IDD Omnibus.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1147

Short Title: IDD Omnibus. (Public)
Sponsors: Representatives Hawkins, Crawford, Quick, and Almond (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Appropriations, if favorable, Rules, Calendar, and Operations of the House
May 4, 2026
*H1147-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO IMPLEMENT VARIOUS CHANGES RECO MMENDED BY THE 2
LEGISLATIVE JOINT CA UCUS FOR INTELLECTUA L AND DEVELOPMENTAL 3
DISABILITIES TO POSI TIVELY IMPACT THE LI VES OF NORTH CAROLIN A 4
CITIZENS WITH INTELLECTUAL OR OTHER DEVELOPMENTAL DISABILITIES. 5
The General Assembly of North Carolina enacts: 6
7
PART I. DIRECT CARE WORKER WAGE INCREASES 8
SECTION 1.(a) It is the intent of the General Assembly to assist in increasing the 9
hourly wages of direct care workers in this State to a minimum of eighteen dollars ($18.00) per 10
hour. To that end, the Department of Health and Human Services, Division of Health Benefi ts 11
(DHB), shall provide a Medicaid rate increase to all of the following: 12
(1) Home- and community-based providers enrolled in the Medicaid program. 13
(2) Intermediate care facilities for individuals with intellectual disabilities 14
(ICF/IIDs), including ICF/IID-level group homes. 15
(3) Providers who provide services to Medicaid beneficiaries receiving services 16
through the North Carolina Innovations waiver program, the Community 17
Alternatives Program for Children, or the Community Alternatives Program 18
for Disabled Adults, and who are either (i) enrolled in the Medicaid program 19
or (ii) approved financial managers or financial support agencies billing for 20
personal care service or waiver service hours provided by direct care workers 21
that are hired by employers of recor d or managing employers under 22
consumer-directed or self -directed options in accordance with any of the 23
following Medicaid Clinical Coverage Policies: 24
a. 8-P: North Carolina Innovations. 25
b. 3K-1: Community Alternatives Program for Children (CAP/C). 26
c. 3K-2: Community Alternatives Program for Disabled Adults 27
(CAP/DA). 28
d. 8H-1: 1915(i) Supported Employment. 29
e. 8H-4: 1915(i) Respite. 30
f. 8H-5: Community Living and Supports. 31
g. 8H-6: 1915(i) Community Transition. 32
SECTION 1.(b) DHB, working with a workgroup of providers, shall determine the 33
definition of direct care worker to be applied and the amount of the rate increases to be 34
implemented under this section. DHB shall further determine the manner in which a provider or 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1147-First Edition
facility shall utilize the increased rate a nd demonstrate compliance with those utilization 1
requirements, including the documentation required to be kept by the provider or facility. This 2
documentation shall be made available upon request by DHB or by the relevant local 3
management entity/managed care organization (LME/MCO). 4
SECTION 1.(c) Any rate increase provided under this section shall be effective on 5
the date approved by the Centers for Medicare and Medicaid Services. Upon implementation of 6
an applicable rate increase required by this section, DHB shall adjust the per member per month 7
(PMPM) capitation amount paid to LME/MCOs and the entity operating the children and families 8
specialty plan accordingly. All LME/MCOs and the entity operating the children and families 9
specialty plan shall be required to implement the increase. 10
SECTION 1.(d) In addition to other allowable reasons for recoupment of funds, if 11
DHB or an LME/MCO determines any funds related to a rate increase required under this section 12
were not used to the benefit of direct care worke rs, then DHB or the LME/MCOs shall recoup 13
part or all of those funds. 14
SECTION 1.(e) There is appropriated from the General Fund to the Department of 15
Health and Human Services, Division of Health Benefits, the sum of one hundred eighty -three 16
million dollar s ($183,000,000) in recurring funds and associated receipts beginning with the 17
2026-2027 fiscal year to implement this section. 18
SECTION 1.(f) This section is effective July 1, 2026. 19
20
PART II. FUND ADDITI ONAL INNOVATIONS WAI VER SLOTS AND DEVELO P A 21
10-YEAR PLAN TO ADDRESS THE REGISTRY OF UNMET NEEDS 22
SECTION 2.(a) The Department of Health and Human Services, Division of Health 23
Benefits, shall amend the North Carolina Innovations waiver to increase the number of slots 24
available under the waiver by a minimum o f 1,000 slots. These additional slots shall be made 25
available upon approval by the Centers for Medicare and Medicaid Services. 26
SECTION 2.(b) There is appropriated from the General Fund to the Department of 27
Health and Human Services, Division of Health Ben efits, the sum of thirty -six million two 28
hundred thousand dollars ($36,200,000) in recurring funds and associated receipts beginning 29
with the 2026 -2027 fiscal year to increase the number of slots under the North Carolina 30
Innovations waiver, as directed by subsection (a) of this section. 31
SECTION 2.(c) The Department of Health and Human Services, Division of Health 32
Benefits (DHB), shall convene a workgroup of relevant stakeholders to develop a plan to satisfy 33
the registry of unmet needs for the North Carolina Innovations waiver within the next 10 years . 34
In developing the plan, the workgroup shall also consider the needs of individuals receiving 35
services approved under the 1915(i) option and may propose an alternative means of distributing 36
slots under the North Carolina Innovations waiver. The 10-year plan shall include a detailed cost 37
analysis of all recommendations and methods proposed to address the registry of unmet needs. 38
No later than February 1, 2026, DHB shall submit a report containing the 10 -year plan to the 39
Joint Legislative Oversight Committee on Medicaid. 40
SECTION 2.(d) Subsections (a) and (b) of this section are effective July 1, 2026. 41
42
PART III. UPDATE TO NC MEDICAID BUY-IN PROGRAM 43
SECTION 3.(a) No later than 90 days after this act becomes law, the Department of 44
Health and Human Services, D ivision of Health Benefits, shall submit the necessary 45
documentation to the Centers for Medicare and Medicaid Services (CMS) for approval to remove 46
the unearned income limit and the resource limit from the eligibility requirements for the Health 47
Coverage for Workers with Disabilities Medicaid eligibility category. Upon approval by CMS 48
of the removal of the unearned income and resource limits, the Secretary of the Department of 49
Health and Human Services shall notify the Revisor of Statutes of the effective date approved by 50
CMS for the removal. 51
General Assembly Of North Carolina Session 2025
House Bill 1147-First Edition Page 3
SECTION 3.(b) G.S. 108A-66.1 reads as rewritten: 1
"§ 108A-66.1. Medicaid buy-in for workers with disabilities. 2
(a) Title. – This section may be cited as the Health Coverage for Workers With 3
Disabilities Act. The Depart ment shall implement a Medicaid buy -in eligibility category as 4
permitted under P.L. 106-170, Ticket to Work and Work Incentives Improvement Act of 1999. 5
The Department shall establish rules, policies, and procedures to implement this act in 6
accordance with this section. 7
… 8
(c) Eligibility. – An Except as provided in subsection (c1) of this section, an individual 9
is eligible for HCWD if:if all of the following apply: 10
(1) The individual is at least 16 years of age and is less than 65 years of age;age. 11
(2) The individual either meets Social Security Disability criteria, criteria or the 12
individual has been enrolled in HCWD and then becomes medically improved 13
improved, as defined in Ticket to Work and as further specified by the 14
Department. An individual shall be determined to be eligible under this 15
section without regard to the individual's ability to engage in, or actual 16
engagement in, substantial gainful activity as d efined in section 223 of the 17
Social Security Act (42 U.S.C. § 423(d)(4)). In conducting annual 18
redetermination of eligibility, the Department may not determine that an 19
individual participating in HCWD is no longer disabled based solely on the 20
individual's participation in employment or earned income;income. 21
(3) The individual's unearned income does not exceed one hundred fifty percent 22
(150%) of FPG, and countable resources for the individual do not exceed the 23
resource limit for the minimum community spouse resource standard under 24
42 U.S.C. § 1396r, and as further determined by the Department. In 25
determining an individual's countable income and resources, the Department 26
may not consider income or resources that are disregarded under the State 27
Medical Assistan ce Plan's financial methodology, including the 28
sixty-five-dollar ($65.00) disregard, impairment -related work expenses, 29
student earned -income exclusions, and other SSI program work incentive 30
income disregards; and 31
(4) The individual is engaged in a substant ial and reasonable work effort 32
(employed) effort, as provided in this subdivision and subdivision, as further 33
defined by the Department Department, and as allowable under federal law. 34
For purposes of this subsection, "engaged in substantial and reasonable work 35
effort" means all of the following: 36
a. Working in a competitive, inclusive work setting, or self-employed. 37
b. Earning at least the applicable minimum wage. 38
c. Having monthly earnings above the SSI basic sixty -five-dollar 39
($65.00) earned-income disregard. 40
d. Being able to provide evidence of paying applicable Medicare, Social 41
Security, and State and federal income taxes. 42
(c1) Additional Earnings Requirements . – The Department may impose additional 43
earnings requirements in defining "engaged in substantia l and reasonable work effort" for 44
individuals who are eligible for HCWD based on medical improvement. 45
(c2) Involuntary Unemployment. – Individuals who participate in HCWD but thereafter 46
become unemployed for involuntary reasons, including health reasons, s hall have continued 47
eligibility in HCWD for up to 12 months from the time of involuntary unemployment, so long as 48
the individual (i) maintains a connection with the workforce, as determined by the Department, 49
(ii) meets all other eligibility criteria for HCWD during the period, and (iii) pays applicable fees, 50
premiums, and co-payments. 51
General Assembly Of North Carolina Session 2025
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(d) Fees, Premiums, and Co-Payments. – Individuals who participate in HCWD and have 1
countable income greater than one hundred fifty percent (150%) of FPG shall pay an annual 2
enrollment fee of fifty dollars ($50.00) to their county department of social services. Individuals 3
who participate in HCWD and have countable income greater than or equal to two hundred 4
percent (200%) of FPG shall pay a monthly premium in addition to the annual fee. The 5
Department shall set a sliding scale for premiums, which is consistent with applicable federal 6
law. An individual with countable income equal to or greater than four hundred fifty percent 7
(450%) of FPG shall pay not less than one hundred pe rcent (100%) of the cost of the premium, 8
as determined by the Department. The premium shall be based on the experience of all 9
individuals participating in the Medical Assistance Program. Individuals who participate in 10
HCWD are subject to co -payments equal to those required under the Medical Assistance 11
Program. 12
(e) Countable Income. – In determining an individual 's countable income, the 13
Department may not consider income that is disregarded under the State Medical Assistance 14
Plan's financial methodology, including the sixty -five dollar ($65.00) disregard, 15
impairment-related work expenses, student earned -income exclusions, and other SSI program 16
work incentive income disregards." 17
SECTION 3.(c) This section is effective on the date approved by the Centers fo r 18
Medicare and Medicaid Services for the removal of the unearned income and resource limits for 19
Health Coverage for Workers with Disabilities program eligibility, as required by Section 1 of 20
this act. 21
SECTION 3.(d) Effective July 1, 2026, there is appropriated from the General Fund 22
to the Department of Health and Human Services, Division of Health Benefits, the sum of one 23
hundred sixty -five thousand dollars ($165,000) in recurring funds and associated receipts 24
beginning with the 2026-2027 fiscal year. 25
26
PART IV. MEDICAID CO MMUNITY ACTIVITIES A ND EMPLOYMENT 27
TRANSITIONS SERVICES 28
SECTION 4.(a) The Department of Health and Human Services, Division of Health 29
Benefits (DHB), shall study the feasibility of adding coverage of a new Medicaid service, entitled 30
"Community Activities and Employment Transitions" (CAET), that provides individualized 31
services and supports for individuals age 16 or older with intellectual or other developmental 32
disabilities and that meets the criteria established in this subsection. DHB shall consider the 33
feasibility of adding the coverage in any of the following ways: (i) by adding an "in -lieu-of" 34
service offered through the 1115 waiver for Medicaid transformation, (ii) by adding or amending 35
a 1915(i) home- and community-based State Plan amendment to include the service, or (iii) by 36
adding the service to any existing Medicaid waiver in this State. The new CAET service shall 37
meet all of the following criteria: 38
(1) The new service shall be modeled after (i) the nonresidential components of 39
the service, entitled "Long -Term Community Supports," currently provided 40
by Vaya Health and (ii) similar services provided by Alliance Behavioral 41
Healthcare that support a meaningful week when used either separately or 42
with other available services. 43
(2) The CAET service shall not include any residential component. 44
(3) Services must originate from facilities that meet the home - and 45
community-based services standards established by DHB and under federal 46
law. 47
SECTION 4.(b) In studying the feasibility of a new CAET service in accordance 48
with subsection (a) of this section, DHB shall collaborate with the Marketing Association for 49
Rehabilitation Centers (MARC), the North Carolina Association for Rehabilitation Facilities 50
(NCARF), the North Carolina Association of Professional Supported Employment (NCAPSE), 51
General Assembly Of North Carolina Session 2025
House Bill 1147-First Edition Page 5
all LME/MCOs, and other appropriate stakeholders. Concurrent with the study of the feasibility 1
of a new CAET service, the Commission for Mental Health, Developmental Disabilities, and 2
Substance Abuse Services (Commission) established under Part 4 of Article 3 of Chapter 143B 3
of the General Statutes also shall collaborate with those stakeholders to review any relevant rules, 4
including 10A NCAC 27G .2301 through .2306. The Commission may amend any relevant rules 5
and, if necessary, may adopt additional rules to account for the numerous community -based 6
activities and employment services that may be provided to Medicaid beneficiaries as part of a 7
new CAET service. 8
SECTION 4.(c) Consistent with the authority granted under G.S. 108A-54(e), DHB 9
may submit any State Plan amendments or waivers, or request other approval from the Centers 10
for Medicare and Medicaid Services, necessary for the implementation of any new CAET service 11
determined to be feasible under subsection (a) of this section. Coverage of the new service may 12
not begin earlier than January 1, 2027. 13
SECTION 4.(d) No later than April 1, 2027, DHB shall submit a report to the Joint 14
Legislative Oversight Committee on Medicaid detailing the following information related to any 15
new CAET service determined to be feasible under this section: 16
(1) The definition for the CAET service and any new Medicaid clinical coverage 17
policy or changes to an existing Medicaid clinical coverage policy. 18
(2) The anticipated annual cost to the State of adding the CAET service. 19
(3) Any legislative changes necessary in order to implement the CAET service. 20
(4) Any recommendations regarding the future establishment of a new facility 21
license for facilities providing the CAET service. 22
(5) Whether DHB is able to add coverage for the CAET service pursuant to its 23
authority under G.S. 108A-54(e) or whether appropriations are required prior 24
to implementation. If DHB intends to add coverage of the CAET service 25
pursuant to its authority under G.S. 108A-54(e), the expected implementation 26
date. 27
SECTION 4.(e) There is appropriated from the General Fund to the Department of 28
Health and Human Services, Division of Health Benefits, the sum of two million dollars 29
($2,000,000) in nonrecurring funds for the 2026 -2027 fiscal year to be used to support the 30
feasibility study required by subsection (a) of this section and for drafting the requests for the 31
authorities or supports needed to implement any proposed new CAET service determined to be 32
feasible under that subsection. 33
SECTION 4.(f) Subsection (e) of this section is effective July 1, 2026. 34
35
PART V. STATE RENTAL ASSISTANCE PROGRAM (SRAP) FOR I/DD HOUSING 36
SECTION 5.(a) The Department of Health and Human Services, Division of Mental 37
Health, Development Disabilitie s, and Substance Use Services, shall develop a State Rental 38
Assistance Program to provide vouchers to assist individuals with intellectual and developmental 39
disabilities to transition to integrated housing as required by the 2024 consent order entered in 40
Samantha R., et al. v. State of North Carolina, et al., 17 CVS 6357 -910 (Wake County Superior 41
Court). The program shall be modeled after the Transitions to Community Living program. 42
SECTION 5.(b) Effective July 1, 2026, there is appropriated to the Departm ent of 43
Health and Human Services, Division of Mental Health, Developmental Disabilities, and 44
Substance Use Services, the sum of one hundred thousand dollars ($100,000) in recurring funds 45
beginning with the 2026-2027 fiscal year to be used to support the pr ogram created pursuant to 46
subsection (a) of this section. 47
SECTION 5.(c) The Department of Health and Human Services, Division of Mental 48
Health, Developmental Disabilities, and Substance Use Services, shall convene a workgroup of 49
relevant stakeholders to d evelop a five -year plan for monthly housing rental subsidies to be 50
provided to individuals with intellectual or other developmental disabilities for use in integrated 51
General Assembly Of North Carolina Session 2025
Page 6 House Bill 1147-First Edition
settings. This plan shall create 200 new monthly housing rental subsidies to be provided to 1
individuals with intellectual or other developmental disabilities each year over the course of five 2
years, resulting in the creation of a total of 1,000 monthly housing rental subsidies by the end of 3
the five -year period. In developing the plan, the wor kgroup shall consider similar subsidy 4
programs in Virginia, Maryland, Connecticut, and Pennsylvania. The five-year plan shall include 5
a detailed cost analysis of the plan. Any plan developed under this subsection shall be in 6
furtherance of the State's compliance with the United States Supreme Court decision in Olmstead 7
v. L.C., 527 U.S. 581 (1999). No later than October 1, 2026, the Division of Mental Health, 8
Developmental Disabilities, and Substance Use Services shall submit a report containing the 9
five-year plan to the Joint Legislative Oversight Committee on Medicaid and to the members of 10
the Legislative Joint Caucus for Intellectual and Developmental Disabilities. 11
12
PART VI. STATE MATCH FOR REHABILITATION SERVICES ADMINISTRATION 13
(RSA) FEDERAL GRANT 14
SECTION 6.(a) There is appropriated from the General Fund to the Department of 15
Health and Human Services, Division of Employment and Independence for People with 16
Disabilities (DEIPD), the sum of four million seven hundred fifty -five thousand seventy -one 17
dollars ($4,755,071) in recurring funds beginning with the 2026 -2027 fiscal year to be used to 18
increase pay to address the vacancy rate in DEIPD, raise rates for Community Rehabilitation 19
Programs, and sustain the vocational rehabilitation workforce to ensure indi viduals with 20
disabilities can access paid employment services. These funds shall provide a State match for 21
seventeen million five hundred sixty -nine thousand two hundred four dollars ($17,569,204) in 22
recurring federal funds, and those federal funds are appropriated to DEIPD for the same purpose. 23
SECTION 6.(b) There is appropriated from the General Fund to the Department of 24
Health and Human Services, Division of Services for the Blind (DSB), the sum of nine hundred 25
ninety-five thousand one hundred sixty -three dollars ($995,163) in recurring funds beginning 26
with the 2026 -2027 fiscal year to be used to increase pay to address the vacancy rate in DSB, 27
raise rates for Community Rehabilitation Programs, and sustain the vocational rehabilitation 28
workforce to ensur e individuals with disabilities can access paid employment services. These 29
funds shall provide a State match for three million six hundred seventy-six thousand nine hundred 30
fifty-nine dollars ($3,676,959) in recurring federal funds, and those federal funds are 31
appropriated to DSB for the same purpose. 32
SECTION 6.(c) This section is effective July 1, 2026. 33
34
PART VII. BAN USE OF PRONE RESTRAINT AND REQUIRE INCREASED 35
PARENTAL NOTIFICATIO N AND TEACHER TRAINI NG ON THE USE OF 36
SECLUSION AND RESTRAINT 37
SECTION 7.(a) G.S. 115C-391.1 reads as rewritten: 38
"§ 115C-391.1. Permissible use of seclusion and restraint. 39
… 40
(c) Physical Restraint: 41
… 42
(5) Physically restraining a student in a prone position is prohibited. 43
… 44
(j) Notice, Consent, Reporting, and Documentation. – 45
(1) Notice of procedures. – Each governing body of a public school unit shall 46
provide copies of this section and all governing body policies developed to 47
implement this section to school personnel and parents or guardians at the 48
beginning of each school year. The public school unit shall request 49
confirmation that parents have received the policy. 50
(2) Notice of specified incidents: 51
General Assembly Of North Carolina Session 2025
House Bill 1147-First Edition Page 7
a. School personnel shall promptly notify the principal or principal's 1
designee of: 2
1. Any use of aversive procedures. 3
2. Any prohibited use of mechanical restraint. 4
3. Any use of physical restraint resulting in observable physical 5
injury to a student.restraint. 6
4. Any prohibited use of seclusion or seclusion that exceeds 10 7
minutes or the amount of time specified on a student's behavior 8
intervention plan.seclusion. 9
5. If the seclusion or restraint was used in a prohibi ted manner, 10
caused observable physical injury to a student, or exceeded 10 11
minutes or the amount of time specified on a student's behavior 12
intervention plan. 13
b. When a principal or principal's designee has personal knowledge or 14
actual notice of any of the events described in this subdivision, the 15
principal or principal's designee shall promptly notify the student's 16
parent or guardian and will provide the name of a school employee the 17
parent or guardian can contact regarding the incident. 18
(3) As used in subdivision (2) of this subsection, "promptly notify" means by the 19
end of the workday school day during which the incident occurred when 20
reasonably possible, but in no event later than the end of following 21
workday.occurred. 22
…." 23
SECTION 7.(b) G.S. 115C-270.30(b)(1) reads as rewritten: 24
"(1) For all teachers, at least eight continuing education credits with at least three 25
credits required in a teacher's academic subject area.and at least one credit on 26
the use of seclusion and restraint , including State policies, safe techniques, 27
and trauma-informed practices." 28
SECTION 7.(c) This section is effective when it becomes law and applies beginning 29
with the 2026-2027 school year. 30
31
PART VIII. DASHBOARD FOR SUSPENSION RATES FOR STUDENTS WITH IEPS 32
SECTION 8.(a) G.S. 115C-12(27) reads as rewritten: 33
"(27) Reporting Dropout Rates, Corporal Punishment, Suspensions, Expulsions, 34
and Alternative Placements. – The State Board shall report by March 15 of 35
each year to the Joint Legislative Education Oversight Committee on the 36
numbers of students who have dropped ou t of school, been subjected to 37
corporal punishment, been suspended, been expelled, been reassigned for 38
disciplinary purposes, or been provided alternative education services. The 39
data shall be reported in a disaggregated manner, reflecting the local school 40
administrative unit, race, gender, grade level, ethnicity, and disability status 41
of each affected student. Such data shall be readily available to the public. 42
public via an electronic dashboard established and maintained by the State 43
Board. The State Board shall not include students that have been expelled 44
from school when calculating the dropout rate. The Board shall maintain a 45
separate record of the number of students who are expelled from school and 46
the reasons for the expulsion." 47
SECTION 8.(b) This section is effective when it becomes law and applies beginning 48
with the 2026-2027 school year. 49
50
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PART IX. ADDITIONAL FUNDS FOR NORTH CAROLINA PERSONAL EDUCATION 1
STUDENT ACCOUNTS FOR CHILDREN WITH DISABILITIES PROGRAM 2
SECTION 9.(a) There is appropriated f rom the General Fund to the Board of 3
Governors of The University of North Carolina the sum of twenty -five million dollars 4
($25,000,000) in recurring funds beginning in the 2026 -2027 fiscal year to be allocated to the 5
State Education Assistance Authority fo r the North Carolina Personal Education Student 6
Accounts for Children with Disabilities Program in accordance with Article 41 of Chapter 115C 7
of the General Statutes. 8
SECTION 9.(b) G.S. 115C-600(a) reads as rewritten: 9
"(a) The General Assembly finds that due to the continued growth and ongoing need in 10
this State to provide opportunity for school choice for children with disabilities, it is imperative 11
that the State provide an increase in funds of at least one million dollars ($1,000,000) each fiscal 12
year for 10 years for the Personal Education Student Accounts for Children with Disabilities 13
Program. To that end, there is appropriated from the General Fund to the Board of Governors of 14
The University of North Carolina the following amounts each fiscal year to be allocated to the 15
Authority for the Program in accordance with this Article: 16
Fiscal Year Appropriation 17
… 18
2027-2028 $77,643,166$102,643,166 19
2028-2029 $78,643,166$103,643,166 20
2029-2030 $79,643,166$104,643,166 21
2030-2031 $80,643,166$105,643,166 22
2031-2032 $81,643,166$106,643,166 23
2032-2033 and each subsequent fiscal year thereafter $82,643,166$107,643,166 24
When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year specified 25
in this section, the Director of the Budget shall include the appropriated amount specified in this 26
section for that fiscal year." 27
SECTION 9.(c) This section becomes effective July 1, 2026. 28
29
PART X. SUPPORT FOR STUDENTS WITH DISABILITIES 30
SECTION 10.(a) Program Established. – Beginning with the 2026-2027 fiscal year, 31
the Department of Public Instruction shall establish a grant program for local school 32
administrative units to apply for funds from the Special State Reserve Fund (SSRF) for children 33
with disabilities for the purpose of covering the extraordinary costs of certain students with 34
disabilities, including costs associated with the placement of students in private schools with 35
approved nonpublic education programs providing special education in accordance with a 36
student's individualized education program (IEP). The grant program shall provide funds for 37
students with disabilities on an ongoing basis according to the students' IEPs. The grant program 38
established by this act shall be administered separately from the grant program funded from the 39
SSRF available to local school administrative units for high costs related to emergency situations 40
for children with disabilities in a school year. Funds administered pursuant to this act shall be to 41
supplement and not supplant existing federal, State, and loc al funding for children with 42
disabilities. 43
SECTION 10.(b) Applications. – A local school administrative unit may apply for 44
grant funds for a student with disabilities served by the unit for extraordinary costs associated 45
with services provided to the stud ent, including for a placement in a private school that has an 46
approved nonpublic education program providing special education in accordance with a 47
student's IEP. To be eligible for a grant, the local school administrative unit must demonstrate 48
that the t otal cost of the services equals or exceeds four times the State average per pupil 49
expenditure for children with disabilities in the prior fiscal year. The local school administrative 50
unit shall provide documentation to the Department of Public Instruction to support the funding 51
General Assembly Of North Carolina Session 2025
House Bill 1147-First Edition Page 9
request. The student's IEP must support the determination of the services, including if the 1
placement of the student is at a private school. Grant funds shall be student -specific and follow 2
the student for special education and related services provided within the State. The Department 3
shall require documentation for renewal of the grant for each school year with a request for funds 4
for the student. The Department shall reimburse seventy-five percent (75%) of the extraordinary 5
costs and disburse funds in quarterly amounts to providers on an approved list from the 6
Department. 7
For the purposes of this act, extraordinary costs shall only include costs directly 8
attributable to providing the special education services on the student's IEP, such as salary of 9
educational personnel; salary of related services personnel; costs for specialized books, materials, 10
or equipment; tuition costs; and consultant costs, if directly attributable to the student's 11
instructional program. Extraordinary costs shall not include administrative or overhead costs, the 12
costs of adapting classrooms or materials that are used by more than one student, nor the costs 13
associated with evaluation, development of the IEP, or service coordination for the student with 14
disabilities. 15
SECTION 10.(c) Oversight. – The Department of Public Instruction shall ensure 16
that, if a student who is covered by grant funds is placed in a private school that has an approved 17
nonpublic education program providing special education in accordance with a student's 18
individualized education program (IEP), the school is approved by the Department as adhering 19
to State and federal laws governing education services for students with disabilities and State and 20
federal laws governing seclusion and restraint of students. The student's local school 21
administrative unit shall remain legally responsible for ensuring the student is receiving a free 22
appropriate public education (FAPE) in the least restrictive environment (LRE) while the student 23
is placed in the private school, as required by State and federal laws governing education services 24
for students with disabilities, and the unit shall conduct an annual review of the student's IEP and 25
any interim reviews requested by the student's parent or legal guardian for purposes of 26
educational decision making in accordance with federal and State laws. Prior to approving a 27
renewal of the grant for a particular student, the Department shall ensure that the annual review 28
of the student's IEP has been completed and the stude nt's parent or legal guardian, for purposes 29
of educational decision making, has received the notice of procedural safeguards required by 30
State and federal laws governing education services for students with disabilities. 31
SECTION 10.(d) Appropriation. – There is appropriated from the General Fund to 32
the Special State Reserve Fund the sum of one million dollars ($1,000,000) in recurring funds 33
beginning with the 2026-2027 fiscal year for the Department of Public Instruction to implement 34
the grant program established pursuant to this section. 35
SECTION 10.(e) Report. – By March 15, 2027, the Department of Public Instruction 36
shall report to the Joint Legislative Education Oversight Committee, the House Appropriations 37
Education Committee, the Senate Appropriations on Education/Higher Education Committee, 38
and the Fiscal Research Division on the amount of grant applications for the 2026 -2027 school 39
year, the amount of grant funds awarded, the types of out -of-school system placements and 40
service providers, and the type of extraordinary costs reimbursed. 41
SECTION 10.(f) G.S. 115C-107.5 reads as rewritten: 42
"§ 115C-107.5. Annual reports. 43
The State Board shall report no later than October 15 of each year to the Joint Legislative 44
Education Oversight Committee on the implem entation of this Article and the educational 45
performance of children with disabilities. The report may be filed electronically. Each annual 46
report shall include the following information: 47
… 48
(4) A summary analysis of the following data to be monitored and collected by 49
the Department of Public Instruction on students with disabilities in each local 50
school administrative unit on a monthly basis: 51
General Assembly Of North Carolina Session 2025
Page 10 House Bill 1147-First Edition
a. The number of new and continued homebound placements. 1
b. The number of new and continued modified day placements. 2
c. The number of new and continued Home/Hospital, Separate Schools, 3
and Residential placements. 4
d. The number of new and continued PRTF placements. 5
The data collected by the Department under this subdivision shall be 6
disaggregated by gender , race, ethnicity, disability, grade level, and school 7
within a local school administrative unit. The report may reflect de-identified 8
data for individual students, when available, regarding disciplinary outcomes, 9
length of homebound, modified day , or institutionalized placement s, 10
including total number of homebound, modified day, and institutionalized 11
placements over the course of a student's public school enrollment, and over 12
the current and two prior school years , and the regular education, special 13
education, and related services being received (i) prior to and (ii) during the 14
homebound, modified day, or an institutionalized setting placement. The 15
report shall also include any finding s by the Office of Special Educ ation 16
Programs that relate to the implementation of a free and public education in 17
the State, including any findings of noncompliance or deficiencies." 18
SECTION 10.(g) The State Board of Education shall submit the information 19
required pursuant to G.S. 115C-107.5(4), as enacted by this section, beginning with the report 20
submitted to the Joint Legislative Education Oversight Committee by October 15, 2027. 21
SECTION 10.(h) This section becomes effective July 1, 2026. 22
23
PART XI. DEVELOP AN OFFICE FOR ACCESSIBLE TRANSPORTATION 24
SECTION 11.(a) The Secretary of the Department of Transportation shall create and 25
administer an office within the Department of Transportation to be known as the Office of 26
Accessible Transportation and Mobility. 27
SECTION 11.(b) The purpose of the Office is to provide resources and expertise for 28
expanding and improving accessible transportation and mobility across the State at the direction 29
of the Secretary. 30
SECTION 11.(c) All appropriate State and local agencies shall coordinate with the 31
Department of Transportation toward the goal of expanding and improving accessible 32
transportation and mobility across the State. 33
SECTION 11.(d) The Office shall consult with stakeholders, selected by the 34
Department, who are consumers of accessible transporta tion as well as professionals with 35
experience in transportation, disability, and aging. 36
SECTION 11.(e) No later than March 31, 2027, the Department shall submit a report 37
containing the following information to the House Appropriations Committee on Transportation, 38
the Senate Appropriations Committee on Department of Transportation, and the Fiscal Research 39
Division: 40
(1) A detailed statement on the Office's mission and scope of responsibilities. 41
(2) A five-year strategic plan to guide the Office's work. 42
43
PART XII. EFFECTIVE DATE 44
SECTION 12. Except as otherwise provided, this act is effective when it becomes 45
law. 46