legislation, to the 2002 Regular Session of the 2001 General Assembly, or the 2003 General Assembly

This section became effective on December 19, 2001. ( TG)

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Chapter 6

Commercial Law

Karen Cochrane- Brown ( KCB), Trina Griffin ( TG), Jeff Hudson ( JH),

Wendy Graf Ray ( WGR), Walker Reagan ( WR), Steve Rose ( SR) and others

( See references by initials on page 269 of this publication.)

Enacted Legislation

Expand N. C. Business Opportunities

S. L. 2001- 13 ( SB 85) directs the N. C. Secretary of Commerce to convene a working group of

interested parties knowledgeable in the different facets of doing business with the Department of

Defense. The working group must include representatives from various government agencies and

nonprofit organizations. Meetings must take place at least every quarter. The purpose of the working

group is to increase business from federal contracts for North Carolina businesses and to utilize service

members’ transition from active duty in North Carolina. The goals of the working group include

investigation of a single point registration for a North Carolina vendor; coordinating various agencies and

organizations that help businesses obtain federal contracts; encouraging industry to meet governmental

needs; creating a skills assessment program for transitioning Department of Defense personnel; and

reviewing other issues the working group determines need to be addressed. The Department of

Commerce may contract for consultant services. Progress of the working group must be reported to the

Natural and Economical Resources Governmental Operations Subcommittee by April 2002 and January

2003.

The act became effective April 4, 2001 and expires June 30, 2005. ( SR)

Bill Lee Two- County Projects

S. L. 2001- 94 ( SB 534) amends the William S. Lee Quality Jobs and Business Expansion Act to

allow more flexibility in creating two- county industrial parks. In order to be eligible for the lower

enterprise tier designation, the lower- tiered county in a two- county industrial park must contribute the

lesser of one- half the costs of developing the park or the proportion of the costs of developing the park

that is equal to the proportion of the park located in that county. Under prior law, a lower- tiered county

was required to contribute at least one- half of the cost of developing the park.

The act became effective for taxable years beginning on or a