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North Carolina Senate Bill S527

North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S527 Compare Versions

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11 GENERAL ASSEMBLY OF NORTH CAROLINA
22 SESSION 2025
3-S 2
3+S 1
44 SENATE BILL 527
5-Health Care Committee Substitute Adopted 4/17/25
5+
66
77 Short Title: Modify Laws Applicable to LME/MCOs. (Public)
8-Sponsors:
9-Referred to:
8+Sponsors: Senator Burgin (Primary Sponsor).
9+Referred to: Rules and Operations of the Senate
1010 March 26, 2025
11-*S527 -v-2*
11+*S527 -v-1*
1212 A BILL TO BE ENTITLED 1
1313 AN ACT TO MODIFY LAW S APPLICABLE TO LOCA L MANAGEMENT 2
1414 ENTITIES/MANAGED CAR E ORGANIZATIONS. 3
1515 The General Assembly of North Carolina enacts: 4
1616 SECTION 1.(a) G.S. 122C-154 reads as rewritten: 5
1717 "§ 122C-154. Personnel. 6
18-(a) Employees under the direct supervision of the area director are employees of the area 7
19-authority. 8
20-(b) As used in this section, the term "area authority senior management" means the area 9
21-director and the employees who are key personnel designated under G.S. 122C-121.1 in the 10
22-following roles, or substantially equivalent positions: chief executive officer, chief financial 11
23-officer, chief operating officer, chief compliance officer, chief information security officer, and 12
24-chief risk officer. 13
25-(c) The area authority shall establish a salary plan that sets the salaries for employees of 14
26-the area authority. The salary plan for area authority senior management employees shall be in 15
27-compliance with Chapter 126 of the General Statutes. 16
28-(d) For the purpose of personnel administration, Chapter 126 of the General Statutes 17
29-applies unless otherwise provided in this Article. Article or in Chapter 126 of the General 18
30-Statutes. Notwithstanding G.S. 126-9(b), an area authority senior management employee of an 19
31-area authority may be paid a salary that is in excess of the salary ranges established by the State 20
32-Human Resources Commission. Any salary for an area authority senior management employee 21
33-that is higher than the maximum of the applicable salary range shall be supported by 22
34-documentation of comparable salaries in comparable operations within the region and shall also 23
35-include the specific amount the board proposes to pay the employee. The area board shall not 24
36-authorize any salary adjustment for an area authority senior management employee that is above 25
37-the normal allowable salary range without obtaining prior approval from the Director of the 26
38-Office of State Human Resources." 27
39-SECTION 1.(b) G.S. 122C-156 reads as rewritten: 28
40-"§ 122C-156. Salary plan for employees of the area authority. 29
41-(a) The area authority shall establish a salary plan which shall set the salaries for 30
42-employees of the area authority. The salary plan shall be in compliance with Chapter 126 of the 31
43-General Statutes. In a multi-county area, the salary plan shall not exceed the highest paying salary 32
44-plan of any county in that area. In a single-county area, the salary plan shall not exceed the 33
45-county's salary plan. The salary plan limitations set forth in this section may be exceeded only if 34
46-the area authority and the board or boards of county commissioners, as the case may be, jointly 35
47-agree to exceed these limitations. 36 General Assembly Of North Carolina Session 2025
48-Page 2 Senate Bill 527-Second Edition
18+Employees under the direct supervision of the area director are employees of the area 7
19+authority. For the purpose of personnel administration, Chapter 126 of the General Statutes 8
20+applies unless otherwise provided in this Article. Notwithstanding G.S. 126-9(b), an employee 9
21+of an area authority may be paid a salary that is in excess of the salary ranges established by the 10
22+State Human Resources Commission. Any salary that is higher than the maximum of the 11
23+applicable salary range shall be supported by documentation of comparable salaries in 12
24+comparable operations within the region and shall also include the specific amount the board 13
25+proposes to pay the employee. The area board shall not authorize any salary adjustment that is 14
26+above the normal allowable salary range without obtaining prior approval from the Director of 15
27+the Office of State Human Resources." 16
28+SECTION 1.(b) G.S. 122C-156 reads as rewritten: 17
29+"§ 122C-156. Salary plan for employees of the area authority. 18
30+(a) The area authority shall establish a salary plan which shall set the salaries for 19
31+employees of the area authority. The salary plan shall be in compliance with Chapter 126 of the 20
32+General Statutes. In a multi-county area, the salary plan shall not exceed the highest paying salary 21
33+plan of any county in that area. In a single-county area, the salary plan shall not exceed the 22
34+county's salary plan. The salary plan limitations set forth in this section may be exceeded only if 23
35+the area authority and the board or boards of county commissioners, as the case may be, jointly 24
36+agree to exceed these limitations. 25
37+…." 26
38+SECTION 1.(c) Subsection (a) of this section applies to employees of area 27
39+authorities who are hired on or after the date this section becomes law. Subsection (b) of this 28
40+section applies to salary plans established on or after the date this section becomes law. 29
41+SECTION 2.(a) G.S. 126-5(a)(2)a. is repealed. 30
42+SECTION 2.(b) G.S. 126-5 reads as rewritten: 31
43+"§ 126-5. Employees subject to Chapter; exemptions. 32
44+… 33
45+(c2) This Chapter does not apply to any of the following: 34
46+… 35
47+(6) Employees of an area authority as defined under G.S. 122C-3(1). 36 General Assembly Of North Carolina Session 2025
48+Page 2 Senate Bill 527-First Edition
4949 …." 1
50-SECTION 1.(c) G.S. 122C-121 reads as rewritten: 2
51-"§ 122C-121. Area director. 3
52-… 4
53-(a1) The area board shall establish the area director's salary under Article 3 of Chapter 126 5
54-of the General Statutes. Notwithstanding G.S. 126-9(b), an area director may be paid a salary 6
55-that is in excess of the salary ranges established by the State Human Resources Commission. 7
56-Any salary that is higher than the maximum of the applicable salary range shall be supported by 8
57-documentation of comparable salaries in comparable operations within the region and shall also 9
58-include the specific amount the board proposes to pay the director. The area board shall not 10
59-authorize any salary adjustment that is above the normal allowable salary range without obtaining 11
60-prior approval from the Director of the Office of State Human Resources.Commission, as 12
61-provided in G.S. 122C-154. 13
62-…." 14
63-SECTION 1.(d) This section applies to salary plans beginning on July 1, 2025. 15
64-SECTION 2. G.S. 126-5 reads as rewritten: 16
65-"§ 126-5. Employees subject to Chapter; exemptions. 17
66-(a) This Chapter applies to all of the following: 18
67-(1) All State employees not exempted by this section. 19
68-(2) All employees of the following local entities: 20
69-a. Area mental health, developmental disabilities, and substance abuse 21
70-authorities, except as otherwise provided in Chapter 122C of the 22
71-General Statutes. 23
72-… 24
73-(4) Employees of an area authority, as defined under G.S. 122C-3, except as 25
74-otherwise provided in Chapter 122C of the General Statutes or otherwise 26
75-exempted by this section. 27
76-… 28
77-(c11) The following are exempt from (i) the classification and compensation rules 29
78-established by the State Human Resources Commission pursuant to G.S. 126-4(1) through (4); 30
79-(ii) G.S. 126-4(5) only as it applies to hours and days of work, vacation, and sick leave; (iii) 31
80-G.S. 126-4(6) only as it applies to promotion and transfer; (iv) G.S. 126-4(10) only as it applies 32
81-to the prohibition of the establishment of incentive pay programs; and (v) Article 2 of Chapter 33
82-126 of the General Statutes, except for G.S. 126-7.1: 34
83-… 35
84-(5) Employees of area authorities, as defined under G.S. 122C-3, other than area 36
85-authority senior management, as defined under G.S. 122C-154. 37
86-…." 38
87-SECTION 3. G.S. 108D-60(a)(5) reads as rewritten: 39
88-"(5) LME/MCOs operating BH IDD tailored plans shall may contract with an 40
89-entity that holds a PHP license and that covers the services required to be 41
90-covered under a standard benefit plan contract." 42
91-SECTION 4. Except as otherwise provided, this act is effective when it becomes 43
92-law. 44
50+SECTION 2.(c) This section applies to employees of area mental health, 2
51+developmental disabilities, and substance use authorities, defined as area authorities under 3
52+G.S. 122C-3, hired after the date this act becomes law. 4
53+SECTION 3. G.S. 126-11 reads as rewritten: 5
54+"§ 126-11. Local personnel system may be established; approval and monitoring; rules and 6
55+regulations. 7
56+(a) The board of county commissioners of any county may establish and maintain a 8
57+personnel system for all employees of the county subject to its jurisdiction, which system and 9
58+any substantial changes to the system, shall be approved by the State Human Resources 10
59+Commission as substantially equivalent to the standards established under this Chapter for 11
60+employees of local departments of social services, local health departments, and area mental 12
61+health programs, local emergency management programs. If approved by the State Human 13
62+Resources Commission, the employees covered by the county system shall be exempt from all 14
63+provisions of this Chapter except Article 6. 15
64+(a1) With approval of each of the boards of commissioners of the county or counties which 16
65+comprise the area mental health authority, the area mental health authority may establish and 17
66+maintain a personnel system for all employees of the area mental health authority, which system 18
67+and any substantial changes to the system, shall be equivalent to the standards established under 19
68+this Chapter for employees of area mental health authorities. If approved by the State Human 20
69+Resources Commission, the employees covered by the area mental health authority system shall 21
70+be exempt from all provisions of this Chapter except Article 6. 22
71+(b) A board of county commissioners may petition the State Human Resources 23
72+Commission to determine whether any portion of its total personnel system meets the 24
73+requirements in (a) above. Upon such determination, county employees shall be exempt from the 25
74+provisions of this Chapter relating to the approved portions of the county personnel system. 26
75+(b1) The board of an area mental health authority, with the approval of each of the boards 27
76+of commissioners of the county or counties which comprise the area mental health authority, may 28
77+petition the State Human Resources Commission to determine whether any portion of its total 29
78+personnel system meets the requirements in subsection (a1) above. Upon such determination, 30
79+area mental health authority employees shall be exempt from the provisions of this Chapter 31
80+relating to the approved portions of the area mental health authority personnel system except as 32
81+provided in G.S. 122C-121. 33
82+(c) The Office of State Human Resources shall monitor at least annually county or area 34
83+mental health authority personnel systems approved under this section in order to ensure 35
84+compliance. 36
85+(d) In order to define "substantially equivalent," the State Human Resources Commission 37
86+is authorized to promulgate rules and regulations to implement the federal merit system standards 38
87+and these regulations at a minimum shall include: recruitment and selection of employees; 39
88+position classification; pay administration; training; employee relations; equal employment 40
89+opportunity; and records and reports." 41
90+SECTION 4. G.S. 108D-60(a)(5) reads as rewritten: 42
91+"(5) During the initial contract term for BH IDD tailored plans, LME/MCOs 43
92+operating BH IDD tailored plans shall contract with an entity that holds a PHP 44
93+license and that covers the services required to be covered under a standard 45
94+benefit plan contract. After the initial contract term for BH IDD tailored plans, 46
95+LME/MCOs operating BH IDD tailored plans may contract with an entity that 47
96+holds a PHP license and that covers the services required to be covered under 48
97+a standard benefit plan contract." 49
98+SECTION 5. Except as otherwise provided, this act is effective when it becomes 50
99+law. 51